Wednesday, September 30, 2009

NHL, MLB, NFL, NBA Win, Hamilton and Balsillie Lose

NHL, MLB, NFL, NBA Win, Hamilton and Balsillie Lose

By Evan Weiner

September 30, 2009

10:30 PM EDT

(New York, N. Y.) -- So Jim Balsillie has dropped out of the bidding for the bankrupt Phoenix Coyotes National Hockey League franchise after a bankruptcy judge in Phoenix, Arizona decided that sports leagues are a private entity and that sports owners have a right to pick owners and territories. The judge, Redfield T. Baum, turned down Balsillie's bid and an offer by the NHL to buy the financially ailing franchise that sits in Glendale, Arizona not in downtown Phoenix because of a terrible decision by the sitting city council in the late 1980s when they buckled to Phoenix Suns CEO Jerry Coangelo's want for the perfect basketball arena with perfect seating for HIS customers and not approve an all purpose use for the building.

The saga of the Phoenix Coyotes should be studied by urban planners and sports business management professors, experts and students as soon as possible because of the action of the elected officials of Phoenix who made a badly flawed decision which resulted in an arena that could only sell 75 percent of the available seating because of obstructed views. Coangelo wanted a hockey team in the building but not own it. He wanted money off of the team as he got the lion’s share of the revenues of any activity in the building because of the lease he demanded and got from the Phoenix officials. Coangelo knew an NHL franchise could not succeed in that building and various Coyotes owners reached the same conclusion very quickly.

The Coyotes franchise became a piece of real estate with a subsequent owner coming up with a plan to try and build an arena in Scottsdale less than five years after Richard Burke and Steven Gluckstern purchased the Winnipeg Jets and moved the franchise to the Valley of the Sun in 1996. Gluckstern quickly cashed in and bought the New York Islanders in what was a real estate grab that did not work out for him in Nassau County, N. Y.

Burke sold the Coyotes to real estate developer Steve Ellman in 2001.

Eventually, after no arena materialized in Scottsdale, Ellman found a willing partner in Glendale and built the arena as part of a real estate development deal.

In 2006, Ellman sold the majority stake of the Coyotes to one of his real estate partners Jerry Moyes in a deal that gave Moyes the hockey team and allowed Ellman to take over the development of the real estate parcel in Glendale. Within two years, Moyes threw his hands up and walked away leaving the NHL apparently to pay off the bills. In May 2009, Moyes decided bankruptcy was a good option and found a willing individual to buy the franchise in Balsillie in a bankruptcy proceeding. The NHL apparently was trying to sell the team to Chicago White Sox and Bulls owner Jerry Reinsdorf as Moyes walked into Judge Baum's court.

Reinsdorf's Major League White Sox franchise was already doing business in Glendale as Reinsdorf moved his spring training headquarters from Tucson, Arizona to Glendale in the winter/spring of 2009.

Balsillie had twice before gone after an NHL team. He had an agreement to buy the Pittsburgh Penguins in 2006 and dropped out after to agree to some NHL stipulations. In June 2007 he made his biggest mistake in his dealing with NHL owners and NHL Commissioner Gary Bettman. Not too long after he signed an agreement to buy the Nashville Predators from Craig Leipold, he announced that he planned to relocate the team to Hamilton, Ontario in 2008-09. Soon after his plans became public, the deal was called off.

Balsillie is obvious a smart guy given his success with Research in Motion and BlackBerry but he actions in the Nashville matter and subsequent behavior in the Phoenix dealings were silly. Prospective sports owners have to understand that becoming a major league sports owner is not a right but a privilege. You have to prove that you a worthy to join their private club, Balsillie might be raking in the cash with BlackBerry but that does not mean that he will be allowed in the brotherhood of owners.

There must have been a huge sigh of relief from the law offices of Major League Baseball, the National Football League, and the National Basketball Association when they found out that Judge Baum in his decision wrote.

"In the final analysis, the court cannot find or conclude that the interests of the NHL can be adequately protected if the Coyotes are moved to Hamilton without first having a final decision regarding the claimed rights of the NHL."

Judge Baum understood from day one that the NHL is a private entity that has its own rules not too much different than a golf course which can allow or reject prospective members. Oakland Raiders owner Al Davis was able to move his team to Los Angeles after the National Football League blocked his planned relocation in 1981 by a 22-0 vote with five abstentions by joining with the Los Angeles Coliseum Commission's lawsuit which charged that the NFL violated antitrust laws by not allowing the move. Davis and the Coliseum Commission won the case, Davis moved the team to LA and the NFL was forced to tighten up its relocation rules. The NFL has not stopped any moves since the Davis case as Robert Irsay took his Baltimore Colts to Indianapolis in 1984, Bill Bidwill took an offer from Tempe, Arizona in 1988, Davis moved back to Oakland in 1995, Georgia Frontiere moved her Rams from Anaheim to St. Louis in 1995, Art Modell accepted an offer from Maryland and pulled his Cleveland Browns out of the Ohio city in 1995 with the team landing in Baltimore in 1996. Bud Adams finally made good on his threat to move the Houston Oilers in 1996 and took them to Nashville in 1998 with a stop over in Memphis in 1997.

The National Basketball Association blocked the sale of the Minnesota Timberwolves to a group led by boxing promoter Bob Arum in 1994. Arum and his partners wanted to put the team in New Orleans. The NBA led by Commissioner David Stern wanted to keep the team in Minneapolis and found a local owner who bought the team. But Stern did not block Donald Sterling's relocation of the San Diego Clippers to LA in 1985 even though he was against the move. Under Stern's watch, the Kansas City Kings franchise moved to Sacramento, George Shinn left Charlotte for New Orleans; Michael Heisley moved his Vancouver Grizzlies to Memphis and Clayton Bennett has a basketball team in Oklahoma City after leaving Seattle. All of those moves got the approval from NBA owners.

Major League Baseball has an antitrust exemption. They could act without worry but the owners and the Commissioner's office got sloppy and were sued in 1992 by Frank Morsani and his Tampa Bay Baseball Group. Morsani and his investors accused Major League Baseball of reneging on its promise to grant the group an expansion team for the Tampa Bay area. In 2003, Morsani and Major League Baseball reached a settlement in the case.

There are many people who are pointing the finger at Gary Bettman for the Phoenix situation and for what people see as a flawed plan to expand hockey into the southern and southwestern part of the United States. Never let facts get in the way of a good story. Bettman was still in the NBA when the 21 NHL owners in 1990 decided that they needed to expand their league footprint.

Bettman was not the NHL Commissioner when the league split the Minnesota North Star franchise and moved a piece of the team to Daly City, California and the Cow Palace then to San Jose in 1991. Bettman was not there when the league added Tampa Bay and Ottawa in 1992-93 or when Wayne Huizenga's Miami-based Florida Panthers and the Disney-owned Mighty Ducks of Anaheim joined the league or when Norman Green decided to move his Minnesota North Stars to Dallas. All three moves were orchestrated for 1993-94 and even though Bettman joined the league on February 1, 1993, he inherited the business moves.

Bettman's so-called southern strategy wasn't so southern when the league expanded in 1997. Nashville joined in 1998, Atlanta in 1999 but two northern cities, Columbus and St. Paul, Minnesota started play in 2000. The Hartford Whalers owner Peter Karmanos apparently was enticed by Raleigh, North Carolina's plan to build an arena for an NHL expansion team and decided to relocate his team to the Research Triangle area but Karmanos had some good reasons to move. Connecticut Governor John Rowland seemed uninterested in building a new Hartford arena and put turned his attention to building a Hartford football stadium for New England Patriots owner Robert Kraft. Karmanos got a number of perks for his hockey team and his Compuware business with the move.

