Strange Court Theories

We all know that lawyers can be creative, which can be both positive for their clients and sometimes negative for society. There has been no shortage of shall we say unique theories offered lately in courtrooms around the country. In cases involving sports, we have seen a judge in Kentucky hand down an opinion that there is no college football team in the country worse than the Duke Blue Devils.

In Seattle, the City's suit against the Sonics to enforce its lease with the team for the Key Center is now in the hands of the judge. There is little about this trial that has been, ah, traditional, other than the Sonics argument that money would be an appropriate remedy for terminating the lease two years early and moving the team to Oklahoma City. The trial took a bizarre turn on Friday with the revelation of an email from former Senator Slade Gorton, now a member of the law firm representing the City as trial counsel, who was working with a group of local executives including Microsoft CEO Steve Ballmer who had an interest in buying the team if Clay Bennett could be forced to sell it. The conflict of interest revealed on the trial's last day shortly before closing arguments deeply embarrassed the city and its law firm and royally ticked off the judge. How it plays out in the final judgement remains to be seen, but it can't be good for the home team.

The most unique theory I have encountered lately comes to us from Pensacola, Florida and while it's not sports related, it's just too good not to pass it share it with you. An enterprising and creative defense attorney in Pensacola is using Google search data to show jurors that what their neighbors have been searching for in sexual subjects is broader than they might have suspected to demonstrate that the community standards as applied to obscenity should be far broader than alleged by the prosecution. The defense is so novel, in fact, that a questions remains as to whether the judge will allow the evidence to be admitted as evidence. It was presented in a deposition and the prosecution has yet to determine if it would object to its admission.

The search data used in the Pensacola case poses the interesting question: What city's residents are most interested in looking up porn on the Internet? The unexpected answer and dubious honor being awarded to my hometown - the top ten list:

The 10 American Cities Most Likely To Search For Obscene Material

1. Louisville, KY
   
2. Rochester, NY
3. Philadelphia, PA
4. Newark, NJ
5. Los Angeles, CA
6. Irvine, CA
7. Pittsburgh, PA
8. Las Vegas, NV
9. Albany, NY
10. Orlando, FL

I don't know what to make of a list in which Louisville leads LA and Vegas, not to mention the conservative, right wing hot spot of Irvine. It's a list that doesn't lend itself to any easy analysis so just take as it is - Louisville gets to claim the title as the nation's most obscene city.

As the NHL Turns

In the latest installment of the continuing soap opera that is the relationship between Jimmy Dolan and Gary Bettman, the NHL has significantly upped the ante in the antitrust suit filed by Madison Square Garden and the Rangers against the NHL. In a counter-claim filed last week, the NHL seeks the approval of the Court to strip Madison Square Garden of the Rangers, asking the Court to approve internal league disciplinary measures that would lead to a forced sale of the Rangers.

The NHL contends that the Garden has violated several league rules to which it consented as a prerequisite for franchise ownership - including one that prohibits member clubs from taking the league to court, as MSG has done three times since last September. In an announcement of the filing the league also indicated that it would be seeking compensatory damages, which would undoubtedly include at least its legal fees since the MSG began the suit last year.

What's a little litigation between loved ones? The earlier the league can find a buyer for the Rangers and get MSG out of its hair the better. The problem is even if they can find a buyer, where will the team play, if not the Garden? If it is the Garden, then do you want a pissed off Dolan as your landlord? I don't know which is worse, an incompetent Dolan as owner, or a pissed off Dolan as landlord doing what he can to wreck your tenant. It's not a great position to find yourself but I'm sure that Bettman will find a way to make it worse - he usually does.

NFL Network and ESPN in Talks

In the same week in which Comcast conquered the Big Ten, it appears that it is claiming another trophy, only this one is much bigger by far. In a recognition that the premier professional sports league in the world has been unable to force its way onto cable systems in the US, the NFL Network is currently in talks with ESPN/ABC to form a joint venture to rescue the channel. The cable networks have successfully resisted the NFL's demand for hefty subscriber fees for what amounted to eight live broadcasts a year and, as a result, the NFL has only been able to get wide distribution on DirecTV.

One possible structure for the joint venture with ESPN would be for the NFL Network to merge with ESPN Classic, which has wide distribution, but relatively small viewership and significantly lower subscriber fees than ESPN or NFL Network. The NFL would add its eight live late season games as well as other programming which would naturally fit on the channel and would help boost the subscriber fees that the joint venture would subsequently be able to charge. Of course, that number will be somewhere between the 16 or 17 cents it gets now and the 70 cents the NFL Network was demanding. I should note here that the Big Ten Network, with significantly more live programming, settled with Comcast at 70 cents, after coming down from the $1.10 it had been demanding for more than a year.

