NCAA Hammers Sampson; Lets IU Skate

The Indiana University/Kelvin Sampson infractions case was resolved today with an announcement by the NCAA infractions committee of the penalties it had decided to hand out to IU, Sampson and former IU assistant coach Rob Senderoff. The NCAA, despite finding IU guilty of failure to monitor Sampson, which is the most significant (or the slightly watered down version) finding it can make against a university, accepted the university self-imposed sanctions. Those amounted to little more than a slap on the wrist and involved no loss of television time, post-season play or scholarships. All the NCAA did was place IU on three years probation - big whoop.

The penalties levied against Sampson and Senderoff are a different matter altogether. Both received show cause orders, which essentially prohibits any NCAA member institution from hiring either of them. Sampson got five years and Senderoff got three. Kent State, where Senderoff is now coaching is going to ask for an interpretation as to whether it is subject to the show cause order. Five years is the second longest penalty handed out to a Division I coach; former Cal coach Todd Bozeman got seven years.

I don't want to say that IU got off easy because of its name, or because Myles Brand used to be its president. I think it's just another example of the lack of integrity of the NCAA enforcement process. The Committee on Infractions refuses to put any teeth behind its rules. Sure, the Committee penalized Sampson, but it did nothing to IU which hired him knowing he was under NCAA probation for rules violation at the time he was hired. If they really were all about a culture of compliance as they claimed in their defense, why hire a known cheater? Until the NCAA starts handing out penalties that involve loss of postseason play, television money and scholarships, cheating will continue because there is no downside. Schools only react to loss of money, so the NCAA has to hit them where it hurts. Start taking away TV appearances and strip cheaters of their share of tournament revenue from their conferences for any year that the school is on probation. I bet that a few years of that will start a clean-up a lot faster than a bunch of Myles Brands speeches.

Will the Mets Ever Play in CitiField?

Anyone interested in taking bets on whether the Mets will ever play in CitiField scheduled to open this spring? While the Mets and Citigroup still say that there is no change in their 20 year, $400 million naming rights agreement, the latest federal rescue plan certainly places that commitment in doubt.

It would not be the best market for naming rights if the Mets have to go back in the market to find a replacement for Citigroup, especially when they will be competing with the Giants and Jets who have yet to find a naming rights sponsor for their new stadium in New Jersey. It's also possible that Barclays may want out of its $400 million deal to place its name on the New Jersey/Brooklyn Nets new arena in Brooklyn, making the New York naming rights market very crowded indeed.

HT Clusterstock.

Impact of the Recession Cont'd - GM

In a move that should have surprised no one, Buick and Tiger Woods announced today that they are terminating their longtime endorsement agreement one year early. The agreement was scheduled to expire on December 31, 2009 but will now terminate, by "mutual agreement" this December 31. GM is looking to cut costs anywhere it can and Tiger no doubt did not come cheap. The termination of this deal leaves Tiger free to negotiate a new car endorsement deal with a an automaker more befitting his status, such as BMW or Mercedes. Buick never really made sense to me for Tiger anyway, other than its longtime arrangement with the PGA. It just didn't really fit with Tiger's image, and now, that GM is broke, Tiger really doesn't need to be associated with it.

Impact of the Recession Cont'd - Golf

Golf has long been considered to be one sport which would be untouched by a recession. Images of freshly cut fairways and well tended greens with rows of electric carts surrounding a beautiful clubhouse just don't give the appearance of a sport that will have problems in an economic downturn, and in past recession that was indeed the case. This time it's different.

Troubles in the auto industry have directly hit the PGA Tour, with GM announcing that it will no longer supply Tour members with courtesy cars. Buick, the official car sponsor of the PGA Tour had supplied courtesy cars to most tournaments but now those tournament officials are left scrambling to find replacement suppliers. So far, however, GM has not backed out of its sponsorship of two PGA Tour tournaments. Chrysler sponsors one tournament and will continue that sponsorship in 2009. However, should the auto companies not get their bailout from the Feds, those sponsorships are likely to disappear. Further, the PGA Tour has an inordinate amount of financial firms as tournament sponsors and as the recession deepens and carries into 2009, those sponsorships may either disappear before the tournament takes place in 2009 or will almost certainly not be renewed for 2010.

