Real Madrid: World's Highest Grossing Professional Sports Franchise

Most Americans, if asked, would tell you that either the New York Yankees or the Dallas Cowboys were the most profitable teams in professional sports and either of those would be a good guess for an American centric audience.  However, those guesses don't take into account the worldwide phenomenon that is global soccer. No sport captures the imagination of sports fans around the world in quite the same way as soccer.

For years, the revenues of the largest soccer teams in Europe have been growing exponentially due to ever increasing television revenue.  Since not all European leagues distribute television money equally, or even negotiate league wide television deals, the disparity between clubs in the same league can vary even more widely than it does in Major League Baseball.  The two teams sitting atop the Football Money League, compiled annually by Deloitte demonstrate just how much the powerful club at the top of perch make in comparison to the rest of the league.  Real Madrid, the richest, highest grossing professional sports club in the world, generated 438 million euros (roughly $603 million at today's exchange rates) in 2009/10 about 40 million Euros more than second place FC Barcelona and a staggering 100 million Euros more than third place Manchester United.

Real Madrid had a relatively even split in revenue sourcing among the three main drivers: broadcast, commercial (sponsorship and merchandise) and gameday.  For a sense of scope, Real Madrid received 158.7 million Euros in broadcast revenue pursuant to a contract it holds individually since La Liga allows its clubs to negotiate individually rather than through a centralized league contract as in the English Premier League, or all major North American leagues.  That contract gives Los Blancos more broadcast revenue than half of the Money League clubs combined.  Real Madrid receives over 150 million euros in commercial revenue, one of only two Money League clubs to do so.  It has a 20 million euro contract with Bwin for jersey sponsorship that runs through 2012/13.  However, that contract has recently been challenged in court as being contrary to Spanish competition laws.

In contrast, the highest grossing MLB club, the New York Yankees, made $441 million in revenue last year, $319 million of which came from gate receipts (gameday in paragraph above). That is less than Manchester United, the third place club on the Money League list.

The value of broadcasting contracts is significantly higher in the NFL than in MLB. In fact, the total value of the NFL's various broadcast contracts was in excess of $3.4 billion in 2009, and it grows annually, assuming no lockout this year.  The Dallas Cowboys, the NFL's most valuable franchise grossed $420 million in 2009, of which only $112 million came from gate receipts. Could explain the recent interest of NFL owners in purchasing European soccer clubs.

NCAA, UConn, Calhoun and Justice: Where's the Beef

Today was decision day in Storrs as the NCAA Committee on Infractions handed down its alleged punishment of the UConn men's basketball program and head coach Jim Calhoun for violations of NCAA rules in the recruitment of Nate Miles and for failing to create an atmosphere of compliance.  The headline sanctions include the suspension of Calhoun for the first three Big East next season and placing the team on three year's probation.  Other penalties include reduction of scholarships from 13 to 12 for three years, limitations on official campus recruiting visits and limiting the number of coaches allowed to recruit off-campus.

UConn and Calhoun should consider themselves lucky.  Failing to promote an atmosphere of compliance is one step removed from lack of institutional control, which is the NCAA's least favorite violation.  nevertheless, the sanctions will not have any material effect on the way in which UConn conducts its program.  Probation is a joke these days since the NCAA has not done anything serious to repeat offenders since it dropped the death penalty on SMU back in the 1980s.

Suspending Calhoun for three Big East games is equally meaningless. First, no one knows what those games will be since the Big East schedule isn't made until the summer.  You can be sure that suspension will be taken into account when the UConn portion of the schedule is made up . The Huskies are not barred from the postseason, nor are they barred from any television appearances, not even non-conference games.  Without hitting a program where it counts - television and the NCAA tournament - the Committee on Infractions is doing little more than slapping the school on the wrist and telling it to go play nice and not to do it again.

If the NCAA is serious about enforcing its rules, it needs to hold head coaches accountable for everything that happens in a program.  No more hiding under the ridiculous notion that he just didn't know what was transpiring right under his nose.  A three game suspension is not enough to get the attention of the average coach.  Some argue that Calhoun takes the suspension hard because of a perceived stain on his legacy and reputation and he, indeed, has implied that he may at least appeal the decision if not sue the NCAA.

“I am very disappointed with the NCAA’s decision in this case,’’ Calhoun said in a statement. “My lawyer and I are evaluating my options and will make a decision which way to proceed.’’

Nevertheless, the average coach is not Jim Calhoun and for the sanctions to truly be effective the NCAA should hit coaches where their attention is most likely to be drawn - their wallets.  Suspend coaches not for a few games during the season, conference games or not.  Suspend them for NCAA tournament games, or other post-season games if the team doesn't make the field of 68.  In the event a school under sanction fails to make the post-season, then the suspension can either carry over to the following year's post-season tournament or could be enforced in the following year's conference tournament with any remaining games to be enforced during the post-season.  That may play havoc with Vegas' college basketball predictions, but that is just an added bonus as far as the NCAA is concerned.

