A Tale of Three Cities
By Evan Weiner
March 28, 2011
http://www.examiner.com/business-of-sports-in-national/a-tale-of-three-cities
(Dover, DE) -- This is the story of three cities and their approach to sports spending. In a town that was once known as the punch line for a Jack Benny radio skit and then the home of Disneyland, Anaheim has decided that it is a worthwhile expenditure to get $75 million in bonds to seduce the Maloof brothers and entice them to move their National Basketball Association franchise to the burg. The Maloofs would eventually be required to pay back the money which presumably is a loan.
Anaheim city officials plan to discuss the proposal on Tuesday. While Anaheim is apparently showing the money to the Maloofs. The expenditure will go to making improvements at the city owned arena and more than likely NBA relocation fees or perhaps going to pay off the money owed to Sacramento when the city loaned other Kings owners some dough. The Maloofs inherited that deal.
Anaheim is a much richer market than Sacramento and more importantly for the Maloofs, the market has a major opening for a winter sports team on one of Rupert Murdoch's LA regional sports cable TV networks. Murdoch is losing Jerry Buss's Los Angeles Lakers in 2012 as Buss will team with Time Warner and form two Lakers networks, one in English and one in Spanish. Murdoch has been known to overpay for sports properties and the Maloofs might be in for a financial windfall thanks to Buss's decision to start two channels and leaving Murdoch.
Meanwhile Sacramento has no money to build a new arena and at this point when Sacramento officials are talking about cutting school programs including basketball out of the budget, having an NBA team in the city in a state of the art building can be considered gauche.
While Anaheim decides and Sacramento dithers, a few hundred miles east of Anaheim, Glendale, Arizona officials have decided that they want their National Hockey League franchise to remain in the municipally funded city-owned arena. In a complex deal, Glendale plans to sell municipal bonds to help make sure the franchise stays. But a self appointed civic group named the Goldwater Institute wants to be the de facto government of the city and has threatened to sue Glendale if they sell bonds to make sure the team stays. Goldwater's threat of a lawsuit against Glendale has stalled sale of municipal bonds that will raise a $100 million that will go to Matthew Hulsizer so he can buy the financially troubled franchise. The money will be used to purchase the team from the NHL.
The NHL wants to go ahead with the sale but Goldwater, the self appointed watchdog, has mucked up the process and the group's interference has played havoc with the bond market. If Glendale does succeed in selling the bonds and there is a court case, the Goldwater Institute, the so-called fiscally responsible group watching the people's interest will cost a lot of people a lot of money in higher interest and court cases.
The Goldwater Institute has a slight problem. One of their board members, Randy Kendrick, is the wife of Major League Baseball's Arizona Diamondbacks owner Ken Kendrick. The Phoenix-based baseball team has been heavily subsidized by taxpayers as the team plays in a municipally funded major league stadium (complete with a swimming pool) and a new spring training facility.
The Goldwater Institute has been fine with the hundreds of millions of dollars spent for the baseball team and other Major League Baseball teams for the construction of spring training bases in the Valley of the Sun metropolitan area. What is ironic about the Goldwater Institute is this. It is one of those self important think tanks that would like to set policy and shrink government spending yet organizations like the Goldwater Institute and people like Grover Norquist (the president of Americans for Tax Reform) is that they live off the government as gadflies. Reduce government and people like Norquist lose their livelihoods and cable TV news networks and news-talk radio shows will lose guests.
Norquist and his ilk have not tried to stop Anaheim. Meanwhile how did Sacramento and Glendale get in these positions?
Sacramento owners have had a long history of flirtation with Anaheim.
For years various Kings ownership groups have sought public funding to replace the privately funded Arco Arena, which opened in 1988, and build a new arena for the city's NBA franchise. Mayor Kevin Johnson, city elected officials and business leaders have about three weeks to accomplish the nearly impossible. Get funding for a new arena and do it in an economically stressed climate in California. It probably won’t happen.
A little background is necessary.
In 1996, the Kings owner at the time, Jim Thomas, proposed building both a Major League Baseball stadium and an NBA arena in the city, but by January 1997, the idea fell apart and Thomas began threatening to sell the team because the franchise was losing money. Sacramento city leaders, fearing that Thomas might move the team to Anaheim or some other city, loaned him $82 million to help ease his financial burden.
Thomas sold the franchise to the Maloof brothers in 1998.
In 2001, Sacramento's mayor, Heather Fargo, put together a task force to study whether Sacramento should green light an arena and entertainment center in the city's downtown area and, by November 2002, there was some sort of commitment to the plan. But the Maloof brothers pulled out of the proposed venture within a year, partly because they didn't want to get stuck with a debt service bill. When the issue was revisited in 2004, the Maloofs were unhappy that a city councilman offered a resolution that would cap spending at $175 million for the city and $175 million for the Maloofs.
Apparently a salary cap on NBA players' payroll is fine for the brothers, but a municipal spending cap for an arena is unacceptable.
In 2006, there was another arena proposal on the table and Sacramento officials appeared to have deliberately used language that made it unclear what voters are being asked to approve. The two-part referendum called for a quarter of a cent general tax hike for 15 years and then asked whether voters would like to see the estimated $1.2 billion in proceeds go to building an arena and other community projects.
Why didn't Sacramento politicians mention that the tax increase in question is in fact a sales tax hike?
The answer seemed to be that the arena referendum had to be worded in such a way because it was never going to get the two-thirds approval needed under California law to pass a sales tax increase. Officials need just a simple majority, a 50.1% plurality, to win a general tax hike.
The politics of sports is at its best extremely messy, and politicians generally go to great lengths to keep stadium and arena building proposals off the ballot. In 2006, Sacramento city officials seemed to have reached a new high — or low, depending on one's viewpoint — in making sure they do right by the Maloof brothers and the NBA. They were determined to build an arena despite the language in Proposition 218, which calls for a two-thirds majority on specific tax increases like arena and stadium projects.
If you looked at the details of the proposed lease between Sacramento and the Maloof brothers, it was clear that the Maloofs would be walking away with a windfall, but that's how the government–sports franchise partnership works and you can't fault the Maloofs in this deal. Sacramento was so desperate to hold on to its only major league team that it was willing to give away the store if voters say yes.
The city, through the general tax, would have put up at least $470 million for the arena and parking. Sacramento officials thought it would have cost as much as $542 million for both, and there also would have been a cost of between $35 and $51 million to pay off the debt service on the loans that will be taken out for the construction. The city would own the building, but all of the revenue generated for all events held inside the building would go to the Maloof brothers. Not only that: The siblings would keep all the money earned from selling the naming rights to the city owned arena.
The Maloofs would pay off Thomas' old loan, which they inherited after they purchased the team. Additionally, they would pay $4 million in annual rent, an amount that could easily come in 2006 from naming rights. The brothers would also have had to kick in $20 million for arena repairs. It was a sweet deal for the Maloofs and a rotten one for Sacramento.
The Maloof-Sacramento "agreement" fell apart because the Maloofs did not want an "arena-village" sprouting up around the arena and wanted lots and lots of parking.
The Maloofs and the city began fighting over development surrounding the arena, the city wanted commercial and residential building to ring the new facility to spur downtown development but the Maloofs, who would get just about every nickel of revenue inside the building, wanted the land for an 8,000 space parking lot. The Maloofs wanted the big parking lot because they would keep all of the money generated from the lot. The Maloofs wanted the same parking deal they have now at the old arena.
That might not seem like a deal breaker until you do the math. Assuming the Maloofs fill the lot and charge $10 a car, that would mean $80,000 a night multiplied by 41 and you get more than $3 million annually from parking alone just from Kings events. The Maloofs would also get parking money from non-Kings events at the building, so the parking lot issue has become significant and a deal breaker.
The two questions on the November 2006 ballot were sounded defeated but there is never surrender in the "arena-game." Stern took over the negotiations in 2007 and nothing happened. The NBA recently walked away from the bargaining table leaving the Maloofs to look elsewhere.
The entire sports industry in the Phoenix area should be studied by urban planners and historians because no city or region has been dumber than Phoenix area politicians in the past quarter century.
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).
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 and the NHL now owns the team. 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.
Meanwhile Glendale has another problem. 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 which 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 Goldwater Institute seems to not have any problem with the All-American game of baseball despite all of the money being spent on the sport in Arizona. This is the tale of three cities and all should be figured out in a couple of weeks. The Maloofs will either stay in Sacrament o or leave for Anaheim and the city of Glendale will either sell the bonds or lose the main tenant in the city build arena. Sports business is pretty simple until politicians gets involved and make financial guarantees.
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
Showing posts with label Hamilton Phoenix Coyotes. Show all posts
Showing posts with label Hamilton Phoenix Coyotes. Show all posts
Monday, March 28, 2011
Monday, March 14, 2011
Are sports fans resilient or suckers?
MONDAY, 14 MARCH 2011 09:10
BY EVAN WEINER
NEWJERSEYNEWSROOM.COM
COMMENTARY
http://www.newjerseynewsroom.com/professional/are-sports-fans-resilient-or-suckers
There is an old saying: March comes in like a lion and goes out like a lamb. For sports fans, March 2011 has come in with the full fury of a lion. There is more March Madness than normal.
Last Friday, the National Football League Players Association and representatives of the National Football League owners broke off negotiations and started the machinery, which promises an interesting offseason. The players association is legally no more – it has decertified – while the owners have locked players out of training facilities and suspended football operations as the 2006 collective bargaining agreement expired.
The breakdown in negotiations and the subsequent actions by the owners and players is just another blow to sports fans in the month of March. The Maloof brothers, the owners of the National Basketball Association's Sacramento Kings, asked the NBA for an extension of the league's March 1 moving deadline until mid-April as the Maloofs attempt to work out an agreement with Anaheim officials to relocate to the Southern California city.
The Maloofs have apparently soured on Sacramento as an NBA city because they cannot get a taxpayer-funded arena that is loaded with high-revenue luxury boxes and club seats – the very type of seats that are beyond the price range of the average worker in Sacramento financially – and Orange County, California residents might be a better fit as they seem to be wealthier than the people in the California capital of Sacramento.
While the Maloofs continue to negotiate with Anaheim officials, Sacramento mayor and former NBA player Kevin Johnson is forging ahead with new arena plans with or without the Maloofs. The Maloof/Kings drama is playing out against an interesting backdrop. Sacramento officials are thinking of cutting school programs like sports and basketball because they don’t have any money for anything but school basics.
Just in case fans haven’t noticed, sports owners are social class segregationists. One owner of a team never hid from his belief that fans are on the low end of the totem pole in sports society and he wanted more well-heeled people in his building.
“Nothing comes from the fan,” said the owner. “Support comes from the customers. Big difference. Fans scream on talk radio. Customers bring their kids, their families, their wives, their dates, their companies, their business partners. They have lives and don’t talk to the radio talk show hosts.”
Sports owners and athletes seem to not care all that much about fans. But fans seem to have very little problem being abused. All of those people who claimed in 1995 that they would never attend another baseball game after the Major League Baseball Players Association went on strike in August 1994 and the owners brought in replacement players or scabs in an effort to break the association in March 1995 seem to have broken their vow and have come back to the ballpark in record numbers in the 21st century.
The news from the New York Mets ownership has not been good for a good while as the Wilpon family has been battling with the trustee involved in the Bernard Madoff case. Irving Picard is looking to get victims money and is going after the Wilpons in an attempt to recover it. The Wilpons seem to be in financial trouble and that is not good news for Mets fans. Still Mets fans have not given up on either baseball or the team, they are hoping the Wilpons go down with the ship and a new owner will step in and bring the Mets back to contention.
In Glendale, Arizona, a conservative watchdog group has been causing havoc with Glendale's ability to sell municipal bonds with a lot of the bond money going to bail out the Phoenix Coyotes National Hockey League franchise so that the team will stay in the city-built arena. National Hockey League Commissioner Gary Bettman went after the Goldwater Institute in a news conference last week in Glendale. There are rumors floating around that Glendale would sue the Goldwater Institute for poisoning the well by bad mouthing the city's attempt to sell the municipal bonds.
The irony of the potential lawsuit is that it might cause a great deal of embarrassment for one of the Goldwater Institute's trustees, Randy Kendrick. Mrs. Kendrick's husband Ken is the Managing General Partner and one of the owners of Major League Baseball's Phoenix-based Arizona Diamondbacks, a franchise that plays in a stadium that was funded by taxpayers and a franchise that just moved into a new spring training facility that was also paid by Arizona taxpayers.
While Bettman was in Glendale, the league had other health problems crop up. Former NHL tough guy Bob Probert left his brain to be studied following his death last June. There was suspicion that Probert, who died of a heart attack at the age of 45, suffered from brain damage that might have been connected to hockey injuries. Researchers at Boston University's Center for the Study of Traumatic Encephalopathy confirmed Probert's fear that he suffered from a brain disease called chronic traumatic encephalopathy (CTE). Boston University is building up a brain bank of deceased athletes, mostly football players and university added a brain recently that of former NFL player Dave Duerson who killed himself on Feb. 17. The Boston University center is attempting to find a link between playing football and permanent head injuries – something that football officials and hired medical experts say is not true.
On Thursday, Montreal police began a criminal investigation into the on-ice hit by Boston's Zdeno Chara that left the Montreal Canadiens' Max Pacioretty with a severe concussion and cracked vertebra. Chara checked Pacioretty into something called a turnbuckle, which is a piece of glass that separates the team benches in the Montreal arena. The NHL didn't take any disciplinary action against Chara but Air Canada let Bettman know they are not happy with the violence in the league and threatened to end the airline's various league marketing partnerships and Bettman responded by saying the league could end an agreement to use Air Canada in chartering teams around Canada and the US. Another NHL Canadian sponsor, Via Rail also wants the league to clean up the violence.
Meanwhile, Quebec Premier Jean Charest criticized NHL violence and wants the league to address the issue. But fans are not all that concerned. They want Bettman fired for ruining their game and don’t understand there is a business component that overrides the concern of the fans. But many fans had no problem with Chara’s hit. Fans in Canada and in the United States, stoked by know-nothing sports writers when it comes to business concerns, want Bettman’s out of office because he is in their minds incompetent and has ruined the game.
The sports fans and the Canadian hockey writers are failing to realize Bettman works for the owners and not for them. The fans blame Bettman for the NHL’s massive Sun Belt expansion plan that dates back to 1990 -- three years before Bettman took over as NHL Commissioner – and that there were 26 teams in the league when Bettman walked into his office for the first time.
In the New York metropolitan area, the Giants and Jets gave their fans a pre-lockout present. A hike in ticket prices for the 2011 season -- a season that at the moment will not be played. Cablevision also has given Knicks and Rangers fans a present for 2011-12, a whopping 49 percent average price hike for Knicks tickets and 23 percent for Rangers ducats. Jim Dolan is renovating Madison Square Garden (again) and needs money for the sprucing up of the 43-year-old building that is not on the New York City tax roll.
Give Jim Dolan some credit.
