Another week of sports business tests fan loyalty
MONDAY, 26 SEPTEMBER 2011 10:44
BY EVAN WEINER
Sometimes you wonder why people become emotionally and, in some cases, overzealous about sports. After all, it is just a game and when one ends another begins. It is understandable that someone cares when they are an active participant in a sports activity but why should a fan care about an industry — sports is an industry — when the real owners of sports seem to take a rather cavalier attitude about their customers.
Just in the last week, the National Basketball Association’s collective ownership through their hired help — NBA Commissioner David Stern is an employee of a consortium of 29 owners (the franchise in New Orleans is owned by the league) — “postponed” (canceled is the real word) the opening training camp sessions and 43 preseason games (which count as regular season games in season ticket plans even though they are not bona fide contests in the strictest sense of competition as part of the 30 team’s business plan.
The only good news for season ticket holders is that a good many of those games were scheduled in so-called neutral sites). There is no word on whether cable TV subscribers will get a refund for paying for something that is not going to be available for them -- NBA pre-season games on cable TV.
While David Stern and the owners’ lockout continues, there is a very real possibility that Seton Hall and St. John’s University basketball fans may see the Big East Conference crumble as big time jock factories presidents and chancellors are again building up cartels and “expanding” big time sports conferences.
Pittsburgh and Syracuse, not the cities but the two jock-factory schools that play big time college football and basketball and earn money off of college kids who don’t get paid for their services and in some cases risk their health for the good old alma mater, have decided the Big East is no longer their cup of tea. The school presidents have decided that there is more prestige playing in the Atlantic Coast Conference and more money that can be squeezed out of fans from a cable TV contract. Pittsburgh’s chancellor Mark Nordenberg made it quite clear that college sports is a business when he addressed the issue talking to the media.
"Every university leader involved in intercollegiate athletics really has two fundamental responsibilities,’’ said Nordenberg. “One is to work to build strength in a current conference home. The second is to be appropriately attentive to the changing landscape and institutional opportunities that might need to be pursued. We also have been attentive to that responsibility. There's nothing incompatible about those.”
Nordenberg’s quote seemed to contradict the school’s 2003 stance when Boston College, Virginia Tech and the University of Miami left the conference to join the ACC.
Pitt brass was very critical of the move after the ACC poached The Big East for “big market schools” to strengthen the ACC’s bargaining position with cable TV executives because the conference needed bigger TV markets.
"We made very clear that if other opportunities did arise, we would feel obligated to seriously assess them looking at the long-term future of the University of Pittsburgh, and I made that point clearly in writing both to the commissioner of the Big East and chair of the conference in May of 2010, and they each responded was they thought the position I had articulated for Pittsburgh was the position that had been embraced by all the members of the conference."
The University of Connecticut seems to be the next Big East school to jump to the ACC. The irony here is that the state of Connecticut sued the ACC in 2003 for poaching the Big East. The case was settled and the ACC took the three schools for TV purposes.
There are some issues surrounding schools jumping from conference to conference for TV dollars. The first is just how are those TV dollars generated? They come from somewhere and the answer is that somewhere is cable TV consumers, who probably have no idea that their money is going to support big time college athletic programs.
The 1984 Congressional rework of cable TV rules that created a sort of cable TV socialism was signed into law by President Ronald Reagan. Cable TV is the second biggest part of the three necessities needed to operate a successful franchise in Major League Baseball, the National Basketball Association, the National Hockey League and Major League Soccer. You can add big time jock factories to that list as well.
The 1984 legislation created a basic expanded tier where “networks” could be banded together and sold as one to consumers. It was the lifeline that saved CNN, the Weather Channel, ESPN and others. The “I Want My MTV” ad campaign grew out of that because the MTV owners wanted to be placed on that tier because that was where money could be made. The cable systems operator decided what should be on that tier, not the consumer, and sports was a natural fit. ESPN thrived and started jacking up the network’s rate. Regional sports networks were founded and that became a huge source of revenue for teams.
The New York Yankees franchise was fortified by TV.
College presidents and chancellors are jumping on the bandwagon. The Disney-owned ESPN has created a University of Texas sports network. The college “realignments” have been caused by the want for TV dollars.