Coaches make their reputation and their big bucks by what they do come tournament time.  If they have to sit out the tournament, they may begin to realize that there is a real price to pay for violating recruiting regulations.  Right now, the only problem with NCAA violations is that the player that usually causes schools to get caught rarely proves worthwhile.  Nate Miles was expelled from UConn in October, 2008 without ever playing for the Huskies.

NBA and Marvel Team Up with Clothing LIne

Marvel comics inspired NBA team covers appeared on ESPN The Magazine's NBA preview edition in the first of the NBA-Marvel partnering efforts.  I'm guessing those covers were a success because the NBA and Marvel have just announced that they are launching a new line of clothing pairing  famous Marvel superheroes with famous NBA teams.  Imagine the Hulk and the Celtics (think green) and Spiderman and the Knicks (the webslinger prowls Gotham).  Since the pairing is only famous superheroes and famous teams, I imagine that means we won't be seeing the Memphis Grizzlies paired with a superhero anytime soon.

Without seeing the clothing line, it's a bit premature to speculate on the success of the venture.  However, Marvel characters are very popular now, fueled by the success of the recent run of Marvel movies: Spiderman (and sequels) , X-Men (and sequels), Wolverine and Iron Man I and II, with more: Thor, Captain America and The Avengers, on the way.   The saturation marketing movies seem to get coupled with the ever present NBA ought to guarantee success.  The clothing line just has to not be too ugly to succeed.

One other point about this partnership that we should not overlook is the deep and extensive partnership that the NBA has with Marvel's parent corporation, Disney.  You may recall that Disney is also the owner of ESPN and ABC, two of the NBA's longstanding broadcast partners, so this is just another exercise of corporate synergy at work.

Ohio Valley Conference Exchanging Info with North Alabama

Conference realignment is far from over just because the Big Ten announced that it was satisfied stopping at 12 members.  In fact,  the so-called low major Division I conferences may be the next group to undergo reshuffling, as the moratorium on moving up to Division I is drawing to an end and a number of Division II programs are examining the possibility of moving up, including the University of North Alabama.  

UNA is currently  in the midst of a study examining the feasibility of such a move.  As part of that examination, preliminary discussions have been held, and information exchanged, with the Ohio Valley Conference about a possible affiliation should UNA make the jump.  It's an affiliation that would make sense for both parties - it's geographically logical for UNA, with compatible programs and nearby Jacksonville State already a member.  In addition, the OVC is a traditionally powerful FCS football conference which would be a good home for UNA football.  On the OVC side, with the recent addition of Southern Illinois - Edwardsville (bet you didn't know it was a D-I school), the conference sits at 11 members, so adding UNA or another member would seem to make sense, for scheduling purposes if no other reason.  FCS conferences generally don't have championship games because of the national championship playoff schedule.

It Was a Dog's Night for Super Bowl Ads: Doritos and Bud Light Score Big

The Packers may have won the game on the field, but the game on the screen - the battle for the hearts and minds of the TV ad viewers ended in a tie.  The consumer created Doritos ad featuring a guy who pays big for teasing a hungry pug with Dorito chips finished in a tie atop the USA Today Super Bowl Ad Meter.

Tied with the Doritos ad was an Anheuser-Busch commercial for Bud Light featuring a dog sitter who puts the dogs to work at his party.  

This was the second time in three years that a consumer created Doritos ad has topped the list which has to be worrisome to the big ad agencies., with their million dollar budgets and huge salaries.  Doritos also finished second last year. The complete Ad Meter list of results can be found here.  You can see all of the ads you may have missed here.

The pug ad was created by a Burbank freelance website designer for all of $500, using a friend's dog and another friend who is a dog trainer.  He won $25,000 for making the finalist cut and having the ad run during the game and won an additional $1 million dollars for having the highest rated commercial.

Volkswagen came in third with an ad featuring a kid, dressed as Darth Vader,  surprising himself by "starting" a car using the Force. In reality, it was started by his father with a keychain remote from the kitchen window.  The ad was the highest finish ever for a car commercial, tying a third place finish by Nissan in 1997. 

For a  contrarian view to that of the "people meter", check out this column from Ad Age, which gave the Doritos ad only two stars (out of four) and the Bud Light ad one and half.  Be sure to check the comments; they're very entertaining.

Top 10 Super Bowl Ads for Tonight

To help get you ready for tonight, here are the top 10 ads, as determined by Mae Anderson, business reporter for the AP:

BEST BUY: Odd couple Justin Bieber and Ozzy Osbourne will star in the electronics seller's Super Bowl debut in the third quarter that promotes a new program where Best Buy will buy back electronics when customers decide to upgrade. The ad's still under wraps, but pairing the teen idol and the prince of darkness certainly fires the imagination.

