Friday, September 28, 2007

Barry the Giants – Tossing out the bathwater

The San Francisco Giants bid farewell to Barry Bonds Wednesday night. The Giants will finish their 2007 this weekend at Dodger Stadium, but Barry won’t be making the trip to Chavez Ravine. One of the more interesting relationships between a sports organization and an athlete, ended with a long fly ball hit in the six inning Wednesday night at San Francisco’s AT&T Park – the house that Barry Built..

It isn’t an understatement to suggest Pacific Bell Park (Pac Bell Park) was built directly as a result of Bonds signing with the Giants as a free agent in 1993. And calling it “as it is” – the Giants might have left their hearts in San Francisco if it wasn’t for Barry.

With the Giants poised to be sold to Tampa Bay interests in 1993, Peter Magowan led a group of 20 investors who paid $100 million for the Giants from Bob Lurie. The Giants sold 1.8 million tickets in 1992. A year later the Giants attendance increased by close to 40 percent to 2.6 million, something Magowan noted in an interview with The Sporting News following the 1993 season, along with how his purchase of the Giants and the organization signing Barry Bonds were directly tied together.

“Last year we sold 1.8 million tickets. This year we sold 2.6 million. First, there was a honeymoon period (because) baseball was still here; people were thankful and wanted to show their support. Second, there was a lot of excitement generated by the signing of Barry Bonds. Third, there was a lot of curiosity about the changes that we made to the marketing of Candlestick Park. Fourth was the conversion to day baseball: We draw much better in the day than we do at night. And fifth, and certainly very important, was the success we had on the field.

“I remember when we signed Bonds and the next day in Louisville the previous ownership (Bob Lurie) did not want to sign him. We had to somehow find a way to promise Bonds that he would get the $43 million that we had agreed to pay him and promise Lurie that in the unlikely event that he ended up with the team back, he would not end up with that contract. It meant going back to all the partners and saying: "If Lurie ends up with the team, and the agent ends up with Bonds, the agent will try to peddle Bonds to one of the other 27 teams. Any monies short of $43 million over that six-year period, we will have to make up the difference - even though we have no ownership interests." That was the way it got done.”

In the 15 years Barry Bonds was a member of the San Francisco Giants Peter Magowan paid Bonds close to $197 million, twice what he paid to buy the Giants. Bonds was the highest paid player in the National League in five of those 15 seasons, including $22 million in 2005.

When PacBell Park (the stadium’s first corporate name) opened on March 31, 2000, the ballpark was the first Major League park built without public funds since the completion of Dodger Stadium in 1962. However, the Giants did receive a $10 million tax abatement from the city and $80 million for upgrades to the local infrastructure (including a connection to the Muni Metro). The Giants have a 66-year lease on the 12.5-acre ballpark site, paying $1.2 million in rent annually to the San Francisco Port Commission.

The Giants have played at or near AT&T’s Park seating capacity since the ballpark opened eight years ago, selling more than 95 percent of the stadium’s available tickets. The Giants won the National League pennant in 2002 coming within five outs of wining the World Series. Bonds hit 73 home runs in 2001 (the single season record) and hit home run number 756 at AT&T Park on August 7, 2007. As is the case with many relationships this one didn’t quite end the way it started; the two sides going their own separate ways destined to never speak to each other again.

“I don't have nor do I want any ill feelings towards the organization,'' the 43-year-old Bonds said, adding that he plans on continuing his playing career. ``I just wish I had known sooner so we had more time to say our goodbyes and celebrate the best 15 years of my life.”

“There comes a time you have to move, I think, in a different direction,” Giants managing director Peter Magowan said. “I do believe he is the greatest player of his generation, one of the greatest players of all time and it was a big advantage to have a player of that caliber in a Giants uniform over these last 15 years.”

How bad a break-up is this going to be? After missing most of the Giants games over the last two weeks (his big toe hurt) Bonds was the starting left-fielder and hit clean-up in the Giants home finale Wednesday night. Bonds last appearance in a San Francisco Giants uniform was an at bat in the sixth inning against the San Diego Padres Jake Peavy (Bonds flew out to deep to right-center). A tip of his cap to the sold out crowd, a few comments to interested media members, Barry Bonds left AT&T Park for the last time as a Giant long before the Giants – Padres game ended.

Ponder that thought for a moment. Barry Bonds played for the San Francisco Giants for 15 years and that relationship ended with Barry not even bothering to wait until his teams game had ended. The Giants end their 2007 season in Los Angeles with three games against the Dodgers this weekend but Barry has already told the Giants he won’t be playing in any of the games. A better question – will Barry even bother making the trip to Lotus Land this weekend?

The undoing of the relationship between Barry and the Giants began with the release of Game of Shadows in March 2006 (some might argue it really began the day the Giants signed Barry, but for argument sake we’ll point to the releasing of Game of Shadows).

Published on March 23, 2006 the book written by Mark Fainaru-Wada and Lance Williams, reporters for the San Francisco Chronicle focused on the use of performance enhancing drugs, particularly allegations based on leaked Grand Jury testimony that Bonds had used steroids and other banned drugs.

The book remains among the most damaging accounts of reported steroid use by Bonds. According to the authors, Bonds began using stanozolol, the same drug for which Ben Johnson tested positive after winning the 100 meters at the 1988 Summer Olympics, starting in the 1999 season. By 2001, the year Bonds broke Mark McGwire's single-season home run record with 73, he was alleged to be using the following performance-enhancers:

"The cream and the clear," two alleged designer steroids distributed by BALCO (Victor Conte), and this laundry list of performance enhancers:

Human growth hormone allegedly sold on the black market by cancer patients to whom it was legitimately prescribed
Insulin, which reportedly enhances the bodybuilding effects of growth hormone
Testosterone decanoate, a steroid often nicknamed "Mexican beans" or "Red beans"
Trenbolone, a steroid typically used in livestock, especially cattle
Stanozolol, sold under the brand name Winstrol

According to the book, Bonds was inspired to use steroids after watching McGwire's 1998 home run record chase with Sammy Sosa. He began working with Greg Anderson, who would later be hired by the Giants. Anderson reportedly received the substances from BALCO.

Anderson also kept meticulous records of Bonds' program; the authors report that Anderson's records indicate that Bonds took up to 20 pills a day and learned to inject himself. The book also claimed that the Giants chose not to confront Bonds about his change in physical appearance, fearing that they would alienate their star slugger, or worse from the team's standpoint, create a drug scandal immediately before the opening of their new stadium. And let’s remember Peter Magowan’s bankers owned a $300 million mortgage on PacBell Park.

Bonds sued the authors and publisher of the book over its use of grand jury documents and tried to block the publishers and authors from profiting from such documents.

On March 24, Judge James Warren denied the request, citing free speech protections for the authors and that the lawsuit had little chance for success. On June 12, 2006, Barry Bonds dropped his lawsuit against the authors. Michael Rains, Bonds’ attorney, stated that he dropped the lawsuit because the authors had been subpoenaed to be part of an investigation into who leaked the secret grand jury transcripts, which is what Bonds wanted all along.

Baseball did react to Game of Shadows – announcing the Mitchell Commission that continues to look into the use of performance enhancement drugs in baseball. Senator Mitchell is expected to release the findings of his two-year study sometime during the off-season.

Over the last two baseball seasons the media’s full frontal assault on Barry Bonds has at times been never-ending. Just before the 2006 Major League Baseball All-Star Game on July 11 – the New York Daily News initially reported before month’s end Bonds would be indicted by a federal grand jury currently in session at the Philip Burton Federal Building in San Francisco. The report suggested the indictment will be announced on a Thursday. 14 months later, tens of millions of dollars in taxpayer money spent, several Grand Jury’s later – nothing has changed in regard to Barry Bonds being indicted.

More often than not Barry has been his own worst enemy in dealing with the media, and a great example of Bonds hate/hate relationship with the media took place after Boston Red Sox pitcher Curt Schilling appeared on Bob Costas’ HBO program.

Schilling as he had been earlier this year was critical of Barry Bonds and other baseball players tainted with allegations of performance-enhancing drugs, Bonds choose to direct negative comments at Costas, not at Schilling. Bonds referred to Costas as “a midget who knows nothing about baseball”. Bob Costas remains one of the most respected sports journalists in the industry, respected for his love of baseball. What makes Bob Costas so successful is his overall knowledge of sports and his balanced opinions. There was no rationale for Barry Bonds’ disparaging comments about Bob Costas, other than to serve as an opportunity for Costas to offer Costas a platform to offer his opinions on Costas – in of all places on CNN’s The Situation Room Friday night with Wolf Blitzer.

And as Blitzer had been promoting throughout Friday night’s program – Costas is certain Bonds has used steroids during his baseball career.

“Absolutely. There is no conclusion other than that, that any reasonable person could possibly reach. If you gave him the benefit of every doubt, there is no longer any doubt to give him the benefit of. Absolutely he did.”

That said – there is no proof Barry Bonds has used performance-enhancing drugs even though there is no reason whatsoever to not believe what Bob Costas believes.

