Tuesday, May 10, 2005

For Sports Agents, often your best is never good enough

When is enough not enough? For LeBron James it would seem Aaron and Eric Goodwin who have negotiated more then $100 million in endorsement agreements for LeBron, but for LeBron results are not good enough. LeBron reportedly has fired the Goodwin brothers, in favor of Maverick Carter, James' close friend and a former high school teammate. Carter will become the leader of a team that will take over deal-making responsibilities for the Cleveland Cavaliers' rising star, who ranks as the fourth-highest-paid athlete endorser in the world.

According to ESPN.com’s Darren Rovell only golfer Tiger Woods ($90 million per year), Formula One driver Michael Schumacher ($50 million) and soccer star David Beckham ($35 million) are paid more off the playing field.

"I'm stunned by everything that is happening," Aaron Goodwin said in an ESPN.com report. "We did everything for LeBron to help mold him off the court and become the next big icon in sports. If what we did over the past two years led him to believe that he no longer needs an agent, then I guess we didn't do too badly."

Two short years ago (May 13, 2003) Aaron Goodwin became the toast of the basketball agent world when LeBron selected the Seattle based agent as his agent.

"I was looking for the best individual to guide me through some critical steps in my upcoming pro career, and Aaron Goodwin is my choice," James said in a statement released by his publicist at the time.

Goodwin wasn’t a well known agent at the time. His only NBA clients of note were Gary Payton and Damon Stoudamire. In LeBron, Goodwin saw the opportunity of a lifetime, a chance to sign an athlete who could propel him to the top of the agent field. Goodwin was a regular at James’ St. Vincent-St. Mary High School games, attended the April 25, 2003 press conference when James announced he would make himself eligible for the NBA draft and sat courtside with his mother, Gloria, at the 2003 Jordan Classic All-Star game in Washington.

James’ looked for an agent who would has he suggested ‘guide me through some critical steps’. Goodwin did that and a great deal more. He negotiated what was then considered a landmark $90 million agreement with Nike and a $12 million contract with Coca-Cola. In the Coca-Cola deal, which has four years remaining on it, James has appeared in Sprite and Powerade commercials as well as on the packaging. He was due an undisclosed bonus if Powerade's market share increased, which it did by 3 percent. The Goodwins also negotiated a memorabilia deal with Upper Deck and a chewing-gum deal with Cadbury Adams for Bubblicious.

His choice of a former high school teammate is going to raise several issues. Maverick Carter has spent the last two years working for Nike (the key company LeBron has a contractual agreement with) and Carter is not is not currently registered as an agent with the NBPA. According to ESPN’s Rovell it would appear Carter doesn’t have any immediate plans to become a certified NBA agent.

Carter and James' road manager, Randy Mims, will be part of a group that will pursue future business transactions for James. James who has just turned 20 has two years left on his current contract with the Cleveland Cavaliers.

On nearly ever level this is disturbing. Just what did LeBron expect of his agents and what did they fail to deliver to an athlete who has just turned 20? Short and sweet the Goodwin brothers did everything that was expected of them, and then were shown the door by their client. It seems as if athletes who live in the stratosphere LeBron James, $100 million isn’t enough. As for the Goodwin brothers, one can only hope they ensured they will be paid the commissions they’ve earned, likely between 10 and 15 percent for the agreements they negotiated in good faith on James’ behalf. Agents are paid a fraction of that percentage for contracts but are usually paid a much higher percentage for endorsement agreements.

The NBA desperately needs LeBron James to succeed both on and off the basketball court. They need LeBron to help restore their fractured image. Gone are Michael Jordan, Larry Bird and Magic Johnson. Shaquille O'Neal was never really interested and Kobe Bryant’s image imploded in the summer of 2003. If David Stern and Company were counting on LeBron James they would best be advised to continue their search.

Will corporate America be interested in talking to LeBron’s “Boys from the Hood”. A high school teammate taking over the business affairs of a 20 year old basketball player sends the wrong message. It suggests LeBron James is much more interested in hanging out with his high school buddies, then he is the advice and guidance two NBA established NBA agents who committed the time and the effort to ensuring LeBron James would make the right business decisions offered him.

It sends the worst possible message about where LeBron James headspace is. It will cause the current roster of companies he endorses to take pause, except one, Nike the company Maverick Carter has spent the last two years working for. It’s well worth considering if Nike and Carter are not in a conflict of interest position in regard to the decision James has made to drop the Goodwin brothers in favor of an employee (Carter) of the biggest product he endorses.

"LeBron as the immediate phenom was a benefit to both Aaron and LeBron," said Sonny Vaccaro, a veteran shoe company executive familiar with negotiations with James' agents in the ESPN report. "What is happening now is just a sign of our times, because everyone wants to be with and grow a company or business with their own people. This was the natural offshoot. It's not like this is an illegitimate group that is raiding the coffers."

Carter is "the ultimate young people person," Vaccaro said in the ESPN report, and he will be afforded ample time to learn the ropes of the business since most of James' endorsement deals are done.

The well respected Vaccaro’s comments aside, The Akron Beacon Journal reported that Def Jam Recordings has taken an interest in James, and James is reportedly near an agreement with McDonald’s. McDonald’s will be a true litmus test for Carter. He’ll have to deal with one of the world’s biggest companies, who up until this week had been negotiating with the Goodwin brothers in what is likely a contact that could be in excess of $15 million. McDonald’s could move forward with the groundwork laid by the Goodwin brothers, they could take advantage of Carter’s inexperience (and negotiate a better agreement suiting their needs) or they could walk away from LeBron.

What happened to the Goodwin brothers happens everyday to sports agents. In a highly competitive industry where it’s a take no prisoner mentality, losing star clients comes with the territory. As an agent you often feel ‘violated’ after delivering so much for your client only to realize that another agent is going to benefit from what you’ve accomplished.

The good news for the Goodwin’s the have proven themselves under the toughest of circumstances and have added several major names to the list of NBA players they now represent: last year's No. 1 pick, Orlando Magic forward Dwight Howard, as well as Boston Celtics guard Gary Payton; New York Knicks guard Jamal Crawford and forward Shareef Abdur-Rahim; and Portland Trail Blazers guard Damon Stoudamire. The Goodwins also are representing University of Washington junior guard Nate Robinson, who is expected to be a late first- or early second-round pick in the upcoming NBA draft.

