Spring Training: Economic Boon or Bust?
1. MLB Opens Spring Training Amidst A-Rod, Tejada Controversy
This week, Major League Baseball's annual rite of spring arrives in earnest, as the league's 30 teams welcome pitchers, catchers, and the outfield, too. Arizona and Florida skies, however, are clouded by the league's latest steroids scandal brought on by Miguel Tejada and Alex Rodriguez—especially in Tampa, where hordes of media await the Yankee slugger's arrival at Steinbrenner Field, and they're not there to ask him about his 2009 RBIs.
On the positive side, baseball, at least for the moment, has never been in better health, with record $6.5 billion revenues for the 2008 season and attendance of 78.2 million, a drop from the prior year of less than 1%. The Yankees and the Mets are set to move into $1 billion-plus new ballparks come April, with the Minnesota Twins moving into a new one of their own a year later and a new Marlins stadium vote postponed until Mar. 12, giving the team more time to show off recently unveiled renderings. The new MLB Network has gotten kudos for its programming, talent, and even-handed coverage of the Rodriguez-Tejada storylines, despite the potential damage said stories could do to the league.
On the negative side, the steroids stories mark the second decade of the performance-enhancing-drug (PED) scandals tainting baseball, with renewed calls for congressional investigation and the removal of Commissioner Bud Selig and MLBPA head Don Fehr. What's more, mixed with the steroid and attendant perjury controversies are whispers of collusion, as fully one-third of the 216 players who had filed for free agency as of Feb. 4 still did not have a job for the upcoming season. And Barry Bonds' agent Jeff Borris continues to insist that baseball's owners colluded against the disgraced slugger in their 18-month-long refusal to hire him.
Interestingly enough, all this baseball turmoil doesn't seem to bother the sport's diehard fans. In a recent ESPN SportsNation poll, 38% of respondents said that they were "surprised by the revelations about Rodriguez and steroids." When asked whether they would forgive Rodriguez for his PED use, 38% of those polled said yes, 30% said that there was "no need to forgive anything," and only 33% replied no. What's more, 15% of participants said that they "wouldn't care at all" if a popular athlete admitted steroid use, while 43% said that they would be "disappointed but would still support" the individual. In other words, fans are beginning to accept PED use as the norm.
2. Spring Training Transient Economic Boon in Florida, Arizona
This month, the westward migration of MLB spring training also continues, as the Los Angeles Dodgers and Cleveland Indians move their training camps to Arizona, drawn by facilities built in large part by public money and enticing incentives. With the Indians and Dodgers moves, 14 of baseball's franchises now train in the Arizona desert, a nearly even geographic split.
Florida government officials claim that spring training contributes $500 million to the state's economy each year, and provides temporary employment to thousands of residents. "It's an economic driver for Florida," Governor Charlie Crist told the Associated Press last year. "It's not just good for our players and owners, it's good for people who need jobs." Officials estimate spring training tourists spend at least $7 million in each training camp city each year—revenue so key to local economies that the Fort Myers city council has committed to spend $50 million to $60 million on a new ballpark to keep the Boston Red Sox in town, and is strategizing to lure the Baltimore Orioles away from Fort Lauderdale as well.
Out West, Goodyear, Ariz., on the far western outskirts of Phoenix, invested $76 million in the baseball complex that attracted the Indians, and the Dodgers/Chicago White Sox $100 million new stadium complex, Camelback Ranch, is ground zero for the spring training facility building boom in the Western Phoenix suburbs (all made possible by the success of the University of Phoenix Stadium in nearby Glendale). The financial windfall the Dodgers were anticipating from their suddenly closer fan base, however, hasn't materialized, as only about half of the 4,000 spring training season tickets they planned on selling have actually been sold. Corporate sponsors are also as hard to capture as a desert roadrunner—not one of the team's "starting nine" major corporate sponsor platforms, a $200,000 annual package for naming rights to different parts of the facility, has sold, and as of last week, the Dodgers and White Sox together had secured only $700,000 in lower-tier sponsorship deals, according to the Los Angeles Times.
