Tuesday, April 28, 2009

Hockey is a business, not a sport


Evan Weiner
Go to Evan's Home Page
Business of Sports Examiner

Hockey is a business, not a sport

April 28, 12:09 PM

Canadian hockey writers, particularly those based in Toronto, have a bizarre conception. Move a financially failing United States-based National Hockey League franchise to Canada, preferably Toronto, and all will be right with the hockey world. The usual hockey writers suspects are the Atlanta Thrashers, Florida Panthers, Phoenix Coyotes, Nashville Predators and now the New York Islanders, particularly if John Tavares ends up with the New York franchise.

But what the Canadian hockey writers, particular those based in what they think is the center of the hockey universe, Toronto, don't understand is the business of hockey is more important than the game of hockey on the NHL level. So as a public service to those in Toronto, here is a primer about the business of hockey in Nassau County and perhaps in the New York boros of Queens and Brooklyn. The New York Islanders franchise has always been more about real estate and cable TV than hockey. The real estate, the Nassau Coliseum, was mighty important to the NHL back in 1971 when the World Hockey Association began making plans to start in 1972-73.

The NHL viewed the WHA as a threat and quickly moved to expand into the new Nassau Coliseum. An expansion franchise was sold to Roy Boe, who ironically owned a team in the upstart American Basketball Association, the same people who started the WHA, Dennis Murphy and his group from Southern California.

The NHL cut off a potentially valuable market from the WHA but created a problem that the then 14-NHL owners didn't see. Boe was financially incapable of running the ABA Nets or the Islanders at the Nassau Coliseum. In 1976 Boe's Nets joined the National Basketball Association but Boe couldn't pay the bills and sold the most marketable basketball player of the day, Julius Erving, to Philadelphia for a reported $3 million. It wasn't enough for Boe to stay financially alive in either the NBA or NHL and Boe eventually had to sell the Nets and the Islanders.

John O. Pickett ended up with the Islanders and got lucky. Charles Dolan was building his Cablevision franchise in the 1970s on Long Island. Dolan had hired Long island politicians to executive posts and went about securing virtually every available cable TV franchise in Nassau and Suffolk County. In the 1970s, local programming was tough to find on local cable, but Dolan had a major league franchise, the Islanders, in his backyard literally as the Nassau Coliseum in Uniondale was located just minutes away from Cablevision's Woodbury headquarters. Dolan signed a long term deal with Pickett and it put millions upon millions of dollars annually into the Islanders till.

What Toronto writers don't understand is just how much Dolan, who now owns the New York Rangers, needs the Islanders and how much Islanders owner Charles Wang needs Dolan's money. Dolan has two valuable assets that other cable competitors don't have on Long Island. The Islanders contract through 2031 and News12, a local news operation that covers Nassau and Suffolk county news. The Islanders are definitely a loss leader for Dolan but in the overall scheme of things, Dolan can walk into any town, village or city on the Island when it comes to renewing his cable systems licenses and say what does Time Warner have locally, what does Comcast have locally? The answer is nothing, he has the Islanders and he has News12. The properties virtually assure Dolan of the renewals in the lucrative multiple cable systems operator business.

Dolan has the same set up in New Jersey, a long term contract with Jeffrey Vanderbeek's Devils hockey team and News12. Dolan is a smart guy, much smarter than the Toronto writers looking at moving the Islanders to Toronto.

The real estate angle cannot be overlooked. Nassau County has dangled to various Islanders owners including Howard Milstein, Steven Gluckstern and Wang the possibility of developing the area surrounding the Nassau Coliseum. In 1997 and 1998 Nassau County Executive Thomas S. Gulotta spent a lot of time negotiating with Milstein and Gluckstern about building a new arena and land development. The sides apparently worked out a deal but there has been an allegation over the years that the agreement fell through of who was going to do the actual construction. Wang is looking to develop the land which would become an arena village complete with a rebuilt Coliseum, sports facilities, commercial ventures and housing.

The Islanders franchise seems secondary to the project as if Wang gets to develop the property as he and his partners stand to make a lot of money if it is built. That is why Wang and NHL Commissioner Gary Bettman are turning the heat up on Hempstead Town Supervisor Kate Murray to get the project approved. The Lighthouse Project has the potential to be the most lucrative deal out there for Wang.

But there are two other New York options that far outweigh Toronto or Kansas City for Wang. The boro of Queens already hosts the Mets and the U. S Open in Flushing Meadows. There is a tract of land that is presently occupied by junkyards just east of the new baseball park and north of the tennis center that New York City has wanted to redevelop for a while. Wang could be interested in the land for an arena if the Nassau proposal falls through. Also, not far from the ballpark and the tennis center there is a tract of land that was once offered to the Jets owner Woody Johnson for a NFL stadium on the old World’s Fair grounds. It is not known if the city would be willing to make Wang the same offer it did to Johnson, but it is possible. That is Wang’s second best option although there might be a compensation package required for the Islanders to move about 15-20 west of Uniondale to Flushing for Wang “invading” New York Rangers territory.

However, Wang and Dolan are partners in a broadband venture and certainly Dolan needs Wang for his cable TV enterprises and Wang technically would not be moving from Long Island.

The third option, which is a lot less valuable, is Wang moving the Islanders to New Jersey Nets owner Bruce Ratner’s proposed Brooklyn arena. Wang would have to work out a deal to grab a portion of the revenue streams from the new place. Ratner’s building has been designed to house not only a basketball team but a hockey franchise as well. Wang would not have to give up his cable TV deal. Wang wanted to buy the Nets in 2003 and move the team back to Long Island. He was beaten out by Ratner who wants to construct an arena village in Brooklyn.