As for Lebon James new team of Maverick Carter and Randy Mims they can be excited they are the ones with the golden goose, but they should realize if LeBron was quick to drop the agents who negotiated agreements in excess of $100 million for him, job security better not be foremost in their planning.

For SportsBusinessNews.com this is Howard Bloom. Sources used in this report, ESPN.com’s Darren Rovell

Sunday, May 08, 2005

A day for Canadian Basketball fans everywhere

The sport of basketball was invented by a Canadian (James Naismith) but it took an American (Jack Donohue) to bring the sport to Canada. Naismith and Donohue are likely together today enjoy the greatest moment in Canadian basketball history, Steve Nash being named the NBA’s Most Valuable Player.
Donohue arrived in Canada shortly before the 1976 Montreal Olympics, stunning the basketball world with a fourth place finish. Donohue duplicated that feat at the 1984 Los Angeles Olympics and retired following coaching Canada to a sixth place finish at the Seoul Olympics. Before today, Canada’s greatest basketball moment took place at the 1983 World Student Games when a Donohue coached Canadian team won the gold media. Charles Barkley and Karl Malone were members of the American team the Canadian team beat in the semi-finals. Donohue, who coached at Kareem Abdul-Jabbar at New York’s Power Memorial High School, passed away two years ago.
A Canadian being selected as the best player in the NBA is as likely as an American being chosen as the world’s best soccer player, not something anyone associated with basketball in Canada would have ever believed would have been possible a few short years ago. In offering full disclosure it should be noted that your publisher and the writer of this piece worked at Basketball Canada from 1988 to 1992. I’ve also worked with basketball programs at the high school and college level for many years and I’m currently the voice of Canada’s three time defending national university champions, the Carleton University Ravens.
Sometime in July 1990 I was in a car heading from a Canadian National Team game at St. Catherine’s Brock University to Toronto. I was with Ken Shields who replaced Donohue following Coach Donohue’s retirement. As Shields was getting Canada ready to compete in they 1990 World Championships (being held in Argentina that summer) he was lamenting Canada didn’t seem to have developed any point guards of note. Shields mentioned a young high school player from British Columbia (Shields lives in British Columbia) but didn’t know much about the young player (Steve Nash) and Shields needed a point guard that summer. Nash joined the Canadian national team several years later, starring for Canada at the 2000 Sydney Games.
Just how underappreciated a sport was basketball in the late 1980’s and early 1990’s? At a meeting with then TSN (Canada’s version of ESPN) then general manager Rick Brace, Brace suggested to tractor pulling and darts drew better ratings then basketball. The seeds first planted by Donohue, then nourished by Shields and finally propelled when Canada hosted the 1994 World Championships (which led to the Toronto Raptors and Vancouver Grizzlies joining the NBA a year later) today see the sport of the crisp of unlimited potential.
If timing is everything, then a Canadian being selected as the NBA’s MVP a spring when basketball doesn’t have to compete with the Stanley Cup playoffs for attention, offers basketball the opportunity it has always needed. Ratings have improved (at least through the first week of the NBA playoffs). According to the Globe and Mail’s William Houston’ “television audiences were up substantially. Rogers Sportsnet's viewer ship increased 78 per cent over the same period last year.
TSN's audiences jumped 73 per cent. At The Score, the numbers were up 23 per cent.
Overall, the growth is 63 per cent, to an average of 86,000 viewers a game from 53,000 in 2004.
Even with the increase, 86,000 is not a large audience. Still, it topped advertisers' expectations, and the numbers seem to show the NBA arrow pointing up.
John Shannon, the head of broadcasting for Maple Leaf Sports and Entertainment, which controls NBA TV rights in Canada, told the Globe and Mail’s Houston he believes the audiences have increased mainly because of strong first-round match-ups.
Shannon categorizes last year's average of 53,000 as the NBA's hardcore base. Additional viewers are tuning in to see the stars, such as Shaquille O'Neal and Canadian-born Steve Nash, but also because the NHL playoffs have been cancelled.
Sportsnet drew the largest audience so far, 137,000 viewers, on April 27, for Game 2 of Memphis Grizzlies against Nash and the Phoenix Suns.
"We've always believed that hockey and basketball produce different audiences," Shannon said in the Globe and Mail report.
"But sports fans are looking for something to watch this time of year. So a little of the growth has to do with the absence of hockey playoffs."
The audiences also are skewing well demographically. The 18-to-49 age group showed a 66-per-cent increase from last year. For the 25-to-54 demo, the numbers were up 79 per cent.” (that again for the Globe and Mail’s William Houston)
A modest Nash told the Associated Press Saturday night "I would probably vote for Shaquille [O'Neal]," Nash said. "He's one of the greatest ever to play the game. I look up to him. He's a huge part of this game's history already. He's one of the very best personalities and players in the game's history."
