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A blog about sports, sports business, and sports representation Stats:Incoming clicks since last reset: 414Outgoing clicks since last reset: 905 Technorati info:Overall rank: 72978Number of inbound blogs: 86 Number of incoming links: 176 Last update: 2008-06-09 12:00:12 GMT Estimated value: $119,252 Stats for http://sportsbusinessdigest.com
Latest Posts:The Sonics a done deal to OKC, Sort of
The new owners of the Seattle Sonics, Professional Basketball LLC, have reached an agreement with the City of Seattle, lease holders for the Key arena, to move the team to Oklahoma City.
The deal requires an upfront payment from the team?s new Chairman Clay Bennet of 45 million dollars. An additional 30 million dollar payment must be made if the Washington State legislator approves 75 million dollars in funding to either upgrade Key arena or build a new stadium. This money must also be paid if Seattle cannot secure another NBA franchise within 5 years.
Under terms of the deal the lease for Key Arena is terminated but the Seattle team name and colors will be staying put. The Oklahoma team will be named something else, and Seattle hopes that it can get another team.
NBA Commissioner said Seattle is a great NBA town but needs a State of the Art arena if they want a franchise in the future. This is a great deal for the NBA which gets a foothold in OKC after the New Orleans Hornets played some home games there a few seasons ago.
It is also another example of the public having a vested interest in helping to fund sport arenas. If the good citizens of Seattle want another NBA team, they are going to have to pony up some tax dollars to help in that venture. 2008-09 Major Sports Leagues Salary Caps
As we prepare to analyze the coming professional sports seasons, analyze free agent signings and all the rest we need to take a closer look at the individuals leagues salary caps. For the upcoming NFL Season the cap will be somewhere north of 109 million dollars per team. The minimum a team can spend on payroll will be right around 83 million dollars. In the coming days we will take a look at different NFL teams in good or bad salary cap positions. Since NHL free agency started yesterday the new NHL salary cap for 2008-09 will be 56.7 million dollars. There is a salary floor in the NHL of 40.3 million. It makes me wonder why all of these teams have already signed guys to big deals. In the NHL it is of the up most importance to have cap flexibility built into the payroll system. Without this the cap can help destroy teams. For the coming NBA season the cap will be around 57 million dollars. This isn?t such a big deal since the NBA has a soft cap. There are exceptions to resigning you own players and most NBA teams constantly find themselves far over this cap. Major League Baseball has no cap, but they do have a luxury tax. When teams spend more then around 130 million then they are taxed 10% per season that they are offer the cap. For big market team like the New York Yankees this is no big deal and they will pay around a 40% tax on their payroll over the 130 million soft cap. These taxes are split up and divided among the other teams. The reason the gulf between big market and small market teams is so wide in MLB is that thee is no salary floor. While teams like the Yankees, Boston Red Sox, New York Mets, and Detroit Tigers all spend north of 150 million dollars. The Florida Marlins are spending around 20 million on payroll. Entertainment Super Companies
If any of us pay attention to the news we know that companies in every industry and looking to merge with similar companies to help the companies survive this weak economy. No where is this more blatant then the world of NASCAR. Here huge companies are looking to prop up some of NASCAR?s biggest teams as each side of these mega entertainment companies look for an edge in attracting sponsorship.
Jack Roush sold half of his race team to Fenway Sports Group. This group owns the Boston Red Sox and its chairman John Henry. John is man who started his own commodities trading business in 1982, and has owned part of the New York Yankees, the entire Florida Marlins, and now part of the Boston Red Sox. He also owns I racing which a company is producing high end racing simulators, and the New England Sports Network.
George Gillette who has owned TV stations, newspapers, and now the Montreal Canadians, and the Liverpool FC English Premier league, and now a majority ownership in Evernham Motorsports. In 2007 Forbes confirmed his net worth at 1.1 billion dollars.
Boston Ventures a private equity company with about 2.4 billion dollars recently bought a majority stake in Petty Enterprises, and their very popular Richard petty Driving Experience. This adds NASCAR to a company which owns stakes in Six Flags Theme Parks, and the Nation Enquirer.
