Tuesday, April 26, 2011

Why are NFL owners really locking out the players?
TUESDAY, 26 APRIL 2011 08:10


The National Football League has been pretending that all is well in the land of the 32 franchises and the league's more than 1,600 employees. Teams are conducting cheerleader tryouts. The league released the 2011 pre-season schedule, then came the regular season schedule announcement and the exciting month of NFL football reaches a climax with three days worth of what is essentially a major restraint of trade, the college draft. That exercise, which starts on Thursday, is made legal thanks to the 2006 National Football League-National Football League Players Association collective bargaining agreement which gives the NFL the right to offer college players a chance to join the players ranks through that mechanism even though the college players have no say in the 2006 agreement.
So all is wonderful in the land of the NFL except for one minor detail. NFL owners have locked out the employees who perform on the field — the players and no new negotiations on the collective bargaining agreement are scheduled until May 16 after a flurry of court decisions will be made on the legality of the lockout and whether the owners can use TV monies from 2011 rights from FOX, NBC, CBS, Disney's ESPN and DirecTV for football operations even if there is no product.
The lockout was lifted by a Minnesota judge on Monday afternoon; the NFL will appeal the ruling which means both sides are back to the bargaining table with no rules for business for 2011. It could be that 2010 rules apply which is not necessarily good for either side. Players will have to wait six years, not four for free agency and the owners have no salary cap to control players costs.
A win for the players perhaps, a win for fans perhaps. A loss for the owners perhaps. But one thing is certain, a lot of the money problems, real or imaginary, that NFL owners are having come from municipalities building new stadiums for teams and that taxpayers dollars which went for palatial stadiums in 1990 are longer good because 21st stadiums are so much better.
The owners have contended that their side was forced into a lockout because the players cannot see that they are financially hurting or that the business model no longer works or that the stars aren't in the right place because the moon isn't in the seventh house and Jupiter hasn't aligned with Mars or something else.
There actually is a reason that the owners do have but for some reason the owners side has not spelled out the problem. Simply, every time a new stadium comes on line (in the most recent cycle, it has been Jerry Jones' Cowboys home in Arlington, Texas and the new Meadowlands facility), the stakes for lesser revenue teams become higher because the new stadiums raises league revenues (all those shiny luxury boxes, club seats, and personal seat licenses) because old facilities just don't have the whistles and gadgets the new places have. The salary cap ceiling goes up as well as the salary cap floor and spending to the minimum has caused owners with fewer revenues streams problems. Teams have to pay for players and probably debt service (for either buying a franchise or throwing money at a new stadium — Cowboys, Giants-Jets, New England Patriots to name some of the franchises that have kicked money into new facilities) and have to cut other areas and that may include the number of coaches on a staff, scouts and other front office personal including sales and marketing employees.
That seems to be the "broken economic model" that NFL owners through Commissioner Roger Goodell are talking about. The owners just have not spelled it out publicly. It goes back to owners versus owners and whether big market owners want to share revenues with smaller market owners.
Oakland, Minnesota, St. Louis, Atlanta, Charlotte (Carolina), Buffalo, Jacksonville, San Francisco and San Diego apparently in that leaky boat (old stadiums) with no upward ability to raise revenues. A little more than 15 years ago, Atlanta along with Jacksonville opened new stadiums and St. Louis officials built a domed stadium that satisfied Los Angeles (actually Anaheim) Rams owner Georgia Frontiere who moved her Rams from the second largest TV market (albeit Anaheim) to Missouri.
The present dispute between the owners and players has roots in the 1960s when Irving, Texas built Dallas Cowboys owner Clint Murchinson a stadium complete with luxury boxes which gave Murchinson extra revenue. In the early 1970s, New Jersey decided to become "big-league" and built the Meadowlands which also had luxury boxes which added to the Mara family's revenue stream.
By 1983, NFL Commissioner Pete Rozelle was complaining that the "luxury box" was the bane to his existence. NFL owners wanted new stadiums and started playing the field. Rams owner Carroll Rosenbloom began plotting the move of his franchise to Anaheim in 1978 although he didn't live to see the team play in a rebuilt Anaheim Stadium in 1980. The Minnesota Vikings ownership shopped around but eventually got a new stadium in Minneapolis. Al Davis ended up in Los Angeles in 1982 in a move that also was spurred by the possibility of more TV money. Even Leonard Tose thought about moving his Philadelphia Eagles to Phoenix although that was to get out of millions of dollars of legal gambling debts and get some money back into his coffers. The NFL didn't want to leave Philadelphia because of an owner's financial trouble caused by gambling at Atlantic City casinos.
Perhaps the NFL owners can explain their position which was caused by government subsidized stadiums being opened in select cities by using an example from New Orleans in 1999. In that year Saints owner Tom Benson started looking for either a rebuilt Superdome or a new New Orleans stadium. Benson was miffed when Louisiana officials did not follow the leads of Jacksonville, St. Louis, Baltimore, Nashville, Cleveland and Oakland which put up piles of cash to attract either an expansion or relocation team to their cities. Jacksonville got an expansion team in 1993, St. Louis wooed Frontiere and got married to the Rams in 1995, Davis took his Raiders back to Oakland in 1995. Houston Oilers owner Bud Adams grew tired of the Houston Astrodome (he first suffered Astrodome fatigue in the late 1980s) and took Nashville offer in 1996. Cleveland came up with funding for a new stadium after Art Modell announced his Cleveland Browns franchise would move to Baltimore in 1996. Cleveland came back online in 1999 in the NFL. Also in 1999, Los Angeles and Houston were bidding for an NFL expansion franchise which would start play in 2002. Houston voters approved a referendum and built a new facility which is what Adams wanted all along and didn't get.
Benson played the stadium game because his football revenues were failing as new taxpayers funded stadiums were opening around the country. In spring 1999, Benson began his attempt to renegotiate the team's lease with Louisiana Governor Mike Foster and the Louisiana legislature. The issue then was the naming rights to the Superdome. Benson did not want the structure named after former Governor John McKeithan who pushed to build the stadium in the 1970s. Benson said renaming the Superdome by calling it the McKeithan Dome would cost his team millions of dollars annually.
The legislature wanted to honor the former Governor while Benson wanted the naming rights to the facility so he could sell it to a business who would pay millions for the privilege.
By 1999, the New Orleans economy had slipped as businesses closed offices in the city and New Orleans population was on the decline. One Saints official said that the team once had the fourth best revenue generating lease in the business. However that official added that once St. Louis, Nashville and Baltimore started enticing team owners with virtual rent-free stadiums, the Saints franchise quickly plummeted to near the bottom of the league.

Benson could no longer keep up with the big boys in what was supposed to be a socialist society which is the NFL's business model.
On January 10, 2001, Benson and the Saints filed a "letter of default" alleging that the state and Superdome officials violated the Saints lease at the dome. Benson had other options which he used despite the fact he had a lease until 2017 with the state for his team to play football at the Superdome. Mississippi officials talked about building a multi-sports complex some 45 minutes from downtown along Interstate 10. Benson owned a car dealership in San Antonio, Texas and seemed to have an interest in the then eight-year-old Alamodome which seated 65,000 people. But the Alamodome was already outdated by 2001. San Antonio Mayor Howard Peak admitted that the Alamodome needed "more suites even though we have 65,000 seats, we have to have club seating and other types of seating."
San Antonio had a new building but the wrong type of seating.
Benson did play the game masterfully. He got an agreement with the state that gave him $186.5 million in state handouts between 2002-2010 and his recent agreement came with a Superdome revenue for more bells and whistles and up to $6 million in annual state handouts if certain benchmarks are not hit. Additionally Benson took control of a building near the dome and is renting offices to the state as part of the new Superdome agreement.
New Orleans may be a small and financially challenged market by Governor Bobby Jindal has no problems providing subsidies to a private business — an NFL team.
Benson can compete because of taxpayers dollars. Other owners aren’t as fortunate in getting a block grant from state or city governments although they do well in other government related tax break areas.
St. Louis has an interesting lease, the Rams-St. Louis agreement calls for the team to be in the top 25 percent of stadium generated revenues in the NFL. With newer stadiums opened, the revenues are probably not in the top 25 percent and an owner can opt out of the lease agreement which ends in 2014. Will Missouri follow Louisiana lead and throw money at Rams ownership?
Right now, Santa Clara, California officials are trying to figure out how to transfer money into an account to build a stadium for the York family's San Francisco 49ers. In Los Angeles, competing groups want an NFL team and in one case, AEG's downturn stadium proposal, the company looks to be trying to pull off a land grab.
The owners want to cut players salaries yet have not given a reason why. It seems hard to believe any NFL owner has financial difficulties with a team. In 1993, Jerry Richardson and Wayne Weaver paid about $140 million for expansion teams in Charlotte (Richardson's Panthers) and Jacksonville (Weaver's Jaguars). By the end of the decade, Houston's Robert McNair paid five times as much for an expansion team. TV monies exploded when Rupert Murdoch bid for NFL rights for his weak FOX syndication alliance of TV stations in late 1993. The owners have done a poor job of articulating their side of the story but apparently there is a side. The lesser markets cannot keep up with the big boys who drive the revenues and in a league that has prided itself with a "leaguethink" philosophy where the weakest link (or smallest market) is equal to New York, Dallas, New England, Washington, Houston and Philadelphia this has become a major problem.
The owners are financially hurting, so they say.
But all of these problems will be swept aside for the draft, just the same way the problems disappeared when the league announced the regular season schedule. It is Kafka-like, black is white, up is down, the NFL is operating as if it is business as usual.
Evan Weiner, the winner of the United States Sports Academy's 2010 Ronald Reagan Media Award, is an author, radio-TV commentator and speaker on "The Politics of Sports Business." His book, "The Business and Politics of Sports, Second Edition is available at bickley.com, Barnes and Noble or amazonkindle.