The picture is not quite that rosy for the LPGA Tour. The LPGA just announced its tour schedule for next year and it dropped three tournaments as a result of sponsors withdrawing their supports. Purses will also be down by about $5.25 million from this year. Adding to the LPGA's concern: its television contracts run out in 2009. Should the recession continue deep into next year as anticipated, the LPGA should have a very difficult time filling sponsorships and likely much reduced television revenue in its new contracts.

100 Blogs That Will Make You Smarter

The Online Universities blog has just posted a very interesting and highly informative list of blogs that is titled, if you couldn't tell from the title of this post, 100 blogs that will make you smarter. I am very proud to say that SportsBiz made this list in the sports category together with a very diverse group. The 100 blogs on the list are divided into a number of categories and the list makes a great resource for future research or just to expand your blog reading, as if most of you needed more blogs to stick in your rss reader.

SEC Charges Cuban with Insider Tradiing

How much money does a multi-billionaire need? Apparently, at least another $750,000. That's the amount the Securities & Exchange Commission believes Dallas Mavericks owner Mark Cuban avoiding losing by dumping all of his Mamma.com stock one day before the company announced it had concluded a successful private offering of its stock. The day after Cuban sold his entire 6% interest in the company, the share offering was announced and the price of the company's stock dropped more than 10%.

The SEC has filed a civil action charging Cuban with insider trading. You can see a copy of the complaint here. The good news for Cuban is that it is a civil action so, unlike Martha Stewart, if he loses he won't be facing jail time. The bad news, aside from the fines and penalties involved should he lose, is that the filing of this action no doubt seals his fate with respect to the Chicago Cubs. No matter how much higher his bid may be, with this complaint hanging over his head, Commissioner Bud has all the ammunition he needs to torpedo Cuban's bid.

More on Cuban and the Cubs

Interesting column from Harvey Araton in today's Times on Mark Cuban's attempt to buy the Cubs. I don't know how much Cuban wants any other team although he did once make a run at the Pirates. He would probably did a good job at resurrecting that franchise which sorely needs it. Araton is right that the Cubs don't need Cuban's brand of overhaul, but that shouldn't disqualify him - especially if he is the high bidder. After all, Zell needs every dollar he can find to save the Tribune these days.

Impact of the Recession Cont'd. - GM

Further to my post of the other day on the impact of the recession on Super Bowl advertising, take a look at this article in today's New York Times on GM's pullback from sports advertising and sponsorship. Nice of the Times to finally weigh in.

British Open Moves to ESPN in 2010

The transition of major sporting events to cable TV that I wrote about the other day is happening faster than anticipated. ESPN and the Royal and Ancient Golf Club of St. Andrews announced that beginning in 2010, all four rounds of the British Open, along with the Senior British Open and the next two Walker Cups will be shown on ESPN. The last two rounds of the Open have been shown ABC.

The deal with the WWLS includes extensive multimedia rights, including live coverage of ESPN360, the digital streaming service available in a few broadband served homes in the US. It is not yet available in any home served by Comcast or Time Warner Cable, significantly limiting its reach. Nevertheless, ABC/ESPN's ability to deliver technology and extensive multimedia platforms appears to be crucial to R&A's decision. "Envisaging the platforms where a younger generation could be positively influenced to experience The Open Championship over the next decade was a significant factor in assembling this arrangement with ESPN," said Alastair Johnson, IMG Vice Chairman who led the negotiations on behalf of the R&A.

Although financial terms weren't disclosed, ESPN is reportedly paying $25 million a year for six or seven years.

ESPN is paying $25 million a year for five or six years to move all four rounds to cable.