Kansas City is an oversaturated market with the NFL Chiefs, the MLB Royals and NASCAR competing for what few corporate dollars are available in the small market city. The Toronto sportswriters apparently have failed to realize that Maple Leaf Sports and Entertainment enjoys its monopoly status owning the only NHL franchise in Toronto and refused to sell Maple Leaf Gardens to anyone who wanted to use the old building as a sports venue because they didn’t want anyone to compete with the two major indoor sports venues they own in the city. At last look, Maple Leaf Sports and Entertainment was a for profit venture and if someone wanted to move an NHL franchise to the city, Maple Leaf Sports and Entertainment would probably run up a nine figure number as compensation for invading the Toronto territory.

Here is hoping that Toronto hockey scribes enjoyed the primer. Wang’s best three choices are Nassau County, Queens and Brooklyn. His worst choices are Kansas City and Toronto. Hockey is a business not just a game.


Sunday, April 26, 2009

What do people want from sports? Just ask them in 2000 and 2009

What do people want from sports? Just ask them in 2000 and 2009

By Evan Weiner

April 26, 2009

6:30 EDT
(New York, NY) As an opinion writer whose words are analyzed in college sports business management classrooms across the United States and as a lecturer who has represented his country as part of a State Department imitative at the George Bush Presidential Library at Texas A and M in College Station, Texas in August 2007 on how the business of sports operates in America to 16 foreign nationals from Canada, Venezuela, Turkey, Nigeria, Russia and Indonesia along with four Americans and as someone who speaks globally, it is incumbent upon me to review my thoughts on a constant basis. Do I need to review my opinions, do they stand up after all of these years? How many times have I been wrong and when do I admit it? It all goes into being a diligent observer.
There is a lot of noise coming from the sports columnist community about the ticket and concession costs at the new Yankee Stadium in the Bronx, New York. Apparently many of these writers along with the chatter from sports talk radio have woken up to the fact that sports is a business and a costly one at that. My advice back in January 2000 was the sports writers, commentators and other reporters needed to leave the protective cocoon of sports media and talk to real people with real lives about sports. That didn't happen and now the scribes and the noisemakers are beginning to take notice of a trend that has been part of the industry for nearly a quarter of a century.
Sports costs are been rising for years and someone needed to pay for it. The well heeled started buying luxury boxes and club seats in the 1960s and the blue collar fan was pushed into the "Bob Uecker seats" or moved farther away from the court, the gridiron, the diamond or the rink. Cable TV operators and sports owners cut large deals giving owners millions in the 1970s and that proliferated in the 1980s and 1990s. Cable TV took sports off of over-the-air TV because cable TV was paid in two ways, subscriber fees and advertising. Over-the-air TV stations got money from just sponsors. The "real" fans started watching more games on TV instead of attending games which were becoming more and more expensive. They were replaced by customers, the corporates looking for a good time out.
Back in January 2000, the three legged stool of financial support for sports, government paying for stadium/arena facilities, large cable TV contracts and selling tickets to corporate buyers who could write the cost of ever increasing ticket costs had taken hold. But in 2000, that formula was 14 years old. Sportswriters, sports columnists, and the noise crowd from sports talk radio never looked at how federal legislation had changed sports right before their collective eyes.
Nor did fans. Or did they?
Back on January 24, 2000, this was my op ed in the Sports Business Journal. It seems sportswriters, sports columnists and the noise community blasting out of AM radio and maybe a few FMs and satellite radio has finally caught up to the fans after seeing the new Yankee Stadium. It may be a little late though for them in looking back at the January 24, 2000 piece I penned.
"What do people want from sports today? As someone who gives speeches and lectures about the business and politics of sports before college kids, young adults, middle-aged adults and senior citizens, I ask that question. The answers from across the board are generally the same.
People want good entertainment value for their money but feel cheated today.
The No. 1 complaint is the cost of tickets and how expensive it is for a family to see a major league contest. Second, those who have attended my speeches say there is too much inconvenience in physically attending games.
People don't like the loud, continuous music and the fact that team owners think a game experience should include ear-splitting music, sideshows and boorish actions by fans that in theory give a hometown team an edge. In fact, people have told me after my speeches that games are supposed to be a leisurely activity and for the most part have become hard to attend for numerous reasons.
People 35 and older don't like the fact that they cannot discuss any aspect of a game during any dead moment because some programmer has turned up some heavy metal song to the noise level of a jet taking off at an airport.
People don't like the boorish behavior of young people who seem to use the excuse of going to a sporting event to get drunk and spit out mean-spirited, foul-mouthed obscenities or start fights with others.
Others don't like all the sideshow aspects connected with the presentation of the game because it interferes with their intent of watching a baseball, football, basketball, hockey or soccer game. That includes shooting T-shirts into a crowd where people jump over one another for a chance at getting one of those prized garments. That includes people dressed in sumo wrestler suits fighting at center ice between periods at hockey games.
People don't mind seeing kid hockey players having a mini game between periods at hockey games or Punt, Pass and Kick contests at halftime of football games. That's not artificial entertainment. People don't like the ersatz quality of most sideshow promotions that teams run today.
People do tell me boxing and track and field offer events to watch without the sideshow. Even though boxing is a sideshow in itself with its bikini- or swimsuit-clad card women, still, the action in the ring is the thing.
Some people are very interested in how their taxes go to support stadiums and arenas and how the general public is left out of the public financing debate for athletic venues.
There are a few hecklers here and there who tell me I don't know what I am talking about. That's fine. They are entitled to their opinion as long as I am entitled to mine. And I don't mind the hecklers as long as they realize I get paid and they don't.
College-aged people accept sports as a business these days with grievances, threats of franchise relocation, strikes and lockouts as parts of the sports landscape. They aren't bothered by the turmoil because they don't know anything else. Some of them weren't even born when baseball shut down during the 1981 player walkout.
People 35 and older are resentful of the high salaries and the business aspect of the sports industry.
I do get a cross-section of people in my audiences, some sports fans and some not. The non-sports fans seem to have the most curiosity about the business and politics of sports. They don't go to the game yet are paying for it through government financing of arenas and stadiums.
In downstate New York, people wonder why their taxes go to upstate New York for minor league venues in Buffalo, Syracuse, Rochester, Binghamton and Albany. People in Michigan wonder why, when they went to Seattle, Tampa, Miami and Texas, they paid extra car rental and hotel/motel and restaurant taxes for venues that they probably will never use.
(Former Baseball Commissioner) Peter Ueberroth once told me never to underestimate the intelligence of the public. I think sports operators should forget about focus and research groups and head to a library, a local Y, a senior citizens home or a college and give a talk. They might be surprised by some of the feedback they get and might listen to people who are not screened and eliminated by some focus coordinator. They actually could learn something from the average person — who might really be a paying customer."
Those 35 year olds back in 2000 are now 44 and older. They have become more detached from sports in terms of watching live events because it costs too much money and with big screen TVs with High Definition capabilities, they get a better view of the game.
Meanwhile, local and state governments are on the hook for billions for facilities which local officials promised would bring jobs and serve as economic engines. Stadiums and arenas have done neither, just ask those in Cleveland and Seattle to name two cities.
In Europe, I learned that Liverpool football fans were frightened with the prospect of American sports owners Thomas O. Hicks and George Gillett turning the Liverpool Football Club into some sort of a American business complete with a new stadium and higher ticket prices which would create a consumer base of just very well off fans who would attend matches. The construction of the new stadium has been delayed because of the global recession.
Sportswriters, those who still have jobs, are producing prose that includes how Yankee Stadium is promoting a caste system of fans. My advice to those writers, review what you have been writing about for years and figure out where you went wrong in your coverage. The caste system was created in 1965 by Houston Astros owner Roy Hofheinz with the opening of the then so-called "Eighth Wonder of the World," the Houston Astrodome that came complete with sky boxes which separated the rich of the blue collar fans. Of course to be technically correct, the Roman Colosseum also had a caste system when it opened in 80 AD.
The concerns of January 2000 by sports fans haven't changed. It appears the "we want customers not fans" mentality is here to stay with the mantra of we need customers to support the high costs of sports. The recession is now hitting the sports world, it seems that for those who claim to be the moral guardians of the game, the sports media, they were just as asleep at the wheel as sports costs soared as they were doing the so-called baseball steroid era. They failed to keep up with their readers, listeners and viewers who knew that sports was no longer live entertainment for everyone anymore.