Thursday, April 21, 2011

NFL lockout 2011: Why are Gov. Christie and other politicians strangely silent?
THURSDAY, 21 APRIL 2011 12:03


The National Football League Draft is on the horizon and there has been a deafening silence from a group of people who actually have some power to exert some influence on what appears to be stagnating talks between the owners, who have locked out their employees — the players — and the players representatives.
People like New Jersey Governor Chris Christie who has no problem yelling at his employers in public settings — New Jersey voters — has gone mute on the issue. Christie is no better than Texas Congressman Lamar Smith who doesn't think Congress ought to be involved in the dispute or President Barack Obama. Christie is in a governor's league that includes both Democrats (Andrew Cuomo of New York, Jerry Brown of California, Mark Dayton of Minnesota among others) and Republicans (Rick Scott of Florida, John Kasich of Ohio, Scott Walker of Wisconsin, Rick Snyder of Michigan, Rick Perry of Texas, Jan Brewer of Arizona, Bobby Jindal of Louisiana) who should be out there jawboning NFL owners to get a deal done with the players.
All the governors are cutting costs so you figure the potential of losing money because there will be no business conducted because of the lockout would stoke their combative fires.
But it hasn’t.
You see taxpayers are on the dole for stadiums that NFL owners use. In Christie's case he inherited a $300 million commitment for infrastructure at the New Meadowlands Stadium and New Jersey is still paying off the debt on the defunct Giants Stadium. Jindal signed off on a deal that calls for cash strapped Louisiana to contribute up to six million annually in public subsidizes for Tom Benson's New Orleans Saints. New York is giving Ralph Wilson some three million dollars annually for upgrades at Wilson's Buffalo Bills facility.
You go from state to state and you will see just how much government money has been invested in the National Football League through stadium building or renovation with the old adage that stadiums are economic engines.
Stadiums are not economic engines and that has been documented time and time again.
The governors are not the only ones who have lost their usually loud voices. There are mayors and city councils that have been strangely silent. The noise machine on AM radio is also strangely quiet on this issue (although given the very nature of talk radio whose content will never be confused with any serious discussion on anything of importance, it might be a blessing in disguise).
Congress too is not touching this issue but there is a big role here that can be played. Congress knows how to apply pressure on sports. But for some reason, Congress even during the days of steroids hearing up on the hill has treated the NFL with kid gloves. Congress praised the NFL's drug testing polices a few years ago.
Here is another reason Congress needs to get involved. Discarded NFL players cannot get health insurance because of pre-existing conditions. No one knows just how many of the former players are now on the public dole on social security insurance or Medicare. As the debate on the future of those programs continues, someone in Congress should be asking why football players who suffered disabling injuries in a sport that brings in a reported $9 billion annually are on the public dole.
National Football League owners, of course, are highly political creatures. San Diego's Alex Spanos gave a speech at the 2000 Republican Convention in Philadelphia when George W. Bush accepted the party's nomination as the GOP's candidate. Spanos also spent a lot of money on 527 attack ads against John Kerry in 2004 when he ran as the Democrat's candidate against George W. Bush. Yet Spanos did know this, you can be a good Republican soldier but sometimes you need a Democratic operative to help you get a new stadium. Spanos hired Mark Fabiani who was deputy campaign manager for communication and strategy for Al Gore during his 2000 run against George W. Bush.
If National Football League teams contribute so much to local economies as the former National Football League Players Association (the group no longer exists) claims, why have the elected officials suddenly becoming like Harpo Marx and Marcel Marceau?
Doesn't the NFL create jobs in a community?
Then there is the TV issue. The NFL Network and ESPN continue to collect subscriber fees from viewers and some of those dollars have been put into a war chest by NFL owners. The use of 2011 TV monies is a another bone of contention between the NFL owners and the now decertified National Football League Players Association with the disbanded association complaining that Rupert Murdoch's News Corp (FOX), Comcast/GE's NBC, Sumner Redstone's CBS, the Walt Disney Company's ESPN and DirecTV money should be frozen and the owners should not have access to those funds.
The NFLPA brought the issue to court and a judge will eventually rule if the NFL owners can use that money.
The money issue is a big deal. Why should non football fans who never watch the NFL on ESPN or ESPN for that matter pay for a service that never use. Because of the 1984 Cable TV Act, anyone who gets basic expanded cable is paying for ESPN. That is another reason that Texas Republican Lamar Smith, the Chairman of the Committee on the Judiciary is wrong when he says that Congress doesn't have a role in the lockout.

The NFL's success is the result of Congressional activity. The Sports Broadcast Act of 1961 was pushed through the House by Brooklyn Democrat Emanuel Cellar and flew through the Senate in what seems like record time and was signed into law by President John F. Kennedy on September 30 of that year. The law allowed the NFL's 14 teams to become one entity when it came to TV negotiations which allowed NFL Commissioner Pete Rozelle to sell the league's teams as one to the highest bidder at the time. William Paley's CBS beat David Sarnoff's NBC but Sarnoff in 1964 decided to bankroll the American Football League.
Sarnoff's money gave the AFL the wherewithal to sign players like Joe Namath and eventually provided the impetus that forced the NFL and AFL to merge. That marriage needed to be approved by Congress. NFL Commissioner influenced two key legislators Louisiana Senator Russell Long and Congressman Hale Boggs with the promise of putting a team in New Orleans in exchange for their votes. The merger was approved by Congress and President Lyndon B. Johnson in the fall of 1966 and New Orleans had a franchise a few days later.
The revision of the 1986 Federal Tax Code featured a loophole that owners immediately embraced. Any municipality building a stadium could only get back eight cents of every dollar generated in the facility to pay down the stadium debt. Owners, depending on the lease terms, could keep 92 cents of every dollar spent in the building.
Taxpayers should be asking why the politicos have gone troppo on this issue. Sports fans are not rational when it comes to their teams, their sport. They don't understand that sports is a business first and is heavily dependent on government support. State and local governments are spending hundreds of millions of dollars on facilities and are not coming close to breaking even on the projects. Because of that, governments have to tap other taxable areas to pay off the debt. There are all kinds of taxes, a hotel tax, a motel tax, car rental tax, sewer tax, cigarette tax, beer and alcohol tax, water tax and whatever else politicians can find to tax for sports. Sports owners can depreciate player contracts and don't pay any property taxes on facilities.
Still sports fans go on blithely and are wondering about their favorite NFL team's draft strategy. Next week's draft is the final product of the 2006 owners-players agreement. Both sides agreed that they would be a draft even if there was a lockout. There is an interesting aspect to a draft. It is, in itself, a restraint of trade but in a free market society accepted. Thirty one owners and the Green Bay Packers Board of Directors divvy up players and the players have no choice but to go to the team that drafts them. There are a few exceptions, Bo Jackson, John Elway and Eli Manning were able to beat the system and get to a preferred destination.
The owners and players continue their pitched battle. The owners claim the economic system is broken though have presented no public proof that they are hurting as an industry and the players don't want to give up the gains they have made financially over the years. The players also seem to not want to be bothered with taking care of their former members or are thinking about their own future down the road in terms of medical benefits. There is always social security and Medicare for them down the road — if the solons of DC decide to continue the safety net like many other industrialized countries although those aging Beltway solons just see darkness ahead for America.
Obama, Lamar Smith, Harry Reid, John Boehner, Chris Christie, Andrew Cuomo are at best ambivalent about the NFL lockout. There should not be. The do have a responsibility to NFL fans who spend money on the product, to taxpayers who have to pay for NFL stadiums, to cable TV subscribers to jawbone the two warring sides. Instead they are missing in action and have sloughed off their responsibility to get involved in an industry they built.
Evan Weiner, the winner of the United States Sports Academy's 2010 Ronald Reagan Media Award, is an author, radio-TV commentator and speaker on "The Politics of Sports Business." His book, "The Business and Politics of Sports, Second Edition is available at bickley.com, Barnes and Noble or amazonkindle.