There is not that much interest in the college sports industry on TV. It is a niche industry at best and the cable TV ratings reflect that as a rather small number of people in the cable TV universe (ESPN has over 90 million subscribers) watch the games, yet 100 percent of the people are paying for what a rather small number of people are viewing. (Cable TV “news” works the same way, 100 percent of the basic tier universe is paying for what maybe a combined five million are watching on the FOX News Channel, CNN, MSNBC, CNBC, FOX Business, CNN’s “Headline News” and other networks.)
The colleges and universities also have a federal tax exemption, which means that the schools and conferences don’t pay taxes from the proceeds of bowl games.
Consumers should be screaming about getting fleeced legally by jock factories by cable TV networks and tax loopholes because of federal legislation that does not help consumers. There are also some questions that need to be answered about all of the stars realigning to produce “Super Conferences.”
Just where is the money going? Most athletic programs lose money, so is the Disney and Rupert Murdoch money going to fix a budget problem or will the college student body see any of that money? Will the money go to pay coaches even more money? Why are college coaches the highest paid state employees in places like Connecticut, Iowa and New Jersey coaching at state schools? Why are governors like Chris Christie not addressing the issue? Rutgers is a New Jersey state school and all of the realignments will impact Rutgers.
Why are the players, the people who make the games possible, getting nothing out of this? The players get scholarship money, yes, and an opportunity to get an education, yes, but the demands on a so-called “student-athlete” are great as there is the emphasis on the sport, not studies. The players on scholarship are also stymied in non-school job opportunities as they are limited to about $2,000 in earning from outside work annually while on scholarship. Other college students are free to earn as much as they can in part time jobs.
Jock factories can say, look because of Bobby Bowden’s or Joe Paterno’s or Bobby Knight’s success, we got money to build new labs, etc. There probably will be some noise that college games have a big economic impact (but local and state governments don’t want to research the real economic benefits of sports because the numbers may not coincide with reality -- that the economic impact is minimal at best).
There is a paucity of reporting on the why Pac 12 Commissioner Larry Scott thinks an Arizona State-University of Southern California baseball game in Japan is great for his conference. Scott wants to put Pac 12 sports in front of Pacific Rim viewers. Don’t be surprised if the Pac 12 starts sending football teams to Asia for games, Scott’s tennis background suggests that he knows all the key money players in Asia and that the college presidents and chancellors of the then Pac 10 when he was hired wanted global expansion.
But what is the real reason that these chancellors are acting like pro sports owners and why are Robert Iger from Disney and Murdoch playing ball with them? Are they bettering the schools or just seizing an opportunity to grab more money?
Sy Syms in ads for his clothing store boasted that “an educated consumer is our best customer,” but that may not be the case in sports. The less a consumer knows the better off sports is as a business.
So Seton Hall, St, John’s and Georgetown probably will be thrown under the jock factory bus because the schools don’t play football and football is driving conference realignments. Without football, those schools are not welcomed into the super college jock factory club. They will be left behind in the money grab because they are not worthy.
So it goes in the world of sports. NBA lockout, college sports realignment, allegations by the British Broadcasting Corporation’s Newsnight that the Beeb has uncovered evidence of secret payments of millions of dollars from Azerbaijan in exchange for two boxing Olympic gold medals at the London 2012 Olympics. Phil Anschutz, the owner of the Los Angeles arena that houses the NBA’s Lakers and Clippers (Anschutz is a part Lakers owner), all of a sudden showing an interest in developing a Sacramento arena for the NBA’s Kings after the team owners, the Maloof brothers, made a pitch to relocate the franchise in Anschutz’s backyard in Anaheim and become a competitor for corporate support in the market.
The Lakers franchise in 2012 will start printing cash as a part owner (with Time Warner Cable) of a Lakers cable TV network in Southern California but Anschutz seem to want to make sure there is no reason for the Maloofs to cash in on LA area cash. While Anschutz will try and play white knight for Sacramento Kings fans, he is trying to convince an NFL owner to move to his proposed football stadium in downtown Los Angeles.
That was the week that was. It makes you wonder why sports fans still watch games when the lords of the game don’t care about them.
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.