Reaction within the Canadian basketball community has been not surprisingly, excited for Nash but understanding what this can mean to the sports growth in Canada.
"For every kid in Canada who believes he has to be seven foot and be able to swing off the rim to even have a chance to play in the NBA, they only have to take a look at Steve," said Leo Rautins, who was a first-round draft pick of the Philadelphia 76ers in 1983 in a Globe and Mail report. "He is a testimony to hard work, perseverance and the don't let anybody say you can't do it mentality." Rautins stands to benefit more then most, he was hired to coach Canada’s National Team in March.
"If it happens, if he wins, I honestly think it would be greater than Mike Weir at Augusta," says former Canadian national team coach Jay Triano, commenting on various US. media reports that Phoenix Suns guard Steve Nash, a native of Victoria, will be named the league's MVP today in a Calgary Herald report.
"Don't be me wrong, I'm a big fan of Mike's. What he did was amazing. But this, if it does happen, would be being the best player in the best league in the world over a whole season, 82 games. That's phenomenal."
"Doesn't matter whether it's a game of cards, of h-o-r-s-e after practice, or darts, or whatever, he has to win. We hold a boccie tournament in the backyard of my assistant coach in Richmond (B.C.) every year, and he's got to win there," said Triano in The Calgary Herald report.
"Here's another example: We held a golf tournament before heading over to the Sydney Olympics with the national team at an executive course," recalled Triano. "A lot of our guys didn't play a lot of golf, but (it was) a decent course. And Steve won, one-over-par. I told him: 'That's great, Steve! One-over. You've gotta be happy. When's the last time you played?' He kind of shrugged and said: 'A year and a half ago.' How many guys you know could shoot a one-over-par on an executive course with rented clubs after not playing for a year and a half?
"And he channels his competitiveness in the right way. Steve is someone who really does put the group before himself. If he has to sacrifice himself for the good of the team, he's willing. And that's pretty rare in any professional sport these days.''
There are those who are going to suggest if the Toronto Raptors had signed Nash last summer when Nash was a free agent the Raptors may have made the NBA playoffs and would be in a better position then they currently are. When asked about signing Nash the Raptors have suggested they couldn’t work the economics of Nash’s contract into the NBA’s salary cap. A basketball season later, a Canadian (Nash) has been selected as the NBA’s MVP, the Raptors didn’t make the playoffs, and the Raptors have an uncertain future in Canada.
Sometimes in business you have to invest in your businesses future and if that future includes paying a luxury tax to sign the greatest Canadian to ever play basketball, you’re the NBA’s only remaining franchise, sometimes you have to spend money to make money. If (more then likely when) the Toronto Raptors leave Canada, they’ll rue the day they could have made a serious attempt to sign a player they could have built their franchise and their brand around.
Just how committed to Canada is Steve Nash. The Toronto Sun reported in Saturday’s edition “the finishing touches are being applied to the creation of the Steve Nash Foundation Celebrity Classic. The inaugural charity all-star game tentatively is scheduled to take place on Friday, July 29, at the Air Canada Centre.
Proceeds will go to the Steve Nash Foundation, although there are rumors some of the funds raised from the game will be earmarked specifically for a youth basketball centre in Toronto.” Ironically the event will replace the annual Vince Carter game.
In another move driven largely the Raptors claimed by the business of the NBA, the Raptors traded Carter to New Jersey (the Nets made the playoffs) for among others Alonzo Mourning (he made the playoffs with the Miami Heat), and the Raptors paid Mourning $10 million to play for the Heat. Whatever business the Toronto Raptors may be in, paying Alonzo Mourning $10 million to play for another team and not investing in their future with Steve Nash….well we’ll leave that logic to Toronto sports fans. Would it not have made more sense to have invested the $10 million they wasted on Alonzo Mourning to help pay for Nash’s contract? It doesn’t make one wonder if the Toronto Raptors are capable of taking any advantage of the opportunity Nash’s MVP affords them.
If the Raptors can’t see the forest for the trees when it comes to how valuable a player Steve Nash would have been for their team, the Canadian National team may not have the opportunity to enjoy that opportunity. Nash made it clear after Canada failed to qualify for the 2004 Athens Games he might not play for the National Team again; certainly Canada Basketball needs to work with Steve Nash on helping to create more awareness for the sport in Canada.
Steve Nash’s selection as the NBA’s MVP stands as a testament not only to the great Nash (and a year the Phoenix Suns are having) but as a tribute to those who helped the game grow in Canada. From James Naismith, to Jack Donohue, to Ken Shields, to all those who have ever cared about basketball in Canada, today is a day in some small way each and everyone who cared can share with Steve Nash, on this the greatest day in Canadian basketball history.
For SportsBusinessNews.com this is Howard Bloom. Sources used in this report: The Globe and Mail, Calgary Herald and Toronto Sun.

