Nationals No-Shows Could Cost D.C. in Taxes

The Washington Nationals ticket sales are one of the success stories of this major league season, along with the team's surprising on field performance. However, the actual number of fans in the stands, the so-called turnstile count, is running than the major league average, which could cost DC considerable tax revenue as well as concession revenue. The Nationals actual attendance average is 24,679 compared to the ticket sold average of 32,019. That no-show average of 23% is higher than the MLB average of 15-20%.

While the team expects the attendance to pick up as the summer goes on, the turnstile count could increase the cost to DC of the bonds to be sold to be paid for the new stadium. No shows are normally higher in the first part of the season while school is still in session and the Nationals pennant race should also help. Nevertheless, if the fans don't start coming to the park, the cost of the park will go up, as Wall Street will force DC to pay a higher interest rate on the bonds as the tax flow from the stadium won't be as secure.

Congressman Threatens Baseball's Exemption Over Soros Bid

I don't usually discuss politics in this blog, since I've chosen to focus on sports and business. However, I've decided to depart from that just this once. The Republicans in the House of Representative have decided that George Soros is not fit to own a major league baseball team, specifically the Washington Nationals. These Congressmen, led by Rep. Tom Davis and Rep. John Sweeney, are certainly entitled to their opinion and they are free to call a press conference and tell the world what they think of Mr. Soros. I may not agree with them but I wouldn't be writing this if that was all they did. No, Rep. Sweeney suggested that baseball's antitrust exemption might be in trouble if they were to allow Soros to enter into the ownership ranks. Now, I don't know about you, but I'm not all that comfortable with the House Republican leadership running character checks on anybody. This wouldn't have anything to do with the tens of millions of dollars Soros gave to moveon.org to attempt to defeat George Bush last year, now would it Rep. Sweeney? Oh, and Rep. Davis, I understand you are in favor of the bidding group that includes Fred Malek, the former Nixon aide - that's just a coincidence, isn't it?

Marquette to stay the Golden Eagles

After fits and starts, Marquette did the inevitable and announced that they will keep using the Golden Eagles as the school nickname. Once the administration made the decision to drop the much derided Gold and hold online elections for a new name, Golden Eagles was the front runner all along. Since Warriors, the old name abandoned in favor of Golden Eagles because of perceived slights to Native Americans, was not one of the possible names eligible for selection, the eventual choice was a foregone conclusion and now Marquette can put this whole PR nightmare behind them as they officially join the Big East on Friday.

Baylor Receives a Near Death Penalty

The NCAA has sent a clear message to the collegiate community with the penalties handed down to Baylor for the basketball violations attendant to the tragic shooting death of Patrick Dennehy. In a series of penalties unmatched since the death penalty handed to SMU, the NCAA barred Baylor from playing any non-conference games for a season, giving it the choice of this season or next. Baylor chose this season and will play only Big XII games and the Big XII tournament. The Bears will be eligible for the NCAA and the NIT, but will have to win the conference tournament to qualify.

The Infractions Committee considered giving Baylor the death penalty, the first time it has been seriously considered since SMU. Baylor was saved only by the action taken by the school in response to the scandal, including the firing of the entire staff, scholarship reductions and post-season bans. In addition to the penalties leveled against the school, strong "show cause" orders were put in place for 10 years against former head coach Dave Bliss and for 5 years against his former assistant Doug Ash, meaning a school which wants to hire either of them have to show the NCAA why they should be allowed to do so. Ash was penalized despite his defense of only following orders, showing to all that the NCAA considers that loyalty has its limits.

Toyota to Leave Indy Racing

While I don't normally write much about racing, this story peaked my interest. Toyota has announced that following the 2006 season, it will no longer supply engines to the Indy Racing League. Following the departure of General Motors at the end of this year, IRL will be left with only one manufacturer, Honda. They will have to find at least one more as their rules require that there be at least two manufacturers competing. The loss of the two largest auto manufacturers in the world may well mean the beginning of the end for Indy Racing in America.

Round 1 to the Angels

The City of Anaheim lost the first skirmish in the legal battle with the Angels over the change in the Angels name, when a state appeals court ruled that the Angels may call themselves the Los Angeles Angels for the balance of the season. The court rejected Anaheim's bid for an injunction, causing at least one Councilman to begin to reassess the City's position. I think the Councilman is probably over reacting, as this decision surely could not have come as a complete surprise. The battle was not necessarily going to be won at the injunction stage. In fact, the virtual disappearance of Anaheim from the nation's newspapers and sportscasts and perhaps from the nation's consciousness strengthens the city's case. So, in an odd sort of way, losing the injunction may actually help win the case.

A New ESPY Award

The ESPY Awards are coming up soon. You know, the annual show where the worldwide leader trots out every celebrity it can buy with Disney's money to hand out awards to all of the sports stars it can round up to fill up the air waves now that the interminable NBA season has mercifully ended. This year, I think the boys in Bristol should add a new category to the show: Most Lucrative Job Feint, "And the ESPY Goes to Bob Stoops. "

Stoops is a master at parlaying interest from the University of Florida, real or imagined, into gold, but this year he outdid himself. After no more than a nod of his head in the direction of Gainesville during the search that led to the hiring of Urban Meyer, Oklahoma has rewarded him with a $3 million bonus if he remains as the OU coach through the 2008 season. His contract was extended through 2011 and he receives a $100,000 raise every year. His incentive bonuses were raised, in some cases considerably. For instance, his bonus for winning the BCS championship was raised from $150,000 to $250,000. No word on what it will cost him to keep USC out of the BCS game so he might earn that bonus.

