NFL's big game against the players starts this week in Minneapolis
TUESDAY, 05 APRIL 2011 11:46
BY EVAN WEINER
NEWJERSEYNEWSROOM.COM
THE BUSINESS AND POLITICS OF SPORTS
Portions of this column are by Evan Weiner and Heather Rascher from ''A Business History of Professional Football,'' unpublished manuscript (2005).
http://www.newjerseynewsroom.com/professional/nfls-big-game-against-the-players-starts-this-week-in-minneapolis
The biggest game on the NFL season starts on April 6 when National Football League owners and the remnants of the now defunct National Football League Players Association face off in a Minneapolis courtroom. In a script that looks like a sequel to the days after the National Football League Players Association imploded in October 1987 when the NFLPA decided to sue NFL owners for free agency, the NFLPA is back in a Minneapolis courthouse and suing NFL owners. Ten players, including one college player who was not even a part of the defunct NFLPA, Von Miller, are suing the league in an antitrust action hoping the court will lift the owners lockout.
Miller's name is on the suit but he is planning to attend the National Football League Draft, an act that restrictions the freedom of college players in finding jobs. The only reason the draft is legal is through collective bargaining. The owners and players have agreed to a draft. Miller plans to be in the courtroom while New Orleans quarterback Drew Brees, one of the 10 plaintiffs, will not attend the opening day festivities. Brees will be at a golf fundraiser.
Brees last week was sounded a conciliatory note to retired and discarded players after being blasted by Sam Huff for criticizing former players who are down and out because of football related injuries. Brees apparently learned well from the late Gene Upshaw (who was the NFLPA Executive Director) who once said that the association could not worry about every problem. While the NFL and the NFLPA duke it out in Minneapolis, the former NFLPA may be involved in another action as former New Orleans and Miami defensive back Gene Atkins is suing the NFL's retirement board after being denied additional health benefits by the group which included the late Dave Duerson. The former defensive back, Duerson, was on the board which said no to Atkins football degenerative claim in 2006. Duerson's suicide in February 2011 raises questions according to the brief filed about Duerson's competence in light of statements that came out after the suicide that he had memory loss and difficulties spelling words.
The NFL and the NFLPA have had more than a half century of issues.
The NFLPA formed in 1956 with help from Creighton Miller, the first General Manager of the Cleveland Browns. Unhappy players in Cleveland and Green Bay assembled a network of "player reps" on each team. The players included Don Shula (Colts), Frank Gifford (Giants), and Norm Van Brocklin (Rams) to represent their teams. The Chicago Bears players did not have a representative. The players first meeting was held in New York in the fall of 1956, after the owners ignored the players' attempts to discuss their requests. The players asked for minimum salaries of $5,000 per season, injury pay, uniform per diems, and for teams to supply their own equipment.
Nothing happened but the players got a big break in 1957 when, the first lawsuit involving professional football and antitrust was filed, Radovich v. NFL, which significantly altered player rights within the league. The case involved a player/coach, George Radovich, who sued the league because the NFL effectively prevented him from attaining employment in the NFL or affiliated leagues, such as the Pacific Coast League, which was in existence at the time. The case was dismissed on the grounds that the NFL was exempted from the antitrust laws, and was appealed to the Supreme Court, which reversed the decision of the trial court, holding professional football subject to the antitrust laws.
The Supreme Court decision changed life for NFL owners. The players could now sue the league on antitrust grounds which they threatened to do. The owners and players settled with the players receiving minimum salaries of $5,000, $50 payment for preseason games, medical coverage for injuries, and a pension.
But the players didn't get what they agreed to and spend the 1958 season chasing the owners to live up to the agreement. The deal was finally signed in 1959.
The players did catch another break when Lamar Hunt started the American Football league and for some college players, they were able to play the NFL off against the AFL in getting some leverage for their initial contract. The AFL-NFL war over established players began in earnest when Pete Gogolak, a kicker on the Buffalo Bills signed a deal with the New York Giants in 1966. What was good for Gogolak and two NFL quarterbacks John Brodie and Roman Gabriel along with Mike Ditka who were been pursued by AFL Commissioner Al Davis to sign with his league was not good for the owners of either league. Brodie, Gabriel and Ditka got raises from their NFL teams. The AFL and NFL announced their intent to merge on June 8, 1966.
The National Football League Players Association wanted to fight the merger but didn't have the funding to do so.
The NFLPA has always been weak and the owners have always known that. The two leagues may have merged, but the player associations did not, as the players on the 16 NFL teams were NFLPA members and the players on the 10 AFL teams were American Football League Players Association members. This caused a major problem in subsequent negotiations as the NFLPA would come to a tentative agreement with the owners on certain collective bargaining issues (such as minimum salaries, retirement age) then the owners would bargain with the AFLPA, who accepted lower terms, which wasn't good for NFLPA members.
There was a brief lockout and a 20-day strike in 1970 that ended just before the 1970 All Star game and which did not result in the cancellation of regular or post-season games, the NFL and NFLPA signed a four-year contract, the first collective bargaining agreement in the history of the NFL, which raised player salary minimums to $12,500 for rookies and $13,000 for veterans, added dental insurance, improved the pension, gave players the right to have agents, gave players representation on the Retirement Board, and provided for impartial arbitration of injury grievances.
(Retired players from that era are still battling the NFL and the NFLPA and the retirement board over injury grievances and the complaining have caught the attention of Congress)
In 1974, the previous CBA was coming to an end. Players were demanding the elimination of the Rozelle Rule and the option clause which kept a player tied to his team in perpetuity unless another team was willing to give up number one draft picks or players to sign a free agent among other things. On July 1, the players went on strike, and were prepared to sit out until a new bargaining agreement was hammered out. The sit-out led to the cancellation of the New York Jets game at New Haven, the first game ever canceled due to a labor impasse. However, by the early part of August, about a quarter of the NFLPA crossed the picket lines, breaking down union solidarity. On August 11, Garvey sent his players back to work after a federal mediator suggested a 14-day cooling off period, instead pursuing the issue through the John Mackey case. The 42-day strike ended that day with nothing gained.
The NFLPA won the Mackey vs. NFL antitrust lawsuit in 1977, but players received only limited free agency with compensation under a new CBA.
On September 21, 1982, NFL players went on strike. It was the longest strike in professional sports in the U.S. at the time and lasted until November 17. The owners responded by locking the players out at the commencement of the strike. During the strike, only 126 of the 224 scheduled regular-season games were played, forcing the league to change the format of post-season play to include 16 teams instead of the usual 10 teams. The players held two "All-Star" games to raise some funding for players without a paycheck. The players got more money but two goals were not met, a form of free agency and more pension money.
The owners were not going to let that happen in 1987.
The players decided to strike after the second week of the season and the NFL reverted to its 1974 tactic of bringing in rookies and free agents and play replacement games. The league canceled the third week's schedule and resumed with the week four match ups.
In 2000, Hollywood made a movie about the 1987 strike called "Replacements," which was based on the Washington Redskins.
Some teams scouted the best available talent and tried to put together a strong replacement team. Other teams took chunks of local semipro teams, like the New York Giants, and hoped for the best. Others like Philadelphia Eagles Coach Buddy Ryan didn't take the replacement games too seriously and wanted for the players to return.
Like in 1974, veterans crossed the picket lines and by October 25, the NFL was able to claim victory. The players reverted to their old standby; plan B that was court action and that set off years of litigation.
"It was a great time and a lot of fun," said Charley Casserly who was part of the Redskins front office at that time. "Really, the interesting thing was we put together a time, the whole organization and Joe Gibbs did a great job coaching them. Nobody crossed the picket line and we beat two teams, St. Louis and Dallas on that climatic Monday Night that had about 10-12 players cross the picket line. The Dallas team had (Tony) Dorsett, Randy White, Danny White, Too Tall Jones. It was quite a time."
The NFL teams who did compete for players for Schramm's replacement league look anyway for players. Casserly found four players in a Richmond, Virginia halfway house who were playing for a minor league team including Tony Robinson who was the quarterback of the replacement team that beat Dallas.
"We did have a little philosophy on it," Casserly continued. "We wanted players that knew the system. We had to put together a team in 10 days to go play a game. Football unlike all other sports is really a team sport. So we wanted guys who knew the Joe Gibbs system. So we started with players who had been in our camp that year and been in our camp the year before and had been in camps with the Gibbs/(Don) Coryell system. We got players from everywhere.
"Obviously NFL cuts, but we got players from Canada, players who were cut in Canada. We wanted players in camp who were healthy and ready to go."
The players crumbled quickly in 1987 but years later Dave Jennings, who was a New York Jets punter at the time, thinks the showdown with the owners was worth it.
"The players were not that interested in a long term strike, they were looking at the next paycheck," said Jennings. "It's tough to get players to strike and stay together. In 1987, it was a shorter strike and we had the court cases working and eventually it worked out for us.
"We got nothing from the 1987 strike, we didn't get anything directly, but indirectly we got free agency and you see what happened. Free agency works."
The players did not get much though in post career benefits. They got their "Money Now" and didn't worry about the long term affect that football would have on their health.
After the conclusion of the 1987 players’ strike, the NFLPA filed an antitrust suit against the owners on October 15, 1987, seeking an injunction against the continuation of the NFL’s player reservation system, and asking for free agency. In (Marvin) Powell (v NFL), filed in the same jurisdiction that heard the Mackey case a decade earlier, the NFLPA claimed that, absent a new agreement, the NFL could not rely upon any “labor exemption” to immunize its player choice and movement restrictions from antitrust laws. Essentially the case considered whether the non statutory labor exemption would continue to protect the RFR system after the expiration of the CBA, and for how long the protection would be extended. In the first phase of the Powell I trial, the NFL argued for exemption based on the theory that the RFR system was entitled to absolute immunity as the subject of mandatory bargaining affecting only parties to the employment relationship. Additionally, the league conversely argued that the survival doctrine, which suggested that the non statutory labor exemption in effect during the term of a CBA survives the expiration of such CBA providing that the conduct at issue was protected during the term of the agreement, protecting the system from antitrust laws indefinitely following the expiration of the CBA.
The absolute immunity theory was rejected by the District Court of Minnesota, which spent more time focusing on the survival doctrine theory, using the Mackey test to determine whether the 1982 CBA qualified for the non statutory labor exemption. Despite the claims of the players that the 1982 CBA was not the product of arm’s length bargaining, the court found that the contrary to be true, and considered whether the CBA then “survived” its expiration due to the fact that it was reached through collective, arm’s length bargaining. The court determined that the CBA would in fact survive the exemption, but still had to determine the length of time such an exemption remains effective.
In January 1988, the district court ruled that the exemption survives the expiration of a CBA, but terminates when the employer and the union reach a bargaining impasse on an issue. Judge David Doty’s decision analyzed the positions of the parties and rejected both arguments, ruling that the “labor exemption related to a mandatory bargaining subject survived expiration of the collective bargaining agreement until the parties reach impasse as to that issue.” Doty indicated an unwillingness to apply the non statutory exemption fully, and ruled that he would not extend “blanket protection to union-employer agreements merely because the challenged activity arises within the context of mandatory collective bargaining.” The decision ultimately favored the owners, allowing them to implement new or different employment terms reasonably contemplated within the scope of the parties’ bargaining history. In Powell I, however, the court could not determine whether the parties had in fact reached an impasse, as it was awaiting an NLRB ruling on NFL charges that the players’ union was not bargaining in good faith.
