NBA Playoffs Are Paying OffRick Horrow
1. Under Partly Cloudy Economic Skies, NBA Playoffs Begin in Earnest
As the Cavaliers have dominated the Pistons—at least so far—discussion about the economy and the economic outlook for next season and beyond dominated the NBA Board of Governors meetings last week and are sure to provide a backdrop throughout the NBA Playoffs as well. NBA Commissioner David Stern projected an air of optimism as he noted that league revenues, although slowed this year, should be up 1% to 2% for the season, with projected league growth at 5% to 7% overall. "Our prospects, leaving aside the unknown of the economic and financial condition…are terrific, and we're going to work together with our players to come up with a model that makes it more profitable," Stern told the national media assembled at the meetings, adding later that the image of the league is "on a complete uptick…our players' reputations are so much better than they were five or six years ago." Stern and league officials indicated that all the economic data they're collecting will be a key element of the package they'll deliver to the NBAPA this summer as reference points for negotiations on a new collective bargaining agreement.
Seemingly compatible chatter at the Portsmouth Invitational NBA pre-draft tournament also indicated that to contain costs for the upcoming season, some teams might limit their roster to 13 players, and that the NBA is considering adopting the D-League's "pick-your-opponent" playoff format. The plan would increase the importance of the regular season as well as create an exciting selection process.
For the moment, however, teams are resigned to a traditional seeding structure, and aside from a pretty cool "chess" ad campaign on TNT featuring various NBA stars and a bunch of hobbled Celtics, the 2009 playoffs are startlingly similar to the 2008 edition.
Consider the Los Angeles Lakers, gunning for the title that eluded them last year yet dominant in almost every way. According to NBA data, the franchise's season ticket renewal rate is close to 98%, despite their charging the highest prices in the league, with an average ticket price of $93.25. And this season, according to Nielsen, an average of 267,000 L.A. households watched each Lakers game, 67% more than the Dodgers on their local affiliate and nearly three times the average viewership for college football—including powerhouse USC.
More broadly on TV, the NBA is expanding its League Pass Broadband internationally for the first time during this postseason, offering live streaming of the NBA playoffs to 100-plus countries at $29.95-$39.95.
NBA.com is also unveiling a new site design to coincide with the start of the playoffs. One the page's main features will be a video section dedicated to Charles Barkley, "The Barkley Zone," and Chris Webber's "C Webb's Fab Five."
Finally, teams hoping to have their players selected for NBA awards are sending gifts to voters. The Bulls sent out "Derrick Rose Colored Glasses" to draw attention to the point guard's ROY-caliber season, while the Heat gave MV3 T-shirts in honor of Dwyane Wade.
2. NBA Marketing MVP Showdown: The King vs. the Black Mamba
According to no less an authority than the Harvard Business School, as reported by CBS' 60 Minutes, Cleveland Cavaliers forward "King" LeBron James is now the third-biggest name in the sports world, trailing only Tiger Woods and David Beckham, with 2008 earnings on and off the court of $40 million.
Cleveland coach Mike Brown now has Coach of the Year honors wrapped up, but James and Laker standout Kobe Bryant continue to battle for the title of on-court MVP. Off the court, it's clear James is ahead in the race for marketing dollars, but Bryant is closing fast.
Both came to the NBA straight out of high school. Just months after being selected "most likely to succeed" in his high school class, James signed a seven-year, $90 million endorsement deal with Nike (NKE)—the biggest deal ever signed by a basketball player. Contracts with Coca-Cola (KO), Vitamin Water, Upper Deck, and Bubblicious bubble gum have helped build a marketing portfolio that James intends to use to help him become the world's first billion-dollar athlete; his endorsement income alone in 2007 totaled $25 million. James also has appeared in commercials, on the covers of Vogue and GQ, and in a documentary about his high school career titled More Than a Game, due out this fall. Another key indicator for an NBA star: James' shoe tally with Nike comprises six signature shoes and four additional styles.