There's Money in PSLs - and Not Just for NFL Teams

You know those Personal Seat Licenses that NFL teams, and now many colleges, have sold to help finance new stadiums? Well, it seems that those fans who bought them thinking that at best they were expensive annoyances, necessary to buy tickets, have now found themselves with an appreciating asset. Many teams allow their PSLs to be freely transferable, so long as the transfer is recorded on the team's books. Fans are now finding that, particularly in markets with rabid fan bases such as Pittsburgh, Philadelphia, Chicago and Baltimore, their PSLs have appreciated 300% in such a few years.

An informal marketplace has developed in classified advertising in local papers and of course on eBay. Fans are even able to sell spots on waiting lists in some cities. One person in Baltimore, who had paid $50 for spot on the list in October, had risen to number 25 and sold his spot to a ticket broker for $2,526. Nice work if you can get it.

A.C. Milan Turns to Warner Bros.

A.C. Milan may have lost the championship game of the Champions League this year, but that hasn't stopped the club from thinking big. It has decided that its future is lies beyond Milan and Serie A. In fact, the executives running A.C. Milan believe its future lies beyond soccer. They believe that they are running an entertainment company with a valuable brand and they have hired Warner Brothers Consumer Products to license the brand worldwide.

Warner has a challenge on its hands as it attempts to market Milan first to the US market. Milan may be well known to the soccer community, but it does not have worldwide fan base of Manchester United, nor the star appeal of David Beckham. Casual fans probably can't identify the well known red and black uniform and won't be able to identify many of team's players.

Fortunately for Warner, Milan looks at this project as a long-term one. It is focusing initially on the Hispanic community, who is presumably better acquainted with Milan through the community's more deeply felt attachment to soccer. In addition, Milan expects to develop soccer academies in the US over time. Milan also expects Warner to be able to cross-promote Milan across all of its media properties to give it the maximum exposure for its dollars.

This will be an interesting test for Warner Brothers. Can it apply the principles it learned selling Bugs Bunny to a completely different product and a completely foreign team. If successful, this will open a major source of new licensing revenue for Warner at a time when it could need a jolt in that division. Licensing is a booming business across the globe, especially in sports. This will be a good opportunity for Warner Brothers to show what it can do in this space.

New NCAA Attendance Leader

I'm currently on the road which means posting will be a bit irregular for the next few days. It should get back to normal by the end of the week.

After nine seasons, Syracuse was finally able to take back the Division I men's basketball attendance crown from Kentucky. The Orange averaged 22,9778 a game beating Kentucky's 22,250 National champion North Carolina came in third, while Louisville finished fourth. The Big Ten led the nation's' conferences in attendance for the 29th straight season, as eight of its eleven members averaged at least 10,000 fans in attendance. The ACC was second, the SEC third and the Big East came in fourth averaging 10,396, a number which is likely to go up next season as it adds Louisville, Cincinnati, Marquette, DePaul and South Florida - the first four of whom should raise the attendance average markedly.

Labor Peace Comes to the NBA

The NBA and the players reached an agreement in principle on a new Collective Bargaining Agreement it was announced last night. The new CBA will be a six year deal and must still be approved by the owners, which is considered a formality, and the players, which is considered to be likely. The CBA includes an increase in the salary cap, a decrease in the length of contracts, a guarantee that players will receive no less than 57% of basketball related income and a lessening of the effect of the luxury tax. It is also important for what it does not include, which is a super luxury tax, which David Stern had pushed hard for and which would have transformed the soft salary cap currently in effect into a hard cap.

The provision that seems to be getting the most attention is the new age limit. According to the new CBA, to be eligible to be drafted an American player must turn 19 in the calendar year of the draft and his high school class must have graduated at least one year previously. A foreign player must turn 19 in the calendar year of the draft. A companion issue which is not receiving quite as much attention, but which I think may be equally if not more important in the long run is the new provision allowing teams to send players in their first two season to the NBDL for skills development.

David Stern's avowed goal before the CBA talks began was to get the NBA personnel out of the high schools. He wanted the age limit raised to 20. The most he could get from the players was 19, but by gaining the year after graduation he achieves his goal of keeping the personnel out of the schools. Look for new rules coming from the Commissioner's office prohibiting scouts and front office personnel from attending high school games or practices, punishable by fines and suspensions.

What will be the effect on the players? Fewer will go to college, because there just won't be that many colleges willing to take their chance with "one and done" players. Look for many of these kids to wind up in prep schools, unless the NBA can define high school graduation to somehow include a post-graduate year.

The NBDL provision may well have the effect of reducing the number of Europeans coming into the league. If you are a young European player making a high six figure salary, will you risk coming to the NBA only to be sent down to the NBDL? All of a sudden, that NBA contract doesn't look quite so attractive.

