SportsBiz - The Business of Sports Illuminated: December 2005

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Thursday, December 29, 2005

 

Happy New Year

I'm going to be traveling for the next week and without internet access, so this will be the last post until around January 9. Enjoy the bowl games, especially the offensive display tomorrow in the Sun Bowl and the mythical national championship in the Grandaddy (my pick is USC, for what it's worth). Best wishes to you and your family and friends for a safe, happy and healthy new year. See you in 2006.

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Belated Holiday Presents for Football Fans

Trojan fans received an early new year's present today with the announcement that head football coach Pete Carroll had finalized a contract extension. While the neither USC nor Carroll would release details of the deal, you can be sure that he is being paid well into the millions and the contract will run for several years. Carroll had been mentioned prominently for several NFL openings and has chosen to the freedom to run his own show at USC, where he has complete control over every aspect of his program, from player selection (USC no longer recruits, they select) to the height of the grass in the Coliseum. No NFL team ever could offer him that degree of control because he would always be dealing with grown men making huge salaries, instead of college kids still responding to adult figures in their lives.

Across the country, Bengals' fans also got a present today as, shockingly, the team announced the signing of quarterback Carson Palmer, a USC grad by the way, to a contract extension that would keep him a Bengal through 2014. Sending a strong message to the team that for once management might actually want to build and maintain a winner, the Bengals actually took the offensive in approaching Palmer about signing him to a contract that could keep him a Bengal for his entire career. Hopefully, that means that other young stars, Chad Johnson among them, will now favorably consider staying in Cincinnati.

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Wednesday, December 28, 2005

 

America's Golden Girl?



Remember this face? Well, if you don't, fairly soon you won't be able to forget her. Coke will be making sure of that. You see, it will be an unprecedented marketing campaign, Coke has decided to make Michelle Kwan the face of the Winter Olympics. Why is that so unusual? Well, you see, for all of her success and fame and personality, Michelle has never won the seemingly single most necessary asset to have to be an Olympic marketer - an Olympic gold medal. In her previous Olympics, Kwan has finished second and third. Sure, she medaled, but she didn't win and in America's eyes that had always equaled failure. Never before had a major Olympic advertising campaign been built around an athlete who had failed to win Olympic gold.

Of course, this is Coke who can be build an advertising campaign around no names if they push enough money behind it. Still, it's a bit of a risk. After all, she could fall, break a leg, break someone else's leg - oh wait, that's already been tried. But that's exactly why Coke took the risk with Kwan, because the only risk was her failing to win the gold. She passed the personality and character things with flying colors. So, get used to that face. You're going to see a lot of it between now and the Olympics. If Michelle Kwan wins the gold, she may never leave your living room.

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Landmark Sugar Bowl

This year's Sugar Bowl is proving to be a landmark in more than ways than one. Not only is it the first time that the game has ever been played outside of the city of New Orleans, but it will markthe last year that Nokia will be the title sponsor. The mobile phone company is giving up it sponsorship following this year's game after a 12 year run. Fox, which takes over the broadcast of the BCS games other than the Rose Bowl next year,, will be in charge of finding a new sponsor.

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New Deal to Buy Blues?


A press release was issued yesterday by General Sports and Entertainment LLC, a company owned by former Detroit Pistons executive Andy Appleby announcing announcing that it had entered into a letter of intent to purchase the St. Louis Blues and the operating lease on the Savvis Center, the Blues home arena. There was no further comment from either Appleby or Blues owners Bill and Nancy Laurie. The Blues have been on the sale block for some time and this is the second letter of intent that the Lauries have executed.

Appleby owns a minor league baseball team and a minor league hockey team. He has never owned a major league franchise in any sport. With the sales history of the Blues and what little information is known about Appleby, it is hard to judge how optimistic to be about the chances for success of this sale or what the sale could mean for St. Louis or the team should it occur. Appleby has a successful background as a sports marketing executive with the Pistons and that is certainly something the Blues could use right now as fans are staying away in record numbers. At this point, however, all Blues fans can do is sit and wait to see if Appleby can pull off the sale and see what are his plans for the team.

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Tuesday, December 27, 2005

 

NBA Team Values - Winning Isn't the Key

Forbes released its annual survey of the value of NBA franchises and several things me when I was first looking over the list. The first is that winning has very little to do with where a club places on the list. Market size is far more of a factor than the quality of the team that takes the floor; otherwise how could you ever explain that the Knicks? How long has it been since the Knicks were anything but pathetic on the court?

