What Would Lebron Really Mean in New York?

What Would Lebron Really Mean in New York?



By Evan Weiner





July 1, 2010



http://www.examiner.com/examiner/x-3926-Business-of-Sports-Examiner~y2010m7d1-What-Would-Lebron-Really-Mean-in-New-York



(New York, N. Y.) -- New York City Mayor Mike Bloomberg wants the Knicks to sign Lebron James. Bloomberg's city is a financial mess with teachers getting fired and services being cutback. New York State is a financial disaster. Of course Bloomberg should not even be the city's mayor as he bypassed a law that term limited city elected officials to two terms (Rudy Giuliani left office because of term limits) but that is a story for another day. Bloomberg won last November for a third time and is the mayor.



Here is the rub with Bloomberg and his want of Lebron James in Manhattan.



Madison Square Garden does not pay city property taxes. It may be as much as $14 million a year that does not go into the city's coffers. Lebron James salary would be about $14 million a year. If the Garden's owners, the Dolan family (a family that made their fortune off of the government because of laws governing the cable TV business) paid the tax, perhaps some of those Knicks fans who are losing their jobs because the city is broke might be retained in their jobs.



(The Dolans did not negotiate the property tax deal, they inherited the break when they bought the Garden in 1995 with the ITT Corporation.)



The Dolans themselves have been cutting back on their "media empire" for a long time. Their News12s in various parts of the New York City metropolitan area have seen a departure of reporters and the Dolan's newspaper, Newsday, just got concessions from workers which will result in five to 10 percent wage cutbacks. The Dolans have money for players but seem to have short arms when reaching into their pockets when it comes to paying reporters and property taxes.



But sports is fantasyland and Lebron James going to the Knicks would be a feel good story for long suffering Knicks fans.



The sports pundits will talk about just how much money Lebron James will pump into the city. That's assuming he lives in the city. There are New York players whose residents are in Florida or in other states where there is no state income tax. They happen to play in New York.



But the "Trickle Down" theory is in play. Surely Lebron would bring more people into New York to see him play for the Knicks and that would mean more money to the city?



That's not true.



The Knicks play two pre-season games in October, then just 41 games between November and April and those dates are scattered. The playoffs would bring a few more dates but certainly nothing that would add up for the city. With or without Lebron or a number of players who would make the Knicks better, the city would not stand to make much. Economic impact is very overrated. People have a finite amount of dollars to spend on entertainment, if it doesn't go to the Knicks, it would go somewhere else in the city or in the metropolitan area.



There would be few people who would plan a trip to New York because of Lebron. As far as being a tourist attraction, Lebron's presence in New York City would pale in comparison to the amount of people who want to see Broadway shows or maybe the Big East Tournament.



Most sports is local. There are few teams that can pull people in and those teams are basically college football teams who travel with large contingents and perhaps St. Louis Cardinals fans.



Lebron doesn't even have the pull of the New York City Marathon. You want an event that brings a multitude of people and a ton of money into town? The Marathon attracts runners globally. There are about 100,000 people who want a shot at the 2010 New York City Marathon. Only 37,000 runners get to participate and an awful lot of those runners are not from New York who rent hotel and motel rooms, dine at area eateries and put money into not only the city but surrounding areas. The Marathon has international travel partners in about 40 countries. Lebron is a one man corporation but he is not going to be a money making attraction to the city and Bloomberg's budget.



Lebron is not as valuable to Bloomberg as the shows in the Javits Center such as the Toy Show or the Jewelry Show. Lebron is not in the same league as the Model United Nations which brings about 5,000 teenagers from all over the world to participate. Lebron cannot compete with Fashion Week or Fleet Week. The Javits Center events, the UN events including the annual world leaders session and the Model United Nations bring not only participants but guests into the area and those guests use hotels/motels and restaurants. Lebron is not the same draw as the US Open in Flushing Meadows in the late summer. How many Europeans will buy plane tickets and book hotels with various travel packages to watch Lebron for a game here or there when they can see two weeks of championship tennis and be in New York City?



Cities compete for conventions.



Conventions make money, sports teams make money for owners and players but in many ways they cannot even compete with a local 24 hour a day supermarket in terms of real economic impact.



A few people might get jobs helping Lebron if he signs with the Knicks but as far as a municipal money making machine. He is not.



There is some other nonsense about New York being the biggest stage in the world. Lebron's popularity began while he was in prep school and he has been in Cleveland, a decaying rust belt city, for the past seven years. He can make the same endorsement money in Cleveland that he can in New York. This is not the 1960s where Mickey Mantle ruled the roost along with other New York Yankees and New York Giants football players in terms of Madison Avenue. Henry Aaron was an afterthought in Milwaukee in the 1950s and 1960s but that was a different time.