The Curious Sale of NHL Teams

Since the lockout began, one NHL team has been sold, an agreement has been reached to sell another and one has been placed on the auction block. What is most curious to me about this fact is what little impact the lockout seems to have played in each of these sales. Let's examine the three situations individually and you will see what I mean and what this may bode for the future of hockey.

The first sale was of the Mighty Ducks from the Disney Company to Henry and Susan Samueli, the owners of the operating lease of the Pond at Anaheim. In this case, Disney got out of the sports business, having also divested themselves of the Anaheim Angels of Los Angeles, Southern California, Orange County and all other points north of San Diego. The Samuelis decided to purchase the team mostly as they wanted to control the only tenant of their building. Their real interest is in buying and moving an NBA team to Anaheim, probably either the Clippers or the Kings. So, consider this sale a real estate play not a vote of confidence in either hockey or Gary Bettman. Basically, they didn't want anyone else to be making the decisions that would determine the course of action that would so greatly impact the arena.

The next sale is the Penguins, where an agreement has been reached by a local group led by Mario Lemiuex to sell the club to a group of investors led by a Silicon Valley venture capitalist, William Del Biaggio, a friend of Lemiuex who would retain a minority interest. This deal is also in most respects a real estate deal. Lemiuex has been so far unsuccessful in obtaining a new arena for the Penguins and any talk of moving the franchise while he is the owner rings hollow. So the solution he has cooked up is to sell the club to someone who come to town, professing his strong desire to keep the team in Pittsburgh but loudly proclaims to one and all that the team will only stay if it gets a new arena. We'll see how this plays out but the Governor has already said that no state money is available for a new arena.

Finally, the potential of the St. Louis Blues was recently announced. Here, the Lauries, the owners of the team and the arena in which the Blues play blamed the financial losses they have suffered as the reason for selling. Since the losses were upwards of $200 million, that seems a plausible reason. A closer examination may reveal yet another possible real estate play at work here. As part of the St. Louis Cardinals new stadium construction, the Cardinals received an exemption from state tax and from the city's five percent entertainment tax. The Lauries had asked for a similar exemption from the city and had been denied. The announcement that the team and the Savvis Center are for sale could be a negotiating ploy as much as a bona fide effort to sell the team. We won't know for sure until a buyer steps forward and closes the sale.

What is striking about all three case is that in each case, the sale is all about the real estate. These sales have far more to do with arenas than with hockey teams. In Anaheim, it was done to protect an arena. In Pittsburgh, it's being done to get an arena. In St. Louis, it may be a negotiating ploy over taxes related to arenas. Is hockey such an insignificant business proposition that the hockey aspect of these deals are now just throw-ins? If that is the case, then the effects of the lockout may be more far reaching than anyone ever thought.

The Price of Baseball In DC Just Went Up

The boys in Bud Selig's office sure must be happy now. According to this morning's Washington Post it appears that the Nationals are on course to record a pre-tax profit of $20 million this season. Quite a turnaround for one of baseball's historic underachievers. Not only does this profit flow directly to the other owners of MLB clubs, but it is sure to raise the bidding price for the Nationals in the auction now underway.

Of course, moving to a new market always brings a sense of excitement that generates sales. The Nationals involvement in a tight pennant race this deep into the season hasn't hurt either. The profit picture is also helped by added television revenue and increased sponsorship from what little was being received in Montreal. An added factor in the team's success is MLB's commitment to keeping expenses low while it operates the team. The Nats payroll is only $50 million, one of the lowest in the majors, although management is hopeful that the financial success that the team is experiencing will allow them to spend some of that money to upgrade the payroll for a playoff run. We'll see if Selig keeps his word to Tony Tavares and Frank Robinson about that.

Money, Money Everywhere: Who Got What Last Year?

My latest edition of Forbes arrived today and it contained the famed Forbes celebrity 100, the list of the 100 highest paid celebrities of the previous year. Leading the list for the first time was the most powerful name in woman's television, and maybe in all of television, Oprah - who earned the tidy sum of $225 million, outpacing (for this year) George Lucas, Mel Gibson and all of the athletes on the list. Remember this was before Revenge of the Sith had been released but it was the year of Mel's Passion of the Christ.

Tiger Woods led the athletes list with total earnings of $87 million, meaning he can easily afford that multimillion dollar wedding party he threw. Michael Schumacher, the leading Formula One driver was the number two earning athlete, coming in at $60 million while winning his seventh driving championship. The leading female athlete was Wimbledon champion Maria Sharapova who earned a million dollars for each of her 18 years.

Let me make several observations about the list. First, I was struck by the continuing appeal of certain figures on the list. For instance, Michael Jordan is the 6th leading earner, generating $33 million which in his case is all endorsement income, given his retirement. Also showing somewhat surprising, at least to me, continuing appeal was Kobe Bryant who checked in at $28.8 million just below David Beckham who was the most well paid soccer player in the world at $32.5 million. In fact, the only other soccer player on the top 20 list was Ronaldo who came in at number 18 with earnings of $23 million.