The NLRB ruled in April 1988, dismissing the owner’s charges of bad faith bargaining, and finding the NFLPA was not required to continue to meet and bargain with the NFL because the parties had reached an impasse in negotiations. In June of 1988, after hearing the motions, the court rendered its decision that the parties had in fact reached an impasse over the free agency issue and that the system of restraints on player movement was now subject to antitrust laws.
The NFLPA decertified in 1989. It no longer represented NFL players and would never do so in the future. (The 2011 NFL complaint to the National Labor Relations Board pointed out that the present NFLPA had decertification as a tool in their toolkit and planned to use it all along in bargaining with the owners and would blow up collective bargaining talks and run to court.)
The players sought an injunction against the use of the RFR system in Powell II, and the owner’s contested the injunction and the court’s earlier ruling. The court ruled that the non statutory labor exemption no longer protected the RFR system from antitrust review, but agreed with the owners that it had no legal authority by which to grant an injunction. Thus the first two phases of Powell set the stage for Powell III, to determine whether the RFR system did in fact violate antitrust laws.
In the final phase of Powell, the NFL filed an interlocutory appeal in the 8th Circuit seeking an order reviving the exemption, reiterating its earlier argument that the labor law should prevail. The players argued that an agreement with the League would in essence overturn the court’s earlier decision in Mackey. The court determined that both parties have a continuing obligation to bargain with one another in furtherance of the collective bargaining process and to maintain a peaceful labor relationship. Further, upon impasse, the courts ruled that the League may exercise its discretion in implementing new or different employment terms within the scope of the parties’ pre-impasse proposals. Finally, the court disagreed with the ruling in Powell II, and ruled to allow the players to unilaterally generate an impasse in order to subvert the non statutory labor exemption and to pursue an antitrust suit for damages. The court then determined that the exemption would survive until a collective bargaining relationship no longer existed, forcing the players back into a bargaining process in which they historically operated at a disadvantage. The court instead suggested that the players resolve a dispute by 1) collective bargaining, 2) using economic force, or 3) reporting their claims to the NLRB.
The NFL appealed and Doty’s finding was overruled. In November 1989, the Appeals court reversed the earlier court’s ruling stating that as long as the players had a union that they could not sue under the antitrust laws (according to rulings involving the dual approach of collective bargaining and antitrust laws). The 8th Circuit Court of Appeals found that, since bargaining was continuing, the labor exemption was still in effect, and overturned Doty’s view and found the restraints in Powell were “exempted from antitrust scrutiny as the exemption survived impasse.” The court ruled that these practices remained within the non statutory labor exemption as long as the NFL and NFLPA maintained an “ongoing collective bargaining relationship”, and that the players could not pursue antitrust claims during collective bargaining. A federal jury subsequently awarded damages and unrestricted free agency to four plaintiffs. Thus, in the aftermath of Powell, the NFLPA decertified, and challenged the NFL’s restraints on antitrust grounds, setting the stage for further litigation.
In 1988, the Washington Redskins signed Wilbur Marshall, paying a steep price ($6 million for 5 years) for his contract, and having to give up their first-round draft choices in 1988 and 1999 as compensation to the Chicago Bears — a penalty that discouraged future deals. In effect, the player’s old team maintains the right of first refusal whereby it can match any offer made to the player by another club, and any team which ultimately signs the player must compensate the old team with draft choices, costing teams at least two first round draft choices to sign most top level free agents, such as what occurred with Wilbur Marshall.
McNeil v. National Football League with Freeman McNeil of Jets as lead plaintiff, involved free agency and related antitrust claims. Prior to the trial in June 1992, the parties filed a number of pretrial motions, the most important of which was the players’ motion for partial summary judgment to strike the owners’ labor exemption defense. The players argued that because the union had officially been decertified, the non statutory labor exemption no longer barred an antitrust challenge to Plan B, thus allowing the jury to consider the case under the Sherman Act. Further, the players’ argued that by abandoning the union they had been placed at a significant bargaining disadvantage, as the owners had used the player association’s non-union status to strip the players of insurance benefits and to extend the playing season. In its defense, the NFL relied on competitive balance arguments saying that the restrictions on free agency were necessary. The League also claimed that the NFLPA continued to function as the official bargaining representative for the players despite decertification, and, regardless of the union’s status as certified or decertified, the non statutory labor exemption still remained in effect.
In the Powell case, the court provided no guidance as to a specific time or event that would eliminate the exemption, and that the court rejected the owners’ contention that the exemption should extend indefinitely. Moreover, the court rejected the owner’s claims that the NFLPA and the players’ union separation via decertification was not valid considering that the NLRB did not decertify the NFLPA. Both parties moved for summary judgment on several fronts. The NFL denied that it could act as a monopoly and violate the Sherman Act, as it was simply a conglomeration of co-owners that were engaged in the common business of producing and marketing professional football for entertainment; the court rejected this claim. Moreover, the NFL claimed that Plan B did not violate antitrust laws, and even if it did the players were not entitled to any damages. The court denied the owners’ motion, holding the owners liable for “antitrust damages from the date the collective bargaining relationship between the union and the league was terminated, but agreeing with the owners that the League was not itself a monopoly. The court did, however, deny the players’ motion for summary judgment concerning the application of the per se rule.
The sides even argued over the jury selection, which was comprised of eight women, none of whom watched professional football. The NFL realized that the odds were not in their favor, and continued to try to convince the jury that under Plan B all parties flourished and that unrestricted free agency would financially ruin many teams in the league. In September 1992, the jury verdict in the McNeil case found that the NFL owners’ restrictions in Plan B were unreasonable restraints of trade in violation of the Sherman Act. The jury also ruled that Plan B resulted in many players being under compensated, and that competitive balance could be preserved with a more liberal system. The jury awarded damages to four of the eight plaintiffs (not McNeil) totaling $543,000 (which was trebled to $1.63 million as per antitrust laws). While damages to the players were minimal, the case opened the door for free agency in football. However, total free agency was not approved by the courts, which ruled that some restrictions were necessary to maintain competitive balance.
The jury’s verdict effectively destroyed Plan B, sending the parties back to the bargaining table. Settlement talks began because both sides had leverage and something to lose. Both sides were victorious, in that the players were freed from Plan B, but did not get unrestricted free agency. The NFL had a few choices: implement another plan that was sufficiently different than Plan B (because only Plan B was enjoined), or it could hope for a reversal on appeal of the McNeil case and continue with Plan B.
Although both parties returned to the bargaining table, they were soon engaged in further legal disputes involving the noncompetitive effects of the League on its players. Aware that it would take time for the McNeil ruling to take effect, the players involved in the dispute remained unsigned at the time of the verdict (September 1992). These players subsequently filed suit, Jackson v. NFL, attempting to be freed from operating under the Plan B system and seeking damages for financial injuries suffered due to the restrictive nature of the system. The case was lead by Keith Jackson of the Philadelphia Eagles, and the remaining nine players involved in the suit included D.J. Dozier, Thomas Everett, Louis Lipps, Stephone Paige, Joseph Phillips, Webster Slaughter, Natu Tuatagoloa, Garin Veris, and Leon White. Before the court could rule on the case, six of the ten players were either released or traded, leaving only four players restricted by Plan B. The court allowed the players five days to sign contracts with other clubs, all of which did, and, because there were no other players that were unsigned or were restricted by Plan B. As such, the case was dismissed by Judge Doty, and left the league with the sense that the courts were now behind the players.
Following the McNeil verdict, a new antitrust lawsuit was filed on behalf of all NFL players – White v. NFL challenging the continued implementation of these or similar unreasonable restraints on competition for player services. The White case was lead by Reggie White, a tight end for the Philadelphia Eagles, who filed the case on behalf of himself and any other player who would play or played in the NFL. The case sought to permanently enjoin the future enforcement of Plan B or any other system, the draft, preseason pay, and the NFL owners’ refusal of negotiating individual benefit packages. In January 1993, the NFL owners agreed to a global settlement of the White class action and other player suits, which granted NFL players, for the first time, the opportunity to be unrestricted free agents, with substantial increases in compensation in a now competitive market. These settlements resulted in payments of $195 million in damages. In exchange for these substantial benefits, the NFL players’ class agreed to a salary cap system.
There was a poison pill in the settlement that kept labor peace for 18 years.
The owners had a salary cap and the players would become free agents after four years of work instead of six seasons. The final year of the collective bargaining agreement, if either side pulled out of the pact, would see players free agency start at six years while the owners would cede the salary cap. That clause was important because neither side wanted to give up a significant piece of leverage as the most players never even get to four years service and the owners could control players costs.
The owners blew up the contract in May 2008 after a number of extensions. The owners no longer wanted to share nearly 60 percent of the industry's revenues with the players.
The post 1993 era players would enjoy far better post career pension and health benefits than those who were in the league before the 1993 season if they got vested. But former players are not getting too much help from the NFL and the NFLPA (or whatever form that the association is claiming today — this was a group who swore in the 1990s that it would never again represent NFL players and yet reformed) — Are all NFL players going to get real post retirement health benefits and if a player is physically disabled because of an injury or injuries suffered on the field, will the players association take care of medical bills or will the disability board turn down the former player forcing that player to seek government programs to pay for medical bills when the owners and players finally get a new agreement--which will happen eventually.
Will the NFL retirement and disability board take care of them? In the case of Johnny Unitas and many other players, they answer was no. Apparently players had a choice, retirement benefits or disability benefits. In Unitas' case, the retirement checks stopped when he took disability payments.
What happens if an NFL career lasts just a year before benefits really kick in? Who takes care of that player if in that one year of NFL play something happens that won't kick up until years after the career is done but can be traced back to football?
Will the United States Government be responsible for football related injuries? The answer to that question is yes and it doesn't matter if you are for health care or against it or you want social security or are looking to gut the system. That's why Congress is taking a closer look at the violent world of football.
One former player is claiming that owners don't want to pay medical and disability payments to former players and that the players association has gone along with the owners and not helped disabled players.
Another question. Is the Department of Labor's assertion that the NFL Retirement and Disability Board paying more attention to hiring lawyers and spending money there instead on former players with disabilities true?
The players should be looking into that.
The National Football League Players Association has put out some information saying it has spent $13 million or so to help out disabled players. A little while ago, the former Interim Director of the NFLPA Richard Berthelsen who was the association's general counsel for years took issue with the comment that the former Executive Director, the late Gene Upshaw, did very little to help out former players like John Mackey in times of need. Berthelsen said nobody did more for Mackey than Upshaw. The league and the players have a program, Plan 88 (Mackey's old number with the Baltimore Colts) that was added to the Collective Bargaining Agreement in 2007 providing eligible retired players with up to $88,000 per year for medical and custodial care resulting from dementia or Alzheimer's.
