NCAA Report Urges Presidents to Seize Control

Yesterday, Myles Brand the president of the NCAA delivered a speech in Washington extolling the successes of collegiate athletics while he also released the report of a task force of 50 university presidents that addressed the future of intercollegiate athletics. In the vision of the task force, the future was not quite as rosy as Dr. Brand painted the present.

The goal of the reforms outlined by the task force were to focus on ways that athletic programs could become more fiscally responsible and transparent to avert a spending crisis in collegiate sports. Does that sound like everything is great? Didn't think so.

The report recommends that the NCAA require member institutions to report detailed financial data, including salaries and capital expenditures, as a condition of membership. The NCAA would then make available, what the task force called "dashboard indicators", or financial warning lights, to help presidents track financial trends and make better informed decisions.

In addition, the task force called for greater faculty involvement in the budgeting process for athletics, presidents provide better guidance to trustees about their role in athletics and several other "best practices". The problem is that these recommendations have been repeatedly made for decades and have never been implemented. There is absolutely no reason to expect that this year will be any different.

The financial reporting won't change anything. The NCAA refuses to exercise any authority to implement any true measures that will affect the arms race afflicting college athletics. Brand fails to see or take action on any real problems. He can't attack a salary issue while being paid the in the same ballpark as some of these coaches. It may take the House Ways and Means Committee to effect change and apparently that is what we can look forward to.

The Oddest NBA Fan

, You wouldn't never guess that this man would be a NBA fan but maybe this is an opening to settle the nuclear stand-off with North Korea. Instead of the six party talks, which don't seem to be going anywhere, maybe we should just send David Stern to Pyongyang to sit with the Dear Leader and talk. Perhaps the trade of direct beamed live satellite NBA games in Pyongyang for nuclear disarmament? A series of NBA games in Pyongyang for no distribution of nuclear arms to Iran and other terrorists? The possibilities are endless.

For all your NBA ticket needs, visit Alpha Tickets

BlogPoll Ballot

Here is this week's ballot. As always, I solicit your comments before I finalize it:

Rank	Team	Delta
1	Ohio State	--
2	Michigan	--
3	West Virginia	--
4	Louisville	2
5	Texas	2
6	Florida	2
7	Auburn	2
8	Tennessee	1
9	Southern Cal	5
10	California	1
11	Notre Dame	1
12	Arkansas	5
13	Rutgers	--
14	LSU	--
15	Boise State	--
16	Wake Forest	8
17	Boston College	1
18	Wisconsin	1
19	Georgia Tech	1
20	Texas A&M	1
21	Clemson	11
22	Oklahoma	4
23	Tulsa	2
24	Brigham Young	2
25	Virginia Tech	1

Dropped Out: Nebraska (#16), Oregon (#22), Missouri (#23).

Looking at the Baseball CBA

Baseball reached a new labor deal this week, more than a month ahead of the expiration of the existing deal. It is a landmark deal not in the particulars but in the fact that it was reached in advance of expiration and without a work stoppage. The ramifications of that fact alone will be positive for the next few years and will allow baseball to build on the last few seasons of expanding attendance and exploding revenues.

The details of the deal that have come out, so far, indicate that this collective bargaining agreement for the most part can be seen as little more than an extension of the previous pact. There is little new in the CBA other than an adjustment of dollars and years.

One area that many had hoped to see addressed was the use to which revenue sharing dollars is put by the receiving clubs. Under baseball's system, revenue sharing recipients are to receipts to improve on-field performance. In the past, this has not been closely monitored by MLB and no grievances have been filed. The players union has been justifiably upset that a number of clubs have received revenue sharing receipts that have totaled in excess of player payroll numbers in some years with no repercussions ( stand up Marlins, Rays, Pirates). The new CBA does have language that will allow the union to more easily file a grievance. In addition, the formula was adjusted to provide a single marginal rate for all clubs. Previously, clubs at the bottom of the revenue-making pyramid paid a higher rate than clubs at the top.

So, Bud Selig gets to add a five years of labor peace to his legacy as commissioner. Remarkable really for a commissioner who has been so blind to so many of the labor issues in his sport that he will have presided over an unprecedented era of labor peace in baseball. He is to be congratulated on achieving a CBA before the deadline and one for five years. That it may have skirted the fundamental revenue sharing issue to achieve it may prove problematic or may just mean that baseball in Florida is doomed.

