Thursday, June 18, 2009

Canseco, Sosa and the Olympics, Sosa and the Olympics

By Evan Weiner

June 18, 2009

10:30 PM EDT

(New York, N. Y.) -- Jose Canseco is hopping mad and is ready to unleash a class action suit against anyone that seems to be connected with Major League Baseball, the owners and the players and anything that isn't nailed down. Canseco's feels he has been blackballed for writing a book about steroids use in baseball and that has cost him a chance at the Hall of Fame and a job in baseball. While Canseco was looking to get even with someone even though he admittedly used banned substances, the New York Times was publishing a report that was leaked by somebody that Sammy Sosa failed a performance enhancement drug test in 2003. The drug test administered to Sosa was supposed to be confidential and the result was not supposed to be released to the public. Canseco's suit and the Sosa revelation came as the International Olympic Committee reviewing the various cities that are ready to lose billions of dollars in a bid to host the 2016 Summer Olympics.

Canseco, Sosa and the IOC are joined at the hip.

Canseco's tome on banned performance enhancing drug use in baseball brought to light steroid usage in baseball and it is because of alleged usage of banned performance enhancement drugs by baseball players, according to some in the know, that caused the International Olympic Committee to drop baseball from the quadrennial sports event known as the Olympics.

Canseco's book also spurred Congress to get off its collective duffs for one of the great shows of all time, the Major League Baseball comes clean hearing before a House committee on St. Patrick's Day 2005, where a parade of players including Sosa, Mark McGwire and Rafael Palmeiro hemmed and hawed about whether they used banned performance enhancing drugs before the Committee on Government Reform.

Congress, which among other things had two wars going at the time, took both the baseball owners and the players to the woodshed and shamed the two sides into toughening up their collective bargaining agreement in terms of drug testing but the St. Patrick's Day celebration of the great American game left one question that no one wants to answer.

If steroid usage in the United States is illegal, why weren't the players caught violating the collective bargaining agreement by testing positive for a banned substance looked upon as cheaters and not lawbreakers?

This is an important part of the entire banned performance enhancing drug usage problem that allegedly exists in sports and it gets back to whether athletes get special treatment. The International Olympic Committee's whole argument that baseball's drug policies aren't tough enough is laughable when you consider the IOC President Jacques Rogge was begging Italian law enforcement personnel to let the IOC police the Turin Olympic Village during the 2006 Winter Olympics because the athletes who might be caught with banned enhancers were really cheating and it was not a criminal offense.

What is even more troubling is how one law enforcement official in Harris County, Texas views athletes taking banned substances. "I’d like to see any players who have broken the rules face up to it publicly and do everything within their powers of persuasion to dissuade young people from using these drugs as opposed to sending them to prison. I think the truth has great powers for them. It’s got to be awful for them to know that they cheated and then perhaps committed perjury," said Harris County District Attorney Pat Lykos to a reporter who did a story on her in the Houston Chronicle newspaper about two weeks ago.

The shame of being named a cheater triumphs breaking the law.

Some members of Congress are thinking about reviewing Sosa's testimony in light of the New York Times report. There is one player who got caught up in the Congressional hearings who pled guilty to lying to Congress. Houston's Miguel Tejada, who plays in Lykos' Harris County, didn't fess up to lawmakers about his anabolic steroids usage. Tejada could have faced a year in jail and deportation on February 11, 2009 when he appeared in court. Instead he got what amounted to a slap on the wrist as on March 26, he received probation.

So much for the seriousness of lying to Congress or breaking the law. Tejada did have an out though, he is from the Dominican Republic and you can buy steroids at any local pharmacy in the country as there is no law against its usage.

Canseco's class action suit contends that he isn't a Hall of Fame candidate because he is blackballed and McGwire, in Jose's opinion, has been blackballed too. Canseco claims he and others are missing income opportunities because they are not in the Hall of Fame. That one Canseco should take up with the Baseball Hall of Fame, the body that empowers baseball writers with 10 years of more experience on the beat to vote on which players belong in the baseball shrine. Why writers who are allegedly journalists should vote on an honor is a question that newspapers never really faced until recently when some papers publishers or editors found it unconscionable that writers voted on the very subjects that they were supposed to be covering. Former Baseball Hall of Fame President Dale Petroskey wasn't too bothered with newspapers who barred writers from voting and once boasted that more writers voted for Hall of Famers after the edict came down from the papers.

Major League Baseball and baseball writers depend on one another and baseball writers do the right thing and promote the game as if it is part of their job.

The same writers who had an idea that players were juiced in the 1990s but gleefully went along the great home run race of 1998 between McGwire and Sosa which allegedly restored interest in the game after the 1994-95 players strike because it was in both the game and the writers best interest to prop baseball back to pre-1994 interest levels.

It did lead to some writers actually speculating that players were taking something and to a juvenile confrontation between then Sports Illustrated writer Rick Reilly and Sosa in the Chicago Cubs clubhouse where Reilly offered to take Sosa to some Chicago lab to get drug tested. Reilly apparently forgot that even baseball players have a right to privacy.

The more serious American sportscaster Bob Costas speculated that some players were juiced in various discussions as did the Washington Post’s Tom Boswell.

Reilly, who for some unknown reason is considered a must read writer, never got a response from Sosa. If Reilly had the goods on Sosa he should have done some investigative reporting and backed it up but he decided to showboat in a clubhouse. Reilly was not a serious journalist that day although it is questionable if Reilly has ever been in the same category of the Pulitzer Prize winner Dave Anderson or of Red Smith or Dick Schaap. Anderson would never have pulled a stunt like Reilly did with Sosa.

Sosa was a star and this is where the IOC comes in. The IOC could never get McGwire, Sosa or others to play in the Olympics because Major League Baseball was never going to suspend its season for two weeks for what essentially was a meaningless tourney for big leaguers. The IOC wants big names and used the lack of Olympic style drug testing as an excuse to throw baseball out of the games. Rogge wants big names; baseball isn't going to give him that. That is why baseball is not in the Olympics and the drug testing issue is the ruse.

The IOC reviewed baseball's application to get back into the Games earlier this week and while the New York Times Sosa story didn't help the cause, the IOC still wants stars not top rated minor leaguers even though that is what they get from FIFA for the football (soccer) tournament. But even the IOC delegates know it would not be wise to pick a fight with FIFA because there is no way they could win. The FIFA World Cup trumps the Olympics.

The IOC thinks it is a nation not a sports organization and why countries buy into the IOC is ludicrous and defies any reasonable explanation. The IOC has left behind billions of dollars of debt in host cities that wanted the two week athletic event and does so without any remorse. In fact, the way the IOC looks at it, it is an honor to host the Olympics although if you ask everyday people in Montreal, Sydney or Athens that might look at it a bit differently as the bill to host the Olympics takes generations to pay off.

The IOC went over the bids for the 2016 Summer Games from Chicago, Madrid, Rio de Janeiro and Tokyo this week in Copenhagen. On October 2, the IOC will announce which city gained the right to lose billions hosting the Games. London is finding out right now just how much it really costs to host the Games and the jubilation of winning the bid for the 2012 Olympic Games back in 2005 has faded as the real cost of the holding the Olympics is beginning to hit homes.