3. The BALCO Bombers: An All-Steroids Team
1B Mark McGwire: 583 Career HRs, 12x All-Star, 1987 AL Rookie of the Year
2B Chuck Knoblauch: 1991 AL Rookie of the Year, 4x All-Star
SS Miguel Tejada: 271 Career HRs, 5x All-Star, 2002 AL MVP
3B Alex Rodriguez: 553 Career HRs, 12x All-Star, 3x AL MVP
OF Barry Bonds: 762 Career HRs, 14x All-Star, 7x NL MVP
OF Gary Sheffield: 499 Career HRs, 9x All-Star, 5x Silver Slugger
OF Jose Canseco: Just call him the "Father of the Steroid Era"
C Benito Santiago: 1987 NL Rookie of the Year, 5x All-Star
DH Rafael Palmeiro: 569 Career HRs, 3,020 hits, 4x All-Star
SP Roger Clemens: 354 Career Wins, 4,672 Ks, 1986 AL MVP, 6x Cy Young Winner
RP Eric Gagne: 3x All-Star, 2x Reliever of the Year, 2003 NL Cy Young Winner
*All players except Rodriguez, Palmeiro, and McGwire were named in the Mitchell Report…Rodriguez admitted to using steroids this past week…Palmeiro failed a drug test during the 2005 season…McGwire continues to dance around steroids questions
4. NBA Trade Deadline and the Luxury Tax
While no one really likes to pay taxes, NBA owners facing Thursday's trade deadline are taking an even harder line on paying luxury tax on their teams' salaries than in previous years. For the 30 NBA owners—many of whom have lost hundreds of millions or more in personal wealth because of the freefalling economy—the Feb. 19 deadline is a line in the sand against luxury tax payments, an opportunity to cut operational costs and clean house on underperforming or out-of-whack players' salaries. Because league-wide revenue is down, the luxury tax threshold will probably be lower in 2009-10 than it is now, leaving teams scrambling to trade for franchise players whose salaries don't count against the cap and cutting those players whose current salaries could damage the team's ability to compete in future seasons, such as Suns forward Amar'e Stoudemire, who in the past week has become the NBA poster child for luxury tax terror.
Being up against it has also caused NBA executives and owners to reconsider long-term organizational structures. Last week, Memphis Grizzlies owner Michael Heisley said on NBA.com: "The only way for this league to really have financial viability across all of the teams is to have team revenue sharing like the NFL has." And during a joint news conference on Saturday at the NBA All-Star festivities in Phoenix, NBA Commissioner David Stern and NBA players union chief Billy Hunter announced that because of the economy and declining league revenues, they are considering reopening the current collective bargaining agreement, set to expire in 2011.
5. LPGA Back on the Course…Albeit Down Four Tourneys for the Season
No, she didn't win. But she did take second place, and in her debut tournament as a full-fledged member of the LPGA, Michelle Wie definitely had a positive impact on ratings and attendance at the season-opening SBS Open at Turtle Bay.
In the economic downturn, the LPGA is facing perhaps its toughest year ever. The organization is fielding four tournaments less than it did in 2008, and paying out about $7.5 million less in purse money, after, among other developments, the Ginn Cos. pulled out of contracts for two events and security giant ADT declined to renew its title sponsorship of the tour's season-ending event.
Wie and young peers Stacy Lewis, Vicky Hurst, and Jiyai Shin are expected to give the tour an "infusion of energy," as USA Today put it, while the television rights picture is solid. The LPGA and the Golf Channel just cemented a 10-year deal, making the Golf Channel the exclusive cable home of the tour starting in 2010. And the tour just signed a lucrative deal for Korean TV rights to LPGA events with J Golf, to better showcase the more than dozen top-ranked Korean players on the tour. The deal is reported to be worth more than $4 million annually, a jump from the current $2.25 million deal the LPGA has with Korean broadcaster SBS (also title sponsor of the Turtle Bay event), and a much-needed revenue constant for the struggling tour.
6. The Super Bowl vs. the Oscars: A Helmet to Updo Comparison
Despite a parade of notable pictures before it—The Set-Up, Pride of the Yankees, Bang the Drum Slowly—it was not until Sylvester Stallone's 1976 Rocky that a sports-themed movie earned the Academy of Motion Picture Arts & Sciences honor of Best Picture.
While Mickey Rourke, up for Best Actor in The Wrestler, is sports' only hope for an Oscar this year, the event itself has often been put on the same pedestal as the Super Bowl, albeit for a female-audience. Here's a look at some comparative metrics for the "Super Bowl for Women."
ABC, which holds the rights to the Academy Awards broadcast through 2014, slashed the price of an ad during this year's broadcast to $1.4 million from last year's $1.7 million—about half of the record $3 million NBC was able to charge for its top Super Bowl ad slots this year. And for the first time in history, the Oscars telecast is accepting ads for movies, in order to boost ad sales during the event, which saw ratings drop to a low of 32 million U.S. viewers last year (compared with the 90 million people who tuned in to Super Bowl XLIII).
Broadcast executives are hoping that movie trailers will help fill the advertising void left by FedEx (FDX) and General Motors (GM), which dropped out of the 2009 picture last summer. Audi and Hyundai have moved in to take GM's place in the automotive category, much as they did during Super Bowl XLIII, while Diet Coke, Sprint Nextel (S), and True North snacks are prominent sponsors of ABC's Oscar Web site. LVMH's (LVMH) Moët & Chandon returns as the official champagne of the Oscars, while Sterling Vineyards wines have been selected as the featured wine at the Academy's Governor's Ball for the sixth year in a row.
Like the Super Bowl, Oscar week represents prime time for nonprofit fund-raising. The 17th annual Elton John AIDS Foundation Academy Awards viewing party will be held as usual on Sunday, co-sponsored by Chopard and Vh1. The foundation has raised over $20 million over the past 16 years (including $5.1 million in 2008 alone) for the fight against HIV/AIDS, making it the most successful fund-raiser held on Hollywood's biggest night. Sir Elton is also hosting a "Global Green" pre-Oscar bash on Thursday.