Thursday, April 14, 2011

Fiesta Bowl scandal could put BCS game in play
THURSDAY, 14 APRIL 2011 11:26

New Jersey would be viable location for one of college football’s biggest games
College football media partners, marketing partners, boosters, and politicians should be circling the date of April 28 for a meeting near the site of the Sugar Bowl in New Orleans. That's the day when a subcommittee of the National Collegiate Athletic Association reviews the license that the group has given to Fiesta Bowl operators to run the annual game in Glendale, Arizona.
The Fiesta Bowl is part of the Bowl Championship Series with Glendale hosting a national championship game every four years. The Fiesta Bowl, South Florida's Orange Bowl, Pasadena, California's Rose Bowl and New Orleans' Sugar Bowl are college football's big events and are worth a lot of money. Each bowl is a fiefdom and one of the reasons that there isn't a college football championship is that none of the powers to be behind those particularly bowls wants to cede one iota of importance that those bowls have.
Until the NCAA gets all of the fiefdoms to agree that a college football championship game that makes (financial) sense, the system will not change. That is unless Congress decides to remove the NCAA’s tax exemption status and the part of the Sports Broadcast Act of 1961 that applies to the group.
Neither action seems to be very likely.
The sacking of Fiesta Bowl chief executive John Junker along with two other top officials could open a Pandora’s Box of problems for Glendale, the Fiesta Bowl and the (college football's) Bowl Championship Series for Arizona politicians who allegedly accepted gifts from Junker.
Arizona elected officials have to abide by state laws, which included an “entertainment ban” that prohibits, state employees and elected officials from accepting tickets or "admission to any sporting or cultural event" for free.
The Fiesta Bowl organizers have been summoned to New Orleans to meet with NCAA members and will be given a day in the NCAA courtroom to explain away a 276 page report by a Fiesta Bowl Special Committee that provided unique details of "excessive" spending on employees and the relationship between Arizona politicians and bowl officials. Apparently Arizona elected officials had no problems accepting gifts from Fiesta Bowl organizers which is a violation of Arizona laws if the gifts bestowed on the elected officials were more than $500.
The Fiesta Bowl organizers seem to have thought the best way to keep their fiefdom going was to have Arizona’s elected officials at their side.
Some Arizona lawmakers are "amending" their campaign financing reports to reflect that they suddenly remembered they took money from Fiesta Bowl officials or got tickets for the game or went on Fiesta Bowl related trips or received campaign contributions from Fiesta Bowl employees.
The Fiesta Bowl officials apparently knew which palms to grease. Among the politicians that got some benefits from the Bowl hierarchy include Arizona Governor Jan Brewer, Senators John McCain and John Kyl, Congressmen J. D. Hayworth and Shadegg. McCain's Political Action Committee — Straight Talk Express — also got some money from bowl officials. Additionally, there were Fiesta Bowl employees who gave $46,000 to 23 political candidates who were reimbursed for their campaign contributions by the Fiesta Bowl.
Interestingly enough, The Goldwater Institute is not involved in any complaining against the Fiesta Bowl which seems to be a contradictory stance for the conservative fiscal watchdog group. The Goldwater Institute doesn't want Glendale to sell bonds to help complete the sale of the NHL's Phoenix Coyotes to a Chicago businessman, Matthew Hulsizer, nor do they seem to care that things didn't work out attendance wise for the Los Angeles Dodgers and the Chicago White Sox during the 2011 Cactus League Spring Training part of the baseball season at the new Glendale baseball park.
Glendale had an open checkbook for the NFL's Arizona Cardinals owner Bill Bidwill (a new stadium), former Phoenix Coyotes owner Richard Burke (a new arena), Jerry Reinsdorf's White Sox, the McCourt family's Dodgers (a new spring training facility) and the city is attempting to work with Jerry Colangelo to build the headquarters for USA Basketball in Glendale.
The Goldwater Institute is nowhere to be found on this issue. Meanwhile, another watchdog group — the not for profit Citizens for Responsibility and Ethics of Washington, D. C. — has filed a complaint with the Federal Election Commission and asking the agency to investigate whether any laws were broken in the Fiesta Bowl's campaign contribution acts.
It will be interesting to see how the NCAA will put together the investigation. Will the NCAA consult cable TV partner, the Walt Disney Company, on this matter? Does the NCAA really want to go after the Fiesta Bowl and pull the license or will they slap someone on the wrist and say don't do that again knowing that every bowl committee does what is best for them not the "game" of college football?
A question that should be directed to NCAA delegates deciding the weighty matter of bowl licensing is this. Do they want a championship game in Glendale or can they line the coffers with another organizer in a bigger market?
Will the NCAA revoke the license and then put the fourth game of the Bowl Championship Series up for bid? If the Super Bowl can be played in East Rutherford in February in 2014, why not a Bowl Championship Series game at the Meadowlands in January? Think of the money that could pour into the BCS if New Jersey, Jerry Jones and his Cowboys Stadium in Arlington, Texas or Dan Snyder's and Washington Redskins stadium in Maryland outside of the District were involved in a bidding war for that spot in the Bowl Championship Series?
The NCAA more than likely should not be trusted with a real investigation of a bowl and corruption. After all this is a body that created the term "student-athlete" to get out of paying disability benefits in the 1950s after a Colorado football player could not work because of an injury suffered on the football field. This is an organization that pockets billions in television money yet limits players' off field, off court, off ice, off diamond earnings to be $2,000. This is an organization that receives a tax exemption from Congress and colleges whose football teams appear at say the Fiesta Bowl don't have to pay taxes on their take from the game.
School presidents and chancellors shop around looking for conferences that will further exposure (big money TV contacts).

This is an organization that has somehow convinced people and politicians that "student-athletes" should be lucky to get a scholarship and feel fortunate that they can play for good old whatever university and entertain stadium or arena audiences, boosters, advertisers, politicians and have their talents used by coaches who earn millions annually from schools, marketing partners and TV partners.
In New Jersey, the state's highest paid employees are the Rutgers football coach and the men's and women's basketball coaches. Go around the country and you will find that college football or basketball coaches are the highest paid employee in a good number of states.
College sports is nothing more than a business.
Congress holds hearings on college sports every so often and generally these hearings go something like this. Congressmen genuflect in front of NCAA honchos then complain about the unfairness of the Bowl Championship Series in that only BCS members have a real shot at a title and that outsiders are just that outsiders with a limited chance of ever winning a NCAA football championship.
Never once do these hearings ever produce anything worthwhile for the "student-athlete" who has to prove to a coach annually that he (or she) is worth the scholarship and if a marginal player gets hurt and is unable to return to sports, that athlete loses their scholarship. The myth of the student-athlete is just that.
A myth.
In Arizona, politicians are scrambling for cover. In New Orleans, Fiesta Bowl officials might be scrambling for the cover of Bourbon Street if indeed the NCAA pulls the bowl game license. The NCAA doesn't seem to be too concerned ever with "moral" problems. The group has pulled two bowl licenses, the Seattle Bowl and the Silicon Valley Football Classic, because the games were poorly attended.
The NCAA is acting because people were caught with their hands in the cookie jar and dispensing money to court politicians. The whole college sports industry needs a review but as long as there is money to be made and college presidents and chancellors looking for the yellow brick road for that pot of sports gold, nothing will change. The Marx Brothers lampooned college football in 1932 in “Horse Feathers,” a remarkable movie that hit on corruption in college football and nothing has changed in 79 years since that Bert Kalmar, Harry Ruby, S. J. Perelman, and Will B. Johnstone came up with a screenplay that had Professor Quincy Adams Wagstaff (Groucho Marx) recruiting players for Huxley for their big game against Darwin. The plot and the jokes of "amateurism" in 1931-32 could easily be used today.
Evan Weiner, the winner of the United States Sports Academy's 2010 Ronald Reagan Media Award, is an author, radio-TV commentator and speaker on "The Politics of Sports Business." His book, "The Business and Politics of Sports, Second Edition is available at bickley.com, Barnes and Noble or amazonkindle.