Friday, May 06, 2005

Hockey musings on a Friday

The National Hockey League wakes up this Friday morning having established a dubious distinction. Welcome to Day 233 of the NHL Lockout, welcome to Gary Bettman’s and Bob Goodenow’s living nightmare, welcome to the longest labor dispute in sports history. Major League Baseball and the NHL shared that record Thursday, the NHL finally having reached MLB’s Day of infamy that baseball reached during their 1994-1995 lockout.
And how did Mr. Bettman and Mr. Goodenow mark this special occasion? By meeting for three hours in Toronto. The two sides met for three hours and ‘agreed’ to meet five more times, including Friday morning (likely serving champagne and orange juice in celebrating their record for ineptitude).
The National Hockey League believes they need a 90 day window once they reach a new collective bargaining agreement with the Players Association to get everything they need in place to re-launch their product. Gary Betttman and Company believes as long as they reach an agreement by July 1 they’ll be able to start their season in early October. The 90 day time frame the league believes represents enough time to sell their season tickets, their local (and one would assume national) sponsorship packages, and their local and national radio and television packages. Ninety days may seem like a long time, but 3 months may not begin to undo the damage that has been done to the sport from an economic and marketing perspective.
While Gary and Bob continue to meet, there are those who continue to believe Bob and Gary will never reach a new agreement. The issue has been raised months ago in the pages of SBN, if Gary and Bob managed to destroy an entire professional hockey season, just what makes anyone believe these two gentlemen are capable of putting aside their differences for the good of the game.
The players seem to now sense they hold an advantage over the owners, believing the owners will (are) desperate enough to agree to any terms they put forward. At the same time, the players just don’t seem to understand if the owners cancelled an entire season the owners are ready to take this as far as they have too. The players may believe that since the owners have at least for the time being shelved their plans for using replacement players the owners are growing more desperate for their services. All that’s really taken place on the part of ownership; a realization that using replacement players would do more harm then good. If the players believe there has been a philosophical shift among ownership away from an owner friendly CBA, the players just don’t get it.
On this historic day in sports history there is a growing sentiment from the players’ side that it may be time to replace Bettman and Goodenow. It’s a safe bet the players were never interested in what Gary Bettman was selling, but players speaking out against Bob Goodenow is an entirely different matter. Tie Domi spoke to The New York Times Joe Lapointe this week: "If these guys don't get a deal done, there's going to have to be new faces in there," Domi said, referring to Commissioner Gary Bettman and Bob Goodenow, the executive director of the union. "There's a lot of ego, and they don't want to put their pride aside. The fight is over. These two guys have got to get a deal done. They'd better, or they won't be around too long."
Wednesday appearing on TSN’s Off the Record, Flyers forward Jeremy Roenick agreed with Domi views regarding both Goodenow and Bettman, suggesting the pair either get the job done or get out of the way. The movement may be small right now towards replacing hockey’s Alfonse and Gaston (add NHL HOF member and hockey agent Bobby Orr to the group) but it is growing.
Just when you believe you may have seen it all with hockey along comes the World Hockey Championship, the only real hockey event since last September’s World Cup. The event is being held in Austria. The event is being televised in a number of counties including Canada. Is there any live American television coverage, no. ESPN reportedly said they had no time available (the games are all being played during the morning or afternoon North American times). Fox Sports Net expressed interest but told the International Ice Hockey Federation they weren’t interested after being offered a package that included all of the tournaments games at a price the network was not prepared to pay.
You have to wonder just what is the IIHF thinking when they turn their backs on an American sports cable network? Hockey needs as much exposure as it can get. Hockey needed to do whatever they it needed to do to get the World Championships on American television. René Fassell the President of the IIHF one would like to believe would like to see hockey’s best at next year’s Olympic Games. What better leverage to have in trying to convince Gary Bettman and the NHL that it is in their best interests that NHL’s appear at the Olympics then by having valued exposure.
The IIHF won’t be the first and certainly won’t be the last international sports federation to have an over inflated view of their product. Clearly the World Hockey Championships represent value in certain television markets; the United States isn’t one of those markets. It is however the market that controls much of the corporate world and when all is said and done will likely determine whether or not NHL’ers will continue to compete in the Olympic Games. If the IIHF doesn’t understand whose stirring the pot, maybe it better find a new chef.
For SportsBusinessNews.com this is Howard Bloom

