Tuesday, May 31, 2011

Will the NBA become a 'fly over' league?
TUESDAY, 31 MAY 2011 14:28

The NBA Champion Final series is one of the National Basketball Association’s crown jewel events but behind the glitz and glamour of the competition is a real question that no one wants to discuss. Is the NBA in danger of becoming what Louisville lawyer and player agent Bruce Miller calls a fly over league?
A fly over league is a term that needs to be defined.
This seems to be the best definition. The NBA may become a league of just major cities with three teams in New York – Manhattan’s Knicks, Brooklyn’s Nets and a small market team moving to Newark. New Jersey Governor Chris Christie has already told NBA Commissioner David Stern that Newark is open for NBA business as soon as the Nets franchise moves over to Brooklyn. New Jersey Devils owner Jeffrey Vanderbeek wants an NBA team in his Newark building. Three teams in the Los Angeles area, two teams in the San Francisco Bay Area
The Sacramento Kings owners, the Maloof brothers, have toyed with the idea of moving their franchise to Anaheim to give Los Angeles three teams, the Lakers and Clippers along with the proposed Anaheim Royals. Sacramento officials are scrambling to find hundreds of millions of dollars to build the Maloofs a new arena despite proposed layoffs of municipal workers along with the shut downs of public parks and scaling back of educational opportunities from kindergarten through 12th grade.
Anaheim doesn’t have an NBA team because city officials gave the lion’s share of the Anaheim arena revenues to the Walt Disney Company when Disney signed a deal to put a National Hockey League expansion team in the building. There weren’t enough revenues left over for Los Angeles Clippers owner Donald Sterling to move his team from the Los Angeles Sports Arena to Anaheim. That is why Anaheim lost an NBA team.
Priorities are priorities for a small market franchise that cannot keep up with the Knicks, Lakers and other large market teams.
National Basketball Association owners and players do not have a collective bargaining agreement after June 30th. The National Basketball Players Association has already filed a complaint with the National Labor Relations Board claiming that NBA owners are not negotiating in good faith.
NBA owners want to roll back salaries and there is a claim that as many as 22 of the 30 franchises are losing copious amounts of money.
Newark officials want to replace the Nets. San Jose is looking for an NBA. The NBA owns the New Orleans Hornets franchise; Wisconsin Senator Herb Kohl is not running for re-election and owns the Milwaukee Bucks, a franchise looking for a new facility. The Indiana Pacers franchise is heavily subsidized by local taxpayers in Indianapolis and surrounding areas. The very successful on court Oklahoma City Thunder franchise is also very heavily subsidized by Oklahoma City taxpayers.
That franchise was in Seattle until a few years ago when local elected officials decided not to build a new arena for the team. The then SuperSonics owners squeezed every last nickel they could out of Oklahoma City and state politicians.
This is the NBA today.
Miller is charge of an effort to bring the NBA to Louisville. The Kentucky market is small yet it is basketball crazy. The state has two “professional” basketball franchises already – the University of Kentucky and the University of Louisville – but the city has not had a “big league” team since the American Basketball Association folded in 1976 and the Louisville Colonels owner John Y. Brown took some NBA cash and left the world of basketball.
Brown returned to pro basketball after in 1976 when he purchased a piece of the NBA’s Buffalo Braves.
Louisville started seeking an NBA franchise about 10 years ago but struck out in efforts to land George Shinn’s Charlotte Hornets, Michael Heisley’s Vancouver Grizzlies and Leslie Alexander’s Houston Rockets. Shinn moved his team to New Orleans (which is a financial disaster), Heisley went to Memphis (another fiscal problem) and Alexander stayed in Houston.
Miller isn’t doing a whole of lobbying for an NBA team at the moment. No one is going to sink $300 million into a small market team without knowing what the new Collective Bargaining Agreement looks like.
Could Louisville work? Under the right set of circumstances, yes. But it has to start with NBA owners increasing revenue sharing between the large market Knicks and Lakers and the ownerless New Orleans, Milwaukee, Salt Lake City, Sacramento, Indianapolis and other small market franchises.
Will the Knicks Jim Dolan and the Lakers Jim Buss (the Lakers scored a huge deal with Time Warner Cable to form a Lakers regional cable station in English and in Spanish starting in 2012) to share revenues? One of the major coups of Major League Baseball Commissioner Bud Selig’s career was getting New York Yankees owner George Steinbrenner to give up some of his dollars in a revenue sharing scheme. Can David Stern, who really has never been very successful in twist the arms of Buss and Dolan to give up some of their dollars to help the smaller markets.
The NBA plans to manufacture what 2008 Republican Presidential candidate John McCain denounced. He claimed Barack Obama wanted to redistribute the wealth of the country.
NBA owners want a shift in wealth the in the business.
McCain, of course, was using a new campaign slogan but Stern and small market owners have been after a shift in wealth for four years now. Mainly the owners want to stop paying the playing enormous salaries over a long term commitment. A lot of players are not as productive as owners and general managers projected and a lot of contracts are bad investments on the court.
The National Basketball Players Association should not be in the business of protecting owners from a bad investment. The NBPA already gave the NBA owners a huge concession in the last go around for a CBA by agreeing to bar players just out of high school and high school graduates from applying for a job as a player in the league.
NBA Commissioner David Stern came up with flimsy excuses which included that he didn’t want to see NBA scouts at high school games. Does that clean up the high school game?