The London Games will be missing baseball and softball. For whatever reason softball was cut from the Summer Olympics program. The American women also did well in the Games, could it be that the women are being punished because Major League Baseball didn't play ball with Rogge? Only the delegates know for sure, but given the IOC's history it would not be a surprise if that was true.

Sports is a business, Canseco thinks he is being shut out, Sosa was outed and the IOC and others think athletes using banned performance enhancer drugs is merely cheating, not unlawful. Just another week in the toy store of life, sports.

Monday, June 15, 2009

Hamilton Loses Again Hamilton Loses Again

By Evan Weiner

June 15, 2009

11:00 PM EDT

(New York, N. Y.) – Hamilton, Ontario taxpayers, United States Bankruptcy Judge Redfield T. Baum saved you millions of dollars but for the tens of thousands of people shut out of Toronto Maple Leafs tickets in an area that is suddenly known as “South Ontario” which really isn’t south Ontario, it is more hurry up and wait for Hamilton to get an NHL team. While some Canadians and a sizeable portion of the Toronto media will probably ratchet up the scorn and competent they have for National Hockey League Commissioner, Gary Bettman, it may have been Jim Balsillie who killed the deal that could have resulted in Hamilton or South Ontario getting an NHL franchise by insisting that his purchase of the financially distressed Phoenix Coyotes hockey team from Jerry Moyes hockey team be done by June 29 or he would walk away.

Judge Baum ruled that there wasn't enough time to resolve all of the issues surround the sale which included whether the NHL could charge a relocation fee and there are others issues surrounding including whether the NHL had the right to block a move from Glendale to Hamilton and if NHL franchises in Toronto and Buffalo, New York should get compensation money if Balsillie “invaded” their territories by placing a team in Hamilton.

That was the 10,000 pound gorilla hanging over the courtroom according to Judge Baum, not to mention that New York’s two United States Senators suggested to the judge that the NHL bylaws and wishes should be considered.

Hamilton's city and elected officials were ready to greet Balsillie as a liberator with open arms and with many millions of dollars to upgrade the city's arena, welcoming him as a conquering hero for getting the city a hockey team. The Toronto media was ready to give him the highest honor that Canada could bestow on one of their own.

Hamilton was ready to spend lavishly as the city has to renovate the city’s arena as it is not up to NHL standards as it lacks high price seating. It was one of the reasons that the NHL bypassed it during various expansions in the 1990s.

So Bettman wins one although not much was resolved by the court because the clock was running out on Basillie's bid to buy the financially insolvent Phoenix Coyotes franchise. The franchise is in financial ruin and hanging over the fate of the franchise is Glendale, Arizona's instance that the franchise stays in the city's new arena for another 26 years or someone will have to pay a huge sum for breaking the lease between the team and the municipality.

National Hockey League Players Association Executive Director Paul Kelly was a loser in Judge Baum's decision. Kelly stuck his neck out saying it was time to pull the plug on the Phoenix franchise although he said he was not advocating a sale of the team to Balsillie or a move to Hamilton. Kelly's reasoning was that someone should come to the realization that the NHL could not succeed with an owner, Jerry Moyes, losing millions upon millions of dollars annually. Not even the father of the modern era of executive directors of players association, Marvin Miller, the long time Executive Director of the Major League Baseball Players Association would ever have told owners publicly in either a newspaper interview or on a sports talks radio station to move a franchise. That is an owners decision although from Kelly's standpoint, he probably looked at it as an opportunity to bring more money into the NHL's coffers that would trickle down to the players.

The financial failure of the Phoenix Coyotes really started with a stupid arena design decision by Phoenix elected officials around 1987 when they decided to built a venue for Jerry Coangelo's Phoenix Suns National Basketball Association franchise. The basketball team was the only major league team in the Valley of the Sun at the time and to make sure that Coangelo was content, happy and treated as a deity, they approved a design that was perfect for basketball and terrible for hockey or arena football or other events in the building. The floor of the building was hardly big enough to support a hockey rink or an indoor football league layout.

Coangelo was the big winner in getting the building, his franchise valued soared and most of the rent payments due for the building occur in years 36-40 on the lease. Coangelo eventually cashed in 2004 when he and his group sold the franchise to Robert Sarver for a reported $401 million US. Given how long arenas last in the NBA, it is doubtful that the team will still be playing in the building in 2027 or 2028.

The Phoenix arena opened in 1992. About two years after the arena opened, Coangelo mentioned to this reporter that the NHL needed and wanted to get teams in the Mountain Time zone in both Denver, Colorado and in Phoenix for a number of reasons including grabbing two much needed TV markets. Coangelo was all for the NHL to move to his arena even though the city owned the building and the building had 4,000 obstructed seats. The Phoenix-Scottsdale-Mesa area was growing by leaps and bounds and a lot of western Canadians spent a good chunk of the winter months in the area. It made a lot of sense that the NHL move into the market to that Coangelo and others including Steven Gluckstern and Richard Burke who bought the financially struggling Winnipeg Jets, a franchise that was in desperate need for a new arena, from Barry Shenkarow in the spring of 1996, felt was ripe for an NHL team.

The relocated franchise moved to Phoenix in the summer of 1996 and it wasn't long before Gluckstern and Burke discovered that Coangelo's sports facility, the municipally-owned building, was totally unsuitable for hockey and there was a need for a new barn.

Gluckstern then decided that he wanted to be a co-owner of the New York Islanders in 1998 and sold his share of the franchise to Burke. Burke held onto the money losing franchise in a bad building until 2001 when Steve Ellman bought the team. One of Ellman's partners was Jerry Moyes, a trucking executive. Because sports franchises are no longer stand alone businesses, beginning in 1998, Ellman and Burke wanted to develop a plot of land that Ellman owned at an old shopping center in Scottsdale into an arena with some shopping around it. That never came to be but Ellman took the team off of Burke's hands.

Glendale came up with an arena plan and Ellman was able to get the team out of Phoenix in 2003. Ellman got a $160 million arena west of Phoenix from Glendale taxpayers but promised something in return. Ellman would build an arena-village complete with shopping, housing and other commercial ventures and sales tax raised within the Ellman arena-village would go back to Glendale to help pay off the city's debt obligation on the arena.

Ellman's Westgate project was floundering in 2006 along with the hockey team. Ellman and Moyes split in 2006, Ellman stayed with the real estate project and Moyes became the owner of the Coyotes. Ellman's real estate project has never been fully developed. By November 2008, Moyes no longer wanted to subsidize the hockey team anymore and the NHL started picking up the bills. Moyes filed for bankruptcy protection in May and agreed to sell the franchise to Balsillie which infuriated the NHL which was trying to sell the team to baseball's Chicago White Sox and basketball's Chicago Bulls owner Jerry Reinsdorf.

Reinsdorf does business in Glendale. The city built a spring training facility which is shared by Frank Mc Court's Los Angeles Dodgers and Reinsdorf's White Sox.

The decision by the Phoenix elected officials back in the late 1980s has had an impact over two decades. The original thinking by urban planners in Phoenix was to build a downtown with the arena as the anchor. A number of years later, the urban planners added a plan to build a baseball park near the arena which would make the downtown a destination place for workers in the area and for those who wanted to spend a night or a weekend downtown. It hasn't really worked out all that well for downtown Phoenix or Glendale.

