SportsBiz - The Business of Sports Illuminated

Difficulties of a Basketball Only D-I Athletic Department

noreply@blogger.com (Mark) — Wed, 23 Jul 2008 20:45:30 -0500

We have talk a lot in this space about the economics of running a major college athletic department. Most of the time, we are talking about Division I schools and mostly those with big time football programs. We don't spend that much time talking about the difficulties that face those schools without football and believe me, those difficulties are numerous. Football is the cash cow that funds all the Olympic sports at most D-I schools, even those at the lower reaches of D-I. Now, imagine how you field a full complement of Olympic sports when your cash cow is basketball and even the most successful basketball programs in the country (all of the top ten, at least, are football schools by the way) don't earn much more than Vanderbilt earns from football distributions from the SEC alone.

For a little more insight into the workings of a basketball only athletic program, take a look at this interview with the Mike Broeker, the Associate Athletic Director at Marquette, as posted on the best Marquette blog I know, Cracked Sidewalks.

Urine Test for HGH Discovered

noreply@blogger.com (Mark) — Wed, 23 Jul 2008 20:32:50 -0500

When Major League Baseball finally got around to effective testing for performance enhancing substances, human growth hormones or HGH was excluded from the program because no effective non-invasive (read without drawing blood) had been developed. Commissioner Bud, who had never wanted to take on the union over drugs in the first place, certainly didn't want to do battle over whether players would have to submit to random blood tests. So, HGH remains likely to be in use in baseball and most other professional sports none of which have effective testing programs for the use of it due to the blood drawing problem.

Now comes word that a group of researchers have apparently stumbled into a urine test which detects the presence of HGH. I say stumbled into it because the researchers, Virginia-based Ceres Nanosciences, partnered with George Mason University in Fairfax, Va., and Italy's Istituto Superiore di Sanit were actually doing cancer research and not actively searching for an effective HGH test. Nevertheless, Ceres believes it can have a test on the market in six months. Assuming that the test passes scientific scrutiny, expect that each of the professional leagues, here and abroad will be under intense pressure to adopt as will the World Anti-Doping Agency, which has been proactively seeking a test for some time now. While no athlete has been found to have used HGH, several athletes including Marion Jones and Andy Pettitte have admitted it.

The Stadium Curse Lives

noreply@blogger.com (Mark) — Mon, 21 Jul 2008 21:04:12 -0500

Over the years, many people involved in sports naming rights have come to believe that there is a curse associated with a corporation, particularly a publicly traded corporation, placing its name atop an arena or stadium. For years, the stock of those corporations significantly underperformed the overall market. In fact, there is a large list of once proud companies whose names formerly adorned arenas and stadiums across the country that now littered the junk bins of business history, having been tossed aside like so much corporate ballast.

The names include the famous, or infamous, such as Enron, Adelphia and MCI, which were formerly the names of the homes of the Houston Astros, the Tennessee Titans and the Washington Wizards, respectively, and the not so famous, the CMGI, PSINet, and AmeriQuest, formerly atop the homes of the New England Patriots, the Baltimore Ravens and the Texas Rangers.

The curse may be asserting itself once again in the wake of the credit crisis now gripping much of the industrialized world. There are four new stadiums and arenas under development in the greater New York City area. Naming rights for two of those have been sold: for the new Mets stadium and for the new arena in Brooklyn which will be the playpen of the Brooklyn (nee New Jersey) Nets. So far, the results are not promising. The Mets will be playing in CitiField and the Nets in Barclays Arena, both global financial institutions suffering significant difficulties, each of which is paying $400 million for the naming opportunity. You wonder if their shareholders don't think there might be a better use for that money now.