The real reason Stern and his owners didn’t want 18-year-old out of high school players was simple. Why pay for research and development when you have a college willing to do just that? By getting a 19-year-old instead of an 18-year old, you have a more finished product and more importantly, a contract renewal comes at 22 or 23 years of age not 21 when a player still has a perceived upside.
Jermaine O’Neal was a total bust with Portland after getting millions from ownership as the 17th player picked in the 1996 draft. He cost Paul Allen a lot of money and did nothing for Allen’s Trail Blazers franchise. Allen though stuck with him and at 21 offered O’Neal a huge contract. O’Neal’s second contract was big but his playing time wasn’t and he languished costing Allen millions.
Portland traded him to Indiana where he flourished. Had O’Neal been in college, Allen would have invested his money in another player. Allen, under today’s CBA, would have been protected against a bad investment because O’Neal would not have come into the league at 18 and qualify for a new contract at 21. Players second contracts come at 22 or 23.
If the NBA owners don’t get rollbacks, Miller’s job of trying to get an NBA team in Louisville will be difficult. The league has not given up on New Orleans yet and is looking for a person who has an interest in keeping the team in New Orleans. The Sacramento arena deal has not been fully explained but the league is committed to remain there through spring 2012. Of course if the owners lock out the players and there is a long work stoppage, it doesn’t matter what will happen in New Orleans and Sacramento in 2011-12.
The new CBA may very well determine whether the NBA becomes a fly over league or not. Charlotte, Memphis, Oklahoma City, San Antonio, Sacramento, Portland, Orlando, New Orleans, Indianapolis, Cleveland and Denver may become fly over cities in the NBA owners minds if they don’t get what they want in the new collective bargaining agreement. The players? They just want status quo.
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, May 25, 2011

NFL lockout, failure of Atlanta Thrashers, and other sports struggles can be blamed on Ronald Reagan
WEDNESDAY, 25 MAY 2011 08:29