“He has passed every possible test; baseball had no significant tests until 2003. And then they upped it in subsequent years. Most of the juicing that Barry Bonds did, which is specifically incredibly detailed in the book "Game of Shadows," took place prior to that, as did his greatest seasons.

“And he maintained some of the benefit into 2003 and 2004. So the fact that he took and passed tests later in his career, tests which still have holes in them, and there are no tests for HGH, and other possible designer steroids, proves very little.”

All great points made by Costas but it’s likely given the financial incentives attached to excellence on a baseball diamond – salaries linked to home run production, what Costas fails to point out the strong likelihood throughout baseball’s steroid era hundreds of major leaguers likely used performance enhancing drugs on a regular basis. If anyone is prepared to give Bob Costas the benefit of the doubt concerning the allegations directed at Barry Bonds it’s just as reasonable to believe at least half of Major League Baseball players used performance-enhancing drugs during baseball’s steroid era. Is it possible (all-right [probable]) Barry Bonds was a better baseball player than the others who allegedly used steroids and enjoyed greater benefits as a result?

“Because other players who are not as great and did not accomplish as much as Barry Bonds were also users. And I don't know how many of the home runs exactly could be discounted. But I think there's a figurative asterisk in the minds of knowledgeable and fair- minded baseball fans.

“Barry Bonds was, through the late '90s, a great, great player. Should have been a first ballot hall-of-famer. I would still vote for him if I had a vote -- broadcasters don't. It's only baseball writers. I would still vote for him because before there was any credible evidence that he used performance-enhancing drugs, he was a truly great player.

“But he went from a great player to a super human player. When you take a look at his statistics, and I'm not going to bore you with all the numbers, but he was a lifetime .290 hitter who had higher than .312 once in his career. At the age of 38, he then hit .370, he hit .340 and over.360 in the next two seasons. He had a lifetime slugging percentage, which is basically a combination of power and average, of .556 through 1998. He then slugged over .800 twice and over .700 twice, in a four-year stretch in his late 30s or early 40s. These are numbers that are almost cartoonish.

“And it makes absolutely no sense, that a player, no matter how great, could maintain his previous level of performance in his late 30s or early 40s, let alone take such a quantum leap. There is no other possible explanation.” Costas told CNN Friday night.

While Barry didn’t handle his last game with the Giants Wednesday evening very well, he did speak with the media Saturday expressing little if any bitterness towards the Giants.

"There always comes a time when time changes," Bonds said. "Change is happening. This is business. I'm not taking this personal. I feel I did what I could the 15 years I was here and I'm proud of that and I'm not disappointed in that.

"I can walk out here with my head high and I'm very proud. I know there was a left fielder in San Francisco and there was no one better. I'm proud of that. And I'm proud of the fans and my family here. I consider my fans part of my family. And this city, I grew up here. I have nothing to be ashamed of and they have nothing to be ashamed of or upset about. We had fun. For 15 years we had a great time."

Where next for Barry? A few issues Barry had better realize if he wants to play baseball in 2008.

His value as a baseball player – selling tickets and helping generate revenue is next to nothing. He’s at 762 home runs. He might have some value to the Oakland A’s. The A’s are averaging 23,525 fans per game, playing to about 53 percent capacity. Barry Bonds personality has made him one of the most hated players in all of baseball. Barry had a good 2007 season hitting a respectable 28 home runs and hitting .276 on a pretty terrible Giants team. But at 43 Barry Bonds no longer is an everyday leftfielder, his destiny if he hopes to play in 2008 is as a designated hitter. And before Barry gets too excited he would be well advised to check out the lay of the land.

Barry was paid $15 million in 2007. Sammy Sosa had a ‘respectable’ season with the Texas Rangers. The Rangers paid Sosa $500,000 this year. Sosa sat out the 2006 season. The Baltimore Orioles paid Sosa $17 million in 2005, after a long career with the Chicago Cubs. Between 1994 and 2005 Sosa was paid $104.95 million by the Cubs. Like Bonds, Sosa found himself caught up in the fallout from baseball’s tainted steroid era. Sosa played the 2007 season at bargain basement prices – would Barry Bonds ever consider playing for next to nothing. Bear in mind Barry Bonds has earned more than $187 million during his MLB career.

If Barry Bonds really wants to play baseball next year he had better realize he’ll command a salary somewhere between $2 million and $4 million, if that. Better for everyone concerned Barry Bonds hang up his spikes, and enjoy the rest of his life, or become a bargain basement baseball player.

As for the Giants – here’s what the teams’ owner had to say Thursday evening. “We always had three things in filling this place: a winning team, a star player and a ballpark,” said Peter Magowan, the team’s owner. “Next year, obviously that star player is gone. But I think the ballpark will stand the test of time.”

Just how many tickets will the Giants sell in 2008 their first in 15 years without Barry Bonds remains to be seen as is Barry Bonds baseball future.

For SportsBusinessNews this is Howard Bloom. Sources cited and used in this Insider Report: Wikipedia

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Thursday, September 27, 2007

Obit – the last of a dying breed William “Dollar Bill” Wirtz

The dead should be mourned and respected at least in the hours and days after their passing. Wednesday, one of the worst owners’ professional sports history Bill Wirtz, the longtime owner of the Chicago Blackhawks, passed away. It would be an understatement to suggest Wednesday was a great day for fans of the Blackhawks, nonetheless Wirtz deserves to be respected and remembered for the good he brought to the National Hockey League. At the same time it’s only fair to look at both sides of the coin, and when it came to Bill Wirtz there was two sides of the coin – the good Bill Wirtz and the bad Bill Wirtz.

Along with being the President of the Chicago Blackhawks, Mr. Wirtz was the Chairman of Wirtz Beverage Group, President of Wirtz Corporation and Wirtz Realty, Director of First Security Trust and Savings Bank, and Chairman of the South Miami Bank Corporation. Mr. Wirtz also served as a Director of U.S. Bank Corporation and Alberto Cluver.

A 1950 graduate of Brown University, Mr. Wirtz took his place alongside his father Arthur and brother Michael when the family purchased the Chicago Blackhawks in 1954. In 1966, Mr. Wirtz was named President of the Chicago Blackhawks, a title he maintained for 41 years.

Mr. Wirtz served as Chairman of the Board of Governors of the National Hockey League for 18 years and was responsible for negotiating the merger between the NHL and the World Hockey Association in the late 1970’s as well the expansion of the league. Known as a man of his word, Mr. Wirtz was also a member of the National Hockey League’s Executive Committee.

No one did more for hockey on both the professional and amateur levels than Mr. Wirtz. He served on both the 1980 and 1984 Winter Olympic Committees. The 1980 U.S. Olympic Team captured the Gold Medal at Lake Placid. For his efforts on both the professional and amateur levels, Mr. Wirtz was inducted into the Hockey Hall of Fame in 1976, was the recipient of the Lester Patrick Trophy in 1978 and was inducted into the U.S. Hockey Hall of Fame in 1985.

Under the guidance of Mr. Wirtz, Chicago Blackhawk Charities was established in 1993. Since that time, Blackhawk Charities has donated over $7.5 million to worthy causes in the Chicagoland area such as Boys and Girls Clubs, Cathedral Shelter, Miseracordia Homes, the Rehabilitation Institute of Chicago, the Chicago Blackhawk Alumni Association, and the Amateur Hockey Association of Illinois (AHAI). Mr. Wirtz also donated both the Chicago Stadium and the United Center to host the Blackhawk Cup, the annual High School Boys and Girls State Championship Game, over the past 20 years.

Mr. Wirtz was also the driving force behind building the United Center which opened in 1994. This was not an easy decision for a man who literally grew up in the old Chicago Stadium. As difficult a decision as this was, Mr. Wirtz recognized the necessity for change. Together with Bulls owner Jerry Reinsdorf, he succeeded in constructing the United Center, a state-of-art arena and one of the finest buildings in the country.

Mr. Wirtz was most proud of the fact that the United Center was financed with private funds and without taxpayer dollars. Mr. Wirtz was most proud of developing the Virginia Wadsworth Wirtz Sports Program at the Rehabilitation Institute of Chicago. This program was near and dear to his heart as it was named after his mother, Virginia Wadsworth Wirtz. Along with continuing to fund this program, Mr. Wirtz was a model humanitarian and many of the good deeds he did for people and organizations throughout the community went unnoticed by design.

“Bill Wirtz was a giant presence in a giant city – his beloved Chicago – and an even greater presence in the National Hockey League. His 41 years as President of the Blackhawks and 18 years as Chairman of the Board leave an incomparable legacy of contributions to the game and to the League. His strength, intelligence, character and passion have been ingrained indelibly in the Blackhawks, in the League and in me. Bill was a true icon and a great competitor.

“While a fan of the game, first and foremost, Bill was a staunch advocate of philanthropic work in the community. Bill gave so much of himself to so many people without hesitation. He touched countless lives in countless ways.