Mackey, the former President of the National Football League Players Association, is suffering from front temporal dementia. The NFL Players Association initially refused to pay a disability income due because some doctors have concluded there is no proven link between brain injury and playing football.
The battle between former players and the football industry over whether playing football causes brain injuries continues.
The "Big Game" in Minneapolis is just a part of the clash between owners, players and retired players in the major ongoing football battles.
Evan Weiner, the winner of the United States Sports Academy's 2010 Ronald Reagan Media Award, is an author, radio-TV commentator and speaker on "The Politics of Sports Business." His book, "The Business and Politics of Sports, Second Edition is available at bickley.com, Barnes and Noble or amazonkindle.
Tuesday, April 5, 2011
Sunday, April 3, 2011
Fiesta Bowl allegations just another Arizona public policy failure
By Evan Weiner
April 3, 2011
http://www.examiner.com/business-of-sports-in-national/fiesta-bowl-allegations-just-another-arizona-public-policy-failure
(New York, N. Y.) -- If you want to see where everything that could possibly go wrong in government spending for sports facilities, you need to look no further that the Phoenix, Arizona area. In a bid to make the Valley of the Sun one of the most prominent sports areas in the country, local politicians have spent more than a billion dollars of public funding to build two arenas, one Major League Baseball park, numerous baseball spring training facilities and a football stadium.
The Valley of the Sun was a sleepy sports setting until the late 1980s. As people moved to the Phoenix area, someone got the idea that Phoenix should have more "big time" sporting options than the National Basketball Association Suns. No, the area needed to become "major league" and getting a National Football League franchise, a Major League Baseball team and a National Hockey League squad would do the trick. The Suns, major college baseball and the mid-level Fiesta Bowl were not enough.
It hasn't financially worked out all that well for Phoenix, Scottsdale, Mesa, Tempe and Glendale. The sacking of Fiesta Bowl chief executive John Junker along with two other top officials could open a Pandora’s box of problems for Glendale, the Fiesta Bowl and the (college football's) Bowl Championship Series for Arizona politicians who allegedly accepted gifts from Junker.
Arizona elected officials have to abide by state laws, which included an “entertainment ban” that prohibits, state employees and elected officials from accepting tickets or "admission to any sporting or cultural event" for free.
The Junker situation could ensnare Arizona elected officials for ethics violations and could be an opening for Congress to investigate the Bowl Championship Series (and maybe tax exemptions that members of the National Collegiate Athletic Association enjoy).
Oddly enough the gadflies at The Goldwater Institute have sat on their hands and have been mum about the Fiesta Bowl revelations, which is so unlike them. The Goldwater Institute doesn't want Glendale to sell bonds to help complete the sale of the NHL's Phoenix Coyotes to a Chicago businessman nor do they seem to care that things didn't work out attendance wise for the Los Angeles Dodgers and the Chicago White Sox during the 2011 Cactus League Spring Training part of the baseball season at the new Glendale baseball park.
Overall, spring training baseball attendance was off in the Valley of the Sun.
How did Arizona politicians get into the sports business and when did they go wrong? It started about a quarter of a century ago when Phoenix started to experience a population growth. Urban planners and historians should study the entire history of the “big time sports industry” of the Phoenix area because no city or region has been dumber than Phoenix area politicians.
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 (The Islanders real estate deal is still festering with present owner Charles Wang apparently shelving an arena-village concept and Hempstead Supervisor Kate Murray not approving the project for reasons only known to Supervisor Murray).
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. Eventually Ellman's partner Jerry Moyes took control of the team and hemorrhaged money and the NHL now owns the team. Moyes and the league battled after Moyes got Canadian investor Jim Balsillie to buy the team. The NHL stopped the sale and the confrontation ended up in court when a Phoenix judge said the NHL had the right to control individual franchises in terms of sale and market. The franchise remained in Glendale and Balsillie's plan to move the franchise to Hamilton, Ontario fell through.
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.
Last fall, Colangelo was back in business in the Valley of the Sun in Glendale. Colangelo wanted to build the USA Basketball headquarters in Glendale and why not? Glendale had an open checkbook for Bidwill, Burke, Reinsdorf's White Sox, the McCourt's Dodgers. But Colangelo is miffed that financing for his headquarters has not come about. But Colangelo left the door open for Glendale (in government sports financing you never close a door) to get someone with money to build a headquarters.
Funny, the Goldwater Institute is not commenting on Colangelo. It must be that Goldwater's trustees don't like the Canadian sport of hockey while American sports like baseball, football and basketball (even if it was invented by a Canadian, Dr. James Naismith) are fleecing Glendale.
Meanwhile Glendale had another problem in 2010. 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 that 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 Sports business is pretty simple have the politicians get involved and make financial guarantees. It has been a good formula for sports owners and players but not so good for taxpayers who have a financial stake in the sports industry whether they watch games or not.
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
By Evan Weiner
April 3, 2011
http://www.examiner.com/business-of-sports-in-national/fiesta-bowl-allegations-just-another-arizona-public-policy-failure
(New York, N. Y.) -- If you want to see where everything that could possibly go wrong in government spending for sports facilities, you need to look no further that the Phoenix, Arizona area. In a bid to make the Valley of the Sun one of the most prominent sports areas in the country, local politicians have spent more than a billion dollars of public funding to build two arenas, one Major League Baseball park, numerous baseball spring training facilities and a football stadium.
The Valley of the Sun was a sleepy sports setting until the late 1980s. As people moved to the Phoenix area, someone got the idea that Phoenix should have more "big time" sporting options than the National Basketball Association Suns. No, the area needed to become "major league" and getting a National Football League franchise, a Major League Baseball team and a National Hockey League squad would do the trick. The Suns, major college baseball and the mid-level Fiesta Bowl were not enough.
It hasn't financially worked out all that well for Phoenix, Scottsdale, Mesa, Tempe and Glendale. The sacking of Fiesta Bowl chief executive John Junker along with two other top officials could open a Pandora’s box of problems for Glendale, the Fiesta Bowl and the (college football's) Bowl Championship Series for Arizona politicians who allegedly accepted gifts from Junker.
Arizona elected officials have to abide by state laws, which included an “entertainment ban” that prohibits, state employees and elected officials from accepting tickets or "admission to any sporting or cultural event" for free.
The Junker situation could ensnare Arizona elected officials for ethics violations and could be an opening for Congress to investigate the Bowl Championship Series (and maybe tax exemptions that members of the National Collegiate Athletic Association enjoy).
Oddly enough the gadflies at The Goldwater Institute have sat on their hands and have been mum about the Fiesta Bowl revelations, which is so unlike them. The Goldwater Institute doesn't want Glendale to sell bonds to help complete the sale of the NHL's Phoenix Coyotes to a Chicago businessman nor do they seem to care that things didn't work out attendance wise for the Los Angeles Dodgers and the Chicago White Sox during the 2011 Cactus League Spring Training part of the baseball season at the new Glendale baseball park.
Overall, spring training baseball attendance was off in the Valley of the Sun.
How did Arizona politicians get into the sports business and when did they go wrong? It started about a quarter of a century ago when Phoenix started to experience a population growth. Urban planners and historians should study the entire history of the “big time sports industry” of the Phoenix area because no city or region has been dumber than Phoenix area politicians.
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 (The Islanders real estate deal is still festering with present owner Charles Wang apparently shelving an arena-village concept and Hempstead Supervisor Kate Murray not approving the project for reasons only known to Supervisor Murray).
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. Eventually Ellman's partner Jerry Moyes took control of the team and hemorrhaged money and the NHL now owns the team. Moyes and the league battled after Moyes got Canadian investor Jim Balsillie to buy the team. The NHL stopped the sale and the confrontation ended up in court when a Phoenix judge said the NHL had the right to control individual franchises in terms of sale and market. The franchise remained in Glendale and Balsillie's plan to move the franchise to Hamilton, Ontario fell through.
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.
Last fall, Colangelo was back in business in the Valley of the Sun in Glendale. Colangelo wanted to build the USA Basketball headquarters in Glendale and why not? Glendale had an open checkbook for Bidwill, Burke, Reinsdorf's White Sox, the McCourt's Dodgers. But Colangelo is miffed that financing for his headquarters has not come about. But Colangelo left the door open for Glendale (in government sports financing you never close a door) to get someone with money to build a headquarters.
Funny, the Goldwater Institute is not commenting on Colangelo. It must be that Goldwater's trustees don't like the Canadian sport of hockey while American sports like baseball, football and basketball (even if it was invented by a Canadian, Dr. James Naismith) are fleecing Glendale.
Meanwhile Glendale had another problem in 2010. 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 that 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 Sports business is pretty simple have the politicians get involved and make financial guarantees. It has been a good formula for sports owners and players but not so good for taxpayers who have a financial stake in the sports industry whether they watch games or not.
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
Wednesday, March 30, 2011
Opening Day: Baseball season is here
WEDNESDAY, 30 MARCH 2011 12:29
BY EVAN WEINER
NEWJERSEYNEWSROOM.COM
THE BUSINESS AND POLITICS OF SPORTS
http://www.newjerseynewsroom.com/professional/opening-day-baseball-season-is-here
It's late March and means it is the start of the Major League Baseball season. It appears the "National Pastime" enters the 2011 season in pretty good shape. The owners and players are not even talking about the end of the industry's collective bargaining agreement in December unlike the more than two year lead up to the National Football League owners lockout or the potential National Basketball Association owners lockout that could happen on July 1.
The baseball part of the sports industry does have some significant problems. The Fred Wilpon-Saul Katz owned New York Mets may be suffering from some serious financial problems. Wilpon and Katz are caught up in the Bernard Madoff financial ponzi scheme and have been trading barbs with the lawyer in charge of getting back some of the funds that the victims lost in the Madoff episode. Wilpon and Katz are fighting with Irving Picard (no relation to the fictional Arthur Picard for was auditioning for the role of Adolph Hitler in Springtime for Hitler in Mel Brooks' The Producers, Picard was the lead tenor for the Albuquerque Opera Company for two seasons) with the dialogue between the three men seemingly coming out of The Producers in some ways.
Picard wants Wilpon and Katz's money and that could be causing some major problems for the Mets. Wilpon and Katz are offering a minority share of the Mets to any interested and well heeled investor or investors.
There won't be a “Springtime for Mets Fans" this season.
Eventually the Wilpon-Katz financial situation will be resolved although baseball people are greasing the skids for a Wilpon-Katz exit. People like Frank Robinson who asserted that the Mets situation is worse than the departed Montreal Expos when he managed the club which was owned by Major League Baseball and Tim McCarver.
While Bialystock-Bloom, rather Wilpon and Katz work out their financial problems off-Broadway in Queens, the messy McCourt divorce is still impacting the Los Angeles Dodgers. There is nothing Major League Baseball Commissioner Bud Selig can do until the McCourt divorce is finalized and once that happens there will be a direction to resolve the Dodgers ownership problem.