Impact of the Recession Cont'd. - Super Bowl

This is another in our continuing series of the posts on the impact of the global economic crisis on sports. Regular readers may have noticed that I have changed the title of these posts from impact of the credit crisis to impact of the recession. It's not that I think the credit crisis is over, although credit is clearly beginning to loosen up, it's just that there is no longer any doubt that we are in a recession and that it is likely to continue for at least the next three quarters.

NBC, a unit of General Electric, is charging up to $3 million for a Super Bowl spot this year and that has some longtime Super Bowl advertisers rethinking their plans. Of course, the economy hasn't helped. GM for one has decided to forgo the big game this year, which has advertising in 16 games. If GM's pleas to Congress are to be believed, the car maker may be in bankruptcy by the time the game rolls around anyway.

FedEx has yet to commit to advertising in the Super Bowl partly out of concern about how paying the price of ads and the surrounding activation campaign would appear when asking employees to tighten their belts due to the economic climate.

While on the surface this migh t be damaging to NBC at a time it can least afford it, in truth it may not hurt much at all. As of September 1, the network had sold 90% of its total inventory at mostly regular asking price, so it profit picture is pretty well locked in. However, at last check the available inventory is the same as it was on September 1, which is not a great sign. I'm guessing it will remaing the same until sometime in early January. You know that the economy is in a major slowdown when the year's highest rated program and its true event programming has yet to sell out only a little over two months away.

UPDATE: The NFL is reducing the price of playoff tickets approximately 10% in response "to the economic challenges facing fans." Commissioner Roger Goodell sent pricing guidelines to all of the teams which also authorized them to charge less for opening round games than for later games. The price for Super Bowl tickets has also been reduced from $800 to $500, the first time a Super Bowl ticket has been reduced by the league.

Court Orders NFLPA to Pay $28.1 Million to Retired Players

The men who made the NFL what it is today, that is those who toiled in the 1950s and 1960s in the era before the giant contracts, seem to have been forgotten by those who have enjoyed the spoils of their labors. Oh sure, the late Gene Upshaw, the former head of the NFL Players Association used to speak warmly of the past generation of players and did make some changes to the retirees disability plan that has had beneficial effects. However, for the most part, Upshaw and the rest of the NFLPA staff had little use for the retired players and did not feel as if they were responsible in any way for the well being. It's as if those players were never in the league or members of the NFLPA. In fact, the retired players had taken their fight to Congress.

As can be seen from the handling of class action suit filed by retired players against the NFLPA involving licensing fees for the use of their identities without compensation, the NFLPA held the retired players in complete disdain. The Court however felt differently and ordered the union to pay $7.1 in compensatory damages and $21 million in punitive damages. While the case only involved licensing fees, it will almost surely change the dynamics of the relationship between the retired players and the NFLPA, although that was hard to tell from the reactions of the union's attorney,

The NFLPA attorney, Jeffrey Kessler said: “Even my grandmother, if she were here today, would be shocked at the vindictive attack of deceit, name calling, requests for punitive damages, that came out of this effort to try to help these retired players.”

The union has said it will appeal if its post trial motions are denied. Nevertheless, I think that no matter how any appeal is decided, this decision will force the NFLPA to take the retired players interest into account in how it operates in the future. As it selects Upshaw's successor the opportunity to forge a new and more cooperative relationship is there and should be seized upon for the good of the players and the game. The collective bargaining agreement will be coming up for negotiation in the next year in a dramatically different economic environment and it will be much better for the players if the active and retired players are unified as they enter into negotiations with owners under a new Executive Director.

BCS Moving to the Worldwide Leader??

According to a story in today's Sports Business Daily, the BCS Commissioners are considering a proposal from ESPN/ABC which would see all four of the BCS bowl games now under contract to Fox move to ESPN. The Rose Bowl has a separate contract with ABC, however a clause in that contract provides that if one of the BCS bowls move to cable then ESPN/ABC has the right to move the Rose Bowl to ESPN. The BCS proposal is thought to be worth $500 million for four years or roughly $20 million more per year than Fox had been offering. Fox has several day to match the offer, but that is thought to be unlikely.