The leading football player was Michael Vick who was 4th at $37.5 million, the bulk of which must come from his salary and his EA Sports endorsement. The only other NFL player on the top 20 list was Matt Hasselbeck at 20. The absence of NFL stars from the list must be attributed to the relative lack of high profile and highly lucrative endorsement contracts. It's hard for me to think of a NFL star that is readily associated with a product the way you might think of Jordan and Nike or Gatorade (check out Darren Rovell's new Gatorade Blog in support of his forthcoming book) or Tiger Woods and Nike or Buick, for instance. Is it because we don't get to see their faces the way we do in other sports? Something to think about as we wait for football season to start.

Seminole Tribe Endorses FSU

Sometime ago, I wrote about the NCAA meddling with universities' nicknames by inserting its politically correct opinion where it doesn't belong. Legislation is under consideration mandating that no university may use a Native American nickname or mascot. The NCAA apparently considers all such nicknames offensive no matter what the particular Native American tribe being honored may believe.

Comes now word from Florida demonstrating yet again the fantasy world that the NCAA inhabits. In a unanimous vote, the Seminole tribal council endorsed the use by Florida State University of the Seminoles as both a nickname and a mascot. The tribe recognized that FSU honored the tribe's contribution to the state rather than demeaned it and demanded that all organizations recognize its word on this matter. That message is being directed at you Myles Brand. I hope you're listening.

Danica and NASCAR

Not surprisingly, Danica Patrick has represented a boom for Indy Racing League. She now accounts for fifty percent of the total branded merchandise now being sold by IRL and she is far and away IRL's best known driver, and other than David Letterman, IRL's best known figure.

Now, NASCAR is scrambling to find their own Danica Patrick, since the real Danica has so far shown no interest in leaving open wheel racing. And it didn't take them long.
For now though, Erin Crocker is in the Class A of NASCAR driving in the ARCA Series and is in the stable of Ray Evernham, the former crew chief who won three championships with Jeff Gordon and owns a Nextel Cup team with drivers Kasey Kahne and Jeremy Mayfield. That means she is in good hands and should have every opportunity to make her way to the top if she's good enough.

Spotlight skips cases of missing minorities

This post is far from the usual here on Sports Biz because it has nothing to do with sports or business but with something far more important than either. From Eric McErlain at Off Wing Opinion comes recognition of the nation's media obsession with the cases of
missing young white women to the exclusion of anyone else. Please take the time to read this article and visit this site: http://www.tamikahuston.com/. It may be too late to help her but not the many missing minority women who don't get the air time in the media that they deserve and that would help their families locate them.

Stadiums, Stadiums, and More Stadiums

As most everyone probably know by now, the Yankees have announced plans to build a new Yankee Stadium across the street from the existing Yankee Stadium in what is now Macombs Dam Park. The new stadium is expected to cost $800 million, to be paid for by the team, although the city and state will be contributing about $200 million to replace the park, provide garages, a new transit stop and road work.

Over in Queens, the Mets are going to be building a new stadium on land adjacent to Shea. The city will be involved in this project as well since the stadium will be used temporarily for the Olympics if the Games are awarded to New York in 2012. While the Mets will foot the construction bill, in the same way that the Yankees are, the city and state will be involved with similar site work, garages and transit work.

One of the interesting points driving the ability of baseball teams to finance their own stadiums is baseball's current collective bargaining agreement. Right now, the Mets and Yankees are probably two of the larger contributors to baseball's revenue sharing pool. In fact, the Yankees are currently the largest contributors. However, under the terms of the agreement, teams paying off stadium debt are allowed to take the debt into account when computing the amount that must be paid into the pool. By one calculation, the Yankees could save $60 million per year in revenue sharing payments alone. That goes a long way towards helping to meet the debt service on the new stadium.

So let's analyze the impact the new Yankee Stadium will have on the rest of the American League. This year, the Yankee payroll was approximately $200 million, which exceeded the next highest time by $85 million. Now, imagine that the Yankees pocketed another $60 million that was no longer required to be contributed to the revenue sharing pool, so the prospective salary pool now exceeds $250 million or more than $100 million in excess of any other team. To put it another way, the difference between the Yankees payroll without the revenue sharing and the rest of baseball may well exceed any other teams payroll. So, should we just mail the World Series trophy to New York and skip straight to football season. Not if you believe my cyber friends at the Sports Economist who have done an interesting analysis of why the Yankees can't win despite the payroll disparity. I think the additional revenue will only make the vaunted Bronx machine more formidable but until the Yankee braintrust decides to fully embrace a youth movement, even an expensive one, I think all the money in baseball won't get them back to the World Series.

NHL Exodus Continues

The owners of the St. Louis Blues announced today that they are putting the team and their long term lease on their Savvis Center home up for sale. The story was first reported in this morning's St. Louis Post-Dispatch and later confirmed in a press release issued by the team. The sale of the Blues would mark the third sale of an NHL team since the start of the lockout.

The Lauries have owned the Blues and the operating lease at Savvis Center since 1999 and cited heavy losses as the reason for selling. The Blues have lost $60 million in just the last two years and the combined cash deficits of the team and the Center have reached $225 million since the Center opened in 1994. The Lauries paid $100 million when they bought the team, which was most recently valued by Forbes at $140 million. The Ducks just sold for $75 million. It is hard to imagine the Lauries even recouping their purchase price at this point, much less any of their accumulated losses. The operating structure both locally and league wide just isn't in place to enable that team to make money.