Wednesday, April 22, 2009

Is the NFL Draft really representative of American business values?

http://www.examiner.com/examiner/x-3926-Business-of-Sports-Examiner~y2009m4d22-Is-the-NFL-Draft-really-representative-of-American-business-valuesIs the NFL Draft really representative of American business values?

April 22, 4:57 PM · Add a Comment
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You hear a lot of about how that President Barack Obama is a socialist, how he wants to share the wealth or how he wants to cap the salaries of say bank executives or automaker execs which is against all free market principles according to certain segments of the chatter society, but here is a question for those shrill voices and writers. How many of you will be celebrating this Saturday when National Football League Commissioner Roger Goodell steps to the podium at Radio City Music Hall over on 6th Avenue in midtown Manhattan, not far from Wall Street which is the heart of the capitalist society, and announces that the Detroit Lions are "on the clock" as Goodell kicks off the 2009 NFL Draft?

Probably a good many of them who are rooting that their favorite NFL team picks up some valuable new employees to help their team advance in the regular season and the playoffs.

You see the members of the radio and cable TV noise chamber and their followers who vehemently despise socialism and salary caps are cheering for the very thing they cannot stand. The National Football League has a cap on player salaries, practices something called "leaguethink" which is really socialism as the 32 owners share the wealth from TV and other revenue sources equally and the NFL Draft itself keeps most of the qualified applicants from shopping their services to the 32 NFL teams. There is no free market for the players ranked from #2 to about #230 in the pool of people qualified to work as a player in the National Football League. The draft also rewards failure; the best of the new employees end up with bad teams like William Clay Ford’s Detroit Lions. The poorly managed teams like Ford’s Lions which was winless in 16 games last year get a bailout, a potential great player.

The conservative columnist and TV pundit George Will is a baseball fan and a free market advocate until it comes to baseball and sports. A number of years ago when Will was a member of the Baseball Blue Ribbon Committee looking at ways of keeping all teams on a level financail playing field, he told me that baseball should and could not be subjected to free market principles. Will had been on the Board of Directors of the San Diego Padres and the Baltimore Orioles so he knew what he was talking about in the sports industry. Sports needs to be regulated by Congress and sports owners need a willing players association that allows what amounts to an illegal business practice. An annual draft of players which takes away an individual player's right to negotiate with multiple potential employers instead one just one.

Think of what the noise chamber would sound like if a college graduate in normal economic times was drafted by a company and sent to an area of the country far from home and was told this is the only job opportunity that you are allowed at a slotted salary. There would be huge cries of that is not fair. This is how it is with the NFL Draft. NFL fans are rooting for something that is against American principles. A legal restraint of trade. But it is only football and why should people care when these college grads, although most of them are not graduating, are offered millions of dollars to play a game?

George Will is, of course, a hypocrite. Free market proponents claim that people should let the market dictate the value of an employee or a business. An entry draft like this Saturday's NFL event is choreographed. Players are slotted into a pay scale based on where they are chosen in the draft. The players except for a very select few at the top of the draft cannot necessarily get their ideal job in their ideal part of the country. They cannot shop around their services and the owners are very happy about that because the players cannot initiate a bidding war between the owners, a good many of whom are free market supporters in their other businesses. It is all legal too under the United States labor laws which allow two parties in collective bargaining, in this case the owners and a willing players association, to cut a deal allowing the draft even though a third party, the draftees, lose the right to sell their services to 32 prospect employers.