The movement of the BCS bowls to ESPN continues a trend of moving high profile events to cable/satellite television and away from the broadcast networks. In many respects, cable, with its dual revenue stream of subscriber fees and advertising, is in a better position to pay up for events than is network TV. Expect this trend to continue and even accelerate as the value proposition for network TV will continue to deteriorate. There is only on Super Bowl and most other events can't begin to charge those types of ad rates.

The other takeaway from this deal is don't count on a playoff anytime soon. If the Big Six conferences can get this kind of money for their little bowl cartel, why in the world would they want to upset the applecart with a playoff.

Are You Ready for Bevo TV?

First came ESPNU, an all sports network devoted to college athletics. It was followed quickly by what is now called CBS College Sports. Both have wide distribution thanks to the ability of their corporate parents to leverage their popular channels to force cable systems to carry the college sports networks if they wanted to get ESPN or any of Viacom's properties such as Showtime.

Then, we got mtn, but the problem was no one could see it, not even the people living within the footprint of the Mountain West Conference who presumably would be interested in watching. Then came the Big Ten Network, with instant carriage on DirecTV by handing over an equity stake to Rupert Murdoch, who then owned the sat network. However, with BTN came nasty disputes with cable systems, primarily the large systems led by Comcast and Time Warner so that in its season, Comcast viewers in Big Ten country either had to switch to satellite or did without.

Why the quickie history lesson? The next step in specialty college sports networks is about to make its presence felt. What could come after channels devoted to college sports in general or a particular conference? Why, one devoted solely to a single university of course. The University of Texas is planning a channel devoted to Longhorn athletics and is currently discussing partnerships and carriage issues with the two satellite channels and the major cable networks. It will not, at least initially, carry football or most men's basketball games as those rights are held by the Big XII and sold as league-wide deals, which places the channel at a severe disadvantage in getting viewers. I just don't know how big the market is, even in Texas, for a channel devoted to baseball, volleyball, track and field hockey. There is only so many hours of watching Bevo graze in a field that even the most diehard Longhorn can take. Nevertheless, this experiment will be watched very closely in certain offices in the South and around Los Angeles.

Looks Like No Cuban for the Cubs

Published reports are that the sale process for the Chicago Cubs is proceeding more slowly than Tribune owner Sam Zell wanted or expected. Even before the credit crisis, Zell had hoped for a quick sale so that the proceeds could be used to pay down some of the crushing debt load he incurred in the Tribune Company buy-out. With the credit crisis and the depression that has hit the newspaper industry, the need for a quick sale has only gotten that much greater.

However, one can never push the Lords of Baseball, who march to the beat of their own drummer, especially Lord High Commissioner Bud Selig. Zell has likely favored the bid of Dallas Mavericks owner, and fan favorite, Mark Cuban, because Cuban was willing to pay top dollar (read roughly $1 billion) and close quickly. Cuban, is not exactly the Commissioner's idea of a member of the baseball club, despite the testimony of David Stern and other basketball owners. He is too brash, too loud and too fan friendly. Not only that, he is a damn fine businessman who takes ownership of his sports teams as a serious business. The longer the sale takes, the more likely it is that the buyer will be someone more to the Commissioner's liking. In fact, the Sun Times is now reporting that Cuban is out and the likely buyer will be the group led by John Canning, Jr., the front runner all along. Why, the front runner? He is Selig's friend and has been a minority owner in the Brewers - you remember the team that Selig used to own.