To anyone who thinks NASCAR teams are going to fold, and reduce the Cup series to that of the IRL series is ludicrous. Thee teams are now backed by some of the biggest companies out there. There also happen to be owned by some of the richest most successful business men out there.
The Six Flags Company also has stakes owned by Washington Redskin?s owner Daniel Snyder, and Microsoft founder Bill Gates. George Gillette has had is hands in sports ownership for a long time and has been ultra successful at it.
As other NASCAR team owners aside from Rick Hendrick, and Roger Penske (both of whom own enough outside ventures themselves to keep the cup operations running) continue to find such lucrative deal, that not only offer much needed money, buy multi platform sponsorship plans, the financial future of Cup racing has never been more secure. Dwayne Wade: Long, strong and down to get the friction on!My goodness…if there was ever a basis for an invasion of privacy lawsuit, Dwayne Wade has cause to bring one. What am I talking about? Well…this. Thank you Black Sports Online!
That’s right folks…D-Wade is the newest endorser of “SUEPER SEX” Time Delay Capsules. Although that picture looks so familiar…where have I seen it before? Ah yes, NBA Live 2006!
So, can D-Wade bring suit for what seems to be an invasion of privacy? Lets review: A person can bring a suit for invasion of privacy/misappropriation when a defendant uses a plaintiff’s name or likeness for commercial advantage. The defenses? If the information is newsworthy (ha! i doubt it) or consent (which is also not likely). So what prevents the lawsuit? Well, since the entity is in China and there is no indication that they have any presence in America, D-Wade would have to travel to China in order to file the lawsuit in the first place. …On the other hand, I think he is participating in some ‘Olympics thingy’ over in Beijing in a few weeks…maybe he could just hammer it out while he’s over there? P.S. for fear of having my computer mutiny against me and kill me, I won’t even mention any joke about D-Wade, sex pills, and Star Jones. Why Can?t the NHL get anything right?
In a year where things started going right for the troubled Hockey League, an original six team won the cup, and the newest star made it all the way to the Stanley Cup finals, the wheels have come off any long term success from this past season. The League now finds itself in a fight with another original six team the New York Rangers, which also happen to be located in the biggest TV market. The owners of the Rangers, Madison Square Garden L.C. have filed an anti trust lawsuit against the NHL since the league wants to take control of their website. In response the league has initiated proceedings that could ultimately force the sale of the Rangers to new ownership. This is a real ugly fight and underscores the belief that Gary Bettman may be the worst Major Sports Commissioner of this era. While I understand the need for the NHL to run their online presence in the style that MLB and the NFL do. However other fights like this have broken out and the owner of the team almost always wins. Furthermore by raising a anti trust lawsuit the league could find itself in front of Congress, since Congress has recently showed a willingness to interfere with the major sports leagues. Bettman should know, or his lawyers should tell him that the NFL and the MLB lost similar cases where rogue owners did want they wanted in signing sponsor to exclusive stadium deals. Jerry Jones, of the Dallas Cowboys, signed a deal in 1996 with Pepsi and Nike in direct opposition to the NFL?s deals with Coke and Reebok. The New York Rangers also signed a deal with Adidas against the wished of MLB. Both of these owners ultimately won and where allowed to sign any deal with which they wished. If the NHL thinks they are going to get the rights to the Rangers website they are diluted. Maybe if the y offered to buy the site they would be more successful. But in typical NHL fashion they think they can do whatever they want. More troubling then that is the proceedings to sell the team. Under the NHL constitution the Ranger owners are not allowed to bring that fight to a court of law. So even if they win the website fight, they could find themselves forced into selling the team. This is just another glaring example of how bad the NHL conducts there own business. The ridiculous TV contract aside these guys really do not have a clue. Mission Impossible: ?Drug-Proofing? Professional SportsYou can’t stop it, you can only hope to contain it. - Dan Patrick
So where does that leave us? As history has already shown us, even the “stand-up” superstars aren’t immune to the problem (anyone remember Rafael Palmerio? anyone hear about Terry Bradshaw this week?), so lets not even bother arguing that there’s only a certain level of player that would deal in such debauchery. So, if no one is immune to the problem, we test every athlete, right? Okay…that’s easy enough. What do we test for? Steroids? Sure, but some people are using HGH now. HGH? Alright. what about those people who are using Viagara? Okay…Viagara too. What about all of the various things you can’t think of, or those that haven’t even been invented yet? Umm…. See where we’re headed? Ten years from now, we’ll have to test players for orange juice because “that guy isn’t catching a cold as often as the normal athlete”. Am I for keeping professional sports as clean as possible? Of course. But at some point, the known evils are better than those unknown evils. Knowing that Barry Bonds was on steroids and he hit 73 home runs in a year as opposed to 50 is a much better outcome than the creation of some yet unknown super drug that lets somebody like Juan Pierre hit 60 home runs (I am in no way implying Mr. Pierre uses drugs, his name is used only to make a