Thursday, May 05, 2005

Tier III minor league sports owners (and the damage some cause)

There are major and minor league sports leagues. There are great sports owners and terrible owners at all levels, in so called Tier I leagues (NFL, MLB, NBA, NHL) Tier II (Arena Football League, Major League Soccer, WNBA) and then there’s Tier III, where sports bottom feeders seem to reside.
The challenge Tier III sports leagues face (ABA, Canadian Football League, Independent Baseball and many Basketball Leagues) isn’t necessarily the product. Many (a majority) of those who own Tier III sports leagues have the best of intentions and are great owners, however it takes only a few rotten apples to spoil the barrel, hurting the reputation of other Tier III sports owners and often ruining the reputation of entire leagues.
The Canadian Football League for all its bluster remains what it has always been a minor professional football league never quite sure how it fits into the sports world. The league has an arms length relationship with the NFL, but is not a feeder league for Big Brother (NFL Europe fills that role). Unfortunately the Canadian Football League attracts problems like the CFL is currently facing in Ottawa. Ottawa is Canada’s fourth largest city, and home to the NHL’s Ottawa Senators. It is also home to the Ottawa Lynx the Baltimore Orioles Triple-A franchise. The Lynx have been at the bottom of Triple A attendance for the last eight years, averaging somewhere around 3,000 fans a game (much less the last two years). The only reason the team is still in Ottawa, a long-term lease and no real place to move the team too.
Ottawa was home to a Canadian Football League franchise until 1997 when, Horn Chen (he owns the Central Hockey League) folded the franchise. Many believed that if Ottawa had a good ownership group a CFL franchise would flourish in the City easily selling out the 30,000 seat football stadium. Three years ago the CFL returned to Ottawa, and good intentions aside the team has proven to be an unmitigated disaster from Day One. The ownership group was based in Toronto. The team didn’t sell out any games in their first three years. The team lost $7 million (a great deal for a minor league sports franchise) but managed to recoup $2 million when the team hosted the Grey Cup in November (Canada’s version of the Super Bowl). If Ottawa had experienced bad ownership before, the current group has basically left town since the Grey Cup ending. With the CFL season set to start in six weeks the team has less then 5,000 season ticket holders and can’t even afford proper equipment for their training camp that begins in three weeks.
The league and the current ownership group held a meeting in Toronto Wednesday releasing the following statement through Tom Wright its commissioner: “The Ottawa Renegades are an integral part of this League and are a fundamental fixture of the sports landscape in the nation’s capital. Our single goal is to ensure that the Renegades continue to provide exciting, entertaining and competitive football for Ottawa fans.”
Referring to the discussions on ownership, Commissioner Wright described the meeting as productive and progressive, and stated a long-term plan for the ownership of the franchise would be formalized soon. Until that time, and in accordance with League policy, no speculative announcements or commentary on the topic will be forthcoming from the League or the Ottawa Club.
The long-term plan is yet the strongest indication why the CFL will never amount to more then a Tier III league always on the edge of the abyss, always at or near the brink of disaster. Ottawa’s old CFL franchise known as the Ottawa Rough Riders was owned in the early 1990’s by Bernie and Lonie Gliberman, father and son businessmen from Detroit. Their first ownership was marked with a series of comedic events. Always threatening to move the franchise, Lonie brought Dexter Manley out of retirement. Lonie dated one of the teams’ cheerleaders. Lonie and his cheerleader girlfriend managed to get into a fight in an Ottawa bar. Conflicting reports had either the cheerleader or Lonie’s bodyguard saving the day, but not Lonie. When the Gliberman’s reign of terror ended, Lonie’s parting remarks to Ottawa football fans included a belief that he and his father could never make football work in Ottawa because everyone hated them.
The nightmare scenario for whatever football fans are left in Ottawa began unfolding in the last few days. Lonie has returned to Ottawa, with an interest in buying a 51 percent interest in the team. Not to be outdone by his Dexter Manley move of the 1980’s, Lonie brought former Green Bay Packer Forrest Greg to town with him. Greg has been out of football for ten years and at 71 is….getting older. Just how much of a carnival does this have to potentially be? When Lonie went to the teams offices Tuesday, he arrived wearing a shirt, tie and jacket and driving a bicycle. If images counts for anything, not a pretty picture.
The World Hockey Association, better known as Fools Gold. The WHA has promised a great deal in the last year, never delivering anything. Their latest concept, a tournament scheduled to be begin May 20 in Hamilton, Toronto and Vancouver. Their website Wednesday evening removed any mention of their proposed May event, now promising: “we are pushing hard to make the much-anticipated Bobby Hull Invitational a reality this June, 2005.” The full release from the leagues’ owners is included in today’s DailyDose. The owners continue to sell Fools Gold, but no one is buying what they’re selling. You can take this to the bank; the WHA will never host a game, a tournament or ice a league.
Finally there’s the ABA in our look at leagues’ and owners who embarrass the industry with inane, inept and incompetence examples.. Truly while others may strive to capture the ABA’s legacy of terrible leadership that would be next to impossible.
According to the league’s Czar (commissioner) Joe Newman, “"We have 56 teams confirmed to play and have accepted applications for 19 additional teams that were submitted before the deadline. At this time, we are uncertain how many of these 19 teams will be added; there should be several and we'll post the final roster of teams in the next week to ten days."
Newman added, "We will also finalize the divisions during the same period. The divisions will be from 7-9 teams and will be determined by the distance and travel times of the teams. Divisions will be named after original ABA legends. Thus far, four legends have been honored including Freddie Lewis, Marvin Barnes, Roger Brown and Spencer Haywood."
"The process is taking a little longer than before because of the new standards and requirements for team membership that were determined at the ABA League Owners meeting. The goal of the new standards and requirements is to strengthen the overall operations of the team and the league. Of course, the reason for the growth is that the ABA business model and plan is one of the best in professional sports. And there are still some good markets available for the 2006-2007 season," Newman stated.
Dick Tinkham, ABA Special Counsel and co-owner concluded, "Growing as quickly as we have has not been easy. However, in spite of some problems, the ABA will be providing an opportunity for more players, more coaches and more referees than any professional sports league ever; fans in three countries will be able to see exciting, professional basketball at very affordable prices, and the teams will make major economic impacts with the large number of venue dates, hotel rooms, transportation and restaurants. These are exciting times indeed."
Nevertheless if you’re interested in becoming part of the K-Tel of sports leagues all you need do is either send an email to conniejoenewman@aol.com. Or click on this link http://www.abalive.com/markets/ for an online application. When was the last time a professional sports league offered online franchise membership plans? It doesn’t make any sense and only ends up drawing ridicule.
The problem leagues like the ABA face in their ‘due diligence’ in searching for owners are the type of owners they attract, people who have no business being associated with anything that considers itself professional. Leagues like the ABA, the WHA and the CFL attract little if any national media attention, except when the truly bizarre takes place.
The Nashville Rhythm became the first men’s professional sports franchise to hire a woman to be their head coach, Ashley McElhiney. The Rhythm was (the team no longer exists) owned by three people two men and a platinum pop star wannabe named Sally Anthony. Anthony attempted to fire McElhiney during a game in February (midway through the third quarter). According to media reports and eye witness accounts, Anthony headed towards the teams bench and had to be restrained by security. The team suspended play shortly after Anthony’s in-game entertainment.
Why does it matter if boys on bicycles want to own Canadian Football League franchises? Why does it matter if proposed hockey leagues that have made nothing but unfulfilled promises are noticed? And why is it important to note leagues that offer online memberships, see franchise disband during seasons and offer the truly bizarre when it come to in game entertainment. In a word Mike Veeck and Mike Wolf.
For anyone who has never met Mike Veeck the loss is yours. Mike Veeck the son of the late legendary Clevleand Indians and Chicago White Sox owner Bill Veeck remains one of sports great dreamers. He also founded the Northern League along with Mike Wolf in 1993. The Northern League continues to grow every year and has spawned the Atlantic League, the Northeast League, the Western League, the Texas—Louisiana Baseball League and the Frontier League. All told over 150 cities are enjoying the joys of professional baseball. Not every team in these leagues will work, but every time Mike Veeck or Mike Wolf come calling they’re faced with many obstacles. And the biggest challenge they face the tainted reputation the lower levels of professional sports face from the wrong owners who somehow end up being associated with these leagues.
For SportsBusinessNews.com this is Howard Bloom