This deal may not happen. It's far too logical and the egos involved on both sides are enormous - we're talking about TV execs here, not to mention that the president of the NFL Network used to be the head of ESPN. A little incest in business is usually a good thing but it could be a problem if the departure was not on good terms. I'm not saying that's the case here; I don't know if it was or not. It just adds to the drama of the negotiations.

NBC and Notre Dame Reup Through 2015

Anybody who thought that Notre Dame's troubles over the last few years would give NBC pause when it came time to renew the peacock's contract to broadcast the Irish can rest easy now. NBC and Notre Dame announced today that their exclusive contract has been extended through the 2015 season despite the Irish having the lowest ratings since the contract began in 1991.

The renewal of the NBC contract should also effectively end any discussion that Notre Dame might join a conference before the end of the 2015 football season. Although financial terms weren't disclosed, it is unlikely that the deal calls for payments much lower than the $9 million per year that the Irish receive under the current deal. With that money flowing in and their seat at the BCS table secure, why should the Irish give all that up to join a conference. Unless the Big East grows some balls and tells Notre Dame to join for football or leave for all other sports, the issue of conference affiliation is dead until 2015. That likely means the next round of conference expansion/realignment won't take place before then either.

This Bud's for the Giants and Jets

The new stadium rising up next to Giants Stadium at the Meadowlands doesn't yet have a name, because the Giants and the Jets, who will be the sharing haven't found the title sponsor. However, the two teams have come up with a stadium sponsorship program unique in the NFL and probably in arenas and stadiums in the US. Instead of securing numerous sponsors for every nook and cranny of the scoreboards and the walls, the teams are selling five sponsorship packages, one for each corner and one for naming rights to the stadium.

To date, two of the corners have reportedly been sold, with Met Life having been announced on Monday. Anheuser-Busch is supposed to be announced today as the second corner sponsor, according to the Wall Street Journal. The corner sponsors get exclusive rights to ads inside the stadium and on the scoreboards to be erected in "their" corner. While no price was announced, it is estimated that the corner sponsorship is being sold for $10-$15 million per year, while the naming rights is currently being marketed for $25 million per year. T

The less is more approach is a good one and should result in greater sponsorship dealers in the long run. I believe that most companies would be willing to pay more for sponsorship where they could be assured of space for branding whose message would not be lost in the clutter of other companies that is usually found in stadiums and arenas. For their sake, I hope that the Giants and Jets get Anheuser-Busch to sign a binding long-term agreement quickly before any deal with InBev goes through, since sports sponsorships, and particularly big dollar deals, are not InBev's preferred marketing strategy.

The Tiger Shutdown and the Tour

As most everyone knows by now, Tiger Woods will be having surgery soon to repair his knee and will miss the rest of the current golf season, including the remaining majors, the Fed-Ex Championship and the Ryder Cup. Here in Louisville, where the Ryder Cup will be played this fall, Tiger's absence is being acutely felt. I don't believe that attendance will suffer, since it's been sold out for months, however, NBC is concerned about its ratings.

I think the same will hold true for the remaining majors, the British Open and the PGA. I don't think ticket sales will suffer but television ratings are likely to plummet. Any tournament without Tiger is likely to draw about 50% fewer viewers. So, the biggest challenge to PGA tour officials is to drum up sufficiently compelling stories that the casual fan, who normally on tunes in when Tiger is in contention, will turn on his or her TV set and watch. In many respects, Tiger's absence for the next six months is a window of opportunity that the PGA Tour would never otherwise have to develop the next generation of stars in the mind of the public. It is a golden opportunity to showcase Tiger's successor(s) to sponsors, tournament directors and the public. How well the Tour officials handle this opportunity will be more interesting to follow than the story of what happens to marketing plans of companies that use Tiger as a spokesperson.

For further discussion and different points of view of the effect of Tiger's injury, take a look at these posts from Darren Rovell and The Sports Economist.

Michigan Claims Northwestern Stole Signs to Win

This story in the Detroit Free Press relates the tale of two student managers/ball boys at the University of Michigan who discovered that Northwestern was "stealing" signs during the Northwestern-Michigan game in 1997. After relaying the information to Lloyd Carr on the sidelines in the third quarter, the Wolverines were able to regroup, and beat Northwestern 26-6 ending a two year losing streak against the Cats. Michigan would go on to an undefeated season, beating Washington State in the Rose Bowl 21-16 to win the national championship. Northwestern head coach Pat Fitzgerald, a linebacker on those Northwestern teams, refused to comment on this story.