The number 1 pick is the only player that has some leverage to chose his team like John Elway tried to do in 1983. Elway did not want to be taken by the Baltimore Colts with the first pick 26 years ago. Elway told Colts owner Robert Irsay not to bother and if Irsay choose him, he would continue his baseball career as a minor league player in George Steinbrenner's New York Yankees organization. Irsay took Elway but ended up trading him to Denver. Elway accepted Denver's offer.

Bo Jackson did not necessarily want to play for the Tampa Bay Buccaneers in 1986 even though Tampa Bay selected him as the top pick in the 1986 draft. Jackson decided to play baseball instead with the Kansas City Royals organization. He had leverage and used it. In 1987, Los Angeles Raiders owner Al Davis took Jackson in the seventh round and that started Jackson's dual baseball-football career.

In 2004, Eli Manning told San Diego Chargers officials not to bother drafting him. But San Diego worked the phones and found an attractive trade package and took Manning anyway. San Diego then sent the quarterback to the New York Giants which was fine with Manning. If Elway, Jackson or Manning were rated lower, they would not have had any leverage.

Potential NFL players coming out of college who are drafted have few choices if they want to make the NFL a career. They could sit out a year and hope they get drafted elsewhere, they can play in Canada or they can go home and find another line of work. Or they can sign a contract with the proposed United Football League and hope the league lasts. Oddly enough the undrafted players have some leverage as they can negotiate with multiple teams and perhaps get bonuses that are better than those drafted in the seventh and final round of annual NFL grab bag.

The NFL owners have a salary cap, which keeps players salaries from skyrocketing and on top of that, NFL players contracts are not guaranteed. A player who gets cut, a fancy word for being fired, keeps his bonus and gets a severance package. NFL owners share enormous national TV revenues although some bigger markets raise more capital than smaller markets because of how much the market will bear for tickets and marketing partnerships. That causes a divide between rich and poorer financed teams but that doesn't affect players as there is a salary cap and a salary floor in the league. Owners have to spend a minimum amount for players and that is a substantial number. The divide is in how much an owner spends on football staff and marketing.

The NFL Draft is now a slice of Americana. Countless hours of TV and radio shows are devoted to this event, numerous stories fill newspapers, blogs and magazines. This is a huge day for football fans and for those fans in the chattering society who decry socialism, spreading the wealth and salary caps. They hope their team gets better but overlook how the draft is so anti-free market capitalism. As the noted philosopher Don King once said. "Only in America."


Sunday, April 19, 2009

Rupert Murdoch should be thanking John Madden for making him a major TV player

http://www.examiner.com/examiner/x-3926-Business-of-Sports-Examiner~y2009m4d19-Rupert-Murdoch-should-be-thanking-John-Madden-for-making-him-a-major-TV-playerRupert Murdoch should be thanking John Madden for making him a major TV player

April 19, 3:00 PM · Add a Comment
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There is one aspect of the John Madden-NFL TV side of the story that most people missed after the announcement that the NFL Hall of Fame coach and broadcast analyst was retiring. Without the NFL and Madden, Rupert Murdoch's United States media empire may not be as imposing as it is today.

Before the NFL and Madden, Murdoch's FOX network, which is technically not a network but a syndication unit, was a weak collection of UHF stations with the exception of a few cities like New York, Washington, and Los Angeles. Before the NFL and Madden, FOX had a few shows that drew some attention, the It's Gary Shandling's Show, the Tracy Ullman Show and Married With Children. Out of the Ullman show came The Simpsons, Shandling's show originally ran on Showtime and then went to FOX. Ullman's show was canceled in 1990. FOX could not establish a late night talk show, the Joan Rivers experiment was a disaster and a 1993 Chevy Chase late night show as a bomb. Not much worked for Murdoch.

Neither Al Bundy nor Bart Simpson, as popular as the characters would become, could bolster FOX. Murdoch's team was buying TV stations and became the biggest owner of over-the-air stations in the United States but by 1993, it was still the fourth network in a three horse race for ratings behind CBS, NBC and ABC.

The NFL and Madden changed all of that. Actually, it was Jerry Jones, the owner of the Dallas Cowboys that put Murdoch on the map as Jones and Murdoch negotiated the TV deal that would change everything. The NFL had been prospering from TV rights fees since the 1961 Sports Broadcast Act which allowed the league commissioner, who is also the league's chief negotiator and lobbyist in all things NFL, to bundle the 14 member franchises into one entity in order to negotiate a TV deal. Three decades later, the NFL was a 30 franchise entity with four separate and distinct elements. CBS had the National Football Conference contests and paid slightly more money for the NFC than NBC did for American Football Conference games because the NFC had more major markets. ABC had Monday Night Football and ESPN and Turner Sports split a Sunday night package.

The NFL was being paid $3.6 million over a four year period between 1990 and 1993.

Murdoch's fourth place network was desperate for a game changer and the NFL provided him with an opening. The NFL and Jones were knocked over by Murdoch's bid for the NFC games. Murdoch was willing to fork over $1.58 billion over four years to get the NFC package along with the Super Bowl. Murdoch had a syndication arm but no news division, no sports division, none of the apparatus that CBS, ABC and NBC had. Murdoch knew that the NFL deals with an old philosophy, cash on the barrel head gets serious consideration and because he blew CBS out of the water with his bid, the NFL and Jones knew they would be getting a new partner with a patchwork of big city VHF and small area UHF stations and both sides would have to make it work.

In December 1993, The NFL took the money. In retrospect, it was the right decision but at the time it looked like just a money grab.