If and when the Atlanta Thrashers National Hockey League franchise is sold and moved to Winnipeg, Manitoba, there will be those who will analyze the failure of the business to catch on in Georgia. Yes, the Thrashers ownership was bad, and there is enough evidence to completely convict the ownership of being thoroughly incompetent as a court proceeding proved.
But it is far more than just bad ownership that doomed the Atlanta Thrashers franchise and after a quarter of a century it is time to place the finger of blame on the real culprit on the potential Thrashers move along with the National Football League lockout, the potential National Basketball Association lockout and the struggles of various franchises to succeed economically in the sports arena.
It was the 99th Congress that revised the 1986 tax code and President Ronald Reagan who signed those changes into law.
A good number of cities should never have had "major league" sports franchises but those cities decided to go into the sports business by building stadiums and arenas and handing out leases to owners that became an albatross around the necks of taxpayers.
The smaller market cities went after teams to show other businesses that their city was a great area for business. Memphis, Nashville, Jacksonville and other smaller towns all of a sudden became big league and paid handsomely for the “title."
The 1986 tax code revision redistributed the wealth and shifted the burden of paying for new facilities from team owners to taxpayers. Only eight cents of every dollar generated in new facilities could go to pay down the debt of the municipally built facility unless a local government got tough and negotiated a better deal.
In most cities, the local governments who were so desperate to build "major league" structures rolled over and gave owners whatever they wanted in an attempt to be "major league" and forced all sorts of tax hikes on local residents. The stadiums and arenas were peddled to voters as "economic engines" that would provide first construction jobs then build up an area. Local residents who had to vote on the expenditure were told that they would pay nothing (in some cities) that the money would come from hikes in hotel and motel taxes and car rentals. Other tax hikes were imposed on beer, alcohol, cigarettes, cigars, tobacco, water, sewer and a general sales tax hike to fund facilities. There were breaks given on property tax payments (the combined Giants-Jets real estate holding pays East Rutherford, NJ about $6 million a year in combined rent and taxes on the Meadowlands facility on a property that is probably worth about $13 million a year on the tax roll.)
Sports owners jumped on the 1986 Congressional act which Ronald Reagan approved. This is what the change in the tax code has brought. A 2011 NFL Lockout, the probable move of the Atlanta hockey team to Winnipeg, the Glendale, Arizona government paying the National Hockey League $25 million to keep a franchise in the city, the delay of a move of the National Basketball Association's Sacramento Kings to Anaheim, California until cash-poor Sacramento along with other local governments in the area find an arena funding formula. The move of the New Jersey Nets to Brooklyn has New York City and New York State politicians fingerprints all over it. The building will be heavily subsidized by New York taxpayers as are the new Yankees Stadium, the Mets ballpark in Flushing (complete with the logos of the taxpayers bailed out corporate sponsor--Citibank) and New Jersey kicked in well over $300 million for infrastructure for the Giants-Jets new stadium. New Jersey still owes hundreds of millions of dollars in paying down the debt at the departed Giants Stadium. New Jersey is not alone in paying for sports facilities that were blown up. Pittsburgh was paying off the debt at Three Rivers Stadium for years, Seattle and King County will be paying off the bonds on the long gone Kingdome until 2014. Those stadiums were replaced after the changes in the 1986 tax code.
The NFL lockout's roots can be directly traced to Ronald Reagan's signature in 1986. It is no coincidence that the majority of NFL cities built new venues after the 1986 legislation. As more and more stadiums were opening on the public dime, revenues kept rising. By the late 1990s, the New Orleans Saints ownership claimed it could no longer compete in the NFL unless they got a new stadium in the city because the team no longer was in the top of the NFL in stadium revenues and fell to the bottom.
Eventually the state of Louisiana came up with a $186.5 million deal to satisfy the owner, Tom Benson, and handed him direct checks every July 1 between 2002 and 2010 to make him happy and keep the team in town. As far as anyone could tell, it was the first time a state gave money to a team. New York State gives $3 million annually to make Ralph Wilson elated in Orchard Park, New York. Indianapolis virtually gives away the new football facility and all of the revenues generated inside the place to Colts owner Jim Irsay. Small market owners need help from governments.
In places like Cincinnati, the local government has to take money from other services to pay down the debt at the football stadium. The new stadiums have helped the owners but in cities like Minneapolis, Oakland and San Diego where the stadiums are old (although renovated in Oakland and San Diego) and cannot produce the revenues that are found in Arlington, Texas (Dallas Cowboys), East Rutherford, Philadelphia, Houston, Foxboro and Washington (Landover, Maryland) and that has hurt the franchises in Minneapolis, San Diego and Oakland. Those teams cannot keep up with the salary floor as NFL revenues rose. The old stadium franchises cannot keep up with the Joneses, Maras-Tischs, Johnsons, Krafts, Snyders, Laniers and the other big boys in revenues.
The NFL lockout is designed to help the old stadium owners who don't have the revenue sources in the local market that new stadium owners have. That's the whole reason behind the NFL lockout strategy. It's not a difficult concept to grasp even though the league and players continue to slug it out in the judicial system. The NFL has been reluctant to spell out the real reason it has locked out the players. They need taxpayers dollars to fix the problem in Minneapolis, Oakland, San Diego, San Francisco (Santa Clara) possibly Buffalo and certainly in Los Angeles and it is a tough sell for the prosperous NFL to beg for tax dollars to build stadiums to help the lower revenue teams. But the league needs taxpayers dollars to make everyone equal.
The National Hockey League came up with a grand plan to expand the business in 1990 from 21 franchises to 30 with most of the nine franchises to take root in the United States. The expansion scheme was hatched long before Gary Bettman became National Hockey League commissioner, something that seems to be conveniently forgotten by sportswriters who don't have any understanding of business and politics and sports.
The official line was the NHL needed to expand their United States footprint for television purposes and the unofficial line was that Wayne Gretzky popularized the NHL because he was in Los Angeles and attracted the Hollywood crowd to Los Angeles Kings games. But the truth was that cities were building arenas and ready to give away the house in exchange for a franchise. In Anaheim, the Walt Disney Company decided to capitalize on the success of the Mighty Ducks movie franchise and bought a team from the league after securing a sweetheart lease in the new Anaheim arena. Disney ended up with everything at the arena and apparently would not share revenues with say Donald Sterling and his National Basketball Association Clippers. Sterling and other potential NBA owners could not get into Anaheim because there was not enough money available for an NBA team to be financially successful thanks to the Disney lease.
Before Bettman got to the NHL, the league split the Minnesota North Stars franchise with some players staying in Bloomington, Minnesota and the rest ended up with an expansion team in San Jose although the franchise started at the Cow Palace in Daly City south of San Franchise. The league expanded into Ottawa and Tampa and then Anaheim and Miami. The NHL owners began splitting a lot of money, $50 million per new franchise. Bettman joined when they league had 26 teams. Bettman came into the league in 1993 when Norman Green was attempting to move his Minnesota North Stars franchise to either Anaheim or Dallas. Green moved to Dallas. In 1995, Quebec City officials refused to provide funding for a new arena and the franchise moved to Denver. Winnipeg officials did not build a new arena and the Winnipeg Jets franchise ended up in Phoenix in a poor conceived arena that was built to satisfy Phoenix Suns owner Jerry Colangelo need for a new basketball arena for his team. The facility was built in such a way that it had thousands of obstructed seats making it unusable for anything but basketball.
In 1997, the NHL expanded to planned new buildings in Nashville and Atlanta (two cities that could hardly be called hockey mad cities), along with St. Paul, Minnesota and Columbus. St. Paul Mayor Norman Coleman pushed heavily to build a taxpayers subsidized arena in St. Paul while private money was found to build a venue in Columbus, Ohio. Also in 1997, Hartford Whalers owner Peter Karmanos moved his franchise to Raleigh, North Carolina. That deal also came with Karmanos promising to move a piece of his Compuware business to the Raleigh area. Connecticut Governor John Rowland was too busy trying to get Robert Kraft to move his New England Patriots NFL franchise to Hartford. Kraft listened said yes and then got a deal in Massachusetts abandoning Rowland.
The NHL expansion gave owners $450 million which was split between 21 owners. That was not Gary Bettman's plan but it was the NHL's business plan was developed by league owners in 1990.
The NBA added four franchises after Reagan changed the tax code but those arenas in Orlando, Charlotte, Miami and Minneapolis were online prior to the change in the law. All four cities became problems for NBA Commissioner David Stern and the league. The buildings were not state of the art 21st century buildings as they were designed in the 1980s. Orlando, Charlotte and Miami didn't have the real revenue producers, club seats and luxury boxes for corporate customers. All three cities replaced arenas that were 20 year old or less. Minneapolis's building was funded by private money---which nearly snuck the franchise---and by the mid 1990s the building was taken over by the government.
The NBA lockout of 2011 will be caused by reckless spending. The NBA went into markets that cannot compete with New York, Los Angeles, Chicago, Boston and other large markets without a real revenue sharing plan. Those markets will never have had franchises without the Reagan signature. Memphis, Charlotte, New Orleans, Oklahoma City, Salt Lake City, San Antonio have teams because of new arenas, Seattle lost a team because local politicians would not spend money for a new build some 12 years after renovating the city's arena bringing the building up to 1990s standards. Despite giving all the revenues away at the arena in Indianapolis, Pacers owner Herb Simon may eventually move his team. Indianapolis cannot make money even though the city has given away the building.
Major League Baseball went through the same dance. New stadiums, great leases and broken promises of stadiums being an economic engine.

Major League Soccer owners learned their lessons well as they sold local politicians on the benefits of new stadiums starting with the failed economic engine theory.
The NHL is still playing the arena game. Charles Wang's New York Islanders franchise needs a new building and Nassau County voters will be asked on August 1 to sell bonds for a building. Edmonton is seeking a new arena, Columbus wants the city to take over the building, and Calgary is looking for a new building. Major League Baseball wants new venues for the Tampa Bay Rays and Oakland A's. The NBA could become a league with three New York area teams, three Los Angeles area franchises and two franchises in the San Francisco Bay Area.