Blogger

If you're viewing this in Internet Explorer and it displays incorrectly, blame Blogger. Apparently, Blogger is in the midst of upgrades and last night, it upgraded this blog. While doing so, it decided to display the right column at the bottom of the page and for that I apologize. I'll work on the fix when I get a chance but in the, meantime, if you want to see the blogroll, scroll down or better yet, get Firefox - you'll thank me later.

The Success of the Golf Channel

The success of the Golf Channel was totally unexpected by all of the experts who said no channel could succeed with such a narrow focus. No one was going to watch golf 24/7 and how where they going to find programming to fill all those hours. Now, ten years later, the success of the channel is a statement of the success of narrow long form programming on both cable and the web. In fact, that narrow focus on doing one thing and doing it well may be just the mantra for our age.

It is probably the single best lesson of the business world of the early 21st century. Focus on one thing, extend that one thing carefully, and doing it better than anyone else. When you do that, your customers will come. They certainly came for The Golf Channel. It now grosses over $100 million in advertising revenue, ranking fourth among cable sports channels behind ESPN, ESPN2 and FSN (collectively). If perhaps you were wondering where to watch a hockey game this year, the reason you can't find it, or haven't heard about it, Vs (the former OLN) the cable home of the NHL in a deal yet to demonstrate the wisdom of Gary Bettman, ranks 7th with revenue of $52.9 million.

Thanks to Paul Kedrosky for the article tip.

Football True American Pastime

Still think that baseball is America's pastime? Maybe this article from Brandweek will change your mind. It seems that the NFL's 21 corporate partners are prepared to pony up a cool $1 billion (that's with a "B") for marketing plans this season. While that's an impressive number by itself and a new record for the NFL, what makes it even more impressive is a comparison to Major League Baseball.

In a record year for MLB by any number of measures, MLB's 20 national sponsors spent a record $300 million behind baseball in 2006. That's $700 million less than football from only one less sponsor. If that doesn't tell you the relative place football holds in the national consciousness, well, I don't really need to add anything.

Blogpoll Ballot

Here is this week's Blogpoll ballot. Ignore the delta -it's a carryover from last week's computer glitch.

Rank	Team	Delta
1	Ohio State	25
2	Michigan	24
3	West Virginia	23
4	Southern Cal	22
5	Auburn	21
6	Louisville	20
7	Texas	19
8	Florida	18
9	Tennessee	17
10	Clemson	16
11	California	15
12	Notre Dame	14
13	Rutgers	13
14	LSU	12
15	Boise State	11
16	Nebraska	10
17	Arkansas	9
18	Boston College	8
19	Wisconsin	7
20	Georgia Tech	6
21	Texas A&M	5
22	Oregon	4
23	Missouri	3
24	Wake Forest	2
25	Tulsa	1

Dropped Out:

Carnival of the Capitalists/Blawg Review

This week's Carnival of the Capitalists is now up and hosted by the Blawg Review, demonstrating that at least some lawyers can be business people too. Get over there.

Baseball Labor Deal Imminent

It appears that a new labor deal is near for Major League Baseball and its Players Association, as both the Associated Press and the New York Times are reporting that a tentative five year deal has been reached and may be announced as soon as tomorrow night in St. Louis. Commissioner Bud Seling will be breaking his own rule about announcements of major significance during the World Series but this one is so positive and so significant, that I guess he won't see fit to levy a fine against himself.

No major changes are expected from the current deal except that draft choice compensation for lost free agents will be either reduced, according to Murray Chass of the Times, or eliminated, according to other media reports. Revenue sharing and the luxury tax will be relatively unchanged with the changes primarily dealing with numbers rather than approaches. That is, when does revenue sharing or the luxury tax kick in as opposed to the actual construct itself. This is probably why the negotiations concluded so quickly as it would have been the most contentious issue if either side decided to revisit the approach to the issue.

Performance enhancing drug testing will remain unchanged from the program recently put into effect. Since that program changed twice in the last two years and the current plan is only a few month old, that is not too surprising.

Baseball has been in a period of unsurpassed prosperity and that had to be a great incentive to complete negotiations. Total attendance this year was a record 76,043,902, an in crease of 1.5% over last year's previous record. Total MLB revenue was expected to be $5.2 billion, and the average player salary was $2.8 million, both records.

A further incentive was that the luxury tax would have ended this year without an extension of the collective bargaining agreement. The Yankees would have been thrilled but I doubt the other owners would have felt the same way.