Sports and the Ballot Box

Aside from the historic nature of last night's election, and that is not something that is easily forgotten or should be something easily set aside, there were several former athletes on ballots across the nation. Most fared well. The most prominent was probably Kevin Johnson, the former All Star point guard of the Phoenix Suns, won election as Sacramento's first African-American mayor by defeating two-term incumbent Heather Fargo in a run-off election. Also elected mayor was Mufi Hannemann, a 6-foot-7-inch former Harvard basketball player, who won re-election as mayor of Honolulu. Here's video of KJ following his election:



In Hawaii, Michael Victorino, the father of Shane, the outfielder of the World Series champion Phillies won election to the Maui county council, unopposed. Other relatives of athletes winning yesterday included George Unseld, Wes' brother and a former basketball player and coach himself, was re-elected to the Metro Council in Louisville, Ky and Connie Mack, the grandson of the great manager of the A's was re-elected to Congress from Florida.

Speaking of Congress, freshman Congressman Heath Shuler, formerly of the Washington Redskins, won re-election in North Carolina. Two former college athletes won re-election to Congress: Baron Hill, a Indiana University basketball player, and Norm Dicks, a University of Washington football player. Heading to Congress for the first time will be Jason Chaffetz, a former BYU kicker.

Perhaps the biggest winner of the night, however, was the Oregon State University basketball program, which gained the best recruiting advantage any college athletics ever had. You see, the Beavers coach is Craig Robinson, who played at Princeton and was a two-time Ivy League Player of the Year. He later served as an assistant coach at Northwestern University on the staff of former Princeton coach Bill Carmody. None of that however explains the special recruiting advantage Robinson possesses for that you must look at his family - his sister is none other than our next First Lady, Michelle Obama. Now, how are Pac-10 coaches going to compete with that?

Newark to Devils: Pay Up or Else

It's only been a year since the New Jersey Devils moved into their new Newark home at the Prudential Center, but relations between the Devils and its landlord have already gone straight into the toilet. The Newark Housing Authority, the owner of the Pru, has issued a demand letter to the Devils declaring the team in default of its lease of the stadium and demanding immediate payment of $2.4 million in rent.

Not surprisingly, the team disputes that it owes the money, claiming that the Authority cost the team roughly $2.9 million in penalties and costs resulting from cost overruns and delays in construction.

Any lease dispute, including this one regarding rent payments, goes to arbitration if it can't be resolved within 30 days.

The arena seems to be a success, the rental dispute aside, having taken in $3o.1 million in gross revenue in the eight months since it opened. Attendance at Devils games also increased substantially following the move from the Meadowlands. This dispute is simply about money and will be resolved, I'm sure. It is not the best way to start a long relationship, however.

The Run to a Billion

For Tiger Woods, 2008 was a year unlike any other. Oh, in some respects it was the same. He finished the year on top of the world golf rankings and led the US in both Ryder Cup points and Presidents Cup points. He came in second in the money list with $5,775,000, despite not playing after June 15, and oh, yeah, he won another major - this time the US Open at Torrey Pines. However, there was that knee injury which required surgery right after the gripping 18 hole Open playoff win and caused Tiger to shut down the rest of the season. So, no, 2008 was unlike any other season, but he did get to spend valuable quality time with one year old daughter Sam Alexis, and, apparently, with Elin who is pregnant again.

Nevertheless, Tiger's quest to become the world's billionaire athlete continued as his earnings didn't suffer much while he was recuperating. The bulk of Tiger's earnings come from endorsements - to the tune of $100 million per year. In dollar value, Tiger's two largest endorsement deals are most likely Nike and Gatorade, which each are supposedly paying him $100 million over a number of years (5 in the case of Gatorade). Those are followed by Gillette and Buick, with his golf course design and development business in Dubai close behind. The Buick deal is up for renewal next year and given GM's financial difficulties, I suspect that it will not be renewed. Of course, that just frees Tiger up to negotiate an even better deal with a car company more suited to his place in the world, like maybe, Porsche or BMW?