Knicks tickets are high priced items. Courtside seats are $3,000 a piece. Dolan is doing what politicians refuse to do, raising “his” tax for seats on well-heeled people to close his budget gap. Dolan has far more courage than Scott Walker, Chris Christie, Andrew Cuomo, Michael Bloomberg and many politicians who will not ask high income earners to share in the sacrifice that lesser income earners are doing whether it is union givebacks and outright government layoffs or paying higher tolls on roads or higher fees to use parks and other government services which means the poorer people of American society are sacrificing far more than the people who have the ability to buy Jim Dolan’s soon to be $3,600 courtside seats.
Dolan is forcing well-heeled customers and corporations who buy Knicks tickets to share in the sacrifice. Of course those people and the corporations that buy the high-ticket items get a tax write off of 50 percent. Someone else is paying for the entertainment-tax writeoff, perhaps the public at large for a few who are entertained at games?
So one NBA team may move, the NHL may be in a court fight with a political watchdog group that features a trustee whose husband benefited from public handouts, the NFL has locked out the players and on the horizon is an NBA lockout on July 1. What is a sports fan to do?
The sports fan who gives his or her team unconditional love and seemingly ends up like Charlie Brown in that Charlie is ready to kick the football out of Lucy Van Pelt's hold in the Peanuts comic strip. But as Charlie Brown gets ready to put his foot into the ball, Lucy pulls it away and Charlie falls on his back and head. (Hopefully Charlie Brown has a better post football career health plan than retired NFL players if he suffered any brain damage from falling on his head – American taxpayers are paying for many players healthcare through Social Security Insurance and Medicare even though the former players are in their 40s and 50s because the National Football League Players Association wanted "Money Now" in their 1982 and 1987 labor actions and didn't bother getting their membership enhanced post career health and pension benefits even though players abused their bodies in their careers.)
The United States federal government, specifically Congress and various Presidents have given owners the tools to make more and more money. But it was in Milwaukee that the shift occurred that put sports on the public dole. In 1950, Milwaukee elected officials decided to build a stadium with public dollars and get a baseball team. In the middle of spring training in the middle of March 1953, the city snagged an owner. Lou Perini moved his financially struggling Boston Braves to Milwaukee and hit the jackpot. Milwaukee gave Perini the stadium for $1,000 in rent and all concession revenue.
Wisconsin fans turned out to see Perini’s Braves in big numbers. That started the business that worked out well for owners of having cities bid for American and National League Baseball teams.
Other owners quickly moved. Bill Veeck sold the St. Louis Browns to Baltimore interests. The Philadelphia A’s baseball team was sold and moved to Kansas City. Brooklyn Dodgers owner Walter O’Malley took notice of Perini’s success and felt Brooklyn (which was at the top of baseball attendance annually) would not be able to compete with Milwaukee and started looking for an alternative to Ebbets Field. O’Malley took his Dodgers to Los Angeles in 1957. Horace Stoneham took his Giants from upper Manhattan to San Francisco in 1957. Both got new stadiums in their new cities although O’Malley spent his own money on Dodger Stadium. But he did get all sorts of tax breaks and incentives and land.
In 1961, President John F. Kennedy signed the Sports Broadcast Act of 1961, which allowed leagues to sell all of their franchises as one to TV networks, which gave leagues an antitrust exemption, and it has paid off fabulously for owners, particularly those in the NFL. In 1966, President Lyndon B. Johnson inked an anti-inflation bill, which also included the American Football League-National Football League merger. That bill led to the formulation of the Super Bowl.
The 1984 Cable TV Act has been embraced by owners who make millions off of cable channels such as ESPN and regional sports cable TV networks, like the New York Yankees’ partially-owned YES Network. The 1986 Tax Act gave owners to big help in negotiating leases at municipally built stadium and arenas. If a town built an arena, owners could get as much as 92 cents on every dollar generated in the building constructed after 1986 on a lease as municipalities were limited to just getting eight cents out of every dollar to pay down the debt on the facility.
The 1986 Tax Act is the major cause for major expansion and franchise relocation in Major League Baseball, the National Football League, the National Basketball Association, the National Hockey League and the formation of Major League Soccer.
Owners sought new buildings and people with money wanted to own teams whether it was for ego, making some money on a team or buying a franchise and holding onto it long enough and then sell it for a nice profit wanted to get into the game. Those people happily bought expansion teams.
Major League Baseball's 1993 expansion into Miami and Denver had more to do with Congress and paying off a debt than new buildings. Major League Baseball owners were found to have colluded against the players by an arbitrator and were slapped with a $280 million fine. The expansion helped offset the $280 million bill as MLB got $100 million each from Miami and Denver owners to join the league. Denver voters approved a baseball park to boot.
Baseball took in more money with the 1998 expansion to St. Petersburg and Phoenix. St. Petersburg had a stadium and Phoenix residents approved a stadium funding for a new facility with a March 31, 1995 expiration date. MLB expanded right before the funding was taken off the table. The 1995 NFL expansion to Charlotte and Jacksonville brought an unexpected side development. Carolina Panthers owner Jerry Richardson hired a sports marketer named Max Muhleman, the man who introduced personal seat licensing to football.
Fourteen NFL teams use the ploy that gives “fans” the right to purchase a seat then pay for a ticket for a game. Richardson needed extra money to pay off his stadium, which did not get as much public money as needed.
Muhleman’s idea came from Donald Trump. As New Jersey Generals owner in the mid-1980s, Trump was looking to move his operations from the Meadowlands to Queens, specifically the Willets Point junkyard land. To help fund the "condo-stadium," Trump was going to have people purchase the seats and then charge for tickets. In Trump’s scheme about 2/3s of the stadium would have featured what is now know as personal seat licenses.
Fans have put up with baseball labor disputes in 1972, 1981, 1985, 1990 and 1994-95 along with a drug scandal in the 1980s and the alleged usage of illegal performance enhancing drugs in the 1990s and beyond.
Fans seemingly are unaware of the physical toll that football players endure from all levels -- Pop Warner kids football up to the NFL -- and how America’s safety net is taking care of broken down players to the tune of perhaps a billion dollars to taxpayers. When the NFL and NFLPA fight over splitting up $9 billion, former players are going through various struggles with seemingly one common theme.
Post-career business failures, broken marriages, the inability to keep a job, financial stress, depression, and disability. Neither the owners nor the players (all of whom will be former players someday) are seriously looking after the discarded players.
But NFL owners have been enriched by non-fans who pay cable bills for ESPN or pay a variety of taxes to help build NFL places of business whether it is was an increase in sales tax, car rental tax, hotel tax, motel tax, water tax, lotteries (in Maryland), a sin tax, a restaurant tax, tax breaks, tax incentives or in the case in Louisiana paying $186.5 million in subsidies to keep the New Orleans Saints owner Tom Benson happy between 2002 and 2010. That lease deal has been rewritten and Benson isn’t getting the same amount of money annually from Baton Rouge politicians. He will get at the most $6 million but the state has given him a building next to the New Orleans Superdome and will rent office space in the Benson Tower.
Since the last NBA lockout in 1999, George Shinn moved his Charlotte Hornets to New Orleans, Michael Heisley took his Vancouver Grizzlies to Memphis and Clayton Bennett removed his Seattle SuperSonics from the Pacific Northwest and placed the team in Oklahoma City. In 1998 and 1999 NBA Commissioner David Stern and his owners were looking for cost certainty and trying to make NBA basketball affordable to fans that had been displaced in the every spiraling up tick in process for tickets. There will be a lockout starting July 1 unless the players agree to take far less money and the reason that NBA owners will do this is because of spiraling costs of running a franchise.
The International Olympic Committee tries to shake down local governments for the privilege of paying for a summer or winter Olympics forcing the local host city to pay off Olympic size debts. Just look at the aftermath of the 2004 Athens Games that contributed to Greece’s financial failings.
Sports fans put up with an awful lot. There are groups who are demanding a say in the NFL lockout or a place at the sports table. To those groups, no offense, but you are not welcomed at the sports table. The truth is the owners only care about customers who bring money to the stadium. For fans, it is fine for you to buy t-shirts, caps, coffee cups with team logos and other merchandise and to watch the games on cable TV. Owners don’t want you. They want customers who spend money.
When the NFL owners unlock the doors, all will be forgiven. After all there is tailgating, betting and lounging around the TV on Sunday afternoons in the fall. Besides there is always college football, a place where players make money for schools and in the process break down their bodies all for the glory of someone’s alma mater. The so-called student athletes may get a scholarship but they are there to either prepare for the pros or to be used to make money for the school – big time college sports has a tax exemption thanks to the federal government. Go to a bowl game and the school doesn’t have to pay tax on their payday for playing football.
It is more than just March Madness time. Sports fans are either the most resilient bunch of people around or the biggest suckers going. The owners know the answer to that premise. Do the 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. He can be reached at evanjweiner@yahoo.com
MONDAY, 14 MARCH 2011 09:10
BY EVAN WEINER
NEWJERSEYNEWSROOM.COM
COMMENTARY
http://www.newjerseynewsroom.com/professional/are-sports-fans-resilient-or-suckers
There is an old saying: March comes in like a lion and goes out like a lamb. For sports fans, March 2011 has come in with the full fury of a lion. There is more March Madness than normal.
Last Friday, the National Football League Players Association and representatives of the National Football League owners broke off negotiations and started the machinery, which promises an interesting offseason. The players association is legally no more – it has decertified – while the owners have locked players out of training facilities and suspended football operations as the 2006 collective bargaining agreement expired.
The breakdown in negotiations and the subsequent actions by the owners and players is just another blow to sports fans in the month of March. The Maloof brothers, the owners of the National Basketball Association's Sacramento Kings, asked the NBA for an extension of the league's March 1 moving deadline until mid-April as the Maloofs attempt to work out an agreement with Anaheim officials to relocate to the Southern California city.
The Maloofs have apparently soured on Sacramento as an NBA city because they cannot get a taxpayer-funded arena that is loaded with high-revenue luxury boxes and club seats – the very type of seats that are beyond the price range of the average worker in Sacramento financially – and Orange County, California residents might be a better fit as they seem to be wealthier than the people in the California capital of Sacramento.
While the Maloofs continue to negotiate with Anaheim officials, Sacramento mayor and former NBA player Kevin Johnson is forging ahead with new arena plans with or without the Maloofs. The Maloof/Kings drama is playing out against an interesting backdrop. Sacramento officials are thinking of cutting school programs like sports and basketball because they don’t have any money for anything but school basics.
Just in case fans haven’t noticed, sports owners are social class segregationists. One owner of a team never hid from his belief that fans are on the low end of the totem pole in sports society and he wanted more well-heeled people in his building.
“Nothing comes from the fan,” said the owner. “Support comes from the customers. Big difference. Fans scream on talk radio. Customers bring their kids, their families, their wives, their dates, their companies, their business partners. They have lives and don’t talk to the radio talk show hosts.”
Sports owners and athletes seem to not care all that much about fans. But fans seem to have very little problem being abused. All of those people who claimed in 1995 that they would never attend another baseball game after the Major League Baseball Players Association went on strike in August 1994 and the owners brought in replacement players or scabs in an effort to break the association in March 1995 seem to have broken their vow and have come back to the ballpark in record numbers in the 21st century.
The news from the New York Mets ownership has not been good for a good while as the Wilpon family has been battling with the trustee involved in the Bernard Madoff case. Irving Picard is looking to get victims money and is going after the Wilpons in an attempt to recover it. The Wilpons seem to be in financial trouble and that is not good news for Mets fans. Still Mets fans have not given up on either baseball or the team, they are hoping the Wilpons go down with the ship and a new owner will step in and bring the Mets back to contention.
In Glendale, Arizona, a conservative watchdog group has been causing havoc with Glendale's ability to sell municipal bonds with a lot of the bond money going to bail out the Phoenix Coyotes National Hockey League franchise so that the team will stay in the city-built arena. National Hockey League Commissioner Gary Bettman went after the Goldwater Institute in a news conference last week in Glendale. There are rumors floating around that Glendale would sue the Goldwater Institute for poisoning the well by bad mouthing the city's attempt to sell the municipal bonds.
The irony of the potential lawsuit is that it might cause a great deal of embarrassment for one of the Goldwater Institute's trustees, Randy Kendrick. Mrs. Kendrick's husband Ken is the Managing General Partner and one of the owners of Major League Baseball's Phoenix-based Arizona Diamondbacks, a franchise that plays in a stadium that was funded by taxpayers and a franchise that just moved into a new spring training facility that was also paid by Arizona taxpayers.
While Bettman was in Glendale, the league had other health problems crop up. Former NHL tough guy Bob Probert left his brain to be studied following his death last June. There was suspicion that Probert, who died of a heart attack at the age of 45, suffered from brain damage that might have been connected to hockey injuries. Researchers at Boston University's Center for the Study of Traumatic Encephalopathy confirmed Probert's fear that he suffered from a brain disease called chronic traumatic encephalopathy (CTE). Boston University is building up a brain bank of deceased athletes, mostly football players and university added a brain recently that of former NFL player Dave Duerson who killed himself on Feb. 17. The Boston University center is attempting to find a link between playing football and permanent head injuries – something that football officials and hired medical experts say is not true.
On Thursday, Montreal police began a criminal investigation into the on-ice hit by Boston's Zdeno Chara that left the Montreal Canadiens' Max Pacioretty with a severe concussion and cracked vertebra. Chara checked Pacioretty into something called a turnbuckle, which is a piece of glass that separates the team benches in the Montreal arena. The NHL didn't take any disciplinary action against Chara but Air Canada let Bettman know they are not happy with the violence in the league and threatened to end the airline's various league marketing partnerships and Bettman responded by saying the league could end an agreement to use Air Canada in chartering teams around Canada and the US. Another NHL Canadian sponsor, Via Rail also wants the league to clean up the violence.
Meanwhile, Quebec Premier Jean Charest criticized NHL violence and wants the league to address the issue. But fans are not all that concerned. They want Bettman fired for ruining their game and don’t understand there is a business component that overrides the concern of the fans. But many fans had no problem with Chara’s hit. Fans in Canada and in the United States, stoked by know-nothing sports writers when it comes to business concerns, want Bettman’s out of office because he is in their minds incompetent and has ruined the game.
The sports fans and the Canadian hockey writers are failing to realize Bettman works for the owners and not for them. The fans blame Bettman for the NHL’s massive Sun Belt expansion plan that dates back to 1990 -- three years before Bettman took over as NHL Commissioner – and that there were 26 teams in the league when Bettman walked into his office for the first time.
In the New York metropolitan area, the Giants and Jets gave their fans a pre-lockout present. A hike in ticket prices for the 2011 season -- a season that at the moment will not be played. Cablevision also has given Knicks and Rangers fans a present for 2011-12, a whopping 49 percent average price hike for Knicks tickets and 23 percent for Rangers ducats. Jim Dolan is renovating Madison Square Garden (again) and needs money for the sprucing up of the 43-year-old building that is not on the New York City tax roll.
Give Jim Dolan some credit.