Wednesday, April 6, 2011

Could New Jersey get the Tampa Bay Rays?
WEDNESDAY, 06 APRIL 2011 11:03


The drumbeats have been sounding about the need for a new Tampa Bay Rays baseball park for a while. The Rays franchise ownership group wants a new stadium because the American League East team needs extra revenues to keep up with the New York Yankees and the Boston Red Sox in the division and sign players to long term big money contracts.
With no new Tampa or St. Petersburg stadium plan on the horizon, there has been a suggestion that Major League Baseball will eliminate the Rays and possibly the Oakland A's (a franchise that has wandered across the country from Philadelphia to Kansas City to Oakland and never has found financial success). The contraction threat seems to coincide with the ending of the 2006 Collective Bargaining Agreement, which will happen in December. There is nothing like using contraction as a negotiating tactic to gain some leverage over the players although there is a little problem baseball will need to overcome.
The Rays iron clad stadium lease.
The Rays ownership is saddled with a lease that former owner Vince Naimoli signed prior to the team's first season in 1998. It was a 30-year-deal with St. Petersburg and the contract ends in 2027. Major League Baseball Commissioner Peter Uerberroth told St. Petersburg and Florida officials in the late 1980s don't bother building the stadium as MLB was not interested in St. Petersburg. MLB expanded to St. Petersburg and Phoenix in 1995
The latest salvo about the Rays dire financial situation comes from a writer and a magazine that Major League Baseball has constantly discredited over the years. Mike Ozanian in his Forbes Sportsmoney blog of April 4 contends there will be no baseball or Tampa Bay Rays in 2015 although it isn't clear from Ozanian's blog just how that is going to happen. MLB has always been rather condescending towards Forbes' annual market evaluation of Major League Baseball teams.
There is one thing for certain. Major League Baseball needs an even amount of franchises so cutting ties with Stu Sternberg and his Rays without knocking out another franchise is not going to happen. Only two MLB franchises need new stadiums, Tampa Bay and Oakland. It appears San Jose would like the opportunity to build a baseball park for Lew Wolff's A's but a funny thing has happened on the way to San Jose.
The former New York Giants baseball franchise, whose owner Horace Stoneham fled to San Francisco in 1957, seems to think they have control over the San Jose territory even though voters twice turned down referendums for Giants baseball parks in the area. Major League Baseball Commissioner Bud Selig appointed a committee two years ago to study the San Jose situation. That committee is still fact finder although it seems an engine search on the Internet would produce whatever results Selig wants inside of 12 seconds. San Jose is farther away from San Francisco than Oakland (San Francisco and Oakland are connected by a bridge and the Bay Area Rapid Transit) and San Jose is part of the Bay Area media market.
The only reason San Jose cannot go after Wolff is the 1922 Supreme Court of the United States decision that gave the National and American Leagues of baseball an antitrust exemption because the court ruled baseball was a game and not an interstate business. The exemption gave baseball owners the right to do whatever they wanted to do. Most of the exemption has eroded over the years but the owners still control territories, which is why San Jose and New Jersey have been shut out of Major League Baseball.
There is no proposal at the present time to attract a Major League team to New Jersey although when then Baseball Commissioner Peter Ueberroth opened the door to possible expansion in 1987, New Jersey had a presentation ready. New Jersey also tried to attract George Steinbrenner's interest and get him to move the Yankees across the Hudson in the 1990s.
Wolff has failed in getting a "stadium-village" for his A's and real estate in Oakland and in Fremont, which is about 20 miles south on the I-880 of the team's present home at the Oakland Coliseum. In St. Petersburg, Tampa Rays ownership, which includes Managing General Partner Stuart Sternberg of Rye, New York, is looking for a new stadium in either St. Petersburg or Tampa.
There was a rumor, which was just a rumor, that the Rays ownership thought about moving the Rays to Connecticut.
Wolff can get out of his lease within a few years in Oakland as he signed a short-term agreement to keep his team at the Coliseum through 2013.
The San Francisco Giants ownership has the San Jose/Santa Clara County territory which is more than 40 miles south of the Giants China Basin ballpark. The Oakland Coliseum is considerably closer to San Francisco and is accessible by the Bay Area Rapid Transit and is not far down the I-880 from the Bay Area Bridge. San Jose became Giants territory in the 1990s when the team attempted to get a stadium built in the South Bay's most populous city. Neither San Jose nor Santa Clara voters had any interest in paying for a Giants stadium and turned down ballpark referendums. Despite the no votes, MLB has not changed the Giants' territorial claim.
Major League Baseball does not live by the same antitrust laws as normal businesses. Wolff is blocked from even thinking about crossing the Santa Clara County line because that would be crossing his baseball brothers. Wolff tried to get as close as he could to San Jose and Santa Clara and not upsetting the Giants ownership by trying to relocate to Fremont.
Oakland does not have the corporate crowd that fills the Giants China Basin stadium. San Jose is the Silicone Valley and somehow both MLB and the Giants are convinced that money headed up the 101 Freeway to San Francisco will shift to a San Jose baseball team, which would have a crippling affect on the Giants. The San Francisco baseball team is one hour away from San Jose; Oakland is across the Bay and is accessible by mass transit.
Wolff doesn't seem to want to sue Major League Baseball and challenge the antitrust exemption. Wolff shares the Oakland Coliseum with the NFL's Raiders and Raiders owner Al Davis did sue the NFL in the 1980s when the league interfered with his negotiations with the Coliseum for a lease extension and then tried to block the Raiders' move to Los Angeles.
Davis won.
In 1984, San Diego Clippers owner Donald Sterling thumbed his nose at NBA officials and moved his franchise to Los Angeles without league consent. He was fined $100 million for the move. Sterling sued the league. The two parties settled. Sterling stayed in LA and paid the NBA a $6 million fine.
That settlement may come back to bite Sterling later this month should the NBA Sacramento Kings owners, the Maloofs brothers, pick up and move into the Los Angeles market in Anaheim and share the area with the Los Angeles Lakers and Sterling's Clippers. The Maloofs, using the Sterling precedent, could end up paying no compensation for entering the LA market.
Major League Baseball did not move a team between 1971 and 2004. The Washington Senators left the nation's capital for Arlington, Texas in 1972. A number of attempted franchise shifts failed for various reasons including San Diego going to Washington in 1974, the Giants to Toronto in 1976, Oakland to Denver in 1979. A number of teams looked at moving to Tampa including the Giants, Seattle Mariners, George W. Bush's Texas Rangers and the Minnesota Twins. Minnesota ownership nearly sold the team to Greensboro, North Carolina interests in the late 1990s if a stadium became available in that North Carolina city. Voters turned down a Greensboro stadium in 1998.
It is not easy to move a team to open markets like Tampa was before 1995, like Denver before 1991, like Washington between 1972 and 2004. What chance does San Jose have? What chance does New Jersey or Connecticut have?
New Jersey may have the right stuff for a Major League Baseball team. In 2000, Major League Baseball had big names like Paul Volcker, the former Chairman of the Federal Reserve, Richard C. Levin, the Yale University President, the former Senate Majority Leader George Mitchell and media personality George Will, a former political operative and college professor who won a Pulitzer Prize for commentary in 1977, analyze baseball's financial condition.
The "Blue Ribbon Panel" on baseball economics left the door open for franchise relocation to places like northern New Jersey and Washington despite the presence of teams in the vicinity. New Jersey or Connecticut have a major revenue stream that is currently untapped. Cablevision's Madison Square Garden network has little summer programming of note that would draw in potential viewers since the Yankees formed the YES Network and the Mets, along with Time Warner and Comcast, started SNY. There probably is more than $60 million on the table waiting for a third New York City area team.
New York City is still the financial capital of the United States. The city once had three baseball teams — the Yankees, the Giants and the Brooklyn Dodgers. Walter O'Malley took his Dodgers to Los Angeles in 1957 although he kicked the tires and his Dodgers played seven games at Roosevelt Stadium in Jersey City, N.J. in 1956 and 1957. O'Malley used Jersey City as leverage in his bid to get New York to spring for a new stadium for his Dodgers. Giants owner Horace Stoneham seemed more determined to move his team from upper Manhattan out of the New York area than O'Malley ... with Minneapolis one of his choices.
With the population, the corporate wealth and television monies available, New York City or northern New Jersey would be ripe for a failing franchise. But New Jersey is blocked (as Connecticut would be) because both the Yankees and Mets would nix any move into their territories and the Philadelphia Phillies ownership would probably object to a third New York area team if it was placed in New Jersey. (The Philadelphia Flyers got a million dollars from John McMullen when he bought the Colorado Rockies NHL team and move his newly acquired team into the Meadowlands in 1982).
In Oakland, Wolff has Comcast's TV money, but he lacks corporate support. San Jose wants to build a stadium and Oakland is back in the game.

There are three essentials to running a successful franchise whether it is in Major League Baseball, the National Hockey League or the National Basketball Association or even Major League Soccer. Government support is an absolute necessity in terms of building a facility. Government can build the place with taxpayers' dollars or give substantial tax breaks and incentives (as the Giants/Jets stadium entity is receiving at the Meadowlands) to owners to build their own plants. The federal government regulates Cable TV where billions are made by sports franchises and separates the Yankees, Mets, Angels, Red Sox, Phillies and Mariners from the rest of baseball and corporate support. Corporates can take 50 cents off the dollar in buying luxury boxes, club seats for business purposes.
Wolff already shares the market with the Giants in the Bay Area and cannot get his foot in the door in San Jose. If Sternberg was looking at the New York City area, he would get a door slammed in his face. Sternberg is not seeking a New York area facility and is concentrating on getting a place built in Tampa. The lease in St. Pete has a long way to go but as the late John McMullen once said, a contract is just a piece of paper.
Major League Baseball moved the financially troubled and ownerless Montreal Expos into Washington after the 2004 season once MLB secured a commitment from the city that it would build a state-of-the-art baseball facility. Remember McMullen's comment.
A contract is just a piece of paper.
Washington is about 40 miles from Baltimore and was a part of the Peter Angelos' Baltimore Orioles territory. MLB worked out a deal with Angelos, which gave him a regional cable TV network, the Mid Atlantic Sports Network, as a partial payment for the Washington team which "invaded" his territory. That agreement might work in Wolff's favor and could be used by someone in New Jersey if that someone decided that New Jersey and Major League Baseball are perfect together.
The owners of the Seattle SuperSonics took their NBA team to Oklahoma City with two years left on their contract in Seattle to use the publicly financed and refinanced facility for their basketball team. Clayton Bennett reached a financial agreement with Seattle and left. But Bennett had the NBA Commissioner David Stern's blessing. Bruce Ratner (when he still owned the majority of the New Jersey Nets) took the Nets from the Meadowlands to Newark for two years with New Jersey's approval along with Stern.
New Jersey had the "right stuff" for Major League Baseball in 2000 according to Volcker, Levin, Mitchell and Will. The state could not go after the Montreal Expos franchise when it was up for sale in 2002, 2003 and 2004 because of the antitrust exemption.
There are 30 Major League Baseball teams. New York City has two teams, Los Angeles has two teams, Chicago has two teams and San Francisco-Oakland has two teams. It is hard to imagine California Senators Diane Feinstein and Barbara Boxer sitting by idly if MLB pulls the plug on the Oakland A’s. The same would probably hold true in Florida after all it was Florida Senator Connie Mack III (the grandson of the Philadelphia A’s manager-owner Connie Mack) that threatened MLB’s antitrust exemption (along with Colorado’s Tim Wirth) in the late 1980s and 1990s and forced MLB to consider expanding to either Miami or the Tampa Bay market or both.
Congress is pretty good at saber rattling and persuasion in the sports industry.
There have been some rumors that have appeared that MLB would mollify Sternberg by giving him a crack at owning the Mets after the Wilpon's fall from grace and that Wolff could take over the Los Angeles Dodgers once the McCourt divorce becomes final. Both seem scenarios seem farfetched. Contracting means the elimination of 50 players which will not please the Major League Baseball Players Association particularly when there are alternatives available — San Jose and maybe New Jersey or Tampa-St. Petersburg — but there is more than just the contraction of two teams. There are minor league cities who will lose clubs and that is sure to draw the attention of Congress. The last thing Selig and company want to do is go to Congress and risk losing the remaining portions of the 1922 SCOTUS decision because that could impact business operations.
Evan Weiner, the winner of the United States Sports Academy's 2010 Ronald Reagan Media Award, is an author, radio-TV commentator and speaker on "The Politics of Sports Business." His book, "The Business and Politics of Sports, Second Edition is available at bickley.com, Barnes and Noble or amazonkindle.

