Tuesday, July 31, 2007

And that’s the way it is -- Michael Vick, done in the corporate marketplace

Since Friday the remaining companies connected to Michael Vick once considered the most marketable athlete in the National Football League and one of sports most prized spokespeople appears finished as an athlete companies want associated with their products. It has been two weeks since Vick was indicated on allegations he was an active participant in an illegal dogfighting business, where according to the 18-page indictment Vick and his cohorts bred dogs where breeders allegedly fought pit bulls for purses as high as $26,000 and some losing dogs were electrocuted, drowned, hanged or shot to death.

The stigma attached to the unproven allegations have made Michael Vick a marketing pariah. Kobe Bryant may have recovered from allegations he assaulted a woman in Boulder, Colorado four years ago, the Duke lacrosse team has been exonerated of all charges relating to the charges three members of the team had rapped an African-American woman, but Michael Vick’s greatest challenge may lie in not proving his innocence but in repairing a persona all but destroyed.

“This is as bad as it gets,” said Bob Dorfman, a San Francisco endorsement expert who publishes the quarterly Sports Marketers Scouting Report in a Kansas City Star report

“There is something about messing with pets that strikes the wrong chord in America. In the grand scheme of things, is it worse than a DUI, is it worse than rape allegations? … But there is something about this which rubs everybody the wrong way, and it stands out more than a DUI, which seems like every other player in sports is getting these days.

“And the allegations of the cruelty and how these animals were killed make it even worse.”

It would seem (at least according to most media reports) the Michael Vick who at one time had corporate partnerships with Coca-Cola, Hasbro and Kraft among others, isn’t the man those and other companies believed he was. His likeness adorned the popular Madden video game. The “Michael Vick Experience” Nike commercial was all the rage. His jersey No. 7 was among the top-five sellers since he joined the Falcons as the first overall draft pick in 2001.

“I don’t think there has been a guy in modern times that has fallen so far,” said former Dallas Cowboys executive Gil Brandt in a Kansas City Star report.

Vick met with NFL commissioner Roger Goodell and Falcons owner Arthur Blank in April and assured both men he had no connection whatsoever to the charges he is facing. If the allegations are proven, not only will Vick be guilty of a heinous crime, but he will have lied to Goodell (creator of the NFL’s no nonsense player conduct code) and Blank (who in December 2004 invested $130 million and made Vick the face of his billion dollar NFL franchise).

“No matter who it is, when somebody lies to you, that does not make you feel good,” Brandt said. “The commissioner asked him, and Michael Vick said he had nothing to do with it. But they’ve got witnesses and photographs and everything that say he was completely untruthful with the commissioner.”

“He’s lost the backing of public opinion,” said David Archer, a former Falcons quarterback and radio analyst for the past five years. “There are a lot of blue-collar people out there wondering how in the world can you have all the money, the fame and everything that goes along with what he had, and throw it away or potentially throw it away.”

“We’ve got to walk a mile in his shoes a little bit,” Archer said. “He comes from a little different culture than probably I did or you did from a middle-class family. He didn’t have that as a kid, and some of the lessons you learn from your parents, he probably didn’t get and had to learn some of those things on the streets.

“I’m not trying to make excuses for him, but there are some things that need to be considered as to why he made some of the decisions he made from his associations of people to decisions he made business-wise. There might be some answers there. They might not be the answers we want to hear, but they can lend some credence as to why he’s done some of the things he’s done.”

Archer told The Kansas City Star he never saw anything in Vick’s off-field activities that might have even remotely suggested he was capable of being an active participant in what he stands accused of.

“He doesn’t go out a lot, he’s not at the clubs, you don’t see him in Vegas,” Archer said. “He just likes to play video games. He plays himself on Madden. He knew I played (for the Falcons), and we talked a number of times. He was forthcoming to me asking me about things, and I’ve enjoyed working with the guy.

“I’m saddened about what’s happened and hope it’s not going to damage him the way I think it probably will.”

Friday, Nike and Reebok began to distance themselves from an athlete who up until a few short weeks ago had been played a key strategic role in their marketing NFL plans. Reebok is the NFL’s uniform license and Vick has a personal endorsement contract worth millions of dollars.

“Nike is concerned by the serious and highly disturbing allegations made against Michael Vick and we consider any cruelty to animals inhumane and abhorrent,'” Nike announced Friday (at one point according to a New York Times report Nike had received more than 165,000 Michael Vick related e-mail’s). “However, we do believe that Michael Vick should be afforded the same due process as any citizen in the United States, therefore, we have not terminated our relationship.”

“We are very pleased that Nike has today signaled it has a zero tolerance policy for athletes who may be involved with staged animal fights and other forms of malicious animal cruelty by indefinitely suspending its relationship with Vick,” Wayne Pacelle, president and chief executive of the Humane Society, said in a statement.

Reebok NFL licensee agreement permits the company to sell NFL authentic and replica uniforms with the numbers and names of NFL players. Reebok pulled all Michael Vick related merchandise Friday. Nike and to a lesser extent Reebok were pressured into distancing themselves from Vick by animal rights groups including the Humane Society and PETA.

"Reebok is as disturbed as everyone else is about the allegations and did not feel there was any other choice but to suspend the sale of his jersey," Reebok spokeswoman Denise Kaigler said.

The actions of corporate America mirror those of the NFL, which earlier this week halted sales of Vick's jersey on its NFLshop.com web site.

"We have suspended sales of Vick-related merchandise on nflshop," NFL spokesman Brian McCarthy confirmed. That includes jerseys, autographed balls and other memorabilia.

McCarthy said it's "not appropriate under the circumstances" to sell Vick items.

Over the weekend according to an Associated Press report: Upper Deck has removed all Michael Vick autographed memorabilia from its online store and will remove the indicted quarterback’s trading card from NFL sets that are scheduled to be released in October.

"Of course we appreciate the fact that Mr. Vick is innocent until proven guilty, but the allegations alone have resulted in an outpouring of very strong emotion within our organization and among the collecting community," Kerri Stockholm, Upper Deck’s director of marketing, said in a statement. "We believe collectors will agree and support this decision as being the best course of action for our football business."

Monday, the Atlanta chapter of the NAACP made a very different statement – pointing out what everyone seems to have forgotten, in America you are innocent until proven guilty.

R.L. White, president of the Atlanta chapter of the National Association for the Advancement of Colored People, said the Atlanta Falcons quarterback has been vilified by animal rights groups, talk radio and the news media and prematurely punished by his team and corporate sponsors.

"If Mr. Vick is guilty, he should pay for his crime, but to treat him as he is being treated now is also a crime," White said at a news conference. "Be restrained in your premature judgment until the legal process is completed."

Taking the advice of his legal team for the most part Vick has been quiet not offering any comment on the chargers he is facing. Monday afternoon Vick appeared on WVEE-FM, calling the radio station from Virginia.

"Hopefully I'll see y'all again," Vick said in a taped interview with host Porsche Foxx, who added that she was advised by Vick's legal team not to ask questions about his case. "It remains to be seen, but that's what I'm working on.

"I just want to thank all my fans and all my support and all the people that are praying for Mike Vick and are in my corner right now. It's a crisis situation for me, but I'm going to get through it and I feel, by the grace of God, that's the only way. I believe in the outcome at the end, and that's why I put my faith in the man upstairs. It pains me not be down there right now because I know so many people want to see me and I want to be there."

As for his future with the Falcons, Vick told the radio station, "Hopefully, under the right circumstances, I think it can work. I know I put the city through a lot, my owner, Arthur Blank, who I love, sincerely; I put him through a lot. It hurts me to put him through this situation.

"A lot of things would have to be worked out for him to put his faith and trust back in me. But if I had the opportunity, if it wouldn't be a problem, I'd like to come back, under the right circumstances."

The problems Vick faces if he returns to the NFL – he hasn’t lit the football field up over the last few NFL seasons. Though he became the first quarterback in NFL history to rush for 1,000 yards in 2006, Vick completed just 52.6 percent of his passes, and his passer rating of 75.7 ranked 20th. And if Vick is forced to sit out the entire 2007 NFL season he will have lost an entire season and that isn’t going to make him a better NFL player. More importantly if he has any hope of restoring his image he’ll have to prove himself on the football field.

Its well worth noting Kobe Bryant’s resurrection was largely due to how well he played for the Lakers – Kobe’s off court success in recent years would have never happened if Kobe wouldn’t have delivered on a basketball court. If Vick sits out the entire 2007 season other NFL’ers will begin to position themselves as marquee players. And if Vick is going to use his on-field skills to help restore his shattered image a year away from the gridiron will make it next to impossible for Vick to have any foundation for that return.

“In terms of his playing career, it was on the downturn a little bit,” Dorfman said. “After that (NFC title) game, he seemed to fall apart a little bit. Atlanta never figured out the best way to use him. His star was starting to fade in terms of on-field performance.”

“The other thing that has compounded it is other players have come up who seem very marketable,” Dorfman said. “Reggie Bush is going to be all over the screens this year. Obviously, Peyton Manning has finally gotten the Super Bowl ring and is more valuable. Matt Leinart is going to see a lot of work … Vince Young. ... With those guys, there are places advertisers can turn. It’s not like they’ve got to use Michael.”

Put in simpler terms – Michael Vick will be yesterday’s news and in Michael Vick’s case damaged goods at best.

“Kobe Bryant had the advantage of playing basketball, a more marketable sport,” Dorfman told The Kansas City Star. “You’re not wearing spikes, you’re wearing street shoes that kids wear and buy. There is a more direct correlation between athlete and product.

“Having a company like Nike that sticks with you and stands by you helps. Nike would do the same with Vick until he’s proven guilty. They won’t use him at all, and when his contract expires, they can drop him or start to activate him a little bit depending on how things go.

“But first, the charges would have to be dropped. He would have to be very contrite in public, apologize profusely, donate a lot of money and time to the ASPCA (American Society for the Prevention of Cruelty to Animals) or some other animal-rights organization, and maybe over time try to get back. And on the field, he has to lead Atlanta to postseason success.”

“Michael has written a new script for how not to make your endorsees happy,” said Paul Swangard, managing director of the Warsaw Sports Marketing Center at the University of Oregon.