What happens next in the saga of the Coyotes is anybody's guess. But based on sports league's histories, it can be assumed that the NHL will try and find a local buyer who will cut a new deal with Glendale freeing up arena revenues that would go to the new owner. Balsillie might sue the NHL charging the league with an antitrust violation and that would take a while as lawyers would have to go through a discovery period and then the case would finally be heard.

Balsillie has now had three cracks at buying an NHL franchise. He withdrew an offer to buy the Pittsburgh Penguins franchise on December 15, 2006 after Bettman told him that he could not buy the franchise unless he agreed to keep the team in Pittsburgh. Balsillie's attempt to buy the Nashville Predators in May 2007 was perhaps the most awkward attempted purchase of a major league sports franchise in modern memory. Balsillie bought the team from owner Craig Leipold and almost immediately set up shop in Hamilton in anticipation of moving the team there, selling season tickets for the Hamilton Predators. By the end of June, Balsillie was on the outside again looking in. Leipold decided to look elsewhere for a buyer.

Balsillie's lack of playing by the rules that owners have established in their business will not help him in anyway in trying to land an NHL team. Membership has its privileges; Balsillie wants to get into a closed club that has its own rules and regulations. Suing to enter the club will not win him any friends in the NHL or in Major League Baseball, the National Football League or the National Basketball Association as Balsillie's actions of just buying a team and moving them to wherever he chooses has to go through a process not a whim. That doesn't fly as there is a list of potential suitors who tried to buy teams and failed throughout the years in sports.

The NHL's constitution goes back into mothballs for the time being. Balsillie is without a team and Glendale still has an anchor tenant in its municipally owned building. The Coyotes saga isn't over by a long shot but it might have all been different if Phoenix elected officials were paying attention to what they signed off on in building an arena back in 1987 and 1988.

Friday, June 12, 2009

NASCAR and a GM Boycott
NASCAR and a GM boycott

June 12, 10:57 AM

Sam Donaldson once related his experience in what is known as talk radio, Sam was hosting a show on a Washington radio station about five years ago and his ratings were not up to par, whatever par is for these infantile, puerile, juvenile shows hosted by some desultory individual whose main job is to be a carnival barker or a pencil neck geek between commercials.

At any rate, Donaldson's program director came in and gave the long time ABC News correspondent a primer in what makes a good talk show host. Donaldson needed to be angry about everything which wasn't going to happen in 2004 for Sam who was enjoying life. Donaldson's radio show soon went the way of all flesh, radio programmers want vile and bile because that is good radio and that is all they care about. That "good radio" mantra is killing what is left of the radio industry as young people have found alternatives to radio listening and it is being reflected in radio losing ad revenue and having audiences getting older and older. Listen to the ads on “news” talk radio and it appears that everyone listening has a major illness and a drug is available for the ailment or needs life insurance or should be preparing their estates.

President Bill Clinton's signature on the 1996 Telecommunications Act which allowed radio consolidation and put a great many radio stations under the ownership of either Clear Channel or Infinity was a total disaster for the industry and radio is still reeling from that legislation.

For the record, I was a repeating guest on Donaldson's ABCNewsNow web cast in 2005.

Rush Limbaugh provides vile and bile and his act can only play in the talk radio format or perhaps the cable TV news circuit where people never let the truth get in the way of a good rant about something they consider bad. It is only entertainment.

When Limbaugh took the act to ESPN to be part of their football crew on their Countdown show in 2003, he self destructed. He went on some blather about Philadelphia Eagles quarterback Donovan McNabb which was pointless and resigned. ESPN executives knew the act and gambled that it would play well in the football field. It didn't.

Limbaugh has stayed out of the sports business since then and his act continues even though his radio bosses are bleeding money and firing people left and right. Limbaugh tangentially re-entered the sports business a few days ago when he told his listeners that they should boycott General Motors because of President Barack Obama's policies. Limbaugh wants Obama's policies to fail.

There is no need to go into Limbaugh's logic or dogma but you kind of wonder whether the France family, the people who own and run NASCAR, really agree with the radio host who by the way makes millions of dollars a year for his daily ratings and has a lifestyle that includes a luxurious Palm Beach, Florida address that is totally at odds with his listeners, some of them General Motors workers who may be out of work shortly.

General Motors, you see, is a major part of the NASCAR business. A smaller General Motors is not a good thing for France's business which has leveled off somewhat after years of growth. General Motors, Chrysler, Ford and Toyota are major players in NASCAR in funding race teams and in marketing deals including race naming rights and television ads.

France's business depends on GM to provide factory support in the various car and truck races. It appears GM will be cutting that support for a few teams and that is not good news. With both GM and Chrysler on the ropes, NASCAR needs to look elsewhere but the entire auto industry is faltering as consumers either have no money or cannot get credit to buy new cars.

If Limbaugh's listeners, and Limbaugh is not the only carnival barker out there wanting a GM boycott, shun GM, NASCAR is also going to be greatly impacted. Last July, GM dropped four of its NASCAR marketing partnership and more cuts are coming. Whether the multimillionaire Limbaugh realizes this or not, and the chances are he doesn't or will not acknowledge it, some of his listeners are being hurt by GM's rapid deterioration but that is not a concern of the desultory, as that would not make good radio. NASCAR fans are more likely to be in Limbaugh's camp because the industry tends to attract Republican supporters and started as a rural southeastern United States business which expanded nationally. That is a non disputably fact and in the 2004 Presidential Election Kenneth Mehlmann, the campaign manager for Bush-Chaney 2004 told me that he was going after "NASCAR dads" which included President George W. Bush showing up at the Daytona 500 while the Republican National Committee set up shop at the racetrack in an attempt to register potential voters.

In 1980, I witnessed the closing of one car factory in Mahwah, New Jersey. It was a Ford plant, if Limbaugh and the other carnival barkers ever thought about how their nonsense plays out, Mahwah is a perfect study for them. When the plant closes, not only did the Ford workers lose their jobs, but all of the support industries around the plant suddenly had no need to exist. These people included the personal who drove the cars out of the factory to showrooms, auto parts suppliers, the little food businesses surrounding the plant and other businesses that sold various items to workers. Mahwah lost a major taxpayer when Ford departed. Someone had to make up those lost local taxes. There is an entire economic chain that comes attached to an auto plant.

The same thing played out in North Tarrytown, New York in 1993, 3,400 workers gone and North Tarrytown lost its biggest taxpayer by the time the place finally shutdown in 1996 although some of the employees were transferred. North Tarrytown, now known as Sleepy Hollow, is still struggling to replace the old plant.

It is playing out now in American Midwest towns. But the carnival barker, the pencil neck geek or the desultory cannot discuss that aspect of the story; it would not make good radio or cable TV news.

The auto industry is a huge sports sponsor but if GM and Chrysler monies disappear someone will have to make up the loss and companies aren't spending as much money on sports sponsorship these days. Getting back to the sports angle, the American Football League in 1965 got a huge contract from NBC which pretty much assured the league's survival. Where did NBC get a good chunk of that money to pay the league? From a Chrysler sponsorship, the joke of the first Super Bowl in January 1967 was not only was it the NFL versus the AFL, the Green Bay Packers versus the Kansas City Chiefs, but it was also CBS, the NFL's network, versus NBC, the AFL's network and Ford, the NFL's sponsor vs. Dodge, the AFL's sponsor.