The Mets and Dodgers problems are temporary though. There are other areas that need to be addressed and some of the difficulties are beyond the control of Bud Selig and Major League Baseball.
Oakland A's owner Lew Wolff is still looking for a new ballpark after not being able to build a "baseball park village" on land near the Oakland Coliseum. Wolff also was not successful in getting a "baseball park-village" constructed down the I-880 south of Oakland in Fremont. Wolff has been asking Selig the same question that Burt Bacharach and Hal David through Dionne Warwick thought about in 1968 (coincidentally the year Charles Finley took his A's from Kansas City to Oakland).
"Do you know the way to San Jose?"
The answer from Selig seems to be I am not sure. Selig appointed a committee to study the issue more than a year ago because the San Francisco Giants ownership claims the San Jose territory as the team's own. There are some flaws in that thinking, Oakland is closer to San Francisco than San Jose. San Jose area residents twice rejected Giants ownership in stadium referendums.
The Giants reluctance to allow Wolff to move is buttressed in part by the 1922 Supreme Court ruling that gave the National League of Baseball an antitrust exemption because baseball was a game not an interstate business.
The 1922 SCOTUS decision has kept a third team out of the New York City area and has shut out New Jersey in the running to get a Major League Baseball team. There is no way the Steinbrenner family of Wilpon and Katz would ever allow a third team in the area and it is possible the Philadelphia Phillies franchise would also object to a New Jersey team.
California is broke and it may be difficult to get state aid as Governor Jerry Brown wants to get rid of redevelopment agencies funding. That could put a crimp in Wolff's plan to find a way to San Jose.
Another west coast problem, this time the Florida west coast, is the ongoing want for Tampa Bay Rays franchise owner Stuart Sternberg's want for a new stadium, preferably in Tampa not St. Petersburg. Major League Baseball Commissioner Peter Ueberroth in the late 1980s told St. Petersburg not to build a stadium. The stadium was built anyway and MLB eventually awarded the city a team in 1995. St. Petersburg signed a 30-year lease with then Devil Rays owner Vince Naimoli starting with the 1998 season and ending in 2027. Sternberg is stuck with the lease.
St. Petersburg elected officials will not let Sternberg out of the lease, at least not at the moment.
There was a rumor around that Major League Baseball would simply contract the Tampa Bay and Oakland franchises with Sternberg taking over the Mets from Wilpon and Katz and Wolff would end up with the Dodgers franchise. The lease in St. Petersburg runs through 2027 and Wolff is committed to Oakland through 2013. The Major League Baseball Players Association will not let 50 jobs go without a fight and then there is Congress. It is unlikely Congress would leave what is left of the 1922 SCOUS ruling if MLB decides to knock off two teams.
New Jersey has a cable TV contract that is available that would blow out Tampa or the San Francisco Bay Area. Cities like Las Vegas and Portland might go after a team and San Jose is in the mix.
But the Mets, Dodgers, A's and Rays may be minor problems for Selig, the former owner of the Milwaukee Brewers, and the Barons of Baseball. Newly elected Republican governors in Wisconsin, Ohio and Florida could have a devastating impact on the bottom line with draconian cuts to public workers and ill-advised policy decisions that have chased business away from those states.
Elections have consequences and in Milwaukee, Brewers owner Mark Attanasio and NBA Bucks owner (Wisconsin Senator) Herb Kohl must be thinking about how much of a hit their businesses will take because the Republican candidate and now Wisconsin Governor elect Scott Walker didn't like a federal funded high speed train project that would have connected Madison with Milwaukee. This decision took place before Walker was Governor and before the February 14th changes in the working conditions for public employees and the explosion and backlash against Walker and Wisconsin Republicans over the ending of collective bargaining for public sector employees.
Why did Walker kill the high speed rail? It was a waste of money.
Funny Republican President Dwight D. Eisenhower during his two terms between 1953 and 1961 understood the value of infrastructure and built the highway system in the country. The Eisenhower built infrastructure is crumbling from neglect and politicians are killing infrastructure projects that are badly needed because the projects are too costly.
At least that is the reason given -- a waste of money.
Draw your own conclusions depending on what side of the aisle or if you are a member of the red or blue team.
Walker apparently isn't a big fan of mass transit based on his eight-year record as Milwaukee County Executive and called the $810 million project a waste of money. Outgoing Democratic Governor Jim Doyle ordered a stop to the project prior to leaving office which Walker approved. But here is the problem that Walker faces and here is where the Milwaukee business community should be up in arms along with voters. The end of the project will eventually cost Milwaukee construction jobs and ended the Spanish company Talgo's deal with the city to build a Wisconsin headquarters in the city in a shuttered warehouse in a depressed section of town where the trains would be assembled.
The Madison to Milwaukee or Milwaukee to Madison high speed trains would have started operating in 2013. Walker had run on a platform that would create jobs. His decision could ultimately cost Wisconsin 4,000 or so jobs and for sports teams, that means a loss of potential customers in a small market. Walker wants the money for road improvements but the feds want the rail line and the feds were willing to pick up most of the maintenance costs on the rail line.
That is not good for Attanasio's business nor is it good for Kohl's fiscally ailing franchise. Selig has said nothing.
Walker also lost another major business because of the political climate in Wisconsin.
Invenergy, a Chicago company, plan to build a large wind power project south of Green Bay went by the boards in the middle of March. Walker proposed a bill that would clamp down on wind power and that was the deal breaker. Again, Walker has chased jobs away. That is not good news for MLB or the NBA. Walker apparently has taken down the "Open for Business" sign not only in Wisconsin but globally. In Spain, one company knows Walker's state is not welcoming their business and all the publicity surrounding Walker and the state Republicans has not made a favorable impression.
In Sternberg's backyard, Governor Rick Scott nixed a high speed rail between Tampa and Orlando. Scott gave up $2.4 billion in federal funding and cost the region 30,000 jobs. The western part of the high speed rail region, near Orlando, was profiled on the CBS show "60 Minutes" and CBS reported that the child poverty level is reaching near 25 percent in that area. In this climate Scott nixed job creation and seems to be at war with teachers. He, like a lot of other political leaders, is on a crusade to cut education and reduce teaching jobs along with other public sector jobs. But there seems to be a major, major flaw in the theory. The more you lay off people, the less tax revenue you raise and you still have to take care of these people in some manner. Scott is a highly unpopular governor and has people in his party, the Republicans, irate with his high speed rail decision.
It cost Florida jobs.
These people spend money in their community, use local stores and those local stores will have less revenues coming in and there will be less taxes available to government to pay for needed services.
It's economy 101.
The decisions by Walker in Wisconsin, Scott in Florida, and Governor Rick Snyder in Michigan will impact Major League Baseball for years. Detroit has lost 25 percent of its population in the last 10 years. Snyder has taken a page from Walker and Scott governing his state. Take money away from the working class and you have less discretionary income for baseball teams. Take away health benefits from fired workers and they will not go to doctors and dentists, people who have money to buy higher priced tickets. Ask your doctor or dentist how business is and they will tell you it is down because people don't have health benefits after losing their jobs.
Major League Baseball has found out that too.
Business was down too slightly in spring training as 12 of the 15 Arizona based spring training clubs including the "team" that allegedly is the strongest followed team in Arizona, the Chicago Cubs, lost customers. In Florida, the attendance for the 15 MLB clubs based in the state dropped by about one percent. MLB attendance has dropped since 2007 (79.5 million customers to 73 million in 2010) but in some cases new stadiums which opened had fewer seats and more luxury boxes (Yankees) but corporate buying has fallen off since the crash of 2008. It remains to be seen how the 2011 numbers will be although within the first month of the season, there should be an indicator on how the season will shape up financially.
The sport is in great shape away from the park with big money TV deals with the over-the-air Rupert Murdoch FOX entity and all sorts of local cable deals (the YES Network is a cash cow locally, SNY does rather well and Comcast has no complaints about the deal the cable behemoth has with the Philadelphia Phillies. The Boston Red Sox still own the majority of the New England Sports Network and mlb.com is making a ton of money. Marketing partners have not fled baseball and franchise values are still high with the New York Yankees leading the way. Baseball's biggest problems are not the Wilpon-Katz Mets or the McCourts Dodgers.
It's the economy stupid.
Evan Weiner, the winner of the United States Sports Academy's 2010 Ronald Reagan Media Award, is an author, radio-TV commentator and speaker on "The Politics of Sports Business." His book, "The Business and Politics of Sports, Second Edition is available at bickley.com, Barnes and Noble or amazonkindle
WEDNESDAY, 30 MARCH 2011 12:29
BY EVAN WEINER
NEWJERSEYNEWSROOM.COM
THE BUSINESS AND POLITICS OF SPORTS
http://www.newjerseynewsroom.com/professional/opening-day-baseball-season-is-here
It's late March and means it is the start of the Major League Baseball season. It appears the "National Pastime" enters the 2011 season in pretty good shape. The owners and players are not even talking about the end of the industry's collective bargaining agreement in December unlike the more than two year lead up to the National Football League owners lockout or the potential National Basketball Association owners lockout that could happen on July 1.
The baseball part of the sports industry does have some significant problems. The Fred Wilpon-Saul Katz owned New York Mets may be suffering from some serious financial problems. Wilpon and Katz are caught up in the Bernard Madoff financial ponzi scheme and have been trading barbs with the lawyer in charge of getting back some of the funds that the victims lost in the Madoff episode. Wilpon and Katz are fighting with Irving Picard (no relation to the fictional Arthur Picard for was auditioning for the role of Adolph Hitler in Springtime for Hitler in Mel Brooks' The Producers, Picard was the lead tenor for the Albuquerque Opera Company for two seasons) with the dialogue between the three men seemingly coming out of The Producers in some ways.
Picard wants Wilpon and Katz's money and that could be causing some major problems for the Mets. Wilpon and Katz are offering a minority share of the Mets to any interested and well heeled investor or investors.
There won't be a “Springtime for Mets Fans" this season.
Eventually the Wilpon-Katz financial situation will be resolved although baseball people are greasing the skids for a Wilpon-Katz exit. People like Frank Robinson who asserted that the Mets situation is worse than the departed Montreal Expos when he managed the club which was owned by Major League Baseball and Tim McCarver.
While Bialystock-Bloom, rather Wilpon and Katz work out their financial problems off-Broadway in Queens, the messy McCourt divorce is still impacting the Los Angeles Dodgers. There is nothing Major League Baseball Commissioner Bud Selig can do until the McCourt divorce is finalized and once that happens there will be a direction to resolve the Dodgers ownership problem.
The Mets and Dodgers problems are temporary though. There are other areas that need to be addressed and some of the difficulties are beyond the control of Bud Selig and Major League Baseball.
Oakland A's owner Lew Wolff is still looking for a new ballpark after not being able to build a "baseball park village" on land near the Oakland Coliseum. Wolff also was not successful in getting a "baseball park-village" constructed down the I-880 south of Oakland in Fremont. Wolff has been asking Selig the same question that Burt Bacharach and Hal David through Dionne Warwick thought about in 1968 (coincidentally the year Charles Finley took his A's from Kansas City to Oakland).