Monday, Tony Taylor who Thursday appeared in a Richmond, Virginia courtroom with Vick and two other men charged in the same indictment (the men all entered innocent pleas Thursday) changed his plea from innocent to guilty. Taylor will be sentenced on December 14 (nearly three weeks after Vick’s scheduled November 26 trial date). According to various media reports Taylor is going to testify that Michael Vick financed the dogfighting enterprise. According to Monday’s court filing: Vick supplied almost all of the money used to run the operation and gamble on the fights, while Taylor and the two other men charged in the case typically split the winnings. Taylor left the operation after a disagreement with the others in 2004, court papers said.

Daniel C. Richman, a professor at Columbia Law School and a former assistant United States attorney, told The New York Times the plea agreement as an important step for the investigation.

“A witness like this is the only way to really get inside information without tracking the crime while it is happening,” Richman said in the New York Times report. “This is the government’s way of signaling to the other defendants that it has significant evidence and that they should seriously consider pleading guilty themselves.”

As bad as things looked for Vick before Taylor changed his plea from innocent to guilty Michael Vick’s legal team are going to be forced to spend the four months leading to the start of the November 26 trial in full damage control. Forget about restoring Vick’s image, right now Billy Martin (Vick’s lead attorney) will be forced to spend a great deal of time trying to create not only the belief Vick isn’t capable of what he is accused of but that he is a decent human being. In the era of instant communications – Michael Vick has all but been convicted and sentenced in the court of public opinion and that will make it next to impossible for Michael Vick to get a fair trial, something afforded to every American.

At this point Michael Vick’s focus should be on helping his legal team prepare the best possible case – the days of corporate America’s interest in working with Michael Vick are finished and are never likely to return.

For SportsBusinessNews this is Howard Bloom. Sources cited and used in this Insider Report: The Kansas City Star, The New York Times, The Atlanta Journal Constitution and Bloomberg News

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Howard Bloom's July 31, 2007 "The Truth: if you can STAND IT!" segment with Assistant SBN Publisher Jason Ilacqua

Howard has the ability to tell "The Truth" like never before, providing listeners with Insider information and up to the minute breaking sports business news.

If you haven't heard it or read about it on SBN, then it hasn't happened yet.

SBN Publisher Howard Bloom talks about the allegations facing Michael Vick and his marketability, NFL'er Pacman Jones' new profession, the Boston Celtics reported trade for Kevin Garnett, and the Cleveland Cavaliers suing Ticketmaster.

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Monday, July 30, 2007

And that’s the way it is – in the sports industry

One of the quotes often associated with legendary newscaster Walter Cronkite was “and that’s the way it is”. The last few weeks have represented challenging days to the very fabric of the sports industry. From Barry Bonds pursuit of sports most cherished record, to heinous allegations directed against one of the most marketable names in professional football, to suggestions the most grievous of crimes may have been committed against the integrity of the National Basketball Association to the Tour de France being nicknamed the Tour de Farce – the sports industry as a business is facing an uncertain future after a turbulent period unlike any in the last 100 years. These are among the worst days in sports history and in a society where instant communications, the ability to communicate and influence opinions can and does take place often in a mere instance, the business of sports is at the edge of an abyss, tittering – looking at an uncertain future.

Among sports most honored records, if not the greatest symbol any athlete can achieve in a career is the career home run record. Babe Ruth hit 714 home runs in his Hall of Fame career. Hank Aaron surpassed Ruth before ending his career with 755 home runs. Friday night Bonds hit the 754th home run of his career. Some might suggest Bonds hitting 755 and 756 at AT&T Park this weekend would have been in Bonds, the Giants and MLB’s best interest. Others believe Bonds tying and surpassing Aaron Saturday or yesterday (during the Baseball Hall of Fame enshrinement for Cal Ripken and Tony Gwynn) may have overshadowed baseball’s chance to honor two of the greatest in baseball history. Still one away from tying Aaron and two away from setting a new career home run mark, Barry Bonds traveling road show heads to Los Angeles for a four game series and the Giants then head to San Diego for a three game weekend series.

One person who has had enough of the Barry Bonds circus, the man who signs Bonds checks, Giants’ owner Peter Magowan.

"I can't wait until it's over," Magowan, the team's managing general partner, said before the Giants came from behind to defeat the Marlins, 12-10, at AT&T Park Friday night. "I think we'll start winning more consistently when this is behind us."

"Barry has done all that we could have basically expected of him," Magowan said about the left fielder, who finished the game batting .281 with 20 homers and 49 RBIs despite a prolonged July slump. "The question of whether to sign him or not, by his performance it was a good signing and our problems have not been because he hasn't done what we thought he would do. And that signing did not prevent us from doing other things we wanted to do, like signing a starting pitcher [Barry Zito]."

But because of that factor alone, Magowan was not ready to say whether he'd bring Bonds back in 2008 for his 23rd season and 16th in San Francisco. Bonds has categorically said he wants to play another season so, among other things, he can reach the 3,000-hit plateau. He's currently 91 hits short.

"The other part moving forward is that the strategy we've been on [building the team around Bonds with older players] is no longer working," he said, taking note that the team hasn't made the playoffs since 2003 despite Bonds reaching numerous home run milestones. "Therefore, it needs to be changed."

Could the Giants change that strategy and rebuild around Bonds, who will turn 44 midway through next season?

"I'm not going to answer that particular question," Magowan said. "You will see what the strategy is as it unfolds."

Bonds reiterated after Friday night's game that he intended to play again next year and put the onus for his return in a Giants uniform squarely on Magowan. Sound familiar?

"My last season is every last year of my contract," said Bonds, who is playing on a one-year deal that expires at the end of the season. "I've had a bunch of those, but this is not going to be my last season. I don't think so -- as a Giant or in baseball. I'm playing. Is it going to be here? I think you need to ask Peter Magowan that question."

For his part Barry Bonds continues to be his own worst enemy. On the verge of passing Aaron, Barry’s detractors continue their assault on Barry surpassing Aaron while accused (but never having tested positive) for the use of performance-enhancing drugs. It’s a battle Barry Bonds is never going to win. There remains a significant majority of journalists who for reasons that have been discussed and reported (including in many Insider Reports); nothing Barry Bonds is going to accomplish will be recognized by these writers and broadcasters.

Last week while appearing on Bob Costas’ HBO program Boston Red Sox pitcher Curt Schilling offered several opinions on baseball players who stand accused of using performance-enhancing drugs. Curt Schilling’s comments focused on the March 18, 2005 steroid congressional hearings. Schilling did appear that day, Bonds did not.

Schilling defended his testimony before Congress in the HBO interview, saying, "When you're sitting in front of Congress and you're under oath, you'd better be damn sure if you're going to mention a name that you are 100 percent guaranteed sure somebody did something."

Schilling said in reference to Rafael Palmeiro, who also appeared that day before Congress and later tested positive for steroids: "The year he tested positive, nothing he did that year should count, which I think would take away 3,000 hits for him."

Schilling believes some players are still using performance-enhancing drugs.

"There were teams that had a subculture of it," he said. "Obviously, guys are still getting caught, which shows me that even with all of the safety nets in place, people are still doing it. My understanding is that steroids and [human growth hormone], one of the main benefits of them is regeneration. If I can show up Sept. 1 and feel April fresh, I've got a huge advantage, not just that day but on everybody. And I think that's why a lot of pitchers have been caught."

Bonds hasn’t offered much about Schilling but offered some ‘interesting’ comments about Costas referring to the well respected journalist as "a little midget man who doesn't know jack about baseball."

Bonds trying to right his comments about Costas offered this in his personal blog Thursday regarding Bob Costas.

“Yesterday (Wednesday), I was asked about my thoughts about Bob Costas. My reaction stemmed from my feelings about Costas' statements during a broadcast. The comment I made about him was off-the-cuff and my problem with Costas is not with his height, but with his irresponsible journalism. If my choice of words offended anyone, that was not my intent. I have consistently said that reporters talk about "third party" conversations without having specific first-hand knowledge of what they are reporting. It is irresponsible and many get away with it day after day. Costas stated that what I am doing on the field is "inauthentic" and he made some really strong accusations about me. To quote him, "he would have been a first ballot Hall of Famer even before he started juicing. And I'm not in the category of those who say suspected juicer, I live on this planet I've seen what I've seen, I know what I know."

“I take great offense to those statements, especially coming from someone who is supposed to have journalistic integrity and not make blanket reckless accusations.”

Barry has had a fractured relationship with the media for decades. By now one would hope Barry Bonds wouldn’t care about what the media had to say about him. That doesn’t appear to be the case and for Bonds is unfortunate to say the least. Barry isn’t helping his image, the Giants and baseball by taking on people like Bob Costas. Time to move on Barry – don’t worry about what the Bob Costas’ of the world think. There is nothing whatsoever you’re going to accomplish that will change their opinions and the sooner you accept that the better your world will be.

The Tour de France ended Sunday. No one seems to care who won the race, but everyone seems focused on the wheels falling off what was once one of the greatest endurance tests in sports. That may itself be the issue facing the Tour de France. Performance enhancement drugs focus in part on offering athletes the ability to recover quickly, a key to winning an event like the Tour de France.

The wheels began falling off the Tour Wednesday when Tour leader Michael Rasmussen was kicked out of the race by his own team (after failing to show up for three pre-race drug testing opportunities). With last year’s winner (still legally the winner) Floyd Landis embroiled in a positive drug test from last years race, Jan Ullrich and Ivan Basso banned from cycling – the sport of cycling isn’t standing at the end of the abyss, it’s fallen over the edge, heading towards a future that could include being banned from the Olympic Games.

“This year it has lost complete credibility,” Bradley Wiggins, whose Cofidis team quit the race when one of its riders failed a drugs test, said at a televised news conference Friday according to Bloomberg.com. “But the Tour de France is essential. It's the one race that attracts the financial backers.”

And Rabobank the team Michael Rasmussen was a part of are looking at ending their association with the sport of cycling.

"We always reconsider if something big is happening and this is big," Helen Crielaard, head of sponsorship at Rabobank, said in an interview with Reuters television.

"We have to reconsider once we get all the facts. Maybe we will change the way we are involved," said Crielaard, who added that Rabobank also sponsored the sport at a local level in the Netherlands and that would certainly continue.

"At this point there is no reason to just finish our sponsorship. But we cannot go on like this for 10 years if it doesn't get better."

"A lot of the main sponsors are going to pull out of the sport," said Gerard Vroomen, chief executive of Cervélo SA of Switzerland, a bicycle manufacturer with Canadian roots that supplies the CSC team, one of the leading competitors on the pro circuit in a Globe and Mail report. "Which I think is a great result. It's the ultimate way to clean up the sport."