Win a Day With Natalie Gulbis

noreply@blogger.com (Mark) — Sat, 19 Jul 2008 20:46:10 -0500

You know you want it. You know you just couldn't pass it up. All you have to do is write a convincing essay. Now, what you did on your summer vacation just won't cut it. You have to be more creative than that. You need to write 200 words on the secret behind your success, be it your wife/husband/partner, your mentor, your team, your assistant or your children. Whomever it is and the how and why they are can be the ticket to your day with the ever so lovely Ms. Gulbis. Go here for all the details of the contest and good luck.

Cubs Bids Are In?

noreply@blogger.com (Mark) — Sat, 19 Jul 2008 17:21:23 -0500

The deadline for bids for the purchase of the Chicago Cubs was yesterday and seven bids were submitted for the package of the team, Wrigley Field and the team's 25% in Comcast
Sportsnet Chicago. Unexpectedly, one bid was also received for Wrigley Field alone, which the Tribune Company had been exploring as a standalone sale. The sale of the iconic ballpark as a standalone was thought by Sam Zell, the new owner of the Trib, to be the way to maximize value, but it was likely to only complicate the sale of the Cubs as it raises a whole host of questions about the lease between the team and the new owner of Wrigley.

The bidders contain few surprises as most of the previously identified likely suitors submitted bids, including the favorite in the clubhouse, John Canning, close friend of Bud Selig and chairman of Chicago based private equity firm Madison Dearborn Partners. Among the others submitting bids were Dallas Mavericks owner Mark Cuban, Chicago Wolves owner Don Levin and the special purpose acquisition company Sports Properties Acquisition Corp., a shell corporation with $215 million looking to buy sports properties headed by New York taxi magnate Andrew Murstein.

Chicago based Syndicated Equities Corp. submitted the bid for Wrigley Field alone. How that bid will fare depends in part on how large the package bids are and how complicated it will be to separate Wrigley from the team. I wouldn't expect to see Wrigley sold separately - the decrease in value to the team would be considerable. Expect to see the price of the package approach $1billion, especially with the Cubs doing so well on the field this year. There is definitely a winning premium, especially when attached to iconic teams like the Cubs. Any sale is subject to approval by the owners of the other teams in major league baseball.

Minor League Promotion of the Week

noreply@blogger.com (Mark) — Fri, 18 Jul 2008 08:23:34 -0500

You have to hand it to minor league baseballs - those teams can dream really up some creative promotions. The recent promotion held by the Grand Prairie AirHogs (don't you just love the name) , was perhaps inevitable given recent publicity concerning a certain baseball star's love life. The AirHogs are an independent team, playing in the American Association and located about 20 miles west of Dallas. This is their first year of operation.

The team held A-Rod and Madonna Night. Anyone wearing an A-Rod jersey (presumably from the Mariners, Rangers or Yankees) or dressed like Madonna could buy a ticket to Wednesday's game for only a dollar. A-Rod and Madonna couples were then treated to a phony wedding ceremony between innings and had opportunities to win a house, car and other luxury items.

Last month, the AirHogs packed the stand with another great promotion. The team gave away a funeral, complete with headstone, casket and plot. There were pallbearer races between innings and fans were encouraged to wear black.

The spirit of Bill Veeck is alive and well in Grand Prairie.

MLB Holds Out Hope for Inclusion in 2016 Olympics

noreply@blogger.com (Mark) — Thu, 17 Jul 2008 22:32:26 -0500

As you probably know, baseball is scheduled to be bounced from the Olympics following the close of the Beijing Games. The reasons are many, but two stand out as at the top of the IOC list: drug testing and the lack of participation by major league players. IOC officials always want to include the top athletes in every sport and with the Olympics coming in August, MLB has refused to release players from major league rosters for participation in the Games. This year, the USA team is composed chiefly of Triple A players.

The drug testing issue is a bit more complicated. The anti-doping rules adopted by the IOC had been much more stringent than those in place in major league baseball, but the new procedures adopted recently may have gone a long ways towards resolving those issues. The new testing procedures and suspension rules for performance enhancing substances that Selig and the union agreed to in the spring appear to have satisfied the IOC.