Docket Report

The Canes are back in court. After firing longtime women's basketball coach Ferne Labati, the University of Miami finds itself facing an age and gender discrimination lawsuit from the 60 year old former national coach year old and Miami Hall of Fame inductee. Labati coached the Canes for 17 years before being fired following this past season's 13-16 record in Miami's inaugural season in the ACC. What makes the firing so different from other situations handled by Miami Athletic Director Paul Dee is there was no warning and no buyout of a contract. Labati was terminated at the end of the season with nary a thank you. Of course, given the manner in which Dee has handled Miami's departure from the Big East, firing of Perry Clark (the former men's coach)and numerous player disciplinary issues, it shouldn't come as a surprise to anyone that this would land Miami in litigation. Take a look at this article from the Tallahassee Democrat to get the full flavor of the Ferne Labati's side of story.

From the The Journal of the Business Law Society comes word of an interesting case that Major League Baseball finds itself in over the rights to the name "Washington Nationals". You would think that the suits up in the Commissioner's office would have checked and double-checked their rights to the name before they announced what the name and logo for the team in DC was going to be. Apparently, somebody screwed up. Now, I don't know whether this guy who is trying to hold MLB up for a get rich quick scheme has a legitimate claim, but surely MLB should have been able to get rid of him without having this dragged into court.

Dodgers To Insure Penny?

The Dodgers have a big investment in pitcher Brad Penny and apparently they are a bit concerned that he may not be as healthy as reported. The team is seeking bids for an insurance policy to guard against a recurrence of the nerve injury that sidelined Penny last year. The expected premiums should be more than $1 million a year.

In other baseball news of note, Bud Selig's dream of a baseball World Cup has not received a rousing welcome in the Land of the Rising Sun. Not surprisingly the dispute between Major League Baseball and the owners of teams in the Japanese Leagues revolve around the distribution of revenue generated by the event, although sources have told the Los Angeles Times that the Japanese owners are also upset about the control over the event being exerted by Selig. As usual, it's MLB's arrogance that may be ticking off the Japanese. You know, "it's our deal, we'll make the decisions". After all, Selig ticks off most of the Americans he deals with why not the Japanese. For the good of the game, and the for the benefit of what should be a great event, let's hope they can all just get along.

Mascot Problems Not Limited to Marquette

We have all heard the ongoing saga of Marquette and its ill fated decision to adopt the nickname Gold, which lasted all of week. Well, the soon to be renamed golden Eagles/Hilltoppers (the finalists in the competition for a new nickname) are hardly the only school facing difficulties with their mascot. Syracuse, for instance, recently shortened their nickname to the gender neutral Orange. In an interesting look at some of the other schools facing issues, the St. Louis Post-Dispatch recently looked into the question as the University of Missouri-St. Louis has decided to drop the Rivermen and adopt a new name in response to student reaction. For reasons that I don't understand, the school administration chose not to adopt the student favorite, and one of the best nicknames I have ever heard : the Hellbenders, named after a local salamander. It just seems that no matter what you do, schools just can't seem to help but find a way to screw up what should be a relatively easy decision.

Glazer's Blueprint for Man U Uncovered

Malcolm Glazer intends to significantly raise ticket prices for Manchester United games in an order to raise the money needed to meet the debt service for the money he borrowed to buy Man U, according to the business plan reviewed by The Times of London. Glazer intends to sharply increase tickets for both Premiership games and Champions League games. He will also send Man U on its customary Asian and US tours, but will now feature a special game in Tampa which is expected to raise a significant amount of money.

Glazer is putting a ceiling on transfer fees which may hinder the personnel moves available to Sir Alex. According to the Times, the cap is 25 million pounds, exclusive of fees received for the sale of players. That could be a significant impediment in what is anticipated to be a very active and expensive transfer market.

Interestingly, there is no mention in the plan of pulling out of the centralized sale of media rights by the Premier League. That is something which has been speculated about in the media ever since Glazer's interest first became public knowledge, but the Premiership and Sky Sports are in negotiations to extend their existing contract. It now appears unlikely that Man U will attempt to bust up the collective rights sale this go around.

So what does all this mean? Are the worst fears of Red Devil fans being realized? Well, not quite. Yes, the price of soccer is going up. Manchester United ticket prices will move up from the middle of the league to the upper tier, but money will Sir Alex will still be the manager. He'll have a transfer fee pot that is a bit on the small side for a club that needs to compete with Chelsea, but I don't think they will be in danger of failing to contend next year.

Postscript: For another view of Glazer's intentions, visit The Sports Economist who has written extensively on this as well.

New York to Look at Queens Option for Olympics

Hard as it may be for many to imagine, NYC2012 organizers are working this weekend with Mets officials to design a plan utilizing one of two Queens sites as options for an Olympic stadium. One option is to retrofit Shea Stadium to accommodate the required track. The other site is a 13 acre site nearby that is currently used primarily by auto salvage operations. Whether that would be a temporary structure which would then be turned into a new stadium for the Mets or would be built as an Olympic Stadium with the Mets to occupy once the Olympics was completed would be worked out later. The planning will be concluded this weekend and a new plan submitted to the IOC on Monday. It may keep the New York bid alive, but it significantly hurts its chances. Manhattan was a key element in the attractiveness of the New York bid.