"I don't know why anybody would want to invest their time or their money in that sport right now if they are concerned with the integrity and believability of the outcome," said David Carter, executive director of the University of Southern California's Sports Business Institute.

"We take the situation very seriously," Computer Sciences Corp. senior marketing manager Theresa McDermit said. "But it appears to us that there's a movement afoot to actually clean up the sport and we want to be supportive of that."

One might suggest the problems the Tour de France is facing have been a long time coming:

1903: Tour begins.

1904: The first cheating scandal occurs, after a rider is towed by a car. The top four finishers are disqualified.

1924: Two brothers are caught using chloroform, cocaine, ASA and a horse ointment to improve their results.

1967: A British cyclist dies on the mountain leg of the tour after taking amphetamines.

1978: A Belgian rider seeks to avoid testing by concealing under his arm a rubber bulb with another person's urine attached to a tube leading to his shorts.

1997: An Uzbek rider is the first to get bounced for ingesting a banned substance.

1998: The entire Festina team is kicked out after a vehicle is found loaded with banned substances. Top French rider Richard Virenque later admits using the stuff and is barred for six months.

2002: The wife of a Lithuanian racer is arrested after police discover a trunk full of performance-boosters. She says it was for her ailing mother.

2004: A French rider says his team, Codifis, engaged in doping. A British cyclist is arrested. A Spaniard expelled by his team, Kelme, says he was forced to use drugs.

2006: Tour favourite Jan Ullrich is barred from entering after being linked by Spanish police to a probe of widespread blood-doping at a Madrid clinic, a probe that ultimately ensnares 50 riders. The eventual winner, Floyd Landis, is found to have a high testosterone level after a remarkable victory in the difficult mountain stage. His victory is withdrawn. Mr. Landis is still appealing on grounds the French lab made errors in testing.

2007: The winner of the 1996 Tour, Bjarne Riis, admits he used a banned substance in his victory. Mr. Riis now heads Team CSC, regarded as one of cleanest teams.

And the news is about to get a great deal worse for cycling. The Associated Press reported on Friday that the International Olympic Committee is looking at cycling’s future as an Olympic sport.

''If cycling doesn't resolve this problem, I'd go as far as saying it should be excluded from the Olympics,'' Swiss IOC member Rene Fasel told The Associated Press. ''Just tell them 'no more.' It's discrediting all those who are honest and clean. The heads of cycling need to know that if they don't clean up the sport, and really clean it up, then it's goodbye.''

''I have only one vote but I know there are others who share my point of view: Clean up your sport and come back then. We have to apply some pressure,'' said Fasel, president of the International Ice Hockey Federation and chairman of the coordination commission for the 2010 Vancouver Winter Games.

The AP reached 12 IOC members in Europe and Africa on Friday. A small number said cycling's Olympic status could be at risk; others were strongly in support of keeping the sport. But IOC member Dick Pound warned that could change if the sport's drug woes persist.

''If cycling doesn't take the steps necessary to bring this under control then I think the concern of some of the members would be that the perception of cycling will spread to other sports, and that's overall bad for the Olympic movement,'' said Pound, head of the World Anti-Doping Agency.

''I'm not one of the ones who said you should cancel the Tour de France, throw out the entire the sport, because of this sort of thing,'' he said, adding that if cycling fails to clean house soon, ''that kind of talk will increase.''

Anita DeFrantz, an IOC member from the United States, says it would be wrong to ban the sport from the Olympics. She said team managers and doctors who supply the illegal drugs are the problem.

''The sport itself is not offensive;'' DeFrantz told the AP. ''It's the people who break the rules and harm the athletes and the dignity of the sport. They're the ones who have to be gone.''

Last week while the race was in its final stages a number of media outlets suggested they would no longer cover the Tour. In the age of instant communications that meant absolutely nothing. The fall of Michael Vick (the subject of our next Insider) was caused by public focus groups that attacked Vick’s image through his sponsors. Until cycling sponsors (in particular the Tour de France corporate partners) walk away from the event, the fall of the Tour de France isn’t about to happen anytime in the near future. And as always television will remain a key to keeping sponsors happy.

“The Tour de France has been around for so long that it's bigger than any scandal,” Richard Dorfman, who negotiated the sale of TV rights for sports events including soccer's World Cup and the A1 motor racing series, said in a phone interview. “I don't want to say there's an acceptance of doping but it's not a big surprise to anyone.”

The withdrawal of two top riders and the accusations about another have prompted several sponsors to question whether it is good for their brands to be associated with the event according to a Wall Street Journal report. "It's not going to be easy to replace the sponsors that are withdrawing because of the general atmosphere" surrounding the drug allegations, said Jérôme de Chaunac, head of Havas Sports International, a sports-marketing unit of ad giant Havas SA. "I think it is, for cycling, one of the worst moments" in its history.

Maybe the saddest statement relating to the Tour de France took place Sunday morning when two members of sports reporters (TSN in Canada) looked at each other with one member of the panel suggesting to the other, can anyone really believe if everyone else associated with the Tour de France is guilty of using performance-enhancing drugs how can Lance Armstrong be the only innocent man. One of sports greatest iconic symbols, who overcame cancer to win seven consecutive Tour de France’s accused of crimes he has never committed, guilt by association. Shame on the Tour de France for that and a great deal more.

For SportsBusinessNews this is Howard Bloom. Sources cited and used in this Insider Report: MLB.com, The New York Times, Bloomberg News, Reuters and Associated Press.

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Howard Bloom's July 30, 2007 "The Truth: if you can STAND IT!" with Assistant SBN Publisher Jason Ilacqua

Howard has the ability to tell "The Truth" like never before, providing listeners with Insider information and up to the minute breaking sports business news.

If you haven't heard it or read about it on SBN, then it hasn't happened yet.

SBN Publisher Howard Bloom talks about the future of the Tour de France and the sport of cycling, Barry Bonds, Barry Bond's comments about Bob Costas, Jose Canseco second tell-all book pointing the finger at Alex Rodriguez, the Baseball Hall of Fame induction ceremony, and Nike and Reebok distancing themsevleves from Michael Vick.

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Friday, July 27, 2007

Howard Bloom's July 27, 2007 "The Truth: if you can STAND IT!" segment with Assistant SBN Publisher Jason Ilacqua

Howard has the ability to tell "The Truth" like never before, providing listeners with Insider information and up to the minute breaking sports business news.

If you haven't heard it or read about it on SBN, then it hasn't happened yet.

SBN Publisher Howard Bloom talks about the terrible week for the image of sports with the Michael Vick dogfighting allegations, Tim Donaghy allegedly fixing NBA games, another Tour de France doping scandal, and of course the circus surrounding Barry Bonds’ chase to break Hank Aaron’s homerun record, Curt Schilling's comments about Barry Bonds and Mark McGwire, the Baseball Hall of Fame induction ceremony or Cal Ripken Jr. and Tony Gwynn, and minor league baseball promotions.

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Thursday, July 26, 2007

Howard Bloom's July 26, 2007 "The Truth: if you can STAND IT!" segment with Assistant SBN Publisher Jason Ilacqua

Howard has the ability to tell "The Truth" like never before, providing listeners with Insider information and up to the minute breaking sports business news.

If you haven't heard it or read about it on SBN, then it hasn't happened yet.

SBN Publisher Howard Bloom talks about another scandal at the Tour de France, NBA commissioner David Stern's press conference addressing the Tim Donaghy scandal, MLB commissioner Bud Selig position on Barry Bonds, and Atlanta Falcons owner Arthur Blank addressing the Michael Vick saga.

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Michael Vick, Arthur Blank, the Atlanta Falcons and Camp Chaos

The Atlanta Falcons open their training camp today in Flowery Branch, Georgia. At the same time in Newport News, Virginia Michael Vick will face federal charges for participating in for-profit dogfighting related businesses since 2001. While they’ll be a full complement of football media covering the first day of Falcons camp, local, regional and national news and to a lesser extent sports media will crowd in the courthouse Newport News.

"While it is for the criminal justice system to determine your guilt or innocence, it is my responsibility as commissioner of the National Football League to determine whether your conduct, even if not criminal, nonetheless violated league policies, including the Personal Conduct Policy," NFL commissioner Roger Goodell said in a letter to the quarterback earlier this week making it clear Michael Vick was to be no where near the Falcons camp for the foreseeable future.

And Goodell made it clear, while Vick is on paid leave from the Falcons he’s biding his time before he takes the gloves off. And that process begins with the NFL hiring a lawyer to investigate Vick’s behavior.

“We have outside counsel that will be focused on this,” Goodell said in Washington after a meeting Tuesday at the NFL Players Association. “We have a security team and they’ll be in touch with all the appropriate parties.”

As has been well reported, while Goodell initially is taking ‘baby steps’ in dealing with Michael Vick, Falcons owner Arthur Blank had a very different approach to how he wanted to deal with Michael Vick.

“After a lot of conversations and give and take by all parties involved, Monday, as you know, the Commissioner notified Michael that he was not to report to training camp while the Commissioner was completing his review of this situation.
“Prior to this action, the Falcons were pursuing the maximum discipline that we could under the CBA, a four week suspension, and had gone so far as to draft the suspension letter. The Commissioner asked us not to take any action until he completed his review of the situation, and we agreed to his request.
“Our preference was for the club to take an action, but after reviewing all options, I do think that this is the best approach for all involved at this time. We're also in agreement with Michael's not attending training camp during the Commissioner's review. We need to allow Coach Petrino, his staff and our players to conduct a focused training camp. We owe it to them, and we need to provide them an environment in which they can plan for the season, working under the assumption that Michael's absence might well run into the regular season.”

Earlier Tuesday NBA commissioner David Stern addressed his sense of betrayal in having to deal with a far range of emotions in reacting to the alleged actions of former now disgraced NBA official Tim Donaghy. Whatever David Stern must be feeling – it must pale in comparison to the complete loss Arthur Blank must have felt and is feeling about Michael Vick.

On December 23, 2004, Arthur Blank made Michael Vick a multimillionaire and at the same time Arthur Blank made the strategic decision to make Michael Vick the face of his NFL franchise.

Vick signed a 10-year contract with the Atlanta Falcons worth $130 million with a $37 million signing bonus, making him the highest paid player in NFL history and one of largest contracts ever in sports when the deal was signed.