In early 1994, Murdoch started to prepare for the 1994 season by quickly established a sports department by giving Madden an enormous contact and hiring his sidekick Pat Summerall. Murdoch also took Madden's CBS support team and made John feel right at home. Madden would become the face of FOX sports and with the NFL in tow, Murdoch was able to steal VHF stations in Detroit and Milwaukee away from CBS. Murdoch had one of TV's crown jewels, the NFL, and FOX would now be in a position to become a serious player in American TV.

It can be suggested that the success of the NFL and Madden on FOX led to Murdoch to start the FOX News Channel. The over-the-air network, still technically a syndication arm, started producing hits like the X-Files along with Beverly Hills 90210, Melrose Place, In Living Color to go along with The Simpsons and Married With Children. Murdoch didn't have blockbuster ratings but the network was doing okay business and he already had a satellite news network in Europe, Murdoch turned to creating a United States cable TV news channel.

There are no what if questions. The NFL and Madden changed the fortunes of both Murdoch and Lawrence Tisch's CBS. In 1993, CBS completed the TV hat trick, it won daytime, prime time and late night ratings. David Letterman had just moved over to the network and things were looking good. But Tisch's CBS did not invest in cable TV, lost the NFL and Madden, football's top star both on and off the field, lost affiliates and would start a downward spiral. Murdoch's FOX Sports added the National Hockey League and Major League Baseball soon after the NFL deal. Eventually Murdoch would gain NASCAR and the Bowl Championship Series. On the cable TV side, Murdoch sort of has a national sports network, but that is not where Murdoch really has a sports foothold. Murdoch's regional sports cable networks are still strong despite being challenged by upstarts in the past few years. FOX either owns or has agreements with 23 regionals and there are college sports networks as well. There is also a partnership with The Big Ten Network

Madden's signing with FOX after CBS lost the NFL rights in 1993 cannot be dismissed. John Madden was a major part of the FOX promotion, so much so that at an NFL owners meeting at the Arizona Biltmore in Phoenix, John ended up by the master of ceremonies for the night's owners party after Murdoch departed. Madden left FOX after the February 2002 Super Bowl and joined ABC Monday Night Football's crew. John was no longer that valuable to Murdoch. Rupert built a viable network, he had built a strong regional sports cable network, he had his news channel and was finally an American citizen because non American citizens could not own TV networks. Murdoch, the Australian, should not have owned FOX but American President Bill Clinton's Federal Communication Commission in 1995 allowed Murdoch to run FOX because it was "in the best interest of the public."

The NFL and Madden helped build Murdoch's business. Both gave credibility to Murdoch. And even though Murdoch did handsomely reward John Madden for his years of service to FOX, Rupert should have been thanking John last Thursday from the highest hilltop from bended knees because without the NFL and John, FOX doesn't exist as a major player in the TV game.


Tuesday, April 14, 2009

Another politician wants to fall for the sports as an economic engine mantra


Evan Weiner
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Another politician wants to fall for the sports as an economic engine mantra

April 14, 9:07 PM · Add a Comment

The town of Ramapo is about 35 miles northwest of midtown Manhattan. It has been a New York City bedroom community for about a half century since the opening of the Tappan Zee Bridge. It has never been an area for professional sports although there was a pre-U. S. Open tennis tournament at Ramapo College in nearby Mahwah, N. J. and the New York Rangers briefly practice at the rink in Monsey, a post office address, within the town.

Rockland Community College's Fieldhouse has hosted major name concerts and at one time, the Theater-Go-Round in nearby Nanuet, N. Y. presented big time performers but that was three decades ago.

Ramapo now wants to get into the sports business, specifically into the minor league baseball stadium building part of the industry. The town supervisor Christopher St. Lawrence apparently thinks the town is ripe for a minor league baseball team.

St. Lawrence is saying all the right things, or at least is repeating the failed mantra of the past two decades of how "this addition to the (Rockland) County will serve as an engine for economic growth." There is no word on where the St. Lawrence baseball team would play or better yet who will pay for a minor league park.

Minor League Baseball might not want a team in the backyard of the New York Yankees or the New York Mets, so St. Lawrence would almost have to entice independent baseball leagues to look at his town and the county.

Independent leagues are not fairing well in this economy. The Can Am League would seem to be a good fit for St. Lawrence's phantom team as the league has franchises in Little Falls, New Jersey and Augusta, New Jersey. But the league lost two teams after the 2008 season. In the best of times, making money on an independent league team is difficult as owners have to pay players salaries unlike the owners in Minor League Baseball where Major League Baseball teams pick up the paychecks for managers, coaches, trainers and players.

The Atlantic League of Professional Baseball requires first class stadiums and Ramapo would be within the geographic footprint of the league. One of the Atlantic League teams, the Bridgeport (Connecticut) Bluefish, is heavily subsidized by one of the poorest cities in America. Bridgeport. The city of Yonkers, another city that has had decades of fiscal problems, is desperately trying to build a ballyard as part of a major redevelopment of the Chicken Island area of the city. The ballpark would be the centerpiece of a major urban development plan and has been a central part of two mayors vision for the city.

The project has been delayed as opponents know that Yonkers will end up using a lot of taxpayers dollars to prop up a minor league baseball team and stadium and there is no money to complete the massive ballpark-village concept. Yonkers is a lot like Washington, D. C. and St. Louis, Missouri in that sense. Ballpark villages that were supposed to be built have not materialized yet in both cities.

The notion of a baseball park being an economic engine is a flawed urban policy and St. Lawrence just needs to go from city to city to gather the data without spending a fortune on consultants and focus groups. Besides he would pay for the consultants and focus groups that would come back with the answer, it's great to have a local team, it will create jobs, people will get affordable entertainment and everyone would be happy.