Why people pay attention to the desultory or carnival barker, and really it is the news media that pays attention for whatever reason, is a good question. The desultory brings nothing to the table. Just ask NASCAR people what a boycott of GM would do and you probably would get a very different answer from the adults who run that business than the puerile, juvenile, desultory, pencil neck geek, carnival barker.

Thursday, June 11, 2009

The United Football League Starts in September
The United Football League Starts in September

By Evan Weiner

June 11, 2009

11:00 AM EDT

(New York, N. Y.) -- The news that the United Football League plans to start playing in October should be great news for players, their agents and even the new Executive Director of the National Football League Players Association DeMaurice Smith. In theory, the National Football League will have a competitor and competition generally has driven salaries higher as was the case in the late 1940s when the All American Football Conference was around and that repeated in the mid-1950s when the Canadian Football League was offering higher salaries than the NFL and the same thing happened between 1960 and 1966 when the American Football League existed as a competitor. In 1974, the World Football League came along and drove up salaries and the United States Football League was writing checks between 1983 and 1985 that delighted players but not NFL owners.

But the new UFL will be a very controlled league and even if DeMaurice Smith wanted to organize a United Football League Players Association as Gene Upshaw and the NFLPA did with USFL players in the 1980s, it probably would not work.

The new UFL's timeline to start play is simple. The league has already identified a pool of players in try out camps and will head to a Casa Grande, Arizona training facility on September 1 to start training camp. All four teams, Las Vegas, New York, Orlando, San Francisco, will be at the Arizona camp.

Can the United Football League find a niche during a rather crowded fall calendar which includes the National Football League, college football, Major League Baseball's playoffs and the World Series, the opening of the National Hockey League and the National Basketball League training camps and regular season and competition from tennis' U. S. Open and even the New York City Marathon?

The answer is to that seems to be no but United Football League officials claim there is a real need for another moderately priced sports venue for consumers and this league, unlike many other start ups will not be throwing money at players. The UFL will have a tightly controlled budget with players not making big salaries which will in turn keep costs down.

The last time a group of owners really tried to challenge the NFL was between 1983 and 1985 when David Dixon's springtime United States Football League was around. There have been other leagues since the USFL such as the Spring Football League in 2000 and Vince McMahon's XFL in 2001 but neither lasted, McMahon's league which had a network TV partner in General Electric's NBC lost millions of dollars and GE/NBC pulled the plug on the venture.

The United States Football League failed in part because certain owners such as New Jersey's Donald Trump and Los Angeles ' William Oldenburg overpaid for players forcing other USFL owners to play catch up. There were other reasons as well including expanding for the 1984 season with the original owners making up losses by charging an expansion fee which allowed the league to go from 12 to 18 teams and the ultimate desire by Trump and a few other owners to switch to a fall season partly because Trump wanted to leverage his team into the NFL.

In the nearly quarter of a century since the demise of the USFL, a lot of people who were connected to the league have blamed Trump for the league's failure and while Trump can be fingered as one of the culprits in putting the business into the ground, there was a lot of blame to go around. Trump certainly did not help the league entering it after year one. Trump signed a lot of players including Doug Flutie to big contracts although he probably did not overspend like Oldenburg who gave Steve Young a 40-year, $40 million contract.

According to United Football League Commissioner Michael Huyghue, the new league has studied the failures of the All American Football Conference, the World Football League, the United States Football League and the XFL and Huyghue is convinced the UFL will succeed because a lot of safeguards have been put into the business which will prevent owners from overspending.

"We have a governor switch on that in the sense that I set the salary cap each year and I also control what the budget is," said Huyghue. "Even if an owner elected to try to do something crazy outside the threshold we have set, he is not authorized to do so. The league signs all the players to their contracts and assigns them to the clubs. So a club can't even initiate that kind of a situation. Plus every contract has to be approved by my office, so I think we have the right kind of parameters in place to eliminate sought of that autonomy that the USFL had that ultimately led to their demise.

"Fortunately (UFL founders) Paul Pelosi and Bill Hambrecht were both investors in the Oakland Invaders in the USFL, so they have a pretty clear sense of what some of the problems were and did that with open eyes when they came into this league. Every one of the leagues we looked at. Many of the folks involved with us have been involved in those leagues. (Las Vegas coach) Jim Fassel played in the World Football League, I was a GM in NFL Europe (with Birmingham) and obviously with Jacksonville (in the NFL), so I think all of us have pretty good experience in other leagues."

The UFL has some owners, Pelosi, Hambrecht, William Mayer in New York, Tim Armstrong, a league founder and now CEO and Chairman of AOL, has some very impressive support people like Huyghue and Frank Vuono, but where will the new league fit in the football fall pantheon? The league certainly will not be as good in quality as the NFL but will it be better than college ball? Huyghue said the UFL will fit in between the NFL and college ball.

"Well I think it is a better product than college football," said the Commissioner. "What makes college football attractive are the alumni loyalty that people have to those alma maters. But in terms in quality of football, this will be a much better talent than college football. I think it fits in the sense that Thursday night viewers are accustomed to watching football (the UFL will be on the Versus cable network every Thursday night during the 2009 season), the NFL has an eight week package, they have talked about during a 16-week package, so I think fans are accustomed to coming to the channel on Thursday night and watching football. I think our league is going to succeed because there is no expansion in the NFL, I know from my experiences in Jacksonville you can build an incredibly competitive team and if you look at the abundance at talented football players out there, I think people are going to be amazed when they find out how many good quality football players are going to be on these UFL teams."

The rag tag, mom and pop operation NFL was not a big time endeavor until the 1960s when something called "leaguethink" took over. In 1960 and 1961 NFL Commissioner Pete Rozelle co-opted the American Football League's revenue sharing plan which was implemented by league founder Lamar Hunt when that league started in 1959. Hunt in planning the fourth American Football League, borrowed that concept from baseball executive Branch Rickey who planned to share revenues equally in his Continental Baseball League, particularly TV money. Rickey's league never got off the ground but Rickey's football influence is incalculable. Rickey's ideas transformed football from a mom and pop store operation into a behemoth. Rickey was not involved in Hunt's league but shaped the AFL which in turn influenced Rozelle.

Huyghue's owners at this point seem to have bought into Rickey's concept which was shaped about 50 years ago.

"In the first year, we share everything," said Huyghue. "So all the teams evenly splits it even if one market generates it from a local sponsorship. In the second year everything is put into a pool and the original team keeps 60 percent and the visiting or the other unit keeps 40 percent. So to the extent an operator does better in this market, he will keep 60 percent of the revenue and 40 percent will go into a shared pool."

The United Football League has four teams in what really is a test marketing year and will probably play games in six cities with the New York franchise hosting a game in Hartford and San Francisco playing a contest in Sacramento. The UFL is skipping Los Angeles in 2009 but will explore putting a team in America's second biggest market next year. The league is playing just 12 games with each team playing the other three teams three times. There will be a championship game over the American Thanksgiving weekend.

The UFL will be expanding in 2010 and will not be solely an American-based sports league. At least that is the plan.

"Well we won't expand by more than 12 teams," said Huyghue. "We really believe that the talent pool would be diluted at that. If we only had 10, we probably would be satisfied with that. We have an ownership group for Monterey, Mexico for next year, they may be, we will decide that at the end of the year which group comes in, Los Angeles and Hartford are also vying for teams, we have been to London and we met with a number of people who have a stadium on the Thames River, a soccer stadium. So I think there are a lot of opportunities. Our games may be televised in Mexico, so we certainly going to be an international league."