Wednesday, May 04, 2005

David Stern -- does absolute power corrupt

Leadership, power – David Stern the National Basketball Association’s Commissioner is all that and a great deal more. The man who saved the NBA from itself in the mid 1980’s seemingly has evolved from one of sports most respected industry leaders to a man possessed by the powerful position he holds. His latest tirade, suggestions he’s prepared to toss Houston Rockets coach Jeff Van Gundy out of the sport – a lifetime ban for comments Van Gundy made after game four of the Rockets – Dallas Mavericks first round NBA playoff series.
The NBA levied Van Gundy with a $100,000 fine Monday, the largest fine ever assessed against an NBA coach for misconduct -- after he publicly accused the league's game officials of inappropriately targeting Rockets center Yao Ming during the playoffs, and blamed Dallas Mavericks owner Mark Cuban for causing the allegedly disparate and inequitable treatment.
According to an Associated Press report: Van Gundy got himself into trouble by telling three reporters at the team hotel in Dallas on Sunday night that a referee not working the playoffs called him after the Rockets went up 2-0 and warned that Yao was mentioned in an online evaluation from supervisor of officials Ronnie Nunn.
Van Gundy added that because Cuban "has been hard on" the league and officials, "he's gotten the benefit."
"I didn't think that really worked in the NBA, but in this case it has," Van Gundy said.
He stood by his complaints Monday and said he's made many of them privately to the league all season.
"I said what I said. I believe what I believe and I've seen what I've seen. They've got to do what they think is right," Van Gundy said. "I would watch all of (Yao's) 20 fouls with anyone. And I would have no problems making my case that he's not refereed appropriately. I stand by that."
Stern attending game five of the Rockets – Mavericks series Monday night in Dallas announced the fine, along with the following comments: "It's just inappropriate," Stern said. "He was penalized for it. We'll see where we go from here.
"There were a lot of things that were done by innuendo but had the effect of using names. We're not going to tolerate it. We're not through with the affair yet. But for now, a $100,000 fine is a good intermediate step. The investigation is not closed. (Further discipline) is possible.
"If he's going to say things like that, he's not going to continue in this league. We're going to have to see. If the attitude reflected by those comments continues to be reflected publicly, he's going to have a big problem with me so long as I'm the commissioner." Stern said.
According to The Houston Chronicle when asked by the league to reveal his source, Van Gundy refused and was according to Stern in violation of Article 24 of the NBA bylaws.
Let’s all take a deep breath, and access what is really happening. The Rockets won the first two games of the series in Dallas and lost the next two games at home. Van Gundy was upset and lashed out at the referees. Maybe he should have looked at more game films before pointing fingers, but that aside does David Stern really believe he’ll be able to impose a lifetime ban on a coach for suggesting he (the coach) didn’t like the referees after his team had lost two (now three) straight playoff games?
This isn’t the first example of David Stern suggesting he was going to bring the hammer down on someone Stern believed had committed an egregious foul against the NBA. After November’s Mayhem in Motown incident when members of the Indiana Pacers and fans attending a Detroit Pistons – Pacers game at the Palace at Auburn Hills became embroiled in a post game brawl, Stern made it clear he would be the sole arbitrator in dealing out punishment, fines and suspensions resulting from what took place at game.
Artest was suspended for the rest of the season, and two of his Indiana Pacers teammates Jermaine O'Neal and Stephen Jackson would miss a total of 55 games for fighting with fans during the melee that broke out at the end of a game.
Overall, the NBA issued some of the harshest penalties in its history by banning nine players for more than 140 games. Artest's suspension was the strongest ever levied for a fight during a game.
"The line is drawn, and my guess is that won't happen again -- certainly not by anybody who wants to be associated with our league," commissioner David Stern said.
"We have to make the point that there are boundaries in our games," Stern said. "One of our boundaries, that have always been immutable, is the boundary that separate the fans from the court. Players cannot lose control and move into the stands."
"It was unanimous, one to nothing," Stern said. "I did not strike from my mind the fact that Ron Artest had been suspended on previous conditions for loss of self-control."
Jermaine O'Neal appealed Stern’s decision (in the NBA Stern is judge, jury and the according to NBA by-laws the sole person NBA players and coaches can appeal his decisions too – absolute power) to Roger Kaplan (and independent arbitrator) as was his right according to the NBA’s CBA. Kaplan upheld Stern’s suspension of Ron Artest (for the rest of the season and postseason), Stephen Jackson (30 games) and Anthony Johnson (five games) for their roles in the Nov. 19 incident that concluded a 97-82 Indiana victory over Detroit in The Palace of Auburn Hills, reduced O'Neal's suspension from 25 to 15 games.
Stern was justified in fining Van Gundy $100,000. The comments the Houston coach made were irresponsible. Asking Van Gundy for his source was also the right action for the league to take, but Stern stepped over the line when he suggested he was prepared to consider a lifetime ban on Van Gundy.
The silliness of his Stern’s remark’s "If he's going to say things like that, he's not going to continue in this league. We're going to have to see. If the attitude reflected by those comments continues to be reflected publicly, he's going to have a big problem with me so long as I'm the commissioner," sends a terrible message to the NBA stakeholders, the league’s players, the league’s franchise owners (David Stern’s real bosses). The message, the warning maybe its time the NBA considered their options when it comes to David Stern’s future with the league.
David Stern’s legacy as a leader in the sports industry should place him among sports legendary leaders. He should be thought of as a man who should be held in the highest possible regard with all the respect and admiration he’s earned. However attempts to claim absolute power, the ability to hand out lifetime bans, the claim that he is a majority of one only serve to taint the reputation David Stern has worked so hard to earn. One can only home a man has honorable as David Stern is, comes to his senses and leads the NBA and stops dictating his beliefs.
For SportsBusinessNews.com this is Howard Bloom. Sources used in this HB Insider Report, The Houston Chronicle, Associated Press, Indiana Pacers.com and ESPN.com