Vick's deal surpassed the $98 million contract the Indianapolis Colts' Peyton Manning signed in March, 2005. Manning, who signed for seven years, is guaranteed $34.5m in bonuses. Vick's $130 million potential value topped Philadelphia’s Donovan McNabb's 12-year, $115m deal that runs through the year 2013. While NFL contracts are not guaranteed, in signing Vick to what was a record contract for an NFL player two and a half years ago, Blank put the future of his franchise in the hands of Michael Vick a scary proposition given that the four incidents of bad behavior have occurred since the contract was signed. Since Blank made Michael Vick a very rich man his behavior off the football field has been less than honorable.

The 18 page federal indictment that spells out a litany of charges against Vick including activities where dogs were strangled, shot, drowned, electrocuted and slammed to the ground and made to fight to the death has upset everyone, especially the man who anointed Michael Vick the face of a business worth close to a billion dollars.

“I think that we tried to make several statements. We made a statement, I don't remember the exact dates, but soon before the indictment but prior to the indictment we made a statement, soon after the indictment, we made a statement. We were very clear as to our feelings on the issue then to our fans, to the community, to our sponsors, to all of us.
“Today is a day when we've been able to gather the facts as we see them today. We've been able to get counsel and seek and support counsel from others, as I mentioned, in the League, the Union, Collective Bargaining Agreement, the Player, et cetera or his representatives. So I think we've made our feelings very clear today. And we did that as quickly as we possibly can.
“I don't think there's any question about how we feel about what's in the indictment. We all feel the same way. It's behavior that is really horrific. But they are charges at this point. Those are charges that we have to let the legal process play out to determine exactly what Michael is innocent of or guilty of or the other three individuals as well.”

The Davie Brown Index Wednesday released an updated report on Michael Vick and Vick’s perception in the marketplace. Over the last 30 days, his overall awareness among U.S. consumers has jumped from 32 percent to nearly 60 percent. At the same time, his likeability, trust, and influence scores nosedived – dropping 22, 19, and 12 points, respectively.

Even more striking is the sharp decline in his endorsement and aspiration scores, which dropped 26 and 24 points, respectively, in the last month.

The DBI is an independent index for brand marketers and agencies that determines a celebrity's ability to influence brand affinity and consumer purchase intent. The DBI provides brand marketers with a systematic approach for quantifying and qualifying the use of celebrities in marketing campaigns by evaluating a celebrity's awareness, appeal and relevance to a brand's image and their influence on consumer buying behavior. Created by Los Angeles-based entertainment marketing agency Davie Brown Entertainment, the DBI includes more than 1,000 celebrities and is powered by a 1.5 million-member domestic research panel.

It appeared Tuesday the Falcons are ready to end their association with Michael Vick. Blank didn’t have to say it, but given that he was ready to suspend Vick for four games (and the teams’ entire training camp) the writing is on the wall – the Falcons are beginning the process of moving on to life without Michael Vick as their marquee and team leader.

“If Michael goes through this process and there is substantial proof and, obviously, the court system finds him guilty or he pleads guilty, you know, that's a very fair, very fair question.
“Obviously, there are things, included in the indictment, that, as I said, are very repulsive to all of us. And a quarterback is not only a technical leader, but a leader of the football team. And we'd need to look at those circumstances in that light.

“My own counsel to Michael would be that these charges are extremely serious. This is not about him playing football in 2007, this is about him having a life and having a life going forward. And I would, you know, my only personal suggestion to Michael is that he focus on his defense. Focus on putting his life together in that regard. Dealing with the process, which is a very difficult process that he'll be going through in the next number of months. I think it would be very difficult for him to do that and to be focused on football at the same time.”

One of the issues the Falcons made clear at Tuesday’s presser – after Tuesday media conference the organization wasn’t going to comment on the off-field distraction Michael Vick would continue to be once training camp opens today.

“We've got a football team that Coach Petrino and his staff need the right environment to get ready to play in the '07 Season. So for us, until the circumstances change, we will not be discussing this situation. Any questions with respect to football, any day you want to ask them, feel free. With respect to this current situation, as I say, until the circumstances change, we owe it to our players to try to create an environment that is focused and ready for football. So that would certainly be what we're about.” Falcons’ team president Rich McKay made clear Tuesday.

That said – Blank, McKay and Petrino can say whatever they’d like but they’re already calling the Falcons 2007 training camp – Camp Chaos.

"This is a football team," Falcons owner Arthur Blank said. "This is not a circus."

Mark Schlereth, an analyst with ESPN and former 12-year NFL veteran, told The Atlanta Journal Constitution Falcons players must accept that Vick is gone.

"We used to have this saying 'That guy's dead.' " Schlereth said about injured or missing teammates. "As bad as that sounds, not in the figurative sense, but the literal sense, that guy is dead, move on. There is nothing we can do. Wish him well, but at the same time you have to focus on what you're trying to accomplish as individual and as a team."

"I guarantee you that Bobby Petrino feels as though they can win with the people that they have, with or without Michael Vick," said Schlereth, who won a Super Bowl with the Washington Redskins and two with the Denver Broncos. "So I don't think there's a sense of panic."

Blank for his part believes Bobby Petrino will be able to handle the inevitable Barnum and Bailey atmosphere that will be a part of the Falcons training camp (at least the first few weeks of the teams’ training camp).

"This is not about one player," Blank said. "It's never been about one player. It is about a football team. It is about an organization that wins on the field. It is about an organization that wins off the field."

"I've heard this from every coach that I've been exposed to in the National Football League, it's not how you deal with the good days, it's how you deal with the bad days," Blank said. "It's how you deal with adversity. I have tremendous confidence in this coaching staff and our players as well, that they will respond and that we will have a very successful team this year."

The Falcons for their part have for years made their players available to the media when the players arrived at training camp on Wednesday. The team instead made the prudent decision to meet with the players first and then allow media access following Thursday’s first workout. Better to ensure Vick’s teammates are all on message than allowing the media (they’re still going to try) to pick the Falcons apart.

Wednesday evening USA Today reported animal rights groups are poised to protest the federal courthouse where NFL star Michael Vick and three other men face arraignment on dogfighting charges.

According to the report, while the Humane Society are planning a low-key approach, PETA are looking at a full frontal assault on the courthouse.

While Humane Society spokesman Martin Montorfano expects a "media circus," he says his group plans no demonstrations but will have representatives present for interviews.

"This is what we've been asking for, for the authorities to get involved and for them to take this seriously. … I don't think this is a proper venue to be engaged in activist-type tactics," Montorfano says.

PETA, based in Norfolk, Va., expects to have at least 100 demonstrators, some with their dogs. "We've been hearing from other groups that are organizing demonstrations. … There's going to be a lot of people out there," says PETA spokesman Dan Shannon.

NASCAR racer and animal rights advocate Greg Biffle won’t be in Richmond today with the protesters, but used his profile Wednesday to share where he believes Vick’s destiny is heading “I just wish they'd put him in jail and be done with it."

"Just put him in prison and tell the general public, just give them all the details of what they do with those dogs," Biffle said. "How they steal people's dogs out of their front yards and use them for bait dogs and let other dogs kill them. There's all the horrifying stories. You look at all the pictures on the Internet of the dogs, just maimed, mangled. It's horrible."

"It goes on everywhere. He's not the only guy. It goes on in this state too," Biffle said. "Maybe they'll use him as an example and maybe get some other people to think about whether they want to be in federal prison with him or not."

Whatever Arthur Blank may have expressed Tuesday, whatever the Falcons may share in the coming days and weeks regarding Michael Vick – Vick guilty or innocent, Michael Vick’s image is beyond repair, especially to a man who has built his reputation along the lines of what Arthur Blank has sold himself to people.

Since acquiring the franchise in February 2002, he has made significant changes that have created renewed excitement for Falcons fans across the region.

During Blank’s first year as owner, the Falcons generated a 100 percent increase in season ticket sales, the highest single-year increase in season ticket sales in NFL history. Fans have filled the Georgia Dome at every home game since Blank took ownership of the club, and for the first time in the franchise’s 40-year history, there is a waiting list for season tickets – a list that currently exceeds 60,000 fans.

Blank is also Owner & CEO of the Georgia Force. He acquired this Arena Football League team in August 2004, and is putting the same passion into building this franchise as he continues to put into the Falcons. In its first season under Blank’s ownership, the Force team played to record-breaking attendance, setting new records on the field, capturing their first National Conference Championship and appearing in their first ArenaBowl. New attendance and player records were also set in the 2006 season, and the Force achieved their first-ever back-to-back-season trip to the playoffs.

Blank is also Chairman, President & CEO of AMB Group, LLC, and Chairman of The Arthur M. Blank Family Foundation. Both companies are part of The Arthur M. Blank Family Office, with the common purpose of giving back to society through financial contributions and personal involvement.

Blank is widely known in the business community for his success in building the world’s largest home improvement retailer. He co-founded The Home Depot in 1978 and retired from the company as Co-Chairman in 2001. At the time of his retirement, The Home Depot was a component of the Dow Jones Industrial Average and one of Fortune Magazine’s "Global Most Admired Companies." During Blank’s last year as CEO of the company, The Home Depot ranked first in social responsibility in an annual survey conducted by Harris Interactive, Inc.

Blank believes in the importance of making a difference – professionally and personally. In addition to the company’s financial success, during his 23 years with The Home Depot the company donated more than $113 million to communities, and Home Depot associates provided hundreds of thousands of hours of personal volunteer time. Blank is extending his experience and values to the Atlanta Falcons and Georgia Force in building two competitive and financially-successful franchises, as well as through the works of the Atlanta Falcons Youth Foundation and community involvement activities.

Blank is also dedicated to his own giving back. Through his generosity, The Arthur M. Blank Family Foundation, along with Blank and his wife’s personal giving, has granted over $220 million to various organizations, most recently in Atlanta; Maricopa County, Arizona; and Beaufort County, South Carolina. Mr. and Mrs. Blank were named as the 2000 Georgia Philanthropists of the Year by the National Society of Fundraising Executives.

Blank is recognized throughout the country for his personal and professional achievements. In 2006, he was named Distinguished American by the Walter Camp Football Foundation, which every year recognizes an individual who has utilized his or her talents to attain great success in business, private life, or public service. Also in 2006, Blank was inducted into the Junior Achievement U.S. Business Hall of Fame, and in 2005 he was named National Entrepreneur of the Year by Ernst & Young.