Knicks tickets are high priced items. Courtside seats are $3,000 a piece. Dolan is doing what politicians refuse to do, raising “his” tax for seats on well-heeled people to close his budget gap. Dolan has far more courage than Scott Walker, Chris Christie, Andrew Cuomo, Michael Bloomberg and many politicians who will not ask high income earners to share in the sacrifice that lesser income earners are doing whether it is union givebacks and outright government layoffs or paying higher tolls on roads or higher fees to use parks and other government services which means the poorer people of American society are sacrificing far more than the people who have the ability to buy Jim Dolan’s soon to be $3,600 courtside seats.
Dolan is forcing well-heeled customers and corporations who buy Knicks tickets to share in the sacrifice. Of course those people and the corporations that buy the high-ticket items get a tax write off of 50 percent. Someone else is paying for the entertainment-tax writeoff, perhaps the public at large for a few who are entertained at games?
So one NBA team may move, the NHL may be in a court fight with a political watchdog group that features a trustee whose husband benefited from public handouts, the NFL has locked out the players and on the horizon is an NBA lockout on July 1. What is a sports fan to do?
The sports fan who gives his or her team unconditional love and seemingly ends up like Charlie Brown in that Charlie is ready to kick the football out of Lucy Van Pelt's hold in the Peanuts comic strip. But as Charlie Brown gets ready to put his foot into the ball, Lucy pulls it away and Charlie falls on his back and head. (Hopefully Charlie Brown has a better post football career health plan than retired NFL players if he suffered any brain damage from falling on his head – American taxpayers are paying for many players healthcare through Social Security Insurance and Medicare even though the former players are in their 40s and 50s because the National Football League Players Association wanted "Money Now" in their 1982 and 1987 labor actions and didn't bother getting their membership enhanced post career health and pension benefits even though players abused their bodies in their careers.)
The United States federal government, specifically Congress and various Presidents have given owners the tools to make more and more money. But it was in Milwaukee that the shift occurred that put sports on the public dole. In 1950, Milwaukee elected officials decided to build a stadium with public dollars and get a baseball team. In the middle of spring training in the middle of March 1953, the city snagged an owner. Lou Perini moved his financially struggling Boston Braves to Milwaukee and hit the jackpot. Milwaukee gave Perini the stadium for $1,000 in rent and all concession revenue.
Wisconsin fans turned out to see Perini’s Braves in big numbers. That started the business that worked out well for owners of having cities bid for American and National League Baseball teams.
Other owners quickly moved. Bill Veeck sold the St. Louis Browns to Baltimore interests. The Philadelphia A’s baseball team was sold and moved to Kansas City. Brooklyn Dodgers owner Walter O’Malley took notice of Perini’s success and felt Brooklyn (which was at the top of baseball attendance annually) would not be able to compete with Milwaukee and started looking for an alternative to Ebbets Field. O’Malley took his Dodgers to Los Angeles in 1957. Horace Stoneham took his Giants from upper Manhattan to San Francisco in 1957. Both got new stadiums in their new cities although O’Malley spent his own money on Dodger Stadium. But he did get all sorts of tax breaks and incentives and land.
In 1961, President John F. Kennedy signed the Sports Broadcast Act of 1961, which allowed leagues to sell all of their franchises as one to TV networks, which gave leagues an antitrust exemption, and it has paid off fabulously for owners, particularly those in the NFL. In 1966, President Lyndon B. Johnson inked an anti-inflation bill, which also included the American Football League-National Football League merger. That bill led to the formulation of the Super Bowl.
The 1984 Cable TV Act has been embraced by owners who make millions off of cable channels such as ESPN and regional sports cable TV networks, like the New York Yankees’ partially-owned YES Network. The 1986 Tax Act gave owners to big help in negotiating leases at municipally built stadium and arenas. If a town built an arena, owners could get as much as 92 cents on every dollar generated in the building constructed after 1986 on a lease as municipalities were limited to just getting eight cents out of every dollar to pay down the debt on the facility.
The 1986 Tax Act is the major cause for major expansion and franchise relocation in Major League Baseball, the National Football League, the National Basketball Association, the National Hockey League and the formation of Major League Soccer.
Owners sought new buildings and people with money wanted to own teams whether it was for ego, making some money on a team or buying a franchise and holding onto it long enough and then sell it for a nice profit wanted to get into the game. Those people happily bought expansion teams.
Major League Baseball's 1993 expansion into Miami and Denver had more to do with Congress and paying off a debt than new buildings. Major League Baseball owners were found to have colluded against the players by an arbitrator and were slapped with a $280 million fine. The expansion helped offset the $280 million bill as MLB got $100 million each from Miami and Denver owners to join the league. Denver voters approved a baseball park to boot.
Baseball took in more money with the 1998 expansion to St. Petersburg and Phoenix. St. Petersburg had a stadium and Phoenix residents approved a stadium funding for a new facility with a March 31, 1995 expiration date. MLB expanded right before the funding was taken off the table. The 1995 NFL expansion to Charlotte and Jacksonville brought an unexpected side development. Carolina Panthers owner Jerry Richardson hired a sports marketer named Max Muhleman, the man who introduced personal seat licensing to football.
Fourteen NFL teams use the ploy that gives “fans” the right to purchase a seat then pay for a ticket for a game. Richardson needed extra money to pay off his stadium, which did not get as much public money as needed.
Muhleman’s idea came from Donald Trump. As New Jersey Generals owner in the mid-1980s, Trump was looking to move his operations from the Meadowlands to Queens, specifically the Willets Point junkyard land. To help fund the "condo-stadium," Trump was going to have people purchase the seats and then charge for tickets. In Trump’s scheme about 2/3s of the stadium would have featured what is now know as personal seat licenses.
Fans have put up with baseball labor disputes in 1972, 1981, 1985, 1990 and 1994-95 along with a drug scandal in the 1980s and the alleged usage of illegal performance enhancing drugs in the 1990s and beyond.
Fans seemingly are unaware of the physical toll that football players endure from all levels -- Pop Warner kids football up to the NFL -- and how America’s safety net is taking care of broken down players to the tune of perhaps a billion dollars to taxpayers. When the NFL and NFLPA fight over splitting up $9 billion, former players are going through various struggles with seemingly one common theme.
Post-career business failures, broken marriages, the inability to keep a job, financial stress, depression, and disability. Neither the owners nor the players (all of whom will be former players someday) are seriously looking after the discarded players.
But NFL owners have been enriched by non-fans who pay cable bills for ESPN or pay a variety of taxes to help build NFL places of business whether it is was an increase in sales tax, car rental tax, hotel tax, motel tax, water tax, lotteries (in Maryland), a sin tax, a restaurant tax, tax breaks, tax incentives or in the case in Louisiana paying $186.5 million in subsidies to keep the New Orleans Saints owner Tom Benson happy between 2002 and 2010. That lease deal has been rewritten and Benson isn’t getting the same amount of money annually from Baton Rouge politicians. He will get at the most $6 million but the state has given him a building next to the New Orleans Superdome and will rent office space in the Benson Tower.
Since the last NBA lockout in 1999, George Shinn moved his Charlotte Hornets to New Orleans, Michael Heisley took his Vancouver Grizzlies to Memphis and Clayton Bennett removed his Seattle SuperSonics from the Pacific Northwest and placed the team in Oklahoma City. In 1998 and 1999 NBA Commissioner David Stern and his owners were looking for cost certainty and trying to make NBA basketball affordable to fans that had been displaced in the every spiraling up tick in process for tickets. There will be a lockout starting July 1 unless the players agree to take far less money and the reason that NBA owners will do this is because of spiraling costs of running a franchise.
The International Olympic Committee tries to shake down local governments for the privilege of paying for a summer or winter Olympics forcing the local host city to pay off Olympic size debts. Just look at the aftermath of the 2004 Athens Games that contributed to Greece’s financial failings.
Sports fans put up with an awful lot. There are groups who are demanding a say in the NFL lockout or a place at the sports table. To those groups, no offense, but you are not welcomed at the sports table. The truth is the owners only care about customers who bring money to the stadium. For fans, it is fine for you to buy t-shirts, caps, coffee cups with team logos and other merchandise and to watch the games on cable TV. Owners don’t want you. They want customers who spend money.
When the NFL owners unlock the doors, all will be forgiven. After all there is tailgating, betting and lounging around the TV on Sunday afternoons in the fall. Besides there is always college football, a place where players make money for schools and in the process break down their bodies all for the glory of someone’s alma mater. The so-called student athletes may get a scholarship but they are there to either prepare for the pros or to be used to make money for the school – big time college sports has a tax exemption thanks to the federal government. Go to a bowl game and the school doesn’t have to pay tax on their payday for playing football.
It is more than just March Madness time. Sports fans are either the most resilient bunch of people around or the biggest suckers going. The owners know the answer to that premise. Do the 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. He can be reached at evanjweiner@yahoo.com
Monday, July 12, 2010
No state compares to Arizona’s sports business follies
No state compares to Arizona’s sports business follies
MONDAY, 12 JULY 2010 07:31
http://www.newjerseynewsroom.com/professional/no-state-compares-to-arizonas-sports-business-follies
BY EVAN WEINER
NEWJERSEYNEWSROOM.COM
THE POLITICS OF SPORTS BUSINESS
With all of the talk around New Jersey about tax cuts, no one has discussed the state's handout of hundreds of millions of dollars for infrastructure for the New York Giants and New York Jets stadium in East Rutherford. There are also other benefits that were given to the two franchises including a break on property taxes and other tax break incentives such as payment in lieu of taxes on the site.
But don't blame the Mara and Tisch families or Woody Johnson, the guys who have funded the actual construction of the stadium, for working the system. Politicians since 1950 starting in Milwaukee have been reaching into the public's pockets to fund sports facilities.
In 1950, Milwaukee politicians decided that the city needed a Major League Baseball team so that the city could feel like a "Big League City." So they built County Stadium to replace Borchert Field (which kind of looked like the Polo Grounds in Manhattan), and went searching for a team in 1953. The financially starved Green Bay Packers played a game at old and run down Borchert Field in 1933 (the Packers next Milwaukee home was the Wisconsin State Fair Grounds starting in 1934) which was the home of the minor league American Association Milwaukee Brewers. The Milwaukee politicians had a few Packers football games every year but that wasn't enough for them.
On March 13, 1953, Lou Perini moved his Boston Braves franchise to Milwaukee. Milwaukee officials were so desperate to fill the stadium that they gave Perini a contract which required him to pay $1,000 in rent and gave him all the concessions in the place. The Perini move got Brooklyn Dodgers owner Walter O'Malley's attention. All of a sudden Milwaukee was a lucrative baseball town with Perini cashing in as more than 1.8 million people saw the Braves in Milwaukee in 1953 which was 1.5 million more people than saw the Braves in Boston in 1952.
O'Malley's Brooklyn Dodgers franchise was the most valuable team in the National League but he was afraid that the Dodgers would not be able to financially compete with the Braves. O'Malley would move his Dodgers to Los Angeles in September 1957 in a deal that would eventually have people around baseball asking: What is baseball's answer to the Denver mint?
The Dodgers.
Politicians have been tripping all over themselves since 1944 to win over sports owners and get a franchise. Oakland failed in an attempt to build a football stadium in 1944 in a referendum. Two decades later Oakland and Alameda County politicians got a stadium referendum passed to give the American Football League's Raiders a home. In 1967, Oakland convinced Charlie Finley to move his Kansas City A's into the stadium.
You can go virtually to every state in the union, including Alaska and Hawaii and find public dollars invested in sports. But who are the dumbest politicians in the country when it comes to sports spending? That is an easy question to answer.
Arizona.
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).
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 and the NHL now owns the team. Glendale could be kicking in as much as $25 million to keep the team going in 2010-11
Glendale is working 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. The entertainment district might be opposed by Bidwill whose business is across the street from the rink. If the team is not sold by the end of the year to a local group who plans to stay in Glendale, the NHL will allow the franchise to relocate
Meanwhile Glendale has another problem. 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 are 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 which 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. And none of this has anything to do with SB 1070; the immigration law that will soon go into effect and that could impact Arizona sports economics even more.
Evan Weiner is an author, radio-TV commentator and a speaker on "The Politics of Sports Business" and can be reached at evanjweiner@yahoo.com
MONDAY, 12 JULY 2010 07:31
http://www.newjerseynewsroom.com/professional/no-state-compares-to-arizonas-sports-business-follies
BY EVAN WEINER
NEWJERSEYNEWSROOM.COM
THE POLITICS OF SPORTS BUSINESS
With all of the talk around New Jersey about tax cuts, no one has discussed the state's handout of hundreds of millions of dollars for infrastructure for the New York Giants and New York Jets stadium in East Rutherford. There are also other benefits that were given to the two franchises including a break on property taxes and other tax break incentives such as payment in lieu of taxes on the site.
But don't blame the Mara and Tisch families or Woody Johnson, the guys who have funded the actual construction of the stadium, for working the system. Politicians since 1950 starting in Milwaukee have been reaching into the public's pockets to fund sports facilities.
In 1950, Milwaukee politicians decided that the city needed a Major League Baseball team so that the city could feel like a "Big League City." So they built County Stadium to replace Borchert Field (which kind of looked like the Polo Grounds in Manhattan), and went searching for a team in 1953. The financially starved Green Bay Packers played a game at old and run down Borchert Field in 1933 (the Packers next Milwaukee home was the Wisconsin State Fair Grounds starting in 1934) which was the home of the minor league American Association Milwaukee Brewers. The Milwaukee politicians had a few Packers football games every year but that wasn't enough for them.
On March 13, 1953, Lou Perini moved his Boston Braves franchise to Milwaukee. Milwaukee officials were so desperate to fill the stadium that they gave Perini a contract which required him to pay $1,000 in rent and gave him all the concessions in the place. The Perini move got Brooklyn Dodgers owner Walter O'Malley's attention. All of a sudden Milwaukee was a lucrative baseball town with Perini cashing in as more than 1.8 million people saw the Braves in Milwaukee in 1953 which was 1.5 million more people than saw the Braves in Boston in 1952.
O'Malley's Brooklyn Dodgers franchise was the most valuable team in the National League but he was afraid that the Dodgers would not be able to financially compete with the Braves. O'Malley would move his Dodgers to Los Angeles in September 1957 in a deal that would eventually have people around baseball asking: What is baseball's answer to the Denver mint?
The Dodgers.
Politicians have been tripping all over themselves since 1944 to win over sports owners and get a franchise. Oakland failed in an attempt to build a football stadium in 1944 in a referendum. Two decades later Oakland and Alameda County politicians got a stadium referendum passed to give the American Football League's Raiders a home. In 1967, Oakland convinced Charlie Finley to move his Kansas City A's into the stadium.
You can go virtually to every state in the union, including Alaska and Hawaii and find public dollars invested in sports. But who are the dumbest politicians in the country when it comes to sports spending? That is an easy question to answer.
Arizona.
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).
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 and the NHL now owns the team. Glendale could be kicking in as much as $25 million to keep the team going in 2010-11
Glendale is working 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. The entertainment district might be opposed by Bidwill whose business is across the street from the rink. If the team is not sold by the end of the year to a local group who plans to stay in Glendale, the NHL will allow the franchise to relocate
Meanwhile Glendale has another problem. 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 are 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 which 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. And none of this has anything to do with SB 1070; the immigration law that will soon go into effect and that could impact Arizona sports economics even more.