James' total endorsement contracts are $10 million more than those of Bryant, the NBA's next-highest earner. Bryant's 2007 endorsement income was estimated by Forbes at $16 million. Despite a 2003 sexual assault case for which charges were dropped but at the time frightened sports marketers away, he has since inked multimillion dollar endorsement deals with Nike and Coca-Cola and last month announced that he had teamed up with Spanish-born watchmaker Ivan Castro to sell a line of high-end Swiss watches for Nubeo under his nickname, Black Mamba. (The MVP version will set you back $285,000.) Bryant was also the cover athlete for NBA '07, appeared in two stunt viral videos on YouTube for Nike that got more than 4.5 million hits each, took the Guitar Hero World Tour commercial stage with Tony Hawk, Michael Phelps, and Alex Rodriguez, and is featured in a reality TV show in China, the Kobe Mentu show. Bryant's shoe count with Nike is at four, and rising. His NBA Championship count, until June, is TBD.
3. 2009 NFL Draft: Tube State of the League
During this weekend's NFL draft, the NFL Network will assume a more prominent role than in years past. It will report live from inside the San Francisco 49ers and St. Louis Rams draft headquarters on Saturday, Apr. 25, according to SportsBusiness Journal. This will broaden fans' options beyond the seemingly endless ESPN coverage from New York's Radio City Music Hall.
Television rights and carriage issues and the just-released 2009-2010 NFL schedule dominate sports headlines and NFL executives to-do lists these last days leading up to the draft. Top of those lists has to be celebrating the recent agreement between Dish Network and NFL Network, which calls for Dish to continue carrying the NFL Net on their Classic Silver 200 programming package. The agreement resolves a year-old dispute that stemmed from the channel's decision to simulcast the December 2007 Giants-Patriots season finale.
DirecTV also has renewed its deal with the NFL to serve as the exclusive satellite provider for out-of-market games. Signed through 2014, DirecTV will give the league $1 billion a year.
The agreements should provide some much-needed good news for the struggling NFL Network, as they abut FCC hearings last week on the Comcast-NFL Network programming dispute. No ruling is imminent, as a decision on that dispute could take several months, and Comcast can drop the NFL Network as early as May 1 unless the NFL makes some hasty concessions about carriage on Comcast's sports tier.
As a small concession to cable subscribers, the NFL is offering Sunday Ticket's Red Zone channel to cable providers with the hope of leveraging companies to provide NFL Network to subscribers. The league owned and operated channel is available in less than 40 million households.
Looking ahead to the fall schedule, the defending Super Bowl champion Pittsburgh Steelers, the Colts, Giants, and Bears form an exclusive NFL primetime broadcast club, with five appearances in prime time each. The Dallas Cowboys, courtesy of their new $1.1 billion stadium, do those teams one better, with an NFL-leading six nationally-televised games. The Cowboys will unveil their new stadium in Week Two, hosting the Giants on NBC. The Jets will have the honor of hosting the last regular-season game held at Giants Stadium when they welcome the Bengals on Jan. 3. The NFL reports that computers generated about 1.3 million possible league schedules for the season; 3,500 were considered by staff in conjunction with the league's broadcast partners.
In not-so-good broadcast TV news, NBC is claiming it lost $45 million on its Super Bowl XLIII broadcast "despite monster ratings and a record $206 million in ad sales," according to the New York Post. It's true then—the NFL is going down the tube.
4. 2009 NFL Draft: The Players and the CBA
NFL players are prepared to make playoff compensation part of the upcoming CBA negotiations. A telling issue facing new NFLPA Executive Director DeMaurice Smith in the CBA talks will be playoff pay, as players get paid a "fraction of what [they] got paid during the season," according to a Sports Illustrated report. Sports Illustrated revealed in its story that New England Patriots quarterback Tom Brady made $33,529 per postseason game he has played, almost 1/30 of what he makes per regular season game.