Look at the next few names on the list and what do you see? First, you see another team whose winning days have been in the past, the soap opera formerly known as the Lakers. Then we have the always up and coming, but never really there, Rockets followed by the Bulls. Now, the Bulls were a decent fan story last year but hardly a true winner, and that followed several years of dismal teams after MJ retired. For true winners, we have to get to the next names on the list, the Mavs, Pistons, Suns and Heat.

So, what is it that drives market value? Like baseball, market value is driven in great part by not only size of market, but also the ability to craft a favorable regional television contract. That too is often, but not always, a function of market size. It is also a function of enlightened and savvy management, something with which many of the teams at the bottom of the list have not been blessed.

This list makes clear something else that is vital to NBA teams, but is often overlooked in discussions about NBA finance - ticket sales. One of the strong factors in the Knicks value is the ability to consistently sell out Madison Square Garden, which brings in $74 million in annual ticket revenue. One of the problems that teams in the bottom third of the list have is the inability to consistently sell out their games. While that may be due in great part to losing teams, that is only partly true. As we have seen, the Knicks certainly aren't winners and effective marketers will be able to sell tickets even to losing teams if they can make the experience enjoyable enough to entice families to want to come. Mavericks owner Mark Cuban has written extensively about the hard work his staff puts in year round into selling tickets. It takes an all-consuming effort to be successful. You can't just rely on the team's success to expect to draw fans to games. Do that, and in a few years your team will either be for sale or you'll be making noises about moving the team for lack of fan support.

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Saturday, December 24, 2005

 

Miami's University High Closing

The Miami high school that was the focus of a New York Times profile on schools giving easy grades to athletes to make them eligible for college athletic scholarships is closing at the end of 2005. The school and its owner are under investigation by the Florida officials including the Attorney General's office and the Miami-Dade State's Attorney.

Also yesterday, NCAA President Myles Brand announced the formation of a 17 member panel to study correspondence and other nontraditional routes to college in an attempt to set standards for athletic eligibility and scholarships. The panel will study four areas:
1. NCAA criteria and approval process for core courses
2. Time limits on core courses
3. Adequacy of core courses at prep schools
4. Requirements for reporting ACT and SAT scores to the NCAA

While I applaud the NCAA for finally taking the steps to examine these areas, I remain amazed that it took this long and the series in the New York Times to get there. Clearly, there has been ongoing academic fraud being perpetrated on a wholesale basis for years now. The NCAA has had such loose standards and oversight of the clearinghouse process that it effectively has been non-existent.

That any of the "graduates" of University High were admitted to major state universities, much less given scholarships and eligibility by the NCAA should be a major embarrassment for everyone involved, from the admissions officers to the coaches and the athletics offices. That the NCAA is finally acting is commendable. I wait with great anticipation to see what comes out of the committee's deliberations.

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Gator Bowl Ticket Sales


Earlier this week, Gator Bowl officials were complaining that Louisville was having difficulty selling out its allotment of tickets for the bowl game to be played in Alltel Stadium on January 2, 2006. "To be honest, the response from Louisville hasn't been what we expected, based on what they told us they thought they could do," Gator Bowl president Rick Catlett said.

As the week went on, the Gator Bowl officials may have cause to change their tune. Not only has Louisville sold out its original allotment, but it has requested an additional 1,000 tickets for the team's family and friends and now is estimated the total Louisville fans attending the game to be well in excess of 20,000. In fact, word from Jacksonville is that Virginia Tech has released some of the hotel rooms that they had originally been obligated by the Gator Bowl to reserve. So, Mr. Catlett, it appears that you owe the Cardinals and their fans an apology.

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Friday, December 23, 2005

 

What's a City's Name Worth?

What is the name of a city worth? Well, if your city is Anaheim, California, your name is worth at least nine figures according to your lawyers. In the city's ongoing lawsuit against the Angels, the City of Anaheim intends to ask for damages of in excess of $100 million in the event the Angels are found to have broken their lease. The damage estimate is based in part on the "hundreds of millions of impressions" lost through the term of the lease, which ran until 2029.

While the Angels contend that the city received its revenue sharing, I think the Angels have a good chance of making their claims stand up. If the court agrees, I believe that Angels owner, Arte Moreno, may well decide that changing the name back again is far cheaper and more beneficial in the long run than paying out damages to the City of Anaheim.

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Competition for the Bears?