Is the Starbury One as Good as the Competition?

In all of the hype surrounding the introduction of Stephon Marbury's $14.95 basketball shoe, the Starbury One, the big question has been is it really as good as the "high priced spread." Now, Marbury has vowed to wear it the entire season so obviously he believes that it is. For his sake, and for the sake of Steve & Barry's, the shoe's exclusive retail outlet, I hope that the shoe is as good as advertised. Here is a link to a discussion on NPR about the anticipated performance of the shoe. An expert cut it apart and compares it to a $200 shoe and finds it just about as good. Worth a listen. HT to True Hoop.

Will Dr. J Buy the Sixers?

Word out of Philadelphia is that legendary Sixer (and former Net great) Juluis Erving is putting together a group to purchase the Sixers, now that it has become apparent that the team is for sale. The asking price is said to be $450 million, which, as a frame of reference, would be the largest price in league history and about a mere $100 million more than the Grizzlies were valued in the current Brian Davis/Christian Laettner deal.

The difficult part from any potential buyer's standpoint is the lease at the Wachovia Center, which is also owned by Comcast-Spectraor, the team's owner. Supposedly, the arena is not to be included in any sale and the terms of any lease will be crucial to the economics of any sale, the viability of the team after the sale and the legitimacy of the asking price.

Let's hope that this rumor is true. I can't think of a better owner for the Sixers than Dr. J, who is both a Sixers legend and a well regarded businessman. He is a beloved figure in Philadelphia and around the NBA and would be a great ambassador for the team. He would certainly be a better face of the team than a couple of lawyers, who are said to be the other bidders. Just what the NBA, more lawyers.

Barca to Expand Nou Camp

According to Bloomberg.com, F.C. Barcelona has plans to expand its home stadium, the renowned Nou Camp to a seating capacity of 115,000, making it the third larger soccer stadium in the world, behind one in Pyongyang and one in Calcutta. The expansion is fueled by Barca's recent on-field success - it's the reigning European champion - as well as the rise in membership in the club, which now has 150,000 members. The club intends to use an increase i income from sponsors and media rights to pay for the expansion rather than an increase in ticket prices.

Baseball Sends LCS to Cable

In a decision that was foretold when Fox signed its contract with Major League Baseball several months ago, MLB has decided to send one of the League Championship Series each year to cable television. The surprise is that it is not ESPN, but former outcast TBS. Apparently, ESPN decided the price, at an estimated $350 million for seven years, was simply too high. Wouldn't Ted Turner be proud?

So, starting next season, Fox and TBS will alternate leagues in televising the LCS for the next seven years. The Division Series for both leagues will be on TBS and the World Series will be on Fox. ESPN will carry regular season games but will not carry any post-season games, except on ESPN Radio. No Division Series games will be on over the air broadcast TV, a reflection of their declining ratings. Now, if the yahoos in the Commissioner's office can just figure out how to schedule to avoid overlaps, then everything will be fine.

BlogPoll Ballot

Here's is my ballot for this week's BlogPoll. As always, let me know what you think . Ignore the delta column - there is an obvious technical glitch in the software this week.

Rank	Team	Delta
1	Ohio State	25
2	Michigan	24
3	West Virginia	23
4	Southern Cal	22
5	Louisville	21
6	Auburn	20
7	Texas	19
8	Tennessee	18
9	California	17
10	Florida	16
11	Notre Dame	15
12	Clemson	14
13	Oregon	13
14	Georgia Tech	12
15	LSU	11
16	Boise State	10
17	Rutgers	9
18	Nebraska	8
19	Arkansas	7
20	Boston College	6
21	Wisconsin	5
22	Pittsburgh	4
23	Texas A&M	3
24	Missouri	2
25	Wake Forest	1

Dropped Out:

Carnival of the Capitalists

This week's Carnival of the Capitalists, a continuation of the third anniversary celebration, is now up at Dispatches from Blogblivion. Get over there and check it out

CBS and HD

Yesterday afternoon I sat down to watch the Bengals (how they could lose to the Bucs is beyond me but that's not the reason for this post) and fully expected to enjoy another NFL game in high definition glory on my big screen. What I found however was a shrunken picture with two large vertical bars on either side. What gives CBS?