In 2003, for the second time in three years, Blank was named Georgia’s Most Respected CEO by Georgia Trend magazine, and in 2002 he was inducted into Georgia State University’s Business Hall of Fame. Among other previous honors, Babson College inducted Blank into its Academy of Distinguished Entrepreneurs in 1995 and conferred on him an honorary degree of Doctor of Laws in 1998.

Blank serves on a number of boards including: Outward Bound USA, where he chairs the Board of Trustees; the Commerce Club, an Atlanta organization of community business leaders; the Board of Trustees of The Carter Center, Inc.; the Board of Trustees of Emory University; the Board of Trustees of The Cooper Institute; and the boards of Cox Enterprises, Inc., and Staples, Inc.

Blank is Chairman of the capital campaign for the new Atlanta Symphony Center. He recently served as Co-Chair for the capital campaign for the new Centennial Olympic Games Museum at the Atlanta History Center.

In September 2001, Blank joined the faculty of Emory University’s Goizueta Business School as its first Distinguished Executive in Residence. He also served as the 2003 Chairman of the Metro Atlanta Chamber of Commerce.

A native of Flushing, N.Y., Blank received a B.S. Degree in Business Administration with Distinction from Babson College, where he was active in a wide variety of extracurricular activities.

Blank has six children and two grandchildren. He and his wife, Stephanie, and their three children live in Atlanta. A strong believer in work-life balance, Blank still makes time for working out and remains an avid runner. His favorite T-shirt appropriately reads, "There is no finish line."

A foundation, a principal of the American Constitution is the belief that someone is innocent until they’re proven guilty. Michael Vick has hired a great team of lawyers and will be afforded due process and he could indeed be proven innocent of the charges. But the damage that has been done to Michael Vick’s reputation is beyond repair in Atlanta. As Blank alluded too, the quarterback is not just the technical leader of a football team but the ‘leader’ both on and off the field.

Arthur Blank has spent a lifetime building a reputation of honor and respect. Men like Arthur Blank understand everyone is entitled to their day in court, but at the end of the day men like Arthur Blank understand there comes a time when an organization needs to distance themselves from someone who has become damaged goods. It isn’t always right, but its part of what makes men like Arthur Blank successful. They make tough decisions that at times make them seem like unforgiving souls. In this case, the only correct decision Arthur Blank can make is to end his association with Michael Vick in the near future and move forward. At the end of the day a billion dollar business will have paid a terrible price, but without paying that price that business (the Falcons) will move backwards. Better to take the hit now, and then allow Michael Vick to bring the Falcons down anymore than he already has.

For SportsBusinessNews this is Howard Bloom. Sources cited and used in this Insider Report: The Atlanta Journal Constitution, USA Today and the Associated Press

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Wednesday, July 25, 2007

A David Stern Tour de Force

Tuesday, July 24, 2007 will one day be recognized as one of the most important and eventful days in David Stern’s career as NBA commissioner. Facing a national media audience that included the three major national cable news networks, national and regional sports networks from the United States and Canada, national sports radio networks – Stern’s Tour de Force resembled more of a Presidential Press Conference than a typical David Stern media conference.

Typically a David Stern press conference has Stern sitting at a table, looking relaxed, smiling in front of a microphone, kibitzing with the media. One of the more effective communication skills David Stern has is his ability to make those around him feel comfortable. Meeting someone like David Stern can be intimidating at the best of times, but David Stern works at making those around him feel important (with those meeting Stern realizing how important a person David Stern is). The David Stern who entered venue was anything but the David Stern the media has come to appreciate. Led into the room by a plefera of handlers, Stern was the last person to enter the room. For the first time in recent memory David Stern spoke from a podium, clearly this was going to be a very different David Stern – Stern wasted little time getting to the heart of the matter, former NBA referee Tim Donaghy and the damage he has brought to the NBA’s reputation.

“The first thing that I would like to say is that our rules are crystal clear; that referees may not either gamble on our games; or, provide information to anyone about those games. We, you know, have a rule that says you're subject to discipline, which would most likely be expulsion from the league and the job. We educate our referees intensely. We have training camp presentations, we have brochures we distribute work rules , they are visited by security, and we give them copies of compliance plans and the like that make it clear that not only aren't they permitted to either gamble or provide information to people; they may not even provide other than to their immediate family the details of their travel schedules or the games they are going to work.

“We take these rules seriously. We have a security department that is large. It's headed by Bernie Tolbert, the senior vice president of security, former FBI, head of the Buffalo office second in command at Philadelphia who has a background in undercover work. We have in house representatives that are from Secret Service, U.S. Army, New York Police Department, and New York State Police Investigation.

“We, in addition, have a security network that includes a security representative with respect to every NBA team. Those security representatives are routinely judged and either changed as appropriate, and instructed on the ground to be listening to what goes on, what they hear, what they see, what they can observe. And those security representatives are for the most part either FBI retired, local police, in some cases DEA. And we are permitted by work rules; some of them are actually functioning in their regular capacity for local PD and working for us at the team level.

“In addition to the constant communication with our security represents of what goes on in the cities, we are in continuous conversation with DEA, the FBI section on organized crime which deals with sports betting, and with the Homeland Security Department. Our security department operates rather extensively, and has actually been beefed up more recently with respect to its activities in connection with Homeland Security, which occupies since 9/11 a more substantial time, a more substantial amount of its time.

“We do subject our referees to extensive security checks, to the limit provided by the law. That is to say, with their authorization each year for the past two years, we have conducted personal background checks that cover credit, bank account, litigation, civil and criminal, assets including real property, debt, you name it; if it's legal to have it, we do it. The agency that we use for that is the Arkin Group, and under the guidance of the former head of worldwide operations for the CIA.”

All that is great, but as is clearly spelled out in “Bad Bet: Understanding the N.B.A.’s Anti-Gambling Rules,” a copy of which was obtained by The New York Times. The document makes it clear -- officials are barred from visiting or attending “any racetrack, off-track betting establishment, casino or gambling establishment of any kind.” Violating the rules subjects the referee “to discipline by the N.B.A., including termination of his or her employment.” Stern made it clear NBA officials weren’t permitted to ever enter a casino in Las Vegas, Atlantic City or anywhere else. Donaghy reportedly has been seen in Bogota an Atlantic City casino.

Unnamed sources told The Philadelphia Inquirer Donaghy had been spotted at Bogota, which if proven to be true would have been a direct violation of Donaghy’s contract and if the NBA knew could have led to Donaghy’ dismissal. David Stern was quick to point out the credentials of his security force. While David Stern defended his security staff if Stern’s security staff either missed an indiscression they shouldn’t have missed or knew Donaghy had been in the wrong place and did nothing about it. Those allegations have yet to be proven and if they are someone will be answering to David Stern, but one point Stern made clear if the allegations that Donaghy worked with illegal sports bookmakers there is little if anything the NBA could have done to prevent that from happening, a bitter pill Stern admitted he had to swallow.

“You know, that's a question that I've asked myself in the pendency of this investigation. And I guess, yes, I'm surprised; but I think no more surprised than the head of the FBI, the head of the CIA, that rogue employees turn on their country in criminal activity despite the best investigative procedures you can possibly imagine; or when judges turn out to be corrupt despite their oath and the processes that are used to monitor them. But that's small consolation to us.

“What I always do is turn it inward and say, what else could we have done and what else can we do. And if I can unburden myself in that area, I want to call in the best minds that I can have around me with respect to criminal activity, gambling detection, and determine what is legally possible.

“You know, we were advised at least as sort of an investigatory matter, the two things that would be usable would be wiretapping, which is available to the FBI and illegal by a private employer check and a 24 hour surveillance on a 24/7 basis of every employee which, you know, not something that we do.”

There was a classic “David Stern” moment during the press conference. When asked how he’s been and how it’s been around the NBA offices over the last few days (since the news first broke Friday) the ‘fatherly’ Stern offered this: “Well, actually after this press conference I’ll be going to the NBA family picnic to assure a bunch of employees, their families and kids that the sun is definitely going to rise tomorrow.

“But really, our what we wanted to do, most importantly and have been chomping at the bit to do, is figure out a way between what we could say and what we couldn't say, to get me here as fast as possible, and that's what we've been spending our time doing and ruminating about how we will spend significant parts of the summer and fall seeking expert guidance with respect to what else we can do.

“We've been comparing our procedures to see whether there are other leagues that we want to, you know, despite our competitive spirit, that actually do it better than we do; whether there's things we can adapt, etc., because we take our covenant very seriously. And that's it.

“It really had to do with getting everything out. We had hoped when this broke on Friday, we spent Sunday preparing for a press conference yesterday. But in light of various conversations that we were having, we thought it better to schedule the press conference for today or tomorrow. But then those conversations allowed us to go forward with today, and so we scheduled it for the earliest possible time with some concern for our friends on the West Coast, so they wouldn't have to get up before 8 a.m.”

As was to be expected Stern did his very best to distance the NBA from what appear to be the actions of one person.

“We understand that the relevant time period being investigated is the past two seasons; that is, 2005 2006, and 2006 2007. I can tell you that during that period of time, Mr. Donaghy refereed 139 regular season games, eight playoff games, and four preseason games.

“I also understand that Mr. Donaghy is the only referee who is alleged to have bet on NBA games and disclosed confidential information to others with respect to NBA games that would enable them to place wagers with an advantage. I'll say it again; I understand that this is an isolated case involving an NBA referee who engaged not only in a violation of our rules, but in criminal conduct.”

David Stern is too smart a commissioner to have not made the above statement without knowing full well the facts the FBI have are along similar lines. It remains to be seen how much damage Tim Donaghy may have managed to accomplish but it a pretty safe ‘bet’ Tim Donaghy has acted alone – not that it makes it any easier for the NBA to deal with.

“I feel betrayed by what happened on behalf of the sport regardless of how protective I've been. This is not something that is anything other than an act of betrayal of what we know in sports as a sacred trust.”

For those who have followed David Stern’s remarkable career David Stern has always acted decisively – never someone who is known for sitting on the fence. At least in the interim, David Stern seems prepared to let the FBI work out whatever they need to take care before the NBA steps in and conducts their own investigation.