point). I know that it goes against our nature, and potentially against any profit motive one might have, but the line has to be drawn somewhere, or else so many resources will be expended cleaning up the game (that you’ll never be able to clean up) that you’ll have to cut into the profit margin to pay for the various drug tests. Let me state now though, I am in no way saying that each sport does not need some sort of drug testing policy in place. What I am saying is that continuing to make the drug testing policies consistently more stringent is going to result in the creation of an untestable drug that turns a human into a robot. Cheating will always be a part of sports. At the end of the day the question you have to ask yourself is, would you rather deal with that known drug that enhances abilities or the unknown drug that enhances abilities to herculean proportions? Agree? Disagree? Leave your thoughts in the comments. GOLF.com: Drug testing to arrive on tour next summer Sports Business Digest: Chuck Knoblauch: 98 Career HR* Understanding the NASCAR economy
I wanted to spend some time today talking about how much money NASCAR drivers earn, but I thought it important to explain exactly how the NASCAR economy works. Since much of this world remain under a cloak, I will be relying on my inside knowledge of the sports, as I use to work for one of the premier NASCAR racing teams. The first thing we must understand is NASCAR contracts are not guaranteed. In fact they are written more in sand then in stone. If since he takes so many pieces of a team to make it competitive if any one of those things is out of whack change is made and made quickly without regard to the contract status. Ok so a team owner goes out and gets a sponsor. Now days a top tier Cup team has to have around 30 million dollars in sponsorship to be competitive. They can get this all from one source as Roush Fenway recently did by signing Aflac to a three year 90 some million dollar deal, or they can spilt it up among many companies. Hendrick Motorsports has done this with the National Guard and Amp Energy drink who each are paying around 15 million per season to sponsor Dale Earnhardt Jr. All of this money is used to operate the race team. Of the major expenses an owner faces is their driver?s base salary. Top tier talents in the Cup series get a base of around 300k. For this fee they are not only expected to drive all the races, but go to appearances for the sponsors. In fact negotiating the amount of appearances is generally the sticking point in signing drivers to new deals. For the owner will have not even looked in the bucket of money it takes to operate one of these teams. The next most important part in the crew chief, for the most part a top tier crew chief gets a base salary of 100k with bonus clause for wins, top 5?s, top 10?s, and final point?s position. On top of that the owner will employ a 10 member pit road team, an engineer, and in many cases a pit crew coach. Most of these jobs have no way for the public to know what they get paid, but my bet is your average pit crew member gets 50k, engineer 75k, and pit coach 75k. Of course all of this is paid out before the cars even get to the race track, and that is the next biggest expense. To transport two race cars, tools, and the driver of the semi cost? team owners right around one dollar per mile. Since most of the cup team are based in North Carolina and last week?s race was in Northern California the transportation bill was right around 3k to get the cars to the track. Now owners do all of this in the hopes of winning big money in the race each week. However even then they are giving away a significant chunk of money. A top tier driver like Jeff Gordon will get his base salary and 50% of his winnings. A lower tier driver like Paul Menard might only get 35% of the winnings in whatever split is worked out in his contract. To put this into perspective Roush Fenway and their five drivers won nearly 1.5 million in this year?s Daytona 500. Once he pays of the drivers Jack Roush has about 700k in revenue. Now I am not going to make the case that no money is being made because if that were true no one would be doing it. However in simply running the races the race teams basically break even. On top of all the payroll expense, these owners must design, engineer, and build the race cars. The best guess here is that would cost around 250k per racecar, not including the engine. Add at least another 100k for the power pant and that is 350k per race car for each race. Granted the owners re hoping that the build a car that will run more then one race, for example Matt Kenseth finished 36th in the Daytona 500 and won a little north of 300k. After the split Roush has 150k back that he spent building the car. If that car comes back in one piece it has the capability of running another race. The average life span of a cup car is right around 10 races give or take. If it doesn?t get wrecked it has the ability to more then make a profit. Once it is all used up on the cup side the owner will either use it as a show car for sponsor events, or sell it to another team either a lower tier cup effort or to one of the other stock car series. This sale will bring back about 30% of its construction value. Anyone can buy an older cup car without an engine for right around 100k. The main source of profit for the owners and really the drivers is in souvenir sales. These agreements are generally split 50-50 among the owner and the driver. So a big name driver like Junior is far more valuable to the team, even if he doesn?t run all that well, then a guy like Casey Mears. Like every other business these days, cup owners must make themselves available to different streams of income. Every single asset has to produce revenue or the team will not be able to continue operating.