As American cities contemplate bidding on the 2016 Summer Olympics, they are taking inventory of the existing assets in the city and determining what would have to be built in order to make a credible bid. First and foremost, for any American bid to succeed, a way has to be found for Cuba to participate in the World Baseball Classic. An appeal has been filed by Major League Baseball and the Players Association and Cuba has offered to donate any money it would have received to victims of Hurricane Katrina. If Cuba remains barred, IOC executives have indicated that the US will not host the Olympics again. How long the position will last, remains to be seen.

Assuming a way out this mess made by the Bush Administration amateurish handling of the permit issue is found, Chicago is one of the cities contemplating a bid for 2016 Olympics. Mayor Daley realizes that a new stadium is a necessity and has floated the possibility of constructing a new domed stadium near the campus of the University of Illinois Chicago, which could be used by UIC after the Olympics are done. The proposed tenant for this dome, you ask? No, not the Bears, since they play in a newly renovated Soldiers Field. A new NFL team is what Hizzoner, Jr. has in mind. Where is this team going to come from is not yet determined, as the NFL has made it clear that expansion is not on the agenda and the league would like the Saints to return to New Orleans.

Of course, as we have discussed here several times, if the Saints can't make it in New Orleans, their likely destination is not Chicago but Los Angeles. After all, Los Angeles is the primary relocation destination for any NFL team according to the Commissioner. However, if the Saints move there , then I suppose the next couple of teams with stadium problems could become prime candidates for Chicago, specifically the Vikings. The entrance price to Chicago that would have to be paid to the Bears I imagine would be huge and I don't really think Chicago is ready to support another team. The population is there, just not the desire. The Bears have the heart and soul of Chicago and did all the time the Cardinals were there. Daley needs to come up with another idea for the Olympics than a new NFL team for Chicago.

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Thursday, December 22, 2005

 

Merry Christmas George, Here's Your Bill!

The good feeling that the Yankees had over the signing of centerfielder Johnny Damon certainly wasn't allowed to last very long. No sooner was it announced that the boys in pinstripes had stolen away the Red Sox centerfielder, then the Commissioner's office presented the Yankees with a bill for this season's luxury tax payment, and it was no pocket change either. The Yankees were hit for a little over $34 million this year after paying over $25.9 million last year and just over $3 million in 2003. The Yankees probably drew some small degree of comfort in knowing that they were not the only ones making a payment. The archrival Red Sox received a bill for a bit over $4.1 million, up from over $3.1 million last year. They are the only two teams subject to the luxury tax this year.

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Wednesday, December 21, 2005

 

2005 Sports Blog Awards

The Red Reporter is conducting voting for the 2005 Sports Blog Awards. I am honored, well okay, grateful to have been nominated in the General category. It's you blog reader civic duty to get over there and vote - preferably for me and preferably more than once. I have no idea what I win but whatever it is, if it comes in the form of swag that I can share with you, dear readers, that's what I'll do. If it's just a button or something that goes on the blog along with the recognition, well, just think how happy you will have made me before the holidays and that should be worth something. I don't know what, but something.

UPDATE: I only discovered that I have been nominated in the category of best new sports blog. You can vote for me in that category here.

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Tuesday, December 20, 2005

 

ACC Bowl Lessons: Better Learn to Travel Well

In an interesting article from earlier this week, the Atlanta Journal Constitution explores the state of the ACC and its bowl partners in light of this year's destinations for ACC teams. You see, certain schools are none too happy about where they are spending the holidays. New member Boston College, the co-champion of the Atlantic Division is spending the holidays in the warmth of Boise Idaho preparing to take on Boise State on the Smurf Turf. It is probably making the Eagles wonder why they left the Big East.

Meanwhile, Georgia Tech who has beaten Auburn and Miami is heading for the Emerald Bowl in San Francisco to play Utah, as the last ACC team selected for a bowl. They were passed over for both the hometown Peach Bowl and the Music City Bowl in favor of teams that finished behind them in the conference. Music City chose Virginia because the officials believed that its proximity to Nashville would help ticket sales. Unfortunately, as of Monday only 4100 of its 10,000 tickets had been sold.

What all this proves yet again, is the entire bowl selection process is about television and ticket sales. Unless the conference contract with a bowl mandates a particular choice, or imposes selection criteria, then the bowls will continue to make selections based primarily on their own self-interest, just as they should. The bowls must make a decent return to stay in business. If the conferences want the money to continue to flow then they must work together with the bowls to achieve a workable solution for both parties.