“I'm going to come back to the fact that I'm going to wait for this investigation to run it's course, because we think we have here a rogue, isolated criminal. And I think we want people to understand our system, and I think I still have to be protective of my officials, including those who likely have been and will continue to be unfailingly besmirched in the allegations that have been made against Mr. Donaghy.

“By and large, they get it right most of the time. They get it wrong sometimes. Sometimes they perhaps carry themselves in a way that is not as modest as we would prefer, but they do their darnedest to get the result right. And frankly, I'm more concerned, rather than chastising them, with reassuring them that I am committed to protecting them while at the same time making sure that we keep our covenant with our fans.

“With respect to transparency, you know, I'm going to wait for the summer to yield the results as a fan and the like. I think it's important that our referees who have a very difficult job, you know, 70 away games every year going into a place where there seems to be unanimity of agreement about their competency, not their integrity, but their competence. We've got people complaining about from both teams about the referees called a bad game against them.

“But we'll continue to work with our referees to get their accuracy level up. We'll continue to work I mean, to be transparent in the sense that our fans know how the system works. We will do that. We're not transparent enough. We will continue to recruit and improve our recruitment which is another ongoing issue. We will continue to bear the expense for both the Development League and the WNBA to work three person rotations so that our referees training can have the greatest array of competition and the like and anything else we can learn. I think transparency is a good thing.”

Donaghy worked five NBA playoff games. Every NBA playoff games plays a critical role in determining the fate of an NBA season and often the future of an NBA franchise, at least the short-term future. Pistons-Magic on April 23; Warriors-Mavs on April 27; Suns-Lakers on April 29; Nets-Raptors on May 4; and Spurs-Suns on May 12. It’s well worth remembering – Donaghy was part of the officiating crew that worked game six of the Nets – Raptors series played in New Jersey. The Nets won the game by one point to win the series in six games. Donaghy worked game three of the Dallas Mavericks – Golden State Warriors series. In the biggest upset in recent NBA playoff history, the Warriors won game three 109-91. Dallas who had the best regular season record during the 2006-07 season were shockingly upset by the Warriors in the first round.

But the game that has caught a great deal of attention from basketball fans everywhere was game three of the Western conference finals between the San Antonio Spurs and the Phoenix Suns. After splitting the first two games in Phoenix, the teams traveled to San Antonio for games three and four. San Antonio won the hotly contested game three 108-101. That game will represent the last NBA (or basketball game) Tim Donaghy will ever officiated, little comfort to Phoenix Suns fans still upset with what they believe began in that game and ended in game five after an incident during game four of the series resulted in Suns star Amare Stoudemire, and his backup, Boris Diaw were both suspended for game five of the series after a melee broke out in game four. The Spurs won games five and six of the series to win the series. More than two months after their teams was eliminated most Suns fans are convinced the genesis of what went wrong for their team in the 2007 NBA playoffs began in game three when Tim Donaghy was at the center of an officiating storm.

“I would like to await the outcome of the criminal investigation so that we will both know before I answer that question, whether that was one of the games that was bet.

“With respect to the review of games, we are, as I said earlier, we didn't deploy all of the people that would be necessary to do that. He worked 150 games over the last two years, of course we did not want to sort of march people together and say, we are now going to investigate Tim Donaghy, I want you to look for this. But I can assure that you in the fullness of the summer and the autumn, we will have the opportunity to review Mr. Donaghy statistically and by video, and it will be done.”

What other message could David Stern offer Phoenix Suns fans? For that matter David Stern can’t conclusively say whether or not the Miami Heat and the San Antonio Spurs the champions of the last two NBA seasons are paper or real champions. And that is where at least the true tragedy of this melodrama will play itself out.

The sense basketball fans, the potential for sports fans to have been cheated – and all because of one misguided man who stands accused of the most heinous crimes against the sports industry – taking the true competitive nature out of a sports event. Those who love sports, who live for that moment in time when our team wins that game, that playoff series and in a very special year, have a Championship Season. If the allegations against Tim Donaghy are proven to be true, shame on Tim Donaghy for tearing the fabric of the sports industry. But for David Stern – his lasting legacy could be determined by how his leadership skills help the NBA move forward through its greatest crisis in league history.

For SportsBusinessNews this is Howard Bloom. Sources cited and used in this Insider Report: The New York Times

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Tuesday, July 24, 2007

Tim Donaghy offering the NBA a Stern test of faith

This morning at 11:00 AM National Basketball Association commissioner David Stern is going to face the most important media conference in the 23 plus years he’s led the NBA. Stern will face what is sure to be a media circus when Stern addresses the allegations former NBA official Tim Donaghy allegedly participated in a scheme to fix NBA games he officiated in during the past two NBA seasons. In no uncertain terms while today’s press conference isn’t going to resolve anything, it will be an important first step in helping David Stern begin the process of restoring a sense of order to the NBA. It wouldn’t be an understatement to suggest the NBA’s future could be on the line in the coming days, weeks and months – and one of the biggest questions that need’s answering, is David Stern ready for the toughest challenge of what has been an amazingly successful career as NBA commissioner.

Stern began his tenure as the NBA’s fourth commissioner on February 1, 1984. Since then, the NBA has added seven franchises; enjoyed a fifteen-fold increase in revenues; expanded its national television exposure dramatically; and launched the Women’s National Basketball Association and the NBA Development League. Interest generated by the league’s growing international initiatives has led to the televising of NBA games in 215 countries in 43 languages. NBA TV, the league’s 24-hour television network which launched in 1999, is available in 73 countries. The leagues’ Web sites, NBA.com, WNBA.com and NBADLEAGUE.com attract more than three million visitors a day, with more than half of them coming from outside the U.S.

Stern began his association with the NBA in 1966 as its outside counsel and during the years before he became commissioner he had a hand in virtually every matter that would shape the league and the structure of professional sports, including the 1976 agreement between the NBA and its players leading to free agency; the collective bargaining agreement that introduced the salary cap and revenue sharing; professional sports’ first anti-drug agreement; and the creation of NBA Entertainment, a marketing, television and multi-media production company that has been telling the NBA story in award-winning fashion for two decades.

Stern’s tenure has been marked by an intense commitment to social responsibility both in the United States and around the world. In 2005, the league launched NBA CARES, through which the NBA, its players and teams have committed to donating $100 million to charity, providing a million hours of hands-on service and creating 250 places where kids and families can live, learn or play. NBA CARES supports a host of community outreach initiatives including Read to Achieve, the Jr. NBA/Jr. WNBA, Basketball without Borders and a myriad of internationally-recognized youth-serving programs that focus on education, youth and family development, and health-related causes. The NBA and its players have also supported, among other causes, volunteerism, child abuse prevention, drug abuse prevention, hunger relief, HIV/AIDS awareness and the Special Olympics.

When Commissioner Stern meets the media this morning (an event that is expected to be televised live by the three major national cable news networks, ESPN, most regional sports cable networks and NBA TV), Stern knows full well not only will the eyes of sports and basketball fans be on him, but NBA owners, players and league officials will be glued to their TV hoping Stern can begin the process to stemming the apocalypse that threatens to destroy the credibility of professional basketball.

Most key NBA officials have remained tightlipped regarding the Donaghy allegations. One person who has often been very critical of NBA officials and in particular how their calls may have affected his teams’ games, Dallas Mavericks owner Mark Cuban. Using his blog to help deliver his message, the outspoken Cuban more often than not a foe of Stern’s has made it very clear – Mark Cuban has complete confidence in David Stern’s ability to handle this crisis.

“Every company of any size has had a problem(s) that its CEO and stakeholders have lost sleep over. Its the law of big numbers. If enough things go on, something is going to go wrong.

“Products get recalled or are tampered with. There are workplace disasters. There is corruption. No industry is immune. Churches, consumer products, law enforcement, cars, planes, trains and plenty more. No profession is immune. From the CEO who misrepresents corporate numbers or events at the expense of shareholders, to the doorman who tips himself from the cover charge at the expense of the club owner, people of every profession make bad decisions.

“Shit happens. Bad Shit happens. When it does, there are two options. Cry over it and do nothing or recognize the problem and do the best you possibly can to not only fix it, but make the entire organization stronger..

“As bad as the allegations facing the NBA today are, its also an opportunity to face every allegation that has ever been directed towards the NBA and its officials and preempt them from ever occurring in the future.

“Calamity can be a catalyst for significant change.

“There are any number of examples in the business world where calamity led to better management, better communications, greater transparency and even better products. As the proverb goes, Necessity is the Mother of Invention.

“The NBA took a hit today. Behind that hit is a catalyst and opportunity for significant change that could make the NBA stronger than it ever has been. It’s a chance to proactively put in place people, processes and transparency that will forever silence those who will question the NBA's integrity.

“I have complete confidence that David Stern and Adam Silver will do just that and the NBA and our officiating will be all the stronger for it.”
There are many more than everyone connected with the NBA waiting for David Stern to help lead the NBA through this crisis. College basketball officials are as concerned as their NBA peers about how the full frontal assault on their profession.

"If it's true, and the initial reports indicate that it is, then it's a huge black eye on all officials, at all levels," veteran college referee Rick Hartzell, who also serves as Northern Iowa's athletic director but refuses to officiate any game with a fellow Missouri Valley team to avoid a conflict of interest told ESPN.com. "People are now going to look that if someone at the highest level of officiating can be bought or swayed to have an impact on a game, then maybe everybody can.

"It paints all of us in a horrible light. It's a very, very sad thing. I hope that somehow people look at this as an individual who made a mistake and don't paint us with the broad brush, but it's a huge black eye."

Veteran official Mike Wood believes according to an ESPN.com report that fans are more hostile today -- and if a controversial call is made, right or wrong, he said officials will hear comments alluding to the Donaghy scandal.

"Every call will be scrutinized at the end of the game," Wood said. "It's a black eye for the sport, if the allegations are true."

"This will open up a situation for someone to say that, 'I told you so. Those guys in stripes are less than honest,'" said John Clougherty, a longtime official and now ACC head of officials. "Any time a fan loses a bet, he's going to say the official is on the take. It just worries me, whether you're in the NBA or college, we're going to have to fight an image problem. Our integrity has been damaged, without question."

"As an official, integrity is all that you have," Wood said. "If Mike Wood has integrity and is honest, that doesn't mean he won't miss a call. It's part of the game. But I'm missing them honestly. Sometimes fans don't understand that. Any controversial call will now be, 'OK, he's betting on the game.'"