“On behalf of the Board of Governors and the entire NHL family, I send heartfelt condolences to his wife, Alice, to his children – Rocky, Gaily, Karey, Peter and Alyson – and all the other members of the Wirtz family. Bill will be dearly missed.”-NHL Commissioner Gary Bettman

“It is a sad day in hockey. We have lost a great owner and a great steward of the sport. Bill carried his passion for the game and for his team with him everywhere he went."

"No one did more for hockey on both the professional and amateur levels than he did. He will always be remembered as a dedicated leader in the sport and for the legacy he has left in his community, especially his humanitarian efforts through his foundation."
"On behalf of all of the owners of the National Hockey League, our hearts are with his family on this difficult day as we all mourn the loss of our dear friend."-Jeremy Jacobs, owner of the Boston Bruins and Chairman of the NHL Board of Governors

“Illinois has lost a true sports and business icon. The legacy of Bill Wirtz will live on through the numerous businesses he built, charities he funded and the thousands of Illinois residents he employed. Patti & I wish to extend our sympathies to the entire Wirtz family. They remain in our thoughts and prayers.” Statement from Gov. Rod R. Blagojevich

“Brenda and I were saddened to learn of the passing of Bill Wirtz. Bill was a good businessman, a good friend and someone who cared deeply about Illinois and, especially, Chicago.

Bill and I worked together to bring the DNC national convention to Chicago in 1996 and I believe he will be remembered for his compassion and for his commitment to his family, his businesses, his employees and to numerous charitable causes.

Brenda and I extend our most sincere thoughts and prayers to Alice and the entire Wirtz family.” Statement from Gov. Jim Edgar

“Bill Wirtz was a giant of a man whose passing leaves a tremendous void in Chicago. It was an honor to have been his partner for over 25 years. He was a person of great integrity, loyalty and generosity.“ Statement from Jerry Reinsdorf

The unedited comments and obit from the Chicago Blackhawks – but is that the real Bill Wirtz, or is there more to the story?

Wirtz had a reputation for stubbornness and frugality. He was vilified by Blackhawks fans for forbidding Blackhawks home games to be shown on TV and for allowing Bobby Hull to leave the Blackhawks. Wirtz was also blamed for the loss of both Dominik Hasek and Ed Belfour, the sacrilegious trade of Chris Chelios to Detroit (in actuality, Chelios asked to be traded and gave approval to then-General Manager Bob Murray when told Detroit was the most interested team), the lopsided trade of Jeremy Roenick and lastly the 1967 trade of a young Phil Esposito.

Bobby Hull and Stan Mikita are so embittered by Wirtz's cheapness that they will have nothing to do with the franchise. Wirtz was also blamed for the Blackhawks Stanley Cup drought, which is the longest in the NHL and the longest in team history.

Under the ownership of Wirtz, the Chicago Blackhawks were named by ESPN in 2004 as the worst franchise in sports.

ESPN has ranked Wirtz as the 3rd greediest owner in all of sports. In February of 2004, ESPN The Magazine published results of a nationwide survey ranking 121 professional sports franchises from the NBA, NFL, NHL, and Major League Baseball. The criteria the fans voted on included "Bang for the Buck", "Fan Relations", "Ownership", "Affordibility", "Stadium Experience", "Players", "Coach/Manager", and "Championships".

It came as no surprise to Blackhawks fans their team finished dead last. And who did Blackhawks fans blame – Bill Wirtz.

But that is only the beginning of the anger Blackhawks fans have towards Wirtz. One of the more popular Blackhawks fan related websites – Wirtzsucks.com “He single handedly put hockey on life-support in Chicago. And that, my friends, seemed to trump all today.”

Longtime Chicago Sun Times columnist Jay Mariotti was incensed Wednesday evening at “Wirtz celebrators” those reveling in the death of Bill Wirtz.

“There are days when I'm ashamed to work in the Chicago sports media. Wednesday was one such day. On both sports radio stations - neither exactly busting out with big ratings when the Sun-Times' Bob Feder reports on them every quarter - I detected a celebratory mood in the air about the passing of Blackhawks owner Bill Wirtz.

“Yes, Wirtz wasn't a popular man. Yes, the Hawks might have a chance to get with the times and have success as new leadership takes over. Yes, he seemed more keen on fighting the players' union than winning hockey games. But have some perspective and decency in the wake of a man's death. Unfortunately, perspective and decency never have been trademarks of Sick Puppy Radio in this town.

“On WMVP-AM, the lead afternoon host implored listeners to call with their choices on other local sports people they wouldn't be sorry to see pass on. Personally, my first selection in any such poll would be Osama bin Laden or someone of his ilk, and I'd like to applaud the station's listeners for not responding with much zeal to the question.”

And as much as others might want to run and hide from this profile – the Wall Street Journal served up Wirtz on a platter the week of April 16, 2007.

The National Hockey League made it to the front page of the Wall Street Journal this week, for all the wrong reasons. In an article titled “The Wirtz Curse: Why Chicago Fans
Trash Blackhawks” Wall Street Journal reporter Douglas Belkin painted as terrible a picture of a professional sports team owner as has ever been offered in one of America’s most respected publications. In the many years the Blackhawks and the Chicago Bulls shared the Chicago Stadium it was the Blackhawks and not the Bulls who filled the historic and now demolished arena. The United Center may be the house that Jordan Built but it’s the arena where the Blackhawks can’t sell tickets. The Blackhawks averaged 12,727 or just 62 percent of their available inventory. The NHL remains a gate driven league and when you are not selling tickets you’re losing money.

According to The Wall Street Journal: in a recent ESPN survey of 80,000 sports fans, the Blackhawks ranked 118th out of 121 professional sports franchises. Under the category of ownership, defined as honesty and loyalty to players and city, the fans ranked Mr. Wirtz second-lowest, above only Jeffrey Loria of major-league baseball's Florida Marlins.

What should be of even greater concern a report earlier this month in The Chicago Tribune suggested the half empty United Center includes thousands of tickets being given away for free by the Blackhawks through numerous promotions, including an e-mail campaign that put top-notch freebies the length of a hockey stick from the ice.

"It's called papering the house," said Barry Melrose, a former NHL player and now a hockey analyst for ESPN. "I'm not surprised they are doing it. It's been a terrible period for the Blackhawks. People are frustrated and angry, and the fans are showing it the only way they can, by staying away."

One fan told the Tribune: "I bought 40 tickets for $3.06 each," said 25-year-old Jason, a part-time ticket broker and full-time culinary student. That small sum accounted for the fees Ticketmaster charged to process the seats.

These weren't in the nosebleeds, either.

"I had two in Section 119 four rows up from the glass," said Jason, who resold those tickets on Craigslist.com for $30 each. Face value on those tickets: $80. Yes the Chicago Blackhawks according to the published report are giving tickets to brokers for nothing. That isn’t “insult to injury”, its sheer stupidity. The Blackhawks are devaluing their entire ticket inventory. It will take the franchise years to recover from how they’re running their business operation.

"We're just trying to put some butts in the seats," said Peter Hassen, the Blackhawks manager of advertising and promotions. "We've had our ups and downs this year, and the fans haven't been supporting us as much as we'd like."

Another recent promotion was with radio station WCKG-FM 105.9. Members of that station's VIP club were offered free tickets for their birthdays instead of the usual box of doughnuts.

"Probably close to 100 or 150 people took advantage of that," Hassen said.

But the giveaway that has drawn the most attention started with an e-mail sent to recent ticket buyers, not season ticket-holders.

"We offered two free tickets to those fans who supported us in the past," Hassan said. "We gave them a password they could use on Ticketmaster to get the free tickets."

A few days after the Wall Street Journal report The Toronto Star’s Rick Westhead broke a report that Wirtz was prepared to sell his interests in the Blackhawks if there was a change in the leadership of the National Hockey League Players Association and that “adjustment” included leadership that mirrored former NHLPA executive director Bob Goodenow.

Goodenow led the NHLPA into a year long lockout that ended with NHL owners negotiating a salary cap directly tied to hockey generated revenues. Wirtz who for many years was the Chairman of the NHL Board of Directors battled the NHLPA for years over the escalation of salaries. Dollar Bill never wanted to pay his players a dollar more than he had too and the thought of the NHLPA going back to the future drove Wirtz to the brink.

"If the union hired someone like Bob, who just says your lying whenever you say you're losing money, I'd put the team up for sale," Wirtz said to Westhead at the time. "And I think that might cause other owners to look at their own investments."

According to the Toronto Star report, Wirtz who owned the Blackhawks for 40 years, lost $191 million in the last 10 years he owned the Blackhawks -- $31 million during the last NHL season alone.

“If you put a gun to my head, I wouldn't buy an NHL team right now, and that includes my own team," Wirtz told The Hockey News in 2003 before the lockout that whipped out the 2004-05 season.

Sports marketer Marc Ganis, of Sportscorp Ltd. in Chicago, told the Wall Street Journal for their April cover story Wirtz "decided the economic structure of the NHL was lunacy long before the other owners. He was the sane man in an insane crowd." By the time owners locked out players, resulting in the cancellation of the 2004-05 season, player salaries accounted for an unsustainable 75% of team revenue, Mr. Ganis says.