Evan Weiner is an author, radio-TV commentator and a speaker on "The Politics of Sports Business" and can be reached at evanjweiner@yahoo.com
Tuesday, June 15, 2010
Lawyers give love a bad name
Lawyers give love a bad name
By Evan Weiner - The Daily Caller 06/15/10 at 6:41 PM
http://dailycaller.com/2010/06/15/lawyers-give-love-a-bad-name/
This is the kind of week in sports that lawyers love.
As the college sports map evolves, National Football League players question the legality of the NFL’s television deals with Disney Company (ESPN), General Electric (NBC), Sumner Redstone (CBS), Rupert Murdoch (FOX) and DirecTV, which promise that the 32 NFL teams will continue to get rights fees even if NFL owners lock out the players or if there are no games during the 2011 season.
And then there’s the case of the National Collegiate Athletic Association imposing sanctions on the University of Southern California’s athletic program.
The sports industry in the United States benefits from an extreme lack of public accountability. The people who cover sports – whether in print, digitally, on TV or on talk radio – have no idea how the business actually operates and, as a result, fail to report a large amount of standard, everyday business that would most likely upset fans were they to get wind of it.
But the U.S. is not alone to perpetrate this crime. The National Hockey League’s Phoenix Coyotes General Manager Don Maloney will tell you Canada is just as guilty.
Maloney, a Canadian who has lived most of his adult life in the New York City area, criticized the way the Canadian media covered his team’s bankruptcy and compelled fans to move the franchise back to the other side of the 49th parallel into Hamilton, Ontario and Winnipeg, Manitoba. And for all intents and purposes, Maloney’s criticism was justified. Toronto-based sportswriters acted more like welcome-wagon hosts than journalists in their effort to jockey the debt-ridden franchise to Hamilton. Most of the Canadian sports media wore its best red and white suit, complete with a red maple leaf lapel pin, when it wrote about the Phoenix franchise and deliberately chose to ignore the fact that the National Hockey League has the right to put a franchise where it desires. This basic business tenet was backed up by a Phoenix-based bankruptcy judge.
The Canadian media wants another team in the Toronto area. But as NFL Commissioner Pete Rozelle once said as he stood on the witness stand during the 1986 United States Football League-National Football League antitrust suit, leagues are natural monopolies and the business does what it wants.
Meanwhile, hourly lawyer fees continue to pile up as the Coyotes franchise fate hangs in the balance. A group called Ice Edge Holdings is still trying to nail down a lease with the city of Glendale, Arizona, that would include the establishment of a new tax and bonding district around the city-owned arena and Westgate City Center. Naturally, Canadian sportswriters have derided the plan and Ice Edge Holdings’ alleged money problems, and have counseled Winnipeg residents to patiently await the Coyotes franchise’s return to the city.
Yet while Glendale politicians devise a way to keep the NHL Coyotes in town, big-time college athletic directors along with their presidents, chancellors and boards of trustees try to figure out how to squeeze more money into their sports programs. Football is the big money maker for college sports. But just how much money do programs need?
At Wisconsin University, Badgers sports is a $90 million a year business.
Basic math shows that 800 athletes each awarded $40,000 in scholarship money makes approximately $30 million, give or take a few million for “labor”. The CBS-Turner Sports deal is worth about $800 million a year to be split among numerous schools. But it’s not enough money to fund every school. Something has to be done.
College sports and schools need more and more money due to rising salaries, health insurance and travel costs.
And despite the revenue stream that comes to big time college programs – in the form of luxury boxes and club seats at the stadium, concession dollars, merchandise sales and marketing partners – the pot of gold at the end of the rainbow is being depleted through deals with and the creation of cable TV networks, such as the Big Ten’s partnership with FOX cable.
The Big Ten currently gives member schools an annual $22 million cut from cable TV revenues, but that could grow to a larger sum if the Big Ten Network reaches 60 million subscribers and charges two dollars per head. In order to reach the 60 million subscriber target however, the Big Ten needs a bigger geographic footprint than its Midwest-based business. The Big Ten has taken small steps in this direction by adding Nebraska (from the Big 12) and looking to add some schools in the east and south. The bigger the Big Ten geographic footprint, the more leverage the conference has in its ability to convince multiple cable system operators to add the network at $2 a month. Do the math: 60 million subscribers at $24 a year makes $1.5 billion, give or take a hundred million here and there to be divided among the schools.
That’s big money.
The pursuit of big money from cable TV is the reason why the Pac 10 conference hired Creative Artists Agency, a big time Hollywood representatives firm, to “advise” it on future expansion techniques. The Pac 10 didn’t miraculously fall in love with the thought of visiting the Colorado Rockies, nor did it develop a deep fondness for the song, “Deep in the Heart of Texas;” it saw revenue opportunities and went for them.
In the end, the promise of TV money from ESPN and FOX (coming from people with no stake in college football) kept the Big 12 going. The Big 12 lost Nebraska to the Big Ten and Colorado to the Pac 10 but kept Texas with the other nine schools.
A curious line from Big 12 Commissioner Don Beebe deserves some attention: according to a story at CNNSI.com, Beebe said establishing “super” conferences could lead to “more governmental, legal and public scrutiny.”
Apparently the entire governing system of big time college sports wants to operate in a vacuum and wants to downplay things like schools being “tax exempt” entities when dealing with earnings for sports and possibly being forced to pay players for services.
Big time college sports programs presidents and chancellors have a single mantra now: find new revenue sources.
Cable TV is that source. Multiple system operators can make or break a conference. The Big Ten Network was a struggling entity until Comcast agreed to place the channel on the basic expanded tier on cable TV giant’s systems within the Big Ten footprint. Conversely, the NFL Network has never reached the heights league officials envisioned because the network has not been able to secure a basic expanded tier with Time Warner and Cablevision, among others.
The basic expanded tier is the ultimate goal for conferences that intend to bulk up by adding schools because simply said, that’s where the money is. The 1984 Cable TV Act, which was signed into law by President Ronald Reagan, not only ensured cable networks’ survival but made them thrive. The basic expanded tier allows multiple system operators to bundle channels they think consumers want and sell them as one group to customers. The basic expanded tier allowed CNN, the Weather Channel, ESPN and other financially struggling networks of the mid-1980s to grow even though the bundling was in clear violation of antitrust laws and all the tenets of free market theory.
The basic expanded tier lineup is decided by multiple system operators and does not allow the consumer to choose what he or she wants to buy. It drives down the price of each channel because 90 million or more subscribers pay for ESPN, CNN, FOX News, MSNBC or Comedy Central on a monthly basis. But the system also begs the question of whether it is fair for 100 percent of customers to pay for what maybe one or two percent watch. College football is popular among a subset of Americans that forms less than eight percent of the 95 million or so subscribers that form the cable universe.
The re-regulation versus a la carte issue came up before Congress in the spring of 2004. In the end, cable operators, sports franchises, and cable news networks scored a huge victory when Republican Rep. Nathan Deal of Georgia conceded that he did not have the support of fellow House and Senate members to introduce legislation calling for the re-regulation of cable television and giving cable customers the liberty to choose which channels they wanted to purchase.
As long as big time college sports make billions of dollars off of people who have no interest in the product, Congress will not change cable TV laws anytime soon.
The NFL gets a slice of cable and satellite TV money as part of the overall deal; and while it’s a significant share, a good amount of the NFL’s $4 billion licensing fee for TV comes from Redstone’s CBS, GE’s NBC and Murdoch’s FOX. Over-the-air networks pay for the NFL from mere advertisement while Disney’s ESPN and DirecTV get subscriber fees and advertising dollars. The National Football League Players Association is very mindful of how the NFL is funded and is concerned that CBS, NBC, ESPN, FOX and DirecTV seem to be willing to underwrite a lockout of the players in 2011 and line the pockets of the 31 franchise owners and the Green Bay with the usual nine figure license fees whether the league plays a game or not.
The NFLPA filed a claim before Special Master Stephen Burbank of the University of Pennsylvania on Wednesday, contending that the league took lower revenue from the five media partners in exchange for guaranteed money in the event of a lockout in 2011. The owners, in the players’ mind, have a war chest and can easily afford to lock out the players.
Some of that money is coming from cable TV subscribers who don’t care about football and have no idea that they are contributing to the owners’ war chest and an NFL lock-out.
In 1984, President Reagan and Congressional leaders had probably never even considered the possibility that the legislation would lead to a complete realignment of big time college sports and give the owners some money in a labor action. Cable TV subscribers are still waiting for refunds for missed games from the 1994-95 Major League Baseball players’ strike, the 1994-95 National Hockey League owners’ lock-out, the 1998-99 National Basketball Association owners’ lock-out and the 2004-05 National Hockey League owners’ lock-out which lasted an entire season.
No cable TV subscriber has ever filed a class action suit requesting a refund for missed games, probably because they have no idea how much they are paying for sports on ESPN, Versus, the NFL Network, the MLB Network (which is also owned by multiple system operators), the various cable TV regional sports that are owned by Murdoch’s FOX, Brian Roberts Comcast or teams such as the New York Knicks and Rangers (MSG Network), the New York Yankees and New Jersey Nets (YES) , the New York Mets (SNY), the Boston Red Sox and Boston Bruins (NESN), the Baltimore Orioles and Washington Nationals (MASN), the Cleveland Indians (Sports Time Ohio), the Colorado Avalanche and the Denver Nuggets (Altitude), the Big Ten Network and the Mountain West Network.
And if that isn’t enough, what happens if the Bowl Champions Series decides to strip the University of Southern California of the Trojans’ 2004 football championship? Will the NCAA face a lawsuit for defrauding ticket holders, cable TV and over-the-air TV networks along with marketing partners by admitting that USC cheated? Five years after the fact, the NCAA has declared that USC cheated which could mean that all games featuring USC’s football team between December 2004 and December 2005 were not legitimate contests. Does that mean that there is a chance that the college football record book would have an unusual line in the honor roll of national champions?
Although the Bowl Championship Series might vacate the USC championship, the Associated Press will not rescind the news organization’s 2004 college football champion (and why is a news organization handing out college football championships?). It’s the BCS’ right to do what it wants and the BCS may have a legal leg to stand on if the title is vacated thanks to a 3rd Circuit Court panel’s decision in May relating to the New England Patriots’ secretly videotaping their opponents’ signals.
New York Jets season ticket holder Carl Mayer, who is a lawyer, was seeking $185 million in damages for Jets fans in a civil case on the basis that the game’s outcome had been predetermined. Patriots coach Bill Belichick knew the Jets defensive signals due to his espionage. Mayer’s complaint centered on the New England-New York Jets season opening game in 2007. The Patriots won the game 38-14. The NFL fined Belichick and the Patriots for the team’s dishonesty and took away a first round draft pick in 2008. The whole issue was taken up by Pennsylvania Senator Arlen Specter who met with NFL Commissioner Roger Goodell because of the enormity of the situation on the world stage.
Meyer’s case was thrown out by a three-judge panel in Philadelphia.
“We do not condone the conduct on the part of the Patriots and the team’s head coach, and we likewise refrain from assessing whether the NFL’s sanctions [and its alleged destruction of the videotapes themselves] were otherwise appropriate,” Senior Judge Robert E. Cowen wrote.
“At best, [Mayer] possessed nothing more than a contractual right to a seat from which to watch an NFL game between the Jets and the Patriots, and this right was clearly honored,” he added.
In other words, caveat emptor or let the buyer beware. You buy your tickets, so stop complaining.
It must be good to be a lawyer in sports these days: so many opportunities to make money on so many fronts. As George Young, the one time General Manager of the National Football League’s New York Giants, once said, “You show me a guy who says he is playing for the love of the game and I will show you a liar. It’s all about the money.”
By Evan Weiner - The Daily Caller 06/15/10 at 6:41 PM
http://dailycaller.com/2010/06/15/lawyers-give-love-a-bad-name/
This is the kind of week in sports that lawyers love.
As the college sports map evolves, National Football League players question the legality of the NFL’s television deals with Disney Company (ESPN), General Electric (NBC), Sumner Redstone (CBS), Rupert Murdoch (FOX) and DirecTV, which promise that the 32 NFL teams will continue to get rights fees even if NFL owners lock out the players or if there are no games during the 2011 season.
And then there’s the case of the National Collegiate Athletic Association imposing sanctions on the University of Southern California’s athletic program.
The sports industry in the United States benefits from an extreme lack of public accountability. The people who cover sports – whether in print, digitally, on TV or on talk radio – have no idea how the business actually operates and, as a result, fail to report a large amount of standard, everyday business that would most likely upset fans were they to get wind of it.
But the U.S. is not alone to perpetrate this crime. The National Hockey League’s Phoenix Coyotes General Manager Don Maloney will tell you Canada is just as guilty.
Maloney, a Canadian who has lived most of his adult life in the New York City area, criticized the way the Canadian media covered his team’s bankruptcy and compelled fans to move the franchise back to the other side of the 49th parallel into Hamilton, Ontario and Winnipeg, Manitoba. And for all intents and purposes, Maloney’s criticism was justified. Toronto-based sportswriters acted more like welcome-wagon hosts than journalists in their effort to jockey the debt-ridden franchise to Hamilton. Most of the Canadian sports media wore its best red and white suit, complete with a red maple leaf lapel pin, when it wrote about the Phoenix franchise and deliberately chose to ignore the fact that the National Hockey League has the right to put a franchise where it desires. This basic business tenet was backed up by a Phoenix-based bankruptcy judge.
The Canadian media wants another team in the Toronto area. But as NFL Commissioner Pete Rozelle once said as he stood on the witness stand during the 1986 United States Football League-National Football League antitrust suit, leagues are natural monopolies and the business does what it wants.
Meanwhile, hourly lawyer fees continue to pile up as the Coyotes franchise fate hangs in the balance. A group called Ice Edge Holdings is still trying to nail down a lease with the city of Glendale, Arizona, that would include the establishment of a new tax and bonding district around the city-owned arena and Westgate City Center. Naturally, Canadian sportswriters have derided the plan and Ice Edge Holdings’ alleged money problems, and have counseled Winnipeg residents to patiently await the Coyotes franchise’s return to the city.
Yet while Glendale politicians devise a way to keep the NHL Coyotes in town, big-time college athletic directors along with their presidents, chancellors and boards of trustees try to figure out how to squeeze more money into their sports programs. Football is the big money maker for college sports. But just how much money do programs need?
At Wisconsin University, Badgers sports is a $90 million a year business.
Basic math shows that 800 athletes each awarded $40,000 in scholarship money makes approximately $30 million, give or take a few million for “labor”. The CBS-Turner Sports deal is worth about $800 million a year to be split among numerous schools. But it’s not enough money to fund every school. Something has to be done.
College sports and schools need more and more money due to rising salaries, health insurance and travel costs.
And despite the revenue stream that comes to big time college programs – in the form of luxury boxes and club seats at the stadium, concession dollars, merchandise sales and marketing partners – the pot of gold at the end of the rainbow is being depleted through deals with and the creation of cable TV networks, such as the Big Ten’s partnership with FOX cable.