Tuesday, May 03, 2005

When is a contract not a contract -- in the sports industry

Truth. Honor. When one signs their name on a contract, the document represents more then a legal binding agreement. It stands as ones bond, their word that they will live by the terms and conditions of the contract. In the sports world often contracts aren’t worth the paper they’re written on. More often then not athletes attempt to renegotiate contracts. When was the last time a professional sports franchise was asked to contribute 25 percent toward the cost of the building a new stadium but broke that agreement in order to remain in a facility they deemed terrible a few months ago.
Terrell Owens signed a seven-year $48.87 million contract with the Philadelphia Eagles last year. The contract included a $9.6 million bonus. In the National Football League only bonuses are guaranteed and are paid entirely in the first year of the contract. Owens’ contract includes a $3.25 million salary this year.
The Eagles held a mandatory mini-camp over the weekend. Owens was a no show. The Eagles can fine Owens $6,000 per day for missing the mini-camp. A report in Sunday’s Philadelphia Inquirer suggested the team may consider recouping $1.8 million, the prorated portion of his bonus for this year after he missed the mini-camp. According to the Inquirer report, ‘an Eagles source said he believed that both the receiver and his agent (Drew Rosenhaus) knew of the potential for the team to recover just under 20 percent of the signing bonus. The source said the Eagles would soon decide if they would take that course of action against Owens.
Owens hired Rosenhaus in the hope that one of the league's most prominent agents could get the Eagles to rework the seven-year, $48.97 million contract the wide receiver signed before last season.’
Rosenhaus is an agent with a ‘reputation’. Based in Miami, Rosenhaus and his brother spent their early years as agents hanging out in the Miami Dolphins players’ parking lot often ‘allegedly’ attempting to steal members of the Dolphins already represented by other agents.
Putting Terrell Owens and Drew Rosenhaus together is a lot like splitting the atom and adding the needed ingredients that result in an Atomic Bomb, nothing good can take place. Owens may indeed believe he signed a bad contact last year. Rosenhaus’ bluster aside, remains one of the NFL’s premier agents working like a bulldog for his clients. However the bottom line is just that, the bottom line. The Eagles negotiated a $48.97 million contact with Terrell Owens in good faith and while only Owens bonus is guaranteed, the $9.6 bonus represents a significant commitment by the Eagles.
The Eagles have three choices in dealing with Owens: they can renegotiate the contact, trade the disgruntled Owens, or force Owens to accept the terms and conditions he agreed to a year ago. The precedent in renegotiating a contract wouldn’t be unique to the Eagles but nonetheless would send the wrong message to the players they have under contact. Have a great season, no problem we’ll give you a new contact, even if you already have a contact. Trading Owens would be a bad idea as well. The team will never get Owens real value back in a trade, the obvious leverage any trading partner would have being Owens terrible reputation. That leaves option three, force Owens to live by the terms and conditions he readily agreed to a year ago. Owens doesn’t have a great many options if the Eagles force his hand. Owens is likely well aware he’d be forced to payback the prorated $1.8 million of his bonus and lose his $3.25 million salary for the 2005 season. Is Terrell Owens really prepared to give up more then $5 million?
In Canada the economics of operating a sports franchise is very different from how teams operate in the United States. Stadiums and arenas often are paid for with private (non taxpayer dollars) in Canada. In the United States stadiums and arenas are either funded with taxpayers’ dollars or a combination of private and public dollars.
Monday the owners of the Toronto Argonauts walked away from an agreement that would have seen a 25,000 facility built in the city. The teams’ management had contended for several years they needed an open air stadium for their team with a seating capacity of around 25,000. The Argonauts have played in the Rogers Centre (formally the SkyDome since 1989). The teams’ owners negotiated an agreement in good faith with the City of Toronto, the Province of Ontario, the Canadian Government, York University (where the stadium was to be built) and most importantly the Canadian Soccer Association (CSA) to build a $90 million stadium. The football team would contribute $20 towards the cost. Its well worth noting that Toronto’s Air Canada Centre, Ottawa’s Corel Centre and Montreal’s Bell Centre (all home to Canadian NHL teams) where built entirely with private dollars.
The Argos managed to find the needed public support (taxpayer dollars) for their stadium ‘dream’ when the CSA bid for the World 21 and Under World Soccer Championships. The centerpiece of that bid was FIFA (soccer’s international governing body) belief the event would be showcased in a new soccer friendly facility in Toronto, Canada’s largest city and the third largest media center in North America (after New York and Los Angeles). For the CSA the opportunity to host the world class event represented an opportunity to spur the growth of soccer in Canada. While the proposed Toronto facility will represent the cornerstone of the event, seven other Canadian cities are scheduled to host games.
“Our passion is for our team and for our fans,” said Argonauts co-owner David Cynamon. “We want to be in a stadium that can accommodate our growing support, with a fan and family-friendly schedule, and fit with our economic structure.”
Added Argo co-owner Howard Sokolowski, “There is a special responsibility that comes with owning an historic franchise like the Argos. We owe it to our fans and, indeed, to the entire community, to make sure that this 132 year old club continues to prosper and grow.”
Those where the comments the Argonauts owners made in their official release. The entire release unedited appears in Tuesday’s DailyDose. No where in the release did Cinnamon and Sokolowski recognize the commitment they had made to the Canadian Soccer Association or too York University. The agreements they had reached in good faith but agreements they now believe are null and void. The Argonauts release focuses on the benefits of staying at the Rogers Centre, its as if they never agreed to the York University stadium partnership.
The Canadian Soccer Association based in Ottawa, quickly moved into damage control holding an afternoon media conference in downtown Toronto, releasing the following statement: "We are disappointed with the confirmation today from the Toronto Argonauts that they have decided to stay at the Rogers Centre. We have been working for the past 10 days with our partners at York University to ensure the success of a 20,000 soccer stadium for the FIFA World Youth Championship Canada 2007.
Our discussions with both York University and our partners at the federal and provincial levels have been most positive and encouraging. The CSA continues to work toward the construction of the York University stadium in partnership with our stakeholders and looks forward to its grand opening in July 2007 for the FIFA World Youth Championship.”
The University released the following statement: “"At this time we are focusing on updating the project requirements and plans to reflect the decision by the Argos, in order to develop a viable solution," stated Gary Brewer, York's vice-president, finance and administration. "This has been a very time-sensitive project from the beginning. We continue to work to tight timelines and will be dealing with many variables over the coming weeks."
In business successful business people do what they believe suits their interests best regardless of the implications. Businesses make decisions along the lines of what Cynamon and Sokolowski decided to do Monday without any regret nor should they have.
Professional sports is a business and in business you’re goal is to make money, or at the least break even on your investment. However the ‘rules of the game’ are different for sports franchises. Owning a sports franchise has its share of public trust, you’re afforded an opportunity to own a business that when you really come down to it, is owned by the people who support the team its fans and sponsors. Owning a sports franchise can truly be a double edged sword.
If success in sports is at least partially based on one’s reputation then the owners of the Toronto Argonauts and Terrell Owens should take heed and pay attention. They may have damaged the trust people have in their abilities and that may cost them more then they believe they stand to gain by not honoring the contracts and agreements they reached and negotiated in good faith.
For SportsBusinessNews.com this is Howard Bloom