New York isn't even the biggest NBA stage. It is just another franchise in the 30 team NBA. The Garden is an overrated building that has been living off the glory days of another Madison Square Garden that was located about a mile north of the place. Garden officials were so disgusted with the four-year-old building in 1972 that they looked at possibly relocating the Knicks and the NHL's Rangers to the New Jersey Meadowlands. Gulf and Western didn't think so highly of the building a decade later after the bought the place in the mid-1970s. In the early 1980s, the Garden owners were screaming that they could no longer be competitive in the then 15 year old building and unless New York City and New York State gave them a property tax break, the Knicks would move to Nassau County and the Rangers to the Meadowlands.



So much for sentimentally. It is all business.



New York Governor Mario Cuomo and New York Mayor Ed Koch cut a deal with the Garden which relieved the arena ownership of the burden of paying city property tax and the arena's electric bill. Everyone in the Con Ed power grid got to pay a portion of the Garden's electric bill. That has gone on for nearly three decades even though neither Cuomo nor Koch though the law was passed by the legislature in Albany in 1982 would last in perpetuity.



Lebron is a money making machine for Lebron and his company along with a sports team, a league and his marketing partners. Knicks ticket prices will go up with Lebron, of course they go up even when the team is bad.

There isn't that much room to expand the fan base at the Garden for Knicks games as remarkably the team is still selling tickets at a high volume at 98.7 percent capacity in a building that seats about 19,500 people in 2009-10. With the teetering economy, a bad record and a lot of sports competition for the dollar in the New York area, it is actually incredible that the Knicks are still sellable. The Yankees cannot sell high priced home plate ticket in a new stadium with a championship team, the Mets attendance is way down and the New York Jets have slashed prices on about a quarter of the seats at the team's new stadium in East Rutherford, New Jersey.



Lebron would probably help Madison Square Garden's cable TV channel because more eyeballs would be on the channel and that would bring in advertising. The network might demand a higher licensing fee from multiple system operators who would then pass that along to cable TV customers which means that all cable TV subscribers that have the Garden's channel on their basic tier would have to pay for what maybe three or four percent of the audience watch---Knicks basketball.



In the world of fantasy---sports---Lebron James to the Knicks is a gift to Knicks fans. In the real world though, it is far far different. Bloomberg wants Lebron, he wanted a New Jersey-based Super Bowl also in 2014 which he got. He has green lighted hundreds of millions of dollars worth of tax breaks and subsidies for the construction of athletic facilities while presiding over job cuts because the city is broke.



Lebron James might save the Knicks from basketball mediocrity but he will do very little for the city's economy and job growth.





Evan Weiner is an author, radio-TV commentator and speaker on the "Politics of Sports Business and can be reached at evanjweiner@yahoo.com

Bad week for Toronto hockey writers

http://www.examiner.com/examiner/x-3926-Business-of-Sports-Examiner~y2009m12d12-Bad-week-for-Toronto-hockey-writers#

Bad week for Toronto hockey writers

By Evan Weiner

December 12, 2009

(New York, N. Y.) -- It has not been a good couple days for the Toronto sports media, rather the Toronto hockey fan sportswriters. National Hockey League Commissioner Gary Bettman met with Quebec Premier Jean Charest and the Quebec premier is under the impression that Bettman would like to see a franchise in Quebec City.

Then came the story that Bettman would prefer expanding the league rather than relocating teams and on top of that there seems to be a group ready to buy the financially troubled Phoenix Coyotes willing to keep the team in Glendale, Arizona.
The stars are not aligning for the Toronto hockey scribes who were waving their red and white pom poms last summer and basically begging a United States bankruptcy judge to let Jim Balsillie pick up the Coyotes franchise and move the team to Hamilton, Ontario.

That didn’t happen as Judge Redfield Baum decided to let the NHL handle the sale of the Coyotes franchise. Balsillie, one of the BlackBerry founders, appealed to Canadian nationalism in his bid to buy the Coyotes and the Toronto hockey writers acted as if they were a Balsillie flack instead of journalists who researched sports league’s constitutions or previous denials of sports teams ownership transfers or relocation such as Major League baseball saying twice no to Edwin Gaylord in the 1980s in his attempt to but the Texas Rangers because he owned a “superstation” in Dallas and Gaylord’s Dallas TV station would air Rangers games nationally and devalue other baseball TV contracts.

That opened the door for George W. Bush to eventually join a group that would buy the Rangers in 1989. A little research would have helped Toronto hockey writers understand how leagues operate.