Should Tax Payers fund Sports Stadiums?
Since Pennsylvania Senator Arlen Specter could not get any more face time with the spy gate NFL disaster, he has turned his attention to publicly financed sports stadiums.
This is an issue that has many complications in both the sports world as well as the business world. A popular Sports stadium in a section of any city is the best example of Ronald Regan?s trickle down economic theory.
What the public and the city leaders want from a stadium is for it to bring a large number of folks in, and then hopefully have them spend money both there and at the surrounding business?.
I happen to live in a place where this theory has been used to a great advantage. In 1996 the taxpayers of the State of Michigan and the County of Wayne voted for a hotel room tax that would help construct two brand new stadiums in Downtown Detroit. One for the Detroit Tigers, and another for the Detroit Lions.
These two facilities were constructed right nest to each other in an ever growing entertainment district of a troubled city. They could soon be joined by a third new stadium for 2008 Stanley Cup Champion Detroit Red Wings. If hockey can get their act together, and the state economy can rebound. More on that in future posts.
Since the construction of these ballparks Detroit has had the honor and privilege of hosting the Super Bowl, The World Series, The Stanley Cup Finals, the NBA finals (although the Detroit Pistons do not play in Detroit and from where the new stadiums sit it is an hour by car to the Palace of Auburn hills), Wrestlemania, NCAA Tournament Games, The Major League All Star Game, and the Red Bull air race.
Granted the World Series and the Stanley Cup finals came through the team?s effort. But the construction of the stadiums brought the others. Anyone telling you that they have now economic impact is a liar, or failed business 101.
Surrounding these stadiums are a host of bars and restaurants that flourish as the regions sports fans flock to these newly constructed wonders. For the city that brings not only tax base, but jobs, and in a city like Detroit we need all the job creation we can get.
Having these new stadiums brought big events, the city and the facility were so able to handle these events is brought more events and made Detroit kind of hip place to hold huge events. More then 750,000 people were downtown for the Red Bull Air Race, me included. The great thing about that was all the commerce. I took both my wife and son and spent a few bucks on Red Bull stuff, but we also had dinner, and rode the people mover. Basically we spent money.
In this city the impact of a big event like these described generally means another million dollars kicked into the Detroit economy. That is tax money that helps fund the city and it is the reason the public has a vested interest in financing such construction projects.