AUDI: One of at least nine automakers advertising during the Super Bowl, Audi's ad during the first break after kickoff is targeted at younger buyers. It shows people escaping from a posh prison to illustrate the difference between "old luxury" and Audi.

CAREERBUILDER.COM: The mocking office chimps that show why viewers might want to look for a new job return in a third-quarter ad.

GODADDY.COM: Promotes the .co alternative to the .com Web domain in an ad that shows celebrity fitness trainer Jillian Michaels and racecar driver Danica Patrick seemingly naked and directs viewers to its Web site to see the ending.

PEPSI: PepsiCo teamed with Eminem on a first quarter stop-motion animated spot that uses a puppet with Eminem's likeness to promote Lipton Brisk. Also has three ads each for its Pepsi MAX and Doritos, all created by fans.

SNICKERS: Comedians Roseanne Barr and Richard Lewis star in a second-quarter ad. It's an encore to last year's hit commercial that saw Betty White take a vicious tackle on a football field.

E-TRADE: The online investing site brings back the popular talking babies it introduced in 2008 in a third-quarter ad.

ANHEUSER-BUSCH: The brewer will promote an imported brand, Stella Artois, for the first time on the Super Bowl. That ad stars actor Oscar-winning actor Adrien Brody as a 1960s jazz club singer. (If you're looking forward to Bud Light's legendary humor, it has three commercials coming, too, which it has teased on Facebook.)

SKECHERS: Kim Kardashian "will break someone's heart," the shoe maker says, in an ad for toning shoes near the two-minute warning.

VOLKSWAGEN: The automaker's trademark whimsy permeates an ad in which a Darth Vader-costumed boy tries using The Force on household objects and his father's Passat.

Football Signing Day: When High School Seniors Sign Away Their Futures in Return for Nothing

The first Wednesday of February is the first day of the annual signing period for NCAA Division I football players during which prospective student athletes sign copies of the National Letter of Intent indicating their commitment to attend the school of their choice and fax the letter into the football coach of the chosen school.  It's an annual rite in which we all get to witness hundreds of grown crowded around fax machines in various states of panic for periods of several hours, awaiting faxes from all those kids who verbally committed to their program. Some schools, notably Alabama, have live webcams fixed on those same fax machines to satisfy maniacal fans who want to see the faxes spit out even though they can't read the names.

But, is the National Letter of Intent in the best interest of the student athlete?  Should he or she sign one?  For most the answer may be yes,  even though as with almost all matters concerning collegiate athletics,  the NLI is a one-sided document totaling favoring the college or university. The NLI commits the student to attend the chosen university, while committing the university to nothing more than a give the student a one year grant in aid in accordance with NCAA guidelines. 

The NLI does not guarantee the student playing time or even a spot on the time. As we shall see, the NLI does limit the student's freedom of movement even if his reason for attending the school in the first place has changed.  It is also, not unusual for coaches to over-recruit and then pressure students to "grayshirt" or delay their admittance in order to defer counting theirs scholarship against the ensuing class scholarship limits.  (An aside, this practice was roundly condemned yesterday in a sanctimonious op-ed piece on SI.com, by the President of the University of Florida, who apparently didn't know, or perhaps just chose to ignore, that it was a practice routinely engaged in by former coach Urban Meyer).

So, why is signing in the best interest of most athletes?  If you're not an superstar who would be guaranteed a spot on the team just by showing up, then signing a NLI, while it may not guarantee your spot on the team, will substantially increase the likelihood that it will not be given away before you get to campus.  If you are a superstar, five star prospect, then you are probably just as well served by not signing a NLI and just telling the coach that you will be coming to his school.  That way, you won't be locked in should something happen before you get there, such as the coach leaving for another job or retiring.  If you have signed a NLI and that should happen, then your ability to move to a different school rests on a release by the school with which you signed or, absent such a release, an appeal granted by the Collegiate Commissioners Association which administers the NLI.

AEG Secures $700 Million Naming Rights Deal for LA NFL Stadium

AEG, the sports and entertainment megafirm, which owns the Los Angeles Galaxy and the Staples Center, among other things, is set to announce a $700 million dollar naming rights deal with Farmers Insurance for a NFL stadium to be built in downtown Los Angeles.  AEG is one of two groups pursuing a NFL team for LA, but this deal certainly pushes it to the forefront.  A deal for a yet to built stadium for a non-existent team has to be the first of a kind, not to mention the largest naming rights deal ever made in North American sports.

AEG's proposed stadium is estimated to cost $1 billion dollars and while its site may be preferred by city leaders, whether the city is willing to issue $350 million in bonds as AEG has requested is yet to be seen. In addition, AEG has to convince an existing NFL franchise to move to LA, while also convincing the owner to sell the team.  There are certainly a couple of franchises that have enough stadium issues to be in play, San Diego and Minnesota, chief among them, but there is as yet no deal.  Still, this deal substantially increases the likelihood that a team that comes to LA will be owned by AEG and will play in a downtown Farmers Insurance Stadium.