Taxpayers are on the hook for billions thanks to Ronald Reagan's signature. Reagan supporters and apologists will probably try to debunk the impact of the 1986 tax code changes on sports. It would be a futile argument. There is plenty of blame to go around starting with the House and then the Senate. Two Senators, New York's Daniel Patrick Moynihan, a Democrat, and then Republican Arlen Specter of Pennsylvania (before he switched parties) tried to close the 92 percent loophole in the tax code but to no avail.
Reagan and Congress changed sports in 1986. A quarter of a century later the impact is astounding. The NFL lockout, the NBA lockout, the Sacramento arena problems, the Glendale subsidies, the Louisiana subsidies which continue to this day for Benson's NFL Saints and the NBA Hornets, Nassau County's vote, the Atlanta relocation, baseball's "Bay" problems in St. Petersburg and Oakland. It goes on and on with no relief in sight for sports fans.
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, May 19, 2011

Former New York Jets great Marty Lyons says retired players need health benefits now
THURSDAY, 19 MAY 2011 07:43

NEW YORK. N.Y. — In October 1987, New York Jets defensive lineman Marty Lyons decided to cross a picket line and play football because he didn't like the way National Football League Players Association Executive Director Gene Upshaw was conducting the association's business. The NFLPA went on strike looking for a liberalized form of free agency and more money. The NFLPA didn't bother asking for after-career lifetime health benefits.
Lyons has never looked back at his decision to cross the picket line and in hindsight thinks the 1987 four week strike was a waste of time.
"I don't worry about it, I got more important things to do than worry about a labor dispute, worry about a lockout" said Lyons on Tuesday at the announcement that he was elected into the College Football Hall of Fame. "I got four kids, I try to be the best father, best husband that I can to them. Whatever happens in this dispute, they will settle it.
"If it is going to help the league, if it is going to help the players, if it is going to subsidize our retirement a little bit better. Great. If it doesn't, I can't worry about things I can't control. I am interested. I am still an NFL alumnus, I still believe in what the players are trying to accomplish but I cannot control it. If you can't control it, why get stressed out about it. I support (former Giants defensive lineman) George Martin and the NFL alumni. I was just at the NFL Draft with (Commissioner) Roger Goodell. I do a lot of work for the Jets. I see the issues on both sides of the fence. But I can't control any of it, so you know what, I get every morning and I go to work."
But Lyons is interested in the welfare of his former teammates and others who played in the NFL and thinks the old players need some help.
"Eighty-seven, it was very difficult," he said the of labor action. "I think there was a lot of dissension between the players and the leadership we had in Gene Upshaw. When the replacement teams can in, some of us made the decision that it was in our best interests and our families best interests allow to let these people to come in and take our jobs."
Neither the 1982 nor the 1987 NFLPA strikes, in the long term, helped the membership. The "Money Now" mantra of the players should have been replaced by “what will your life at the age of 45, 50, 55 and 60 be like?” The players seem to have the same problems today as they did in 1982 with the exception of having more money than those who played 29 and 24 years ago.
"Probably not," said Lyons of whether the two strikes helped those players involved in the long run. "You know, I think the issues from 87 to where we are now maybe get magnified a little bit more because there is more money involved. Anytime that there is money involved and the issues are back and forth, I don't know who wins. Because you got the owners, because they want a little more money, you got the players...I see guys like Kevin Turner, a good friend of mine who played at the University of Alabama suffering from Lou Gehrig's disease.
"A lot of head injuries.
"He is 41 years old, 42 years old with three kids. What's the NFL going to do for him? What's his pension going to do for him and his family? He's just fighting every day to stay alive.
“There's another head injury. "
The National Football League does not acknowledge that head injuries may cause health problems down the line. In 2010, the league posted a warning about head injuries in each of the 32 team's locker rooms but other than a few words and some other forms of communications, players still are getting their bells rung and returning to the field as quickly as possible.
"You didn't worry about them (head injuries), you really didn't worry about injuries," said Lyons of his attitude and the attitude of his NFL playing peers during his time in the league in the 1980s. "Because the bottom line is, if you allowed somebody to come in and take your position, you may not get it back. So there was a big difference, everybody played hurt. If you were injured, it was a different story."
Lyons former coach Walt Michaels and former Sack Exchange teammate Joe Klecko are hurting like many others who played in the NFL.
"If you see Walt now and walks around, if you see Joe Klecko, he just had a shoulder replacement. The game does have a price to pay if you play it long enough. And I think man for man, the individuals that are playing the price now, myself I had eight operations, I would have gone through a few more if I had an opportunity to lace them up and play one more game. It is well worth the price now to get out of bed."
Lyons is doing well. He is a senior vice president of operations for a Long Island construction company, the Marty Lyons Foundation is still going strong after 27 years helping terminally ill children, he is a motivational speaker and has 20 years of broadcasting on his resume.
But Lyons knows that former NFL players need help.
"I would love to see the league and the committee (the players association or more correctly what is the decertified players association) to come to some sort of agreement that if you are a vested player (three or more years experience) and you leave the game, you have a lifetime benefit of health benefits. When you retire, you benefits stop (the post 1993 players get health benefits for five years and then it ends, Lyons career was done in 1989 after 11 years). You better hope you get a good job or have enough money to go on COBRA. So I think health benefits are the number one priority that we should be looking at to get retired players once they leave the NFL.
"If you are vested and you make a contribution to helping the league and the players then you and your family should have lifetime health benefits. When I left the game in 1991, I had to get my health benefits. In hindsight, I think it was a mistake (that the NFLPA did not fight for lifetime health care) because some of the players who are financially stressed or some of the players now who don't have health benefits maybe they would not be in this situation in their life and the time of the life if they had better benefits, better health care. Maybe they would have gotten the proper help needed."
Lyons, despite an 11 year career, never made big money that could last a lifetime. The "billionaires versus millionaires" slogan that sportswriters have attached to this lockout doesn't work. Very few players make huge sums of cash. Most careers are brief and players need to find other employment after their careers. But the problem is that NFL players might have short careers but their aches and pains last a lifetime and some become disabled and cannot work. Those players eventually end up on social security insurance and Medicare and are looked after by taxpayers.
That is where Upshaw and his associates which include members of the NFLPA executive board and player agents failed their constituency in 1982, 1987 and 1993. They took short term gains and didn't see the future.