Now the Toronto writers are facing a dilemma. What if Quebec City really has the wherewithal to finance a new arena? In 1995, Quebec Nordiques owner Marcel Aubut and Bettman tried to persuade Quebec politicians to come up with public financing for a new arena to replace Le Colisee and failed. Aubut sold the team to Charlie Lyons and Ascent and the franchise ended up in Denver, Colorado.

The Toronto writers have been tearing apart Bettman for years about a perceived perception that Bettman has anti-Canadian stance and never include in their critiques of the “New York lawyer” or the “diminutive” commissioner helped prevent the Edmonton Oilers owner Peter Pocklington from selling his team to Houston sports owner Les Alexander who planned to take the team to Texas in 1998. Bettman also helped broker a deal to keep the Ottawa Senators in the Canadian capital, although technically the Senators home arena is in Kanata, which is west of Ottawa.

Bettman also fought to keep franchises in Pittsburgh, Nashville and Glendale, Arizona (Phoenix). He pushed for Edmonton and Calgary to get a share of the Alberta hockey lottery.

Under Bettman’s watch, Quebec City, Winnipeg and Hartford (three former World Hockey Association teams) have relocated. Quebec City to Denver in 1995, Winnipeg to Phoenix (now Glendale) in 1996 and Hartford to Raleigh, North Carolina in 1997. All three cities simply did not have state of the art 1990s hockey arenas. Connecticut Governor John Rowland, who ended up in prison, seemed smitten with New England Patriots owner Robert Kraft snooping around Hartford looking for a stadium for his National Football League team and didn’t really play ball with Hartford Whalers owner Peter Karmanos.

Rowland not only lost a hockey team but probably Compuware jobs as Karmanos wanted to establish a Connecticut outpost for his computer company.

Rowland lost the Whalers and Kraft never really had any intention of moving his Patriots from the Boston metropolitan area and simply used Rowland as leverage to get a new stadium in Foxboro next to his old stadium. Kraft is further developing that property in Foxboro. He may be using United States government stimulus funding for his project.

The Toronto media, at least one of the hockey fans, er writers, Randy Sportak is urging the NHL to go into Toronto or Hamilton and while Quebec City or Winnipeg would be great additions to the league, Toronto deserves a second team. Sportak is also suggesting that the league move the New York Islanders or the Nashville Predators to southern Ontario.

Lazy journalism on Sportak’s part if he thinks the Islanders will move. Sportak probably has no idea how lucrative the Islanders cable TV deal with Cablevision’s Charles Dolan really is. The deal runs until 2031 and it behooves Dolan, the owner of Madison Square Garden, the National Basketball Association’s Knicks and the NHL’s Rangers and the MSG Network, to keep paying. You see Dolan needs the Islanders to stay in Uniondale or move to the proposed Brooklyn arena or the proposed building that could end up on Shea Stadium’s former site or in the junkyards at Willets Point adjacent to the US National Tennis Center to keep his cable TV franchises on Long island.

Here is how it works. Dolan can go before any town, village or city board on the island in both Nassau and Suffolk County when his cable TV systems franchise licensing agreement is up and say I have two things other cable operators don’t have. The Islanders and News 12. Dolan uses the same strategy in New Jersey with the Devils and News 12. Dolan is a major benefactor of New Jersey Devils hockey.
That is how sports operators. Islanders owner Charles Wang is hoping that he can develop the area around the Nassau Coliseum in Uniondale. If he cannot, you can be sure that New York City Mayor Michael Bloomberg, who found funds for new baseball stadiums for the Yankees and Mets, will be chatting up Brooklyn and Queens with Wang.

No matter how lucrative the Toronto market might be, and this is no slight about Toronto, T. O. is not the Big Apple even if hockey is king in Toronto.
There is no suggestion at present that Nashville is ready to give up on the Predators.

If there is expansion, Quebec City and Winnipeg are on top of the charts for the NHL. In fact, the founder of the Russian-based Kontinental Hockey League Alexander Medvedev, the Deputy Chairman of the Board of Directors of the Russian Gazprom energy company, thinks that Quebec City is long overdue for an NHL team. An expansion of the league would mean a good deal of money for NHL owners. Even if the league sells the franchises for $150 million each, which is probably a low figure, two franchises would mean the NHL owners would split the $300 million 30 ways and give each owner $10 million.

It has not been a good week for the Toronto sports media. Quebec City wants an NHL team and Gary Bettman is listening, the NHL favors expansion over relocation, New Jersey Nets owner Bruce Ratner wants a hockey team in his proposed Brooklyn building, presumably the Islanders, and Ice Edge wants the Coyotes and has a plan to use Saskatoon, Saskatchewan as a second home for five games which should cause the Toronto writers to break out the pom poms again. But Saskatoon is not Southern Ontario nor is Quebec City and that is a problem for the Toronto scribes.

evanjweiner@yahoo.com