And perhaps the NFL should take a page from the Academy's playbook in its "Oscar Night in America" program. Instead of threatening private organizations with legal action for hosting large viewing parties, the Academy encourages it, enabling local charities across the U.S. to raise millions for their causes.
Luckily, labor unrest within the Screen Actors Guild has not caused the cancellation of this year's Oscars as was feared in late 2008. Last year's cancellation of the Golden Globes by the Hollywood writer's strike caused a hit of $70 million to $80 million on the local economy, including $2.5 million from canceled parties, according to the Los Angeles County Economic Development Corp. (Also of consideration is the $14 million-to-$15 million in ad revenue lost to NBC.) The economic impact of the L.A.-based Oscars is estimated at about $130 million, compared with $300 million to $400 million for the itinerant Super Bowl.
And yes, Vanity Fair's annual Oscar party is back on this year, albeit not at Morton's…and albeit with a smaller guest list than is the norm. We're guessing that Hollywood C-listers and athlete hangers-on need not apply.
7. Nascar: Average Advertising Spending per Race
With Daytona and a Matt Kenseth win in the books, let's take a look at how the top advertising spenders per Nascar race during the 2008 season are faring. Where are they now?
5. $372,222 General Motors
4. $394,444 Toyota (TM)
3. $411,111 AT&T (T)
2. $461,111 Ford (F)
1. $477,778 Sprint
*GM, Toyota, and Ford all expect to cut their Nascar advertising in 2009…AT&T and Sprint plan to maintain 2008 advertising levels this year
8. Coming (Back) to America?
Will David Beckham come back to America? Looks as if we'll have to wait a couple more weeks to see.
Although MLS Commissioner Don Garber, vacationing in Spain, had set a deadline of Friday, Feb. 13, for Italian Serie A club AC Milan to put forth a reasonable offer for Beckham's services, as of that date the Italians had only proffered a reported $3 million and staging a couple of exhibition games in the U.S. for the 33-year-old star midfielder, well below the $10 million to $15 million that CEO Tim Leiweke and AEG, owner of the MLS Los Angeles Galaxy, had been seeking. "We've got tickets to sell, games to schedule, sponsors have programs, we have promotions being planned with ESPN and many of our commercial partners, and this just can't continue to drag on," said Garber in the Washington Post.
Beckham has stated as recently as Saturday that he wants to stay on with the Italian club when his three-month "loan" ends on Mar. 9 and that he would return only reluctantly to Los Angeles if he is forced to do so. "I know it will be difficult to go back after everything that's happened…I've said I want to stay in Milan, and I haven't changed my mind, but it's out of my hands," Beckham told the Los Angeles Times on Saturday. AC Milan manager Carlo Anccelotti echoed Beckham's sentiments, saying that the club still had 20 days to close the deal before Mar. 9 and that Beckham is crucial to helping the club achieve the third-place finish it needs to claim a spot in the European Champions League.
Leiweke, however, is having none of it, stating emphatically that "we're not going to play that game anymore," and assuring reporters that Landon Donovan, also on loan to Bayern Munich, would return. Despite the tough talk, Leiweke is likely assuring himself and Galaxy fans nothing more than two very sulky players on his sideline, angry at being dragged back down into international football's minor leagues. If they do return, come Mar. 9, look for Beckham and Donovan ailments and injuries aplenty.
9. British bailout: Government Aids Olympic Venues
Latest figures from the British government estimate that the cost of the London 2012 Olympic stadium could reach £547 million (approximately $816 million), almost double the original estimate. The Department for Culture, Media & Sport's annual report on the Olympic project revealed that the credit crunch and structural changes to the roof have added a potential £22 million to the stadium's costs. Projected costs for building the Olympic park venues are also predicted to rise by up to £196 million from November 2007 to 2012.
A separate report published by the London assembly's budget committee warned that the recession and uncertainty over central government funding could put Boris Johnson's mayoral Olympic budget at risk. The mayor's plans to use money raised by selling off the Olympic site to pay back the cash it has borrowed to help fund the games is predicted to be hampered by the property market slump in London. The recession, coupled with uncertainty over government funding, has placed enormous pressure on the functional bodies. And the uncertainty surrounding Olympics preparations is of particular concern as the games are only three years away.
10. Lil' Wayne Go Around the Horn?
Jay Mariotti, Woody Paige, Michael Smith and…Lil' Wayne?
The set of ESPN's Around the Horn had a little bit of extra "swagga" last Tuesday, as three of the show's regular participants were joined by the Grammy award-winning rapper to form an interesting, entertaining foursome.
Wayne, who writes a blog for ESPN.com and has appeared on the TV show 1st and 10 held his own against the sportswriters in debating such topics as fighting in hockey, the A-Rod steroid scandal, and fans rushing the court in college basketball. Despite consistently having the lowest point total, Wayne received some added help from host Tony Reali at the end of each round, and scored an upset, if not rigged, victory.
Always the showman, with the time he won to speak freely at the end of the episode, Wayne declared that he is no longer afraid of Hall of Fame linebacker Lawrence Taylor, due to appear on next season's Dancing with the Stars.