How in the world do you spend hundreds of millions of dollars for the premier television property in sports and then scrimp on a few bucks by not buying enough HD trucks to go around to cover every game? It's not like you don't know how many trucks you're going to need every week. And how in the world does the NFL let CBS get away with it? Every game on Fox is in high definition and there is certainly a difference in production values. I have a hard time stomaching Fox's endless promos, and their pregame and halftime show is unwatchable, but the game itself is wonderful in HD and CBS should go to school on their production. Not showing every game in HD is just cheap and really ought to be beneath the network. Commissioner Goodell, you should put a stop to this and soon.

Thank Heaven for 7-11

If you read this blog, then you know that professional sports find sponsors for some of the most unusual aspects of game productions, but I think the Chicago White Sox get the prize for the most creative sponsorship of the decade, and the decade is still not over. You see, the Sox, just one year removed from their World Series Championship but out of the playoffs, have managed to create a sponsorship literally out of nothing. In a great combination of branding and creativity, the White Sox have sold the start time of their night games. That's right, convenience store chain, 7-Eleven will pay the team $500,000 a year to change the first pitch of the team's evening game to, you guessed it 7:11 PM. You have to got to give the marketing office credit for creativity.

McMurry Responds to NCAA

If you have been reading this blog for any time at all then you are well acquainted with the NCAA's recent campaign to selectively rid the nation's colleges and universities of Native American mascots and nicknames, where those mascots and nicknames have limited commercial appeal or value. This policy has been rightly challenged as arbitrary and is currently the subject of litigation filed by the University of North Dakota.

What has been lost in all the uproar over the often incomprehensible application of the "hostile and abusive" standard adopted by the NCAA in its application to situations as such as the feathers in the William and Mary logo but not the any usage of Native American imagery at Utah, for instance, is the effect of the rule on smaller schools without the resources to fight the NCAA that their larger Division IA brethren possess. A case in point is little McMurry University, a 1400 student, Methodist affiliated, liberal arts school in Abilene, Texas, whose nickname since its founding in 1923 had been the Indians. When its NCAA appeal failed, the Board of Trustees and officers of the school decided that the best course to stay on the right side of the NCAA would be to go forward with no nickname or mascot.

So, this is what it has come to: McMurry, a religiously affiliated liberal arts institution has decided to stage its protest by refusing to give its athletic teams a nickname. It can't afford a protected fight with the NCAA because it doesn't have the resources. It just waits and hopes that UND will be successful and then maybe, just maybe, it will go back to life as before, when the bureaucrats in Indianapolis left it alone.

Cal Uses Slingbox to Show Game in Stadium

You know you must be near Silicon Valley when you see innovative uses of technology placed at the disposal of the athletic department. In this case, the newly found mania for California Golden Bear football needed to be met this week as the Bears took on Washington State in a game that, to the dismay of Cal fans, was not scheduled for television. Riding to the rescue was Cal alum and Bear fan, Jason Krikorian, co-founder of Slingbox Technology.

Cal is providing its fans with a live game experience in Memorial Stadium showing the Washington State scoreboard feed on the Memorial Stadium scoreboard. This will be accomplished by redirecting the Wazzoo feed via the Internet, using Slingbox technology and a computer connected to the Memorial Stadium video scoreboard. It's really a unique idea and the first time I've heard of a university trying to provide a game broadcast in this manner. It's a great service to their fans and, of course, a terrific ad for Slingbox. Way to go Bears.

Fast Company

My thanks to Fast Company for recognizing this blog in its current issue. I would link to the article but unfortunately it's password protected for subscribers and print purchasers only.

Light Postings

Sorry for the light postings this week but I've been away on personal business and without access to the dear old computer. I'm back and once I clear out my desk from real work......

Blogpoll Ballot

Here's my preliminary Blogpoll ballot for this week and as always it's subject to change based on your comments and how I feel before i press the final submit button on Wednesday morning.

Rank	Team	Delta
1	Ohio State	--
2	West Virginia	1
3	Florida	3
4	Michigan	1
5	Louisville	2
6	Southern Cal	2
7	Texas	1
8	Tennessee	4
9	California	4
10	Auburn	8
11	Notre Dame	3
12	Missouri	8
13	Clemson	6
14	Nebraska	4
15	Oregon	4
16	LSU	7
17	Georgia Tech	1
18	Georgia	8
19	Boise State	2
20	Arkansas	6
21	Rutgers	2
22	Iowa	1
23	Wisconsin	3
24	Virginia Tech	2
25	Oklahoma	10

Dropped Out: Florida State (#24), Wake Forest (#25).