Now, before anyone gets too bent out of shape, let me point out that this was no Patriots spygate. The sign stealing, if you want to call it that, was of the baseball variety. One of the NU coaches was able to deduce from the way the Michigan center lined up whether the play was going to be a run or a pass and yelled to his defense accordingly. Apparently, the Michigan center changed hands on the ball depending on the play and placed one hand on his hip on some plays but not on others. The Cats were able to use these "tells", in poker parlance, to apparently such good effect that the 1995 defeat ranked as the biggest upset in Michigan history until Appy State came along last season. Leave it to the Big Ten's smart kids to be the ones to figure it out.

Here's a video clip of the 1995 game just to jog the memory banks of how special that win really was:




HT: Wizard of Odds

Big Ten Network and Comcast Call Truce

According to the Chicago Tribune, the two year long trench war between Comcast and the Big Ten is about to end. The deal should be announced this week, putting the Big Ten Network into about 55 million homes and doubling the homes within the Big Ten Conference's footprint to 13 million. It will also significantly ratchet up the pressure on Time Warner and Charter to make deals of their own with the Big Ten rather than be left on the outside with angry subscribers, as they would be the only major cable or satellite systems left without the network.

Apparently, the Big Ten did not have to cave in on its most important point, keeping the channel on the basic tier, at least within the footprint of the conference, more or less. You Penn State fans in Philadelphia will have to pay up as Comcast won the right to put the BTN on the digital sports tier there. The Big Ten had been holding out for a fee of $1.10 per subscriber but apparently settled for around $.70, still a nice chunk of change for a relatively unproven and mostly second tier product and a major cash infusion for the member schools.

The Big Ten's success in getting the BTN established with the satellite providers and now Comcast will likely influence the SEC to more strongly consider starting its own network as its TV contracts roll out. There was a discussion about it at the last conference meetings and it will be examined in more detail throughout the year, I'm sure. In fact, the only two BCS conferences not currently known to be considering their own networks are the Big East and Pac-10. The Pac-10 could be examining it and just not announcing the fact and the Big East doesn't need its own network as it has made ESPN its network with its most recent contract.

If Bud Goes Will the Clydesdales Follow?

The King of Beers is apparently subject to the same rules of tribal warfare as other monarchs. InBev, a weirdly named, patched together Belgian/Brazilian beer conglomerate has announced a $46 billion offer to purchase Anheuser-Busch, the parent of Budweiser, Bud Light and, yes, those famous Clydesdales. While it is far from certain at this point what the outcome of this corporate attempted coup may be, it is never too early to begin to assess the consequences of the loss of independence for A-B.

A-B is far and away the largest sports advertiser in North America and perhaps the world. It has used its enormous marketing budget, some $500 million in annual US advertising time, to build and maintain market position for Budweiser and Bud Light. Sports has always been a key factor in that marketing as it is the easiest route to the most significant beer drinking demographic group - young men. In addition, A-B spends $300 million in sports sponsorships annually, money which is very likely to be cut significantly if the deal with InBev is consummated.

InBev has a very different philosophy about marketing, one which should make owners of professional sports franchises and athletic directors of U.S. colleges and universities quickly start campaigns to keep A-B an independent company. InBev's philosophy is to use those dollars to market based on price. It does not believe in spending ad dollars in a way that drowns out your competitor. As a result, it is not a major sports sponsor nor is its advertising budget more than a fraction of that spent by A-B.

In order to protect its Budweiser sponsorship and advertising dollars, every college and university athletic director should march into his or her president's office and ask the president to instruct that all shares of A-B held by the university's endowment be voted against any offer by InBev and not tendered to InBev. These announcements should be coordinated, perhaps by conference, and made public for maximum public relations effect to gain momentum against the sale.

I should point out for the record that I am not an Anheuser-Busch shareholder and have no personal stake in this battle. I don't really care who ultimately owns Budweiser - I don't drink it and don't own it. However, the impact of the sale on the collegiate and professional sports world in this country can't be overestimated. A-B is an irreplaceable part of the American sports scene and a major, major financial force which will be greatly diminished if the sale is consummated. The sale will in all likelihood go down for a price a bit higher than the current offer and InBev will install cost cutting measure more severe than currently contemplated. That will undoubtedly mean significant cuts in both advertising and sponsorship dollars In a weak economy the impact of the loss of those dollars will only be magnified.