MLB officials still don't know how to play IOC politics very well, however, as evidenced by the latest misstep coming in yesterday's press conference announcing the USA baseball team. MLB vice-president Bob Watson said: "I think if Chicago or Tokyo would win the Olympics for 2016, I think those countries are baseball countries, they have venues. " He further said: "Instead of a three day break for an all-star game, you might end up have a four or five day break and get all the games in some kind of way using major leaguers."

While Watson's comments may seem logical from our standpoint, it's not too much of a stretch to think that IOC members will see it as a heavy-handed attempt at influencing the venue choice for 2016, something almost guaranteed to backfire. One thing the IOC hates above all else is the feeling of being pressured to do anything. It's a highly political organization, impressed with its own self worth that must be handled with kid gloves. It's worse than UN. Watson's approach was exactly the wrong one.

What Are Three National Championships Worth?

noreply@blogger.com (Mark) — Tue, 15 Jul 2008 08:35:20 -0500

There are various measures to value sports enterprises but none can effectively be applied to collegiate programs no matter how Forbes may try. Nevertheless, we have been given a rather picture of the relative worth of winning national championships in football and basketball.

The University of Florida just announced a 10 year licensing agreement with Sun Sports for local television, radio, online and multimedia rights. The rights include tape-delayed football, men's and women's basketball, baseball and Olympic sports. One of Sun Sports' most profitable shows is "Breakfast with the Gators," a Sunday morning replay of the previous day's football game.

The value of the license is $100 million and is reputed to be the highest in the country. The previous highest reported media contract was the University of Nebraska at 112.5 million, but that is for 13 years.

The timing of this deal is interesting, coming as it does just on the heels of the SEC meeting at which the formation of a SEC television network was discussed in earnest. This contract is likely a good indication that the SEC network won't be happening anytime soon. I also found it interesting that Florida was able to deal these rights on its own, without the involvement of the SEC. Unlike several other conferences that control local media rights in order to maintain the ability of the league to negotiate better contracts with national providers, apparently the SEC does not have local rights. As a result, Florida was free to go off on its own, as the University of Kentucky had previously done, and effectively scuttle the SEC network before a league wide decision could be made. It's certainly a good deal for Florida but whether it's a good one for the league remains to be seen.

10 Worst Sports Announcers (Updated)

noreply@blogger.com (Mark) — Mon, 14 Jul 2008 13:38:54 -0500

Maxim is out with a list of the 10 worst sports announcers on television. First, who knew Maxim actually had articles, but, of course, this is really just a list with pictures and small paragraphs that are little more than a couple of sentences so I guess that doesn't really qualify as an article. The picture on the left is Samantha Lusk and she is here to remind you of why anyone would actually get Maxim.

Anyway, I don't know about you but I won't quibble too much with men that they put on the list, but I have issues with the order they're listed. First, Chris Berman is irritating without doubt, but THE worst announcer, I'm afraid not. That dubious honor is a statistical dead heat between the always annoying and ever too loud Dick Vitale and the always annoying and mostly antagonistic Billy Packer. Berman comes in no better than third behind those two.

Who might be missing from this list that deserves consideration? Dave O'Brien, ESPN's unfortunate choice as a soccer announcer. He might be a decent announcer when covering a sport he knows something about, but when covering soccer, a sport about which he knows very little and cares even less, he is little short of abominable. Pam Ward is a college football play by play announcer for ESPN that only rarely can make it through an entire game without misidentifying at least three players. I don't know if she doesn't prepare properly, has lousy spotters or just has difficulties picking up numbers, but watching a game she announces you just sit there waiting for her mistakes. Finally, also deserving of consideration for his constantly unsuccessful attempts at humor, a man who is in far too much love with himself, Kenny Mayne. Granted, he rarely does play by play but he does do horse racing and since I'm a racing fan, I am subjected to his obnoxious attempts at humor far too often then is good for me.