As Boston College Athletic Director Gene DeFillipo said, "It's got to be about more than who can sell the most tickets. If it's just about travel and geography, then we are at a real disadvantage." Right, Gene, you should have thought about that before you left a georgraphically compatible conference for one you don't belong in.

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Monday, December 19, 2005

 

Monday Night Football

So, tonight's, ahem, game features the Packers against the Ravens. The only people excited about this game live in Green Bay and you have to wonder how excited the Cheeseheads are at this point in the season. Although this is the next to last Monday night game ever to be broadcast by ABC, you have to wonder if even Al and Big John care about it. This game is exactly why the new contract with NBC for Sunday night includes a feature allowing the network to choose games after the first seven weeks of the season, so they won't be locked into dogs like this one from day one. Although the schedule makers should have been able to see this one coming from August, or maybe even June.

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Williams Given New Contract at Maryland

Gary Williams got a nice contract boost today as the University of Maryland assured itself of his services though 2013. His base salary is a cool $1.6 million, which rises to $2.3 this season if his bonuses for academic and athletic performances are met.

Williams' contract will be extended by one year (past May, 2009) when Maryland is selected for the NCAA Tournament and either the team achieves the annual NCAA Academic Progress Rate (APR) cut score or the scholarship student-athletes on the basketball team earn an average of 27 academic credits per year.

His bonuses are tied to graduation rates and regular season ACC performance, according to the Maryland website.

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Sunday, December 18, 2005

 

Just How Good a Deal Did MLB Get in Washington?

A very interesting article in this mornings Washington Post points out just how successful Major League Baseball was in negotiating the return of baseball to the nation's capital. The stadium deal negotiated by MLB is virtually unprecedented in modern times for the low contribution being made by the team. The amount of public subsidy is not only open-ended, as the team is not responsible for cost overruns, but unusually large on the front end.


These days, team contributions in the neighborhood of one-third and more of the construction costs of new stadia are common. For the Nationals, depending on whether you count the rent the Nats will be paying, their share of the costs come to between 3 and 12 percent, assuming no cost overruns and without taking into account infrastructure improvements. That minimal contribution is a staggeringly sweet deal for MLB, as it should result in a significantly higher purchase price for the Nationals once Selig ever decides who the buyer will be.

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Saturday, December 17, 2005

 

Bowl Sponsorships

The value of bowl title sponsorships rose to an all time high of $44 million this year. In part, that is because of the addition of the new Poinsettia Bowl in San Diego, sponsored by the San Diego Credit Union and the new sponsorship of the Meineke Car Care Bowl in Charlotee, formerly the Continental Tire Bowl. The amount will increase significantly next year when the Peach Bowl becomes the Chick-fil-A Bowl due to a new and lucrative sponsorship contract.
Not including in the calculations is the presenting sponsorship that Citicorp provides for the Rose Bowl. At this time, only one other bowl, the Motor City Bowl, doesn't sell title sponsorships, due to its relationships with the major auto manufacturers.

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Friday, December 16, 2005

 

Will Pro Sports Return to New Orleans (cont.)?

The continuing saga of the Saints and the Hornets had new chapters being written this week as the soon to be retiring Deputy NBA Commissioner Russ Granik was in New Orleans to turn the Arena and get a feel for the feasibility of the Hornets playing any games there this year, but more importantly returning to their home next year. While Granik was noncommittal after the tour, New Orleans officials assured him that the Arena could be made ready for the Hornets to play in by March. The more difficult question remains whether the town would actually be ready to support a major professional sports franchise by this time next year, much less by July, when the team's option to return to Oklahoma City must be exercised.

On the NFL front, it appears that Paul Tagliabue may be on the verge of sending the Saints back home for next year, at least if you believe the tea readers in New Orleans. If that is true, then Tags should be congratulated by one and all for doing the right thing by the players and the city they've called home. The players need to be in one place for an entire season. The practice facility has sustained little damage and will be ready for use next season. If the Superdome is not ready, then the Saints can play their games in Baton Rouge, a short bus ride away. It makes far more sense than to let Tom Benson steal away to San Antonio when the league doesn't want the team there in the long run anyway.

On a bright note to end this visit to the Big Easy, on Sunday afternoon in beautiful Fogelman Arena, the first collegiate or professional athletic game to be played in New Orleans since Katrina will take place when the Tulane women's basketball team takes on Central Connecticut State. For all of you in New Orleans, come out to Fogelman and cheer on the Wave. Admission is free to celebrate the Wave's return to campus. I know the kids are glad to be home.