Here is free consultancy for St. Lawrence. Those jobs you think you will create have no lasting value. They will be per diem work for a few parking lot attendants and vendors. If the town of Ramapo builds the stadium, the town would probably use Department of Public Works employees to work at the stadium in maintenance and ground crew. The team will hire just a handful of employees at minimum wage or slightly above to do some promotions If the town finds the money to build a place, an owner because of the loophole caused by the 1986 federally tax code revision can keep as much as 92 percent of the revenues generated in the stadium with the town using the other eight cents to pay down. The town could find other sources of revenue by imposing a hotel-motel tax, but that is a problem with a paucity of rooms in the area. They could also raise car rental taxes, but Ramapo is a bedroom community not a destination area so that is not a good alternative. In New York, where the state is in deep financial trouble, raising taxes to build a stadium that might be used 70 days annually would not be a smart move.

It is very unlikely that a Rockland-Ramapo baseball team will attract 6,000 paying customers for every home game in the best of economic times.

Christopher St. Lawrence may be peddling the line that Minor League Baseball has proven "extremely profitable" something that former Yankees catcher and one time Newark Bears owner Rick Cerone might not be using. Newark has been a perennial money loser despite playing in a new stadium. The last Bears owners declared bankruptcy on October 24, 2008. A new group of owners picked up the team in a bankruptcy court.

For some reason, politicians have latched onto building baseball, soccer, football stadiums and arenas as economic engines. The inconvenient truth about the thought that building sports facilities would act as an economic engine was uttered by one time New York Jets President Jay Cross as he pushed to build a Jets-Olympic stadium on Manhattan's west side. Cross said the only people who make money off a stadium are sports owners and parking lot attendants.


Sunday, April 12, 2009

Delaware Sports Book Threatens NFL


Delaware Sports Book Threatens NFLPosted April 12th, 2009 by Evan Weiner
By Evan Weiner
April 13, 2009
12:30 AM EDT
(New York, N. Y.) -- One of Bernard Madoff’s most famous baseball clients, Fred Wilpon, officially opens up Taxpayers Bailout, rather CitiField in Flushing on Monday for his New York Mets 2009 home opener. While Citibank is Wilpon’s most visible financial and marketing partner there is another very visible marketing partner which should raise some eyebrows around the sports community. The world’s largest casino operator Harrah’s has signed an agreement with the Mets owners, the Wilpon family, that includes advertising and also something called “the Caesar’s Club” which is a 12,000 square foot area inside the stadium where Harrah’s will serve food and drinks. Mets minor league affiliates will also be included in the marketing partnership.
But here is the troubling aspect of the deal based on Major League Baseball’s history with gambling and the industry’s explosion of players who gambled on games. Harrah’s plans to give Mets fans special deals to get them to go to Harrah’s Atlantic City properties and there will be Harrah’s-theme nights at the stadium, CitiField.Citibank has a 20-year, $400 million agreement with the Wilpons although it is unclear just how much of the annual commitment is being picked up by American taxpayers. Citibank, Madoff and Harrah’s are all part of the New York Mets franchise. A broken bank, a convicted ponzi scam artist and a casino is hardly the image Major League Baseball wants in trying to sell a franchise but that is the mess that exists in Queens.At New York’s other new baseball park in the Bronx, the new Yankee Stadium, the Connecticut-based Mohegan Sun Casino has a restaurant in the new facility. Mohegan Sun is no stranger to big league sports. National Basketball Association Commissioner David Stern gave the green lght to the casino’s owners, the Mohegan Native American Tribe, to purchase the Women’s National Basketball Association’s Orlando Miracle after no local ownership wanted the team back in January 2003.It will be very difficult for Major League Baseball Commissioner Bud Selig to fly from his Milwaukee office to Dover, Delaware and start telling Governor Jack Markell and other Delaware politicians that they should forget about establishing a sports book in the state. But it would not be surprising to see Selig join with National Football League Commissioner Roger Goodell and the National Collegiate Athletic Association in attempting to persuade Markell from pursuing his goal of bringing sports gambling to Delaware.
Major League Baseball has not joined in the fight yet. The Delaware proposal is flying underneath baseball’s radar as well as hockey and basketball. Minor League Baseball has a team in Wilmington, neither the NBA nor the NHL has a team in Delaware. The NFL has no presence in the state, while there are colleges that play big time sports in Delaware. It is doubtful that NBA Commissioner David Stern will join the fray as he has publicly changed his stance on government sponsored casino partnerships despite his league’s Tim Donaghy problem. Donaghy, a former league referee, bet on NBA games and pleaded guilty to conspiracy to engage in wire fraud and transmitted wagering information through interstate commerce in August 2008.
Sports owners employ a double standard when it comes to gambling and gaming. There is no doubt that the NFL looks the other way when it comes to point spreads, over and unders and other bets when it comes to NFL games. The point spreads and gambling bring people into the game and the same holds true for college football and college basketball. Gambling is good for business but the sports commissioners want an industry that is purer than Caesar’s wife.
There is the claim is that wagering on the outcome of a game might impact on the integrity of a game. While he was managing the Cincinnati Reds, Pete Rose allegedly bet on his team to win games. Rose allegedly violated Major League Baseball rules and was placed on baseball’s ineligible list in August 1989 even though Major League Baseball never issued a formal finding that Rose bet on games.
Over the years there have been fights between NBA Stern and Oregon officials as well as New Jersey politicians about sports betting. Stern also had politicians in Ontario and British Columbia change sports lotteries before his league expanded into Toronto and Vancouver in the mid-1990s. NHL Commissioner Gary Bettman succeeded in getting a portion of the Alberta hockey lottery to be diverted and placed into the coffers of the Calgary Flames and Edmonton Oilers.
Selig’s industry is loaded with casino marketing partnerships, one of his owners, Detroit’s Mike Ilitch’s wife owns a casino in Detroit and is looking to expand the family’s gaming holdings. Ilitch does not have the casinos in his name due to Major League Baseball bylaws. Goodell has a tricky sell. Pittsburgh’s Rooney family has racinos and dog tracks and while the some of the family is exiting the Steelers ownership, it should be noted that one time Steelers running back Jerome Bettis applied for a slot parlor license after Pennsylvania approved plans to build casinos and Bettis was asked not to get involved by the NFL. The Rooney family attempted to block casino construction near the teams home field in Pittsburgh because of traffic problems.
When it suits an owner, sports gambling is fine. Ironically enough, the new Pittsburgh casino is helping to provide funding for the new Pittsburgh arena, which will open in 2010.
When money flows into sports from gambling spots or there is an opportunity in Las Vegas, leagues jump in except the NFL. In January 2003, then NFL Commissioner Paul Tagliabue nixed an attempt by Las Vegas to buy a spot during ABC’s Super Bowl telecast.
Governor Markell contends that the NFL’s partners, Sumner Redstone’s CBS, General Electric’s NBC, Rupert Murdoch’s FOX and Disney’s ESPN give out point spreads on league related telecasts and that it is hypocritical that one on hand the NFL crusades against gambling yet ignores point spreads discussion by their TV partners.
Delaware, like virtually every other state in America, needs money with a $751 million deficit. The fight between Governor Markell and Roger Goodell will continue as will. On March 26, Rep. Peter Schwartzkorf, a Rehoboth Democrat introduced House Bill 100 that would legalize sports betting in Delaware. Three venues, Dover Downs, Delaware Park and Harrington Raceway would be three sites and ten other places will be granted betting licenses and that might include new casinos, sports bars-restaurants.
There will be more lobbying and more talks on the Delaware sports betting bill. Nevada has had a sports book forever and the University of Nevada at Las Vegas had a big time college basketball team. The National Hockey League will have the league’s awards presentation there in June. Delaware doesn’t have any Las Vegas cities, there will never be a Delaware franchise in the NFL and the NCAA is not scheduling any men’s basketball playoffs there. There are people in Delaware betting on games, why shouldn’t the government take a piece of the action?
Sports leagues and owners are in favor of casinos and gambling where it suits their needs. Delaware’s plan doesn’t benefit sports owners and that is why the NFL and NCAA are against it.