Nevertheless, don't count NYC 2012 out until the votes are counted. The IOC likes to stage games in America for the ready access to American corporate sponsors. Since most of it corporate sponsors are headquartered in the New York area, you can be sure that will be taken into account by the IOC voters. Paris may be the favorite, but favorites in IOC elections, like in the Belmont Stakes being run today, have a history of losing.

Raiders Suit Against NFL Gets New Life

The California Supreme Court agreed to review the Oakland Raiders suit against the NFL for possible error after a lower appellate court had reversed a trial judge's' ruling granting the Raiders a new trial. The trial judge had granted a new trial following the jury decision against the Raiders in a suit against the NFL concerning their move back to Oakland. The Raiders had lost the trial after the jury returned a 9-3 verdict in the NFL's favor, but the trial judge ordered a new trial because he found jury misconduct. His ruling was reversed on appeal. That appellate decision was accepted for review by the California Supreme Court, so Al Davis' suit lives another day. For more on the case, see this article on law.com.

UEFA to Liverpool: You can Defend!

Liverpool's dream season get to continue for at least another game. After winning the Champions League, but failing to finish in the top four of the Premiership and thereby grabbing one of England's four places in next year's competition, it looked like Liverpool would not be around to defend its title. However, UEFA's executive committee has decided to allow the Reds a special admittance into next year's first qualifying round. UEFA actually went further by making the change permanent for all future champions.

While Liverpool's archrival Everton keeps its spot as the fourth place finisher, the Champions League 40 million pounds in media money will now have to be divided five ways instead of four. That certainly can't make the other four clubs too happy with this decision, even if they had been expressing public support for it.

Venture Capitalist Friend of Lemieux to Buy Penguins

Even in the midst of the lockout, deals must go on. A Silicon Valley venture capitalist and friend of Mario Lemieux is leading a group which has negotiated a letter of intent to buy the Pittsburgh Penguins. Lemieux and most of the other local investors in the team would retain an ownership interest and the team would stay in Pittsburgh. Why anyone would want to buy a hockey team at this point is the question of the moment and why anyone would buy the Pens is particularly interesting. With the possible exception of the Coyotes, the Pens may have the worst situation in the NHL. They have unquestionably the worst building and a terrible lease, with no real prospect of improving either in the near future. The new labor agreement, from what we know at this point, doesn't appear to offer that much benefit to them. To me, this seems most like a friend helping out a friend, with the hope that something will happen down the road to bail them all out. Frankly, I don't get it.

The Minors are a Major Focus

Today was sports day at the Wall Street Journal as the nation's business newspaper turned its eye on the business of minor league sports with not one but two feature articles. On page one, the Journal featured a look at arena football (sub.req.) on the eve of Arena Bowl XIX, highlighting its transformation into a family sport from the days of hot tubs and bikinis. More impressive, it appears that many of the teams are even making money, not to mention the tremendous increase in franchise value.

The second article, on the front page of the Weekend Section, was a look at minor league baseball (sub. req.) and how it has become a major league profit generator by focusing on family entertainment, often to the point where baseball is, at best, of secondary importance. Again, much like arena football, many minor league franchises are seeing dramatic increases in value, in many cases thanks in no small part to multi-million dollar investment by the community in new stadiums. The model that has served the major sports so well - get the public to pay for the stadiums and then ratchet up the ticket price to cover the rent - is also making its way into the minors.

Stanford to Renovate Stadium

Stanford unveiled an $85 million renovation of Stanford Stadium intended to make it a "spectacular, intimate, small, cozy football stadium" . The renovation will reduce seating capacity from its current 85,000 to 50,026, which more closely approximates the crowds it now draws. Last year, the Cardinal only drew drew more than 40,000 once. The university is still $25 million short of the amount needed to fund the project.

In other Pac-10 news, the conference has renewed its television contract with ABC. More dramatically, it has left Fox for ESPN, hoping to take advantage of putting the conference across all of the ESPN media. In addition, the fact that Fox is now the network of the BCS, but ABC retained the Rose Bowl may have played a factor.

The Pac-10 has also finalized the move to add the ninth league game starting next year when college football adds a twelth game. The conference has decided that a round robin schedule was more important than adding another home game just for the money. It's a shame more of college football's major powers don't adopt this philosophy.

DC United To Get Local Owner

It looks like defending MLS Cup Champion DC United will be getting new local ownership soon. A local group that includes team president Kevin Payne is close to purchase the operating rights of the team from Anschutz Entertainment Group, according to the Washington Post. If the deal closes, that will reduce the number of teams run by AEG to four. The price is estimated to be $20 million which marks a significant increase in franchise value. United has been engaged in discussions for a new soccer specific stadium at Poplar Point in southeast Washington, near the site of the Nationals new stadium and it is expected that those talks will continue. Soccer specific stadia are the key to financial success in MLS. AEG has been seeking a new investor to run the San Jose Earthquakes, another of its teams, who might be relocating having difficulties with its existing stadium situation and unable to put together a deal for a soccer specific stadium.