Wirtz was widely credited -- or blamed -- for leading the lockout. Leading up to the lockout, Hockey News quoted Mr. Wirtz as saying, "The players keep wanting more and more. Pretty soon they'll want the key to my door. I love them all. But I love my door even more."

“He holds a public trust, a responsibility, and he's failed to live up to it," says Mark Weinberg, a Chicago attorney who spent two years researching and writing a self-published book called "Career Misconduct: The Story of Bill Wirtz's Greed, Corruption and the Betrayal of Blackhawks' Fans."

Wirtz and Weinberg had an “interesting relationship” Weinberg published a ‘fanzine’ in the years before the internet and blogging began serving sports fans. He then wrote "Career Misconduct: The Story of Bill Wirtz's Greed, Corruption and the Betrayal of Blackhawks' Fans." And Wirtz really was upset with Weinberg. Wirtz allegedly had Weinberg threatened with arrest for selling his the book outside the United Center (on public property). Weinberg filed a Federal lawsuit over the matter.

“I wrote it in 2000. ("Career Misconduct: The Story of Bill Wirtz's Greed, Corruption and the Betrayal of Blackhawks' Fans.")

“It’s an expose of Wirtz’s crimes and corruptions over the course of his career. There’s litigation surrounding the book. When I wrote it in 2000 I wanted to sell it to disgruntled Blackhawk patrons outside the United Center. So from Dec. 27, 2000, to Feb. 14, 2001, I sold it outside the arena. But on Valentine’s Day three undercover cops told me I couldn’t sell it on public sidewalks because I was violating Chicago’s anti-peddling ordinance. I left that night but came back two days later thinking there’s no way they’ll harass me two nights in a row. But they threatened to arrest me, so I left.”

Owning a sports franchise for 4 decades is a very long time. Bill Wirtz experienced the full spectrum of the sports industries evolution in the last 40 years. He began his days as an NHL owner in a period when the owners had total control and never really adjusted to changes in the sports industry when the pendulum swung the other way. Bill Wirtz may have understood what it was to be an NHL owner in the 1960’s, 1970’s and 1980’s but he wasn’t ready when the players seized control of their rights in the 1990’s. You can say whatever you’d like about anyone but once they stop recognizing the changes their business is undergoing they become a poor manager and owner of their business.

Bill Wirtz never and that should read NEVER understood where the sports industry was in the last 15 to 20 years. His steadfast belief that televising his teams’ home games would hurt his teams’ attendance never made any sense. Add in how important broadcast revenues are to sports franchises today and the scope of how out-of-date an owner Bill Wirtz had becomes even more apparent.

That is in no way to suggest Bill Wirtz was a bad man. Having never met the man personally it’s not fair to judge the man’s character. But as the owner of a major North American sports franchise there is no excuse whatsoever for how out-of-touch with reality Bill Wirtz was. Everyone deserves to be respected and Bill Wirtz did more good than bad in his life, but at the end of the day he ceased to be an effective sports owner 20 years ago and the fans of the Chicago Blackhawks paid a terrible price. Respect and honor Bill Wirtz but its time to revive a once great sports franchise nearly killed by its now late owner Bill Wirtz.

For SportsBusinessNews this is Howard Bloom

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Tuesday, September 25, 2007

The fate of the Seattle Sonics was pre-determined a long time ago

The last few days have seen the battle between Seattle Sonics owner Clay Bennett and the City of Seattle ‘heat up’. Friday Bennett filed his legal move -- filing papers seeking arbitration on the KeyArena lease. Bennett while not stating what his true intentions are, intends to do what he wanted to do since he bought the Sonics for $350 million from Seattle native and Starbucks founder Howard Schultz on July 18, 2006. Monday, the City of Seattle filed a lawsuit in King County Superior Court in an attempt to force the Sonics to continue playing at KeyArena through 2010.

"Too often pro sports teams have run over local governments and gotten their way with them. Today we are standing up and saying 'no.' We have an agreement. We are going to enforce that agreement. We want you to honor your promises," Seattle City Attorney Tom Carr said in a prepared statement Monday.

How serious is the City of Seattle – they’ve retained former U.S. Sen. Slade Gorton legal firm to handle their lawsuit.

"Regrettably, almost from the beginning those Oklahoma owners gave every indication that they did not intend a longtime stay in the city of Seattle," Gorton said, citing recent comments from part-owner Aubrey McClendon that the new owners never wanted to keep the Sonics in Seattle despite their public statements.

"The issues with the Sonics profitability at KeyArena have less to do with KeyArena than perhaps the Sonics' ability to defend the high pick & roll," Carr said. "Good teams, competitive teams have done well here."

Bennett did most of his talking when he fired the first salvo in this war Friday, holding a major press conference after he announced he has had enough with the Sonics KeyArena lease.

“In an effort to bring some clarity as to where we are relative to our lease, we believe it’s time to take some formal action and find the legal determination as to certain elements of the lease. This morning we have filed for a ruling through the arbitration process, by which we hope to find some clarity, or more understanding, of the elements of our lease document. As we approach the Oct. 31 deadline, we’ve seen nothing tangible, we’ve seen nothing come together that is formal, legal or binding that would suggest the development of an arena. Given the tenor of the city in enforcing and demanding that we play in KeyArena for the next three years and given the city’s retention of a highly-respected former U.S. Senator and given their efforts in their own statement of ‘lawyering up,’ we believe it is time to engage.

“Further, we believe it does not make sense to stand and wait and watch the clock strike twelve on Oct. 31. It’s clear that we need to make things happen and get more engaged in advance of that deadline. KeyArena is not a viable NBA arena. A renovated KeyArena is not a viable NBA arena. I understand the timing of this legal filing is in advance of Oct. 31. I want to be very clear that we remain absolutely committed to engage in the same process that would bring about the development of a new building. This is absolute consistent with our original commitment to the selling group, the NBA and the public at-large. We have been consistent about the perimeters and the framework of this acquisition. The franchise will not remain in this marketplace without a new arena. We will not break the lease. We will operate within the legal perimeters set forth in the document, which we now hope will be more clearly defined, and with the guidance of the NBA commissioner and the other owners.

“I’ve said previously that we were going to move the date of the actual filing of our relocation application off of Nov. 1, which I’ve previously stated. This is an effort to move it away from the opening of our season. Hopefully this will give a platform for our team, our coaches and our entire organization to launch a positive year. There is no new time or date set, except to say that we are developing our application, and we will file.

“We’ve also been made aware that there is interest in local investors acquiring the team. The teams are not for sale. We remain bullish on the NBA for many, many reasons, notwithstanding our current operating challenges which are tied to playing in an unworkable facility.

“I want to speak to our most important constituency: our fans, season ticket holders and our courageous sponsors. This is the first year that we’ve really had an imprint on this team and we’re very excited about the season. We have a dynamic mix of young and dynamic players, a first-rate coaching staff and a basketball staff led by Sam Presti and P.J. Carlesimo. You’ll see a disciplined, hard working, smart team on the floor working hard every day to get better. We are committed to providing the ultimate basketball entertainment and social experience to our fans. We will provide solid and meaningful value for our sponsors and marketing partners.

“I want to close and reiterate with what I think are the important points. Our action today sends a signal of urgency and will serve as a catalyst to bring leadership together to find a solution. We will engage in any realistic, leadership-driven opportunities that come our way. Nothing has changed in our commitment on July 18, 2006. If we can reach an acceptable lease agreement with a new arena facility, the Sonics and Storm are here for a very long time. If a commitment for a new building is not realized, we will evaluate our options, which will include relocation. We are seriously committed to finding an answer in this marketplace. We stand ready to engage with our professional consultants and anyone we can bring to the table that can assist in the development of a workable plan. But we cannot stay at KeyArena. I implore leadership – elected leadership, business leadership, civic leadership and people of influence who can move this thing forward – please, come to the table. Let’s talk.”

If only anyone would care to believe Bennett is really interested in talking. All one has to do is examine the history behind Bennett’s $350 million purchase to understand from the day Clay Bennett bought the Sonics his sole goal was to move the team to Oklahoma City.
During the 2005-06 NBA season, Bennett, along with Aubrey McClendon of Chesapeake Energy, Tom L. Ward of SandRidge Energy, and G. Jeffrey Records Jr. of MidFirst Bank, partnered with the City of Oklahoma City and the State of Oklahoma in providing a revenue guarantee for the NBA's New Orleans/Oklahoma City Hornets. This resulted in the temporary relocation of the Hornets to Oklahoma City for two seasons.

Bennett had offered to purchase at least a minority controlling interest in the New Orleans/Oklahoma City Hornets until July 2006 (from George Shinn), however that ended when the NBA made it clear to Shinn the Hornets were heading back to New Orleans by the start of the 2007-08 NBA season. Bennett then made his next move heading a group known as The Professional Basketball Club LLC (TPBC) that purchased the Seattle Supersonics and the Seattle Storm for $350 million from Schultz on July 26, 2006.

The NBA approved the sale of the Sonics from Schultz to Bennett a week before the start of the 2006-07 season. David Stern made special mention of Bennett’s purchase late last October in his pre-season press conference.