Bettman and the NHL owners did not stop the sale of the Quebec Nordiques by owner Marcel Aubut to Ascent Entertainment and Charlie Lyons in 1995 after Aubut could not get a new arena in Quebec City.

A sports commissioner can make suggestions to owners but at the end of the day, a commissioner works for the owners, a notion that certain sportswriters, fans and apparently some "experts" who teach sports business classes cannot grasp. Just ask former Major League Baseball Commissioner about autonomy. A Commissioner has some rope but not much. A Commissioner is a lobbyist, in Bettman's case, a negotiator when a collective bargaining agreement with the players is done, and gets TV and marketing deals done. Someone in the NHL decided that Phoenix was an important market and was worth keeping.

The NHL is the only buyer left standing with Balsillie gone. Judge Baum wants the NHL to be kinder to Moyes and Wayne Gretzky in making them whole. The Phoenix area has been hard hit by the recession and the real estate bust but demographers think there could be as many as eight million people in the Valley of the Sun metropolitan area by 2050. Phoenix and the surrounding area was one of the fastest growing United States markets in the 1990s and into the 21st century. But that is in the future. Phoenix has a lot of western Canadian snowbirds along with American Midwesterners who winter in the Valley. Those people are potential customers, the Phoenix business community needs to step up as well to keep the team there. The Coyotes franchise also needs an owner who understands that hockey has to be sold not only on the NHL level but on the youth level.

The Dallas Stars franchise resides in a major Sun Belt market with months of very hot weather yet the Metroplex has embraced youth hockey and Texas has more professional hockey teams than any other state in America.

Balsillie will probably be back but he needs to be rehabilitated if he wants an NHL franchise. He needs to understand that the NHL has rules and regulations and until he gets into the club, he needs to abide by the owners and the Commissioner's wishes.

As far as Hamilton, the city officials of the 1980s were not much smarter than those in Phoenix who knuckled under and gave into Coangelo's demands. The city's arena was built without a thought of the future and lacks sufficient luxury boxes and club seats. The Hamilton building is not up to NHL standards and it will cost taxpayers in an economically depressed city hundreds of millions of dollars to get the building up to snuff. Then there is the question of how much money that a potential Hamilton owner has to pay Maple Leaf Sports and Entertainment for invading the Toronto territory and how much money that owner has to give Buffalo Sabres owner Tom Galisano for encroaching the Sabres northern territory not to mention worrying about the United States Senate and New York Senators Charles Schumer and Kristen Gillibrand. The two New York lawmakers were not happy with the thought of a Hamilton team because it might take business away from Buffalo.

For those who think the game is the most important part of sports, think again. Or read Judge Baum's decision.

Tuesday, September 29, 2009

Wednesday is Emanuel Cellar Day

Wednesday is Emanuel Cellar Day

By Evan Weiner

September 29, 2009

10:00 AM EDT

(New York, N. Y.) -- September 30th is Emanuel Cellar Day around the NFL and NFL owners and players should be celebrating the life of one of the 20 most important people in NFL history. Wait a second, when did Emanuel Cellar play football? Did Emanuel Cellar coach a team? Did Cellar own a franchise? Was he a Commissioner?

The answer to all of those questions is no. Emanuel Cellar never put on a uniform, never patrolled a sideline or ran the NFL yet without Emanuel Cellar, the NFL of today might be a totally different entity. It is conceivable that there would be no Super Bowl without the Brooklyn native, Congressman Cellar.

New York Congressman Emanuel Cellar first entered the House of Representatives in 1923. In 1923, the NFL was a floating craps game with teams scattered throughout the American northeast and Midwest that would come and go. It is unclear if the young Congressman liked football in his early days in office. But the Brooklyn representative's impact on professional football would come nearly four decades later in 1961, when Congressman Cellar authored legislation that would give the NFL tremendous clout with growing television networks: the Sports Broadcast Act of 1961. That summer, both the House and Senate passed Cellar’s legislation, and the Act was signed into law by President John F. Kennedy on September 30, 1961. The Cellar Bill allowed the NFL to market its broadcast rights as a league package, evenly spreading the broadcasting revenues among the franchises and guaranteeing each team substantial annual revenues.

In 1961, the National Football League was still mired in a mom and pop store mentality not long removed from the days of when Chicago Bears owner and Coach George Halas would travel to Wisconsin and lend a hand at Green Bay Packers fund raisers. The NFL was growing in the 1950s because of television exposure but the league owners were extremely cautious in their business decisions and with good reason. The business of the National Football League was strictly a six month a year affair and there was not much financial growth or stability until the mid 1950s.

That all changed in 1959 when Lamar Hunt and Bud Adams were unable to buy the Chicago Cardinals, Hunt wanted to move the franchise to Dallas and Adams wanted to place it in Houston, nor were they able to convince Halas and Pittsburgh owner Art Rooney that the 12-team NFL should expand. So Hunt started his own circuit, the American Football League, got Adams to join up and found six other owners. Hunt's new league, the AFL would start operations in 1960.

In early 1960, Hunt's league or AFL IV (three previous AFLs folded in the 1920s and 1930s) signed a television contract with the rather weak American Broadcasting Company for $2 million per year for the first five years, with each AFL franchise receiving $250,000 per team per year, which was approximately 15% less than received per team in the NFL.

The deal, which was brokered by among others Jay Michaels, the father of Al Michaels who was the announcer of Monday Night Football and now Sunday Night Football, was somewhat astounding as the AFL had no track record but neither did ABC which wasn't even seen in a number of American cities in those days. But ABC needed something and the AFL would be a perfect partner.

Part of the success of the league in attaining coverage was due to New York Titans owner Harry Wismer, who was also a noted sportscaster of the time. Wismer got AFL IV game coverage on the Associated Press and United Press International wires and helped the league land a contract with ABC. History has been unkind to Wismer as the New York Titans franchise skirted with bankruptcy but without Wismer, there might not have been a big TV deal. The AFL pooled its eight teams and sold ABC the league's team as one entity which was against United States antitrust laws. But the AFL was a new business that flew under the radar, at least in legal circles.

The NFL owners and new NFL Commissioner Pete Rozelle took note of the AFL-ABC TV deal and wanted the same thing. In 1960, NFL teams were on TV but each of the 13 teams put together a local TV network and the large city teams, New York, Chicago and Los Angeles received far more TV money than Green Bay, Baltimore and Pittsburgh. The inequity of TV revenues could have become a big problem but Rozelle went to work convincing his owners that selling the league as one TV package to either the two big networks at the time, the Columbia Broadcasting System (CBS) or the National Broadcasting Company (NBC) was the way to go.

In 1961, the 14 NFL owners decided to sell their TV rights as one and give a TV network the right to show all 98 games on the schedule just like Hunt's league was doing (not every one of the AFL's games was shown on ABC in 1960) Rozelle cut a two-year, $9.1 million deal with CBS but the NFL decided to make sure their deal was legal and submitted the deal before Federal Judge Alan K. Grim in Philadelphia.

Justice Grim was very familiar with NFL TV deals. In 1953, Judge Grim handed down a ruling that gave the NFL the right to blackout team's home games which meant that a local fan either had to buy a ticket to a home game to watch the team or travel about 75 miles and watch the game in an out of town bar or hotel and cheer on the home team from there. In the 1960s, it was common for New York Giants fans to travel to Connecticut to watch WTIC, Channel 3 in Hartford if they wanted to see Giants games and could not get a ticket inside Yankee Stadium. In July 1961, Judge Grim decided the NFL-CBS deal violated antitrust laws because the agreement the competition between teams for TV deals. The decision flew counter to the AFL-ABC deal as well as the National Basketball Association's partnership with the National Broadcasting Company

Because the league was under a court-ordered injunction which prevented it from signing a league-wide contract with a network which meant Rozelle had to become a lobbyist and find a sympatric ear in either the House or the Senate. Rozelle found just the man he needed in Congressman Cellar, the Chairman of the House Judiciary Committee's Subcommittee on Anti-Trust and Monopoly. The long time Brooklyn Democrat in the House got a bill through the House and a similar bill introduced in the Senate by one time Vice Presidential candidate, Tennessee Democrat Estes Kefauver pushed a bill through the Senate. The whole process took about a month as Cellar began hearings on August 28. The proceedings took a day.