Lyons looks at the dispute as a former player but notes that other people are getting hurt. NFL teams have been laying off or reducing employee’s salaries. Coaches are taking a pay cut and if games are missed per diem employees will be left out in the cold.
"Everybody wants a little bit more of the pie," he said. "And the bottom line is that the people at the bottom end of the food chain that are going to pay the price if they don't play the game of football. You got a lot of people that are relying on that added income every single Saturday or Sunday whether they are parking cars or working concessions or working the stadium. For them not to have an opportunity to feed their family when there is a lockout or labor dispute, it is a shame."
NFL owners and players go to court on June 3 to argue over whatever they are fighting for. Collective bargaining agreement negotiations pick up on June 8. The players want status quo and keep 59 percent of football revenues, the owners want the players to give back revenues, cut their salaries (contracts are not guaranteed) and help build stadiums in Minnesota and Santa Clara, California by kicking in part of their revenues. Meanwhile former players are still out in the cold with meager pensions and no health benefits and for many football players, getting health insurance is almost impossible because of pre-existing conditions.
This is the NFL, with the initials NFL standing for, "Not For Long."
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

Monday, May 16, 2011

Fans don't matter in sports
MONDAY, 16 MAY 2011 14:43

And so the National Football League lockout has become a version of the People's Court. The good guys, the National Football League Players Association, are fighting for workers' rights and are begging "fans" to help them lift the lockout. The owners, the bad guys, want to take away the players ability to make truckloads of money and are threatening their long term health care. Wait, the players have done such a great job in past collective bargaining agreements that former players lose health benefits five years after their playing careers are done and only if a player has three years in the league.
The "People's Court" is now playing in Minneapolis, Minnesota where United States District Judge David Doty is figuring out of the owners owe the players money over how the league managed to negotiate TV contracts to protect that side if in the event of a 2011 lockout. The players are seeking $707 million in damages. The fans will get ZERO if Judge Doty gives the players a monetary award even through a good chunk of that TV money comes from the cable TV subscriber-based ESPN and the satellite pay service DirecTV. In fact a good many people who never watch an NFL game on either ESPN or DirecTV are subsidizing the billions of dollars that ESPN and DirecTV pays the NFL.
The chances are that Judge David Doty will not address relief for subscribers are great. Fans are not a part of the lockout equation. Cable TV subscribers never received a rebate in 1994 and 1995 when Major League Baseball shutdown the 1994 season and the National Hockey League's lockout did not end until January leaving cable TV subscribers without a product from mid-September 1994 through January 1995. An awful lot of teams had local cable TV deals in 1994 and 1995 and subscribers were playing for something that they didn't get. Programming in terms of games which they were charged for. In 1998-99, the National Basketball Association locked out the league players for about 30 games. Not one cable TV subscriber received a penny back for missed games. Interestingly enough the owner of the Golden State Warriors, Chris Cohan, tried to stiff the Oakland Alameda Coliseum Authority and not pay rent at the Oakland Arena during the NBA lockout.
An arbitrator smacked down Cohan and forced him to pay rent for missed games.
No one has ever looked after cable TV or satellite TV subscribers and gotten consumers money back for missed games because of labor actions.
Judge Doty also should bring up the fitness of Rupert Murdoch (FOX owned and operated stations such as Channels 5 and 9 in New York and Channel 29 in Philadelphia), Sumner Redstone (Channel 2 in New York, Channel 3 in Philadelphia) and Comcast-GE's Channel 4 in New York and Channel 10 in Philadelphia for agreeing to deals with the NFL that would underwrite a lockout by supplying a full TV rights fee even if there was a lockout.
The question here that needs to be asked in court is how people who have public licenses to run TV stations nationally (and program networks and syndication arms—FOX is not a network but a syndication company) like Murdoch, Redstone and the NBC owners (General Electric when the contract was signed) could use monies generated by a business that is owned by the public---a television station---to provide a foundation for a lockout/strike war chest?
Television is one of the three essentials of the sports business. The trilogy is government (government builds stadiums, provides tax breaks for the business, creates cable TV rules and allows businesses to write off part of the expense of a luxury box, club seats, tickets and dining in a stadium or arena restaurant), cable TV (in the case of the NBA, NHL and Major League baseball through regional sports channels) and corporate support.
The fans don't count for much except undying loyalty to a team.
Despite all of the fans "concerns" no one is protecting them while the owners and players have an army of high priced lawyers taking care of their interests.
The other "People's Court" venue is in St. Louis where an Eight Court of Appeals panel has been reviewing Judge Susan Nelson's order to lift the lockout.
The battle between the NFL and the former players association has been defined as billionaires versus millions. That is not true at all. It is multi-faceted with elected officials having their hands all over this lockout. Here's why. Politicians pushed stadiums after the 1986 federal tax code revisions to become "big league." Canadian sportswriters have it all wrong when they blame National Hockey League Commissioner Gary Bettman for the league's "sunbelt strategy" and expansion into Atlanta, Nashville, Tampa, Miami, Anaheim and San Jose (although neither Anaheim nor San Jose are in the sunbelt) and franchise relocations into Raleigh, Dallas, Denver and Phoenix. New arenas came online with sweetheart leases and begged to get into the NHL. The same thing happened in the National Basketball Association, the NFL and Major League Baseball.
To those Canadians sportswriters who keep spewing the same nonsense about Bettman’s southern strategy and get it wrong constantly. The NHL decided to expand to 30 teams from 21 in 1990, four years after the revision in the tax code while Bettman was working at the NBA.
Cities bid against one another for teams and when the league would not expand into a city, an existing club owner picked up and moved to a city waiting with open arms. In the NFL, Baltimore, St. Louis, Nashville and Oakland got teams. As more cities built NFL facilities and handed out sweetheart leases, the ones left behind---Minnesota, Oakland and San Diego---could not maximize or match the revenues in their old stadiums. The new places in East Rutherford (for the Jets and Giants), Arlington (the Dallas Cowboys) and Indianapolis (where Jim Irsay hit the lottery in terms of what he has to pay in order to rent the new facility) pushed up league revenues and raised the salary cap for players. It also brought up the salary floor and the less revenue producing stadiums were not printing out the right amount of money for NFL owners. Literally some teams cannot keep up to the Joneses (okay Jerry and Stephen Jones and the Cowboys) and that is why the NFL wants to cut the slice of the revenues the players get from 59 to 48 percent and reduce salaries.
The players, of course, want no part of that seeing how TV monies are enormous and that NFL owners seem to be swimming in money. The players want the owners to show them the books. The owners won't give them the books the players are seeking. The majority of the players don’t make millions and have short careers.
It is all about "Money Now" on both sides of the argument.
Previous incarnations of the National Football Players Association (this version doesn't exist, wink-wink, as the players association officially decertified in March) have ignored the long time health needs of the players and have always stuck to the "Money Now" mantra, a slogan which appeared in 1982. A lot of people knew that playing surfaces in Philadelphia and Houston and other places were not good for the players. The players did nothing about the surfaces of stadiums that were built on the back of taxpayers.
The multi-purpose stadiums built in the 1960s, Houston, St. Louis, Pittsburgh, Philadelphia and other places had an artificial field which was separated from a concrete type surface by a piece of foam or other flimsy padded material. Players knew the fields were not safe yet the people who were watching out after their interests worried about "Money Now."