Says Kansas City Chiefs and former Patriots linebacker Mike Vrabel: "In the postseason, obviously, you're playing for the championship, the will to win, the love of the game. But the reality is that the most valued part of our season is when we're paid the least by far and when the injury risk is greatest. It's a fine line we walk as players."
5. Tom Hicks in Default?
Days ago, it was revealed that the MLB Texas Rangers and NHL Dallas Stars owner Tom Hicks' sports holding company defaulted on a $10 million quarterly interest payment on Mar. 31. The default notice begins a process that could eventually put banks in charge of both teams, although it would not affect his co-ownership of EPL club Liverpool.
According to The Wall Street Journal, creditors to Hicks Sports Group (HSG) have "declared the company in default, a measure that could eventually dislodge" the teams from Hicks' control, and further, that the default notice is "the strongest sign yet of the economic perils awaiting the country's professional sports leagues." It said a group of 40 financial institutions and other investors hold $525 million of HSG debt, led by New York sports-financing group Galatioto Sports Partners with close to $100 million.
An HSG spokesman said that the two teams are "unable to fund both their operating expenses and debt service;" Hicks had apparently been funding operating expenses out of pocket for some time and put a halt to the practice. A complete foreclosure could not happen for at least 180 days; Hicks is meanwhile attempting to sell minority stakes in both teams and recently confirmed that he will be taking $20 million off the Rangers' payroll for 2010.
6. Premier League: Divisible by Two?
Hicks' English Premier League club Liverpool may soon have other economic forces affecting it. According to the London Daily Mirror, Phil Garside, chairman of EPL club Bolton, has put together plans for an EPL second division that would make the vaunted British league look a lot more than the NFL, with its AFC and NFC partition. The new format calls for two 18-team divisions of the EPL, requiring "promotion and relegation of two clubs between the divisions."
Fourteen of the 20 EPL squads will have to vote in favor of the proposal to move it forward; England's Football Association (FA) also would have to weigh in. The Mirror says the EPL's top four clubs—Manchester United, Chelsea, Arsenal, and Liverpool—are likely to vote against the plan, as it would affect their revenue distribution. Scottish clubs Celtic and Rangers would reportedly be asked to join Premier League 2.
Meanwhile, several international banks are set to take over EPL club West Ham United after the Icelandic bank that provided much of the club's financing was declared effectively insolvent. Until the team is sold, any spending or player acquisitions will have to come from revenue generated by sales.
7. Wealthiest Augusta National Members
One of the world's most exclusive golf clubs was on the international stage last week, as Augusta National played host to the Masters. At any given time, Augusta National has a list of approximately 300 members, a who's who of the business world. A 2004 USA Today list is the most recent documentation of who the members are. Based on 2008 figures, here are the five wealthiest:
5. Charles Johnson (Franklin Resources) $4.9 billion
4. Stephen Bechtel Jr. (Bechtel) $5.5 billion
3. Riley Bechtel (Bechtel) $5.5 million
2. Warren Buffet (Berkshire Hathaway) $50 billion
1. Bill Gates (Microsoft) $57 billion
8. Oscar de la Hoya Retires, Will Boxing get KOed?
Will the legacy and stellar business platform laid down by Oscar de la Hoya during his 17-year pro boxing career sustain the sport in another golden age or will it go down like a dumbstruck rookie in the ring after de la Hoya announced his retirement last week? Thanks to de la Hoya, the near future, at least, is looking golden.
Since turning pro in 1992, de la Hoya has pretty much carried his sport. At 36, he has had 45 pro fights, won 10 titles in six weight classes, and been featured on a record 19 Pay-Per-View fights and record 32 HBO fight telecasts. The biggest revenue generator in boxing history, he has cornered just under $700 million in PPV revenue and 14.1 million buys, which does not include his other 26 professional bouts, or all the other monies "the PPV fights generated from ticket sales, sponsorships, foreign television rights, and other revenue streams," as ESPN puts it. He hit his prime as the Latin market was becoming more of a focus for the sports industry and opened the sport to female fans.