President John F. Kennedy signed the Sports Broadcast Act of 1961 into law on September 30. The legislation gave both the NFL and AFL cover from the Sherman Anti-Trust Act and gave the same protection to the National Basketball Association as well as the National Hockey League. The American and National Leagues of Baseball already had an antitrust exemption thanks to the Supreme Court decision of 1922 in the Baltimore Terrapins versus the National League case. Congressman Cellar and Senator Kefauver didn't overlook college football in the bill.

There was provision included which precluded the NFL from televising any game on either Friday night after 6 PM or on Saturday between the second Friday in September and ending on the second Saturday in December. This was done to protect college football which had a TV deal in place for Saturday afternoons.

After operating under local contracts for the 1960 and 1961 seasons, the NFL pooled its television rights and sold them to CBS for $4.65 million annually for the league. In 1963, NBC was awarded exclusive network broadcasting rights for the 1963 AFL Championship Game for $926,000, and later signed a five-year, $36 million television contract with the AFL IV to begin with the 1965 season.

In 1950, the most popular sports in the United States were baseball, horse racing and boxing. Within a decade, Americans had falling in love with Sunday afternoon football, with the 1958 NFL title game between the Baltimore Colts, led by a crew cut quarterback named John Unitas taking on the glamour boys from New York. The Giants were led by handsome Frank Gifford and were the darlings of Madison Avenue. The close game went into overtime and with Unitas leading the Colts downfield for a game-winning touchdown. That game changed the course of TV history for the NFL. The Giants would lose the 1959 NFL title game as well to the Colts, but that didn’t diminish TV’s appetite for Giants players. In 1960, middle linebacker Sam Huff was featured on the CBS television show 20th Century with Walter Cronkite providing the narration of “The Violent World of Sam Huff.” TV embraced football, both the National and American Football League. It was the perfect sports event for the small screen.

Public Law 87-331, better known as the Sports Broadcasting Act, is the most important piece of legislation passed by Congress and signed into In 1964, CBS submitted the winning bid of $14.1 million per year for the NFL regular-season television rights for the 1964 and 1965 seasons, and also acquired the rights to the championship games for $1.8 million per game for those same seasons. In 1965, CBS acquired the rights to the NFL regular-season games in 1966 and 1967, with an option for 1968, for $18.8 million per year (an increase of 33% over the prior deal). The NFL later moved to an arrangement in which all of the networks got some of the games, making all networks solely interested in broadcasting the games of the NFL, and not those of a rival league. By 1969, TV income had risen to $1.6 million per team in the NFL and $900,000 per team in the AFL.

The television deals signed by CBS and the NFL solidified the profitability of the NFL and the 1964 AFL-MNC deal enhanced football's popularity. “The TV contract and then the June 1966 AFL-NFL merger made it possible,” said Wellington Mara, the long time owner of the NY Giants, years later in analyzing the NFL's success. “You can't predict what would have happened, but we certainly would not have the league we have today. That was the most important decision ever made in the league.”

After the merger of the AFL and the NFL in 1966 (the television contracts did not expire until 1970), Rozelle thought a Monday Night televised game would be a ratings grabber. After CBS and NBC declined, due to the success of shows such as Laugh-In, Rozelle approached ABC. ABC, which had been struggling in prime time for years, jumped at the chance in 1969. Monday Night Football (MNF) debuted in 1970, with ABC acquiring the rights to televise 13 NFL regular-season Monday night games in 1970, 1971, and 1972. The Jets lost to Cleveland 31-21 in the first Monday Night Football contest, and Howard Cosell and Don Meredith provided commentary. Joe Namath, star Quarterback for the Jets who eventually would be on the MNF crew, could not envision what kind of franchise Monday Night Football would become. “For players back then especially, we didn't realize anything about prime time or how many people would be watching. It was another game for us. It was exciting knowing that you are on television,” said Namath. “Monday Night Football is great for the fans and the players alike. Heck, I didn't have the foresight to see how important that was.”

Congressman Emanuel Cellar has never been honored by the NFL or recognized by the Pro Football Hall of Fame in Canton, Ohio but he is as responsible for the NFL's success as much as Rozelle, Halas, Namath, Red Grange and a handful of others including two Presidents Theodore Roosevelt (who single handily saved football) and Ronald Reagan (who signed into law the 1984 Cable TV Act and the 1986 Tax Act which changed sports). Cellar's legislation propelled the NFL and by 1965, pro football eclipsed baseball as America's favorite sport.

Thursday, September 24, 2009

Will US Homeland Security Net Prokhorov?

Will US Homeland Security Net Prokhorov?

By Evan Weiner

September 24, 2009

12:00 PM EDT

(New York, N. Y.) -- Mikail Prokhorov has decided that buying the New Jersey Nets and putting up money to help fund Bruce Ratner's arena in Brooklyn is too good a deal to pass over. He wants in and is ready to show that he what it takes to compete in American sports. Prokhorov is said to be Russia's wealthiest man and likes to invest some of his money in athletic endeavors. But before Prokhorov's New Jersey soon to be Brooklyn Nets play on a court set up in Red Square with Vladimir Putin and Dmirtri Medvedev acting like Spike Lee and Jack Nicholson there is one little matter that has to be settled and it is not getting National Basketball Association Commissioner David Stern's approval to join the NBA fraternity of owners nor is it getting Ratner's 29 partners, the other NBA owners, to sign off on the deal.

Prokhorov's transaction will have to be reviewed by the United States Department of Homeland Security. Money transfers from Russian banks to America need to be reviewed.

If Prokhorov is an upstanding businessman without any blemishes on his record, there should be no problems getting the initial approval which would come from Washington. But if there are any questions about Prokhorov, there could be a delay in getting the agency's approval and that is the most significant hurdle facing the planned Prokhorov purchase of the Nets franchise.

Right now there is a Middle Eastern group of investors who allegedly are looking to sink hundreds of millions of dollars into an American sports entity. The story goes that the said entity has been waiting for the Department of Homeland security to approval the transaction and that someone has been dragging their heels since last winter. This sports entity has a United States bank of record waiting for the money and approval but so far, no money has been transferred.

If all is well with the Prokhorov application, the money transfer should take no more than a week to approve. Money from China pours into America daily, money from the Middle East comes into the United States; foreigners own chunks of real estate in Manhattan and in Miami and, of course, non American money enters the various stock exchanges on a minute-to-minute basis. America will welcome Prokhorov's money but his bid for the Nets will have to pass Department of Homeland Security eyes.

Prokhorov's deal with Ratner is simple enough. Prokhorov is putting up $200 million to buy into the franchise and then investing in Ratner's Brooklyn real estate complex which includes the construction of a multi purpose arena for the Nets (Ratner has always wanted a hockey team in the building as well from day one although that has not been publicized) along with commercial and residential properties. It is more of a real estate deal than a sports transaction. Prokhorov is the first Russian to express an interest in an NBA team but not the first foreigner this year to offer to put money in an NBA franchise. Chinese investors are looking to buy a piece of the Cleveland Cavaliers.

Another Russian, Alexander Medvedev, openly spoke about buying a National Hockey League franchise last May with the hope of moving an unnamed team to Quebec City.