Ten Most Powerdul Celebrity Athletes

Thanks to Forbes and its penchant for lists, we now have a list of the ten most powerful celebrity athletes. Actually, we have a list of the top 100 most powerful celebrities, but in the interest of time and in keeping with the theme of this blog, I have edited it down to the top ten athletes. What is the criteria you ask? Good question and there is no objective answer it seems. The criteria Forbes sets out consists of two primary factors: money and fame. Of the two, money is probably the more easily calculated, as fame is measured by "buzz" factor, mentions in trade press, hits on blogs, appearances on TV and the like. Basically, fame is Forbes judgement. So, on with the list, numbers below are ranking on the top 100 list:

2. Tiger Woods - big surprise right - only earned over $100 million last year.

5. David Beckham - soccer's US savior, not surprised he is second ranked athlete just surprised at how high

16. LeBron James - the new face of the NBA, his marketing push in China is helping his quest to become a billion dollar athlete

18. Michael Jordan - even retirement doesn't stop the relentless endorsement machine

19. Kobe Bryant - the NBA MVP has now been fully rehabilitated as an endorser

20. Phil Mickelson - golf's number two can still churn out over $50 million a year

23. Roger Federer - the tennis king generates more worldwide buzz than his buddy Tiger

24. Alex Rodriguez - that contract and the Yankees add up to lots of time on Page Six

36. Kimi Raikkonen - worldwide Formula One still beats out Nascar

37. Jeff Gordon - but Nascar has a more loyal fanbase

If there is one common thread among all these athletes, it is lucrative endorsement contracts. The athletes in individual sports, golf and tennis, make the bulk of their money from endorsement contracts, while the athletes in team sports, basketball and baseball, make most of their income from their team contracts. The team sport athletes make substantial sums from endorsements but it is the buzz generated from those endorsements and their on court or on field performance that lands them on this list. In the case of the individual sport athletes, their playing may generate the buzz that lands them here, but their endorsements is what enriches them.

Horse Racing's Latest Hedge Fund

The results from thoroughbred racing's most recent highly publicized attempt at a hedge fund has apparently whetted the appetite of investors for a shot at the gold ring or the Triple Crown or just some of that alleged $50 million that is going to be paid for syndication of Big Brown. Three of racing's most well known and well respected trainers are today announcing (sub.) the formation of a new fund yesterday to invest in horses, to be purchased by and trained by the three of them. D. Wayne Lukas, Bob Baffert and Nick Zito plan to raise between $75 and $125 million by late August and to create a 100 horse stable within three years.

The three trainers have put up some of the most impressive numbers ever seen in racing. Among them, they have won 26 Triple Crown races since 1980, including Saturday's Belmont Stakes by the Nick Zito trained D'Tara, and have earned over $460 million in purse money. The three feel that this is the kind of money that is increasingly necessary in order to compete for the top of line horses with petrodollar billionaires from the Middle East and elsewhere who have increasingly sent prices skyrocketing.

While it will be interesting to see if these three can actually work together after so many years of competition, I would much rather be an investor in this fund than the fund that is being put together by the guys that own Big Brown. The fees are the same here - the managers (including the three trainers) are taking a standard management fee of 2% plus a 20% profits interest but your odds of making money are exponentially greater when the minds selecting horses and training them are three of the greatest trainers of their generation. Of course, the downside here is that the minimum investment is $3 million and your money is tied up for three years, but that is hardly different from a typical hedge fund. Should be fun to watch and if they successfully raise the money, the next Keeneland yearling sale should be very interesting.

Racing's Loss If Big Brown Wins

I have never forgotten the thrill of watching Secretariat fly down the home stretch of Belmont Park so far in front of the rest of the field that he was the only horse the TV cameras could include in their wide angle shots of the field. The epic adventures of Affirmed and Alydar are constantly replayed every year that any horse has the opportunity to win the Triple Crown. So why do I, a horse racing fan and patron of so many years ( more than I care to acknowledge to you masses and giveaway my age), feel so ambivalent if not downright negative about Big Brown's assault on the Triple Crown? Simple, I think his win today could set racing back years, if not decades.

Big Brown's connections have pasts that leave a lot to be desired. His trainer has a trail of drug related suspensions that Barry Bonds would be ashamed of and his owners has a string of securities violations. But that's not really the problem. As Eric Crawford points out in today's Courier-Journal, shady owners and trainers has never really impacted a horse's legacy. No, what concerns about Big Brown is his acknowledged steroid use. Steroids have no more of a place in horse racing than they do in any human sport. They serve the same purpose in racing as they do in baseball - they are performance enhancers and should be banned. I don't for a minute buy they argument that they are a training aid and don't affect his racing. We have heard that argument in baseball and in track and it's no truer there than in horse racing. Big Brown has been juiced and his racing is suspect as a result.