Tuesday, April 5, 2011

NFL's big game against the players starts this week in Minneapolis
TUESDAY, 05 APRIL 2011 11:46

Portions of this column are by Evan Weiner and Heather Rascher from ''A Business History of Professional Football,'' unpublished manuscript (2005).

The biggest game on the NFL season starts on April 6 when National Football League owners and the remnants of the now defunct National Football League Players Association face off in a Minneapolis courtroom. In a script that looks like a sequel to the days after the National Football League Players Association imploded in October 1987 when the NFLPA decided to sue NFL owners for free agency, the NFLPA is back in a Minneapolis courthouse and suing NFL owners. Ten players, including one college player who was not even a part of the defunct NFLPA, Von Miller, are suing the league in an antitrust action hoping the court will lift the owners lockout.
Miller's name is on the suit but he is planning to attend the National Football League Draft, an act that restrictions the freedom of college players in finding jobs. The only reason the draft is legal is through collective bargaining. The owners and players have agreed to a draft. Miller plans to be in the courtroom while New Orleans quarterback Drew Brees, one of the 10 plaintiffs, will not attend the opening day festivities. Brees will be at a golf fundraiser.
Brees last week was sounded a conciliatory note to retired and discarded players after being blasted by Sam Huff for criticizing former players who are down and out because of football related injuries. Brees apparently learned well from the late Gene Upshaw (who was the NFLPA Executive Director) who once said that the association could not worry about every problem. While the NFL and the NFLPA duke it out in Minneapolis, the former NFLPA may be involved in another action as former New Orleans and Miami defensive back Gene Atkins is suing the NFL's retirement board after being denied additional health benefits by the group which included the late Dave Duerson. The former defensive back, Duerson, was on the board which said no to Atkins football degenerative claim in 2006. Duerson's suicide in February 2011 raises questions according to the brief filed about Duerson's competence in light of statements that came out after the suicide that he had memory loss and difficulties spelling words.
The NFL and the NFLPA have had more than a half century of issues.
The NFLPA formed in 1956 with help from Creighton Miller, the first General Manager of the Cleveland Browns. Unhappy players in Cleveland and Green Bay assembled a network of "player reps" on each team. The players included Don Shula (Colts), Frank Gifford (Giants), and Norm Van Brocklin (Rams) to represent their teams. The Chicago Bears players did not have a representative. The players first meeting was held in New York in the fall of 1956, after the owners ignored the players' attempts to discuss their requests. The players asked for minimum salaries of $5,000 per season, injury pay, uniform per diems, and for teams to supply their own equipment.
Nothing happened but the players got a big break in 1957 when, the first lawsuit involving professional football and antitrust was filed, Radovich v. NFL, which significantly altered player rights within the league. The case involved a player/coach, George Radovich, who sued the league because the NFL effectively prevented him from attaining employment in the NFL or affiliated leagues, such as the Pacific Coast League, which was in existence at the time. The case was dismissed on the grounds that the NFL was exempted from the antitrust laws, and was appealed to the Supreme Court, which reversed the decision of the trial court, holding professional football subject to the antitrust laws.
The Supreme Court decision changed life for NFL owners. The players could now sue the league on antitrust grounds which they threatened to do. The owners and players settled with the players receiving minimum salaries of $5,000, $50 payment for preseason games, medical coverage for injuries, and a pension.
But the players didn't get what they agreed to and spend the 1958 season chasing the owners to live up to the agreement. The deal was finally signed in 1959.
The players did catch another break when Lamar Hunt started the American Football league and for some college players, they were able to play the NFL off against the AFL in getting some leverage for their initial contract. The AFL-NFL war over established players began in earnest when Pete Gogolak, a kicker on the Buffalo Bills signed a deal with the New York Giants in 1966. What was good for Gogolak and two NFL quarterbacks John Brodie and Roman Gabriel along with Mike Ditka who were been pursued by AFL Commissioner Al Davis to sign with his league was not good for the owners of either league. Brodie, Gabriel and Ditka got raises from their NFL teams. The AFL and NFL announced their intent to merge on June 8, 1966.
The National Football League Players Association wanted to fight the merger but didn't have the funding to do so.
The NFLPA has always been weak and the owners have always known that. The two leagues may have merged, but the player associations did not, as the players on the 16 NFL teams were NFLPA members and the players on the 10 AFL teams were American Football League Players Association members. This caused a major problem in subsequent negotiations as the NFLPA would come to a tentative agreement with the owners on certain collective bargaining issues (such as minimum salaries, retirement age) then the owners would bargain with the AFLPA, who accepted lower terms, which wasn't good for NFLPA members.
There was a brief lockout and a 20-day strike in 1970 that ended just before the 1970 All Star game and which did not result in the cancellation of regular or post-season games, the NFL and NFLPA signed a four-year contract, the first collective bargaining agreement in the history of the NFL, which raised player salary minimums to $12,500 for rookies and $13,000 for veterans, added dental insurance, improved the pension, gave players the right to have agents, gave players representation on the Retirement Board, and provided for impartial arbitration of injury grievances.
(Retired players from that era are still battling the NFL and the NFLPA and the retirement board over injury grievances and the complaining have caught the attention of Congress)
In 1974, the previous CBA was coming to an end. Players were demanding the elimination of the Rozelle Rule and the option clause which kept a player tied to his team in perpetuity unless another team was willing to give up number one draft picks or players to sign a free agent among other things. On July 1, the players went on strike, and were prepared to sit out until a new bargaining agreement was hammered out. The sit-out led to the cancellation of the New York Jets game at New Haven, the first game ever canceled due to a labor impasse. However, by the early part of August, about a quarter of the NFLPA crossed the picket lines, breaking down union solidarity. On August 11, Garvey sent his players back to work after a federal mediator suggested a 14-day cooling off period, instead pursuing the issue through the John Mackey case. The 42-day strike ended that day with nothing gained.
The NFLPA won the Mackey vs. NFL antitrust lawsuit in 1977, but players received only limited free agency with compensation under a new CBA.
On September 21, 1982, NFL players went on strike. It was the longest strike in professional sports in the U.S. at the time and lasted until November 17. The owners responded by locking the players out at the commencement of the strike. During the strike, only 126 of the 224 scheduled regular-season games were played, forcing the league to change the format of post-season play to include 16 teams instead of the usual 10 teams. The players held two "All-Star" games to raise some funding for players without a paycheck. The players got more money but two goals were not met, a form of free agency and more pension money.