Ratner is no stranger to doing business internationally. He has a deal with the British bank Barclays (a banking business that has no American branches) to put up $400 million over 20 years for the naming rights to his proposed arena and has smaller deals with other businesses for various in arena naming rights. But he was still significantly short of the cash needed to build a venue that might cost $750 million to a billion dollars. That is where Prokhorov's rubles will come in handy.

For Prokhorov, this could be a major real estate deal as he could end up controlling 45 percent of the arena and 20 percent of the real estate development of 22 acres of Brooklyn real estate. Brooklyn has a large Russian population in Brooklyn in Brighton Beach which is on the subway line that would serve the Ratner-Prokhorov arena.

Ratner has finally gotten a go ahead to build the arena from the New York State Economic Development Corporation and with Prokhorov's money could have the final piece of the puzzle to break ground on the building. Ratner has been attempting to develop the Brooklyn real estate he owns for four years. Ratner is hoping to get his team or maybe Prokhorov's team into Brooklyn sometime in the next three years.

Prokhorov won't be the first Russian billionaire to own a sports franchise outside of Russia. In 2003, Roman Abramovich purchased controlling interest in Chelsea of the English Premier League, rather the Barclay Premier League as the same Barclay bank that is hoping the Brooklyn building will materialize is the naming rights holder for what might be the best known sports league in the world. Abramovich is not the only "foreigner" who has a controlling interest of a Premiership team. Americans Stan Kroenke (Arsenal), the Glazier family (Manchester United), Thomas O. Hicks and George Gillett (Liverpool), Randy Lerner (Aston Villa),Andrew Appleby (Derby), Ellis Short (Sunderland) are well represented. In 2008, Manchester City was purchased by Abu Dhabi’s Sheikh Mansour bin Zayed al Nahyan. Portsmouth is now run by a group of Middle Eastern and Asian businessmen fronted by Dr. Sulaiman Al-Farim. West Ham may be for sale after Iceland's Björgólfur Gudmundsson saw a lot of his fortune disappear in the global meltdown. Fulham is owned by Mohamed Al-Fayed who also has Harrods store in London.

Los Angeles Kings owner Phil Anschutz and his AEG company own the major London arena. The company has built a North American style arena in Berlin, Germany and owns sports franchises in Europe. If Americans can invest in sports in Europe and Asia, why can’t non-Americans sink money into American sports? Other than America’s myopia and the thought other someone other than an American owning “their team” there should not be a problem unless Homeland Security finds one.

There is no suggestion that there will be a run of foreigners who will take over 40 to 45 to 50 percent of American teams in Major League Baseball, the National Football League, the National Basketball Association, the National Hockey League or Major League Soccer as what has happened in the English Premiership. American sports leagues have accepted foreign money throughout history. The National Hockey League's main offices are in New York but the league started in Canada and there has always been "foreigner" ownership depending on a person's viewpoint either by Americans or Canadians. Japanese ownership launched the Tampa Bay Lightning.

The NBA has "foreigner" ownership in Toronto with Maple Leaf Sports and Entertainment running the Raptors. Jack Kent Cooke, a Canadian, had the Los Angeles Kings and Lakers of the NBA in the 1960s and 1970s, sold those teams and bought the Washington Redskins of the National Football League. A Canadian, Pat Bowlen, owns the NFL's Denver Broncos. A Belgium company, Interbrew, ran Major League Baseball's Toronto Blue Jays from 1995-2000.

Major League Baseball would not allow Ninento's president Hiroshi Yamaguchi of Japan to buy the Seattle Mariners in 1992 at first. But relented after pressure and accusations of racism from Seattle and Washington elected officials along with the Seattle business community and accepted Yamaguchi's money as long as he had under a 50 percent share of the club and did not run the team. American sports leagues also received a lot of funding for loans from France's Société Générale bank which has gone under the radar in the day to day reporting of sports news in the United States.

National Basketball Association Commissioner David Stern seems ready to embrace his potential Russian partner and there will be the due diligence of checking out Prokhorov by league security and then Prokhorov's bid to buy into the New Jersey Nets will be given to NBA owners for approval. That is the normal selection process for American investors but Prokhorov is a Russia so the first and probably the most important test for him as a potential owner will come from United States Department of Homeland Security Secretary Janet Napolitano and her staff. If they approve Prokhorov's money transfer plans, then there should be no problem for Stern and his owners to approve the Russian's bid to buy into an NBA team. Stern will be a major step closer to his goal of globalizing the NBA. The Nets could be playing CKSA Moscow in a pre-season game in Red Square with the band in the background playing Midnight in Moscow.

Sunday, September 20, 2009

Will Stern Allow Chinese or Russian Owners in the NBA?

Will Stern Allow Chinese or Russian Owners in the NBA?

By Evan Weiner

September 19, 2009

8:00 PM EDT

(New York, N. Y.) – In January 1992 at a little media conference prior to the annual Baseball Assistance Team fundraiser in a Times Square hotel, Major League Baseball Commissioner Fay Vincent was trying to explain why his 26 member ownership group had a policy that barred non-American citizens from owning a Major League Baseball with the exception of the two Canadian teams, the Montreal Expos and the Toronto Blue Jays. Vincent and his owners had a major problem on their hands, Jeff Smuylan, the man who invented 24-hour a day sports talk radio in the United States, was having financial problems and had a deal in principle to sell his majority share of the Seattle Mariners to Hiroshi Yamauchi, the president of the Nintendo Company Ltd.

The problem with Yamauchi’s bid was simple. He was offering $75 million for 60 percent of the Mariners franchise. That was the good news for Vincent’s owners but the bad news was that Yamauchi lived in Japan and that was a major problem as xenophobic owners wanted nothing to do with a foreigner running a Major League Baseball team.

After all, it was un-American for a Japanese citizen to fund a franchise in America’s National Pastime.

Yamauchi thought it made good business sense for him to invest in a Major League Baseball team in Seattle. His son-in-law Minoru Arakawa ran Nintendo’s American division in Seattle. Arakawa, his wife Yoko and grandchildren lived in Seattle. Yamauchi’s company employed 1,400 people in Seattle and Yamauchi pledged to keep the franchise in the city.

That didn’t seem to please Vincent or the owners and on a cold January night in New York Vincent seem to be looking for excuses that would keep the Mariners franchise out of foreign hands. None of his answers seemed logical.

Eventually after Major League Baseball was put through the ringer as Seattle and Washington state officials along with Washington Senator Slate Gorton started questioning baseball’s anti-foreigner ownership policy, a compromised was reached. Yamauchi was allowed to buy a significant stake in the franchise but could not be a majority owner.

On July 1, 1992, Yamauchi closed the deal and he and his American partners have run the Mariners franchise since then. Yamauchi’s Seattle representatives has been a good group for the other owners; the Yamauchi’s people knew what buttons to push to get a new Seattle taxpayers funded stadium from the Washington legislature in 1995 after voters said no to a new stadium in 1994.

Major League Baseball has not had a legitimate foreign offer for any American team since 1992. The Belgium-based Interbrew brewery owned the Toronto Blue Jays for five years between 1995 and 2000 after the brewers purchased the Blue Jays owner Labatts (beer). The National Football League has not faced that issue either. The National Basketball Association could be getting a foreign owner if a Reuters report on September 16 is correct.

Russia’s richest man, Mikhail Prokhorov, according to the Reuters article is interested in buying a significant stake in Bruce Ratner’s New Jersey Nets franchise. Ratner has been attempting to move the East Rutherford-based team to the Atlantic Railyards in Brooklyn for four years and just got New York State approval for a scaled-down arena. Ratner’s problem is that he has been losing money on the team since he purchased the franchise in August 2004.

It seems inconceivable that NBA Commissioner David Stern would mimic Fay Vincent circa 1992 and rattle off reasons why he and his owners would block foreign investors in NBA teams. Stern has been pushing a strategy that has globalized the NBA and basketball with his biggest success to date in making China an NBA hotbed and before that Hong Kong.