How Elections Should Be Settled

Since election season is now ready to kick into high gear with the historic nomination of Barack Obama now secured, I thought it is a good time to steer away from sports (sort of) for just a minute to bring you news of the way elections ought to be determined. If, like me, you believe that poker is more than just a card game but can actually tell a great deal about the character of the player, then this is for you. Under New Mexico state election law, a tie election is determined by a game of chance. The choice of the game is apparently left up to the candidates. Three times in the last ten years, candidates have chosen poker as the game to determine the winner. You just got to love New Mexico.

Duke Steals Notre Dame's AD

Earlier this spring, Duke suddenly found itself, thankfully, in the need of a new athletic director. Joe Alleva, who had presided over the debacle that was the Duke lacrosse case had skipped town to become the new AD at LSU. He's now Les Miles' problem and good riddance.

So, Duke was faced with a seemingly major problem: how to attract a first rate candidate to its newly open AD job. Let's face it, while there are a lot of things to like about Duke, the AD job doesn't really appear to be one of them. Sure, the basketball program is a successful, both on the court and financially but as any student of collegiate athletics knows, football drives the financial engine. And Duke football is, charitably, the worst in the BCS and in desperate need not only of wins but of major facilities upgrades which requires a huge financial commitment. So a new AD will be expected not just to turn football around but to raise great sums of money to do it before the results can be seen on the field. Now just how many people do you think are lining up for this job?

That makes the signing of Notre Dame athletic director Kevin White to be almost incomprehensible. White is highly respected around the entire NCAA and has done a masterful job in difficult circumstances at Notre Dame. That he was willing to leave for a program in the condition that Duke is in says volumes about his situation at ND and if I were a Domer fan I would be very concerned. What it says is that Crewcut is in charge of the athletic department and the Board of Trustees would not back up its AD in any battle between the boss and his employee. The board took the employee's (Weis, in case you weren't following) side and White felt too compromised to stay. In truth, his path out the door probably began with the Whittingham firing and Weis hiring and only progressed from there. The contract extension in the middle of the first season, which was clearly not White's idea fanned the flames. The measure of his desire to get out is the word he used to describe his feeling upon landing in Durham. When he got there, he said he was "euphoric" to be there, that's right "euphoric". That's not a word that new hires usually say to make the new bosses feel good. That's an expression of sheer relief to be out of a situation that had become a living hell.

Welcome to Durham Kevin and best of luck. You're going to love living in Durham but you're going to need all the help you can get resurrecting that football program. Oh, and when the time comes, better not blow that hiring decision when you pick a new basketball coach.

NFL Arms Race Pressures Smaller Markets

We have discussed the arms race in collegiate athletics many times here over the last couple of years, but college is not the only place that the race is taking place. The NFL, the world's most successful professional sports league, is engaged in an arms race of its own and the timing couldn't be worse for some cities. Just as the league is on the verge of reopening the collective bargaining agreement, bringing with it labor uncertainty for the 2010 season, the opening of new stadiums in Indianapolis, Dallas (Arlington) and New York (New Jersey) and the recent opening of the University of Phoenix Stadium in Glendale is likely to trigger "state of the art" clauses in the leases of both the St. Louis Rams and the Cincinnati Bengals before 2015.

The Rams' lease with St. Louis County for the Edward Jones Dome contains a clause that requires the County to provide the Rams a venue that ranks in the top 25% of the NFL by 2015. With the addition of the new stadiums currently coming online, and the age of the dome, there is little likelihood that renovations could be made to the Edward Jones Dome to bring into the top 8 in the league. That would mean the County would be required to build the Rams a new stadium at a cost near the $1 billion that is being spent on the new Cowboys Stadium. Of course, given the long lead time for these matters, decisions about a new stadium are going to have to be made in the next two years or the Rams are going to be free to consider alternatives, including relocation. It is not lost on the powers that be in St.Louis that the new owner, Chip Rosenbloom, Georgia Frontiere's son, lives in Los Angeles.

The Bengals lease for Paul Brown Stadium also contains a state of the art clause, requiring Hamilton County to install any new technologies in use by 14 other NFL teams. With the new stadiums coming online and other stadiums upgrading to compete with them, the cost to the taxpayers of Hamilton County for upgrades to Paul Brown Stadium in the next decade could run into the hundreds of millions of dollars. I guess the good news is, at least they won't have to build an entirely new stadium.

You have to hand it to the NFL owners thought. Once again, they demonstrate the power of the NFL brand and ability to wring the maximum out of governments when lease deals are on the table. Blackmail is a wonderful thing when you are the blackmailer and the NFL owners are never shy about exploiting their ability to blackmail cities and counties. It's the local taxpayers left holding the ransom bag.