“Well, actually I have sort of a sense of optimism because although Clay and his ownership group are based in Oklahoma City, almost from the first day that Clay started looking at Seattle as an investment and then as a purchase, he stressed to me the vibrancy of the Seattle market, the revenue streams that could be available there, and its jumping off status to Asia and its business relationships to Asia, which is a subject on which the Board spent some time today, not in terms of Seattle, but in terms of the NBA’s opportunities. So, I went from kind of skeptical in a way, to kind of getting on line with “Ok, I get what you see here.” But, of course, the large investment that they’re making and that they’re continuing and willing to stand behind is dependent upon a new building. And, they actually have committed to resources for experts and consultants and the like, to follow a critical path that seems designed to exhaust every opportunity, including the political route, the governmental route that is necessary to have a new building. I’m delighted to see the effort so focused, and hopefully their intentions here will be reciprocated by the decision makers who have the opportunity to impact it in a positive way, “Stern offered after the BOG’s approved Bennett’s ownership of the franchise.

“David has said it very well. We, first and foremost in our evaluation, made a decision to invest in the NBA and to be a shareholder in what we view as a very important and growing, global business. We also view the Seattle marketplace as a remarkable opportunity – very dynamic, expanding economy, beautiful place to be. The connection to the Pacific Rim, the existing trade that is there, the future trade that will happen, and the league’s potential internationally and really a lot of work that is already being done in that pursuit. So, our interest is in that marketplace and in that economic model. I am encouraged by what has happened so far in terms of the development of a building. I think we’re being well received, and I think we’re making constructive progress toward that end. So, we’ve been working -- although we didn’t receive board (NBA Board of Governors) approval until today – we’ve been working, really since the day we announced (the purchase), on this project. So, we’re excited to really hit the ground and begin some serious work,” Bennett saying what any new owner would say on the eve of his first year as owner of an NBA franchise based in Seattle.

Both Bennett and Stern were saying what needed to be said, but actions speak louder than words. Last November when a proposal to build a new arena in Sacramento for the Maloof brothers and their Sacramento Kings was roundly defeated Stern sent former NBA vice-president John Moag to Sacramento with the goal of brokering an arena deal. A year later Moag, who founded Baltimore based Moag & Co., an investment bank for the sports, media, and entertainment industries is still working hard at finding solutions to the Kings issues in Sacramento. Stern hasn’t sent anyone to Seattle to attempt to broker a franchise saving deal between Bennett and the City of Seattle.

Stern tried his best to compare both where the two franchises where at February’s All-Star Weekend in Las Vegas.

“No, I think that two different things. First of all, in California it's really hard to get anything passed, because the citizens have spoken.

“I think that Seattle is a much more mature situation. The new ownership has done so much, beyond what we could have hoped. They were very poorly treated at first. Everyone thought they were simply going to go in and wanted to move the team to Oklahoma City again. And they were disbelieved when they said they would like to keep it there.

“They've spent enormous sums of money and time and the like to come up with a plan, a funding plan. They've laid it out. They've got a site selected, et cetera. And it will either happen or it won't. We've been around this track a long time and I hope it happens because Seattle has been a very good city for the NBA and the Clay Bennett Group, I think, would be great, great, and will continue to be great owners for the Sonics. I don't see a role for me at this point.” Stern said Saturday.

Thursday, Stern echoed similar comments to The Seattle Times relating to how the NBA feels about the Sonics insistence a new arena (largely publicly funded) be built in the immediate future. Its clear, David Stern has all but washed his hands of any future involvement in the Seattle arena debate.

"I'm not intimately involved" with the latest news in Seattle, Stern said. "Our office is keeping on top of it. I've been extensively involved with the All-Star [preparations]. I haven't had a chance to review it, except on a top-line basis.

"But, obviously, the ownership group is working very hard to get something done and spending an enormous amount of time, effort and money on putting together the best possible proposal and building."

Bennett made it clear in February what he wanted (expected) if the franchise was going to stay in Seattle, a $500 million taxpayer built facility. On February 13, 2007 Bennett visited the Washington (State) House, asking for $300 million in state funding, and $100 million from the City of Renton. Bennett is ready to kick-in $100 million. However, Bennett intends to retain all of the funding the arena will generate. Given the Sonics can expect between $150 million and $200 million in naming rights for the proposed arena, not only will Bennett not pay a dime if his wish is granted, but he’ll actually make a profit.

According to The Seattle Times, here is the proposal Bennett made to Washington’s (State) politicians last Tuesday: Sonics funding plan

Senate Bill 5986 would extend several taxes paying off existing sports stadiums to fund a new arena, arts groups and stadium maintenance.

Sales taxes: A 0.017 percent sales tax for Safeco Field debt would be extended by 17 years, to 2029, and a separate 0.016 percent sales tax for Qwest Field debt would be extended by eight years, to 2029. $227 million

Restaurant tax: A 0.5 percent tax on restaurant meals and drinks to pay off Safeco Field debt would remain until 2015, three years longer than previously projected. $75 million

Car rental taxes: A 2 percent car-rental tax for Safeco Field debt would be extended until 2015. Another 0.75 percent car-rental tax for Kingdome debt also would continue. $40 million

Hotel/motel tax: After the Qwest Field debt is paid off in 2021, a 2 percent tax on hotel- and motel-room rentals would be split between the new arena and arts groups. $81 million

Total financed: $423 million

On Monday, April 16, 2007 Washington State politicians faced two choices – commit political suicide and give into Bennett’s blackmail or reject Clay Bennett’s demands. Sports welfare isn’t what it once was – Bennett’s demands were soundly rejected.

In a statement, Clayton Bennett, the chairman of the Professional Basketball Club, LLC, expressed his disappointment with the Legislature for its inactivity.

"This a staggering and quite likely a debilitating blow to our efforts to develop a world-class arena facility," said Bennett. "Clearly at this time the Sonics and Storm have little hope of remaining in the Puget Sound region.

"We believe we have gone to extraordinary lengths with significant time and resources to craft a proposal for a global-caliber multi-purpose event facility that would be a valuable public asset for the region for years to come and have minimal impact on taxpayers. By its inaction the Legislature has delivered the message that they are indifferent to the notion of the Sonics and the Storm leaving the market."

“We remain willing and available to work with the Governor and the Legislature to explore every conceivable funding option for the building. We are also receptive to analyzing any private financing mechanisms that are brought to our attention. But at this time we have no other concepts on the table.

“We want to recognize Senator Margarita Prentice and Representative Eric Pettigrew for their courageous leadership in the Legislature. We also want to thank the good people of Renton who have enthusiastically supported these efforts. In addition we wish to thank the many supporters and advocates who have worked hard on our behalf.

“As owners we remain absolutely committed to restoring the Sonics to a championship caliber team – on this subject we will not waver. Further we are committed to delivering the very best fan experience and sponsor value that we can. We thank our fans, season ticket holders and sponsors from the bottom of our heart. We also thank our professional staff, our players and coaching staff, all of our friends who work at KeyArena and everyone who has believed in us.”

Outside the Sonics & Storm organization, supporters also responded with frustration to the Legislature's decision.

"As a season-ticket holder since 1978, I am interested in knowing what the next step will be for the Sonics organization and what more we fans can do," said Judi Childs, the president of the Sonics Booster Club. "I am so disappointed in the Legislators for killing the King County Events Center bill and think they are being very short-sighted. I feel that sports are a very important part of our community as are the arts, museums, theaters, etc. All of them together make our great city and county on of the most desirable in the US."

"While we are disappointed with our state leadership in Olympia for failing to find a solution to this problem, we will not let today's announcement detract from the real progress that has been made," Save Our Sonics & Storm co-founders Steve Pyeatt and Brian Robinson said in a statement.

"Mr. Bennett and the Professional Basketball Club have had a very short time to overcome substantial adversity. During this period they have established an impressive coalition of community and business leaders. They assembled a first-class design and development team and put together a very viable funding package which came closer to passing than most people probably realize. Additionally, the city of Renton has proven to be a remarkable advocate for the Sonics & Storm in this region. It is our sincere hope that all of these parties will continue to move forward until the King County Events Center becomes a reality."

And David Stern – what did the Commissioner have to say about the plight of the NBA franchise that has called Seattle home since 1962? (the sounds of silence are all that could be heard at the time).

And what will be the future for the NBA franchise owned by Clay Bennett and the NBA in Seattle?

David Stern continues on message. He continues (for what its worth) to say the right things the Sonics will stay where they are, but he’ll allow the process to play itself out in Seattle.

At the same time Stern will not get in the way if Bennett’s wants to try and move the franchise to Oklahoma City. David Stern is too smart a man to not realize Oklahoma City proved during the two years they where home to the Hornets the city has earned the chance to have their own NBA team.

The NBA isn’t necessarily done with Seattle. For the NBA history might be about to repeat itself.

Robert Johnson paid a $300 million expansion fee when the Charlotte Bobcats became the 30th NBA franchise on December 18, 2002. The NBA originally expanded to Charlotte in 1987, with the Charlotte Hornets (and the Miami Heat) joining the NBA in time for the 1988-89 season. The NBA awarded the expansion franchise to George Shinn. The Hornets moved into the 24,000 seat Charlotte Coliseum. Shinn became embroiled in an alleged rape case.

