The never-ending business of sports
FRIDAY, 06 MAY 2011 08:34
BY EVAN WEINER
THE BUSINESS AND POLITICS OF SPORTS
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.