"You'd have to have a play that impacted the score that you can call," said Hartzell, who officiates primarily Big Ten, Big 12 and Horizon games. "There are certain plays that officials don't call from certain points on the court. If you're 60 feet from the play, you can't rush in there and put someone on the line or call an offensive foul and take the ball away. If you did it more than once or twice, then someone is going to say 'Something is going on here.'

"It's hard to fathom that someone could have influence in a game in a way that you could guarantee that it would be under seven [points] or over eight [points] or however it works. You'd really have to stretch the bounds of officiating to get it done."

It’s easy to understand why NBA officials are as concerned as they are about the impact Tim Donaghy is going to have on their reputations and on their industry – their ability to be treated professionally. NBA officials earn between $100,000 and $300,000 annually and arguably have the toughest job in sports and without any hesitation potentially the greatest impact on the outcome of a game of any of their counterparts in other sports. Five fouls a college basketball player is out of game, six in the NBA. A seasoned official always makes the right foul call, but from time-to-time even the best basketball official makes a mistake in calling a foul on the wrong player. An offensive charge can be called a defensive block.

Irregardless of how the NBA frames the crisis in confidence (and rest assured David Stern will offer a Tour de Force today) human nature dictates at least for the foreseeable future every close call basketball officials make is going to be second guessed. That isn’t fair, but thanks to Tim Donaghy, basketball officials face a very difficult season.

"That doesn't mean that once in a while you wouldn't go out of your space if your partner didn't see a play," said Hartzell, who used to referee in the ACC with Donaghy's father Jerry. "But to be able to think you could do that for an entire 48-minute or 40-minute game, to manage that point spread, seems almost impossible to do. I don't have experience and don't want any, but it would be hard to do it without scrutiny from the people who hire you. The light would go off immediately."

ESPN.com’s Wayne Drehs spoke with Brandon Lang, whose life story was immortalized by Matthew McConaughey in the 2005 film, "Two for the Money”. Lang offered some insight into betting on NBA games.

“You can bet on who's going to win, by how many points. You can bet whether it's going to be a high-scoring or low-scoring game with the over/under. You can bet the first, second, third or fourth quarter. You can bet the first-half and second-half winner or loser. What you have to understand is that gambling is always designed to keep people watching.

“If it's a televised game or the playoffs, you can bet the over/under on total points for a player, say whether or not LeBron James is going to score 30. You can bet over/under on rebounds for a guy like Tim Duncan. There are a lot of individual prop bets, but normally those are only in the playoffs or for major regular-season televised games.”

One issue Lang offered ESPN the difference between legalized sports betting in Las Vegas, off-shore (online sports betting) which is now banned in the United States, or betting with a bookie (illegal sports betting).

“Most of the time, when you bet with a bookie, you can bet on credit. When you bet offshore, you have to post up that money. I have to wire that offshore sports book $1,000 so I have $1,000 in my account to play with. As soon as I double my money, I can ask them to send $1,000 back or all $2,000, whatever. With your bookie, you typically settle up once a week. And that's when people get in trouble. It's credit -- usually somebody vouches for you, they'll give you a $5,000 line or something like that. Then you start getting behind, you start chasing and the next thing you know you just lost $7,000 and you don't have it. In Vegas and offshore, you have to post your money before you gamble with it.”

Donaghy allegedly was involved with bookies. According to various media reports Donaghy’s problems began after he placed and lost NFL bets to bookies. The bookies then turned the debts Donaghy had into an opportunities to pre-determine the outcome of games (usually against the point spread) where Donaghy was officiating. Who or what exactly is a bookie – this from Lang.

“He's basically the sports book. He has his own line, his own money. He runs his own book. Different bookies will have different lines. To get into the various intricacies, most players want to have multiple bookies because lines can vary. If I have a guy in New York who has the Knicks as a 6.5 point favorite against the Nuggets and I have another guy in Florida who has the Knicks at 5.5, I'm going to take my bookie in New York and take Denver and then take New York with the bookie in Florida and lay the 5.5 points. If the final margin is six points, then I'll win both.”

Lang a self-proclaimed “big-game handicapper” given his background was asked by ESPN if he believed bookies and organized crime could have used Tim Donaghy along the lines of the allegations that have been reported.

“You see a lot of calls in the NBA, "Hey -- he didn't even touch him." But he's [under suspicion] because they will go back and watch every game he officiated, know the spread, know the totals, they'll watch the fourth quarter and they'll know exactly what games he [allegedly] fixed. One hundred percent, no questions asked, they'll know exactly.

“They just have to look at the fourth quarter. That's where you'd be able to tell. I'm telling you -- it would have to be the total, not the winners or losers. You can't dictate a side, especially in the NBA. He couldn't take that chance. If someone gets injured or doesn't show up or is having a terrible night or whatever, you can't do it. But manipulating the total you can control from the very tip. If you need an over, a referee can dictate a high- or low-scoring game just by how he's calling it. It's going to come out.

“If he has action on the game and wants something in particular to happen, I'd say 75 percent. I've been asked for years if games could be fixed. And I always told people not by players. Because the guys in the key positions who could get something done, your quarterbacks and running backs, are making millions and aren't going to risk it all to help some friend make $100,000. An official, though, could do it. In the NFL, there's a task force that on Monday reviews every critical call that came anywhere near the point spread. I don't believe that's ever been done in the NBA.”

And as Lang made clear – the “mob” has a long history linked to illegal sports betting – suggesting the obvious no one should be surprised by the allegations and charges linking an NBA official, allegedly deep in debt to organized crime, tarnishing his entire profession.
“The mob has had its hands in fixing and shaving games going back to the late '40s. They've always been under question for getting teams to shave points. The fact that they finally got to an official -- well, at least an official who got caught -- isn't surprising. Listen, this is just the first guy to get caught. I think, without question, there are more officials out there who have shaved points. I guarantee you there are. This is just the first guy to get caught.

“And it's going to be fascinating to see how this all plays out because [if the allegations are true, it's my opinion that] he's going to cut a deal and rat on everybody. And it was a mob bookie that supposedly turned him in. That was the worst thing they ever could have done. They turned him in, now he's going to give them all the evidence, spill everything and then go in the witness protection program. I don't get it. He was their meal ticket. Whatever risk they had with him, turning him in was a bad move. Now he's going to be dropping dimes on them.”

All that aside one of the first questions Stern is bound to be asked to address this morning -- “Bad Bets: Understanding the N.B.A.’s Anti-Gambling Rules”. The document in question is an eight page pamphlet that outlines in finite detail “all players and league personnel are barred from gambling on any league game, including those in which they do not participate. Rules for referees go considerably further. They are prohibited from “participating in any gambling or placing bets of any kind.”

One of the biggest issues Stern is going to have to deal with, how effective is NBA security if Tim Donaghy managed to get away with betting on NBA games, let alone the allegations Donaghy bet on NFL games. The information in “Bad Bets: Understanding the N.B.A.’s Anti-Gambling Rules” is clear – NBA officials are not allowed to make bets of any kind. If you want to bet you can’t retain or become an NBA official. David Stern can (and he will) suggest what may have happened with Tim Donaghy is one “isolated case” but one case is one case too many for any sports league who believes in their in-house security systems management team. Clearly there are serious issues David Stern and the NBA must address when it comes to who left the barn door open for Tim Donaghy to run out of and make a mockery of the NBA.

“The financial difficulties experienced by problem or compulsive gamblers would make affected N.B.A. referees easy targets for individuals involved in the gambling business,” the pamphlet reads according to The New York Times who obtained a copy.

“Everyone thinks of point-shaving scandals as involving players, but I’ve always felt at this point it would be a referee,” said Bryan Leonard, a professional sports bettor and handicapper in Las Vegas for 24 years in a New York Times report. “In the N.B.A., players are making millions of dollars. They don’t need the money. What do referees make?” (NBA officials as reported earlier in this insider report make between $100,000 and $300,000 a year, plus expenses).

The clock starts ticking for the greatest challenge a major league sports commissioner has faced in recent memory at 11:00 AM. Good luck Commissioner Stern, you’re going to need all the luck in the world to get the NBA through this crisis.

For SportsBusinessNews this is Howard Bloom. Sources cited and used in this Insider Report: ESPN.com and The New York Times

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Howard Bloom's July 24, 2007 "The Truth: if you can STAND IT!" segment with Assistant SBN Publisher Jason Ilacqua

Howard has the ability to tell "The Truth" like never before, providing listeners with Insider information and up to the minute breaking sports business news.

If you haven't heard it or read about it on SBN, then it hasn't happened yet.

SBN Publisher Howard Bloom talks about the allegations against Tim Donaghy, the New York Times obtained a copy of an eight page NBA pamphlet “Bad Bets: Understanding the N.B.A.’s Anti-Gambling Rules,”, the Michael Vick story, data relating to David Beckham and the exposure generated in his first MLS game, and the weekend sports ratings.

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Monday, July 23, 2007

Tim Donaghy -- Who would have ever linked the NBA and the WWE?

In a body blow to the image of the National Basketball Association thanks to disgraced former NBA official Tim Donaghy the NBA will forever be linked to the murky world of professional wrestling (at least when it comes to Donaghy). In what is surely to be the biggest challenge in David Stern’s brilliant 23-year career as NBA commissioner, Stern this week is going to be forced to deal with the NBA credibility after reports the FBI will indict Donaghy on charges that he willingly participated in a scheme to fix NBA games. And the link to professional wrestling – anyone who has followed the squared circle knows all too well the referees are part of the entertainment, never to be believed – as fake as the talent. Being able to say David Stern and Vincent K. McMahon in the same breath – unimaginable, but believable thanks to the ill advised lifestyle of Tim Donaghy.

N.B.A. Commissioner David Stern issued a statement Friday that said, “We would like to assure our fans that no amount of effort, time or personnel is being spared to assist in this investigation, to bring to justice an individual who has betrayed the most sacred trust in professional sports, and to take the necessary steps to protect against this ever happening again.”

Barry Mano, president of the National Association of Sports Officials, told the Los Angeles Times, "If this is true, it is a tragedy of enormous proportion, not just for himself and his family but for our industry. It cannot be understated what a terrible thing this could end up being."

NBA games typically generate 10% to 15% of all sports betting in Las Vegas according to a Los Angeles Times report. Overall legal sports betting in Nevada hit $2.25 billion in 2005, but that figure was dwarfed by some $380 billion in illegal sports wagers, according to the National Gambling Impact Study Commission.