In May 2009, Cleveland Cavaliers owner Dan Gilbert completed a deal to sell up to 15 percent of the team to a group of Chinese businessmen including JianHua Huang, who has brokered sponsorships with a number of North American sports teams.

Phil Anschutz’s AEG (Anschutz has a piece of the Los Angeles Lakers) and NBA China are developing arenas throughout China in an effort to not only push the NBA in China but other sports and entertainment at well.

So it will seem that Stern would welcome Prokhorov who has a financial stake in the Russian Super League and the Euroleague’s CSKA Moscow’s basketball team if he passes all of the NBA’s checks.

Ownership groups can be good or bad from the United States or Canada; it is never easy to figure out who will be successful and who will fail. The NHL, which also has global aspirations, has had one non-North American owner.

National Hockey League President Gil Stein and his 22 owners had no problem with the prospect of Japanese money providing the majority funding for the expansion Tampa Bay Lightning franchise in 1992 (along with New York Yankees owner George M. Steinbrenner III). Kokusai Green’s owner Takashi Okubo. The experience was terrible as Okubo was an absentee owner and the team’s finances were a mess. Kokusai Green sold the franchise in 1998. That was the last foreign owner in the NHL. Charles Wang, who purchased the New York Islanders in 2000, was born in Shanghai, China but moved to New York at the age of 8.

Even though Major League Baseball has a sign still up saying Americans only despite increasing globalization and the National Football League has not faced the prospect of having a foreigner buy a team, North American owners have been purchasing European properties in English soccer. MLB’s Texas Rangers (and NHL Dallas Stars) owner teamed up with former NHL Montreal Canadiens owner George Gillett to purchase the English Premier League’s Liverpool F. C.

In 2006, NFL Cleveland Browns owner Randy Lerner bought Aston Villa. The year before, the Tampa Bay Buccaneers Glazier family purchased Manchester United.

Former Detroit Pistons executive and Minor League Baseball owner Andrew Appleby purchased the Derby County Football Club of the Premiership in 2008. Another American owner, Stan Kroenke (NBA’s Denver Nuggets, NHL Colorado Avalanche, MLS Colorado Rapids, National Lacrosse League’s Colorado Mammoth, NFL’s St. Louis Rams and the Altitude Sports and Entertainment regional cable TV network in the Rocky Mountain states) is the largest share holder of the North London-based Arsenal FC.

Major League sports teams are not cheap and there are not a lot of Americans who could afford purchasing a team. If Prokhorov is indeed interested in the New Jersey Nets, NBA Commissioner David Stern would be foolish to turn a deaf ear to him. The founder of the Kontinental Hockey League, the Russian billionaire Alexander Medvedev claimed last May that he wanted to buy an NHL team and move it to Quebec City.

If Jim Balsille thinks the NHL has given him a difficult time in attempting to buy the Phoenix Coyotes and moving the franchise to Hamilton, Ontario, Balsille’s case against the NHL would be child’s play compared to an attempt by Medvedev to buy an NHL franchise. Medvedev started a new Russian league that went after NHL players and signed a few including Alexander Radulov who left his Nashville team while under contract to play for Salavat Yulaev Ufa in 2008-09.

It is only a matter of time before some North American franchises are purchased by non-Americans and non-Canadians. Americans are snapping up English Premiership League teams why wouldn’t major money people from Europe or Asia not jump at the opportunity at a North American team? Fay Vincent is no longer guarding the gate like he did on that cold January night in the middle of Times Square in January 1992. The xenophobic policy of Major League Baseball of 1992 made no sense. It makes even less sense in 2009.

Thursday, September 17, 2009

IOC Delegate Dick Pound Asks: Where’s Obama?

IOC Delegate Dick Pound Asks: Where’s Obama?

By Evan Weiner

September 17, 2009

11:30 AM EDT

(New York, N. Y.) – In the real world, Dick Pound would be largely dismissed as someone who just opens his mouth and comes up with astonishing statements without facts to back them up. Pound should know better since he is a lawyer but Pound does not live in the real world. You see Pound, a Montreal barrister and jock sniffer, is an International Olympic Committee delegate from Canada and a member of a select group that doesn’t want to abide to the tenets of civilization, laws of countries or care about the financial ruin they leave behind after the International Olympic Committee’s two week sports bazaar is concluded.

Pound is now suggesting that United States President Barack Obama drop everything and get to Copenhagen, Denmark on October 2 and perhaps genuflect or possibly have IOC delegates drool all over him so that Chicago can secure the 2016 Summer Olympics.

The IOC will announce the winning bid that day.

Chicago is in a four-city race to secure the games. Tokyo, Japan, Madrid, Spain and Rio de Janeiro are also bidding for the right to host the 2016 games. Pound wants Barack Obama in Copenhagen, Michelle Obama won’t do.

“Olympic bids are so important these days to the countries that it would be surprising for a country not to send its biggest hitter. If the U. S. doesn’t match the others, that is something will be noticed,” Pound recently said.

Apparently these IOC delegates, whose predecessors could be bribed in exchange for a yes vote for a city that wanted the prestige of the Olympics, are more interested in star power. These IOC delegates can no longer visit bid cities because of the little problem with some bribery that took place in the selection of Salt Lake City as an Olympic venue in 2002. So now it is more Entertainment Tonight or E! than fact finding (or money grabbing) missions. It is widely thought that British Prime Minister Tony Blair put London’s bid for the 2012 Summer Games over the top when he genuflected before the ever powerful IOC delegation in 2005 when they picked the 2012 Olympics site.

United States President George W. Bush did not attend the 2005 IOC vote but New York didn’t live up to Olympic expectations and did not have a shiny, new, expensive, taxpayers supported main stadium on the drawing board so even if he did show up, New York wasn’t going to be the choice. The IOC wants everything new, everything state of the art, everything supported by taxpayers money. The IOC believes it is a global entity like no other and they snooker politicians, business leaders and media companies into believing them. The IOC also wants to feel love from local governments in terms of getting governments to create a slush fund to cover the cost of the financial losses as Olympic Organizing Committees generally underestimate the cost of hosting these affairs and someone, not the IOC, has to pick up the tab.

But IOC delegates may get an honest to goodness 24-karat American celebrity as Oprah Winfrey is threatening to go to Copenhagen. It is a good thing that the National Enquirer is available in Europe as Oprah partially owes her career to the constant drumbeat of publicity the Enquirer has offered her for well over two decades.

The big guns are supposed to be out in Copenhagen on October 2 when the IOC delegates vote on the 2016 Olympics venue. Brazil’s President Luiz Inacio Lula da Silva will be there championing the Rio bid, Spain’s King Juan Carlos will not miss this event either as he pushes for Madrid. Japan has a new government and the plans call for Crown Prince Naruhito to be in the Danish’s capital as Tokyo’s representative. The Japan Olympic Committee is hoping the new Prime Minister Yukio Hatoyama will show up. Japan’s problem is that the former government may not have supported sports as a priority, which is not what Rogge and his band want to hear. France’s President Nicolas Sarkozy, another political celebrity on the world stage partially because of his wife, singer Carla Bruni, is throwing his support behind Lula and Rio.

But where is President Obama?

Perhaps Barack Obama has better things to do than play around with the IOC. Let’s see, Obama will still be wrestling with bringing Americans a new health care system, there is still that pesky war in Iraq, and action in Afghanistan seems to be heating up. The Middle East remains the Middle East, North Korea is still high on the docket with possible talks there and Iran has signaled that it wants in on the talks action and there also is an 800-pound elephant in the room that is dragging down the 2010 Vancouver Winter Olympics and the 2012 London Summer Games. Something called the recession or maybe more appropriately the world wide economic abyss.