ABC/ESPN Consider Saturrday Night Basketball

Buoyed by the ratings success of Saturday night college football, ABC/ESPN is considering continuing sports coverage for Saturday prime time once the college football season is over. According to Mediaweek, network executives are considering both NBA and college basketball for the time slot, although there are some hurdles involved for NBA coverage.

ABC would need to go back to the NBA to secure additional rights if it decides it would like to broadcast Saturday night games. David Stern indicates no talks have been held and regional networks might be upset at losing valuable prime time nights, but I don't think that would stand in the way of the NBA for long. No such issue should present itself for NCAA coverage, as there should be sufficient inventory in ESPN's conference rights packages. If the right match-ups were shown, there is no reason to believe that ratings would not follow. While they may not be up to the levels of college football, they should still be high enough to justify the move. It makes good sense for ABC and is a great way to drive a male audience to Saturday night.

Carnival of the Capitalists

The Third Anniversary edition of the Carnival of the Capitalists is now up at Business Pundit. Get over there!

Chargers Win in Poweder Blues

The San Diego Chargers celebrated their appearance on Sunday Night Football tonight by first breaking out the powder blue uniforms and then breaking the Steelers. We can only hope that the Chargers' brass will finally wise up, take a cue from the good luck of beating the Super Bowl champs, follow the lead of the two New Jersey teams and restore the traditional uniforms for good. It's past time to bring back the best looking uniform in professional football and if beating the Steelers on Sunday Night isn't a sign from above, well, I just don't know what is. C'mon Mr. Spanos, it's past time to make the switch - the nation's fans are waiting.

North Dakota Sues NCAA

Following through on a threat first issued several months ago, the University of North Dakota has filed suit against the NCAA over the use of its Fighting Sioux nickname and logo seen on the left. The suit, filed in Grand Forks District Court, in North Dakota, seeks an injunction prohibiting the NCAA from enforcing its ban on the nickname, along with unspecified money damages. The complaint alleges a breach of contract, breach of good faith and illegal restraint of trade, causing a violation of the North Dakota antitrust laws.

The North Dakota Attorney General's office filed the suit on behalf of the university, but the costs of the litigation are being paid by alumni association.

This case should be interesting to follow as UND has the NCAA in its home court, at least so far. Look for the NCAA to try to remove this to federal court. The NCAA did not follow it normal rule making procedure when it adopted the rules on Native American nicknames and mascots and may well be vulnerable to this attack. I would not be at all surprised to see the preliminary injunction issued and frankly wouldn't be surprised if UND is successful at least as to the first count of its complaint, based on the failure of the NCAA to follow its own procedures.

Penguins Sold Again

The Pittsburgh Penguins got another potential new owner and a big win last night as they opened play in what they hope will be one of their last seasons in the Mellon Arena. Jim Balsillie, Chairman and co-CEO of Research in Motion, the company which brought us the Blackberry, signed a purchase agreement to buy the Pens for about $175 million. He pledged repeatedly to keep the team in Pittsburgh in contrast to his earlier efforts to buy the team when he wanted to move them to Hamilton, Ontario. Balsillie has no partners in the purchase, which must be approved by the NHL Board of Governors.

Balsillie made no secret of the need to get a new arena built and pushed the team's deal with a casino company for arena funding. However, if that deal falls through, the plan for funding is less clear and what happens to the team if no arena is built is less clear. Balsillie would not comment on any move of the team to Hamilton if no arena is built.

He is clearly a man who has been raised on, and is in love with hockey. He is an excellent businessman and will be a good owner and welcome addition to the NHL. He will be good for the Penguins and is a man who can get the arena built if he is truly committed to Pittsburgh and there is no reason at this point not to take his word at face value. If the casino is awarded to the Isle of Capri, the Penguins' casino partner, the arena will be built at no cost to the team and the Pens will stay in Pittsburgh. They are building one of the most exciting young teams in the NH and, hopefully, this sale and the arena plans means the folks in the Steel City will get to enjoy it. If not, those in Hamilton will.

The NBA and Europe

There are several NBA teams in Europe at the moment holding exhibition games against Euroleague teams and conducting preseason practice. For the most part, it's an exercise in showing the flag - building goodwill for the NBA and USA basketball and trying to expand the fan base of the NBA in the European market. Depending on how each coach handles the trip, it can also be a fun and broadening experience for the players.