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Earthquake Move to Houston Official

MLS dropped the other shoe yesterday making the official announcement that San Jose Earthquakes would be moving to Houston effective immediately. While the move comes as no surprise, one aspect of the announcement gave fans in San Jose hope for the future. In a move reminiscent of the Cleveland Browns/Baltimore Ravens relocation, the MLS office retained the colors, logo and nickname of the Quakes with the express intention of returning them to San Jose as early as 2007. In fact, in the league announcement of the move MLS also announced a letter of intent has been signed with the city of San Jose to bring an expansion team to San Jose.

While the team has moved to Houston, it has no place to play and no plans in place for a new stadium. It is likely to play in the University of Houston's Robertson Stadium for the next 2 to 3 years while their new soccer specific stadium is being built at a location yet to be determined. The irony is that the team formerly known as the Quakes are now playing in a college stadium with no plans in place for a soccer stadium. Where have we seen this script before?

Meanwhile, back in San Jose, city officials indicated a willingness to spend as much as $80 million on a new stadium to house the expansion team that may be coming. Unfortunately, that commitment was not made about two weeks ago when the team was still there and they wouldn't have had to worry about an expansion team. Maybe it's an indication of how solid the offer should be perceived.

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Thursday, December 15, 2005

 

2005 Sports Blog Awards

The Red Reporter is presenting the 2005 Sports Blog Awards so get yourself over there and nominate your favorite blogs in the all of the different categories and don't forget the lessons of my political mentor, the late great mayor of Chicago, "Vote early and vote often." I appreciate your support.

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Cuba Banned from World Baseball Classic


The US government decided that the amazingly ineffective over 50 year old ban on trade with Castro led Cuba was more important than letting the Cuban baseball team participate in the new World Cup of Baseball. Now, you and I know that this World Cup is mostly just another idea of the suits in Major League Baseball to raise money, but this time they have actually hit upon something that could turn into a good thing. However, that will only happen if the players want to play and most of the baseball playing countries of the world participate.

After a brief dustup in the birthing process, Japan signed up and it looked like all the major countries were in the mix. Then the Bush Administration stepped in and decided to play politics with baseball. Everybody and their brother knows that this embargo, which has been around since the Kennedy administration, has failed miserably in its stated aim of ridding the world of Castro. Worse, it has made the US look like a fool for being the only country in the world that still abides by it. Now, for the first time, W. wants to apply it to an international sporting event. Let's hope that common sense and the combined efforts of the MLB officials and leaders of the MLB Players Association who, miracles of miracles, are appealing this ruling together, will be successful. While Cuba wouldn't be the favorite for the title, it wouldn't be the same without them.

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NBA's Most Popular Jersey

Who would you guess wears the NBA's best selling jersey? My first guess was Lebron and it was wrong. It was close - he comes in third. It wasn't Shaq. He was on the list and high up too at number 6. It wasn't Kobe. After sales tailed off a bit because of his "court problems", Kobe came in a strong number five. No, number one on the list was a new face in town. It was the Miami Heat fashion model and scoring guard Dwyane "Flash" Wade. Led by sales of Wade and Shaq, the Heat jerseys led team sales for the first time too. Not much I can add to this, I just thought it was interesting to see Wade's increasing and well deserved popularity.

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Wednesday, December 14, 2005

 

Penguins Update

There was an interesting article in the Kansas City Star about the pursuit by a group in Kansas City of the Penguins with the idea of relocating them to Kansas City to play in the Sprint Center when it opens in 2007. The article makes several interesting points about Kansas City geography that would be favorably received in the Commissioner's office, I would imagine, in the event that Mario Lemeiux is unable to work out a deal. One point which is particularly intriguing, given the NHL's new unbalanced and heavily division oriented schedule, is the idea that Detroit would move to the Eastern Conference should Kansas City come into the league. That would certainly make for some interesting match-ups in a reconfigured Northeast Division.

Hamilton, Ontario has also put its hat in the ring, according to this story from the Toronto Star. However, Hamilton has longer odds to overcome than most cities that may bid for the Pens. Not only must it overcome Commissioner Bettman's everpresent desire to maintain a national American presence at all costs, but Hamiltion is within the territorial rights of both the Toronto Maple Leafs and the Buffalo Sabres, so any move into Hamilton would involve buying off both clubs at a not inconsiderable sum, I'm sure.

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Are the Quakes on the Move?