Monday, April 6, 2009

Why is this league, the National Football League, different from all other leagues? Ask Congress

Why is this league, the National Football League, different from all other leagues? Ask Congress Posted April 6th, 2009 by Evan Weiner
By Evan Weiner
April 6, 2009
7:30 PM EDT
Somebody up on Capitol Hill is upset at the National Football League and that begs the question. Why is this league, the National Football League, different from all other leagues? All the other leagues, Major League Baseball, the National Basketball Association, the National Hockey League, Major League Soccer and the National Collegiate Athletic Association can put games on cable/satellite TV or broadband and not attract scrutiny but the NFL cannot.
All other leagues can have their own networks without Congress poking their collective noses into their networks, but the NFL cannot.
All other leagues can schedule games anytime they want and place the games on TV but the NFL cannot on Friday nights and all day Saturday during the high school and college season.
It was television that made the NFL into the giant it is today because of the Sports Broadcasting Act of 1961 and like Major League Baseball which zealously protects the Antitrust exemption that was given to the American and National Leagues in 1922 by the Supreme Court of the United States, the NFL would like the Sports Broadcast Act of 1961 to remain the law of the land.
It does seem quite unusual that staffers of both the House and Senate Judiciary Committees, at policy session at the National Cable Television Association convention last week in Washington brought up the law which was shepherded through Congress by House Democrat Emanuel Cellar in 1961 and signed into law by President John F. Kennedy on September 30 of that year just days after the NFL extended its partnership with DirecTV for NFL Sunday Ticket and once again denied multiple cable systems operators a chance at the service.
The NFL-DirecTV deal now goes through 2014 and DirecTV is the exclusive NFL Sunday Ticket partner and that doesn't make the cable operators happy nor does the agreement make the Senate jump for joy, particularly Pennsylvania Republican Arlen Specter who has been critical of the NFL since the league decided to put a small number of games, some late season Thursday night and Saturday games on the NFL Network. But the cable operators might eventually be in the Congressional crossfire since the staffers are discussing the removal of games from cable, the ESPN and NFL Network packages, and placing them on over-the-air networks. The NFL has a full slate of Sunday games, more than other sports, and all of the NFL playoff games are available on over-the-air TV which is more than MLB, the NBA and the NHL can say.
Congress and the NFL have been battling one another for a few years over the NFL Network and how most football fans don't have access to those games. Some background is necessary to fully understand why the NFL decided to put that schedule on the NFL Network and not go with Comcast's OLN back in 2005.
There is one theory, which has been floating around for some time, that the NFL decided to keep Versus's promised limited package for the NFL Network not necessarily because the owners wanted to grow their own network, but rather because the owners didn't want to share additional cable television revenues with their players, as the league and players were negotiating a new collective bargaining agreement in late 2005.Cable television and collective bargaining issues involve money: NFL owners feel they are giving too much revenue to the players and are also losing millions of dollars annually because big multiple systems operators (MSOs), such as Comcast (the nation's largest, with 24 million subscribers), Time Warner, and Cablevision, will not add the channel to their basic expanded lineups.
There has been little progress between the MSOs and the NFL since week 17 of the 2007 season. On December 29, the Patriots-Giants contest in East Rutherford, N.J., became a political football, metaphorically speaking, as the game was scheduled to be carried by the NFL Network. At that time, the channel reached only 43 million cable and satellite homes — out of a possible 95 million homes — in the nation. Senator John Kerry of Massachusetts first suggested that the December game (which featured the then-undefeated Patriots) be moved to NBC, possibly as a Sunday night presentation. But the NFL wanted to keep the game on the NFL Network to give the league some leverage in its ongoing talks with cable operators.
Kerry, along with Specter and Senator Patrick Leahy of Vermont, wrote a letter to the commissioner of the NFL, Roger Goodell, in which they threatened to reconsider the limited antitrust exemption that the NFL enjoys (although none of senators was specific as to what the Senate could really do). Following that pressure, the game was shown on CBS and NBC — as well as on the NFL Network.
The NFL wants cable companies to carry its network on a basic expanded tier so that all subscribers get the channel, whether they want it or not. (This is the same arrangement that covers such channels as ESPN, CNN, and the Weather Channel.) But the big MSOs objected to the cost of the NFL Network and questioned whether it was a value to subscribers. League owners and the MSOs have been at odds since the league signed an exclusive deal for its NFL Sunday Ticket package with the satellite system DirecTV. Cable operators will not be able to bid on the NFL Sunday Ticket package until after the 2014 season.