Now, de la Hoya will presumably turn his attention full time to his Golden Boy Promotions, of which he is president. A maturing company, Golden Boy boasts in its stable many promising young fighters and has next on its card the May 2 Manny Pacquiao-Ricky Hatton fight at the MGM Grand in Las Vegas. Together with HBO and Top Rank, Golden Boy has put together a massive multitiered, multimillion dollar marketing plan for the event. The goal of the plan is to sell one million PPV buys, much of it via digital technology platforms.
9. Corey Surrency and Eligibility
According to a little-known and unenforced NCAA rule, if an athlete participates in organized sports after his 21st birthday but before enrolling in college, he loses a year of eligibility for every year he participates in the given sport. Just like that, Corey Surrency's career as a Florida State WR is gone, faster than you can say Chief Osceola.
If you haven't heard by now, the NCAA denied Surrency's appeal for an extra year of eligibility. With his scholarship taken away, so are Surrency's dreams of being the first person in his family to graduate from college.
The NCAA has a longstanding tradition of sticking it to players. Remember Jeremy Bloom? The Colorado Buffaloes WR/PR was ruled permanently ineligible because he had a part-time job as, oh, an Olympic skier. How about former NBAer Keith Van Horn? And did you know that the Utah Utes were placed on probation for, among other things, head coach Rick Majerus buying his star forward a meal after telling the kid his father had died?
Florida State is appealing the original decision, and a verdict is expected within the next three to five weeks. But if the NCAA upholds the ruling, it'll be taking more than just a season of college football away from Surrency. They'll be taking away any chance he has for a legitimate future. It is no secret that teams illegally recruit and that players illegally receive gifts, so go after them, not the Olympian, or the grieving, or the kid who just wants to graduate from college.
10. Best Professional Sports Cities to Be a Fan
Forbes recently released its list of the most miserable professional sports cities in America, and as interesting as the list was, it was quite the downer. Here is my list of the five best professional sports cities in which to be a fan. The criteria for this list include recent performance, championships since 1990 (sorry Yankees fans, you don't deserve credit for World Series teams led by Babe Ruth or Yogi Berra), and off-the-field factors that make fans smile.
5. Miami. Miami may not have the best fans, but it sure is a good place to be one. Since 1990, the city has two new franchises (Marlins and Panthers), built three facilities (including the recently approved Marlins stadium), and won two World Series and an NBA Championship.
4. Detroit. If you don't judge the city by the auto industry or the Lions, Detroit is a great place to be a fan. The Red Wings are the New York Yankees of the NHL, winning four Stanley Cups in the last 11 years, and the Pistons have had separate title runs in the last two decades. Comerica Park played host to the 2005 MLB All-Star Game, while Ford Field, one of the NFL's gems, was home to this year's Final Four.
3. Chicago. Michael Jordan is singlehandedly responsible for six of the city's seven crowns (eight if you count the Chicago Fire's 1998 MLS Cup). The White Sox' 2005 World Series title was its first in 88 years, and although the Bears lost Super Bowl XLI, the recent acquisition of Jay Cutler gives fans a reason to hope. The Blackhawks are on the upswing, and the longer the Cubs lose, the more people love them.
2. Boston. Since 2000 no city has held more championship parades than Boston. The Patriots are three-time Super Bowl champs, the Celtics have returned with their 2008 NBA title, and the Red Sox snapped the pesky "Curse of the Bambino" that haunted the franchise from 1914 until 2004. The Bruins haven't won a Cup since 1972, but could this be their year?
1. New York. Titles aside (its seven since 1990 ties the city with Chicago for the most), New York has all of the intangibles you would want from a sports town. New Meadowlands included, New York is home to three of the four most expensive stadiums in the country. The Big Apple has it all, from the NBA and NFL drafts to All-Star games. One thing in particular that gives New York the edge in this poll is options. Yankees-Mets? Giants-Jets? Rangers-Isles? You decide.
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