David Stern held a news conference with the head of the Euroleague the other day and discussed the prospects of the NBA in Europe. He disclosed that he had met with the head of Real Madrid and Vlade Divac to discuss the possibility of a European division of the NBA sometime soon. Stern discounted the possibility of that happening soon due to the lack of NBA ready arenas in Europe as the Euroleague plays in arenas that are too small by NBA standards.

What the American press failed to focus on was the remarks by Jordi Bertomeu, the head of the Euroleague, about his league and its future appeal. As Mark Cuban points out, Bertomeu basically threw down the gauntlet and told the press that it was only a matter of time before the Euroeague would be a viable alternative to, and not a feeder system for, the NBA. While it may never match the NBA dollar for dollar, it probably doesn't have to - it only has to get close as the lifestyle is more humane, with less travel, fewer practices and a better (less frequent and fewer overall) game schedule.

While Stern wants to continue to use the NBA's millions to build brand awareness worldwide, Bertomeu is content to use the NBA to build the brand and ride along the wave. He will let Stern build basketball fans and follow behind and capture those fans for his league with players that are familiar to the new fans. It's a great strategy and it's already starting to pay dividends. It was former Duke star Trajan Langdon who led CSKA Moscow to a 94-75 win over the Clippers last night.

Is this the NBA or the NCAA?

You have to wonder how much the NBA players care about their game. After the World Championships this summer, there was the usual talk about why the Europeans, the rest of the world for that matter, was catching up to the good old US of A and why their fundamentals were so much better than ours. Oh there were all the usual suspects rolled out... you know the drill: ESPN, the shoe companies summer camps, the AAU scene, the NBA's supposed emphasis on individual skills.

What no one talked about was the NBA restrictions on practice time. NBA teams have restrictions that are not all that different from college teams. Teams are allowed precisely three hours of court time daily. Now, we know why colleges have practice restrictions, to protect students study time, but the for the pros this is their job and they only have to be there three hours a day? OK, I know they have to be on the job more than the three hours on the court but you get my drift.

Anyway, I'm not the only one who thinks this is ridiculous. Mavs owner Mark Cuban apparently doesn't feel like forking over another $100,000 fine this early in the preseason so he only obliquely referred to this rule in his blog today. How are teams supposed to mesh new players in such limited time? How are players supposed to improve their fundamentals with direct coaching in such limited time? Why did the players association demand these rules in the last collective bargaining agreement - didn't the players care about getting better?

Note this line from the Star article - "Many Raptors spent September playing pick-up games on the Air Canada Centre 's practice court, but the coaching staff was barred from instructing during those workouts." Is this the NCAA? Is there are any other professional league in the world in any sport that has such restrictions in the off-season? What sense do they make?

Will NCAA Expand to Canada?

The University of British Columbia has formally approached the NCAA to determine exactly what would be required to be admitted as a Division I member, according to a report published in the student newspaper of York University. UBC is still waiting on a response from the NCAA and would be the first institution outside the United States to become a member if its application is successful. While it would require a substantial investment on the part of the university, it appears that should the NCAA be favorably disposed, the university is likely to pursue membership. With the Winter Olympics coming to Vancouver in 2010, facilities will not be an issue for UBC, which has apparently had some preliminary discussions with venue management already. Welcome aboard Thunderbirds, eh!

Congress Targets the NCAA

The Chair of the House Ways and Means Committee, the tax writing arm of the House of Representatives has taken direct aim at the tax exemption enjoyed by the NCAA and college athletics in general. In a letter sent to Myles Brand, President of the NCAA, Representative Bill Thomas R-CA, asked Brand to justify the association's tax exempt status in light of its lucrative contract to televise the men's basketball tournament as well as the activities conducted by member institutions.

Rep. Thomas points to multimillion dollar broadcast contracts, coaches' escalating salaries, the increase in corporate sponsorships and the facilities arms race and questions whether colleges and universities deserve to continue to receive tax exempt status for their athletic operations. One question posed by Rep. Thomas frames the issue rather succinctly:

"How does playing major college football or men's basketball in a highly commercialized, profit-seeking, entertainment environment further the educational purpose of your member institution?"

The NCAA should treat this letter seriously as Congress is concerned about the direction of major college athletics.