The Big Ten currently gives member schools an annual $22 million cut from cable TV revenues, but that could grow to a larger sum if the Big Ten Network reaches 60 million subscribers and charges two dollars per head. In order to reach the 60 million subscriber target however, the Big Ten needs a bigger geographic footprint than its Midwest-based business. The Big Ten has taken small steps in this direction by adding Nebraska (from the Big 12) and looking to add some schools in the east and south. The bigger the Big Ten geographic footprint, the more leverage the conference has in its ability to convince multiple cable system operators to add the network at $2 a month. Do the math: 60 million subscribers at $24 a year makes $1.5 billion, give or take a hundred million here and there to be divided among the schools.
That’s big money.
The pursuit of big money from cable TV is the reason why the Pac 10 conference hired Creative Artists Agency, a big time Hollywood representatives firm, to “advise” it on future expansion techniques. The Pac 10 didn’t miraculously fall in love with the thought of visiting the Colorado Rockies, nor did it develop a deep fondness for the song, “Deep in the Heart of Texas;” it saw revenue opportunities and went for them.
In the end, the promise of TV money from ESPN and FOX (coming from people with no stake in college football) kept the Big 12 going. The Big 12 lost Nebraska to the Big Ten and Colorado to the Pac 10 but kept Texas with the other nine schools.
A curious line from Big 12 Commissioner Don Beebe deserves some attention: according to a story at CNNSI.com, Beebe said establishing “super” conferences could lead to “more governmental, legal and public scrutiny.”
Apparently the entire governing system of big time college sports wants to operate in a vacuum and wants to downplay things like schools being “tax exempt” entities when dealing with earnings for sports and possibly being forced to pay players for services.
Big time college sports programs presidents and chancellors have a single mantra now: find new revenue sources.
Cable TV is that source. Multiple system operators can make or break a conference. The Big Ten Network was a struggling entity until Comcast agreed to place the channel on the basic expanded tier on cable TV giant’s systems within the Big Ten footprint. Conversely, the NFL Network has never reached the heights league officials envisioned because the network has not been able to secure a basic expanded tier with Time Warner and Cablevision, among others.
The basic expanded tier is the ultimate goal for conferences that intend to bulk up by adding schools because simply said, that’s where the money is. The 1984 Cable TV Act, which was signed into law by President Ronald Reagan, not only ensured cable networks’ survival but made them thrive. The basic expanded tier allows multiple system operators to bundle channels they think consumers want and sell them as one group to customers. The basic expanded tier allowed CNN, the Weather Channel, ESPN and other financially struggling networks of the mid-1980s to grow even though the bundling was in clear violation of antitrust laws and all the tenets of free market theory.
The basic expanded tier lineup is decided by multiple system operators and does not allow the consumer to choose what he or she wants to buy. It drives down the price of each channel because 90 million or more subscribers pay for ESPN, CNN, FOX News, MSNBC or Comedy Central on a monthly basis. But the system also begs the question of whether it is fair for 100 percent of customers to pay for what maybe one or two percent watch. College football is popular among a subset of Americans that forms less than eight percent of the 95 million or so subscribers that form the cable universe.
The re-regulation versus a la carte issue came up before Congress in the spring of 2004. In the end, cable operators, sports franchises, and cable news networks scored a huge victory when Republican Rep. Nathan Deal of Georgia conceded that he did not have the support of fellow House and Senate members to introduce legislation calling for the re-regulation of cable television and giving cable customers the liberty to choose which channels they wanted to purchase.
As long as big time college sports make billions of dollars off of people who have no interest in the product, Congress will not change cable TV laws anytime soon.
The NFL gets a slice of cable and satellite TV money as part of the overall deal; and while it’s a significant share, a good amount of the NFL’s $4 billion licensing fee for TV comes from Redstone’s CBS, GE’s NBC and Murdoch’s FOX. Over-the-air networks pay for the NFL from mere advertisement while Disney’s ESPN and DirecTV get subscriber fees and advertising dollars. The National Football League Players Association is very mindful of how the NFL is funded and is concerned that CBS, NBC, ESPN, FOX and DirecTV seem to be willing to underwrite a lockout of the players in 2011 and line the pockets of the 31 franchise owners and the Green Bay with the usual nine figure license fees whether the league plays a game or not.
The NFLPA filed a claim before Special Master Stephen Burbank of the University of Pennsylvania on Wednesday, contending that the league took lower revenue from the five media partners in exchange for guaranteed money in the event of a lockout in 2011. The owners, in the players’ mind, have a war chest and can easily afford to lock out the players.
Some of that money is coming from cable TV subscribers who don’t care about football and have no idea that they are contributing to the owners’ war chest and an NFL lock-out.
In 1984, President Reagan and Congressional leaders had probably never even considered the possibility that the legislation would lead to a complete realignment of big time college sports and give the owners some money in a labor action. Cable TV subscribers are still waiting for refunds for missed games from the 1994-95 Major League Baseball players’ strike, the 1994-95 National Hockey League owners’ lock-out, the 1998-99 National Basketball Association owners’ lock-out and the 2004-05 National Hockey League owners’ lock-out which lasted an entire season.
No cable TV subscriber has ever filed a class action suit requesting a refund for missed games, probably because they have no idea how much they are paying for sports on ESPN, Versus, the NFL Network, the MLB Network (which is also owned by multiple system operators), the various cable TV regional sports that are owned by Murdoch’s FOX, Brian Roberts Comcast or teams such as the New York Knicks and Rangers (MSG Network), the New York Yankees and New Jersey Nets (YES) , the New York Mets (SNY), the Boston Red Sox and Boston Bruins (NESN), the Baltimore Orioles and Washington Nationals (MASN), the Cleveland Indians (Sports Time Ohio), the Colorado Avalanche and the Denver Nuggets (Altitude), the Big Ten Network and the Mountain West Network.
And if that isn’t enough, what happens if the Bowl Champions Series decides to strip the University of Southern California of the Trojans’ 2004 football championship? Will the NCAA face a lawsuit for defrauding ticket holders, cable TV and over-the-air TV networks along with marketing partners by admitting that USC cheated? Five years after the fact, the NCAA has declared that USC cheated which could mean that all games featuring USC’s football team between December 2004 and December 2005 were not legitimate contests. Does that mean that there is a chance that the college football record book would have an unusual line in the honor roll of national champions?
Although the Bowl Championship Series might vacate the USC championship, the Associated Press will not rescind the news organization’s 2004 college football champion (and why is a news organization handing out college football championships?). It’s the BCS’ right to do what it wants and the BCS may have a legal leg to stand on if the title is vacated thanks to a 3rd Circuit Court panel’s decision in May relating to the New England Patriots’ secretly videotaping their opponents’ signals.
New York Jets season ticket holder Carl Mayer, who is a lawyer, was seeking $185 million in damages for Jets fans in a civil case on the basis that the game’s outcome had been predetermined. Patriots coach Bill Belichick knew the Jets defensive signals due to his espionage. Mayer’s complaint centered on the New England-New York Jets season opening game in 2007. The Patriots won the game 38-14. The NFL fined Belichick and the Patriots for the team’s dishonesty and took away a first round draft pick in 2008. The whole issue was taken up by Pennsylvania Senator Arlen Specter who met with NFL Commissioner Roger Goodell because of the enormity of the situation on the world stage.
Meyer’s case was thrown out by a three-judge panel in Philadelphia.
“We do not condone the conduct on the part of the Patriots and the team’s head coach, and we likewise refrain from assessing whether the NFL’s sanctions [and its alleged destruction of the videotapes themselves] were otherwise appropriate,” Senior Judge Robert E. Cowen wrote.
“At best, [Mayer] possessed nothing more than a contractual right to a seat from which to watch an NFL game between the Jets and the Patriots, and this right was clearly honored,” he added.
In other words, caveat emptor or let the buyer beware. You buy your tickets, so stop complaining.
It must be good to be a lawyer in sports these days: so many opportunities to make money on so many fronts. As George Young, the one time General Manager of the National Football League’s New York Giants, once said, “You show me a guy who says he is playing for the love of the game and I will show you a liar. It’s all about the money.”
Saturday, April 24, 2010
Sports and Arizona's Relationship is Going to Become Quite Complicated Soon
Sports and Arizona's Relationship is Going to Become Quite Complicated Soon
By Evan Weiner
April 24, 2010
http://www.examiner.com/examiner/x-3926-Business-of-Sports-Examiner~y2010m4d24-Sports-and-Arizonas-relationship-is-going-to-become-quite-complicated-soon#
(New York, N. Y.) -- Has Arizona once again risked losing the Super Bowl?
No, this is not about the Arizona Cardinals football team bowing to the Pittsburgh Steelers in the 2009 Super Bowl and returning to the “Big Game”. That is merely a game on the field. But off the field there is now a big question.
How will the sports world react now that the Arizona Governor Jan Brewer and the state's two legislative bodies have passed a tough immigration law? Could Arizona lose major sporting events like the Super Bowl? The National Football League is in the midst of the league's draft and probably will not get around to comment on the new Arizona law but given the very political nature of the league and how the league is very sensitive to the NFL's image, it is probably a good thing that Glendale, Arizona is not in the running for the 2014 Super Bowl.
The new Arizona law will go into effect sometime this summer assuming that there are no court orders to stop it.
The National Football League has a history of pulling a Super Bowl from Arizona and putting the political weight of the entity known as the NFL into a lobbying position. Arizona "celebrates" Martin Luther King Day as the result of direct intervention by the National Football League in terms of dangling a Super Bowl in front of voters. In 1987, newly elected Arizona Governor Evan Mecham's first act in his new job was to erase Martin Luther King Day from the Arizona calendar as an official state holiday. That decision set off a boycott of the state with entertainers like Stevie Wonder refusing to perform in any venue in Arizona.
Governor Mecham's reasoning was simple. The Arizona legislature in 1986 and Governor Bruce Babbitt, in Mecham's opinion, created the holiday illegally.
The National Football League, in an attempt to help the Phoenix Cardinals owner Bill Bidwill to sell more seats after he misread the Phoenix-area market following the move of his Cardinals from St. Louis to Tempe in 1988, awarded Tempe the January 31, 1993 Super Bowl. But Mecham's decision created a number of problems for the league, specifically the National Football League Players Association was not too keen on playing the NFL's showcase game in a state where a governor took away the holiday and the action was supported by Senator John McCain.
In 1989, the Arizona state legislature approved a law making Martin Luther King Day a state holiday but voters needed to approve the measure. In 1990, Arizonans went to the polls and rejected the making Martin Luther King Day a state holiday. Shortly after the voters said no, the NFL said no to Arizona and pulled the January 31, 1993 game from Tempe.
The Super Bowl allegedly pumps money into the local economy although in the Phoenix-area's case it is not as much as say putting the "Big Game" in Pontiac, Michigan or Detroit or Minneapolis since a good number of "snowbirds" vacation or spent winters in warmer climates like the Phoenix-area, South Florida or the Tampa, Florida area. What the Super Bowl does do is bring "high rollers" into town and the local community hopes that the "high rollers" such as corporate CEOs like a local area and will leave a piece of their business in the area and open up a local headquarters and create jobs.
That rarely happens but it is a selling point for the local group hoping to land a Super Bowl.
The National Football League after pulling the 1993 game went back to Arizona and laid the cards out on the table telling voters if they approved the holiday in a November 1992 vote, the NFL would award the next available Super Bowl to Tempe. Arizona voters approved the 1992 ballot initiative and five months later the NFL lived up to their part of the bargain and granted Tempe the January 28, 1996 game.
The next available Super Bowl is the 2014 game but Glendale and Arizona officials are not bidding for that event which is probably a good thing for everyone involved at this point. The NFL also holds a spring meeting once every four years or so at the Arizona Biltmore in Phoenix.
There is another real sports prize that could impacted by the new Arizona law. The Glendale, Arizona stadium, that is the home to the NFL's Arizona Cardinals and hosted the 2008 Super Bowl, is one of the 18 cities that has been proposed for use by USA Bid Committee in an effort to win the FIFA World Cup in either 2018 or 2022.
The FIFA World Cup is the biggest sports event on earth.
The new law will not play well with the FIFA delegates or some of the members of the USA Bid Committee which include Houston Dynamo and Los Angeles Galaxy owner Philip Anschutz, New York City Mayor Michael Bloomberg, comedian and Seattle Sounders FC part-owner Drew Carey, former Goldman Sachs Vice Chairman (Asia) Carlos Cordeiro, U.S. Men’s National Team player Landon Donovan, Executive Director David Downs, U.S. Soccer CEO and General Secretary Dan Flynn, U.S. Soccer Foundation President Ed Foster-Simeon, Major League Soccer Commissioner Don Garber, U.S. Soccer President and USA Bid Committee Chairman Sunil Gulati, U.S. Women’s National Team former player Mia Hamm, Walt Disney Company President and CEO Robert Iger, former U.S. Secretary of State Dr. Henry Kissinger, New England Revolution and New England Patriots owner Robert Kraft, Motion Picture Director Spike Lee, California Governor Arnold Schwarzenegger, University of Miami President Donna Shalala, ESPN Executive Vice President for Content John Skipper, Univision CEO Joe Uva and Washington Post CEO and Publisher Katharine Weymouth.
The Glendale stadium hosted the highest attended soccer match in the state of Arizona on February 7, 2007 when 62,462 fans watched the U.S. National team defeat Mexico, 2-0. Will the new Arizona law put a halt to international football "friendlies" in Arizona featuring Mexican teams?
Major League Baseball might be keeping a close eye on the developments in Arizona. The Chicago Cubs and the Milwaukee Brewers are looking for improvements at spring training bases in Mesa and Maryvale for their teams. Naples, Florida officials have made an offer to Cubs ownership to relocate the team's spring training facilities from Mesa to Naples.
If the National Hockey League's Phoenix Coyotes remain in Glendale, the franchise's new owners could be to host the 2012 or 2013 NHL All-Star Game. Glendale was supposed to venue of the 2011 event but the club's bankruptcy filing and financial uncertainty forced the league to move the game to Raleigh, North Carolina.
The National Collegiate Athletic Association held a "March Madness" men's basketball tournament event in Glendale in 2009. Will the NCAA bypass Glendale because of the new law?
Then there is another issue. Will athletes speak up either in favor or against the new law? Athletes now tend to shut up on issues with the exception of a handful of performers like then Dallas Mavericks basketball player Steve Nash who spoke out against the Iraq War. Wayne Gretzky supported the Iraq War. Ironically Nash now plays in Phoenix and Gretzky coached in Glendale.
Arizona is a hub of sports activities. Glendale is the home of the NFL's Arizona Cardinals and the NHL's Phoenix Coyotes. The NBA Suns and Major League Baseball's Diamondbacks reside in downtown Phoenix. There is a NASCAR event along with golf and tennis events. Fifteen Major League Baseball teams hold spring training in the Phoenix area, there are major college football, basketball and baseball programs along with minor league baseball and hockey teams scattered throughout the state. The United Football League holds training camp in Casa Grande.