"Do you know the way to San Jose?"
The answer from Selig seems to be I am not sure. Selig appointed a committee to study the issue more than a year ago because the San Francisco Giants ownership claims the San Jose territory as the team's own. There are some flaws in that thinking, Oakland is closer to San Francisco than San Jose. San Jose area residents twice rejected Giants ownership in stadium referendums.
The Giants reluctance to allow Wolff to move is buttressed in part by the 1922 Supreme Court ruling that gave the National League of Baseball an antitrust exemption because baseball was a game not an interstate business.
The 1922 SCOTUS decision has kept a third team out of the New York City area and has shut out New Jersey in the running to get a Major League Baseball team. There is no way the Steinbrenner family of Wilpon and Katz would ever allow a third team in the area and it is possible the Philadelphia Phillies franchise would also object to a New Jersey team.
California is broke and it may be difficult to get state aid as Governor Jerry Brown wants to get rid of redevelopment agencies funding. That could put a crimp in Wolff's plan to find a way to San Jose.
Another west coast problem, this time the Florida west coast, is the ongoing want for Tampa Bay Rays franchise owner Stuart Sternberg's want for a new stadium, preferably in Tampa not St. Petersburg. Major League Baseball Commissioner Peter Ueberroth in the late 1980s told St. Petersburg not to build a stadium. The stadium was built anyway and MLB eventually awarded the city a team in 1995. St. Petersburg signed a 30-year lease with then Devil Rays owner Vince Naimoli starting with the 1998 season and ending in 2027. Sternberg is stuck with the lease.
St. Petersburg elected officials will not let Sternberg out of the lease, at least not at the moment.
There was a rumor around that Major League Baseball would simply contract the Tampa Bay and Oakland franchises with Sternberg taking over the Mets from Wilpon and Katz and Wolff would end up with the Dodgers franchise. The lease in St. Petersburg runs through 2027 and Wolff is committed to Oakland through 2013. The Major League Baseball Players Association will not let 50 jobs go without a fight and then there is Congress. It is unlikely Congress would leave what is left of the 1922 SCOUS ruling if MLB decides to knock off two teams.
New Jersey has a cable TV contract that is available that would blow out Tampa or the San Francisco Bay Area. Cities like Las Vegas and Portland might go after a team and San Jose is in the mix.
But the Mets, Dodgers, A's and Rays may be minor problems for Selig, the former owner of the Milwaukee Brewers, and the Barons of Baseball. Newly elected Republican governors in Wisconsin, Ohio and Florida could have a devastating impact on the bottom line with draconian cuts to public workers and ill-advised policy decisions that have chased business away from those states.
Elections have consequences and in Milwaukee, Brewers owner Mark Attanasio and NBA Bucks owner (Wisconsin Senator) Herb Kohl must be thinking about how much of a hit their businesses will take because the Republican candidate and now Wisconsin Governor elect Scott Walker didn't like a federal funded high speed train project that would have connected Madison with Milwaukee. This decision took place before Walker was Governor and before the February 14th changes in the working conditions for public employees and the explosion and backlash against Walker and Wisconsin Republicans over the ending of collective bargaining for public sector employees.
Why did Walker kill the high speed rail? It was a waste of money.
Funny Republican President Dwight D. Eisenhower during his two terms between 1953 and 1961 understood the value of infrastructure and built the highway system in the country. The Eisenhower built infrastructure is crumbling from neglect and politicians are killing infrastructure projects that are badly needed because the projects are too costly.
At least that is the reason given -- a waste of money.
Draw your own conclusions depending on what side of the aisle or if you are a member of the red or blue team.
Walker apparently isn't a big fan of mass transit based on his eight-year record as Milwaukee County Executive and called the $810 million project a waste of money. Outgoing Democratic Governor Jim Doyle ordered a stop to the project prior to leaving office which Walker approved. But here is the problem that Walker faces and here is where the Milwaukee business community should be up in arms along with voters. The end of the project will eventually cost Milwaukee construction jobs and ended the Spanish company Talgo's deal with the city to build a Wisconsin headquarters in the city in a shuttered warehouse in a depressed section of town where the trains would be assembled.
The Madison to Milwaukee or Milwaukee to Madison high speed trains would have started operating in 2013. Walker had run on a platform that would create jobs. His decision could ultimately cost Wisconsin 4,000 or so jobs and for sports teams, that means a loss of potential customers in a small market. Walker wants the money for road improvements but the feds want the rail line and the feds were willing to pick up most of the maintenance costs on the rail line.
That is not good for Attanasio's business nor is it good for Kohl's fiscally ailing franchise. Selig has said nothing.
Walker also lost another major business because of the political climate in Wisconsin.
Invenergy, a Chicago company, plan to build a large wind power project south of Green Bay went by the boards in the middle of March. Walker proposed a bill that would clamp down on wind power and that was the deal breaker. Again, Walker has chased jobs away. That is not good news for MLB or the NBA. Walker apparently has taken down the "Open for Business" sign not only in Wisconsin but globally. In Spain, one company knows Walker's state is not welcoming their business and all the publicity surrounding Walker and the state Republicans has not made a favorable impression.
In Sternberg's backyard, Governor Rick Scott nixed a high speed rail between Tampa and Orlando. Scott gave up $2.4 billion in federal funding and cost the region 30,000 jobs. The western part of the high speed rail region, near Orlando, was profiled on the CBS show "60 Minutes" and CBS reported that the child poverty level is reaching near 25 percent in that area. In this climate Scott nixed job creation and seems to be at war with teachers. He, like a lot of other political leaders, is on a crusade to cut education and reduce teaching jobs along with other public sector jobs. But there seems to be a major, major flaw in the theory. The more you lay off people, the less tax revenue you raise and you still have to take care of these people in some manner. Scott is a highly unpopular governor and has people in his party, the Republicans, irate with his high speed rail decision.
It cost Florida jobs.
These people spend money in their community, use local stores and those local stores will have less revenues coming in and there will be less taxes available to government to pay for needed services.
It's economy 101.
The decisions by Walker in Wisconsin, Scott in Florida, and Governor Rick Snyder in Michigan will impact Major League Baseball for years. Detroit has lost 25 percent of its population in the last 10 years. Snyder has taken a page from Walker and Scott governing his state. Take money away from the working class and you have less discretionary income for baseball teams. Take away health benefits from fired workers and they will not go to doctors and dentists, people who have money to buy higher priced tickets. Ask your doctor or dentist how business is and they will tell you it is down because people don't have health benefits after losing their jobs.
Major League Baseball has found out that too.
Business was down too slightly in spring training as 12 of the 15 Arizona based spring training clubs including the "team" that allegedly is the strongest followed team in Arizona, the Chicago Cubs, lost customers. In Florida, the attendance for the 15 MLB clubs based in the state dropped by about one percent. MLB attendance has dropped since 2007 (79.5 million customers to 73 million in 2010) but in some cases new stadiums which opened had fewer seats and more luxury boxes (Yankees) but corporate buying has fallen off since the crash of 2008. It remains to be seen how the 2011 numbers will be although within the first month of the season, there should be an indicator on how the season will shape up financially.
The sport is in great shape away from the park with big money TV deals with the over-the-air Rupert Murdoch FOX entity and all sorts of local cable deals (the YES Network is a cash cow locally, SNY does rather well and Comcast has no complaints about the deal the cable behemoth has with the Philadelphia Phillies. The Boston Red Sox still own the majority of the New England Sports Network and mlb.com is making a ton of money. Marketing partners have not fled baseball and franchise values are still high with the New York Yankees leading the way. Baseball's biggest problems are not the Wilpon-Katz Mets or the McCourts Dodgers.
It's the economy stupid.
Evan Weiner, the winner of the United States Sports Academy's 2010 Ronald Reagan Media Award, is an author, radio-TV commentator and speaker on "The Politics of Sports Business." His book, "The Business and Politics of Sports, Second Edition is available at bickley.com, Barnes and Noble or amazonkindle
Tuesday, March 29, 2011
Attention Drew Brees, Sam Huff has a few questions for you
TUESDAY, 29 MARCH 2011 08:40
BY EVAN WEINER
NEWJERSEYNEWSROOM.COM
http://www.newjerseynewsroom.com/professional/attention-drew-brees-sam-huff-has-a-few-questions-for-you
You get the feeling from Sam Huff that he would not mind suiting up for one more game, maybe at the old Yankee Stadium as a New York Giants linebacker or at the old D. C. Stadium in Washington performing the same duties for the Redskins and lining up against New Orleans quarterback Drew Brees.
Huff, who was there at the beginning of the National Football league Players Association in 1956, represents a good many players of his era like Charlie Sumner and Pat Matson among others has no use for Brees. The New Orleans Saints quarterback, according to the old players, apparently thinks it is not the responsibility of the National Football Players Association to look after the players who literally built the industry in the 1950s (and before), 1960s and 1970s.
His statement made in 2010 still resonates among former players such as Huff, Matson and Sumner.
“There’s some guys out there that have made bad business decisions,” Brees said. “They took their pensions early because they never went out and got a job. They've had a couple divorces and they're making payments to this place and that place. And that’s why they don’t have money. And they’re coming to us to basically say, ‘Please make up for my bad judgment.’ In that case, that’s not our fault as players.”
Brees apparently did not know – or he just parroted NFLPA talking points. According to Eugene (Mercury) Morris, the Miami Dolphins running back in the 1970s, Brees' comment was just a repeat statement that was made three years earlier.
“The statements by Drew Brees on retired players came from ''talking points'' from Doug Ell," Morris said of the labor lawyer who works with the NFLPA. "Those same comments appear in the Congressional Record from the June 26th 2007 hearing called ''An Uneven Playing Field?''
Brees, who is one of the plaintiffs in a lawsuit that was filed on March 11 in an attempt to end the NFL owners’ lockout, may have missed another history lesson that is sure to come up in a Minneapolis courtroom in the case in two weeks. After the failed 1987 NFLPA strike (when the association could not hold the membership together and many stars including Lawrence Taylor, Joe Montana and Howie Long crossed the “picket line” along with ordinary players), the association decertified in order to file a lawsuit against the NFL.
The National Football League Players Association, after disbanding in 1989, said it would never again represent the players. Four years later, the NFLPA, with the same leadership in place, reorganized and represented the players again.
Brees and the players will have a difficult time explaining the NFLPA’s actions in 1989 and 1993. The NFL filed an unfair labor practice charge against the NFLPA in February and claimed the NFLPA was not negotiating in good faith in the then on-going talks aimed at reaching a new collective bargaining agreement. The heart of the argument is the 1989 association decertification, which led to the Freeman McNeil antitrust lawsuit against the league.
The NFL owners have maintained that the players planned to use the decertification card in the 2011 talks as leverage. The NFLPA has dismissed the NFL owners concern.
Sam Huff played between 1956 and 1969 when players -- with the exception of Joe Namath -- were not highly paid. Whatever gains players made by selling their services to completing leagues (the old and established NFL and the new AFL -- the fifth attempt by NFL rival promoters to successful stage a league) when they finished college irritated the owners.