Huyghue doesn't see the Canadian Football League as either a threat or competitor.

There has been only one rival league to the NFL that succeeded, Lamar Hunt's American Football League although the NFL plucked the Cleveland (now St. Louis) Rams out of the second American Football League in 1937 and took three teams from the All American Football Conference in 1950 (San Francisco, Baltimore, now Indianapolis by way of New York, Dallas and Baltimore, and the first Cleveland Browns, now Baltimore). The NFL took all of Hunt's AFL teams, Boston (now New England), Buffalo, Cincinnati, Dallas (now Kansas City) Denver, Houston (now Tennessee), Los Angeles (now San Diego), Miami, Minneapolis (which dropped out and became Oakland) and New York. The World Football League's presence forced the NFL to expand to Seattle and Tampa Bay. The football highway is littered with the financial wreckage of three AFLs, the AAFC, the WFL, the USFL, the SPL, the XFL and even the NFL backed World League of American Football which became NFL Europa. Professional football, while on the surface looks incredibly successful, is a tough business. It is even tougher in a deep recession and that is the starting point for this new venture.

Tuesday, June 9, 2009

The US Speaker of the House's husband talks football and the economy
The U. S. Speaker of the House’s Husband Talks Football and the Economy

By Evan Weiner

June 9, 2009

3:15 PM EDT

(New York, N. Y.) -- As the husband of the Speaker of the United States House of Representatives whose wife, Nancy Pelosi, is second in the line of succession should the American President become incapacitated, resign, die or is removed from office by impeachment, Paul Pelosi should know something about the future of both the American and global economy. Pelosi is a major investor in the United Football League, which plans sort of a "beta" test run this fall to see if there is a want for a professional football league that will not be the equal of the National Football League but will be better, in the minds of the organizers, than American college football.

The United Football League will kick off on October 8 and will conclude with a championship game of the American Thanksgiving weekend. The league will have four franchises, New York, Orlando, Las Vegas and San Francisco. The New York team will play one "home" game in Hartford and San Francisco will "host" a game in Sacramento and will play a total of 13 games including the championship contest. Those are the plans at the moment.

The league will be controlling costs as the UFL Commissioner sets the annual salary cap and controls the league budget. The league signs players and assigns the players to the four teams. The teams will share revenues in 2009. League officials expect to lose money in the first year, 2009, of operations. So why would Paul Pelosi get involved and did his wife tell him something about the economy that he is putting up millions to support the venture?

"That wasn't the reason that she gave me," laughed Pelosi at a New York UFL gathering yesterday. "My wife's comments really have nothing to do, Congress....they are doing their best to get this country out of the worst recession we have seen in my lifetime. It is a phenomenal task and they are busy 24/7 down there (Washington, D. C.) trying to do it and we are all hopeful that we are going to come out of it.

"We are going to come out of it, it is a question of when. As a financial person, I think it is going to be starting next year."

Pelosi is operating the San Francisco franchise and might play a game in Sacramento. The Sacramento area has been one of the hardest hit in the United States in terms of job losses and foreclosures. The state has double-digit unemployment and the state government has become dysfunctional. The ever-present state deficit is forcing layoffs, closure of state parks and the cutback in state services, all of which is being felt on the local levels. That could impact the spending habits of people going to sports events.

"These are real challenges," said Pelosi. "California has tremendous financial burdens, there is no question about it. If you want to talk about football (former NFL Commissioner) Paul Tagliabue is a close friend of mine for the last 50 years. We went to college together and as he used to say when he was commissioner when we were looking to build a new stadium in San Francisco and Governor (Arnold) Schwarzenegger wanted to meet with him in LA, Tags said no, no, Governor, I will meet with you in Sacramento because the NFL has a California problem, not an LA problem, because you need new stadiums for Oakland, San Francisco and San Diego plus you don't have a team in LA.

"The NFL has significant problems out there and that was four years ago before the economic problems we have. So yeah, there are tremendous problems out in California. I think as far as the product we are delivering, we are looking at a $20 average ticket. I think that is very affordable, great entertainment for families.

"I am a season ticket holder of the 49ers, I am a season ticket holder for the Giants and I pay a hell of a lot more for those tickets than our fans are going to have to pay to come see our games. Sacramento is a tremendous market, it is one of the top 28 markets in the country and I think that the idea of playing a game up there and maybe doing an expansion team up there makes a hell of a lot of sense. But where are they going to get the money for that new (NBA/Sacramento) Kings stadium, I don't know."

California has become ungovernable.

"It's difficult," said Pelosi. "I see some of the people in the (2010) gubernatorial race are rethinking whether or not they want to be in it when they are looking at these financial problems. It is a job you are not sure you want."

Should the United Football League succeed, there is a chance Pelosi might end up owning the only team in San Francisco as the York family wants to move their team, the 49ers, down to Santa Clara. Pelosi doesn't seem to be too happy with that development.

"As a native San Franciscan and a long time 49ers fan, I think it is really too bad that the Niners don't take opportunity to have a new stadium in Hunter's Point (nor far from Candlestick Point) which I really think would be a great solution for them and for San Francisco. They are obviously bent on going down to Santa Clara and now they have gone to the city council and it is going before the voters and I don't know how it is going to turn out. But we would hate to lose them as San Franciscans."

Al Davis and the Oakland Raiders ownership are watching with a close eye what is happening in Santa Clara as there is a possibility that a deal could be brokered whereby the two Bay Area football teams could share the Santa Clara facility.

"Al listens to everything, don't you think?" said Pelosi, a long time Davis acquaintance.

Pelosi has invested in the United Football League and is testing out two Northern California markets and he believes the UFL can work filling a niche between the NFL and college football and he is in it for more than just 2009. The trick is to convince the sporting public that the UFL is a worthwhile product and that may be difficult as the roadside is littered with three failed American Football Leagues, the All American Football Conference the World Football League, the United States Football League, the NFL-backed various incarnations of the World League of American Football which started in 1991 and ended life as NFL Europa in 2007, the XFL, the Spring Football League, three leagues which never got off the ground, the All-American Football League, the International Football League and the Professional Spring Football League. But Pelosi and his partners think they have the right stuff to succeed even in an economic downturn.

Monday, June 8, 2009

Hockey's Desert Showdown
Hockey’s Desert Showdown

By Evan Weiner

June 8, 2009

10:00 PM EDT

(New York, N. Y.) -- The Detroit Red Wings could win the Stanley Cup on Tuesday night, the Los Angeles Lakers could take a 3-0 lead in the NBA Finals, Major League Baseball will offer a full schedule of games but the real sports action on Tuesday will take place in a bankruptcy court in Phoenix, Arizona. Jim Balsillie's law team will be arguing why the Ontario billionaire should be able to buy the financially distressed Phoenix Coyotes franchise from Jerry Moyes and move the team to Hamilton, Ontario for the 2009-10 season.

The National Hockey League is fighting Basillie's planned takeover of the debt-ridden franchise and the league claims that four parties are interesting in purchasing the team. But the ramifications of Basillie's planned purchase will be echoing in the United States and Canada not only in hockey but also in Major League Baseball, the National Hockey League and the National Basketball Association for a long time to come.