Pound should know something about that, his country is about to find out just how much debt future generations of Canadians are about to absorb with Vancouver’s games. Pound, the Montreal barrister, also knows that Montreal and Quebec and Canada finally paid off the 1976 Montreal Olympics debt in 2006.

But Pound should have no fear that Chicago might turn turtle about the idea of funding a money-losing venture. Pound knows what turning turtle means, in hockey parlance, it means someone in a fight goes into a defensive position and hopes the fight will go away. Pound knows a lot about hockey, he once said that about one-third of the NHL’s 700 or so players were using performance enhancing drugs.

He provided no evidence and according to NHL drug testing results, Pound was far, far off the mark as just a handful of players failed tests. No matter Pound continues to talk.

The Chicago city council has given the International Olympic Committee an open check to cover whatever cost overruns are incurred should the Illinois city get the 2016 Games. Apparently the Chicago elected officials were not swayed by the 2004 Athens debacle that lost billions upon billions of dollars or that a good number of the sites used in the 2000 Sydney Games are unused and that Australian officials are paying hundreds of millions of dollars to maintain facilities that sit empty.

Nor is the Chicago council upset that America’s past time, Baseball, is not an Olympic sport because the IOC in a fit of pique threw baseball out of the games because Major League Baseball would not sent the game’s biggest names to compete in a tournament that coincided with Major League Baseball’s regular season. The IOC got into a squabble with Major League Baseball and started to complain to the United States Congress that Major League Baseball’s drug testing policy wasn’t good enough for them.

That’s pretty funny considering the IOC President Jacques Rogge was begging Italian officials to let the IOC take care of any illegal drug problems during the 2006 Turin Winter Olympics because the use of banned performance enhancing drugs, while illegal, is really cheating. The IOC should hand out punishment, not law enforcement officials.

The Chicago city council apparently also overlooked the absence of another population American game, softball. The prevailing feeling is that IOC delegates cut softball in retaliation because Major League Baseball would not play by IOC rules and also that the American women were just too good for their own good. The American women did not bring home the gold in the 2008 Beijing Games so they is a world of softball players who can not show off their skills because a bunch of IOC delegates for whatever reason dropped softball from the Games. (Rogge will not mess with football, the global game not the American version, as the want for major stars to compete is not the same as it was for baseball. Football’s World Cup is bigger than the Olympics. The World Cup qualifier in 1969 sparked a war between Honduras and El Salvador)

Baseball and softball have been replaced by rugby (Rogge is a former rugby player) and golf. The possibility of Tiger Woods competing in the 2016 Games and bringing his money making machine to the Olympics was just too good to be true for Rogge and his gang.

The IOC is all about money and IOC delegates should be on their hands and knees kissing up to Obama not the other way around. In fact the delegates should be singing the Star Spangled Banner and reciting the Pledge of Allegiance because without American TV money, American corporate dollars and the American military, there would not be an Olympics on a grand scale. The IOC offices in Lausanne, Switzerland would not be as grand.

It was the American Broadcasting Company (ABC) and Roone Arledge that created the financial stability for the International Olympic Committee. ABC’s money funded the Olympics, American corporations bought sponsorships and the US Military protected Greece in 2004 and will no doubt have a presence in Vancouver early next year.

Here is another reason why the IOC delegates should be saluting Obama, his predecessors, George H. W. Bush, Bill Clinton and George W. Bush. None of them tried to change the Cable TV Act of 1984, which was signed into law by Ronald Reagan. The IOC does not have a deal on the table with an American broadcasting partner for the 2014 Sochi (Russia) Winter Games or the 2016 Summer Games and is waiting for improving economic conditions before they sell off the rights.

Rupert Murdoch has said his American FOX TV operation will not bid for future Games because the Olympics lose money. It is unknown whether CBS will go after the Games but two American TV units will go after the Games, General Electric’s NBCUniversal unit and the Walt Disney Company’s ESPN. The ESPN did is intriguing because it depends on what is American cable TV socialism.

Americans don’t get this notion but there is a government sanctioned cable TV socialism that President Reagan approved in 1984 which goes against antitrust laws that allows cable TV networks to bundle their products and is sold to consumers by a cable TV operator on a basic expanded tier. The Cable TV operator and the networks cut the deal and the consumer either accepts the package or turns it down. ESPN is the most profitable part of the Disney company because of cable TV socialism where 100 percent of those buying basic expanded services are paying for what a tiny fraction watch. ESPN is the most expensive channel on the tier but consumers don’t know that because cable TV companies do not have to itemize bills for their consumers.

Disney will submit a bid and most of the money behind that bid will come from people who never watch ESPN.

If the Olympics creed contains anything about fair and honest competition, which at some point might have been true, it is certainly not the case today. Pound wants Obama in Copenhagen and what the IOC wants is far more important than health care in America, or talks with North Korea, or Iran, or the economy, or Wall Street, or the Middle East, or Iraq or Afghanistan. After all, the Olympics are the Olympics and you just cannot slag off the Olympics even if it is true that the IOC has a proven history as a gang of thieves that have been run in the past by fascists and is above the law. It is still the Olympics, the pinnacle of competition, at least that is what Pound wants people to believe.

Wednesday, September 16, 2009

Will Senate Candidate Linda McMahon Talk About Pro Wrestlers Dying from Drug Overdoses on Her Watch?

Will Senate Candidate Linda McMahon Talk About Pro Wrestlers Dying from Drug Overdoses on Her Watch?

By Evan Weiner

September 16, 2009

3:00 PM EDT

(New York, N. Y.) – There is yet another Republican running for the Senate seat held by the Democrat Christopher Dobbs in Connecticut. Linda McMahon, the Chief Economic Officer of World Wrestling Entertainment, has decided that she is qualified to replace Dodd in the November 2010 election.

Here is the problem for the wrestling CEO, how does Linda McMahon explain the many deaths of performers, some with ties to her organization and others who were employed by competitors, caused by the usage of illegal substances. Substances that were banned in legislation that went through the Senate in 1990, the very institution she would look to join.

Those deaths that should have rattled and ravaged her business, the wrestling industry. Fortunately for Linda McMahon, her husband Vince, their son Shane and daughter Stephanie and her husband Paul Michael Levesque a.k.a. Triple H, there is very little scrutiny of the industry.

The drug issue, which seems to cloud hovering over Major league Baseball for years, is for the most part a non-issue even though Linda McMahon’s husband was indicted in November of 1993 on charges of possession of steroids and conspiracy to distribute steroids. McMahon beat the rap after a jury came back with a not guilty verdict on July 22, 1994. In 2005, McMahon’s wrestling circuit was still wrestling with drug issues and following the death of Eddie Guerrero, the McMahons imposed new drug testing policies.

The number of wrestlers who have died before their 50th birthdays is staggering. Most of the deceased performers overdosed or died of heart attacks.

Linda McMahon needs to be asked about the whole illegal drugs issue. Wrestling resides in a murky area in sports and entertainment. The genre has some athleticism but in 1989 Vince McMahon testified before the New Jersey State Senate that his product was not a bona fide competition and that wrestling matches were staged events. McMahon was trying to catch some tax breaks from the state of New Jersey for his live shows and his pay-per-view TV offerings.

The United States Congress went after Major League Baseball with a viciousness after a number of factors influenced them including the International Olympic Committee’s fit of pique in 2003 after Major League Baseball refused to let stars compete in the Olympic Games that included IOC criticism of baseball’s drug testing procedure and a threat that New York would not get the 2012 Summer Olympics unless baseball knuckled under to the IOC. That caught Congress’s attention along with Jose Canseco’s tell all book about banned substance usage in baseball. Congress also made some noise by also calling in National Football League, National Basketball Association and National Hockey League people to testify in what really were dog and pony shows.