By the way, where are the municipal leaders who lead the rush to get stadiums built for NFL owners (and other sports)? President Barack Obama has washed his hands of the NFL lockout as has the Chairman of the House Judiciary Committee, Republican Lamar Smith of Texas. Apparently all elected officials want to stay clear of the NFL lockout despite the fact that the NFL clearly has been built by Congress (the Sports Broadcast Act of 1961, the 1966 AFL-NFL merger, the 1984 Cable TV bill that allowed cable operators to bundle channels on a basic tier and forced subscribers to pay for all channels on a basic tier -- the tier that became the home to sports -- whether the subscribers watch sports programming or not and the 1986 tax code revision which changed the way municipally funded stadiums and arenas were financed and placed the burden of paying off the debt on taxpayers) and helped along by local elected officials.
There is no bully pulpit pressure on either side. There is no Congressional pressure. Missing in action on the subject are Governors like Chris Christie, Andrew Cuomo, Tom Corbett, Rick Snyder, Scott Walker, Rick Scott, Jerry Brown, Rick Perry, Bobby Jindal, Jan Brewer. Minnesota's Mark Dayton is busy looking to get New Jersey's Zygi Wilf a stadium for his Minnesota Vikings despite the lockout. Tough guy politicians are beating up on municipal workers and teachers yet have not voiced an opinion on the NFL lockout which may close stadiums in the fall. The same stadiums politicians have claimed are economic engines for the community.
The fans are being hosed and yet they always come back although not necessarily in the stadiums or arenas. Fans have been priced out by NFL owners unless they want to pay a fortune of money for a seat. But fans can always sit in front of a TV and the owners will make money from rights fees and from cable TV, it doesn't matter if no one watches. The ESPNs and the regional sports channels of the world get their money from subscriber fees. That is part of the argument that has been redacted from the Judge David Doty's courtroom. No one, from NFL lawyers, to the people who are representing an organization that allegedly went out of business on March 11, the NFLPA, to the cable TV network executives want to touch. It would just bring unwanted trouble.
NFL beat writers for newspapers aren't going to report on that either and it would not be in the best interests of ESPN SportsCenter, ESPN's Outside the Lines, the fluff ESPN shows that feature sportswriters like Mike Lupica and a gang of know nothings talking about nonsense, or the CBS, NBC, FOX or Disney's ABC news to discuss that aspect of the lockout. The television executives have a big role in this lockout. They are not complaining about their partner's---NFL owners--business strategy. Corporate partners have also been very quiet about the NFL's tactics. The only ones complaining are the bottom feeders---the fans.
The NFL is just the first in the queue. NBA owners and players don't have a collective bargaining agreement after June 30. The Major League Baseball owners and players six-year collective bargaining agreement ends in December and the National Hockey League owners and players deal is done in September 2012.
It's all about money.
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.