In fact, former National Football League Commissioner Pete Rozelle went before Congress in 1966 begging for Congressional permission to violate antitrust laws so that the American Football league and National Football League could merge because a bidding war for players was becoming too costly for both leagues. Rozelle got the merger with some old fashioned horse-trading. He got key yes votes from Senator Russell Long and Congressman Hale Boggs (both of Louisiana) in exchange for an expansion franchise in New Orleans.
The merger brought an end to the bidding war for talent and suppressed salaries. It probably stripped collective bargaining rights away from the players in both leagues. The NFLPA opposed the merger but the union’s complaints fell on deaf ears in Congress.
“Getting $500 a year (raise) was a big deal from (Giants owner) Wellington (Mara),’’ Huff said. “When I was drafted I went with Wellington to the Ed Sullivan show. He offered me $5.000 (in 1956) and that was so much money, more than my dad ever made in the coal mines (of West Virginia). I told Mr. Mara I can't sign and let me check with my coach Art Lewis. He had played in the NFL. I called Coach Lewis and said here I am in New York and (the Giants) offered me a contract for $5,000. Pappy -- we called him Pappy -- said sign before he changes his mind.”
Sam Huff was the face of the New York Giants and maybe the NFL during his playing days. He was on the cover of a November 1959 issue of Time magazine (the first ever NFL player on that magazine's cover) and the star of the CBS News documentary (yes at one time network news was a crown jewel of CBS and NBC and the networks did do documentaries) "The Violent World of Sam Huff (narrated by Walter Cronkite) in 1960.
Huff helped popularize the NFL and has this advice for Brees.
“Drew Brees should keep his mouth shut," Huff said from West Virginia on Thursday. “We (he and his Giants teammates from the 1950s and 1960s) would put a target on his back. I don't understand all this crap. We formed it (the NFLPA). Kyle Rote (the Giants end), he did it and put it all together.”
Despite being the face of the Giants and the NFL, Huff's final salary with the Giants in 1963 was $19,000. He made more money in Washington, his first contract with the Redskins was for $30,000 in 1964. But Huff didn't become rich from playing football and his second career with Marriott along with being part of the Washington Redskins radio broadcasts made him secure.
Back in Huff's day, pro football was seen as a stepping-stone to another career. No one really thought football was a lifelong profession and no one gave a second thought to the post career problems that players developed from playing in "The Violent World of Sam Huff."
No one has a number because a lot of former players just don't out and talk about their problems. There does seem to be a post-career record of multiple operations for knee, hip and shoulder replacements, depression, spousal abuse, finance problems, homelessness, drug addiction, dementia, thoughts of suicide and suicide. Vested veterans get some post-career health benefits but only for five years. Players from Huff's era get meager pensions and if they didn't get a second job after their career (or are unable to work because of injuries), they ended up on the public dole before the age of 65 on social security insurance and Medicare. The cost to the taxpayers may be in the billions caring for discarded players.
The players from the 1950s just wanted better playing conditions but the owners never took the players very seriously. Huff was out of the NFL when the players struck in 1968. The NFLPA has always had a difficult time in keeping the association's membership together. That is a far cry from what football is all about according to Huff.
“It is about teamwork, teammates working together if you go on strike. (Gene) Upshaw could have been a great leader but when he became the power (Executive Director in 1983) he took away everybody's vote. It became all about money. I know what unions are; my father was in the United Mine Workers. The NFLPA is just an organization. (Current NFLPA head DeMaurice) Smith says it is one locker room (for the present and past players). De Smith never played football; neither did (NFL Commissioner) Roger Goodell. It is a mess.
“De Smith said all the right things (about taking care of the old players) but he hasn't followed through. The worst thing is (the former players) didn't make much money but they made the game. Gene Upshaw changed all of it. He was a turncoat. It is all about money.”
In 1974, the NFLPA's slogan was Freedom Now, as the association pushed for free agency. In 1982, it was "Money Now" as the players pushed for free agency and more money. There seemed to be no long-term plan for the players for good pensions and long-term health care.
Huff wondered how two guys with no football experience (Goodell and Smith) without people around them with football experience could "make up the rules if you never played."
Players who may have suffered long-term injuries from playing in the NFL (or three different versions of the American Football League or the All America Football Conference) from the 1920s to the 1960s never surfaced. To this day, according to one former player, no one in the NFL or NFLPA knows exactly how many players performed in the NFL. The NFL finally admitted in 2010 that concussions might cause long-term health issues for players and their families, although the NFL and the NFLPA won't confirm that concussions from football injuries cause brain trauma.
“It's all about money. (Giants quarterback) Eli Manning got $100 million,” said Huff.
“We have to take care of them (former players). We made the game what it is. It is war without guns. But I played high school, college football, was the rookie of the year and at the end it didn't make a difference.”
Huff's world, violent as it was on the football field, was much simpler. He dealt with Wellington Mara on his contract. There were no agents. Agents have not helped according to Huff. They fall into the money now category.
The owners and players will face off in a Minneapolis courtroom in April. It seems NFL owners and players have spent the better part of a half of a century in court. This squabble will ultimately be settled at the negotiating table after the court case and a possible National Labor Relations Board hearing. But don't look for Huff and his peers to be sitting at the peace table and signing onto an accord after a ceasefire has been declared.
Huff doesn't have a seat at the table, which is probably why he would like to suit up one more time in the “Violent World of Sam Huff.”
“If anyone is overpaid, it's Brees,” said Huff. “Why did he open his mouth?”
Huff said that if Brees went against his Giants teams of the 1950s and 1960s, the only thing Brees would say is “did someone get the license plate of that truck?”
Evan Weiner, the winner of the United States Sports Academy's 2010 Ronald Reagan Media Award, is an author, radio-TV commentator and speaker on "The Politics of Sports Business." His book, "The Business and Politics of Sports, Second Edition is available at bickley.com, Barnes and Noble or amazonkindle
TUESDAY, 29 MARCH 2011 08:40
BY EVAN WEINER
NEWJERSEYNEWSROOM.COM
http://www.newjerseynewsroom.com/professional/attention-drew-brees-sam-huff-has-a-few-questions-for-you
You get the feeling from Sam Huff that he would not mind suiting up for one more game, maybe at the old Yankee Stadium as a New York Giants linebacker or at the old D. C. Stadium in Washington performing the same duties for the Redskins and lining up against New Orleans quarterback Drew Brees.
Huff, who was there at the beginning of the National Football league Players Association in 1956, represents a good many players of his era like Charlie Sumner and Pat Matson among others has no use for Brees. The New Orleans Saints quarterback, according to the old players, apparently thinks it is not the responsibility of the National Football Players Association to look after the players who literally built the industry in the 1950s (and before), 1960s and 1970s.
His statement made in 2010 still resonates among former players such as Huff, Matson and Sumner.
“There’s some guys out there that have made bad business decisions,” Brees said. “They took their pensions early because they never went out and got a job. They've had a couple divorces and they're making payments to this place and that place. And that’s why they don’t have money. And they’re coming to us to basically say, ‘Please make up for my bad judgment.’ In that case, that’s not our fault as players.”
Brees apparently did not know – or he just parroted NFLPA talking points. According to Eugene (Mercury) Morris, the Miami Dolphins running back in the 1970s, Brees' comment was just a repeat statement that was made three years earlier.
“The statements by Drew Brees on retired players came from ''talking points'' from Doug Ell," Morris said of the labor lawyer who works with the NFLPA. "Those same comments appear in the Congressional Record from the June 26th 2007 hearing called ''An Uneven Playing Field?''
Brees, who is one of the plaintiffs in a lawsuit that was filed on March 11 in an attempt to end the NFL owners’ lockout, may have missed another history lesson that is sure to come up in a Minneapolis courtroom in the case in two weeks. After the failed 1987 NFLPA strike (when the association could not hold the membership together and many stars including Lawrence Taylor, Joe Montana and Howie Long crossed the “picket line” along with ordinary players), the association decertified in order to file a lawsuit against the NFL.
The National Football League Players Association, after disbanding in 1989, said it would never again represent the players. Four years later, the NFLPA, with the same leadership in place, reorganized and represented the players again.
Brees and the players will have a difficult time explaining the NFLPA’s actions in 1989 and 1993. The NFL filed an unfair labor practice charge against the NFLPA in February and claimed the NFLPA was not negotiating in good faith in the then on-going talks aimed at reaching a new collective bargaining agreement. The heart of the argument is the 1989 association decertification, which led to the Freeman McNeil antitrust lawsuit against the league.
The NFL owners have maintained that the players planned to use the decertification card in the 2011 talks as leverage. The NFLPA has dismissed the NFL owners concern.
Sam Huff played between 1956 and 1969 when players -- with the exception of Joe Namath -- were not highly paid. Whatever gains players made by selling their services to completing leagues (the old and established NFL and the new AFL -- the fifth attempt by NFL rival promoters to successful stage a league) when they finished college irritated the owners.
In fact, former National Football League Commissioner Pete Rozelle went before Congress in 1966 begging for Congressional permission to violate antitrust laws so that the American Football league and National Football League could merge because a bidding war for players was becoming too costly for both leagues. Rozelle got the merger with some old fashioned horse-trading. He got key yes votes from Senator Russell Long and Congressman Hale Boggs (both of Louisiana) in exchange for an expansion franchise in New Orleans.
The merger brought an end to the bidding war for talent and suppressed salaries. It probably stripped collective bargaining rights away from the players in both leagues. The NFLPA opposed the merger but the union’s complaints fell on deaf ears in Congress.
“Getting $500 a year (raise) was a big deal from (Giants owner) Wellington (Mara),’’ Huff said. “When I was drafted I went with Wellington to the Ed Sullivan show. He offered me $5.000 (in 1956) and that was so much money, more than my dad ever made in the coal mines (of West Virginia). I told Mr. Mara I can't sign and let me check with my coach Art Lewis. He had played in the NFL. I called Coach Lewis and said here I am in New York and (the Giants) offered me a contract for $5,000. Pappy -- we called him Pappy -- said sign before he changes his mind.”
Sam Huff was the face of the New York Giants and maybe the NFL during his playing days. He was on the cover of a November 1959 issue of Time magazine (the first ever NFL player on that magazine's cover) and the star of the CBS News documentary (yes at one time network news was a crown jewel of CBS and NBC and the networks did do documentaries) "The Violent World of Sam Huff (narrated by Walter Cronkite) in 1960.
Huff helped popularize the NFL and has this advice for Brees.
“Drew Brees should keep his mouth shut," Huff said from West Virginia on Thursday. “We (he and his Giants teammates from the 1950s and 1960s) would put a target on his back. I don't understand all this crap. We formed it (the NFLPA). Kyle Rote (the Giants end), he did it and put it all together.”
Despite being the face of the Giants and the NFL, Huff's final salary with the Giants in 1963 was $19,000. He made more money in Washington, his first contract with the Redskins was for $30,000 in 1964. But Huff didn't become rich from playing football and his second career with Marriott along with being part of the Washington Redskins radio broadcasts made him secure.