Shinn and then partner Ray Wooldridge moved the team to New Orleans after failing to get the public financing for a new arena. Long gone where the days of 21,000 season ticket holders, but the NBA believed in the Charlotte market. Stern and company understood it wasn’t the Charlotte market but the owners of the team in that market. Its well worth noting as soon as George Shinn left town voters supported a new arena for an NBA franchise, Bobcats Arena that opened last year.

That will allow the final piece of this puzzle to fall into place. David Stern will suggest Seattle is a good NBA market, but the current ‘political climate’ isn’t going to allow a new arena to be built. If a new arena is built, David Stern will all but guarantee the good citizens of Seattle – they’ll get an NBA expansion franchise.

Under this scenario everyone wins. Bennett move to a market where he was born and raised – he’ll be seen as the Local Hero, and at the same time the Stern will leave the door open for the NBA’s return to Seattle once the city works out its arena issues. But the first parts done – the Sonics are heading to Oklahoma City, next year.

For SportsBusinessNews this is Howard Bloom

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Monday, September 24, 2007

Alex Rodriguez – he’s going to break someone’s bank -- but not the Chicago Cubs

Major League Baseball heads into the last week of the regular season staring at an interesting post-season. The four American League teams are all but set (the Boston Red Sox, Los Angeles Angels, Cleveland Indians and New York Yankees) and in the National League the New York Mets, Arizona Diamondbacks and the Chicago Cubs appear destined for the post season with the Philadelphia Phillies and the San Diego Padres vying for the wild-card spot. For long suffering Chicago Cubs fans (the Cubs last won the World Series in 1903) Sunday a New York Magazine report suggested not only should Cubs fans be look at the present, but the teams’ future may include Alex Rodriguez joining the Cubs next year.

New York Magazine is reporting Rodriguez’s agent Scott Boras has begun “secret negotiations” with one of the Cubs potential ownership groups. The (unnamed) group according to the report are talking to Boras about a ten-year $300 million contract that would include Rodriguez receiving an ownership stake in the Cubs. The report uses unnamed sources and its well worth noting it is illegal and against the rules of baseball for anyone to conduct negotiations with a player while he is under contract to another team. That isn’t to suggest the practice doesn’t take place, but in this case completion of the sale of the Cubs is still months away.

There is a strong favorite emerging in the sale of the Cubs, but a report last week in the Los Angeles Times suggested the process of selling the Cubs could move the sale of the franchise to 2008.

That would end any real possibility the sale of the Cubs, and A-Rod joining the Cubs could be tied together. That’s not to suggest it couldn’t take place but it’s likely if A-Rod is going to sign with a new organization he will do so in December. The financial implications A-Rod will have on whichever team signs him will force that team to make other roster moves to pare down their team payroll to lessen the overall financial impact A-Rod’s $30 million to $35 million annual contract would have on a teams’ payroll and how that might impact that team having to pay baseball’s luxury tax.

Sunday evening Boras tried to set the record straight on the New York Magazine report and the New York Yankees shrugged off the suggestion.

"Great players with great demand create great rumors," Boras said in a telephone interview with The Associated Press on Sunday night. "While I would enjoy having lunch with Mark Cuban and [John] Canning, at this point of the year that conversation would not include Alex Rodriguez. I have not talked to anyone."

"It's a silly story, and we don't believe it," he told ESPN.com's Buster Olney on Sunday evening. "However, if it was true, it would be grounds to disqualify the applicant even before he went through the process, because it would demonstrate a disregard for major league rules and procedures, and we're confident the commissioner would feel the same way."

That comments aside, Rodriguez has the option of opting out of the ten-year $252 million he signed with the Texas Rangers in 2001. Rangers’ owner Tom Hicks realized he couldn’t afford the biggest contract in team sports history and dealt Rodriguez to the New York Yankees four years ago. Boras included an opt-out clause in his client’s contract; Rodriguez has the right to inform the New York Yankees ten days after the conclusion of the 2007 World Series if he will exercise the free agency clause in his contract.

During the mid-summer classic Boras suggested not only would his client opt-out of his contract but he believed Alex Rodriguez was about to become the first professional athlete to earn more than $30 million annually. Boras the best in the business negotiated a similar opt-out clause in J.D. Drew’s previous contract with the Los Angeles Dodgers. Drew opted out and signed a five-year $70 million contract with the Boston Red Sox.

According to a published report: the language in Rodriguez's record-breaking contract signed in 2001 says that for the 2009 and 2010 seasons, A-Rod will receive $27 million plus the higher of $5 million or $1 million greater than the annual average value of the non-pitcher with the largest annual average value package. Thus, Boras explained, even if Rodriguez does the minimum and agrees to give up his free-agent rights to stay with the Yankees for the next three seasons, he would be guaranteed $32 million in each of the final two of those years. So Boras had the ultimate insider information when he recently told Los Angeles Magazine he anticipates the first-ever $30 million player coming soon.

"The way the provision operates, he either gets that or he can become a free agent after any of those seasons again," Boras told The New York Post.

And here’s where it makes even less sense Rodriguez is going to end up in the Windy City. There are only four or five franchises that could seriously consider a $30 million contract for one player. And with the year A-Rod is having is not unreasonable to assume he might be able to command as much as $35 million annually.

Remember not only would a team have to assume a multi-year contract likely in the area of five-year’s and $150 million but in all probability the resulting luxury tax – an additional 40 percent surcharge on an annual basis. A-Rod’s contract could cost a MLB franchise at least $42 million a year (taxes included), based on an annual contract in the area of $30 million. The Yankees and Mets both moving into new stadiums at the start of the 2009 season would look at signing A-Rod, as would both the Los Angeles Dodgers and Los Angeles Angels. It would be next to impossible for any other team to even consider signing A-Rod; it would be a terrible business decision for any other team to consider, including the Boston Red Sox.

There has been a great deal of speculation A-Rod could be headed for Yawkey Way and Fenway Park. The Red Sox average ticket price for the 2007 season is $47.47 (20 percent higher than their nearest competitor). Fenway has been sold out the four and a half seasons. The Red Sox might try and sign A-Rod (trade Manny Ramirez and Mike Lowell leaves the team as a free agent, could possibly make it work financially), but it would still represent a bad business decision for the Fenway Sports Group. Those sentiments aside; who ever said professional sports owners made business decisions based on prudent business moves? Given the professional (and at times personal) rivalry that exists between the Yankees and the Red Sox add the Red Sox to the mix as to where A-Rod may end up next year, as little business sense as it might make, especially when you consider how Red Sox CEO Larry Lucchino feels about the Evil Empire new palace set to open in time for the 2009 season,

But it’s the Yankees who remain the favorite to retain A-Rod next year and beyond. Whatever gap exists between the Yankees and every other MLB franchise in overall revenue will only get wider when the new Yankee Stadium opens in 2009. Some industry insiders estimate the Yankees will make an additional $50 million-$100 million annually.

Asked whether the new Yankee Stadium could force Boston’s ownership to forgo improvements at Fenway in favor of a new ballpark, Lucchino told The Boston Globe, "A new ballpark is not in the cards. But the new behemoth Yankee Stadium in 2009 does militate in favor of us doing everything possible to make Fenway Park a bit bigger, better, and more revenue-producing in the near future."

What about the Cubs – should the Waveland Avenue gang be added to the mix? According to a weekend ESPN report Chicago-based private-equity dealer John Canning Jr. is the strong favorite to gain control of the Cubs. It's not just that he's put together a group of local establishment tycoons that readily can amass the $1 billion it might take to buy the franchise, Wrigley Field and 25 percent of Comcast SportsNet Chicago from the Tribune Company.

The ESPN report suggests: Canning is hard-wired into the establishment of Major League Baseball, which must approve new ownership. The chairman of Madison Dearborn Partners is a friend and business associate of Commissioner Bud Selig. He owned a piece of the Milwaukee Brewers when the Seligs ran the team and still has an 11-percent stake under the new majority owner, Mark Attanasio.

Another member of the group, Andrew McKenna, also has connections. Now chairman of McDonald's Corp., he was chairman of the Cubs in the early 1980s.

What's more, Allen and Company, the investment banking firm that represented Selig's ownership group in selling the Brewers, is representing Canning's group now. Its partner on the case is Steve Greenberg, the former deputy commissioner of MLB.

Canning is the very model of the kind of owner Selig has sought to install when teams change hands, particularly baseball's flagship franchises. The commissioner wants no renegades who will break ranks on labor matters or break the bank on player salaries. (The damage might already have been done in the case of the latter, with the Cubs' $100 million payroll.)

The Los Angeles Times on September 15, 2007 reported the sale of the Tribune Company (the owners of the Los Angeles Times, The Chicago Tribune, the Chicago Cubs and other media related properties) the sale which many industry observers would include Wrigley Field (the Cubs home stadium) and the Tribune's 25% share of Comcast SportsNet, a regional cable TV network could instead be sold in parts.