UPDATE: CBS announced this morning, in an announcement that made a Monday that was already a good one following the actions of Paulson and Bernanke in backstopping Fannie Mae and Freddie Mac, that Billy Packer won't be returning to CBS Sports next season. For the first time in 34 years we will no longer be subjected to his whiny, hateful voice announcing the Final Four with his constant, unremitting pro ACC agenda. Clark Kellogg will step down from the studio show to join Jim Nantz at the courtside play by play table. It truly is a good Monday in sports. Well, it would be a totally good Monday but for the sale of Anheuser Busch to InBev. To see why that is a sportsfan problem, take a look at this post.

Rodriguez Settles With WVU for $4Mil

noreply@blogger.com (Mark) — Wed, 09 Jul 2008 20:41:22 -0500

The long Michigan nightmare is over. New UM football coach Rich Rodriguez has agreed to settle with his former employer West Virginia University, although cave is probably the more accurate term, by agreeing to pay the entire $4 million buyout fee at issue in the suit between them.

Rich Rod will pay $1.5 million and other sources, presumably the UM or its football boosters will pay the other $2.5 million. I guess to that extent it can be considered a somewhat hollow victory for Rich Rod although I'm sure he could have gotten Michigan to pay that much up front without the necessity of going through all the embarrassing depositions. Speaking of depositions, it was the threat of deposing the Michigan president and athletic director that spurred the settlement. What did WVU give up? The Mountaineers will not receive its legal fees, nor will it receive interest on the $4 million. All in all, not too bad a deal for WVU.

Steve and Barry's Update - Bankruptcy Filed

noreply@blogger.com (Mark) — Wed, 09 Jul 2008 20:29:53 -0500

Updating my post of last week about Steve and Barry's dire financial straights, the retailer filed for bankruptcy protection today in New York. The company listed $693.5 million in assets and debt of $638 million as of May 31.

As often happens when a company gets into financial difficulties, media coverage becomes part of the problem. That's not a knock on the media, just a statement of fact.

"Recent rumors and speculation surrounding Steve & Barry's financial situation have become self-fulfilling prophecies,'' the co-founders said. Suppliers will be paid under normal terms after the filing, and secured lenders gave Steve & Barry's permission to use cash collateral to pay operating costs, the company said.

Gary Sugarman, Steve & Barry's chief operating officer, said in a statement today "recent media coverage'' made it difficult to continue normal operations. Goldman Sachs Group Inc., hired to find financing or explore a sale of the company, found no buyers to prevent the bankruptcy filing, he added.

Steelers on the Block?

noreply@blogger.com (Mark) — Tue, 08 Jul 2008 07:25:01 -0500

According to an article in this morning's Wall Street Journal, Pittsburgh Steelers CEO Dan Rooney is in talks with his brothers to buy out their interest in the club so that he will become the principal owner. Rooney wants to preserve the family's 75 year ownership of the club and his four brothers do not have the same interest in maintaining ownership of the team as he does.

Rooney's plan, however, may result in a sale of the entire ownership interest in the Steelers to an outsider if a bid is made that results in a substantially higher price than Rooney is prepared to pay. Stanley Druckenmiller, billionaire chairman of Duquense Capital Management, longtime Steeler fan and the former chief trader for legendary hedge fund manager George Soros is has expressed an interest in buying the team.

The Steelers are blessed with a relatively new stadium in Heinz Field and a fanatically loyal fan base. Pittsburgh, however, is the classic Rust Belt town with little growth and departing or dying industrial and corporate base presenting the club with shrinking sponsorship opportunities. The Wall Street Journal estimates the club's value at something less than $800 million, while Forbes valued the team at just over $900 million. The truth is likely somewhere in between, although it may well depend on whether Rooney or Druckenmiller is doing the buying. Rooney should get a lower purchase price as he is buying minority interests, which should be subject to a minority interest discount.