There is a phrase in the NHL's constitution that could set off a legal battle of unprecedented scope that has not been seen since the owners of baseball's Federal League's Baltimore Terrapins sued baseball's National League and American League and others because the team was not offered a buyout like other Federal League teams after the 1915 season. The Terrapins owners took the case all the way to the United States Supreme Court claiming that the buyout of other Federal League teams and not them was a violation of the Sherman Antitrust Act. In 1922, the United States Supreme Court ruled that baseball was not an interstate commerce and baseball was exempt from antitrust laws of the United States.

Major League Baseball has lived with certain business protections that the other sports have wanted but have been unable to get from the United States Congress.

Because of the antitrust exemption, baseball owners have been able to choose who they want in the ownership group, what areas should have Major League Baseball and what areas should be denied. One of those who had been denied was Frank Morsani who sought a Major League Baseball team in Tampa, Florida beginning in the early 1980s. Morsani ended up buying 42 percent of the Minnesota Twins in 1984 with the intention of relocating the team to a new stadium in Tampa. Morsani never got the team, which stayed in Minneapolis but was promised an expansion team when one became available. Morsani also tried to buy the Texas Rangers and when Major League Baseball did move ahead on expansion in 1990, Morsani was told on December 19th that his group was eliminated from consideration.

Morsani decided to sue Major League Baseball in November 1992 and settled with MLB in September 1993. Major League Baseball did expand to Tampa shortly after the settlement but Morsani was not part of the group awarded an expansion team in 2005.

Major League Baseball has been taken to the mat by the United States Congress numerous times in terms of adding teams in 1962, 1969 and 1993. Major League Baseball has added teams because various lawmakers including Missouri Senator Stuart Symington, Florida's Connie Mack III, Colorado's Tim Wirth have threatened to strip the industry of the exemption unless there were move teams.

Major League Baseball blocked bids by Toronto investors to move the San Francisco Giants to Ontario in 1976 and the Oakland A's to Denver in 1979. Both actions went unchallenged by the United States Congress.

Major League Baseball settled a suit brought on by Seattle, King County and state of Washington in 1970 by awarding Seattle an expansion team in 1976 to start play in 1977 to make up for the city's loss of the Seattle Pilots to Milwaukee in March 1970. Bud Selig and his group purchased the assets of the Pilots after the Pilots owners filed for bankruptcy protection.

Oddly enough, Major League Baseball Commissioner Bud Selig is watching the Phoenix proceedings very carefully. Major League Baseball, the National Football League and the National Basketball Association have a dog in this fight. The leagues try and control matters like territorial rights and have established territories for franchises.

The National Basketball Association blocked the sale of the Minnesota TimberWolves to Louisiana investors in 1994 who planned to move the franchise to New Orleans.

The NHL blocked the move of the St. Louis Blues to Saskatoon, Saskatchewan in 1983 after Ralston Purina sold the team to Canadian buyers.

The leagues were able to use their bylaws to regulate their industries. Basillie's lawyers don't believe that the NHL's bylaw --- No franchise shall be granted for a home territory within the home territory of a member, without the written consent of such member --- is legal and is in fact a violation of both American and Canadian trade laws.

The bylaw apparently gives the Toronto Maple Leafs and the Buffalo Sabres ownership groups the right to block any attempt by anyone to put a franchise in Hamilton, Ontario because the city is within the territory of both franchises.

The bankruptcy case that will be heard in Phoenix comes one day after the 43rd anniversary of the announcement of a merger agreement between the National Football League and the American Football League. During the lead up to the agreement, NFL and AFL officials didn’t know what to do with the New York Jets and Oakland Raiders franchises as both teams had "invaded" NFL territories in New York City and San Francisco. One scenario had the Jets moving to Los Angeles, the Los Angeles Rams moving to San Diego, the San Diego Chargers would then end up in New Orleans and the Raiders going to either Portland, Oregon or Seattle. In the end, the Jets ownership paid a $10 million indemnification to the New York Giants and the Raiders forked up $8 million to the San Francisco 49ers.

New York Islanders owner paid off the New York Rangers NHL franchise when Boe's team joined the NHL in 1972. The cost was $4 million. Boe also had to $4.8 million to the Knicks for invading New York’s territory after the National Basketball Association in June 1976 “expanded” by four teams, taking in four American Basketball Association teams including Boe’s Nets. In 1982, John McMullen had to pay off the Rangers, Islanders and Philadelphia Flyers when he bought the Colorado Rockies and moved the team from Denver to East Rutherford, New Jersey. Four years earlier, the NHL said no to a move from Denver to New Jersey.

There is a history of leagues taking care of business although there have been lawsuits. The NFL refused to take in two World Football League teams after the WFL’s demise in 1975. Memphis owner John Bassett sued the NFL on antitrust grounds because the league would not add his team or the Birmingham Vulcans. The court sided with the NFL.

The 10,000-pound gorilla in Bankruptcy Judge Redfield Baum’s courtroom is the NHL’s constitution and that clause. The Phoenix area judge has to deal with bankruptcy laws but then there are the league’s rules. It is a 10,000-pound gorilla according to the judge and for the owners it is how they conduct business. It is their business, they have made the rules and they enforce them unless they broke the law. Balsillie thinks they have, his potential lodge brothers say no and that may be a bigger problem than whether Glendale, Arizona has an NHL team.

Thursday, June 4, 2009

A Congressman wants to know why a qualified 18-year-old cannot play in the NBA

Evan Weiner
Go to Evan's Home Page
A Congressman wants to know why a qualified 18-year-old cannot play in the NBA

June 4, 3:44 PM

It was inevitable that one day Congress would be calling on National Basketball Association Commissioner David Stern and ask him why his league doesn’t hire qualified 18-year-old high school graduates to play in the league. Congressman Steve Cohen, a Tennessee Democrat, wants to know how Stern and the National Basketball Players Association came up with the rule in the collective bargaining process and his office is checking out whether the rule is legal even though it was ratified by the owners and players as part of the collective bargaining process in 2005. To get into the NBA, a player has to be one year out of high school and 19 during his rookie season.

Stern is on record as wishing the entry age into the NBA was 20, not 19. The present collective bargaining agreement is done in 2011.

The real reason that Stern wanted a 19-year-old entry rule was economical. NBA owners don’t want to pay an 18-year-old to sit on the bench or apprenticing. A player can develop his skills in college and spare an NBA owner research and development costs. That is the real reason qualified 18 year olds cannot work in the NBA. It has nothing to do with maturity although that is an excuse that people who love basketball have bought hook, line and sinker.