There is a belief that sports is the "toy store" of life and that it is just a game, an entertainment diversion. The truth is that the toy store yarn that is constantly spun is a lie. The NFL proved that in 1991 and 1992 in Arizona. There will be a sports reaction to the legislation signed into law by Arizona Governor Jan Brewer, it is just a matter of time before a powerful sports group reacts and it just might cost Arizona a big event if history is any indication.
Evan Weiner is an author, radio-TV commentator and lecturer on "The Politics of Sports Business" and "Sports in Society." He can be reached at evanjweiner@yahoo.com
By Evan Weiner
April 24, 2010
http://www.examiner.com/examiner/x-3926-Business-of-Sports-Examiner~y2010m4d24-Sports-and-Arizonas-relationship-is-going-to-become-quite-complicated-soon#
(New York, N. Y.) -- Has Arizona once again risked losing the Super Bowl?
No, this is not about the Arizona Cardinals football team bowing to the Pittsburgh Steelers in the 2009 Super Bowl and returning to the “Big Game”. That is merely a game on the field. But off the field there is now a big question.
How will the sports world react now that the Arizona Governor Jan Brewer and the state's two legislative bodies have passed a tough immigration law? Could Arizona lose major sporting events like the Super Bowl? The National Football League is in the midst of the league's draft and probably will not get around to comment on the new Arizona law but given the very political nature of the league and how the league is very sensitive to the NFL's image, it is probably a good thing that Glendale, Arizona is not in the running for the 2014 Super Bowl.
The new Arizona law will go into effect sometime this summer assuming that there are no court orders to stop it.
The National Football League has a history of pulling a Super Bowl from Arizona and putting the political weight of the entity known as the NFL into a lobbying position. Arizona "celebrates" Martin Luther King Day as the result of direct intervention by the National Football League in terms of dangling a Super Bowl in front of voters. In 1987, newly elected Arizona Governor Evan Mecham's first act in his new job was to erase Martin Luther King Day from the Arizona calendar as an official state holiday. That decision set off a boycott of the state with entertainers like Stevie Wonder refusing to perform in any venue in Arizona.
Governor Mecham's reasoning was simple. The Arizona legislature in 1986 and Governor Bruce Babbitt, in Mecham's opinion, created the holiday illegally.
The National Football League, in an attempt to help the Phoenix Cardinals owner Bill Bidwill to sell more seats after he misread the Phoenix-area market following the move of his Cardinals from St. Louis to Tempe in 1988, awarded Tempe the January 31, 1993 Super Bowl. But Mecham's decision created a number of problems for the league, specifically the National Football League Players Association was not too keen on playing the NFL's showcase game in a state where a governor took away the holiday and the action was supported by Senator John McCain.
In 1989, the Arizona state legislature approved a law making Martin Luther King Day a state holiday but voters needed to approve the measure. In 1990, Arizonans went to the polls and rejected the making Martin Luther King Day a state holiday. Shortly after the voters said no, the NFL said no to Arizona and pulled the January 31, 1993 game from Tempe.
The Super Bowl allegedly pumps money into the local economy although in the Phoenix-area's case it is not as much as say putting the "Big Game" in Pontiac, Michigan or Detroit or Minneapolis since a good number of "snowbirds" vacation or spent winters in warmer climates like the Phoenix-area, South Florida or the Tampa, Florida area. What the Super Bowl does do is bring "high rollers" into town and the local community hopes that the "high rollers" such as corporate CEOs like a local area and will leave a piece of their business in the area and open up a local headquarters and create jobs.
That rarely happens but it is a selling point for the local group hoping to land a Super Bowl.
The National Football League after pulling the 1993 game went back to Arizona and laid the cards out on the table telling voters if they approved the holiday in a November 1992 vote, the NFL would award the next available Super Bowl to Tempe. Arizona voters approved the 1992 ballot initiative and five months later the NFL lived up to their part of the bargain and granted Tempe the January 28, 1996 game.
The next available Super Bowl is the 2014 game but Glendale and Arizona officials are not bidding for that event which is probably a good thing for everyone involved at this point. The NFL also holds a spring meeting once every four years or so at the Arizona Biltmore in Phoenix.
There is another real sports prize that could impacted by the new Arizona law. The Glendale, Arizona stadium, that is the home to the NFL's Arizona Cardinals and hosted the 2008 Super Bowl, is one of the 18 cities that has been proposed for use by USA Bid Committee in an effort to win the FIFA World Cup in either 2018 or 2022.
The FIFA World Cup is the biggest sports event on earth.
The new law will not play well with the FIFA delegates or some of the members of the USA Bid Committee which include Houston Dynamo and Los Angeles Galaxy owner Philip Anschutz, New York City Mayor Michael Bloomberg, comedian and Seattle Sounders FC part-owner Drew Carey, former Goldman Sachs Vice Chairman (Asia) Carlos Cordeiro, U.S. Men’s National Team player Landon Donovan, Executive Director David Downs, U.S. Soccer CEO and General Secretary Dan Flynn, U.S. Soccer Foundation President Ed Foster-Simeon, Major League Soccer Commissioner Don Garber, U.S. Soccer President and USA Bid Committee Chairman Sunil Gulati, U.S. Women’s National Team former player Mia Hamm, Walt Disney Company President and CEO Robert Iger, former U.S. Secretary of State Dr. Henry Kissinger, New England Revolution and New England Patriots owner Robert Kraft, Motion Picture Director Spike Lee, California Governor Arnold Schwarzenegger, University of Miami President Donna Shalala, ESPN Executive Vice President for Content John Skipper, Univision CEO Joe Uva and Washington Post CEO and Publisher Katharine Weymouth.
The Glendale stadium hosted the highest attended soccer match in the state of Arizona on February 7, 2007 when 62,462 fans watched the U.S. National team defeat Mexico, 2-0. Will the new Arizona law put a halt to international football "friendlies" in Arizona featuring Mexican teams?
Major League Baseball might be keeping a close eye on the developments in Arizona. The Chicago Cubs and the Milwaukee Brewers are looking for improvements at spring training bases in Mesa and Maryvale for their teams. Naples, Florida officials have made an offer to Cubs ownership to relocate the team's spring training facilities from Mesa to Naples.
If the National Hockey League's Phoenix Coyotes remain in Glendale, the franchise's new owners could be to host the 2012 or 2013 NHL All-Star Game. Glendale was supposed to venue of the 2011 event but the club's bankruptcy filing and financial uncertainty forced the league to move the game to Raleigh, North Carolina.
The National Collegiate Athletic Association held a "March Madness" men's basketball tournament event in Glendale in 2009. Will the NCAA bypass Glendale because of the new law?
Then there is another issue. Will athletes speak up either in favor or against the new law? Athletes now tend to shut up on issues with the exception of a handful of performers like then Dallas Mavericks basketball player Steve Nash who spoke out against the Iraq War. Wayne Gretzky supported the Iraq War. Ironically Nash now plays in Phoenix and Gretzky coached in Glendale.
Arizona is a hub of sports activities. Glendale is the home of the NFL's Arizona Cardinals and the NHL's Phoenix Coyotes. The NBA Suns and Major League Baseball's Diamondbacks reside in downtown Phoenix. There is a NASCAR event along with golf and tennis events. Fifteen Major League Baseball teams hold spring training in the Phoenix area, there are major college football, basketball and baseball programs along with minor league baseball and hockey teams scattered throughout the state. The United Football League holds training camp in Casa Grande.
There is a belief that sports is the "toy store" of life and that it is just a game, an entertainment diversion. The truth is that the toy store yarn that is constantly spun is a lie. The NFL proved that in 1991 and 1992 in Arizona. There will be a sports reaction to the legislation signed into law by Arizona Governor Jan Brewer, it is just a matter of time before a powerful sports group reacts and it just might cost Arizona a big event if history is any indication.
Evan Weiner is an author, radio-TV commentator and lecturer on "The Politics of Sports Business" and "Sports in Society." He can be reached at evanjweiner@yahoo.com
Wednesday, September 30, 2009
NHL, MLB, NFL, NBA Win, Hamilton and Balsillie Lose
http://www.mcnsports.com/en/node/7547
NHL, MLB, NFL, NBA Win, Hamilton and Balsillie Lose
By Evan Weiner
September 30, 2009
10:30 PM EDT
(New York, N. Y.) -- So Jim Balsillie has dropped out of the bidding for the bankrupt Phoenix Coyotes National Hockey League franchise after a bankruptcy judge in Phoenix, Arizona decided that sports leagues are a private entity and that sports owners have a right to pick owners and territories. The judge, Redfield T. Baum, turned down Balsillie's bid and an offer by the NHL to buy the financially ailing franchise that sits in Glendale, Arizona not in downtown Phoenix because of a terrible decision by the sitting city council in the late 1980s when they buckled to Phoenix Suns CEO Jerry Coangelo's want for the perfect basketball arena with perfect seating for HIS customers and not approve an all purpose use for the building.
The saga of the Phoenix Coyotes should be studied by urban planners and sports business management professors, experts and students as soon as possible because of the action of the elected officials of Phoenix who made a badly flawed decision which resulted in an arena that could only sell 75 percent of the available seating because of obstructed views. Coangelo wanted a hockey team in the building but not own it. He wanted money off of the team as he got the lion’s share of the revenues of any activity in the building because of the lease he demanded and got from the Phoenix officials. Coangelo knew an NHL franchise could not succeed in that building and various Coyotes owners reached the same conclusion very quickly.
The Coyotes franchise became a piece of real estate with a subsequent owner coming up with a plan to try and build an arena in Scottsdale less than five years after Richard Burke and Steven Gluckstern purchased the Winnipeg Jets and moved the franchise to the Valley of the Sun in 1996. Gluckstern quickly cashed in and bought the New York Islanders in what was a real estate grab that did not work out for him in Nassau County, N. Y.
Burke sold the Coyotes to real estate developer Steve Ellman in 2001.
Eventually, after no arena materialized in Scottsdale, Ellman found a willing partner in Glendale and built the arena as part of a real estate development deal.
In 2006, Ellman sold the majority stake of the Coyotes to one of his real estate partners Jerry Moyes in a deal that gave Moyes the hockey team and allowed Ellman to take over the development of the real estate parcel in Glendale. Within two years, Moyes threw his hands up and walked away leaving the NHL apparently to pay off the bills. In May 2009, Moyes decided bankruptcy was a good option and found a willing individual to buy the franchise in Balsillie in a bankruptcy proceeding. The NHL apparently was trying to sell the team to Chicago White Sox and Bulls owner Jerry Reinsdorf as Moyes walked into Judge Baum's court.
Reinsdorf's Major League White Sox franchise was already doing business in Glendale as Reinsdorf moved his spring training headquarters from Tucson, Arizona to Glendale in the winter/spring of 2009.
Balsillie had twice before gone after an NHL team. He had an agreement to buy the Pittsburgh Penguins in 2006 and dropped out after to agree to some NHL stipulations. In June 2007 he made his biggest mistake in his dealing with NHL owners and NHL Commissioner Gary Bettman. Not too long after he signed an agreement to buy the Nashville Predators from Craig Leipold, he announced that he planned to relocate the team to Hamilton, Ontario in 2008-09. Soon after his plans became public, the deal was called off.
Balsillie is obvious a smart guy given his success with Research in Motion and BlackBerry but he actions in the Nashville matter and subsequent behavior in the Phoenix dealings were silly. Prospective sports owners have to understand that becoming a major league sports owner is not a right but a privilege. You have to prove that you a worthy to join their private club, Balsillie might be raking in the cash with BlackBerry but that does not mean that he will be allowed in the brotherhood of owners.
There must have been a huge sigh of relief from the law offices of Major League Baseball, the National Football League, and the National Basketball Association when they found out that Judge Baum in his decision wrote.
"In the final analysis, the court cannot find or conclude that the interests of the NHL can be adequately protected if the Coyotes are moved to Hamilton without first having a final decision regarding the claimed rights of the NHL."
Judge Baum understood from day one that the NHL is a private entity that has its own rules not too much different than a golf course which can allow or reject prospective members. Oakland Raiders owner Al Davis was able to move his team to Los Angeles after the National Football League blocked his planned relocation in 1981 by a 22-0 vote with five abstentions by joining with the Los Angeles Coliseum Commission's lawsuit which charged that the NFL violated antitrust laws by not allowing the move. Davis and the Coliseum Commission won the case, Davis moved the team to LA and the NFL was forced to tighten up its relocation rules. The NFL has not stopped any moves since the Davis case as Robert Irsay took his Baltimore Colts to Indianapolis in 1984, Bill Bidwill took an offer from Tempe, Arizona in 1988, Davis moved back to Oakland in 1995, Georgia Frontiere moved her Rams from Anaheim to St. Louis in 1995, Art Modell accepted an offer from Maryland and pulled his Cleveland Browns out of the Ohio city in 1995 with the team landing in Baltimore in 1996. Bud Adams finally made good on his threat to move the Houston Oilers in 1996 and took them to Nashville in 1998 with a stop over in Memphis in 1997.
The National Basketball Association blocked the sale of the Minnesota Timberwolves to a group led by boxing promoter Bob Arum in 1994. Arum and his partners wanted to put the team in New Orleans. The NBA led by Commissioner David Stern wanted to keep the team in Minneapolis and found a local owner who bought the team. But Stern did not block Donald Sterling's relocation of the San Diego Clippers to LA in 1985 even though he was against the move. Under Stern's watch, the Kansas City Kings franchise moved to Sacramento, George Shinn left Charlotte for New Orleans; Michael Heisley moved his Vancouver Grizzlies to Memphis and Clayton Bennett has a basketball team in Oklahoma City after leaving Seattle. All of those moves got the approval from NBA owners.
Major League Baseball has an antitrust exemption. They could act without worry but the owners and the Commissioner's office got sloppy and were sued in 1992 by Frank Morsani and his Tampa Bay Baseball Group. Morsani and his investors accused Major League Baseball of reneging on its promise to grant the group an expansion team for the Tampa Bay area. In 2003, Morsani and Major League Baseball reached a settlement in the case.
There are many people who are pointing the finger at Gary Bettman for the Phoenix situation and for what people see as a flawed plan to expand hockey into the southern and southwestern part of the United States. Never let facts get in the way of a good story. Bettman was still in the NBA when the 21 NHL owners in 1990 decided that they needed to expand their league footprint.
Bettman was not the NHL Commissioner when the league split the Minnesota North Star franchise and moved a piece of the team to Daly City, California and the Cow Palace then to San Jose in 1991. Bettman was not there when the league added Tampa Bay and Ottawa in 1992-93 or when Wayne Huizenga's Miami-based Florida Panthers and the Disney-owned Mighty Ducks of Anaheim joined the league or when Norman Green decided to move his Minnesota North Stars to Dallas. All three moves were orchestrated for 1993-94 and even though Bettman joined the league on February 1, 1993, he inherited the business moves.