Vote for Sale

noreply@blogger.com (Mark) — Tue, 08 Jul 2008 00:59:31 -0500

Okay, it's not sports, but it's too funny not to pass along. Apparently, a 19 year old Minnesota boy slept through high school civics class or he would have learned that selling your vote on eBay is not the best way to participate in the civic endeavor we call democracy. Not only that, it's not even remotely legal. University of Minnesota student, Max Sanders, offered to sell his vote in the presidential election in November to the highest bidder, with a minimum bid of $10.

His listing included the comments, "Good luck" and "You're (sic) country needs you", written by Sanders using an alias.

Sanders has been charged with one felony count of bribery, treating and soliciting which carries a sentence of up to five years imprisonment and a fine of up to $10,000. For his part, Sanders maintains it was all just a joke. The listing received no bids before eBay took it down.

More Than Just Basketball Shoes

noreply@blogger.com (Mark) — Sat, 05 Jul 2008 12:44:58 -0500

When you think of great rivalries, you generally think of sports first: Ohio State - Michigan, Army - Navy, Auburn - Alabama, USC - Notre Dame, Yankees - Red Sox and many others. However, the corporate world has more than its share: Coke - Pepsi, UPS - Fed-Ex, Apple - Microsoft, Visa - Mastercard, well, you get the picture. One of the most intense corporate rivalries of the last two decades has played out on the sporting fields and courts of the world: Adidas - Nike. Now the sporting goods giants are taking the competition to a new venue on a old familiar stage.

The Olympics has long been a giant advertising platform on which official sponsors, who have paid dearly for the privilege hawk their product relentlessly. On the outskirts of the Olympic Games and on TV surrounding the Games, but not on NBC or the comparable official channels around the world, the competing sponsors hawk similar products in campaigns that are usually just as lavish. This year, Adidas and Nike are taking the competition to a whole new level. Each company is unveiling new shoes to outfit a competitor in each sport, 28 in all, being contested at the Beijing Games, (except that Adidas is skipping equestrian). The reason for the elaborate competition this time is simple - China is the world's second largest consumer market and the largest untapped market. Both companies have made large investments in China and see the Olympics as the single best opportunity to capture the next billion dollar market.

Adidas, the official outfitter of the Chinese Olympic team, has just opened its largest store ever, in the heart of Beijing's commercial district. Adidas is also the official shoe sponsor of the Olympic Games and is supplying more than 3,000 athletes. Nike says its supplying thousands, which means it must be less than 3,000. Nevertheless, Nike got to China and has already crossed the billion dollar mark in sales, a year ahead of schedule. This battle, like the corporate battles being waged between this two elsewhere in the world, will mean a near constant presence on Chinese television for their shoes, and a battle over top Chinese athletes for endorsement contracts. Expect Adidas to have an edge on the stars of the Olympics and for Nike to bid obscene sums to win them away - it's the Nike way.

For a look at a much different Olympics, read the new book Rome 1960,an engaging account of the Rome Olympics that featured some of the greatest American athletes ever, such as Muhammad Ali (then, Cassius Clay) Rafer Johnson and Wilma Rudolph (see, Rudolph in Adidas at Rome above) and a Games that was relatively untainted by commercialism. It was, however, contested in the shadows of the Cold War and the contest between East and West hung heavy over the Games. Check it out - you won't be disappointed.

Money Flowing in Big Orange Country

noreply@blogger.com (Mark) — Thu, 03 Jul 2008 08:11:35 -0500

There must be a money tree somewhere in Mike Hamilton's backyard or maybe he discovered a wreck of a pirate ship laden with gold at the bottom of the Tennessee River just outside Neyland Stadium. How else can you explain the raises he passed out yesterday.

Both the University of Tennessee football coach and men's basketball coach got contract extensions with substantial raises yesterday. The often criticized Phil Fulmer, whose tenure at UT has divided fans as the memory of the Vols national championship in 1998 has faded, received a raise of $350,000 taking his salary up to $2.4 million and extending his contract to 2014. The new contract will extend automatically one year if the Vols win eight games. There are annual raises, incentive bonuses and loyalty bonuses also built into the new agreement.