The owners were not going to let that happen in 1987.
The players decided to strike after the second week of the season and the NFL reverted to its 1974 tactic of bringing in rookies and free agents and play replacement games. The league canceled the third week's schedule and resumed with the week four match ups.
In 2000, Hollywood made a movie about the 1987 strike called "Replacements," which was based on the Washington Redskins.
Some teams scouted the best available talent and tried to put together a strong replacement team. Other teams took chunks of local semipro teams, like the New York Giants, and hoped for the best. Others like Philadelphia Eagles Coach Buddy Ryan didn't take the replacement games too seriously and wanted for the players to return.
Like in 1974, veterans crossed the picket lines and by October 25, the NFL was able to claim victory. The players reverted to their old standby; plan B that was court action and that set off years of litigation.
"It was a great time and a lot of fun," said Charley Casserly who was part of the Redskins front office at that time. "Really, the interesting thing was we put together a time, the whole organization and Joe Gibbs did a great job coaching them. Nobody crossed the picket line and we beat two teams, St. Louis and Dallas on that climatic Monday Night that had about 10-12 players cross the picket line. The Dallas team had (Tony) Dorsett, Randy White, Danny White, Too Tall Jones. It was quite a time."
The NFL teams who did compete for players for Schramm's replacement league look anyway for players. Casserly found four players in a Richmond, Virginia halfway house who were playing for a minor league team including Tony Robinson who was the quarterback of the replacement team that beat Dallas.
"We did have a little philosophy on it," Casserly continued. "We wanted players that knew the system. We had to put together a team in 10 days to go play a game. Football unlike all other sports is really a team sport. So we wanted guys who knew the Joe Gibbs system. So we started with players who had been in our camp that year and been in our camp the year before and had been in camps with the Gibbs/(Don) Coryell system. We got players from everywhere.
"Obviously NFL cuts, but we got players from Canada, players who were cut in Canada. We wanted players in camp who were healthy and ready to go."
The players crumbled quickly in 1987 but years later Dave Jennings, who was a New York Jets punter at the time, thinks the showdown with the owners was worth it.
"The players were not that interested in a long term strike, they were looking at the next paycheck," said Jennings. "It's tough to get players to strike and stay together. In 1987, it was a shorter strike and we had the court cases working and eventually it worked out for us.
"We got nothing from the 1987 strike, we didn't get anything directly, but indirectly we got free agency and you see what happened. Free agency works."
The players did not get much though in post career benefits. They got their "Money Now" and didn't worry about the long term affect that football would have on their health.
After the conclusion of the 1987 players’ strike, the NFLPA filed an antitrust suit against the owners on October 15, 1987, seeking an injunction against the continuation of the NFL’s player reservation system, and asking for free agency. In (Marvin) Powell (v NFL), filed in the same jurisdiction that heard the Mackey case a decade earlier, the NFLPA claimed that, absent a new agreement, the NFL could not rely upon any “labor exemption” to immunize its player choice and movement restrictions from antitrust laws. Essentially the case considered whether the non statutory labor exemption would continue to protect the RFR system after the expiration of the CBA, and for how long the protection would be extended. In the first phase of the Powell I trial, the NFL argued for exemption based on the theory that the RFR system was entitled to absolute immunity as the subject of mandatory bargaining affecting only parties to the employment relationship. Additionally, the league conversely argued that the survival doctrine, which suggested that the non statutory labor exemption in effect during the term of a CBA survives the expiration of such CBA providing that the conduct at issue was protected during the term of the agreement, protecting the system from antitrust laws indefinitely following the expiration of the CBA.
The absolute immunity theory was rejected by the District Court of Minnesota, which spent more time focusing on the survival doctrine theory, using the Mackey test to determine whether the 1982 CBA qualified for the non statutory labor exemption. Despite the claims of the players that the 1982 CBA was not the product of arm’s length bargaining, the court found that the contrary to be true, and considered whether the CBA then “survived” its expiration due to the fact that it was reached through collective, arm’s length bargaining. The court determined that the CBA would in fact survive the exemption, but still had to determine the length of time such an exemption remains effective.
In January 1988, the district court ruled that the exemption survives the expiration of a CBA, but terminates when the employer and the union reach a bargaining impasse on an issue. Judge David Doty’s decision analyzed the positions of the parties and rejected both arguments, ruling that the “labor exemption related to a mandatory bargaining subject survived expiration of the collective bargaining agreement until the parties reach impasse as to that issue.” Doty indicated an unwillingness to apply the non statutory exemption fully, and ruled that he would not extend “blanket protection to union-employer agreements merely because the challenged activity arises within the context of mandatory collective bargaining.” The decision ultimately favored the owners, allowing them to implement new or different employment terms reasonably contemplated within the scope of the parties’ bargaining history. In Powell I, however, the court could not determine whether the parties had in fact reached an impasse, as it was awaiting an NLRB ruling on NFL charges that the players’ union was not bargaining in good faith.
The NLRB ruled in April 1988, dismissing the owner’s charges of bad faith bargaining, and finding the NFLPA was not required to continue to meet and bargain with the NFL because the parties had reached an impasse in negotiations. In June of 1988, after hearing the motions, the court rendered its decision that the parties had in fact reached an impasse over the free agency issue and that the system of restraints on player movement was now subject to antitrust laws.
The NFLPA decertified in 1989. It no longer represented NFL players and would never do so in the future. (The 2011 NFL complaint to the National Labor Relations Board pointed out that the present NFLPA had decertification as a tool in their toolkit and planned to use it all along in bargaining with the owners and would blow up collective bargaining talks and run to court.)
The players sought an injunction against the use of the RFR system in Powell II, and the owner’s contested the injunction and the court’s earlier ruling. The court ruled that the non statutory labor exemption no longer protected the RFR system from antitrust review, but agreed with the owners that it had no legal authority by which to grant an injunction. Thus the first two phases of Powell set the stage for Powell III, to determine whether the RFR system did in fact violate antitrust laws.
In the final phase of Powell, the NFL filed an interlocutory appeal in the 8th Circuit seeking an order reviving the exemption, reiterating its earlier argument that the labor law should prevail. The players argued that an agreement with the League would in essence overturn the court’s earlier decision in Mackey. The court determined that both parties have a continuing obligation to bargain with one another in furtherance of the collective bargaining process and to maintain a peaceful labor relationship. Further, upon impasse, the courts ruled that the League may exercise its discretion in implementing new or different employment terms within the scope of the parties’ pre-impasse proposals. Finally, the court disagreed with the ruling in Powell II, and ruled to allow the players to unilaterally generate an impasse in order to subvert the non statutory labor exemption and to pursue an antitrust suit for damages. The court then determined that the exemption would survive until a collective bargaining relationship no longer existed, forcing the players back into a bargaining process in which they historically operated at a disadvantage. The court instead suggested that the players resolve a dispute by 1) collective bargaining, 2) using economic force, or 3) reporting their claims to the NLRB.
The NFL appealed and Doty’s finding was overruled. In November 1989, the Appeals court reversed the earlier court’s ruling stating that as long as the players had a union that they could not sue under the antitrust laws (according to rulings involving the dual approach of collective bargaining and antitrust laws). The 8th Circuit Court of Appeals found that, since bargaining was continuing, the labor exemption was still in effect, and overturned Doty’s view and found the restraints in Powell were “exempted from antitrust scrutiny as the exemption survived impasse.” The court ruled that these practices remained within the non statutory labor exemption as long as the NFL and NFLPA maintained an “ongoing collective bargaining relationship”, and that the players could not pursue antitrust claims during collective bargaining. A federal jury subsequently awarded damages and unrestricted free agency to four plaintiffs. Thus, in the aftermath of Powell, the NFLPA decertified, and challenged the NFL’s restraints on antitrust grounds, setting the stage for further litigation.
In 1988, the Washington Redskins signed Wilbur Marshall, paying a steep price ($6 million for 5 years) for his contract, and having to give up their first-round draft choices in 1988 and 1999 as compensation to the Chicago Bears — a penalty that discouraged future deals. In effect, the player’s old team maintains the right of first refusal whereby it can match any offer made to the player by another club, and any team which ultimately signs the player must compensate the old team with draft choices, costing teams at least two first round draft choices to sign most top level free agents, such as what occurred with Wilbur Marshall.
McNeil v. National Football League with Freeman McNeil of Jets as lead plaintiff, involved free agency and related antitrust claims. Prior to the trial in June 1992, the parties filed a number of pretrial motions, the most important of which was the players’ motion for partial summary judgment to strike the owners’ labor exemption defense. The players argued that because the union had officially been decertified, the non statutory labor exemption no longer barred an antitrust challenge to Plan B, thus allowing the jury to consider the case under the Sherman Act. Further, the players’ argued that by abandoning the union they had been placed at a significant bargaining disadvantage, as the owners had used the player association’s non-union status to strip the players of insurance benefits and to extend the playing season. In its defense, the NFL relied on competitive balance arguments saying that the restrictions on free agency were necessary. The League also claimed that the NFLPA continued to function as the official bargaining representative for the players despite decertification, and, regardless of the union’s status as certified or decertified, the non statutory labor exemption still remained in effect.
In the Powell case, the court provided no guidance as to a specific time or event that would eliminate the exemption, and that the court rejected the owners’ contention that the exemption should extend indefinitely. Moreover, the court rejected the owner’s claims that the NFLPA and the players’ union separation via decertification was not valid considering that the NLRB did not decertify the NFLPA. Both parties moved for summary judgment on several fronts. The NFL denied that it could act as a monopoly and violate the Sherman Act, as it was simply a conglomeration of co-owners that were engaged in the common business of producing and marketing professional football for entertainment; the court rejected this claim. Moreover, the NFL claimed that Plan B did not violate antitrust laws, and even if it did the players were not entitled to any damages. The court denied the owners’ motion, holding the owners liable for “antitrust damages from the date the collective bargaining relationship between the union and the league was terminated, but agreeing with the owners that the League was not itself a monopoly. The court did, however, deny the players’ motion for summary judgment concerning the application of the per se rule.