Back in Huff's day, pro football was seen as a stepping-stone to another career. No one really thought football was a lifelong profession and no one gave a second thought to the post career problems that players developed from playing in "The Violent World of Sam Huff."
No one has a number because a lot of former players just don't out and talk about their problems. There does seem to be a post-career record of multiple operations for knee, hip and shoulder replacements, depression, spousal abuse, finance problems, homelessness, drug addiction, dementia, thoughts of suicide and suicide. Vested veterans get some post-career health benefits but only for five years. Players from Huff's era get meager pensions and if they didn't get a second job after their career (or are unable to work because of injuries), they ended up on the public dole before the age of 65 on social security insurance and Medicare. The cost to the taxpayers may be in the billions caring for discarded players.
The players from the 1950s just wanted better playing conditions but the owners never took the players very seriously. Huff was out of the NFL when the players struck in 1968. The NFLPA has always had a difficult time in keeping the association's membership together. That is a far cry from what football is all about according to Huff.
“It is about teamwork, teammates working together if you go on strike. (Gene) Upshaw could have been a great leader but when he became the power (Executive Director in 1983) he took away everybody's vote. It became all about money. I know what unions are; my father was in the United Mine Workers. The NFLPA is just an organization. (Current NFLPA head DeMaurice) Smith says it is one locker room (for the present and past players). De Smith never played football; neither did (NFL Commissioner) Roger Goodell. It is a mess.
“De Smith said all the right things (about taking care of the old players) but he hasn't followed through. The worst thing is (the former players) didn't make much money but they made the game. Gene Upshaw changed all of it. He was a turncoat. It is all about money.”
In 1974, the NFLPA's slogan was Freedom Now, as the association pushed for free agency. In 1982, it was "Money Now" as the players pushed for free agency and more money. There seemed to be no long-term plan for the players for good pensions and long-term health care.
Huff wondered how two guys with no football experience (Goodell and Smith) without people around them with football experience could "make up the rules if you never played."
Players who may have suffered long-term injuries from playing in the NFL (or three different versions of the American Football League or the All America Football Conference) from the 1920s to the 1960s never surfaced. To this day, according to one former player, no one in the NFL or NFLPA knows exactly how many players performed in the NFL. The NFL finally admitted in 2010 that concussions might cause long-term health issues for players and their families, although the NFL and the NFLPA won't confirm that concussions from football injuries cause brain trauma.
“It's all about money. (Giants quarterback) Eli Manning got $100 million,” said Huff.
“We have to take care of them (former players). We made the game what it is. It is war without guns. But I played high school, college football, was the rookie of the year and at the end it didn't make a difference.”
Huff's world, violent as it was on the football field, was much simpler. He dealt with Wellington Mara on his contract. There were no agents. Agents have not helped according to Huff. They fall into the money now category.
The owners and players will face off in a Minneapolis courtroom in April. It seems NFL owners and players have spent the better part of a half of a century in court. This squabble will ultimately be settled at the negotiating table after the court case and a possible National Labor Relations Board hearing. But don't look for Huff and his peers to be sitting at the peace table and signing onto an accord after a ceasefire has been declared.
Huff doesn't have a seat at the table, which is probably why he would like to suit up one more time in the “Violent World of Sam Huff.”
“If anyone is overpaid, it's Brees,” said Huff. “Why did he open his mouth?”
Huff said that if Brees went against his Giants teams of the 1950s and 1960s, the only thing Brees would say is “did someone get the license plate of that truck?”
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
Monday, March 28, 2011
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
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
Thursday, March 24, 2011
Sports owners are entitled to lion’s share of stadium revenues – and here’s why
THURSDAY, 24 MARCH 2011 06:39
http://www.newjerseynewsroom.com/professional/sports-owners-are-entitled-to-lions-share-of-stadium-revenues-and-heres-why
BY EVAN WEINER
NEWJERSEYNEWSROOM.COM
Washington Post sports columnist Sally Jenkins asked a question in a column written after the NFL lockout started on March 11. It was a simple query that the writer could not answer. "Where is it written that (NFL) owners are entitled to the lion’s share of revenues from structures we help build and support?"
There was no answer in the piece – although if Jenkins did some research (all she would have to do is go back almost 25 years) and read her own newspaper, which covers the politics of Washington, D. C., she would have found it.
It actually is written and the document with Ronald Reagan's signature sits somewhere in Washington.
The answer is the 1986 Tax Reform Act, signed into law by President Reagan, which says only eight cents of every dollar generated in a facility goes off to pay down the debt. That is the starting point for leases. Before the change in the federal tax code in 1986, municipalities got more money from stadium- or arena-generated revenue and used that money to pay down the debt.
The Tax Reform Act of 1986 opened a loophole in the tax laws and gave owners ammunition in their battles with cities and states to get new or renovated stadiums with the opportunity to cash in on newly found revenue streams like luxury boxes and club seats.
The owners pitted city versus city. In the NFL, Art Modell took his Cleveland Browns to Baltimore (and got a loan from the state to help him out financially as part of the deal), Bud Adams moved his Houston Oilers to Nashville, Al Davis returned his Raiders to Oakland after failing to get a new stadium in Inglewood and left the Los Angeles Coliseum. Georgia Frontiere went home to St. Louis with her Rams leaving Anaheim behind. Robert Kraft played ball with Connecticut Gov. John Rowland and thought about going to Hartford but stayed in Foxboro with his New England Patriots working out a deal, although he put up money for his stadium.
Houston outbid Los Angeles for the NFL’s 32nd team, an expansion franchise in 1999 thanks to a new stadium. The Glazier family stayed in Tampa after considering a Baltimore bid. Cleveland built a new stadium after Modell left. Pittsburgh voters said no to a new stadium but elected officials decided to construct one anyway. Cincinnati paid for a new stadium. Indianapolis found money for Jim Irsay who might have moved his Colts elsewhere. Jacksonville built a new stadium for an NFL expansion team. Oakland renovated the Coliseum for Davis. Kansas City-area voters put up funding to renovate the Chiefs’ home field. Denver OK’d a new stadium while San Diego upgraded the city’s stadium for the Chargers and the Super Bowl.
Arlington, Texas raised the city’s sales tax again for a stadium, this time for Jerry Jones’ Dallas Cowboys; Philadelphia built Jeffrey Lurie a new Eagles park. Dan Snyder may want a new Redskins facility in Washington replacing his Landover, Maryland structure. Chicago rebuilt Soldier Field, Detroit put up money for William Clay Ford’s Lions. Green Bay got a renovation job at Lambeau Field which included funding from a 0.5 percent sales tax hike in 2000. Seattle replaced the Kingdome with a baseball stadium (which was approved by the state legislature after voters said no) and a football facility.
More than $310 million went into the construction of a Glendale, Arizona stadium for Bill Bidwill’s Cardinals. Louisiana rebuilt the Superdome after Hurricane Katrina in 2005 and the state is spending millions on yet another renovation at the building. Arthur Blank wants to replace the soon-to-be 19-year-old municipally funded Georgia Dome with a new stadium for his Atlanta Falcons.
In some cases, NFL owners like Jones, Bidwill, Ford and others threw some money into the projects. In some cases, NFL owners double dipped selling personal seat licenses and then asking those who bought the licenses to pay for tickets for a game to pay off owners’ debt.
The 1986 law gave municipalities a federal tax exemption on bonds to build new stadiums. The results are stunning. In 2011, 29 of the NFL's 32 teams have new stadiums or renovated facilities with enhanced revenue streams stemming from the 1986 legislative action. Only San Francisco and Minneapolis have not upgraded facilities for NFL owners.
Sports-team owners started putting pressure on municipalities shortly after Congress sent the completed bill to Reagan for his approval. The frenzy then started as the Chicago White Sox ownership threatened to move to a publicly funded stadium in St. Petersburg, had the Illinois General Assembly not given approval for building a new ballpark on Chicago's South Side.
Baseball expanded to taxpayer-funded stadiums in Denver, St. Petersburg and Phoenix. Most cities built new ballparks for their Major League teams. The Cubs, Red Sox, Dodgers, and A’s still play in old facilities but Chicago, Boston and Los Angeles have renovated their ballparks. Spring training is different, too, with little cities being forced to build state-of-the-art complexes in a bid to keep teams from leaving for better offers in other areas of Florida or Arizona.
In 1990, Major League Baseball and Minor League Baseball signed a new agreement that mandated cities and states across the country to either build new facilities or renovate existing parks by 1994, or Major League owners could pull out of those cities. It's no coincidence that independent minor league teams sprung up, using cities that Major League Baseball deserted as the basis for their business ventures.
The National Hockey League decided to expand the league's United States "footprint" in 1990 claiming that the league needed to expand for television purposes. With the help of municipal governments leagues did expand and owners got a slice of expansion money. The new venues also raised the value of franchises.
The United States government, along with state and city governments, is partners with sports, whether it is on the professional or college level. National Basketball Association Commissioner David Stern freely admits that government is a sports partner.
According to Stern, there are three elements needed for sports teams to succeed: Government, cable TV and corporate support. Government has funded stadiums and arenas, provided tax breaks and incentives to build facilities and through the Cable TV Act of 1984 and the Tax Act of 1986 provided more revenues for sports owners. Without the Cable TV Act of 1984, ESPN might have folded; the tax act capped revenues that were generated inside a facility to pay off the debt of a publicly funded stadium or an arena at eight cents on a dollar. Neither New York Senator Daniel Patrick Moynihan nor Pennsylvania Senator Arlen Specter could close the loophole that exists to this day.
Arizona Senator and one-time Republican Presidential candidate John McCain wanted to end the stadium and arena building process that has taken place since the 1986 tax reforms that were passed by Congress, called for the elimination of the tax exemption for bonds for stadiums and arenas. McCain has said little about the legislation since his Presidential run.
The 1986 law that capped revenues at a municipally built facility for sports franchise had a significant consequence. There was no way to pay off the debt with just eight cents being collected from every dollar spent in a stadium or an arena so other taxes were used to make up the difference.
There was a "sin tax" in Cleveland with an extra levy put on cigarettes, cigars and alcohol. Many areas raised sales tax while others hit local residents with "tourist" taxes from tax hikes on motel, hotel, restaurant and car rentals bills. There was also a water tax, some owners were able to negotiate deals for rent and agreed to a formula called payment in lieu of taxes (PILOT) and didn't have to pay full property taxes on stadiums they controlled that were municipally financed. The sports facilities, proponents argue from both sides of the political aisle. If that wasn't enough, team owners received cash from states to help out with some bills.
The worst deal that was signed was between Louisiana Governor Mike Foster and New Orleans Saints owner Tom Benson. Louisiana gave Benson $186.5 million in checks as a thank you for keeping the team in New Orleans between 2002 and 2010. The city of San Diego was buying unsold San Diego Chargers tickets as part of a lease arrangement in the late 1990s.
New York State is heavily invested in Ralph Wilson's Buffalo Bills by virtue of a 1998 lease agreement between Wilson and Erie County that called for $63.25 million worth of improvements at the Orchard Park facility. The Empire State Development Corporation gives $3 million a year to Orchard Park for stadium maintenance.