Sam Zell agreement to buy the Tribune Company would allow him to sell each part of the company as separate entities, but that wouldn’t make any sense in terms of maximizing what the Cubs can be sold for.

John Henry, Tom Werner and Lucchino paid $700 million for the Red Sox and an 80 percent stake in the New England Sports Network in 2001. Henry had been the owner of the Florida Marlins; Werner had owned a stake in the San Diego Padres and Lucchino had been president of the Padres. The three men where baseball people.

The Times last week reached the same conclusion ESPN did over the weekend -- John Canning will be the next Cubs owner when the dust clears. The report also pointed out Henry, Werner and Lucchino’s bid wasn’t the biggest bid for the Red Sox six years ago. Their $700 million bid was topped by Charles Dolan’s $790 million bid for the Red Sox. Most industry observers believe when the Red Sox where sold Major League Baseball commissioner Bud Selig influenced the process – ensuring the Red Sox would be sold to baseball people. Selig claims those ‘rules of the game’ will not be enforced with the sale of the Cubs, and that Canning doesn’t have any edge as to who will next own the Cubs.

"None of that is true," Selig told the Los Angeles Times. "We would take a look at any bid. Nobody will get faster approval than any other guy."

"In the Boston situation, the people were in baseball and they were highly regarded," he said. "Did [that] play a primary role? No. But it's helpful when you know somebody."

But the sale of the Tribune Company to Zell that includes $12 billion in debt is far more complicated than the sale of the Red Sox was.

"Notwithstanding Major League Baseball's desire to be in business with John Canning," a person close to the transaction said in the Los Angeles Times report, "he's got to pay what the asset is worth."

"There are buyers who would like to pick this asset off while we're doing the larger transaction," a Tribune source said. "But we don't have a gun to our head."

"It's a great time to own the asset," a person close to the transaction said. "But that doesn't mean we should let someone else do five or 10 things to the asset that we could do to maximize its value."

Assuming both ESPN and The Los Angeles Times are correct in reporting John Canning Jr. is the definitive favorite to buy the Cubs the New York Magazine report makes no sense whatsoever.

The New York Magazine report doesn’t point to Canning being in the drivers seat when it comes to buying the Cubs but it doesn’t report (as do both ESPN and The Los Angeles Times) Mark Cuban has little if any chance to buy the Cubs. The style of contract the New York Magazine report believes could happen ($10-year, $30 million annually, $300 million and an ownership stake in the Cubs) fits Cuban’s ownership style. Like Cuban it’s innovative and practical – it makes sense, but Cuban isn’t going to buy the Cubs.

Canning knows the rules of the MLB ownership game and how they’re played. He likely has Selig’s support because in large part because Selig knows Canning won’t rock the boat and will be a good MLB team owner. Good owners who play by the rules aren’t negotiating contracts with Scott Boras that are in direct violation of MLB ownership rules – one of the most basic principals of the ownership game. If Canning is indeed the favorite – what incentive would he have to risk his favorite ownership status by secretly negotiating an agreement for Alex Rodriguez with Scott Boras? Sometimes one plus one does equal two.

And if Boras Sunday night denial wasn’t enough to suggest the New York Magazine report didn’t have a great deal of creditability than the MLB rule that prohibits a player from having part ownership of a team or a team negotiating for future ownership with a player (as part of a contract) should put the New York Magazine report to bed – but that said it won’t stop the speculation as to where Alex Rodriguez will be playing baseball next year.

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

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Friday, September 21, 2007

It’s time for Floyd Landis to pay the price

Some stories are too good to be true. Cancer survivor Lance Armstrong retired after winning seven consecutive Tour de France’s in 2005, Armstrong initially had to feel a strong sense of satisfaction when fellow American Floyd Landis claimed the 2006 Tour and the greatest prize in cycling, the Tour’s Yellow Jersey. Imagine how Lance must feel today about Floyd Landis.

Not only was Landis a fellow American, but like Armstrong although not to the same extent, had overcome seemingly insurmountable physical adversity to claim one the toughest titles in sports when it comes to endurance. The Tour de France is a 22-day, 20-stage road race that is usually run over more than 3000km that has been contested since 1903. Thursday, the winner of the 2006 Tour de France Floyd Landis was finally stripped of his title. Time for reality Floyd, time to live with the shame you’ve brought to your sport and to cycling.

The United States Anti-Doping Agency (USADA) announced Thursday that an independent arbitration panel issued its written decision finding that Floyd Landis of Murrieta, Calif., committed a doping violation during the 2006 Tour de France. Following a nine-day evidentiary hearing and a lengthy post-hearing review of all the evidence and testimony submitted, the majority of the independent panel of arbitrators from the American Arbitration Association (AAA)/North American Court of Arbitration for Sport (CAS) found that the sample provided by Landis after his Stage 17 victory was positive for exogenous testosterone.

As a result of his doping violation, Landis received a two-year suspension and forfeits his first-place finish in the 2006 Tour de France and all related prize money. The United States Anti-Doping Association who brought the case against Landis where thrilled by the decision.

“Today’s ruling is a victory for all clean athletes and everyone who values fair and honest competition,” said USADA Chief Executive Officer Travis T. Tygart. “This decision confirms for the overwhelming majority of American athletes who compete ethically that USADA is committed to protecting their right to participate on a drug-free playing
field.

“This case is really just another sad example of the crisis of character which plagues some of today’s athletes and undermines the honest achievements of all of those athletes who compete with integrity. Hopefully, some of the good that comes from this type of case is that other athletes who might be tempted to cheat will recognize that there is no honor in doping to win.

“I want to thank all of the dedicated USADA Board members and employees, the many experts who assisted in this case and our outside counsel, Rich Young, Matt Barnett, Dan Dunn and Jennifer Sloan of Holme Roberts & Owen LLP for their tireless commitment in pursuing the truth. Everyone on USADA’s team operates on one fundamental principle: do what is right,” continued Tygart. “Here, despite the intense pressure applied by Mr. Landis and his high-priced legal and public relations team, we knew that doing what was right required staying the course and fulfilling our duty to clean athletes. USADA brought the case against Mr. Landis because, as the independent panel confirmed today, the scientific evidence established that he had committed a doping violation.”

"According to our rules we will be stripping him of his title and awarding it to Pereiro,'' Pat McQuaid said the Tour director when hearing the news.”He has the chance whether to appeal or not. ... But there's nothing to stop us now from stripping him of his title.''

"It took that long to confirm what we already knew ... that he (Landis) cheated,'' Race Director Christian Prudhomme said in an Associated Press repport. "For us, Floyd is no longer the champion. We have said and repeated since this time that we have faith in the results from Chatenay-Malabry.''

Also relieved at the decision was the leader of that French lab, which underwent intense scrutiny during the arbitration hearing.

"We took a lot of flak,'' lab director Jacques de Ceaurriz said. "It was a little exaggerated. Things could have been handled better, without attacking the laboratory.''

Needless to say Floyd Landis and his legal team didn’t take the news well.

"This ruling is a blow to athletes and cyclists everywhere," stated Mr. Landis. "For the Panel to find in favor of USADA when, with respect to so many issues, USADA did not manage to prove even the most basic parts of its case, shows that this system is fundamentally flawed. I am innocent, and we proved I am innocent."

The decision of the arbitrators clearly establishes that, regardless of the evidence presented by the athlete of laboratory errors, the conflicted and coordinated testimony of the anti-doping community -- including heads of other WADA laboratories and experts who receive millions of dollars from USADA -- will prevail over the evidence presented by the athlete.

"The majority Panel's decision is a disappointment, but particularly so because it failed to address the joint impact of the many errors that the AFLD laboratory committed in rendering this false positive. To take each of these errors singly is to ignore the total falsity of the result. The majority panel has disregarded the testimony of Mr. Landis' experts, who are preeminent in their respective fields, without analyzing the impact of the errors on the final result. This is a miscarriage of justice," said Mr. Landis' attorney Maurice Suh, partner at Gibson, Dunn & Crutcher LLP.

Midway through the 2006 Tour de France (July 10, 2006) The New York Times first reported that Landis was competing in the one of the most physically punishing events in sports with a degenerative hip condition.

"If I hadn't had a bicycle-racing career, I would have had the hip replaced two years ago because I don't really want to deal with the pain," said Landis, the 30-year-old American leader of the Phonak team from Switzerland.

Describing the pain, he told The New York Times in an interview at his team hotel in Châteaubourg before the Tour's eighth stage, "It's bad, it's grinding, it's bone rubbing on bone.

"Sometimes it's a sharp pain," he continued. "When I pedal and walk, it comes and goes, but mostly it's an ache, like an arthritis pain. It aches down my leg into my knee. The morning is the best time, it doesn't hurt too much. But when I walk it hurts, when I ride it hurts. Most of the time it doesn't keep me awake, but there are nights that it does."

And Landis’ Tour de France team made it clear; they had their leaders back and support in his drive to claim Le Tour de France.