In this specific battle, the league and Comcast have been feuding since 2005, when the league pulled out of an agreement to allow the Versus network (owned by Comcast) to carry a limited Thursday-Saturday package. In an about-face, the NFL then assigned the package to its NFL Network in 2006. Had Comcast gotten the NFL package, it could have set up Versus as a serious threat to ESPN's dominance, as the network had already landed an American NHL cable contract and was negotiating with MLB for a limited package of games. The NFL deal would have greatly accelerated the introduction of Versus to MSOs.
In 2008, the NFL failed miserably to get the support of lawmakers to put the NFL Network on basic expanded tiers. On May 6, the NFL Network filed a complaint with the FCC, accusing Comcast of discriminating against the league-owned sports channel in violation of equal treatment requirements under the 1992 Cable Act. Lawyers for the NFL think Comcast is violating the law because Versus receives wider distribution on Comcast cable systems. NFL lawyers also think that Versus ended up with the Pac-10/Big 12 conference football games contract because Versus has more subscribers than the NFL Network. But on May 8, the chairman of the FCC, Kevin Martin, essentially told the NFL not to expect relief from the commission, saying he would not try to adopt rules that could help the NFL Network get carriage on Comcast systems across America.
Only one million Comcast subscribers have purchased the NFL Network. If the NFL is charging a dollar per subscriber per month, the NFL has lost a quarter of a billion dollars annually in its dispute with Comcast.
The NFL might disappear from Comcast entirely on May 1 if the league and the cable giant do not come up with a new agreement.
Nearly 48 years after the passage of the Sports Broadcast Act of 1961, Ivy Johnson, a Republican staffer on the Senate Commerce Committee, has opined that when the act was passed because the NFL's had a commitment to offer games on free, over-the-air TV.
Here's a bulletin for Johnson and other staffers like Stewart Jeffries and Christal Sheppard and others from both sides of the aisle. Learn your history before you sprout off opinions.
It might enlighten you.
There was no cable or satellite TV back in 1961. The NFL sought an antitrust exemption because the rival football league, the American Football League, signed a five-year deal with the then rather small American Broadcasting Company to air most of the new league's games including the AFL Championship in 1960. The AFL borrowed a page from Branch Rickey's proposed Continental Baseball League that included a planned TV revenue share between Continental Baseball League franchises which called for the fledgling league to bundle the franchises and sell the TV rights as one entity. Major League Baseball had an antitrust exemption and routinely signed a national deal with the National Broadcasting Company with those revenues going to fund the players pension plan. Both American and National League franchises cut local deals and kept the money from games seen in the home team market. The NBA, NHL and NCAA were non factors in those days.
It is very unlikely that the NFL could get billions of dollars annual if the 1960 rules were re-established. Here is a flash of Capital Hill staffers, in the old days, TV stations literally printed money but that is not the case today. George Preston Marshall could not replicate the old Washington Redskins network which consisted of the old Confederacy. The market that Marshall had included Jacksonville, Miami, Tampa, New Orleans, Charlotte, Dallas and Houston, all NFL cities today. The New York Giants network was all of New England along with New York and New Jersey. Green Bay had a poor network and it took quite a bit of pressure from NFL Commissioner Pete Rozelle to convince his owners in 1960 and 1961 to break up profitable networks for the New York Giants, Chicago Bears and Los Angeles Rams.
Over-the-air TV cannot compete for sports rights with regional cable networks or ESPN as cable networks get both licensing fees from cable subscribers and advertising. Over-the-air networks make money strictly from commercials.In virtually every American city with a sports franchise, owners have sold TV rights to cable companies like ESPN, Turner and the regional cable networks. The Sports Broadcasting Act of 1961 made the National Football League into the juggernaut it is today. If Congress wants to repeal the Sports Broadcast Act of 1961, the NFL might resemble baseball with rich teams in the big markets and struggling franchises in Kansas City, Buffalo, Green Bay, Jacksonville, Nashville, Charlotte and St. Louis.
Congress, if the representatives really feel like messing around with the NFL, can go with the nuclear option. Both chambers could blow up the 1966 legislation which allowed the merger of the NFL and AFL. They could create two, three or four football leagues where players could sell their services to different teams instead of the one franchise that selected them in the draft. That would create a different American football structure and end the Super Bowl as it is played today.
The NFL's success has been built in Washington, on Capital Hill. Perhaps Congressional staffers ought to look at 1960s era legislation instead of opining and understanding those pieces of legislation. The next decade will feature massive changes in technology in TV, radio, cell phones, broadband and computers. The staffers may look very foolish in the next decade when the changes come.
evanjweiner@yahoo.com http://www.mcnsports.com/en/node/6129