In the summer of 2010, the giveaways kept coming despite belt tightening around the country. Jacksonville politicians gave up the city's right to collect 25 percent of the revenue for naming rights of the city owned football stadium to the National Football League's Jaguars or about $4 million through 2014.
NFL owners fear the municipal gravy train may be heading to the station and one of the disputes in the 2011 lockout centers around stadium costs and that the players should be kicking in money to help build stadiums. The reason why there has been no work on the new Santa Clara, Calif., stadium that will eventually house the San Francisco 49ers franchise is that the NFL doesn't want any funding to go into the construction until there is a new agreement between the owners and players. Minnesota and San Diego are seeking new stadiums. Two Los Angeles groups are planning to build new stadiums with the operative word being "planning."
As the new stadiums that came into existence in the 1990s, Rupert Murdoch’s struggling FOX television syndication company which is misidentified as a network threw an enormous amount of money at NFL owners and wrested the rights to NFC games from CBS. That deal helped establish FOX as a TV power and caused NBC and Disney to ante up billions for the right to televise NFL games.
The NFL was swimming in money and a lot of it, more than 57 percent, ended up in the players’ pocket.
"Where is it written that (NFL) owners are entitled to the lion’s share of revenues from structures we help build and support?"
It was written in Congress and signed into law in the Oval Office in 1986. Ronald Reagan's signature opened the floodgates for the owners to get their hands on revenue streams in new facilities at bargain basement prices as taxpayers’ dollars were used to build stadiums and arenas. The Gipper's greatest football role wasn't in the movies but at 1600 Pennsylvania Ave. in 1986.
Evan Weiner, the winner of the United States Sports Academy's 2010 Ronald Reagan Media Award, is an author, radio-TV commentator and speaker on "The Politics of Sports Business." His book, "The Business and Politics of Sports, Second Edition is available at bickley.com, Barnes and Noble or amazonkindle.
THURSDAY, 24 MARCH 2011 06:39
http://www.newjerseynewsroom.com/professional/sports-owners-are-entitled-to-lions-share-of-stadium-revenues-and-heres-why
BY EVAN WEINER
NEWJERSEYNEWSROOM.COM
Washington Post sports columnist Sally Jenkins asked a question in a column written after the NFL lockout started on March 11. It was a simple query that the writer could not answer. "Where is it written that (NFL) owners are entitled to the lion’s share of revenues from structures we help build and support?"
There was no answer in the piece – although if Jenkins did some research (all she would have to do is go back almost 25 years) and read her own newspaper, which covers the politics of Washington, D. C., she would have found it.
It actually is written and the document with Ronald Reagan's signature sits somewhere in Washington.
The answer is the 1986 Tax Reform Act, signed into law by President Reagan, which says only eight cents of every dollar generated in a facility goes off to pay down the debt. That is the starting point for leases. Before the change in the federal tax code in 1986, municipalities got more money from stadium- or arena-generated revenue and used that money to pay down the debt.
The Tax Reform Act of 1986 opened a loophole in the tax laws and gave owners ammunition in their battles with cities and states to get new or renovated stadiums with the opportunity to cash in on newly found revenue streams like luxury boxes and club seats.
The owners pitted city versus city. In the NFL, Art Modell took his Cleveland Browns to Baltimore (and got a loan from the state to help him out financially as part of the deal), Bud Adams moved his Houston Oilers to Nashville, Al Davis returned his Raiders to Oakland after failing to get a new stadium in Inglewood and left the Los Angeles Coliseum. Georgia Frontiere went home to St. Louis with her Rams leaving Anaheim behind. Robert Kraft played ball with Connecticut Gov. John Rowland and thought about going to Hartford but stayed in Foxboro with his New England Patriots working out a deal, although he put up money for his stadium.
Houston outbid Los Angeles for the NFL’s 32nd team, an expansion franchise in 1999 thanks to a new stadium. The Glazier family stayed in Tampa after considering a Baltimore bid. Cleveland built a new stadium after Modell left. Pittsburgh voters said no to a new stadium but elected officials decided to construct one anyway. Cincinnati paid for a new stadium. Indianapolis found money for Jim Irsay who might have moved his Colts elsewhere. Jacksonville built a new stadium for an NFL expansion team. Oakland renovated the Coliseum for Davis. Kansas City-area voters put up funding to renovate the Chiefs’ home field. Denver OK’d a new stadium while San Diego upgraded the city’s stadium for the Chargers and the Super Bowl.
Arlington, Texas raised the city’s sales tax again for a stadium, this time for Jerry Jones’ Dallas Cowboys; Philadelphia built Jeffrey Lurie a new Eagles park. Dan Snyder may want a new Redskins facility in Washington replacing his Landover, Maryland structure. Chicago rebuilt Soldier Field, Detroit put up money for William Clay Ford’s Lions. Green Bay got a renovation job at Lambeau Field which included funding from a 0.5 percent sales tax hike in 2000. Seattle replaced the Kingdome with a baseball stadium (which was approved by the state legislature after voters said no) and a football facility.
More than $310 million went into the construction of a Glendale, Arizona stadium for Bill Bidwill’s Cardinals. Louisiana rebuilt the Superdome after Hurricane Katrina in 2005 and the state is spending millions on yet another renovation at the building. Arthur Blank wants to replace the soon-to-be 19-year-old municipally funded Georgia Dome with a new stadium for his Atlanta Falcons.
In some cases, NFL owners like Jones, Bidwill, Ford and others threw some money into the projects. In some cases, NFL owners double dipped selling personal seat licenses and then asking those who bought the licenses to pay for tickets for a game to pay off owners’ debt.
The 1986 law gave municipalities a federal tax exemption on bonds to build new stadiums. The results are stunning. In 2011, 29 of the NFL's 32 teams have new stadiums or renovated facilities with enhanced revenue streams stemming from the 1986 legislative action. Only San Francisco and Minneapolis have not upgraded facilities for NFL owners.
Sports-team owners started putting pressure on municipalities shortly after Congress sent the completed bill to Reagan for his approval. The frenzy then started as the Chicago White Sox ownership threatened to move to a publicly funded stadium in St. Petersburg, had the Illinois General Assembly not given approval for building a new ballpark on Chicago's South Side.
Baseball expanded to taxpayer-funded stadiums in Denver, St. Petersburg and Phoenix. Most cities built new ballparks for their Major League teams. The Cubs, Red Sox, Dodgers, and A’s still play in old facilities but Chicago, Boston and Los Angeles have renovated their ballparks. Spring training is different, too, with little cities being forced to build state-of-the-art complexes in a bid to keep teams from leaving for better offers in other areas of Florida or Arizona.
In 1990, Major League Baseball and Minor League Baseball signed a new agreement that mandated cities and states across the country to either build new facilities or renovate existing parks by 1994, or Major League owners could pull out of those cities. It's no coincidence that independent minor league teams sprung up, using cities that Major League Baseball deserted as the basis for their business ventures.
The National Hockey League decided to expand the league's United States "footprint" in 1990 claiming that the league needed to expand for television purposes. With the help of municipal governments leagues did expand and owners got a slice of expansion money. The new venues also raised the value of franchises.
The United States government, along with state and city governments, is partners with sports, whether it is on the professional or college level. National Basketball Association Commissioner David Stern freely admits that government is a sports partner.
According to Stern, there are three elements needed for sports teams to succeed: Government, cable TV and corporate support. Government has funded stadiums and arenas, provided tax breaks and incentives to build facilities and through the Cable TV Act of 1984 and the Tax Act of 1986 provided more revenues for sports owners. Without the Cable TV Act of 1984, ESPN might have folded; the tax act capped revenues that were generated inside a facility to pay off the debt of a publicly funded stadium or an arena at eight cents on a dollar. Neither New York Senator Daniel Patrick Moynihan nor Pennsylvania Senator Arlen Specter could close the loophole that exists to this day.
Arizona Senator and one-time Republican Presidential candidate John McCain wanted to end the stadium and arena building process that has taken place since the 1986 tax reforms that were passed by Congress, called for the elimination of the tax exemption for bonds for stadiums and arenas. McCain has said little about the legislation since his Presidential run.
The 1986 law that capped revenues at a municipally built facility for sports franchise had a significant consequence. There was no way to pay off the debt with just eight cents being collected from every dollar spent in a stadium or an arena so other taxes were used to make up the difference.
There was a "sin tax" in Cleveland with an extra levy put on cigarettes, cigars and alcohol. Many areas raised sales tax while others hit local residents with "tourist" taxes from tax hikes on motel, hotel, restaurant and car rentals bills. There was also a water tax, some owners were able to negotiate deals for rent and agreed to a formula called payment in lieu of taxes (PILOT) and didn't have to pay full property taxes on stadiums they controlled that were municipally financed. The sports facilities, proponents argue from both sides of the political aisle. If that wasn't enough, team owners received cash from states to help out with some bills.
The worst deal that was signed was between Louisiana Governor Mike Foster and New Orleans Saints owner Tom Benson. Louisiana gave Benson $186.5 million in checks as a thank you for keeping the team in New Orleans between 2002 and 2010. The city of San Diego was buying unsold San Diego Chargers tickets as part of a lease arrangement in the late 1990s.
New York State is heavily invested in Ralph Wilson's Buffalo Bills by virtue of a 1998 lease agreement between Wilson and Erie County that called for $63.25 million worth of improvements at the Orchard Park facility. The Empire State Development Corporation gives $3 million a year to Orchard Park for stadium maintenance.
In the summer of 2010, the giveaways kept coming despite belt tightening around the country. Jacksonville politicians gave up the city's right to collect 25 percent of the revenue for naming rights of the city owned football stadium to the National Football League's Jaguars or about $4 million through 2014.
NFL owners fear the municipal gravy train may be heading to the station and one of the disputes in the 2011 lockout centers around stadium costs and that the players should be kicking in money to help build stadiums. The reason why there has been no work on the new Santa Clara, Calif., stadium that will eventually house the San Francisco 49ers franchise is that the NFL doesn't want any funding to go into the construction until there is a new agreement between the owners and players. Minnesota and San Diego are seeking new stadiums. Two Los Angeles groups are planning to build new stadiums with the operative word being "planning."
As the new stadiums that came into existence in the 1990s, Rupert Murdoch’s struggling FOX television syndication company which is misidentified as a network threw an enormous amount of money at NFL owners and wrested the rights to NFC games from CBS. That deal helped establish FOX as a TV power and caused NBC and Disney to ante up billions for the right to televise NFL games.
The NFL was swimming in money and a lot of it, more than 57 percent, ended up in the players’ pocket.
"Where is it written that (NFL) owners are entitled to the lion’s share of revenues from structures we help build and support?"
It was written in Congress and signed into law in the Oval Office in 1986. Ronald Reagan's signature opened the floodgates for the owners to get their hands on revenue streams in new facilities at bargain basement prices as taxpayers’ dollars were used to build stadiums and arenas. The Gipper's greatest football role wasn't in the movies but at 1600 Pennsylvania Ave. in 1986.
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.
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