Before I get to the possible new home for the San Jose Earthquakes, I want to first thank everyone for their advice about a new computer. Although I was sorely tempted to hold out for a new Apple with an Intel chip due (it's rumored) in February, I really couldn't wait that long. So, I broke down, rushed off to the local Best Buy and scooped up a HP laptop that weighs all of about 5 1/2 pounds, a feature that was very important to me. It has far more features than I expected to get for the price and so far I'm very satisfied. More to come on the machine at a later date for those of you who may be in the market.

On to the Quakes. In a not entirely surprising development, the Quakes hope for a new stadium crashed this week and with it may have gone the chances of a sale to the group that owns the Sharks and the likelihood the Quakes will remain in San Jose. AEG, the owner of the Quakes had given the city a deadline to firm up plans for a new stadium or would start entertaining offers to sell the club to groups interested in moving it out of town, most likely to Houston. Since it is now unlikely that the city will pull a stadium out of Santa's bag, look for the Quakes to be playing next season in Reliant Stadium while their new Houston home is under construction.

In other MLS news, Kansas City soccer fans got a one year reprieve as Lamar Hunt announced that the Wizards would stay put for another year despite the total lack of movement on a new stadium for the team. There has been interest from a local group in being the club, but without a stadium deal, Hunt won't sell. With this announcement, local officials now have another 10 months in which to put a deal together while the Wizards have the misfortune of playing another season in a mostly empty Arrowhead Stadium. By the way, Hunt's Chiefs only have about 7 more years on their Arrowhead lease, so their fans better hope that Kansas City officials get their act together on a football stadium, which they've shown no evidence of doing so far.

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NBA and Euroleague Team Up

The NBA and the Euroleague today announced their most ambitious partnership slate of exhibition games yet for next year's preseason. Four NBA teams, the Spurs, Clippers, 76ers and Suns will conduct one week training camps in European cities as well as play games against Euroleague teams while there. At the conclusion, the Spurs and 76ers will join the 05-06 Euroleague champion and runner-up for a tournament in Cologne, Germany. The entire affair is being sponsored (as you knew it would it be, this is the NBA after all) by EA Sports. Personally, while this is nice and all, I'm still waiting for my cable company to pick up the Euroleague game of the week so I can finally see Maccabi Tel Aviv play on a regular basis. It sure beats the Raptors.

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Braves for Sale




Now that Time Warner has take AOL off the market, it has to find a new one way to appease corporate raider Carl Icahn. Apparently, one asset it is looking into selling is the Turner South cable network and its primary source of programming, the Atlanta Braves. Time Warner has acknowledged internally that the Braves and Turner South are for sale. One possible buyer is Arthur Blank, one of the founders of Home Depot and the owner of the Atlanta Falcons. He acknowledged an interest in the Braves. Another possibility is former Brave president Stan Kasten, who is involved in one of the groups bidding on the Nationals. If his group is unsuccessful in Washington, he could be back in the hunt in Atlanta.

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Monday, December 12, 2005

 

Penguins Likely to Move in '07


The Pittsburgh Penguins lease in Mellon Arena expires in 2007 and it is likely that the team will be relocating at that time, accordingto team president and living legend Mario Lemieux. The Pens are projecting a $7 million loss this season but that is predicated on sell-out crowds and the team making the second round of the playoffs. Anything short of that only increases the loss. While the Penguins have applied for a license to operate a slots parlor as a means to fund a new arena, even if it is granted the only license for Pittsburgh, the new arena wouldn't be built for another three to four years. It's not known if the Penguins ownership could afford to bear losses while waiting that long. Groups in both Kansas City, with the newly constructed Sprint Center, and in Houston have expressed interest in the Penguins relocating there.

It would be unfortunate to see the Penguins move, but it is perhaps inevitable given their arena situation. I think it is unlikely that the city and county will put up sufficient funds to build a new arena without tapping into the slots money, but there is no guarantee that the Penguins will be awarded the license. If the license is awarded to another applicant, the likelihood is slim that slots revenue can be used for arena funding. The timing is difficult under any circumstances and with only six months before the Penguins can begin looking for a new home, I think Pittsburgh should begin getting used to the idea of winters without hockey.

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Saturday, December 10, 2005

 

Posting May be Infrequent

My laptop has gone off to join the laptops in the sky and as a result the frequency of my posting will be, well, almost non-existent for a while. I have to shop for a new one and would appreciate any advice, suggestions or ideas that any of you dear readers have. I would like to get something that is lightweight - around 5 1/2 pounds or so, with at least a 14" screen and a full keyboard. I've been looking at models with both AMD and Centrino chips and would appreciate any advice about the downsides of one v. the other. Anyway, tomorrow being Sunday and the big ad circular day, I suspect that I will be shopping.