The 19-year-old entry into the NBA was something Stern very much wanted. He had been complaining for years that allowing 18-year-olds to enter the league right out of high school was wrong although Stern did not provide any evidence that having 18-year-old employees playing for NBA franchises was an unwise policy. It must have been good to be National Basketball Association Commissioner David Stern when he reached a new Collective Bargaining Agreement with the players in 2005. The NBA strongman snapped his fingers and the National Basketball Players Association Executive Director Billy Hunter jumped and agreed to a new collective bargaining agreement that stated high-school graduates could no longer apply for a job in Stern's domain starting in 2006.Stern didn't want new high-school grads in his league because he says it's not good for his business to have his franchises send scouts to high school basketball games.But Stern did welcome 18-year-olds in his league for a final time in 2005-06 with the knowledge that if any of them are any good, he would market their likenesses globally so the NBA can make a buck off them. Stern defended his hypocritical stance by saying that once a player joins the NBA, he has full membership rights.Just as Stern got his way, the United States Pentagon decided to go after the same high-school-student pool that Stern decided was too young, immature and unproven for his franchise owners and the high rollers who buy NBA tickets whether they are in the comfort and safety of a luxury box or sitting in seats with WiFi-equipped waiter service.Stern repeatedly said that there is no room for recent high-school graduates in his domain. Perhaps, the new graduates were better off in Iraq or Afghanistan. The Defense Department started to market military service to 16- and 17-year-olds with the hope that high-school seniors will sign up for the military upon graduation.The Defense Department was working with a private marketing company to create a database of high-school and college students. The Defense Department was trying to identify potential recruits by getting information such as birth dates, Social Security numbers, e-mail addresses, grade-point averages, ethnicity and subjects the students are studying.The military some information already on potential recruits through the No Child Left Behind Act. Military recruiters have called students' homes trying to find 18-year-olds to join the armed forces.Last time anyone looked, basic training was a lot tougher than any NBA training camp. Qualifying to become an Army Ranger is harder than making the Orlando Magic and sitting on the bench at 18.While the United States was sending 18-year-olds into harm's way, Stern was banishing 18-year-olds from his league. Maybe Stern is trying to shield them from the Knicks City Dancers or the Lakers Cheerleaders. He said it does not send a good message that his league's scouts are in high-school gyms looking at players. One has to wonder what Stern thinks about the Defense Department's recruiting techniques.

Congressman Cohen is also wondering about that and the sports versus military service qualifications aspect of the collective bargaining agreement could be a key reason that the NBA's rule has attracted his attention.What was even more baffling was how NBA-beat writers and sports-radio talk-show hosts bought into Stern's argument, and how NBA basketball will benefit from not having 18-year-olds in a 30-team league. Basketball, both on the college and NBA level, is entertainment, that's all. Yes, billions of dollars flow into the industry, but it's not the real world.Stern is the keeper of entertainment. How can he welcome an 18-year-old into his league this year, and then deprive another one of the same chance the next? Is an 18-year-old old enough to serve his country, but not old enough to play basketball?There is something very wrong with that picture. But neither Stern nor Hunter really care about the 18-year-old player. The NBA owners got cost control and the NBA players continued to make millions.

It is too bad that Greg Oden and Kevin Durant, who decided to enter the 2007 NBA Draft after their freshmen seasons in college, didn’t go up to the podium at the theatre in Madison Square Garden in New York after their names were called, shake hands with Commissioner David Stern and said, “Thanks Mr. Stern and thanks to you and National Basketball Players Association Executive Director Billy Hunter for selling us out and costing us millions of dollars.”

Both Oden and Durant could have been in the NBA in 2006-07, but they were not allowed to work in Stern’s business because Stern decided he didn’t want 18-year-olds around and Hunter suddenly agreed as 18-year-old high school graduates were barred from entering the workforce because of a new collective bargaining agreement.

Hunter had said he was against Stern’s proposal to raise the NBA’s minimum age entry from 18 to 20 and in fact, he was against raising the age minimum at all. But in the 2005 agreement Hunter traded off 18 year old entry for other benefits which meant that Oden, Durant and for the foreseeable future any talented high school senior who had the ability would not be eligible to play in the NBA under the terms of the new Collective Bargaining Agreement.

Had the agreement been in place in 1995, Kevin Garnett, Kobe Bryant and Lebron James would have had to sit out a year or go to college or go to Europe or play for the Harlem Globetrotters (like Wilt Chamberlain did until he became NBA eligible) or in the Continental Basketball Association. There was not a minor league option for either Garnett or Bryant in those days.

Lebron has been an NBA selling point since the day he declared himself eligible for the NBA Draft and just in case you haven’t noticed, after Lebron arrived in Cleveland in 2005, the Gund Brothers sold the franchise to Michigan businessman Dan Gilbert for $375 million. It’s doubtful that the Gunds would have been able to get that much money for the team without James.

Stern had no problem using the high school graduate James in marketing opportunities and James’ marketing partners had no problems that he was 18 and barely out of high school. Stern has never had any problems with the great 18-year-olds who bring back a return on the investment. It’s the ones who don’t that cause difficulties.

But all 18-year-olds do make decisions. Some are good, some are bad. That’s life. Major League Baseball signs 18 year olds, Freddie Adu played in Major League Soccer at 14, the National Hockey League draft includes 18-year-olds, and there are younger people on the tennis and golf tours. An 18 year old can join the military and vote and is considered an adult.

Because sports is filled with emotion and rationality is never applied to the business, you end up with inequities like the NBA barring 18-year-olds and the National Football League having a rule where entry players need three years of college before joining the group.

In 2004, the NFL went to court to in an attempt to stop Maurice Clarett and Mike Williams from entering that year’s draft because they had not been in college and playing football for three years since high school graduation which was and remains the league rule for qualification to play. A lower court found in favor of Clarett and Williams but a three judge panel appeals court which included Supreme Court nominee Sonia Sotomayor overturned the lower court ruling and reinstated its rule.

Stern has rattled off numerous reasons when asked about the age minimum including how he didn’t want NBA scouts in high school gyms or how some parents of an 11 year old said that their son was going to be in the NBA and other hard to believe rationales. But he never addressed the real reason the he and his NBA owners wanted the age restriction.


NBA owners had rolled the dice on a number of players like Taj McDavid, Leon Smith and Korleone Young who came out of high school and were busts. Jermaine O’Neal floundered on Portland’s bench during his first contract, and then became an all-star with Indiana when Portland ownership decided not to pursue him when his contract ended. Portland did all the research and development on O’Neal and Indiana got the benefit. Chris Antsey, Kendrick Perkins and Kwame Brown did not become All-Stars but there are many who are drafted at 19, 20 and 21 in the same boat.

It was not the rookie contract that bothers Stern and the owners, it was the second contract. O’Neal showed nothing in Portland, yet his original contract was up when he was 21 and he had ability, the question then becomes what do I pay him and for how long. The Toronto Raptors had the same problem with Tracy Mc Grady. Orlando signed Mc Grady

The thinking was this. If Stern and the owners could push back the age minimum, they could also push back the time when a player could become a free agent whether it was restricted after three years or full free agency after four seasons. It’s easier to evaluate a slightly older player when it comes to offer that player a second contract. They would also get free research and development from colleges and universities. Players can get better or worse in the college game and NBA owners didn’t have to pay them millions to learn the business.

It’s all about money.

Only a handful of 18-year-olds are good enough for the NBA.
So Oden and Durant are deprived of making a few million at the age of 18. They will get their fair share, if they choose to do so, starting at the end of June when they are drafted. But what if they suffered career threatening or ending injuries in their year at school? Would the NBA care? Probably not. Maybe someone would take them on the second round where there is almost no financial risk.

It’s all about money.

Oddly enough Oden had a knee injury and doctors in Portland shut him down forcing him to miss his rookie season with the Trail Blazers.