Allow me to introduce myself
Hello sports fans and hello to sports business fans. I hope all of you are doing well, your teams are winning and your bank accounts are growing. So who am I and why should you care? Well I am a huge sports fan; I live outside of Detroit Michigan. I am a member of the NASCAR media, and I am employed as a fantasy racing expert over at www.fantasyinsideronline.com. More importantly I make my entire living writing, predominantly writing sports. I am also enrolled in an online school program to finish up my business degree. Over the years I have had a lot of jobs, I use to be a band promoter, then I worked in the Front Office of a semi Pro Football team, and I almost went to work for Vince McMahon and his failed football venture. I guess one could say that I know my sports, and I understand the business behind them. I look forward to sharing my thought and ideas on sports business with all of you, and hopefully this will be a successful endeavor for all of us. Cheers! Mission Impossible? Women?s Tennis goes ?spy? in new marketing campaign
The Women’s Tennis Association campaign, which will run in more than 75 countries, has been timed to break over the summer when tournaments such as Wimbledon and the US Open raise the sport’s profile to a seasonal high. WTA’s TV campaign features a total of 10 players from the Sony Ericsson WTA Tour, including Sharapova, women’s No 1 Ivanovic, and Venus and Serena Williams. The campaign, which includes press and digital advertising, uses the idea of the champion tennis players as “superheroes both on and off the court” using the strapline “Looking for a hero?”. WTA’s ad opens with shots of the tennis stars dressed in casual attire in everyday situations. They then each receive phone calls, on sponsor Sony Ericsson’s phones, and dash off superhero-like to re-emerge dressed for competition in their tennis outfits. Kudos to Grey Agency for this campaign. It’s hard to go wrong with the superhero/spy angle, and the camera angles in the commercial itself add a “cool” factor which should appeal to viewers older and younger alike. Combine that with the fact that Wimbeldon started today, and it looks like the WTA has just put a couple million dollars to pretty good use. The ad, which has now gone world-wide, can be seen on the Guardian’s Website. The Guardian — Maria Sharapova and Ana Ivanovic star in WTA tennis ad Nothing says Father?s Day like baseball and?Macy?s?Is there any venue into which baseball doesn’t stretch its steroid filled hands? Earlier in the year, MLB had teamed up with Indiana Jones to bring two of America’s favorite past time’s together; Baseball and Harrison Ford (huh? what?). This past weekend, baseball invaded America’s homes once again, this time in a much more traditional way…Macy’s catalogs! Details from the Boston Business Journal (another article on the topic by Sarah Talalay at the Sun Sentintel), Macy’s has gathered a collection of 15 MLB stars and is pairing it with baseball team deals for a Father’s Day promo. The players and managers will appear on the cover of a multimillion circulation Father’s Day Gift Guide that Macy’s will distribute during the next few months. In addition, many of the players will appear in local print ads. Some national print ads are also expected in magazines such as GQ and Esquire. The athletes and team deals are being used to push summer sportswear at Macy’s, including apparel from Tommy Hilfiger and Nautica. To support the promotion, Macy’s has signed a number of club sponsorships, including the Astros, Braves, Cardinals, and Reds. In the week before Father’s Day, it will hold Macy’s nights at those ballparks, where it will distribute gate premiums and coupon books. Some of the players will make appearances at local Macy’s stores, and the retailer is using autographed baseballs as a premium that shoppers can buy at a discount with a purchase. Additional elements to the sweepstakes in some markets include unique baseball prizes, such as having a father/son catch on your favorite local MLB diamond.
…okay, you’ve convinced me Macy’s. I’m on my way to buy some polo shirts. Those baseball guys are just too wholesome! Boston Business Journal: Macy’s signs MLB stars for Father’s Day Promo Floyd Mayweather to the MMA??Pop Quiz. What’s the quickest way to kill a professional sport? a. Strike/Lockout b. Lack of big events/Star Power c. Lack of Money
For a few days, we have all known that UFC President Dana White has another ?huge announcement? that he will make in the near future… Mayweather has hinted at wanting to compete in mixed martial arts in the past and earlier this year also competed at the WWE?s Wrestlemania event. Could Dana White and the UFC be set to announce that they have signed Floyd Mayweather? I know, I know, it sounds completely crazy; but the pieces are all lined up for it to happen. Floyd Mayweather to the MMA? Questions abound…How much money would he make? He was scheduled to make around $25 million with his De La Hoya fight, so I’m assuming that the UFC will provide him with a better pay off…Can Pretty Boy Floyd compete in the UFC? Athletes from Boxing and MMA have always said that their respective sport has better athletes than the other; now maybe we’ll finally get to see that match-up happen. Take an entertaining athlete in Mayweather, and add to it a sport that is growing in popularity, has been recognized by ESPN, and is being shown on CBS during primetime hours…and what do you have? A very rich man named Dana White. That’s what you have. MMAHQ: Floyd Mayweather in the UFC [Rumor] Sports Business Digest: ESPN jumps on the MMA Bandwagon Sports Business Digest: MMA & CBS…Success! Lakers? Your Sports Chalet awaits.Sports Chalet Inc. has signed a three year sponsorship deal with the Lakers, making Sports Chalet “The Official Sporting Goods Retailer of the Los Angeles Lakers”. So, when you need that “official” Kobe Bryant ‘I visited Veil, Colorado and all I got was this stupid t-shirt…and a sexual assault lawsuit’ t-shirt, you know where to go! More information from BizJournals, Among the highlights of the partnership are:
Sport Chalet will take the sponsorship and use it to create unique advertising and promotional opportunities to engage its target audience. Suite nights and receptions were also inked in the deal.