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Thursday, December 08, 2005

 

So Who is the Big Winner of Bowl Season?

Now that we know who is going where, just who is the big winner of the college bowl season? The first and most obvious answer to that question is the winner of the Rose Bowl. After all, the winner gets to take home the crystal football, symbolic of supremacy in college football for the year. If that turns out to be USC, the Trojans will have secured their place in history in a precedent setting three-peat,(in the process paying royalties on that term to former LA resident Pat Riley.) On the other hand, if it's Texas, then the Horns will have restored the UT program to heights not seen since the days of Richard Nixon and in the process halted the Trojans bid for history. Yes, the big winner is Pasadena, but this blog is about sports business and so we're going to look at who the money winners of the bowl season are and the answers there are a little different.

As we know, the Big Six BCS conferences control the college football bowl process and manipulate it to fill their coffers, so it's no surprise that the big winners all come from their ranks, with one exception. The biggest winner of all is Notre Dame. In its last season of eligibility for a full BCS share of $18.3 million, the Irish make it to the Fiesta Bowl. Starting next season, the Irish will only get an at-large of $4.5 million when it makes a BCS game, but this year it gets a full share and doesn't have to split it with any conference colleagues.

When we turn out attention to conferences, the one at the top this year is the Big Ten. Aided by the resurrection of Penn State and the selection of Ohio State as an at-large BCS team, the Big Ten is projected to earn a record $35 million this season, averaging a little more than $3 million per school. In addition to the two BCS schools, the Big Ten sent 6 other schools to bowl games, failing to fill one of its affiliated bowls - the Motor City Bowl. The Big Ten distributes bowl equally among member schools after giving the participating school an allowance for expenses. The usual leader in conference bowl revenue is the SEC, but this year the SEC comes in tsecond with $32.55, failing to fill one of its bowl slots. The Big XII is projected to earn about the same as last year at $25 million and the Pac-10 is projected to be down a bit at $19.9, after earning $21 million last year. The Big East should earn about $21.1 million this year, down from last year, when the league had a different configuration.

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Wednesday, December 07, 2005

 

March Madness to Be Streamed Online Free

The first fallout of the purchase of CSTV by CBS is a pleasant one for college basketball fans as the two announced this week that all games of the NCAA men's basketball tournament will be streamed live online again this year via CSTV's website. The major difference from last year is that access to the streaming will be advertiser supporter and free to the viewer. The game being shown on your local CBS station will not be available online but all other games then being played will be. The nation's March productivity numbers should see a drop this year.

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Monday, December 05, 2005

 

ESPN and NASCAR Update

For any of you who might be shareholders in Disney, you can take comfort in knowing that ESPN has not overpaid by too much for the NASCAR rights, at least according to ESPN President George Bodenheimer, the Business Week cover boy. He told an analyst conference today that the NASCAR deal won't impact his projection for "double digit" profit growth, which is good news indeed to Disney shareholders, as ESPN was one of the major contributors to Disney's overall profit.

Bodenheimer also indicated that the worldwide leader is not surprisingly looking at the video iPod as yet another distribution channel - if you work for ESPN the first lesson you learn is there are never enough distribution channels. The new ESPN cell phone service is scheduled for a February debut so you will never be out of touch with Stuart Scott's poetry jam. Scary thought isn't it?

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Sunday, December 04, 2005

 

Yankees Sea of Red Ink

What do you get when you combine more than 4,000,000 fans, a regional cable network generating income of at least $100,000,000 and a payroll of in excess of $200,000,000? Well, if you're the New York Yankees, you get an operating loss, according to the New York Daily News, of somewhere between $50 and $85 million. And that's only for starters. If Major League Baseball decides that the Yankees have been undervaluing the rights fee being paid by the partly owned YES Network, MLB may require the Yankees to contribute additional revenue to the other clubs for the revenue-sharing fund.

Baseball finances are a bit complicated of course and it's not at all clear that just because the Yankees show that big a loss, on paper, that it actually translates into actual losses for the owners. There is the matter of the ownership of YES and its profits to consider. Nevertheless, revenue sharing has begun to have the desired effect and the $75 million in revenue sharing payments and $33 million in luxury tax that the Yankees paid last year has clearly cooled their free agent activity somewhat. They were not as active last year and so far have not been terribly active. Selig has gotten exactly what he designed as far as the Yankees are concerned.