Monday, May 02, 2005

The Wonderful Wacky World of Hockey and those who cover the sport

As the wacky world of hockey, the National Hockey League continues its fall toward total obscurity; three issues have reared their ugly head in the last week which illustrates just how backward the sport of hockey is.
Issue One – a leading NHL agent is offered a forum to expose his views on the NHL lockout. Issue Two – members of the Canadian media and hockey fans have taken up the cause for Todd Bertuzzi the NHL player who assaulted Steve Moore in a game last March, ending Moore’s career. Issue Three – NHL owners have decided at least for the time being replacement players won’t be a part of their 2005-06 plans, which only makes sense if the league and its players association are close to an agreement. Taken separately it might be easy to suggest that on their own each subject may not represent a major problem to the league’s image, but when put together indicates just how terribly managed a professional sports league the NHL has become, and how badly the media covers the sports.
Last Sunday, The Lawrence Eagle Tribune featured an editorial by one of the greatest players in NHL history Bobby Orr. Orr contended in his editorial that NHL commissioner Gary Bettman and NHLPA executive director Bob Goodenow should step aside for the good of the game in order that a labor agreement be reached. Orr as had been suggested in an earlier SBN Insider Report believes that it may be impossible for Bettman and Goodenow to reach an agreement. Orr made several great points in what was a well written piece. Orr’s prose aside, The Lawrence Eagle Tribune committed an unpardonable error in publishing Orr’s piece, at least in how they presented the article to their readership.
Bobby Orr is one of the greatest Boston Bruins in history and remains one of the five greatest players in hockey history. He has every right to speak his mind and again the stance he took closely mirrors positions taken by SportsBusinessNews.com. However, the error in judgment made by the paper is in that they had the responsibility to make it abundantly clear to their readership that Orr is an NHL agent and therefore derives a significant portion of his current income from NHL players. And what the paper needed to point out was that Bobby Orr has lost that ability to earn a living directly as a result of the NHL lockout.
In an accompanying piece Russ Conway one of hockey’s more respected writers did note that Orr was an agent, offering these six words of clarification in a 500 word article: “operates a hockey player sports agency”. Did the paper note that Bobby Orr was an agent? If six words in a 500 word sidebar represent full disclosure then yes they made it clear, but no six words at the end of a sidebar written by the papers Associate Editor is not acceptable. Sports journalism suffers from enough stigmatisms. The Lawrence Eagle had the moral and ethical responsibility to make it clear in Orr’s byline and in Conway’s lead that Orr is a leading NHL agent. Clearly as an agent Bobby Orr was directly in a position of a conflict of interest. Shame on The Lawrence Eagle Tribune.
Sports journalism on the best of days suffers from too many writers being offered platforms to express their opinions. Sunday’s Ottawa Citizen offered an example of a sports columnist offering prose that may have been best left out of his column.
Hugh Adami the sports section’s Sunday columnist offered his views on Steve Moore. For those who may have forgotten Moore is the former Colorado Avalanche player who had his career ended when he was attacked by Todd Bertuzzi in the closing moments of an NHL game last March. The NHL suspended Bertuzzi indefinitely. Last week Bertuzzi met with NHL commissioner Gary Bettman seeking reinstatement. Regardless of whether or not NHL hockey returns this fall, Bertuzzi wants his suspension lifted so that he might be able to play hockey in Europe this fall. Bertuzzi’s NHL suspension has been recognized by the International Ice Hockey Federation and prevents Bertuzzi from playing professional hockey anywhere.
Aside from whether or not Todd Bertuzzi should be allowed to play hockey again (he will be allowed to return soon enough unlike Steve Moore), the Canadian media seemingly has turned Steve Moore into the villain. As unimaginable as it may be, a young man who will suffer for the rest of his life directly as a result of Todd Bertuzzi’s actions is now the bad guy.
Some of the highlights of Adami’s piece in Sunday’s Ottawa Citizen including the following:
Is it my imagination, or is Steve Moore beginning to look like a weenie in his apparent mission to extract a pound of flesh from Vancouver Canucks winger Todd Bertuzzi?
After all, it wasn't as if Moore was taken hostage and gunned down in a botched robbery by a career criminal. Moore, a bit of an agitator himself, was attacked 14 months ago in what is characteristically a violent game by an opponent who showed he could be as much a goon as a really good hockey player.
It was clear from his first news conference in late March 2004 that Moore was in an unforgiving mood, despite Bertuzzi's weeping apology broadcast live in Canada and the U.S. a few days following the incident.
Moore may want to consider the accident in which Dan Snyder of the Atlanta Thrashers was killed when teammate Dany Heatley lost control of his speeding Ferrari, about six months before the Bertuzzi-Moore incident.
There is a great deal more insight Adami offered, and he suggested in his close that it might be in Moore’s best interest to stop being a weenie. To compare the tragic accident that ended the life of Dan Snyder to the mugging of Steve Moore just doesn’t make any sense. Dany Heatley and Dan Snyder were involved in a terrible accident that ended Snyder’s life. Bertuzzi has been found guilty of assault causing bodily harm in a plea bargain last December. Bertuzzi is facing a multi-million dollar civil suit from Moore that could rock hockey to its foundation if Bertuzzi’s actions are found to have been premeditated. However, Adamai’s suggestions that Moore is weak for not being able to forgive Todd Bertuzzi again suggests sports writers are lacking both morals and ethics. And the opinions of Hugh Adami (a columnist more often then not very well respected by SBN) are shared by many other Canadian sports writers.
The NHL’s Board of Governors recently decided their immediate plans for the 2005-06 season would not include the use of replacement players. Either the NHL and the NHLPA are very close to a labor agreement or the league is misguided in their belief that the league will suffer little if any damage as a result of losing a year in terms of being able to sell their product.
In order to market the 2005-06 season the NHL will have to rebuild its image from the ground-up. More importantly the member franchises are going to have to put a great deal of effort and commitment into rebuilding their season ticket base, and that’s where the NHL’s decision to not move forward with a 2005-06 season until the league reaches a new labor agreement becomes interesting.
Does anyone currently working for the National Hockey League or an NHL franchise honestly believe they’ll be able to sell season tickets before they have a new labor agreement? Why would anyone who had enough faith in the NHL and invested their money in season tickets for a cancelled 2004-05 season be prepared to again write a check to any NHL franchise for a season that may never take place? And for that matter would it make any sense for any NHL franchise to invest the time, money and effort into a season ticket campaign when they are not able to firmly commit to delivering their product?
One issue remains clear in looking at the NHL labor problems; the league continues to lack the leadership it needs to reach a new labor agreement? If Gary Bettman and Bob Goodenow haven’t been able to reach a labor accord in time to save an entire season, it doesn’t make any sense to believe they are capable of reaching an agreement now. As for the media, (The Lawrence Eagle Tribune and The Ottawa Citizen examples), the media are afforded an opportunity to offer their views and often influence public opinion. Its not a matter of whether or not an opinion is right or wrong, it is about the media understanding the responsibility that goes along with that platform.
For SportsBusinessNews.com this is Howard Bloom