The likely next step in this drama is a series of House committee hearings on the state of major college athletics. Will they be entertaining? No doubt - it will be fun to watch Myles Brand squirm as he tries to justify his salary of some $850,000 and the ridiculous sums that coaches are being paid. Questions about the addition of the twelfth football game will be interesting.

Nevertheless, it will be all show and major change is unlikely without a new scandal erupting that goads Congress into action. Division I schools with big football and basketball programs have have too many friends in high places to truly be scared of real action out of Rep. Thomas. The wholesale loss of the exemption is unlikely but change at the margins is possible. Congress could remove the deductibility of sky boxes. force financial aid decisions out of the hands of coaches, and demand that admission decisions be free of athletic department influence.

In the end, how the NCAA and its members justify the high profile programs will be the key to just far the House is able to carry this campaign. Continuing to justify them by asserting that the football and basketball programs attract donors and potential students to the university doesn't really work for federal tax policy purposes, as neither of those reasons is truly related to accomplishment of the educational purpose of the university. Both of those are directly tied to the production of the income. That said, however, it will ultimately be as all things are in Washington, a political decision, and in those, the NCAA and its members, usually get their way.

Blogpoll Ballot

Here's is my blogpoll ballot for this week. Not a whole lot of movement at the top, as you will see (Tennessee was a technical error in the software last week - it accounts for last week only having 24 teams):

Rank	Team	Delta
1	Ohio State	--
2	Auburn	--
3	West Virginia	--
4	Southern Cal	--
5	Michigan	--
6	Florida	--
7	Louisville	--
8	Texas	--
9	Georgia	--
10	Oregon	3
11	Tennessee	15
12	Cal	6
13	Notre Dame	3
14	Oklahoma	--
15	Georgia Tech	8
16	Boise State	3
17	Nebraska	5
18	Clemson	1
19	Missouri	5
20	Iowa	8
21	Virginia Tech	10
22	Rutgers	1
23	Florida State	3
24	Wake Forest	2
25	Texas Tech	1

Dropped Out: Louisiana State (#10), TCU (#15).

Heisley to Sell Grizz

Michael Heisley has reached an agreement to sell his 70% share of the Memphis Grizzlies to a group led by former Duke basketball player Brian Davis, according to a report in the Memphis Commercial-Appeal. The remaining 30% of the team is owned by a group of local Memphis investors who have a 30 day period to match the offer made by Davis and buy Heisley's interest. The offer is reported to value the team at $350 million, considerably more than the local investors are reported to consider the team to be worth.

Heisley has clashed with local fans, corporate supporters, the University of Memphis ( a co-tenant at Fed-Ex Forum), and local government in recent years as the team has experienced dwindling attendance despite recent on court success. The club is rumored to be hemorrhaging money, generating an estimated loss of more than $40 million in the 2005-06 season despite making the playoffs.

The Davis group is said to be ready with a plan to embark on cost-cutting, including the elimination of the position of team president Jerry West. Given the tepid acceptance of the Grizzlies in Memphis, and the lease which locks the team in Memphis for another 8 years, it is hard to imagine what Davis and his group have in mind to win the support of fans by reducing expenses. Cost cutting generally leads to shedding team payroll, which would threaten the team's playoff run. That could only further decrease fan support and only exacerbate an already tenuous fan connection in a city that never fully accepted the team. This is not good news for Grizzlies fans - what few there are.

UPDATE: Christian Laettner, Davis' teammate at Duke and partner in Blue Devil Ventures LLC, a Durham NC based community development company focusing on downtown redevelopment projects, is a member of the group purchasing Heisley's interest. Laettner has expressed an interest in returning to playing in the NBA for the Grizz. Doubtful if that will be much help to the team's playoff hopes.

Carnival of the Capitalists

This week's Carnival of the Capitalists is now up at My 1st Million at 33. Get over there.

MLS to Sell Space on Jerseys

Major League Soccer will plow new ground for an American professional sports league next year as it has decided to break the once sacred advertising barrier of the front of the jersey. For its entire eleven year existence, MLS has placed its sponsors' names on the sleeves and on the backs of the jerseys. However, the front of the jerseys carried only the team name and logo. Now, that is about to change and starting with the 2007 season, MLS will allow its teams to sell the marketing rights to the front of the jersey, presumed to be the most valuable marketing space in any professional sport.

The MLS program allows individual clubs to sell their own jersey rights and keep a majority of the revenue, subject to a floor established by the league, and subject to approval by the league. This is a marked change for a league that is governed by the single entity concept, in which almost all business has been conducted by the league office and sponsorship revenue has been pooled.