Friday, May 6, 2011

The never-ending business of sports
FRIDAY, 06 MAY 2011 08:34


Two Saturdays ago, my son and I were at the Yonkers, N.Y. Planet Fitness working out. The 55-year-old man and the 25-year-old son were talking sports – but not anything about on-the-field action.
It was about the Mets ownership and Bernie Madoff and the Los Angeles Dodgers owners divorce with Jamie McCourt hiring David Boies (who tried Gore v. Bush in front of the Supreme Court after the 2000 Presidential Election on behalf of Al Gore) in her battle against Frank McCourt and how Boies was now also representing the National Football League in court in a proceeding against the remnants of the decertified National Football League Players Association.
My son is of the opinion that the sports bubble has burst, which it has, but it doesn't appear that way on the surface. Sure, National Football League owners have locked out the players because of finances and National Basketball Association Commissioner David Stern is ready to put the lock on the door on July 1, telling the players they are no longer welcomed until they give back some $800 million in revenue.
But more and more money is being poured into sports in the United States and elsewhere. In Australia, the Australian Football League signed a record four-year, $125 billion (in Australian dollars or about $137 billion in American currency) agreement with three networks including one partially owned by Rupert Murdoch. In the United States, NBC's new bosses, Comcast opened up their checkbook for a 10-year, $2 billion deal with the National Hockey League. The Pac 12 signed a 12-year, $3 billion contract with FOX and ESPN, which will give each member school $21 million annually over the life of the contract.
The bubble has not burst despite patches of empty seats at the new Yankee Stadium and a drop in Major League Baseball attendance early in the season. Television money is making up for the lack of revenue from unsold seats.
As we spoke in the locker room, a man decided to join in on the conversation saying that he agreed with my son. The explained that he had New Jersey Nets season tickets for the past 26 years and he would have to pay triple for his seats when the franchise moves to Brooklyn. He has to pay $385 per ticket for the same type of seats in Brooklyn as he had in the Meadowlands and at Newark. He was undecided about renewing his Nets tickets given that he could get Giants or Jets tickets at the Meadowlands as the wait list for season tickets for both teams has disappeared.
But the man was undecided about whether paying $385 per ticket starting in 2012 was the prudent thing to do.
This is the hold sports has on fans.
The late John McMullen, when he owed the New Jersey Devils, told me that sports is the only business where emotions – not rational thinking – guides the business for owners, executives, players and fans. How else can you explain the cheering in Sacramento when the NBA's Kings owners – the Maloof brothers – decided to stay in the city for another season with the hope someone will find $500 million to build an arena and then give virtually all of the revenues in a mostly taxpayer-funded facility to the Maloofs.
This even though Sacramento’s unemployment rate is around 12 percent and the city is letting go of municipal workers because Sacramento (along with California) is broke.
That happened on Monday. Sacramento kept the team for a year and while that was happening NFL lawyers and attorneys representing the defunct NFLPA were positioning themselves to beg the 8th Circuit Court of Appeals in St. Louis to either allow the NFL lockout to continue or lift it. Also this week, the Department of Justice wants to know more about the Bowl Championship Series in college football.
The DOJ is trying to figure out whether the Bowl Championship Series runs afoul of federal antitrust laws. The DOJ wants to know why there is no college football championship game. The DOJ is not asking any questions about the education of so-called "student-athletes" (a term invented so colleges could shield themselves from workers’ compensation claims) or the limit on how much money the so-called "student-athlete" can make from off-the-field jobs. Or why college programs have antitrust protection and college football teams appearing in bowl games don't pay taxes on the take home revenue from the games.
Sports fans endure a lot of nonsense but they never turn their back on the games. A lot of people have been priced out of MLB, NFL, NBA or NHL games but that's fine. They can watch games on television and buy all the overpriced jersey and hats and other things with team or league logos on it.
Owners and leagues care about the logo, not necessarily players. A logo is worth more than a great player. Sports fans like "our guys" no matter what city "our guys" play in – even though "our guys" are itinerate workers at best who sell themselves to the highest bidder after being "drafted," in an illegal act that is under labor law made legal through a collective bargaining agreement.
In Sacramento, the Kings, are "our guys" and we need "our guys" for some reason. It isn't because "our guys" are economic magnets who will propel the economy (that argument died in the 1990s) and bring new business to the California capital. But "our guys" bring some unexplainable something to any city or area. A small segment of the population feels good because their area is major league.
In Charlotte, after George Shinn moved his NBA Hornets franchise to New Orleans in 2002, one of the reasons that Charlotte Mayor Pat McCoury gave for wanting to build a new arena to replace the then 14-year old Charlotte Coliseum and get the NBA back in town was because Charlotte would get mention on ESPN's SportsCenter. McCoury got a new arena built and a replacement team -- which has been an economic disaster.
In Glendale, Arizona, the city gave the NHL $25 million to cover the financial losses incurred by the league-owned Phoenix Coyotes. The city hopes to get the NHL to sell the team to a Chicago businessman shortly and keep the franchise in Glendale. If the city fails, the team will go to Winnipeg and make Winnipeg a "major-league city" in North America, complete with that feel good feeling that sports is supposed to bring.
Since Monday, Sacramento has kept a basketball franchise and now will turn over every rock possible to find money to satisfy the NBA and the Maloofs that the city (and a six county area stretch out to Lake Tahoe and the California-Nevada border) can act like a major-league city and pay for an arena that will make the Maloofs feel good. Glendale has forked over $25 million to the NHL, the Department of Justice is looking into the Bowl Championship Series, the NFL is playing at a St. Louis courthouse, the International Olympic Committee put the word out to American TV networks that it is time to pay a king's ransom if they want a crack at the Sochi 2014 Winter Olympics and the Rio 2016 Summer Games.

The NFL is hoping someone in the Minneapolis-St. Paul area will build the NFL Vikings a new stadium while Toronto Mayor Rob Ford wants to go after the Jacksonville Jaguars or the heavily taxpayer-subsidized New Orleans Saints and bring one of those teams to his city.
The NBAPA is not happy with the latest NBA owners’ proposal for a new collective bargaining deal as the old one expires on June 30 and David Stern has already bought a padlock. Major League Baseball may have to pick up the tab and pay Los Angeles Dodgers players as the Dodgers ownership – allegedly – has no money to pay the players.
The Wilpon-Katz-Madoff saga continues with the Mets ownership still locked in a battle with Irving Picard, the trustee overseeing the Madoff victims claims, and there is no end in sight although Fred Wilpon and Saul Katz are looking to sell a piece of the franchise to cover debts.
Just another week in fantasyland.
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, May 3, 2011