Some teenagers are circumventing the NBA and have or are heading to Europe where there is no age restriction. The NBA does not have to pay for research and development in European leagues. One 17-year-old, Jeremy Tyler is skipping his senior year at San Diego High School to try his hand in Europe. Last year, Brandon Jennings decided to skip college ball after high school and sign with Lottomatica Roma. Jennings spend a lot of time on the bench because the team didn’t want to spent time developing a player who was going to be there one year only and head to the NBA. In a sense the European leagues are experiencing the same problem that major college programs are witnessing with star players coming in for one year and then departing.

The threat of Congressional hearings over whether a few talented players who are 18 and recent high school grads who cannot work in the NBA will probably not change Stern or his owners minds about their rule. Congress cannot impose workplace conditions on the NBA although a great deal of Stern’s success in turning around a moribund league that was on the ropes in 1983 was because of the 1984 Cable TV Act and the 1986 Tax Act. But Congress can pressure Stern and the National Basketball Players Association to revise the present collective bargaining agreement or suggest that 18-year-olds should be brought back into the league as part of the next bargaining pact.

Stern is, of course, a lobbyist and knows his way around Washington and the Congress. The House Judiciary Committee would be his first stop if there is a hearing. It would be interesting to hear Stern’s reasons for keeping 18-year-olds out and if one of those reasons is the economics of developing a player.

Wednesday, June 3, 2009

One Less Taxpayer Bill to Pay, AIG Replaced as a Manchester United Marketing Partner
One Less Taxpayer Bill to Pay, AIG Replaced as a Manchester United Marketing Partner

By Evan Weiner

June 3, 2009

9:00 PM

(New York, N. Y.) -- American taxpayers got some good news earlier today out of Manchester, U. K. The Manchester United football club will have a new corporate logo on the team's uniform top starting in 2010 as the Chicago-based insurance company Aon has signed a marketing deal with the squad to replace the "to big to fail" insurance company, the American International Group or as it is better known, AIG as a ManU shirt sponsor.

For whatever reason, AIG executives back in April 2006 decided to partner with ManU, arguably the best known sports brand name in the world. The deal was for four years and paid Manchester United about 56.5 million pounds over the life of the deal. On January 21, 2009, the day after Barack Obama was sworn in as the 44th President of the United States, AIG officials announced the "too big to fail" insurance company would not extend the sponsorship.

American taxpayers, who own a good chunk of AIG, will be on the hook for a $25 million payment to the English football club for the 2009-10 season. That is, of course, a pittance compared to the monies the United States government has "loaned" the "too big to fail" insurance giant since September 2008.

In March 2009, House Democrat Ann Kirkpatrick of Arizona was threatening to hold hearings to see if any of the government bailout money was going to pay off the AIG-ManU agreement. Nothing came of that but AIG monies going to sports and junkets is a sensitive topic.

The idea of having the AIG logo on the ManU shirts was part of a marketing effort to expose the company to new clients around the world. That strategy did not work with AIG, at least not when you consider that AIG hit a liquidity crisis on September 16, 2008 and collapsed. The Bush Administration came to AIG's rescue by loaning the company up to $85 billion. AIG received more than $120 billion in the fall of 2008.

After the 2009-10 English Premier League season, AIG will be out of the sports business, at least in Manchester. Other companies seem to be leaving sports sponsorships as well and that is playing havoc with three National Football League teams, Jerry Jones' Dallas Cowboys, the Mara family and Tisch family owned New York Giants and Robert Wood (Woody) Johnson IV's New York Jets. Jones has been unable to sell the naming rights to his soon to be opened new Cowboys Stadium in Arlington, Texas and the Mara-Tisch-Johnson troika is still looking for a naming rights partner for the new Meadowlands stadium opening up in East Rutherford, New Jersey.

Finding marketing partners in Arlington and East Rutherford may be difficult in this economic climate when the truth of the matter is that no one can really quantify just how much business is brought in when a company spends money on naming rights at stadiums or arenas.

Jones, the Maras, the Tisches and Johnson need the naming rights dollars to help pay off debts incurred by stadium costs. Even though local governments in Arlington and in New Jersey are putting up hundreds of millions of dollars in developing the facilities, the owners were counting on corporate dollars to pay off the bills.

Because Jones, the Maras and Tisches and Johnson are not getting that money, it could spur them to really take a hard line in the just started owners-players collective bargaining negotiations. The owners want the players to understand that there may not be as much money available to pay them in 2011 and will suggest that give backs might be appropriate.

The old days of NFL Commissioner Paul Tagliabue and NHLPA Executive Director Gene Upshaw extending the 1993 labor agreement is done. Tagliabue has retired and Upshaw passed away last August. Also missing from the negotiating table is Dan Rooney, the Pittsburgh Steelers owner who was named ambassador to Ireland by President Obama. The players trusted Rooney.

Although the present labor deal ends in 2011, there is some pressure to get a deal in place shortly after next February's Super Bowl. The provision that wedded the owners and players to the 1993 agreement, the owners would lose the salary cap in the final year of the collective bargaining agreement while the players would cede the chance to be gain free agency after four years and would have to wait until six full years of service, expires sometime next March. That clause caused nightmares for both sides as the owners have set players cost while players, many of who never last six years, could bid their services to other teams after four and any change would upset the applecart. The owners though want change and are willing to risk losing the cap in 2010 if they are able to get the players to agree to cost reductions in the next collective bargaining agreement.

NFL owners recently extended over the air network contracts with CBS and FOX and reworked a deal with DirecTV.

The NFL has had a problem for years with revenue sharing and it was not with the players. The owners have apparently abandoned the "leaguethink" policy which NFL Commissioner Pete Rozelle in 1960 or 1961 usurped from Lamar Hunt's newly formed American Football League after Hunt borrowed the concept from Branch Rickey's Continental Baseball League which was looking for owners in 1959. Rickey's league never got off the ground but his idea of sharing TV revenues among the Continental League owners along with other revenue streams took hold in Rozelle's NFL in 1961 and 1962 after Rozelle convinced Jack Mara in New York, George Halas in Chicago and Daniel Reeves in Los Angeles that sharing TV money equally with the Green Bay Packers, Steelers and Baltimore Colts would strengthen the league. Today, big market teams want to keep large revenues generated within their markets and not share it with small market franchises. That has caused a discrepancy between large and small market teams because some of the large market teams use the money to pay off debts or create larger football coaching staffs or scouting staffs.

That divide is still a problem for the owners.

Naming rights are a big deal. But do naming rights really promote a company. The New York Mets and Citibank entered into a $400 million-20 year naming rights deal that started well before the bottom fell out for the bank. American taxpayers have put money into Citibank along with Bank of America which has the naming rights for the Charlotte football stadium and a multiyear deal with the Richardson family's Carolina Panthers.

But does a name slapped onto a football stadium, baseball field or an arena really bring in business? Does an AIG logo on ManU's shirts mean business for AIG? That is a question that is probably unanswerable. Companies still invest in sports because they believe that it is the best way to get their message across to 18-34 year old men. The only thing that is sure that American taxpayers are off the hook after the upcoming Manchester United season for $25 million a year as the AIG logo will fade into ManU's history book. But they are still on the hook for Citibank, Bank of America, General Motors and other entities that have received bailout money for sponsorships and while the monies paid for sports sponsorship is a drop in the bucket, the question of propriety should be answered. Should government back entities like AIG spend even a nickel on any advertising?