However, the end of this period of inactivity may be in sight. For one, if no new collective bargaining agreement is reached before the end of next year and the old deal is extended, the luxury tax goes away. That frees up $33 million for 2007. Long term, there is new Yankee Stadium on the horizon which not only shelters revenue as the team deducts debt service from revenue sharing, but it will open vast new revenue streams from luxury boxes and club seats to new concessions and sponsors.

The rest of baseball should enjoy these losses while they can. Don't expect the Yankees to show restraint for long.

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Under Armour Pushes Into Uniforms




Performance apparel maker Under Armour continues its push into the collegiate uniform market, with its recent announcement of a deal with Auburn to outfit all of the Tigers teams for a five year, $10.6 million deal. The deal ends Auburn's 50 year relationship with Russell. Auburn is the second university to make a deal with the company, following the hometown University of Maryland Terrapins, who are the thinly disguised Under Armour team seen in its television commercials.

Auburn will receive $3.7 million in cash, but Auburn officials believe that the marketing opportunities with the brash young company are the true appeal.

"You sit at an Auburn junior high game, and those football players in the eighth grade come onto the field (mimicking) the Under Armour commercial," Jacobs (Auburn's Athletic Director) said. "Those are our future recruits. What they're doing nationally is going to be a great story to tie us with them to get that national exposure. From that standpoint, it's invaluable."



So, I guess from now on "you must protect this house" now refers to Jordan-Hare Stadium.

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Saturday, December 03, 2005

 

Reaction to the NY Times Article on Diploma Mill

It has been a week since the New York Times first published a storydocumenting the use of a particular diploma mill in Miami by various student athletes to become eligible to attend Division I schools and play football and basketball there. I first wrote about that story here. I think now is a good time to check in and see what has transpired since that article was published.

Reaction has actually been surprisingly swift. Myles Brand, President of the NCAA, has said that he would form a panel to review the use of correspondence courses and other "nontraditional" programs to meet academic standards. Brand was acting partly in response to a letter from SEC Commissioner Mike Slive, several of whose member schools had admitted students from University High, the subject of the Times article.

In Florida developments, both the Florida High School Athletic Association and the Florida Attorney General announced investigations into University High and its owner. The FHSAA also began investigating allegations of inducement of students to transfer schools.

So, where do we now find ourselves? The NCAA has announced yet another panel to look into closing a loophole which should probably have never been there in the first place. They should be applauded for acting quickly but why were no red flags thrown up at the clearinghouse when these transcripts showed up? Isn't that why there is a clearinghouse? The panel should take a look not just at closing this loophole but at the internal process that allowed these kids to slip through the eligibility approval gauntlet.

Schools need to review their internal admissions process as it applies to athletes and determine if different standards are being applied. How did 11 universities admit students who passed to take one example from the story, had a grade point average below 2.0 and then miraculously in one semester, took geometry, trigonometry and precalculus receiving A's and B's in all three. That alone should have triggered a close examination of his transcript and test scores by admission offices and a review of the school.

The NCAA and the colleges and universities involved should be commended for a quick response yet have much to answer for when they look at themselves in the mirror. Diploma mills are allowed to flourish and prey on unsuspecting and naive young men only when allowed to do so by adults in charge that look the other way and do nothing to stop them. Doing nothing only encourages the activity. It is incumbent on those with the power to put them out of business to act quickly for the sake of the students in whose interest they are supposed to be working.

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Friday, December 02, 2005

 

Stevens Retires




Congratulations and best wishes for a great retirement to the Hall of Fame jockey Gary Stevens who has decided to follow on of his favorite mounts, Rock Hard Ten, and call it quits. Stevens, winner of more than 5,000 races, won 3 Kentucky Derbies, # Belmonts and 2 Preaknesses. Those of you who don't follow horse racing may remember him for his great acting stint as George Woolf in the movie Seabiscuit. We'll miss you Gary, good luck. Enjoy yourself.

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Thursday, December 01, 2005

 

Nascar Signs TV Deals for Fall Season

NASCAR has signed separate television deals with ABC/ESPN and TNT for eight years each, covering the second half of the season, including the Chase for the Cup, according to a story in today's MediaWeek online. The ABC/ESPN deal will bring $270 million per year, while the TNT deal is worth $80 million. Apparently, NASCAR is holding the official announcement until conclusion of its negotiations with Fox for the first half of the season.

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