In other MLS franchise news, San Antonio now appears to be out of the running for any franchise in 2006. Commissioner Don Garber said that the draft agreements the league received contained many terms directly contradictory to the Memorandum of Understanding that league and the city had entered into earlier in the year. Garber said the league would be pursue expansion with a list of other cities that included Toronto, Houston, Seattle, St. Louis, Rochester, Cleveland and others. Toronto has stadium issues of its own after the Argos of the CFL torpedoed a deal to build a stadium with York University that was intended to house a MLS expansion team. Houston has a track record of packing Reliant Stadium for soccer and is no doubt high on MLS' list.

Is There Light at the End of the NHL Lockout?

According to a story in today's Toronto Globe and Mail, the players and the owners have agreed on a formula for a salary cap, thereby clearing the biggest hurdle to ending the labor dispute. Apparently, it will be a team by team floor and cap tied to a percentage of revenue, with the introduction of a luxury tax if a team hits the mid-point after the first year. While some items remain to be worked out, if the revenue sharing formula has indeed been agreed to, then a final settlement can't be too far away.

There are contentious issues ahead but progress on this point, indicates that union head Bob Goodenow has been removed from the forefront of the negotiations. It probably also means that Commissioner Gary Bettman has as well. Rule changes should be hammered out to improve the flow of the game and reduce the goalie's advantage. Participation in the Olympics should be maintained. Finally, assistance for small market teams, especially in Canada needs to be found. All of this will be easier to do now that the major issue has been decided and that antagonistic principals have been removed from the scene.

More Details on the Bid for the NHL

According to a report in the New York Times, the Bain Capital bid to purchase the NHL contains an option to allow some owners to use a portion of the cash received in the sale to purchase equity in the single entity which would own the NHL after the sale. This option may well make the deal far more attractive to those owners who, for some inexplicable reason, want to remain actively involved in hockey.

ESPN Dumps the Football Coaches Poll

In somewhat of a surprise announcement, ESPN removed its name from the coaches poll used to help determine the teams eligible to play in the BCS championship game at the end of the college football season. This follows by several months the Associated Press decision to remove its poll from the BCS altogether. USA Today, a cosponsor of the coaches poll intends to continue its affiliation. While ESPN cited its discomfort with the coaches' decision not to disclose the votes each week, but only in the final poll, as a major factor in its decision, the move of the BCS games (other than the Rose Bowl) to Fox from ESPN's parent ABC might have had something to do with the decision.

Bidding for Nats Exceeds Expectations

The bidding for the Washington Nationals has come fast and furious. According to the TheDeal.com at least four of the seven bids received exceeded $400 million and the highest may have been close to $430 million. Before the bidding, Major League Baseball had been expecting bids between $350-400 million. The highest bid is reported to be from the group headed by Jonathan Ledeckey and including George Soros, as reported here. Interestingly, the report notes that many believe the bidding may not be over. MLB may cut the bidders to three and ask for another round of bids in an effort to move the price up towards $475 million. If so, the next round is likely to include the Ledeckey/Soros group, and a group headed by Fred Malek and containing Colin Powell. MLB bought the former Expos for $120 million several years ago before moving them to Washington this year. The value would be even higher but for a terrible financial deal on television rights made with Peter Angelos, the owner of the Orioles, to start a regional cable channel. Most of the value of the channel belongs to the Orioles but will be provided by the Nats.

Former Suitor Sues Turner, Time-Warner over Hawks Deal

Texas businessman David McDavid filed suit today in Fulton County Court, in Atlanta Georgia, against Turner Broadcasting and Time-Warner alleging breach of contract over the sale of the Atlanta Hawks and Thrashers. McDavid claims that they broke a binding agreement with him to sell the teams and shared confidential information about the deal with competing purchasers, including Ted Turner's son and son-in-law. According to the Atlanta Constitution the suit alleges fraud and misappropriation of trade secrets and documents the long and tortured course of the negotiations over the teams. If what is being alleged is true, McDavid has a decent case. Nevertheless, proving it will be another story.

Coaches' Strike Could Halt Fall Sports

If you thought every coach made high six or seven figure contracts and never had to worry about something like the cost of health insurance, welcome to Division II. In what is surely a unique situation, even in Division II, all of the coaches in Pennsylvania State Athletic Conference are members of the same union and could be going on strike this fall. The union is fighting to protect a modest salary increase, which they claim will be eaten up by the colleges' demand for an increase in the copay to be required for the coaches' health insurance. The coaches may approve a strike which would be scheduled to start in August. It will certainly be a far cry from the strikes by players making millions a year - the minimum salary for a head coach in this conference is $30,000 and for assistants is $25,000.

Olympics 2012 - NYC Non!!

The New York City bid to host the 2012 Olympics, as well as the Jets hope to build a new stadium on West Side of Manhattan were sent reeling today in a double whammy of bad news. First, not entirely unexpectedly, the International Olympic Committee evaluation commission report on the bidding cities heaped the most praise on Paris, with London close behind. While the report on New York was mostly positive, the commission expressed concern about the stadium. The report was a technical one and no one really knows what impact it will have on next month's voting.