Pearl received a $300,000 raise, taking his salary to $1. 6 million. His contract now runs to 2014 and also provides for annual raises, loyalty bonuses, and incentive bonuses. Since Pearl will be receiving an immediate $250,000 signing bonus and a $1,5 million retention bonus, his contract contains a $2.5 million buyout clause that decreases annually to $1 million should he leave by the end of the term in 2014.

UT's other high profile coach, women's basketball coach Pat Summit, is still in discussion over the modification of her contract so no announcement about the terms of her raise was made.

The sums being paid to these coaches is not too out of line with the rest of the SEC. Pearl becomes the third highest paid coach in the conference, while Fulmer will only be the seventh, which is stunningly low. The idea the there are six coaches in the SEC making more than $2.4 million per year says everything there is to say about how badly skewed we have allowed college athletics to get. The UT coaches got these raises at a time in which the UT faculty received no raises and the students faced substantial tuition increases because the university is facing over $11 million in budget cuts. Granted, the athletic department self-generates its funding, although that probably includes some amount for student fees, nevertheless, the message being sent is hardly the one college athletics should be sending in the face of the economic difficulties being faced all across the country, and especially at state universities.

British Horse Racing to Adopt Year Long Series

noreply@blogger.com (Mark) — Wed, 02 Jul 2008 21:50:46 -0500

The popularity of season long series like NASCAR's Sprint Cup and the PGA's new Fed-Ex Cup seems to be growing, both among fans and the participants. It is now spreading across the pond based on yesterday's announcement by the British horse racing industry of its new Sovereign Series. The new season long competition, kicking off in 2009, will be composed of ten Group I races (the European equivalent to North America's Grade I) stretching from May to October, contested at each of Britain's seven major tracks, at distances ranging from one mile to a mile and 4 furlongs and including races restricted to three year olds, for older horses and for three year olds and up.

Points will be awarded to the first three finishers and the horse with the most points at the end of the season, following the contesting of the Champion Stakes, will be declared the Series winner. The Series will have a prize pool of 2 million pounds; it is still to be determined if that goes entirely to the winner or if it will be split among the first three finishers. An additional 3 million pounds will be added to the purses of the 10 races involved, which are already contested for total purses equalling at least 5 million pounds.

One major problem will be a calendar clash with the season ending Champion Stakes. It is contested at Newmarket in October, in close proximity to Europe's most prestigious race, the Prix de l'Arc de Triomphe at Longchamps in Paris, which is the world's richest turf race, and the Breeders Cup races in the US. It is not at all clear that an owner would want to run in the Champion Stakes if he had a horse capable of winning the Arc and the Breeders Cup, even if the2 million pounds went entirely to the series champion. The Series promoters have a year to work out the calendar kinks and let's hope they can manage to arrange it so that a horse could run in all three, perhaps by skipping the Sovereign Series September race. Maybe the Champion Stakes could be moved a little closer to the Queen Elizabeth II Stakes, to enable an owner to compete in all three season ending events.

In any event, this is an exciting idea and an excellent way to promote British racing. The planners expect to add an additional 3 million pounds to be spent on promotion and that is welcome news indeed. Racing is too fine a sport to be left to its own devices. We have seen what happens without innovation and the injection of outside funds and energy like this idea should go a long way towards rekindling the British public's deeply felt affinity for the sport. If only their American counterparts were listening. This was the original concept behind the Breeders Cup, but the promotion efforts seems to have diminished over the years. More and better attention needs to be paid to that. Automatic qualification for winning certain races is an excellent beginning. Allocation of dollars to a major promotional campaign would be even better. The great stories around racing need to be told to the American public throughout the year and not just during the first week in May.