The sides even argued over the jury selection, which was comprised of eight women, none of whom watched professional football. The NFL realized that the odds were not in their favor, and continued to try to convince the jury that under Plan B all parties flourished and that unrestricted free agency would financially ruin many teams in the league. In September 1992, the jury verdict in the McNeil case found that the NFL owners’ restrictions in Plan B were unreasonable restraints of trade in violation of the Sherman Act. The jury also ruled that Plan B resulted in many players being under compensated, and that competitive balance could be preserved with a more liberal system. The jury awarded damages to four of the eight plaintiffs (not McNeil) totaling $543,000 (which was trebled to $1.63 million as per antitrust laws). While damages to the players were minimal, the case opened the door for free agency in football. However, total free agency was not approved by the courts, which ruled that some restrictions were necessary to maintain competitive balance.
The jury’s verdict effectively destroyed Plan B, sending the parties back to the bargaining table. Settlement talks began because both sides had leverage and something to lose. Both sides were victorious, in that the players were freed from Plan B, but did not get unrestricted free agency. The NFL had a few choices: implement another plan that was sufficiently different than Plan B (because only Plan B was enjoined), or it could hope for a reversal on appeal of the McNeil case and continue with Plan B.
Although both parties returned to the bargaining table, they were soon engaged in further legal disputes involving the noncompetitive effects of the League on its players. Aware that it would take time for the McNeil ruling to take effect, the players involved in the dispute remained unsigned at the time of the verdict (September 1992). These players subsequently filed suit, Jackson v. NFL, attempting to be freed from operating under the Plan B system and seeking damages for financial injuries suffered due to the restrictive nature of the system. The case was lead by Keith Jackson of the Philadelphia Eagles, and the remaining nine players involved in the suit included D.J. Dozier, Thomas Everett, Louis Lipps, Stephone Paige, Joseph Phillips, Webster Slaughter, Natu Tuatagoloa, Garin Veris, and Leon White. Before the court could rule on the case, six of the ten players were either released or traded, leaving only four players restricted by Plan B. The court allowed the players five days to sign contracts with other clubs, all of which did, and, because there were no other players that were unsigned or were restricted by Plan B. As such, the case was dismissed by Judge Doty, and left the league with the sense that the courts were now behind the players.
Following the McNeil verdict, a new antitrust lawsuit was filed on behalf of all NFL players – White v. NFL challenging the continued implementation of these or similar unreasonable restraints on competition for player services. The White case was lead by Reggie White, a tight end for the Philadelphia Eagles, who filed the case on behalf of himself and any other player who would play or played in the NFL. The case sought to permanently enjoin the future enforcement of Plan B or any other system, the draft, preseason pay, and the NFL owners’ refusal of negotiating individual benefit packages. In January 1993, the NFL owners agreed to a global settlement of the White class action and other player suits, which granted NFL players, for the first time, the opportunity to be unrestricted free agents, with substantial increases in compensation in a now competitive market. These settlements resulted in payments of $195 million in damages. In exchange for these substantial benefits, the NFL players’ class agreed to a salary cap system.
There was a poison pill in the settlement that kept labor peace for 18 years.
The owners had a salary cap and the players would become free agents after four years of work instead of six seasons. The final year of the collective bargaining agreement, if either side pulled out of the pact, would see players free agency start at six years while the owners would cede the salary cap. That clause was important because neither side wanted to give up a significant piece of leverage as the most players never even get to four years service and the owners could control players costs.
The owners blew up the contract in May 2008 after a number of extensions. The owners no longer wanted to share nearly 60 percent of the industry's revenues with the players.
The post 1993 era players would enjoy far better post career pension and health benefits than those who were in the league before the 1993 season if they got vested. But former players are not getting too much help from the NFL and the NFLPA (or whatever form that the association is claiming today — this was a group who swore in the 1990s that it would never again represent NFL players and yet reformed) — Are all NFL players going to get real post retirement health benefits and if a player is physically disabled because of an injury or injuries suffered on the field, will the players association take care of medical bills or will the disability board turn down the former player forcing that player to seek government programs to pay for medical bills when the owners and players finally get a new agreement--which will happen eventually.
Will the NFL retirement and disability board take care of them? In the case of Johnny Unitas and many other players, they answer was no. Apparently players had a choice, retirement benefits or disability benefits. In Unitas' case, the retirement checks stopped when he took disability payments.
What happens if an NFL career lasts just a year before benefits really kick in? Who takes care of that player if in that one year of NFL play something happens that won't kick up until years after the career is done but can be traced back to football?
Will the United States Government be responsible for football related injuries? The answer to that question is yes and it doesn't matter if you are for health care or against it or you want social security or are looking to gut the system. That's why Congress is taking a closer look at the violent world of football.
One former player is claiming that owners don't want to pay medical and disability payments to former players and that the players association has gone along with the owners and not helped disabled players.
Another question. Is the Department of Labor's assertion that the NFL Retirement and Disability Board paying more attention to hiring lawyers and spending money there instead on former players with disabilities true?
The players should be looking into that.
The National Football League Players Association has put out some information saying it has spent $13 million or so to help out disabled players. A little while ago, the former Interim Director of the NFLPA Richard Berthelsen who was the association's general counsel for years took issue with the comment that the former Executive Director, the late Gene Upshaw, did very little to help out former players like John Mackey in times of need. Berthelsen said nobody did more for Mackey than Upshaw. The league and the players have a program, Plan 88 (Mackey's old number with the Baltimore Colts) that was added to the Collective Bargaining Agreement in 2007 providing eligible retired players with up to $88,000 per year for medical and custodial care resulting from dementia or Alzheimer's.

Mackey, the former President of the National Football League Players Association, is suffering from front temporal dementia. The NFL Players Association initially refused to pay a disability income due because some doctors have concluded there is no proven link between brain injury and playing football.
The battle between former players and the football industry over whether playing football causes brain injuries continues.
The "Big Game" in Minneapolis is just a part of the clash between owners, players and retired players in the major ongoing football battles.
Evan Weiner, the winner of the United States Sports Academy's 2010 Ronald Reagan Media Award, is an author, radio-TV commentator and speaker on "The Politics of Sports Business." His book, "The Business and Politics of Sports, Second Edition is available at bickley.com, Barnes and Noble or amazonkindle.

Sunday, April 3, 2011

Fiesta Bowl allegations just another Arizona public policy failure

By Evan Weiner

April 3, 2011


(New York, N. Y.) -- If you want to see where everything that could possibly go wrong in government spending for sports facilities, you need to look no further that the Phoenix, Arizona area. In a bid to make the Valley of the Sun one of the most prominent sports areas in the country, local politicians have spent more than a billion dollars of public funding to build two arenas, one Major League Baseball park, numerous baseball spring training facilities and a football stadium.

The Valley of the Sun was a sleepy sports setting until the late 1980s. As people moved to the Phoenix area, someone got the idea that Phoenix should have more "big time" sporting options than the National Basketball Association Suns. No, the area needed to become "major league" and getting a National Football League franchise, a Major League Baseball team and a National Hockey League squad would do the trick. The Suns, major college baseball and the mid-level Fiesta Bowl were not enough.

It hasn't financially worked out all that well for Phoenix, Scottsdale, Mesa, Tempe and Glendale. The sacking of Fiesta Bowl chief executive John Junker along with two other top officials could open a Pandora’s box of problems for Glendale, the Fiesta Bowl and the (college football's) Bowl Championship Series for Arizona politicians who allegedly accepted gifts from Junker.

Arizona elected officials have to abide by state laws, which included an “entertainment ban” that prohibits, state employees and elected officials from accepting tickets or "admission to any sporting or cultural event" for free.

The Junker situation could ensnare Arizona elected officials for ethics violations and could be an opening for Congress to investigate the Bowl Championship Series (and maybe tax exemptions that members of the National Collegiate Athletic Association enjoy).

Oddly enough the gadflies at The Goldwater Institute have sat on their hands and have been mum about the Fiesta Bowl revelations, which is so unlike them. The Goldwater Institute doesn't want Glendale to sell bonds to help complete the sale of the NHL's Phoenix Coyotes to a Chicago businessman nor do they seem to care that things didn't work out attendance wise for the Los Angeles Dodgers and the Chicago White Sox during the 2011 Cactus League Spring Training part of the baseball season at the new Glendale baseball park.

Overall, spring training baseball attendance was off in the Valley of the Sun.