Bettman's so-called southern strategy wasn't so southern when the league expanded in 1997. Nashville joined in 1998, Atlanta in 1999 but two northern cities, Columbus and St. Paul, Minnesota started play in 2000. The Hartford Whalers owner Peter Karmanos apparently was enticed by Raleigh, North Carolina's plan to build an arena for an NHL expansion team and decided to relocate his team to the Research Triangle area but Karmanos had some good reasons to move. Connecticut Governor John Rowland seemed uninterested in building a new Hartford arena and put turned his attention to building a Hartford football stadium for New England Patriots owner Robert Kraft. Karmanos got a number of perks for his hockey team and his Compuware business with the move.
Bettman and the NHL owners did not stop the sale of the Quebec Nordiques by owner Marcel Aubut to Ascent Entertainment and Charlie Lyons in 1995 after Aubut could not get a new arena in Quebec City.
A sports commissioner can make suggestions to owners but at the end of the day, a commissioner works for the owners, a notion that certain sportswriters, fans and apparently some "experts" who teach sports business classes cannot grasp. Just ask former Major League Baseball Commissioner about autonomy. A Commissioner has some rope but not much. A Commissioner is a lobbyist, in Bettman's case, a negotiator when a collective bargaining agreement with the players is done, and gets TV and marketing deals done. Someone in the NHL decided that Phoenix was an important market and was worth keeping.
The NHL is the only buyer left standing with Balsillie gone. Judge Baum wants the NHL to be kinder to Moyes and Wayne Gretzky in making them whole. The Phoenix area has been hard hit by the recession and the real estate bust but demographers think there could be as many as eight million people in the Valley of the Sun metropolitan area by 2050. Phoenix and the surrounding area was one of the fastest growing United States markets in the 1990s and into the 21st century. But that is in the future. Phoenix has a lot of western Canadian snowbirds along with American Midwesterners who winter in the Valley. Those people are potential customers, the Phoenix business community needs to step up as well to keep the team there. The Coyotes franchise also needs an owner who understands that hockey has to be sold not only on the NHL level but on the youth level.
The Dallas Stars franchise resides in a major Sun Belt market with months of very hot weather yet the Metroplex has embraced youth hockey and Texas has more professional hockey teams than any other state in America.
Balsillie will probably be back but he needs to be rehabilitated if he wants an NHL franchise. He needs to understand that the NHL has rules and regulations and until he gets into the club, he needs to abide by the owners and the Commissioner's wishes.
As far as Hamilton, the city officials of the 1980s were not much smarter than those in Phoenix who knuckled under and gave into Coangelo's demands. The city's arena was built without a thought of the future and lacks sufficient luxury boxes and club seats. The Hamilton building is not up to NHL standards and it will cost taxpayers in an economically depressed city hundreds of millions of dollars to get the building up to snuff. Then there is the question of how much money that a potential Hamilton owner has to pay Maple Leaf Sports and Entertainment for invading the Toronto territory and how much money that owner has to give Buffalo Sabres owner Tom Galisano for encroaching the Sabres northern territory not to mention worrying about the United States Senate and New York Senators Charles Schumer and Kristen Gillibrand. The two New York lawmakers were not happy with the thought of a Hamilton team because it might take business away from Buffalo.
For those who think the game is the most important part of sports, think again. Or read Judge Baum's decision.
eweiner@mcn.tv
NHL, MLB, NFL, NBA Win, Hamilton and Balsillie Lose
By Evan Weiner
September 30, 2009
10:30 PM EDT
(New York, N. Y.) -- So Jim Balsillie has dropped out of the bidding for the bankrupt Phoenix Coyotes National Hockey League franchise after a bankruptcy judge in Phoenix, Arizona decided that sports leagues are a private entity and that sports owners have a right to pick owners and territories. The judge, Redfield T. Baum, turned down Balsillie's bid and an offer by the NHL to buy the financially ailing franchise that sits in Glendale, Arizona not in downtown Phoenix because of a terrible decision by the sitting city council in the late 1980s when they buckled to Phoenix Suns CEO Jerry Coangelo's want for the perfect basketball arena with perfect seating for HIS customers and not approve an all purpose use for the building.
The saga of the Phoenix Coyotes should be studied by urban planners and sports business management professors, experts and students as soon as possible because of the action of the elected officials of Phoenix who made a badly flawed decision which resulted in an arena that could only sell 75 percent of the available seating because of obstructed views. Coangelo wanted a hockey team in the building but not own it. He wanted money off of the team as he got the lion’s share of the revenues of any activity in the building because of the lease he demanded and got from the Phoenix officials. Coangelo knew an NHL franchise could not succeed in that building and various Coyotes owners reached the same conclusion very quickly.
The Coyotes franchise became a piece of real estate with a subsequent owner coming up with a plan to try and build an arena in Scottsdale less than five years after Richard Burke and Steven Gluckstern purchased the Winnipeg Jets and moved the franchise to the Valley of the Sun in 1996. Gluckstern quickly cashed in and bought the New York Islanders in what was a real estate grab that did not work out for him in Nassau County, N. Y.
Burke sold the Coyotes to real estate developer Steve Ellman in 2001.
Eventually, after no arena materialized in Scottsdale, Ellman found a willing partner in Glendale and built the arena as part of a real estate development deal.
In 2006, Ellman sold the majority stake of the Coyotes to one of his real estate partners Jerry Moyes in a deal that gave Moyes the hockey team and allowed Ellman to take over the development of the real estate parcel in Glendale. Within two years, Moyes threw his hands up and walked away leaving the NHL apparently to pay off the bills. In May 2009, Moyes decided bankruptcy was a good option and found a willing individual to buy the franchise in Balsillie in a bankruptcy proceeding. The NHL apparently was trying to sell the team to Chicago White Sox and Bulls owner Jerry Reinsdorf as Moyes walked into Judge Baum's court.
Reinsdorf's Major League White Sox franchise was already doing business in Glendale as Reinsdorf moved his spring training headquarters from Tucson, Arizona to Glendale in the winter/spring of 2009.
Balsillie had twice before gone after an NHL team. He had an agreement to buy the Pittsburgh Penguins in 2006 and dropped out after to agree to some NHL stipulations. In June 2007 he made his biggest mistake in his dealing with NHL owners and NHL Commissioner Gary Bettman. Not too long after he signed an agreement to buy the Nashville Predators from Craig Leipold, he announced that he planned to relocate the team to Hamilton, Ontario in 2008-09. Soon after his plans became public, the deal was called off.
Balsillie is obvious a smart guy given his success with Research in Motion and BlackBerry but he actions in the Nashville matter and subsequent behavior in the Phoenix dealings were silly. Prospective sports owners have to understand that becoming a major league sports owner is not a right but a privilege. You have to prove that you a worthy to join their private club, Balsillie might be raking in the cash with BlackBerry but that does not mean that he will be allowed in the brotherhood of owners.
There must have been a huge sigh of relief from the law offices of Major League Baseball, the National Football League, and the National Basketball Association when they found out that Judge Baum in his decision wrote.
"In the final analysis, the court cannot find or conclude that the interests of the NHL can be adequately protected if the Coyotes are moved to Hamilton without first having a final decision regarding the claimed rights of the NHL."
Judge Baum understood from day one that the NHL is a private entity that has its own rules not too much different than a golf course which can allow or reject prospective members. Oakland Raiders owner Al Davis was able to move his team to Los Angeles after the National Football League blocked his planned relocation in 1981 by a 22-0 vote with five abstentions by joining with the Los Angeles Coliseum Commission's lawsuit which charged that the NFL violated antitrust laws by not allowing the move. Davis and the Coliseum Commission won the case, Davis moved the team to LA and the NFL was forced to tighten up its relocation rules. The NFL has not stopped any moves since the Davis case as Robert Irsay took his Baltimore Colts to Indianapolis in 1984, Bill Bidwill took an offer from Tempe, Arizona in 1988, Davis moved back to Oakland in 1995, Georgia Frontiere moved her Rams from Anaheim to St. Louis in 1995, Art Modell accepted an offer from Maryland and pulled his Cleveland Browns out of the Ohio city in 1995 with the team landing in Baltimore in 1996. Bud Adams finally made good on his threat to move the Houston Oilers in 1996 and took them to Nashville in 1998 with a stop over in Memphis in 1997.
The National Basketball Association blocked the sale of the Minnesota Timberwolves to a group led by boxing promoter Bob Arum in 1994. Arum and his partners wanted to put the team in New Orleans. The NBA led by Commissioner David Stern wanted to keep the team in Minneapolis and found a local owner who bought the team. But Stern did not block Donald Sterling's relocation of the San Diego Clippers to LA in 1985 even though he was against the move. Under Stern's watch, the Kansas City Kings franchise moved to Sacramento, George Shinn left Charlotte for New Orleans; Michael Heisley moved his Vancouver Grizzlies to Memphis and Clayton Bennett has a basketball team in Oklahoma City after leaving Seattle. All of those moves got the approval from NBA owners.
Major League Baseball has an antitrust exemption. They could act without worry but the owners and the Commissioner's office got sloppy and were sued in 1992 by Frank Morsani and his Tampa Bay Baseball Group. Morsani and his investors accused Major League Baseball of reneging on its promise to grant the group an expansion team for the Tampa Bay area. In 2003, Morsani and Major League Baseball reached a settlement in the case.
There are many people who are pointing the finger at Gary Bettman for the Phoenix situation and for what people see as a flawed plan to expand hockey into the southern and southwestern part of the United States. Never let facts get in the way of a good story. Bettman was still in the NBA when the 21 NHL owners in 1990 decided that they needed to expand their league footprint.
Bettman was not the NHL Commissioner when the league split the Minnesota North Star franchise and moved a piece of the team to Daly City, California and the Cow Palace then to San Jose in 1991. Bettman was not there when the league added Tampa Bay and Ottawa in 1992-93 or when Wayne Huizenga's Miami-based Florida Panthers and the Disney-owned Mighty Ducks of Anaheim joined the league or when Norman Green decided to move his Minnesota North Stars to Dallas. All three moves were orchestrated for 1993-94 and even though Bettman joined the league on February 1, 1993, he inherited the business moves.
Bettman's so-called southern strategy wasn't so southern when the league expanded in 1997. Nashville joined in 1998, Atlanta in 1999 but two northern cities, Columbus and St. Paul, Minnesota started play in 2000. The Hartford Whalers owner Peter Karmanos apparently was enticed by Raleigh, North Carolina's plan to build an arena for an NHL expansion team and decided to relocate his team to the Research Triangle area but Karmanos had some good reasons to move. Connecticut Governor John Rowland seemed uninterested in building a new Hartford arena and put turned his attention to building a Hartford football stadium for New England Patriots owner Robert Kraft. Karmanos got a number of perks for his hockey team and his Compuware business with the move.
Bettman and the NHL owners did not stop the sale of the Quebec Nordiques by owner Marcel Aubut to Ascent Entertainment and Charlie Lyons in 1995 after Aubut could not get a new arena in Quebec City.
A sports commissioner can make suggestions to owners but at the end of the day, a commissioner works for the owners, a notion that certain sportswriters, fans and apparently some "experts" who teach sports business classes cannot grasp. Just ask former Major League Baseball Commissioner about autonomy. A Commissioner has some rope but not much. A Commissioner is a lobbyist, in Bettman's case, a negotiator when a collective bargaining agreement with the players is done, and gets TV and marketing deals done. Someone in the NHL decided that Phoenix was an important market and was worth keeping.
The NHL is the only buyer left standing with Balsillie gone. Judge Baum wants the NHL to be kinder to Moyes and Wayne Gretzky in making them whole. The Phoenix area has been hard hit by the recession and the real estate bust but demographers think there could be as many as eight million people in the Valley of the Sun metropolitan area by 2050. Phoenix and the surrounding area was one of the fastest growing United States markets in the 1990s and into the 21st century. But that is in the future. Phoenix has a lot of western Canadian snowbirds along with American Midwesterners who winter in the Valley. Those people are potential customers, the Phoenix business community needs to step up as well to keep the team there. The Coyotes franchise also needs an owner who understands that hockey has to be sold not only on the NHL level but on the youth level.
The Dallas Stars franchise resides in a major Sun Belt market with months of very hot weather yet the Metroplex has embraced youth hockey and Texas has more professional hockey teams than any other state in America.
Balsillie will probably be back but he needs to be rehabilitated if he wants an NHL franchise. He needs to understand that the NHL has rules and regulations and until he gets into the club, he needs to abide by the owners and the Commissioner's wishes.
As far as Hamilton, the city officials of the 1980s were not much smarter than those in Phoenix who knuckled under and gave into Coangelo's demands. The city's arena was built without a thought of the future and lacks sufficient luxury boxes and club seats. The Hamilton building is not up to NHL standards and it will cost taxpayers in an economically depressed city hundreds of millions of dollars to get the building up to snuff. Then there is the question of how much money that a potential Hamilton owner has to pay Maple Leaf Sports and Entertainment for invading the Toronto territory and how much money that owner has to give Buffalo Sabres owner Tom Galisano for encroaching the Sabres northern territory not to mention worrying about the United States Senate and New York Senators Charles Schumer and Kristen Gillibrand. The two New York lawmakers were not happy with the thought of a Hamilton team because it might take business away from Buffalo.
For those who think the game is the most important part of sports, think again. Or read Judge Baum's decision.
eweiner@mcn.tv
Monday, June 15, 2009
Hamilton Loses Again
http://www.mcnsports.com/en/node/7515 Hamilton Loses Again
By Evan Weiner
June 15, 2009
11:00 PM EDT
(New York, N. Y.) – Hamilton, Ontario taxpayers, United States Bankruptcy Judge Redfield T. Baum saved you millions of dollars but for the tens of thousands of people shut out of Toronto Maple Leafs tickets in an area that is suddenly known as “South Ontario” which really isn’t south Ontario, it is more hurry up and wait for Hamilton to get an NHL team. While some Canadians and a sizeable portion of the Toronto media will probably ratchet up the scorn and competent they have for National Hockey League Commissioner, Gary Bettman, it may have been Jim Balsillie who killed the deal that could have resulted in Hamilton or South Ontario getting an NHL franchise by insisting that his purchase of the financially distressed Phoenix Coyotes hockey team from Jerry Moyes hockey team be done by June 29 or he would walk away.
Judge Baum ruled that there wasn't enough time to resolve all of the issues surround the sale which included whether the NHL could charge a relocation fee and there are others issues surrounding including whether the NHL had the right to block a move from Glendale to Hamilton and if NHL franchises in Toronto and Buffalo, New York should get compensation money if Balsillie “invaded” their territories by placing a team in Hamilton.
That was the 10,000 pound gorilla hanging over the courtroom according to Judge Baum, not to mention that New York’s two United States Senators suggested to the judge that the NHL bylaws and wishes should be considered.
Hamilton's city and elected officials were ready to greet Balsillie as a liberator with open arms and with many millions of dollars to upgrade the city's arena, welcoming him as a conquering hero for getting the city a hockey team. The Toronto media was ready to give him the highest honor that Canada could bestow on one of their own.
Hamilton was ready to spend lavishly as the city has to renovate the city’s arena as it is not up to NHL standards as it lacks high price seating. It was one of the reasons that the NHL bypassed it during various expansions in the 1990s.