Where this story is headed is anyone’s guess and where it ends is impossible to guess, but the NBA is in serious trouble on every possible level. And five weeks from now (at the end of August) the latest version of the Dream Team will compete along with 11 other counties in the most important pre-Olympic basketball qualifying event before next summer’s Beijing Olympics. The Tournament of the America’s – in the heart of Sin City, Las Vegas, the only American city where sports betting is legal. To date there hasn’t been anyone linking the allegations against Donaghy to Las Vegas but the optics of any sports betting and NBA players is a nightmare scenario for Stern and the NBA. And the Tournament of the America’s isn’t a weekend affair; it will be a ten-day basketball event where more than 1,000 sports media will descend on Las Vegas.

One person who may has incredible Chutzpah – Viva Las Vegas Mayor Oscar Goodman. David Stern has made it clear he isn’t interested in putting an NBA team in Las Vegas but told Goodman when during the February 16-18 All-Star Weekend he was free to offer the NBA a proposal within 30-days as to how Goodman could make an NBA franchise work in Sin City – one that was free of any links to sports betting. Five months later Goodman has presented anything to the NBA, but comments Goodman made after Friday’s sensational news linking an NBA official to sports betting offered Goodman the platform he was looking for.

"I think that there's going to be a public recognition that Las Vegas does monitor this kind of alleged activity," Goodman said Friday.

"I don't want anyone's bad fortune to cause us good fortune, but I think it will cause people to look at Las Vegas in a light perhaps differently than they do, because we do in fact regulate this kind of activity."

One issue Stern has made clear to Goodman – Vegas has a snowballs chance in Hell of becoming home to an NBA franchise as long as the city’s legal sports books take “action” on NBA games. Vegas does a great job of monitoring the state’s legal sports books but after Friday events Mayor Oscar better start focusing any hopes of Las Vegas becoming home to an NBA team to the National Hockey League. One of the “victims” of the allegations against Donaghy will unfortunately be Las Vegas, through no fault of their own.

"We're the only regulatory agency in the world that really looks at unusual activity as far as the movement of the line and that type of conduct," Goodman told the Associated Press. "That's why whenever red herrings are thrown up that somehow Las Vegas is a bad place because we have sports betting, I look at it just as a reverse. I think it's a good thing that Las Vegas has the type of regulation that makes sure that bad things don't happen."

That said the list of those who will be victimized in the coming days, weeks and months by Donaghy’s actions will be Donaghy’s former peers, NBA officials. The abuse NBA officials are going to take over the first few months of the NBA season from basketball fans will at times be unbearable. But those will be basketball fans, being basketball fans. It won’t make the comments right, but most NBA officials will have the intestinal fortitude to accept sports and basketball fans acting as fans.

What will be next to impossible for NBA players – the incredible scrutiny each and every decision they’re going to make from NBA players, coaches and officials. The good news, none of the examination of how they handle themselves on a basketball court will be their fault but human nature being what it is; every call NBA officials make will be looked at under a microscope.

In what has to be considered a made-for-the-media opportunity Friday’s breaking news regarding Tim Donaghy was also the first day 17 of the NBA’s biggest names began a tryout camp in Las Vegas – hoping to be back in Las Vegas in five weeks for the Tournament of the America’s. While Stern and most NBA front office types remained tight-lipped in regard to Donaghy, some of the NBA’s biggest names weren’t bound by the same unofficial Stern mandated gag order.

"I was surprised like everybody else," said Detroit Pistons guard Chauncey Billups, one of 17 NBA players who began training Friday for the Olympic qualifying tournament next month in a USA Today report. "Everybody probably had the same reaction whether you played in the league or are a regular citizen."

"It's a shame," said Los Angeles Lakers All-Star Kobe Bryant, who led the league in NBA scoring. "It's unfortunate and I'm sure the league is on top of it and will handle the situation accordingly. I'm very surprised that this would come up.

"The NBA hasn't really had any scandals on gambling that I can remember."

Cleveland Cavaliers star LeBron James said any discussion about perhaps the league's most serious crisis was "sensitive conversation."

"The NBA is taking every precaution and going over everything that might be going on with the allegation," James said. "The commissioner (David Stern) is going to do everything he can to try to make it right and as I player, all I can do is sit back and wait to see what happens. But as a competitor, as hard as I play, it is very disappointing."

Jerry Colangelo, former Phoenix Suns owner and now managing director of the USA Basketball Senior National team, told it as it should be – nothing good whatsoever can come of the news.

"Obviously we were all taken back when we heard the story like everyone else in the game would be," he said. "Now it's up to the league and the FBI to do their thing. Everything goes without saying. When something like this happens, there is never anything good to say."

One NBA coach told The Post about the betting scandal: "Our officials are so scrutinized and evaluated; I'm shocked something like this could happen. I mean, even the evaluators are evaluated."

But others believe that if any of the allegations are proven true, it could deal pro basketball an irreversible blow.

"What will happen is every time there is an arguable call at the end of games, fans are going to say, 'See? Told you. It's crooked,' " said an NBA team executive, who asked not to be identified.

In May at a press conference attended by among others Joel Litvin and Stu Jackson the NBA talked about their much ballyhooed official monitoring system and how effective a program it was.

“We literally observe every single call that is made by our referees during every game,” said Joel Litvin, the N.B.A.’s president for basketball operations, said at the time. “An observer who works for the N.B.A. sits in the arena, watches the game and watches the game again on tape, and he breaks it down as to every call and every missed call by official and who the call was made on, the player. He puts it into a database which, as you can imagine, is quite rich in terms of the ability to slice and dice the data and to train our officials.”

Stu Jackson, the league’s executive vice president who oversees officials, said at the time that the database was “very valuable as a tool for identifying play-calling trends of an individual official, play-calling of the officiating staff as a whole, and it’s been extremely valuable in identifying trends that we can use to better develop the officiating staff in various refereeing areas.”

Comments NBA Players Association chief Billy Hunter offered The New York Times Sunday evening suggest NBA players are going to have some serious issues with how Stern and the NBA handle the Tom Donaghy affair in the coming days, weeks and months.

“When we talk about image,” Hunter said, “the focus has always been on the players, because we have a league that is predominately black, so a lot of other things probably tend to go unscrutinized.

“If anything, this demonstrates that they weren’t fully focused,” Hunter added, referring to the N.B.A., “that they were focusing more on the game in terms of player conduct as opposed to reviewing whether or not the game itself was in jeopardy, in terms of conduct by referees.

“I don’t know what Stern knew or what he didn’t know,” Hunter said. “He didn’t disclose anything to me. All I know is that David pays people to keep him informed. He makes every effort to know everything there is to know.

“David pays for information,” Hunter told The New York Times, referring to the league’s willingness to devote resources to a security staff. “He doesn’t like to be embarrassed. Maybe in this instance he was. All I know is that his chief of security is a former F.B.I. agent.”

But in an era of instant communications and unnamed sources being acceptable forum of reporting – a New York Daily News report suggesting the NBA was aware Tim Donaghy’s officiating was becoming an issue is problematic for the NBA.

“The NBA referee suspected of betting on - and even fixing - games was previously confronted by league officials who feared he had a gambling problem, sources said yesterday.

“Tim Donaghy was ordered to the league's offices in New York - but he was allowed to continue officiating games because NBA honchos did not suspect he was gambling on games or fixing the contests, the sources said.” – that from Saturday’s New York Daily News

There is no reason to suspect the unnamed sources aren’t credible but if in fact the report is accurate and the NBA did in fact call Donaghy ‘on the carpet’ suspecting he had a gambling issue and was betting on games – the body blow to the NBA might be terminal. Certainly if the report is proven to be true, whoever participated in the meeting with Donaghy sat the NBA’s Park Avenue offices and knew of the meeting better start dusting off their resume – they’ll be looking for a new job in the not too distant future.

"It's a major, major crisis," said Ronn Torossian, president of New York-based 5W Public Relations in a Los Angeles Time report. "The NFL's problems have all been off the field and can be blamed on individuals. This is the institution rather than the individual. People aren't going to remember Tim Donaghy's name in a few days. People are going to remember the brand of the NBA, and that's what David Stern should be concerned about."

"People are going to ask, 'Which games were [Donaghy] involved with?' " Torossian said. "People are going to look at the point spread and see what the score was. This is not going to go away any time soon. There are a lot of questions."

"The fans might lose, the NBA brand might lose, but casinos don't lose," Torossian told The Los Angeles Times. "They might lose in the short term, but not in the long term. They're always going to be a money-making operation."

Even Las Vegas sports book officials did their best to spin the story as far away from Sin City as they possibly could.

"It doesn't make the whole league corrupt if this comes out to be true facts, but over the last two years, we haven't seen anything and we haven't heard anything" about suspect NBA games, said Jay Kornegay, executive director of the sports book at the Las Vegas Hilton. "When we have suspicions, there are whispers around this town. We usually get wind of it. Either it was a very small party, if it happens to be true, or it happened illegally. It certainly didn't happen in this city."

"For the most part, the sports world has had a pretty good record with scandals compared to the corporate world [and] the political world," Kornegay said in Saturday’s Los Angeles Times.

Jimmy Vaccaro, the chief oddsmaker for American Wagering, which runs 60 sports books across Nevada, said that such performance would leave any gambler giddy.

“It’s too early to say anything definitive about this situation,” he said, “but if you win 7 out of 11, more than 60 percent, you’d be a billionaire in about a year.”

And when it came to pointing where Donaghy’s actions may have had the greatest impact, Vacarro’s suggestion to The New York Times offered Las Vegas sports books officials an opportunity they’ve likely been looking for, for a long time – the now illegal (at least in the United States, Internet sports betting sites).

“There was never anything brought up around here regarding any N.B.A. game. I’m guessing that the bets didn’t happen here — it probably happened with local bookmakers or offshore (there is the link to online sports betting). There would be a smell of something here and there would be talk about it.”
The next few days will offer a fascinating opportunity to see how great David Stern really is. In some circles (present company most defiantly included) David Stern not only is the strongest leader in sports but an example corporate America should always pay attention. Pay attention “boys and girls” it’s time for a Stern leadership test – David’s toughest ever.

For SportsBusinessNews this is Howard Bloom. Sources cited and used in this Insider Report: The New York Times, USA Today, The New York Daily News and The New York Post.

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