How did Arizona politicians get into the sports business and when did they go wrong? It started about a quarter of a century ago when Phoenix started to experience a population growth. Urban planners and historians should study the entire history of the “big time sports industry” of the Phoenix area because no city or region has been dumber than Phoenix area politicians.
Had the Phoenix city council been smart, which they were not, they would have approved a multi-purpose arena back in the late 1980s that would have accommodated the NBA's Phoenix Suns and an NHL team. Instead lawmakers approved a $90 million expenditure that was designed to appease Suns owner Jerry Colangelo. The arena was built in such a way that the building was only good for basketball and not hockey or Arena Football or indoor soccer and that severely limited the potential revenues that could be generated in the place. Making sure they further satisfied Colangelo, the terms of the lease between the city and the NBA team required that the franchise pay the bulk of lease payments in years 36-40 of the 40-year lease agreement. The real rent is supposed to kick in around 2028 but given the lifespan of facilities (the Miami Arena was viable for about 11 years, the Charlotte Coliseum for about 13), it is doubtful that the team will even be playing in the arena in 2028 or 2029.
The arena opened in 1992.
In 2003, the city kicked in another $17 million to modernize the place when a second Valley of the Sun indoor athletic facility opened in Glendale, which is west of downtown Phoenix.
After taking care of Colangelo, Phoenix planners decided that a new downtown could be built with the arena and a baseball park as anchors so Phoenix politicians went about the task of getting a referendum in front of the public asking for support to build a ballpark for a Major League baseball team.
Over in Tempe, Phoenix/Arizona Cardinals owner Bill Bidwill, who came to the Valley of the Sun with his St. Louis Cardinals football team in 1988, wasn't too happy with his stadium in Tempe. Bidwill started to shop around looking for an Arizona community that wanted his team and was willing to build a stadium that the public would fund and put most of the stadium revenues in Bidwill's pocket. It took 12 years for Bidwill to find the right partner — Glendale — as votes in 2000 said yes to putting up $300 million of the estimated $465 million dollars needed to build a stadium. The money would come from a rise in the hotel/motel tax and car rentals (that is a mechanism designed to placate the locals, out of towners will pay, you won't, however most of the money on the car rental side comes from locals who rent cars more than visitors), Bidwill would recoup the $165 million through stadium naming rights and through a loophole in the 1986 Federal Tax Act which limits the money a municipality can take from stadium generator revenues to eight cents on a dollar.
Mesa said no to Bidwill in 1999.
Colangelo spearheaded the baseball stadium drive. He wanted a Major League Baseball team and went back to Phoenix-area politicians to make his pitch. They listened again.
In 1994, the Maricopa County Board of Supervisors (despite huge budget deficits and cutbacks in the funding of services) said yes to Colangelo and gave the go ahead for a quarter-cent increase in the county sales tax to pay for a part of the stadium's cost. There was a string attached, the approval had to come by March 31, 1995 which meant Major League Baseball had to either relocate a team to Phoenix (unlikely as there was nowhere to play in Phoenix) or expand. MLB awarded Phoenix and St. Petersburg teams beginning in 1998 when the Phoenix stadium would be completed.
The Maricopa sales tax hike was a problem.
Maricopa County residents were not allowed to vote on the issue of funding a baseball stadium with general sales tax revenue. In August 1997, Maricopa County Supervisor Mary Rose Wilcox was shot by Larry Naman after leaving a county board meeting. The shooter testified in court that Wilcox's support for the tax justified the attack. In May 1998, Naman was found guilty of attempted first-degree murder.
Colangelo had his stadium whether Maricopa County residents liked it or not. Colangelo's stadium was supposed to have cost $279 million but the ballpark actually price tag was over $350 million and Colangelo's group had to make up the difference. Colangelo's group paid $130 million for the expansion team, there was the cost overruns and a high payroll and throw in the fact that Major League Baseball didn't give Arizona and Tampa Bay full revenue sharing between 1998 and 2002, and that nearly caused the team to declare bankruptcy by 2004.

While Colangelo was looking for a baseball team, he also wanted a National Hockey League team to take up dates in the city's new arena. In 1994, Colangelo told this reporter that Phoenix was a perfect spot for the NHL. The NHL needed to fill the Mountain Time zone for TV purposes and Phoenix and Denver were in the mix for NHL franchises.

Colangelo, who was not a hockey guy, was spot on. Denver investors bought the Quebec Nordiques in 1995 and moved the team to the Colorado city and Richard Burke put together a group that included Steven Gluckstern and bought the Winnipeg Jets. Burke and Gluckstern moved the team to Colangelo's building in 1996 and that is when trouble started.

The building approved by Phoenix politicians in 1988 had more than 3,000 view-obstructed seats or about 25 percent of the house. No NHL team can survive in a flawed arena even if the building was just four years old. Burke bought out Gluckstern in 1998 after Gluckstern teamed up with Howard Milstein to buy the New York islanders in a real estate deal (The Islanders real estate deal is still festering with present owner Charles Wang apparently shelving an arena-village concept and Hempstead Supervisor Kate Murray not approving the project for reasons only known to Supervisor Murray).

In 1999, Burke was hoping to move the team to Scottsdale. Bidwill had struck out in his bid to win voter approval for a $1.8 billion football stadium-village on May 18 of that year but Burke had won a preliminary vote on that date for a new arena with the help of Steve Ellman.

Burke got his arena project approved by Scottsdale voters in November 1999 but the arena was never built. Ellman bought the Coyotes in 2001 after the Scottsdale deal fell through. Ellman worked out an arena-land developing deal with Glendale officials in 2001 and moved his Coyotes to a new arena in 2003. Glendale paid $180 million for the building, Ellman did some developing but the real estate deal turned bad. Eventually Ellman's partner Jerry Moyes took control of the team and hemorrhaged money and the NHL now owns the team. Moyes and the league battled after Moyes got Canadian investor Jim Balsillie to buy the team. The NHL stopped the sale and the confrontation ended up in court when a Phoenix judge said the NHL had the right to control individual franchises in terms of sale and market. The franchise remained in Glendale and Balsillie's plan to move the franchise to Hamilton, Ontario fell through.

Glendale could be kicking in as much as $25 million to keep the team going in 2010-11

Glendale worked with a group called Ice Edge Holdings to keep the team in the arena and create a tax district around the building to help stabilize the Coyotes bleak financial picture. That fell through but another suitor came to the rescue, Chicago businessman Matthew Hulsizer.

Last fall, Colangelo was back in business in the Valley of the Sun in Glendale. Colangelo wanted to build the USA Basketball headquarters in Glendale and why not? Glendale had an open checkbook for Bidwill, Burke, Reinsdorf's White Sox, the McCourt's Dodgers. But Colangelo is miffed that financing for his headquarters has not come about. But Colangelo left the door open for Glendale (in government sports financing you never close a door) to get someone with money to build a headquarters.

Funny, the Goldwater Institute is not commenting on Colangelo. It must be that Goldwater's trustees don't like the Canadian sport of hockey while American sports like baseball, football and basketball (even if it was invented by a Canadian, Dr. James Naismith) are fleecing Glendale.

Meanwhile Glendale had another problem in 2010. The Arizona Stadium and Tourism Authority (AZSTA) is broke. That is the group that has raised funds for the Cardinals Glendale stadium and various Major League Spring Training ballparks that ring the Valley of the Sun. Hotel/motel and car rental taxes (which is 3.25 percent) from tourists that fund the authority are flat.

Arizona public officials decided in the 1990s to become a sports destination. Spring Training would be a big money maker for Arizona as baseball fans would flock to see their favorite teams in March of every year. The authority took in $34 million last year and has $37 million in expenses, $16 million of which goes to the Cardinals football stadium. Surprise (Kansas City and Texas), Scottsdale (San Francisco) and Tempe (Los Angeles Angels of Anaheim) will be getting less money to pay the bills at three spring training facilities. Youth sports will take a million dollar or so hit.

All of this is a product of Proposition 302 that was approved by Maricopa County residents 10 years ago.

The Maricopa County Stadium District and the Arizona Stadium and Tourism Authority are responsible for stadiums around Phoenix. The stadium district was formed in 1991 to make sure Phoenix area-based spring training teams were not lured by Las Vegas.

How expensive is spring training?

The Los Angeles Dodgers now share a new $110 million stadium in Glendale with the Chicago White Sox, who moved from Tucson. Glendale is providing $54 million in financing for the stadium.

Scottsdale and the stadium authorities put together a $23 million package to refurbish Scottsdale Stadium to make the San Francisco Giants ownership happy. About $13.3 million is from the AZSTA funds, $6.67 million from the Maricopa Stadium District, and $3.1 million from the city.

Arizona officials contend that the 2010 spring training slate had an economic impact of $348 million yet there is a deficit.

All of the maneuvering has left an impression. The baseball landscape has changed with all 15 Major League Baseball teams that train in Arizona located around Phoenix. Tucson has lost three teams (the White Sox, Colorado Rockies and the Diamondbacks). The arena in Phoenix has to fight Glendale for non-basketball events. Glendale, not Phoenix or Tempe has the Super Bowl and while Phoenix gets a piece of the event buck, it is Glendale that gets sports spending money from those crown jewel events. The downtown envisioned with the arena and stadium as the pillars of a new downtown Phoenix has not materialized.

The question of whether it was worth spending billions in a state that is broke is never addressed by politicians. Arizona is selling off state buildings to plug a financial gap that in part was caused by poor sports decisions on every level.

They could have said no to Colangelo. They could have said no to Bidwill. They could have said no to the NHL. They could have said no to Major League Baseball. Don't blame the owners for asking for money, they could have asked for whatever they wanted.

There was an awful lot of economic miscalculation when it came to sports planning in Arizona and the battle is far from over. Mesa would like to hold onto the Chicago Cubs, the franchise that allegedly is the economic engine of the Cactus League, and the Milwaukee Brewers ownership could be looking to exit Maryvale. The Sports business is pretty simple have the politicians get involved and make financial guarantees. It has been a good formula for sports owners and players but not so good for taxpayers who have a financial stake in the sports industry whether they watch games or not.

Evan Weiner, the winner of the United States Sports Academy's 2010 Ronald Reagan Media Award, is an author, radio-TV commentator and speaker on "The Politics of Sports Business." His book, "The Business and Politics of Sports, Second Edition is available at www.bickley.com, Barnes and Noble 's xplana.com, kobo's literati or amazonkindle. He can be reached at evanjweiner@yahoo.com