So Bettman wins one although not much was resolved by the court because the clock was running out on Basillie's bid to buy the financially insolvent Phoenix Coyotes franchise. The franchise is in financial ruin and hanging over the fate of the franchise is Glendale, Arizona's instance that the franchise stays in the city's new arena for another 26 years or someone will have to pay a huge sum for breaking the lease between the team and the municipality.
National Hockey League Players Association Executive Director Paul Kelly was a loser in Judge Baum's decision. Kelly stuck his neck out saying it was time to pull the plug on the Phoenix franchise although he said he was not advocating a sale of the team to Balsillie or a move to Hamilton. Kelly's reasoning was that someone should come to the realization that the NHL could not succeed with an owner, Jerry Moyes, losing millions upon millions of dollars annually. Not even the father of the modern era of executive directors of players association, Marvin Miller, the long time Executive Director of the Major League Baseball Players Association would ever have told owners publicly in either a newspaper interview or on a sports talks radio station to move a franchise. That is an owners decision although from Kelly's standpoint, he probably looked at it as an opportunity to bring more money into the NHL's coffers that would trickle down to the players.
The financial failure of the Phoenix Coyotes really started with a stupid arena design decision by Phoenix elected officials around 1987 when they decided to built a venue for Jerry Coangelo's Phoenix Suns National Basketball Association franchise. The basketball team was the only major league team in the Valley of the Sun at the time and to make sure that Coangelo was content, happy and treated as a deity, they approved a design that was perfect for basketball and terrible for hockey or arena football or other events in the building. The floor of the building was hardly big enough to support a hockey rink or an indoor football league layout.
Coangelo was the big winner in getting the building, his franchise valued soared and most of the rent payments due for the building occur in years 36-40 on the lease. Coangelo eventually cashed in 2004 when he and his group sold the franchise to Robert Sarver for a reported $401 million US. Given how long arenas last in the NBA, it is doubtful that the team will still be playing in the building in 2027 or 2028.
The Phoenix arena opened in 1992. About two years after the arena opened, Coangelo mentioned to this reporter that the NHL needed and wanted to get teams in the Mountain Time zone in both Denver, Colorado and in Phoenix for a number of reasons including grabbing two much needed TV markets. Coangelo was all for the NHL to move to his arena even though the city owned the building and the building had 4,000 obstructed seats. The Phoenix-Scottsdale-Mesa area was growing by leaps and bounds and a lot of western Canadians spent a good chunk of the winter months in the area. It made a lot of sense that the NHL move into the market to that Coangelo and others including Steven Gluckstern and Richard Burke who bought the financially struggling Winnipeg Jets, a franchise that was in desperate need for a new arena, from Barry Shenkarow in the spring of 1996, felt was ripe for an NHL team.
The relocated franchise moved to Phoenix in the summer of 1996 and it wasn't long before Gluckstern and Burke discovered that Coangelo's sports facility, the municipally-owned building, was totally unsuitable for hockey and there was a need for a new barn.
Gluckstern then decided that he wanted to be a co-owner of the New York Islanders in 1998 and sold his share of the franchise to Burke. Burke held onto the money losing franchise in a bad building until 2001 when Steve Ellman bought the team. One of Ellman's partners was Jerry Moyes, a trucking executive. Because sports franchises are no longer stand alone businesses, beginning in 1998, Ellman and Burke wanted to develop a plot of land that Ellman owned at an old shopping center in Scottsdale into an arena with some shopping around it. That never came to be but Ellman took the team off of Burke's hands.
Glendale came up with an arena plan and Ellman was able to get the team out of Phoenix in 2003. Ellman got a $160 million arena west of Phoenix from Glendale taxpayers but promised something in return. Ellman would build an arena-village complete with shopping, housing and other commercial ventures and sales tax raised within the Ellman arena-village would go back to Glendale to help pay off the city's debt obligation on the arena.
Ellman's Westgate project was floundering in 2006 along with the hockey team. Ellman and Moyes split in 2006, Ellman stayed with the real estate project and Moyes became the owner of the Coyotes. Ellman's real estate project has never been fully developed. By November 2008, Moyes no longer wanted to subsidize the hockey team anymore and the NHL started picking up the bills. Moyes filed for bankruptcy protection in May and agreed to sell the franchise to Balsillie which infuriated the NHL which was trying to sell the team to baseball's Chicago White Sox and basketball's Chicago Bulls owner Jerry Reinsdorf.
Reinsdorf does business in Glendale. The city built a spring training facility which is shared by Frank Mc Court's Los Angeles Dodgers and Reinsdorf's White Sox.
The decision by the Phoenix elected officials back in the late 1980s has had an impact over two decades. The original thinking by urban planners in Phoenix was to build a downtown with the arena as the anchor. A number of years later, the urban planners added a plan to build a baseball park near the arena which would make the downtown a destination place for workers in the area and for those who wanted to spend a night or a weekend downtown. It hasn't really worked out all that well for downtown Phoenix or Glendale.
What happens next in the saga of the Coyotes is anybody's guess. But based on sports league's histories, it can be assumed that the NHL will try and find a local buyer who will cut a new deal with Glendale freeing up arena revenues that would go to the new owner. Balsillie might sue the NHL charging the league with an antitrust violation and that would take a while as lawyers would have to go through a discovery period and then the case would finally be heard.
Balsillie has now had three cracks at buying an NHL franchise. He withdrew an offer to buy the Pittsburgh Penguins franchise on December 15, 2006 after Bettman told him that he could not buy the franchise unless he agreed to keep the team in Pittsburgh. Balsillie's attempt to buy the Nashville Predators in May 2007 was perhaps the most awkward attempted purchase of a major league sports franchise in modern memory. Balsillie bought the team from owner Craig Leipold and almost immediately set up shop in Hamilton in anticipation of moving the team there, selling season tickets for the Hamilton Predators. By the end of June, Balsillie was on the outside again looking in. Leipold decided to look elsewhere for a buyer.
Balsillie's lack of playing by the rules that owners have established in their business will not help him in anyway in trying to land an NHL team. Membership has its privileges; Balsillie wants to get into a closed club that has its own rules and regulations. Suing to enter the club will not win him any friends in the NHL or in Major League Baseball, the National Football League or the National Basketball Association as Balsillie's actions of just buying a team and moving them to wherever he chooses has to go through a process not a whim. That doesn't fly as there is a list of potential suitors who tried to buy teams and failed throughout the years in sports.
The NHL's constitution goes back into mothballs for the time being. Balsillie is without a team and Glendale still has an anchor tenant in its municipally owned building. The Coyotes saga isn't over by a long shot but it might have all been different if Phoenix elected officials were paying attention to what they signed off on in building an arena back in 1987 and 1988.
eweiner@mcn.tv
By Evan Weiner
June 15, 2009
11:00 PM EDT
(New York, N. Y.) – Hamilton, Ontario taxpayers, United States Bankruptcy Judge Redfield T. Baum saved you millions of dollars but for the tens of thousands of people shut out of Toronto Maple Leafs tickets in an area that is suddenly known as “South Ontario” which really isn’t south Ontario, it is more hurry up and wait for Hamilton to get an NHL team. While some Canadians and a sizeable portion of the Toronto media will probably ratchet up the scorn and competent they have for National Hockey League Commissioner, Gary Bettman, it may have been Jim Balsillie who killed the deal that could have resulted in Hamilton or South Ontario getting an NHL franchise by insisting that his purchase of the financially distressed Phoenix Coyotes hockey team from Jerry Moyes hockey team be done by June 29 or he would walk away.
Judge Baum ruled that there wasn't enough time to resolve all of the issues surround the sale which included whether the NHL could charge a relocation fee and there are others issues surrounding including whether the NHL had the right to block a move from Glendale to Hamilton and if NHL franchises in Toronto and Buffalo, New York should get compensation money if Balsillie “invaded” their territories by placing a team in Hamilton.
That was the 10,000 pound gorilla hanging over the courtroom according to Judge Baum, not to mention that New York’s two United States Senators suggested to the judge that the NHL bylaws and wishes should be considered.
Hamilton's city and elected officials were ready to greet Balsillie as a liberator with open arms and with many millions of dollars to upgrade the city's arena, welcoming him as a conquering hero for getting the city a hockey team. The Toronto media was ready to give him the highest honor that Canada could bestow on one of their own.
Hamilton was ready to spend lavishly as the city has to renovate the city’s arena as it is not up to NHL standards as it lacks high price seating. It was one of the reasons that the NHL bypassed it during various expansions in the 1990s.
So Bettman wins one although not much was resolved by the court because the clock was running out on Basillie's bid to buy the financially insolvent Phoenix Coyotes franchise. The franchise is in financial ruin and hanging over the fate of the franchise is Glendale, Arizona's instance that the franchise stays in the city's new arena for another 26 years or someone will have to pay a huge sum for breaking the lease between the team and the municipality.
National Hockey League Players Association Executive Director Paul Kelly was a loser in Judge Baum's decision. Kelly stuck his neck out saying it was time to pull the plug on the Phoenix franchise although he said he was not advocating a sale of the team to Balsillie or a move to Hamilton. Kelly's reasoning was that someone should come to the realization that the NHL could not succeed with an owner, Jerry Moyes, losing millions upon millions of dollars annually. Not even the father of the modern era of executive directors of players association, Marvin Miller, the long time Executive Director of the Major League Baseball Players Association would ever have told owners publicly in either a newspaper interview or on a sports talks radio station to move a franchise. That is an owners decision although from Kelly's standpoint, he probably looked at it as an opportunity to bring more money into the NHL's coffers that would trickle down to the players.
The financial failure of the Phoenix Coyotes really started with a stupid arena design decision by Phoenix elected officials around 1987 when they decided to built a venue for Jerry Coangelo's Phoenix Suns National Basketball Association franchise. The basketball team was the only major league team in the Valley of the Sun at the time and to make sure that Coangelo was content, happy and treated as a deity, they approved a design that was perfect for basketball and terrible for hockey or arena football or other events in the building. The floor of the building was hardly big enough to support a hockey rink or an indoor football league layout.
Coangelo was the big winner in getting the building, his franchise valued soared and most of the rent payments due for the building occur in years 36-40 on the lease. Coangelo eventually cashed in 2004 when he and his group sold the franchise to Robert Sarver for a reported $401 million US. Given how long arenas last in the NBA, it is doubtful that the team will still be playing in the building in 2027 or 2028.
The Phoenix arena opened in 1992. About two years after the arena opened, Coangelo mentioned to this reporter that the NHL needed and wanted to get teams in the Mountain Time zone in both Denver, Colorado and in Phoenix for a number of reasons including grabbing two much needed TV markets. Coangelo was all for the NHL to move to his arena even though the city owned the building and the building had 4,000 obstructed seats. The Phoenix-Scottsdale-Mesa area was growing by leaps and bounds and a lot of western Canadians spent a good chunk of the winter months in the area. It made a lot of sense that the NHL move into the market to that Coangelo and others including Steven Gluckstern and Richard Burke who bought the financially struggling Winnipeg Jets, a franchise that was in desperate need for a new arena, from Barry Shenkarow in the spring of 1996, felt was ripe for an NHL team.
The relocated franchise moved to Phoenix in the summer of 1996 and it wasn't long before Gluckstern and Burke discovered that Coangelo's sports facility, the municipally-owned building, was totally unsuitable for hockey and there was a need for a new barn.
Gluckstern then decided that he wanted to be a co-owner of the New York Islanders in 1998 and sold his share of the franchise to Burke. Burke held onto the money losing franchise in a bad building until 2001 when Steve Ellman bought the team. One of Ellman's partners was Jerry Moyes, a trucking executive. Because sports franchises are no longer stand alone businesses, beginning in 1998, Ellman and Burke wanted to develop a plot of land that Ellman owned at an old shopping center in Scottsdale into an arena with some shopping around it. That never came to be but Ellman took the team off of Burke's hands.
Glendale came up with an arena plan and Ellman was able to get the team out of Phoenix in 2003. Ellman got a $160 million arena west of Phoenix from Glendale taxpayers but promised something in return. Ellman would build an arena-village complete with shopping, housing and other commercial ventures and sales tax raised within the Ellman arena-village would go back to Glendale to help pay off the city's debt obligation on the arena.
Ellman's Westgate project was floundering in 2006 along with the hockey team. Ellman and Moyes split in 2006, Ellman stayed with the real estate project and Moyes became the owner of the Coyotes. Ellman's real estate project has never been fully developed. By November 2008, Moyes no longer wanted to subsidize the hockey team anymore and the NHL started picking up the bills. Moyes filed for bankruptcy protection in May and agreed to sell the franchise to Balsillie which infuriated the NHL which was trying to sell the team to baseball's Chicago White Sox and basketball's Chicago Bulls owner Jerry Reinsdorf.
Reinsdorf does business in Glendale. The city built a spring training facility which is shared by Frank Mc Court's Los Angeles Dodgers and Reinsdorf's White Sox.
The decision by the Phoenix elected officials back in the late 1980s has had an impact over two decades. The original thinking by urban planners in Phoenix was to build a downtown with the arena as the anchor. A number of years later, the urban planners added a plan to build a baseball park near the arena which would make the downtown a destination place for workers in the area and for those who wanted to spend a night or a weekend downtown. It hasn't really worked out all that well for downtown Phoenix or Glendale.
What happens next in the saga of the Coyotes is anybody's guess. But based on sports league's histories, it can be assumed that the NHL will try and find a local buyer who will cut a new deal with Glendale freeing up arena revenues that would go to the new owner. Balsillie might sue the NHL charging the league with an antitrust violation and that would take a while as lawyers would have to go through a discovery period and then the case would finally be heard.
Balsillie has now had three cracks at buying an NHL franchise. He withdrew an offer to buy the Pittsburgh Penguins franchise on December 15, 2006 after Bettman told him that he could not buy the franchise unless he agreed to keep the team in Pittsburgh. Balsillie's attempt to buy the Nashville Predators in May 2007 was perhaps the most awkward attempted purchase of a major league sports franchise in modern memory. Balsillie bought the team from owner Craig Leipold and almost immediately set up shop in Hamilton in anticipation of moving the team there, selling season tickets for the Hamilton Predators. By the end of June, Balsillie was on the outside again looking in. Leipold decided to look elsewhere for a buyer.
Balsillie's lack of playing by the rules that owners have established in their business will not help him in anyway in trying to land an NHL team. Membership has its privileges; Balsillie wants to get into a closed club that has its own rules and regulations. Suing to enter the club will not win him any friends in the NHL or in Major League Baseball, the National Football League or the National Basketball Association as Balsillie's actions of just buying a team and moving them to wherever he chooses has to go through a process not a whim. That doesn't fly as there is a list of potential suitors who tried to buy teams and failed throughout the years in sports.
The NHL's constitution goes back into mothballs for the time being. Balsillie is without a team and Glendale still has an anchor tenant in its municipally owned building. The Coyotes saga isn't over by a long shot but it might have all been different if Phoenix elected officials were paying attention to what they signed off on in building an arena back in 1987 and 1988.
eweiner@mcn.tv
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