Sonics Now Officially Moving to OKC

noreply@blogger.com (Mark) — Wed, 02 Jul 2008 21:15:02 -0500

What's the price of freedom in the NBA? Apparently, the price tag is $75 million, at least if you're a bunch of cowboys. The Clay Bennett ownership group has reached a settlement agreement with the City of Seattle clearing the way for the Sonics move to Oklahoma City for the 2008-09 season. In return for agreeing to the termination of the Sonics lease, the ownership group will pay the City $45 million and agree to leave the Sonics name and colors behind for a future NBA team. In addition, the Bennett group will pay Seattle an additional $30 million in 2013 if the state legislature approves funding for a new arena or Key Arena renovation next year and Seattle does not get a replacement NBA team (the Hornets, Kings??) within the next five years.

The one potential fly in the ointment is the lawsuit being pursued by Howard Schultz, he of Starbucks fame, against the Bennett group. The City has agreed that if the team is ultimately forced to move back to Seattle as a result of the Schultz suit, however unlikely, the city will refund $45 million and if the team plays in Key Arena during the next two seasons, then the Bennett group won't owe the additional $30 million.

The NBA was apparently part of the settlement process and has also supposedly committed to Seattle officials to assist in returning a team to Seattle within five years, assuming the arena issue is resolved. An ownership group is in place, headed by Microsoft CEO Steve Ballmer and the outline of a deal on renovations for Key Arena are in place. What is needed is action by the legislature and that is by no means assured. However, the Mayor and Governor are solidly behind the plan and with local ownership not likely to have the same issues as the Bennett group presented, I would be more optimistic this time.

Starbury Not Enough; Steve and Barry's Contemplates Liquidation

noreply@blogger.com (Mark) — Mon, 30 Jun 2008 23:45:35 -0500

With its reliance on low cost shoes and clothing, often attached to prominent figures in sports and entertainment, you would think that retailer Steve and Barry's would be perfectly suited for the current economic times. The empire built on cheap tee shirts, Stephon Marbury's Starbury shoes and clothing lines endorsed by the likes of Venus Williams and Sarah Jessica Parker (with nothing costing more than $20) this is a retailer that hit the sweet spot of name brands and low prices. However, too quick expansion spread the company too thin and stretched the finances to the breaking point.

With cash now running short, the company is readying plans for the closing of more than 100 stores and contemplating a full liquidation if emergency financing is not found. What has become apparent is that Steve and Barry's earnings came from opening stores not operating them. The company would receive large upfront payments from landlords for opening stores, while operating margins were only 1% to 3% on sales of roughly $1 billion.

One of the major issues to be determined in any liquidation or bankruptcy proceeding is what will become of the license agreements with various celebrities and athletes, such as Ben Wallace, Laird Hamilton, Amanda Bynes and as mentioned Venus Williams. It's not known if there are clauses in the agreements allowing for their termination in the event of liquidation or if a bankruptcy court will permit the celebrities to terminate them should they so desire.

Strange Court Theories

noreply@blogger.com (Mark) — Mon, 30 Jun 2008 00:28:04 -0500

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

Louisville, KY
Rochester, NY
Philadelphia, PA
Newark, NJ
Los Angeles, CA
Irvine, CA
Pittsburgh, PA
Las Vegas, NV
Albany, NY
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

noreply@blogger.com (Mark) — Mon, 23 Jun 2008 21:04:35 -0500

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

noreply@blogger.com (Mark) — Sat, 21 Jun 2008 00:23:36 -0500

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

noreply@blogger.com (Mark) — Thu, 19 Jun 2008 21:58:47 -0500

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

noreply@blogger.com (Mark) — Thu, 19 Jun 2008 07:49:08 -0500

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

noreply@blogger.com (Mark) — Thu, 19 Jun 2008 07:15:11 -0500

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

noreply@blogger.com (Mark) — Wed, 18 Jun 2008 09:19:24 -0500

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