Perhaps Linda McMahon fits the position after all.

For whatever reason, Congress has never go after the entertainment industry about the usage of illegal substances or looked into banned substance usage by teenagers who are not athletes.

If Linda McMahon is running for a Senate seat, maybe it is time for some Congressional committees to review professional wresting. The carnage has been documented and the toll is large especially compared with the number of deaths attributed to drug overdoses in Major League Baseball. The answer in baseball appears to be zero, although Ken Caminiti died of a drug overdose in 2004 at the age of 41. Caminiti was the National League’s Most Valuable Player in 1995 and discussed his steroids usage with a reporter from the America magazine Sports Illustrated in 2002. Caminiti did not have steroids in his system at the time of his death.

Mrs. McMahon is getting more coverage than normally allotted to first time candidates because she has been involved in the on going storylines of the World Wrestling Entertainment. What is going to be interesting is to see how the local NBC affiliate in Hartford handles Mrs. McMahon’s campaign. General Electric’s NBC unit has had a very long relationship with the WWF/WWE. Dick Ebersol, the chairman of NBC Universal sports and Olympics, is one of Vince McMahon’s best friends. NBC has throughout the past two decades given exposure to the WWF/WWF in form of TV specials and NBCUniversal’s USA Network has the cable TV rights in the United States to McMahon’s product.

McMahon’s failed football league, the XFL, was co-owned by NBC in 2000-01. It was Ebersol’s assistant NBC Sports President Ken Schanzer who pulled the plug on the XFL, not Ebersol after the league lost millions of dollars.

Mrs. McMahon will boast of building a company that has more than 500 employees in Connecticut and the truth is that Vince and Linda McMahon took out loans and mortgaged and hocked everything they had to push the World Wrestling Federation (Titan Sports) beyond a northeastern United States base in a gambling to make the WWF a national property in the U. S. They rolled the dice and gambled that Wrestlemania in 1985 would put them on the map.

The McMahon’s empire was built on a house of cards and a naiveté of other wrestling promoters in 1983-84. The McMahon’s bought out Vince’s dad’s Capital Sports in 1982 and changed the business. Because Capital was based in the US northeast and promoted shows in Boston, New York, Philadelphia, Pittsburgh, and south to Washington, it was thought the McMahons had deep pockets because of the markets and some TV deals. Wrestling was a regional business with promoters having handshake deals not to invade other territories.

Those other regional wrestling operators watched as the McMahons signed their talent (as independent contractors) and thought they could not match the McMahon’s deep pockets. They thought wrong; the McMahons had no money and were literally living from show to show. The McMahons desperately needed the pay-per-view Wrestlemania show at New York’s Madison Square Garden to score big.

It did.

Mrs. McMahon is correct that she is a businesswoman who helped shape a fast growing business in Stamford, Connecticut over on Holly Hill.

The McMahons got lucky.

If reporters are not diligent and in this political climate of my team is better than your team stuff of talk radio and cable TV that passes for journalism, Mrs. McMahon may catch another break. She needs to be held accountable for the deaths of the performers in her business from drugs. She is a flawed candidate but will anyone bother to look at the other side of wrestling beyond the Undertaker character that appears on the McMahon family TV productions and house shows?

The democracy deserves an answer.

Sunday, September 13, 2009

The European and North American Sports Cultural Divide

The European and North American Sports Cultural Divide

By Evan Weiner

September 13, 2009

10:00 PM EDT

(Copenhagen, Denmark) -- On September 1st, the wife and I were walking down Strøget, the main shopping area in Copenhagen when she spotted a fellow in a red shirt with the letters AIG emblazoned on the front. She wondered why anyone would want to wear the insignia of a disgraced financial company that is being bailed out by America taxpayers on a shirt until she realized that the shirt was actually part of the Manchester United football kit.

In Europe, no one thinks twice about seeing a corporate logo on a sports uniform. It is part of the game unlike the practice in North America where advertising on Major League Baseball or National Football League or National Basketball Association or National Hockey League shirt is akin to drawing a moustache on the Mona Lisa.

The European football kit is not much different than a rugby shirt. The team's major sponsor has a big logo which captures the eye while a much smaller team logo resides in the upper left hand side of the shirt. The shirt or kit manufacturer has a small logo on the upper right side of the shirt. The logo is clearly visible on TV screens, from the stands or in newspaper/magazine pictures.

That is the reason the sponsorship is so attractive.

AIG's logo has been plastered on Manchester United's shirts since 2006 as part of a four-year, $100 million (US) deal. AIG is not the only taxpayer bailout English Premier League team marketing partner. The U. K. has nationalized the Northern Rock bank. Northern Rock's logo appears on Newcastle United's shirt. Northern Rock also is a major sponsor of Newcastle's rugby team.

Financial institutes have been sports marketing partners for a long, long time and it seems that people in the United States have no problem with stadium naming rights except possibly Citibank's marketing deal with Fred Wilpon's New York Mets. In the United States, journalists and editors who should know better and avoid corporate names in articles, columns, radio updates and talk shows along with TV talking heads embrace the corporate names. The fourth estate has accepted corporate marketing partnership and so have sports fans.

Naming rights, presumably, for a stadium do not interfere with a game nor does the NBA's marketing deals with a car company to sponsor league trophies for the Most Valuable Player Award, Defensive Player of the Year, Sixth Man Award and Most Improved Player.

The English Premier League is sponsored by Barclay's bank.

But there is a great sports cultural divide between Europe and North America. In Europe, sports teams whether it is in football, cycling, rugby or cricket have advertising on their shirts, in North America there is still a thought that advertising on baseball uniforms, football, hockey and basketball shirts is something of a violation that might even supersede the separation of church and state although it is rather unclear just what is so sacred about a jersey in those sports even though there is subtle advertising on those shirts as the companies that make the shirts have clearly visible logos on the clothing.

In North America, it is accepted practice for race drivers to have their uniforms plastered with sponsor logos and Major League Soccer follows European tradition and places advertising logos on soccer shirts.

Does a sponsor’s logo ruin a game? The answer is no.

In Europe, the inclusion of a sponsor logo is no big deal. But to some like Ralph Nader, a sponsor's logo on a sports shirt is absolutely wrong and breaks the covenant between the fans sports owners. There are others who feel the same way.

On May 4, 2004, Nader sent a letter to Major League Baseball Commissioner Bud Selig condemning Selig and Major League Baseball owners for putting advertising logos on New York Yankees and Tampa Bay Devil Rays uniforms for the opening series of the 2004 MLB season in Tokyo, Japan.