The race to a billion dollars may now have a new entrant and one that may well give Tiger a good run for his money, so to speak. With his fifth place finish in the Brazilian Grand Prix, the second year driver Lewis Hamilton grabbed what was denied to him in this race last year, the world championship of Formula One. At the tender age of 23, he becomes the youngest driver in the history of the sport, one that has consistently seen its champion populate the upper reaches of the Forbes list of the highest paid athletes in the world. Assuming his success on the track continues, he is likely to follow closely on the Tiger's heels in the billionaire club. His current contract with McClaren, which runs to 2012, pays him an estimated 75 million pounds over five years, with endorsements bringing in another 30 million pounds. However, when the contract is renewed in 2012, expect that McClaren to jump to about 30 million pounds a year. He has already achieved a first in getting McClaren to allow him to obtain personal sponsors outside the team sponsors; something else which should ratchet up his income before the new contract.

As the first black champion in his sport (his father is black and his mother is white), he is practically a marketer's dream - young, good looking, bright and a winner. A package remarkably similar to Tiger Woods in a sport that is arguably more popular worldwide. If Hamilton's success on the track continues, the future is practically limitless for him and I wouldn't be a bit surprised if he follows Woods into the billionaires club just a few years later.

Will the NCAA Finally Find Teeth?

On Thursday, the NCAA Board of Directors heard recommendations from the Division I Committee on Infractions that would significantly beef up the penalties that the heretofore toothless NCAA would levy against member schools found to be violating the myriad rules in its several inch thick rulebook. The Infractions Committee recommended that the NCAA dust off some old but now rarely invoked penalties that would hit offending schools where it would hurt the most - their pocketbooks.

Among the recommendations suggested by the Committee are greater use of fines, postseason bans and that oldie but goodie, television bans. The Committee also recommended that the cooperation of the school committing the infraction not be taken into account in determining the penalty to be applied.

The Board of Directors has taken the recommendations under advisement but has delayed taking any action while it confers with member schools. It should be a short period for investigation. The decision on these recommendations should be a "no brainer". It is long past time for the NCAA to start imposing penalties that actually mean something to the offending school. Without meaningful penalties, the NCAA is nothing but a toothless, old hag who mouths idle threats. If the sanctions applied for violating the rules do not include post season and television bans as well as fines, and the NCAA starts to actually apply the tools in its arsenal, then the rampant rules violations that currently plagues college sports will just continue unabated. The sooner the NCAA acts, the sooner it can begin to clean up after itself.

Impact of the Credit Crisis Cont'd.

The common wisdom has always been that sports would be immune from most of the gyrations of the American economy. Unless there was a depression on the order of the Great Depression, then the impact of a recession would be fairly minimal. After all, Americans still want their entertainment and watching televised sports is cheap. Sure, attendance in the cheaper seats might be a little less, but businesses would still need to entertain customers and besides, if you weren't the NHL, then your money came primarily from television anyway.

Well, welcome to the recession of the 2008-09, when the received wisdom is being tossed away like most businesses ability to obtain a loan from their friendly neighborhood bank. The NFL has responded to the crisis in a way that demonstrates once again just how much different it is from other professional sports leagues. According to Chief Financial Officer Anthony Noto, the league is about to close on almost $2 billion in financing to ensure that the 32 clubs can weather the storm without difficulty. This at a time when most major corporations in this country and around the world are having trouble tapping into the commercial paper market or their bank credit lines to finance their ongoing operations. While the NFL is an obviously good credit risk, since the borrowings are backed up by nearly $3.5 billion in annual television revenue, creditworthiness does not seem to count for too much in this market. However, the cachet of the league and its reputation for operations as well as it TV revenues, and the new stadiums coming online, made this financing appealing. Access to tickets may not have hurt either.

In another sign of the weakening economy, Chevrolet, traditionally one of the largest sports advertisers, announced that it would be significantly reducing its sports sponsorships because of falling sales and the economic slowdown. General Motors has begun closing plants and downsizing as it is hemorrhaging red ink. It is currently in Washington seeking a federal bailout to aid a possible merger with Chrysler, although why GM execs believe that will help matters is beyond me. GM had previously announced that it would not air a Super Bowl commercial this year. By next season's Super Bowl, there may not be a GM to consider a commercial.