BizJournals: Sports Chalet to sponsor Lakers MMA & CBS?Success!Looks like CBS’s decision to team up with Elite XC is going to work out well. The results (at least partially) are in. Looks like people DO want to watch the MMA, and CBS potentially has a gold mine on their hands, as they captured a large portion of the key 18-34 male demographic. From TV by the Numbers, …Saturday Night Fights Elite XC event action scored 4.3 million viewers between 9pm-11pm. It may not sound like much in terms of viewers, but it hit the target with the coveted 18-34 youth, particularly the elusive 18-34 year old male television viewer. The event had 1.9/6 18-49 rating (36% higher than the crimetime drama repeats) , a 1.9 among adults 18-34 (more than twice the season average .9 rating ) and a 2.6 rating among men 18-34, more than triple the season average of 0.7). …as alluded to earlier the primary bout (Slice/Thompson) took place after 11pm, the final numbers will be even bigger (and again are not included in the numbers above) as that was no doubt the most watched portion of the fight.
Maybe, maybe not…For now though, lets just all bask in the violent (James Thompson’s ear? anyone?) glory that is the MMA. ***And no…I’m not even going to entertain the idea that the MMA is fixed. At least, not yet. TV by the Numbers: Nielsen Ratings May 31, 2008: MMA Scores with Youth for CBS 2010 NBA All Star Game. In Dallas?Cowboys Stadium at Arlington?
I really have to hand it to Jerry Jones. He apparently has made it his personal mission to bring as many quality sporting and entertainment events and positive press press as humanly possible to/for the Cowboys new stadium at Arlington which opens in 2009. Already on his list? Cotton Bowl in 2010 and the Super Bowl in 2011 (assuming that whole pesky NFL labor dispute works itself out). So what’s his next pursuit? The 2010 NBA All Star Game, of course! From the Dallas Ft. Worth Telegram, Two NBA sources say that the Dallas Mavericks have made inquiries that could bring the 2010 NBA All-Star Game to the new Cowboys stadium in Arlington. Mavericks owner Mark Cuban has been reluctant in the past to bring an All-Star game to Dallas. The NBA is in charge of seating, and regular-season ticket holders are displaced for the event. Some season ticket holders, in fact, do not even get tickets for the game. Cuban has been critical of such treatment. At the new retractable-roof stadium in Arlington, scheduled to open for the 2009 Cowboys season, a configuration for basketball would make the seating capacity much larger than the Mavericks? home arena, American Airlines Center, so season ticket holders could be accommodated and the NBA?s ticket demands could also be satisfied. The NBA All-Star Game…at a football stadium. Looks like it will make Mark Cuban, Mavericks season ticket holders and Jerry Jones and the Cowboys very happy. While the situation is still in the early stages (no bid has been made as of yet), I look for this to be a done deal. These are the sort of deals that Jerry Jones, and Cuban as well, seem to always be a part of, and I see this as being no exception. So to review, Jerry Jones Stadium will be holding the 2010 NBA All-Star Game…at least I think. Looking ahead, I think it will be very interesting to see how profitable this situation is for both parties. Will we maybe see New York holding the All-Star game at the new Yankee stadium? Will using the larger stadiums of other major sports become the norm (thereby ensuring that season ticket holders won’t be alienated?) A curious situation indeed. Dallas Ft. Worth Telegram: 2010 NBA All-Star Game could be headed to Arlington |
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