So, is this the beginning of a trend in American professional sports or simply an anomaly chalked up to a league that is still on the fringe of American consciousness. Sale of jersey sponsorship is an accepted and highly lucrative practice in the rest of the world and is one of the leading revenue producers for the top soccer clubs in Europe. AIG is paying Manchester United almost $100 million over 4 years for the privilege of having its three letters prominently displayed on the Red Devils chest.

Mark Cuban and a couple of other NBA owners are on record as wanting to sell sponsorships and David Stern is willing to look at it. So far, baseball, still reeling from the reaction to the infamous Spiderman on the bases incident from a few years back seems the most gun shy. The NFL prominently displays the logo of its clothing manufacture and NFL Europe displays so many logos it resembles NASCAR. The use of logos in the NFL may not be that far off. I would expect the NBA to jump in first but I think we are still a few years away. Money will have to get tighter for one of the Big Three to take the leap and that's another reason I think the NBA may be first. It's the league that I think will be the first to see the money crunch that is coming and will see this revenue stream as the way out. Assuming that the fans accept the MLS move without a passing thought, as I'm sure they will, look for the NBA to explore this within the next 3-5 years.

Magic to Get New Arena in O-town

Orlando and Orange County officials have announced a deal to build a new downtown arena, performing arts center and renovate the Citrus Bowl, keeping the Magic in town. The arena is estimated to cost $480 million and the plans are to spend $175 million on the renovations and expansion of the Citrus Bowl, which will be losing one of its tenants, UCF which is moving to a new on campus stadium next season. The Citrus Bowl is the home of the Capital One and Champs Sports Bowls

The deal calls for the Magic to contribute $114 million to the overall cost of the new arena, including a $50 million cash contribution, upfront lease payments and operational support. The Magic will also guarantee $100 million in bonds to be issued to finance construction of the arena. That level of team contribution to a NBA arena is certainly on the low to middle end of current construction levels and should enable the Magic to substantially increase overall team profitability once the arena comes online.


NBA Commissioner David Stern had earlier pledged to the city that Orlando would get the NBA All Star Game once the new arena is built and that it would be placed in the regular rotation for the event as well. Officials from the SEC and ACC have indicated that the city would become an attractive site for conference basketball and gymnastics tournaments with a new arena

The Mouse Rings Off

Despite incessant promotion throughout the ESPN family of networks, Mobile ESPN never caught on with the general public. As a consequence, Bristol finally threw in the towel and announced this week that it would shut the service down at the end of the year. Even after investing $150 million in launching and promoting the service, generating an estimated $25 million in losses, ESPN could never establish a value proposition for the general sports fans. The market never progressed beyond gamblers and bookies who craved the in-depth information that was the key to the service. The casual sports fan was content to get scores through the regular cell phone service.

So, where did ESPN go wrong? After all, the WWLS had the marketing juggernaut that is the Disney empire to throw behind Disney Mobile. Was it the concept or the execution? Apparently, the folks in Bristol underestimated the difficulty in convincing people to change cellular phone subscriptions, especially when they couldn't promise or deliver better service, only more features. People only seem to switch cellular companies as a result of dissatisfaction with their current carriers or as a result of cheaper service plans. ESPN offered neither of these and, as a MVNO (mobile virtual network operator), that is, someone who leased space on an operator's network, ESPN was stuck with Sprint Nextel's service. There was simply no compelling value proposition being offered by ESPN and it was plain to see from the beginning that this project was doomed to failure.

The smart move was to offer this as a licensing service in the same manner as ESPN intends to move forward. This provides the existing cellular companies with additional content, something which they are all seeking and something which ESPN is good at and is known to deliver. It can be offered for a small additional fee to the consumer or as an advertiser driven product for free. Either way is likely to be far more attractive to the consumer than a $40 product which offered no discernible additional value. So, as we've learned, even the Mouse can screw up when it arrogantly assumes it can dominate a market on the strength of brand name alone, but while, expensive, it need not be fatal to its efforts in the cell phone space. It can retool and still remain a player - just in a different direction.

Update: Interesting take on this from Fast Company blog, similarly suggesting that ESPN forgot that it is all about creating destinations and it failed to create Mobile ESPN as a destination. Instead, without it being sufficiently distinctive in its own right, it became just another content delivery device and its customers already had one of those, only cheaper.