Two decades later, sports is out of whack
TUESDAY, 03 MAY 2011 08:26
About two decades ago, a tall man with an identifiable nasal twang was holding court at Gallagher's Steak House one afternoon as he lifted a martini with a shaking hand to his mouth. The septuagenarian with a bad wig was standing near the slabs of meat that were hanging at the steak house and in a crescendo was complaining about the world of sports. The empty room began filling up as the man droned.
"Sports is out of whack," said the man with the familiar voice in a loudish way as he fumbled to take a sip of his martini. He was disgusted with the industry that he first entered in the 1950s as Willie Mays’ advisor.
Last week was yet another week of vindication for the man who was despised by sportswriters for telling it like it is.
The three -- make that about five -- events of the week of April 25-April 30, had nothing to do with actual games. There was the draft in a locked-out-then-open-for-business-then-locked-out National Football League.
There was Sacramento Mayor Kevin Johnson moving as much earth as he could to try and keep the city's National Basketball Association team in team in town despite the fact that the unemployment level had hit 12 percent in his region. At the same time he was rounding up $10 million in marketing partnership for the owners of the NBA Kings, the Maloof brothers, Johnson was cutting workers at the city's police and fire departments and school administrators were trying to figure out whether they can keep sports going in Sacramento public schools.
East of Sacramento on US 50, Lake Tahoe interests were beginning a plan to bring the 2022 Winter Olympics to the area and were beginning the campaign to try and sell the idea to locals as a job creator and a moneymaker like the 2010 Vancouver Winter Games, which cost Canadians a fortune in taxpayer subsidies.
Just another week in the toy store of life, as sportswriters like to refer to their little world.
The National Football League lockout is being played out in a various courtrooms and has political overtones whether people want to believe it or not. The players scored a big victory when Susan Richard Nelson, a federal judge for the United States District Court for the District of Minnesota, lifted the lockout last Monday.
Judge Nelson was nominated to the bench by President Barack Obama, a Democrat who is believed to be labor friendly. Judge Nelson, in her opinion, wrote that she was convinced of the players’ argument that the lockout was irreparably harming their collective careers.
The irony here is that Judge Nelson fell into line with National Football League Players Association thinking of 1982 -- Money Now -- and her ruling did the retired, discarded players no favors. The present players are the ones who have to help out the disabled former players -- the discarded ones -- who have no health benefits because the NFLPA never got around to getting players long-time health care and have to depend on social security and Medicare for health coverage. Judge Nelson worried about the present day players but nowhere is there a players association worry for retired players who are hurting.
The discarded players are wondering whether one of their own, former Giants defensive lineman George Martin, can lobby the NFLPA or whether they have to have a group to pressure the NFLPA to do something about their financial/health benefits problems.
The owners and players don't plan to get back to the bargaining table until May 16. More time has elapsed for the former players who need real help, not government assistance for their pre-existing medical conditions.
The NFL won Game 2 in this best-of-who-knows playoff series when the 8th U.S. Circuit Court of Appeals granted the league a temporary stay of Judge Nelson's order with two judges -- both Bush appointees -- agreeing with the league, while a Clinton appointee sided with the players. The 8th circuit in St. Louis is thought to be more business friendly.
The two lead negotiators in the talks are very political. NFL Commissioner Roger Goodell is the son of Charles Goodell, a Republican, who represented Western New York in the House of Representatives and replaced the slain Robert F. Kennedy in 1968 in the Senate. Goodell's father-in-law, Sam Skinner, was Chief of Staff for President George H. W. Bush.
NFLPA Executive Director DeMaurice Smith was a member of President Obama's transitional team.
In a sense it is the Democrats versus the Republicans. Labor versus business.

NFL owners have done a poor job of explaining the why behind their proposal of asking the players to take substantially less of the gross, from about 59 percent to 41 percent with 48 percent of that going to player salaries. The players don't believe there is a real financial problem in the NFL after the league got new large TV deals and a bunch of new stadiums with more revenue streams coming online.
The 1986 federal tax code update created the NFL labor dispute. Owners seized on a piece of the changes in the code that had major consequences. Municipalities could build new stadiums for teams and get as little as eight cents back on every dollar generated inside the facility. Depending on the deal an owner cut with the city officials, an owner could garner as much as 92 cents of every dollar.
But it is those taxpayer-funded new stadiums that have caused the problem. With every new stadium that has opened or has been renovated, more revenue does flow into the league -- which raises not only the salary cap ceiling but also hikes the salary cap floor.
The 1986 tax code revision was a double-edged sword. For some owners (like Art Modell) it was a lifesaver, while for others (like those in Minnesota), it has been a disaster.
Franchises playing in old facilities like the Oakland Raiders, the San Diego Chargers, the San Francisco 49ers, the Atlanta Falcons, the St. Louis Rams, the Minnesota Vikings and others cannot keep pace and are struggling to meet the salary cap floor. Additionally some owners have thrown a lot of money into new stadiums and have to pay down the stadium debt.
The 49ers owners, the York family, have not gone full throttle in getting financing for a proposed stadium in Santa Clara as of yet. The league wanted to show the players they need to contribute money for the Santa Clara facility.
Northern California's two football franchises are not alone in the need for a new facility in the region. The ongoing saga of the Sacramento Kings franchise continues apace with Mayor Johnson leading the charge to build a new arena. Johnson is a former NBA player who has some friends in high places over at the Olympic Tower in Manhattan at the NBA offices.
He wants to keep an NBA team in a city with major fiscal problems that a couple of years ago had tent cities for the homeless. Sacramento is a small market that has been a problem for NBA Commissioner David Stern and his owners for about a decade and a half. The city has been unable to get financing for a new arena for Kings basketball for about a decade. The Kings owners, the Maloofs, may see Anaheim as a financial savior.
Johnson has rounded up the business community and has gotten some economic promises but it may be far tougher to put together a wide coalition of the willing in Northern California to put up money for a new arena in very difficult economic times. But that isn't stopping people in the region from kicking the tires to find out if the 2022 Winter Games is a viable business.
The International Olympic Committee might like to go back to Lake Tahoe/Squaw Valley, a Winter Games venue in 1960, but the IOC also likes money and they really like taxpayers to pick up the tab for their two-week sports bazaar, which seems to be more than just a money loser. The IOC Games is a financial drag and California is not a place where taxpayers will be willing to put up big bucks for an event that is still 11 years away. Still the old “it will create jobs” mantra will be trotted out and it will bring attention to Lake Tahoe.
That was the week that was. It's over and sports will let it go for another week. That elderly tall gentleman who is constantly being validated for his simple statement was partly responsible for the success of the National Football League. He might have been bigger than the NFL during his prime years in the 1970s.
The man who two decades ago said “Sports is out of whack” was none other than Howard Cosell, who during the 1970s was one of the three men in the booth announcing Monday Night Football and was both the most popular and most hated man on TV.
You wonder what Howard would have said about the week that was.
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.