However, what followed later this afternoon can't help New York's case. At a meeting of the state Public Authorities Control Board this afternoon, representatives of Assembly Speaker Sheldon Silver and Senate Majority Leader Joseph Bruno abstained from vote on approval of the stadium, which is tantamount to a no vote since the matter needs unanimous approval. Failure of the stadium to win approval leaves both the Olympic bid in doubt, as the Mayor has said that he has no alternate site, and the Jets new home in doubt. For more on today's events, please see the New York Times article here.

Endorsements Don't Always Follow the Money

In an interesting story, ESPN's Darren Rovell takes a look at Alex Rodriguez and the baseball market to answer the question of why baseball's highest paid, and arguably best, player isn't raking in endorsements after his move to the Yankees. The answer may have more to say about A-Rod than the market.

To continue in the marketing vein, the New York Times examines the endorsement potential of Indy racing sensation Danica Patrick. She combines beauty and uniqueness as the only major woman driver in her sport, but it remains to be seen if she will have staying power. It will be important for her to be competitive on the IRL circuit, even though it doesn't get much attention once the 500 is over.

USC Bans Beer at Games

It's a sad day for undergraduates in LA. The University of Southern California has announced that beer will no longer be sold at its home games. Now, how will anyone survive that incessantly annoying trumpet call?

Twins Stadium Deal Has Unique Twist - They Must Share

Now you know Twins owner Carl Pohlad is getting really desperate to get a new stadium deal done. He has agreed to a deal with a heretofore unthinkable concept: share profits from a sale with the public. The other owners in professional sports in North America must be ready to send the men in white coats to Minneapolis to grab Pohlad and put him away before he does further damage to their lucrative raiding of the public coffers. Who has ever heard of a team owner willing to share with the public the profits made on a sale of a sports franchise? If this trend catches on, we may witness a new day in stadium financing - stadiums that actually pay for themselves. What a concept!

SEC Rakes It In Again

The Southeastern Conference money machine rolls on. This year, the SEC will distribute to its members a record $110.7 million, up almost 2% over last year. That amount does not include bowl payments that participating schools retained, according to the Orlando Sentinel.

Portland: Waiting to Catch a Baseball Rebound Lover

From my cyber friend, Maury Brown at http://www.businessofbaseball.com/, comes this fascinating article from Portland Tribune providing an inside look at the strategy being adopted by Portland Oregon backers of the drive to get Major League Baseball to Portland. Having recognized that the losing bidders for previous teams usually wind up with the next several teams that get sold, Portland wisely would like to position itself to be the only viable alternative for an owner wishing to move a franchise. It will focus its marketing efforts on the six groups that lose the bidding for the purchase of the Washington Nationals feeling strongly that one of those groups will try and buy the Devil Rays, Marlins or A's and to consider moving them. To me, the most likely team to move is of course the Rays since they not only play in a mausoleum but before the number of fans worthy of the facility. That is only the tip of the franchise's problems and a change of ownership is desperately needed before they can begin to make a run to respectability. The article is a great look at the marketing of a city and worth your attention.

Israeli National Team Shows the Way to Peace

I know this is a blog about sports business but this post is about something far more important - the conflict in the Middle East. It seems an impossible dream, that Arabs and Israelis could ever coexist on the same small patch of ground. Yet, as in many things, it is sport that may be showing the way. Two of the largest and most popular stars on the Israeli national soccer team that takes on Ireland in World Cup qualifying tomorrow, are Israeli Arabs. They have the strong support of the Arab community and the perhaps grudging admiration of the team's Jewish supporters. For more on this inspiring story, see this article.

Bidding for Nats May Get Steep

At least 7 bids have been received by Major League Baseball for the Washington Nationals and it's now clear that the bidding will not go to the faint of heart or wallet. Today, a true financial heavy hitter has joined the race, as Geoerge Soros joined billionaire Jonathan Ledeckey's bid. Adding Soros' money behind an already financially pwoerful bid can only up the stakes and insure that MLB will clear more from the Nats sale than had been earlier imagined.

Romanowski Settles

Former Oakland Raider, Bill Romanowski settled his lawsuit with a former teammate by paying Marcus Williams $415,000, or $75,000 more than a jury awarded Williams in April. According to this article on law.com the $75,000 represents pain and suffering a the price Romanowski paid to get the whole matter over with so he could move on to his now budding movie career.

Hockey Update

In the latest news from the hockey world, ESPN to no one's surprise has declined to exercise its option to carry NHL games should there be a 2005-06 season. Having found success with substitute programming during the lockout season, ESPN was in no hurry to dish out $60 million to the NHL in rights fees, especially when the league had given NBC a revenue sharing deal. What other options the NHL has now are not clear and what that will bring in revenue certainly is open to question.

Word from Toronto is that a potential rival league with the backing of the players association, former New York Mayor Rudy Giuliani and a leading Canadian diplomat may be formed in the event the players and the NHL fail to reach an agreement on a new contract by summer's end. It's all about bargaining power and the whole scheme may be nothing more than an attempt to gain negotiating leverage. Nevertheless, a business plan is being circulated among investment bankers and apparently is being pitched to Fox for possible broadcast. Still, it has the smell of negotiations about it.