Nader didn't hide his feelings in his salvo to Selig.
"The great lengths of selfishness with which you are willing to go to desecrate baseball and alienate fans of the game should no longer surprise us. Still, your placement of advertisements on the New York Yankees and Tampa Bay Devil Rays uniforms for Major League Baseball's opener on March 30 in Tokyo ambushed fans across the country and left them shaking their heads at this obscene embarrassment," Nader wrote in his opening paragraph.
"We urge that you immediately put this issue to rest once and for all and eliminate any current or future possibility that Major League Baseball will accept advertisements on uniforms.
"You are suffocating Baseball's fan base. It's not enough for fans who want to enjoy a game to be forced to watch this pitch sponsored by that company or that home run sponsored by this corporation. In addition, they go to a stadium paid for by the fans and taxpayers, yet almost every available space is filled with ads and named after some multinational corporation with no ties to the community.
"Over the last several years, fans have been made to watch 'virtual advertising' infiltrate television broadcasts, and T.V. commentators using the broadcast booth to hawk cell phones during the playoffs and World Series. This over-commercialization is sapping the fun out of being a fan of Major League Baseball.
"Now, you have sunk to a greedy new low. Bending Baseball to the demands of advertisers and accepting more than $10 million (according to Advertising Age) for a corporation to plaster ads on the uniforms for the two-game series in Tokyo. It's supposedly a one-time deal, but conventional wisdom says otherwise -- that permanent advertising on uniforms isn't a question of 'if,' but 'when.'
"MLB executive vice president for business Tim Brosnan, told reporters in Japan 'Are there any definitive plans to put logos on uniforms? No. I don't see that happening. But on the other side of the coin, never say never.'
"'We're mindful of the fans, but I don't think [advertising on uniforms] is unreasonable,' Brosnan later told the New York Post. 'We're always looking for new ways to advance our business.'
"That must sound reassuring to fans. The public tolerates a certain amount of commercialism, but why do you insist on trying the patience of loyal baseball fans across the country? We already have NASCAR, with drivers doubling as walking commercial billboards. Is that really what you want for the national pastime?
"Commissioner Selig, no one is trying to get in the way of your ability to make money, but you need to look beyond the immediate bottom line to make Major League Baseball sustainable. As primary caretaker, this means your job is to respect cities and fans, ensure the integrity of the game, and eliminate self-interested and destructive tendencies. Advertising on uniforms runs counter to each of these critical principles.
"If you allow such an explicit interference of baseball with another greedy vehicle for corporate marketing -- using player uniforms as product placement surfaces -- apathy is not what you should expect from fans and sportswriters. There will be considerable resentment, and fans will drift away. A matter of taste can sour more quickly than you think."
Major League Baseball has not added logos to the front of team shirts yet. Nor as the NFL, NBA or the NHL. But the way North American sports is structured today, there is no reason to keep logos off of shirts except for tradition. The National Hockey League a few years back wiped off the names of the companies that supply equipment to players unless the league received a stipend from the companies. Putting a logo on a Major League Baseball, National Football League, National Hockey League, and National Basketball Association uniform would not compromise any games. Logos on shirts in Europe or Asia are commonplace. There is nothing scared about sports uniforms.

Wednesday, September 9, 2009

Is International Football Just Like Major League Baseball?

Is International Football Just Like Major League Baseball?

By Evan Weiner

September 5, 2009

16:00 GMT

(London, U. K.) – Over the past few months, United States banks and financial institutes that have accepted taxpayer’s money have been warning that they need to pay big bonuses to employees because they could lose talented people elsewhere if they didn't cough the stipends. Where would these people, who helped break the economic system, go?

Maybe Spain.

They might follow the lead of international football players headed to Barcelona or Madrid because of new and very favorable tax laws that were designed to attract foreign nationals to the country in good paying jobs. It is not much different from Florida or Texas having no state income tax. The tax laws where it is in Spain, the US, Canada or the UK have definite consequences in sports.

It doesn’t seem to matter when you are in the world, sports leagues and organizations seems to have become very money conscience all linked through government policies. Football, the kind played on a global basis not the American version of the game, has a lot in common with the North American big four sports, baseball, basketball, football and hockey.

Major League Baseball’s rich and poor divide among the 30 clubs was caused by big television money and government regulations. The New York Yankees can out spend the Kansas City Royals, Oakland A’s, the Pittsburgh Pirates and virtually any other baseball team to get free agents and the same can be said of the Barcelona club of La Liga in football. Because of television money and Spain’s tax laws, Barca or Real Madrid can ante up huge contracts and pay large transfer fees for top of the line players. In the English Premier League, one London newspaper pointed out the difference in payrolls in the Manchester City-Portsmouth match, it seemed Manchester City had a Boston Red Sox-like payroll while Portsmouth resembled the Florida Marlins. Some Premiership teams print money because of their brand name.

Manchester United's red kit or shirt is adorned with a big AIG logo which is costing United States taxpayers about $25 million annually in licensing fees. That deal ends in 2010. ManU is one of the biggest sports brand names internationally.

Spain’s tax laws were not necessarily passed to strengthen Barca or Real Madrid but foreign players can sign with Spain-based teams and pay just 24 percent tax on their earnings for the first five years they are in Spain. The tax rate in England for top paid players will be 50 percent starting in 2010. Real Madrid’s gets far more money from TV than other teams, which sort of mirror’s Major League Baseball’s problems with the New York Yankees. Real Madrid is in the middle of a seven year, 1.1 billion euro deal with the Spain's Mediapro and gets about 150 million euros a year to spend like is more than the New York Yankees local cable TV deal. Real Madrid gets a bit more of a third of operating revenue from TV deals, another third from licensing deals from marketing partners and less than a third of the 290 million euros in revenues the team earned in 2008 from fans in the stands. Real Madrid has a North American business model, use government laws to the team's advantage, get huge TV money and have big spending corporate partners and marketing partners. Fans come in fourth in the economics of the team which is the New York Yankees business model.

Real Madrid may be heavily in debt, but Spain’s bankers have no problem giving the club a large line of credit. Barca also enjoys a good relationship with banks in Spain.

Real Madrid spent 258 million euros to improve its roster for the 2009-10 season. The TV and corporate partners will cover the costs of the salaries. Barca parted with about 40 euros to get Zhatan Ibrahimovic which sounds like the New York Yankees business model again. Spend top money for top players and hope that translates to wins and revenue.

Both La Liga and the English Premier League have a global presence and that means more eyeballs in front of TV screens watching them and buying merchandise. La Liga and the Premiership beam games into Asia.

La Liga and the English Premier League seem to be on a collision course when it comes to spending but the Premier League’s top teams, Manchester United and Arsenal, are crying foul and that they cannot keep with them the spending. Another Premier League, Chelsea, was part of the arms game when the team signed Gael Kakuta of Lens but football’s governing body, FIFA, found that Chelsea illegally signed the player and has barred Chelsea from acquiring players during two transfer periods in 2010. Chelsea is appealing the ruling but the London-based team might use European Union laws which allow youngsters the right to work anywhere in Europe as a basis for the defense.

The English Premier League clubs, particularly Manchester United, Chelsea and Arsenal, have been going after players under the age of 18 from France, Italy and Spain. La Liga is fighting back by signing some of England’s top players. Some Americans are also looking for contracts in Europe as Major League Soccer has all sorts of salary restrictions and Americans can make more money elsewhere. The MLS is not considered even a middle tier league.

There will be no owners-players labor unrest in football although some club owners are pushing for some sort of cap on the player transfer fees which have been skyrocketing.

Only the National Hockey League in North America has a transfer fee as the league has some deals in place to purchase the contract of some players in Europe. The NHL does not have a transfer fee deal in place with the Russians. The NHL also has a transfer fee agreement with Canada’s Junior A teams. Major League Baseball, the National Basketball Association and the National Football League have no transfer fees. Europeans and South Americans can join NBA teams once their contracts with local teams expire.

Major League Baseball can bid on Japanese players if a player is posted and the winning bidder.

Sports, no matter which side of the Atlantic, seem to follow the same rules, use government to get ahead, hope for big local TV contracts and sell tickets to customers, not fans. There is also something else that North American major league franchises and European football teams have in common. Both entities feature clubs that have huge debt services. North Americans sports followers and their European counterparts probably don’t feel that baseball, football, basketball, hockey, global football, rugby and other sports have a relationship, but they do. The games may differ but it is business except maybe in Glasgow where the two local football teams, the Celtic and Rangers, are still engaged in a blood feud that is rooted in sectarianism between the Rangers Protestant fan base and the Celtic Catholic supporters. The Celtic-Rangers rivalry is rooted in Glasgow's religion sectarian past although business interests along with other pressures. The Celtic-Rangers matches are the real deal and may be the last rivals in sports where fan interest comes before business although that is changing as business and social pressured build in Glasgow.

The trinity of government, TV and corporate support is the lifeblood of big time sports in the North America, the same holds true in Europe.