"Floyd was honest enough to speak to me about this," General Manager John Lelangue said. "It didn't change any of our plans. Since January, the objective was and remains the Tour de France. His condition was not a problem to our objective.

"We knew about the condition and that was important. I know we're talking about hip surgery, but if it's done well and planned for a good moment, I'm confident he will return to training normally and there won't be any problem next season."

What happened after the New York Times report (timeline from ESPN) speaks volumes as to what continues to drive the terrible decision athletes continue to make.

July 14: Landis takes the overall race lead for the first time without winning a stage. He relinquishes the yellow jersey two days later in a strategic move, and then retakes it three days later.

July 19: A disastrous collapse in a climbing stage in the Alps costs Landis the yellow jersey. He trails leader Oscar Pereiro of Spain by more than eight minutes, a seemingly insurmountable deficit.

July 20: Landis and his Phonak team launch a surprise attack on the first of several climbs in a brutally hot, demanding Stage 17 in the Alps. He catches the early breakaway group and rides off solo, steadily gaining on the peloton, which fails to chase until too late. Landis' fist-pumping finish in Morzine puts him back into contention, 30 seconds shy of Pereiro.

July 22: Landis overtakes Pereiro in the time trial and seals his Tour victory. The next day, he becomes the third American rider to lift the race trophy on the Champs-Élysées.

July 27: The UCI, cycling's governing body, announces that an unidentified Tour de France rider has tested positive for a performance-enhancing substance. Speculation centers on Landis after he abruptly withdraws from a race in the Netherlands. Phonak confirms later that day that Landis' 'A' sample tested positive for abnormal testosterone levels.

July 27: Later that day, Landis strongly denies doping in a teleconference with U.S. reporters. During the following days, his advisers suggest various explanations for his elevated testosterone-to-epitestosterone ratio, including alcohol consumption and a prescribed thyroid medication. He retains attorney Howard Jacobs, who has defended several high-profile athletes against doping charges.

July 31: An anonymous source tells The New York Times that Landis' urine sample showed the presence of synthetic testosterone.

Aug. 5: Landis' "B" sample confirms the "A" result. Phonak fires him. Tour de France officials declare they no longer consider him the race champion, although Landis can't be officially stripped of his title until his hearing process is complete.

Aug. 15: Phonak owner Andy Rihs announces he is folding the team, which was plagued by numerous doping offenses during its short existence.

September: Landis formally requests that his arbitration hearing to contest the doping charges be open to the public, a first for an accused athlete, following the U.S. Anti-Doping Agency's denial of Jacobs' motion to dismiss the case. ... Landis undergoes successful hip resurfacing surgery and begins rehab.

October: Hundreds of pages of technical documents and legal correspondences related to Landis' case, including a slide presentation assembled by his coach, Dr. Arnie Baker, are posted on his Web site. The "wiki defense" spurs a wide, continuing discussion on Internet message boards and blogs. Baker gives a talk in Tucson, Ariz., citing scientific and clerical errors in the testing in the first of what will eventually become a series of "town hall meetings" aimed at influencing public opinion and building a legal defense fund.

November: An unknown hacker sends e-mails purporting to come from the French lab, alleging numerous drug testing errors and sloppy procedures. Later, hard copies of letters outlining errors specific cases are mailed to reporters and some anti-doping authorities. The letters are labeled "whistle blower documents" by the Landis team. Neither side has offered firm evidence that the letters are authentic.

December: USADA requests permission to test Landis' seven "B" or backup urine samples from the Tour de France that were not originally tested because the corresponding "A" samples were negative. Landis fights the request, which is not made public for two months.

2007

January: WADA chief Dick Pound, discussing Landis' alleged testosterone levels with a New York Times Magazine writer, comments, "You'd think he'd be violating every virgin within 100 miles." Landis blasts the remarks at his fund-raisers ... Landis hires former Los Angeles deputy mayor Maurice Suh as co-counsel ... The French Anti-Doping Agency summons Landis for its own hearing, but later agrees to put its investigation on hold until after Landis' USADA appeal is completed ... Landis, fully recovered from his hip surgery, conducts a training camp for amateur cyclists in Southern California. He tells ESPN.com he does not expect to compete in 2007.

February: Landis announces a book deal with Simon & Schuster for "Positively False," to be published in June. Acting as a spokesman for the company that manufactures the device implanted in his hip, he makes public appearances at the Tour of California. ... Landis' defense team charges that the same two technicians at the French lab were involved in testing his "A" and "B" samples, a protocol violation that resulted in the dismissal of a case against another cyclist.

April: The arbitration panel rules in a 2-1 vote that Landis' leftover "B" samples can be tested at the French lab and possibly used as evidence in the case, although they cannot be considered official positives. ... In an anonymously sourced story, the French newspaper L'Equipe subsequently reports that several of those samples show the presence of synthetic testosterone. ... Landis' defense team contends its observers were not allowed proper access to the testing and analysis.

May: Landis' team charges that computer files related to the testing may have been altered or destroyed. ... French Anti-Doping Agency chief Pierre Bordry announces that the lab has asked for an independent audit.

May 14 - 23: The arbitration hearing is held at Pepperdine University School of Law in Malibu, Calif. Landis' defense focuses on casting doubt on the credibility of the Chatenay-Malabry laboratory outside Paris where the test samples were processed. Landis' lawyers accuse technicians of failing to follow correct procedures and incorrect scientific interpretation of test results. USADA's lawyers bring in experts to support the test findings. The majority of evidence presented at the hearing is scientific in nature, but part of the hearing devolves into personal issues when three-time Tour winner Greg LeMond testifies that Landis had obliquely told him he was guilty in a phone conversation not long after the positive test was revealed. Landis denise the allegation, but fires business manager Will Goeghegan when it is revealed in open court that Geoghegan placed a threatening phone call to LeMond the night before LeMond was scheduled to testify.

Sept. 20 The arbitration panel releases its ruling on Landis, upholding the results of the test results that showed Landis used synthetic testosterone in his 2006 Tour de France victory. Landis is left with one avenue -- an appeal to the Court of Arbitration for Sport.

Last month The New York Times Magazine’s Sara Corbettt took an in-depth look at the last twelve months for Landis – “The Outcast

In the piece Landis slammed not only Armstrong but refered to three-time Tour de France winner Greg LeMond as “pathetic.” LeMond “needs help, honestly.” And also: “I feel bad for the guy. What happened to him is horrible, but don't use that to make up lies about me.”

LeMond testified at the Landis’ arbitration hearing, the end of bitter battle between the two cyclists. LeMond’s testimony took a bizarre twist when just before he was schedule to testify LeMond received a call from Landis’ manager who threatened to reveal the secret if LeMond showed up to testify.

Shortly after LeMond dropped those bombshells, the manager, Will Geoghegan, walked up to LeMond, apologized and admitted he made the call. Which led to “You’re fired” — the message Landis attorney Maurice Suh gave to Geoghegan while they were still standing in the hearing room.

“It was a real threat, it was real creepy, and I think it shows the extent of who it is,” LeMond said before leaving the Pepperdine law school after his spellbinding day. “I think there’s another side of Floyd that the public hasn’t seen.”

The next day, Geoghegan released a public statement apologizing.

“I have been very angry about how unfair this whole proceeding is to Floyd, a great friend and a greater champion, and stupidly tried to take out my anger on Greg,” Geoghegan said. “I acted on my own, impulsively, after a beer or two. I never thought about keeping Greg from testifying.”

Nevertheless what Floyd Landis about LeMond shared with the New York Tiems suggests there indeed serious issues -- as LeMond’s believes “I think there’s another side of Floyd that the public hasn’t seen.” What did Floyd Landis believe he could gain by referring to Greg LeMond as “pathetic?”

What led to LeMond appearing on behalf of the U.S. Anti-Doping Agency; was a phone call Landis and LeMond shared on August 6, 2006. LeMond was attending a charity event in Massachusetts; got a call from Landis that lasted 36 minutes. According to a report in The International Herald Tribune LeMond said he urged Landis to confess if his backup B sample also proved to be positive. The call was made days after Landis won the 2006 Tour de France, only to face the scrutiny of a positive drug test days after.

"I made it very clear that I did not judge that he did or didn't because his B sample was not positive at that time," LeMond testified.

"I said, I don't know if you did or didn't, but if you did, you can be the one to change the sport . . . salvage the sport. I would encourage you to come clean."

Landis according to The New York Times profile remained very bitter over what transpired after the call towards LeMond. Landis told The Times he was infuriated last fall when he heard that LeMond had been repeating his “completely false” version of their phone call. On an online forum widely read by serious cyclists, he posted a bilious but at that point inscrutable threat directed at LeMond, including the line, “If he ever opens his mouth again and the word Floyd comes out, I will tell you all some things that you will wish you didn't know.”

The battle between the two men played out publicly, an exercise in crisis communications that Landis lost and played a major role in the end of his professional cycling career. What next for Floyd Landis? According to an ESPN.com report Landis spent close to $2 million on his defense. He has one more appeal open to him -- an appeal to the Court of Arbitration for Sport. He has a month to file an appeal.

"I have to assess whether a system that corrupt is worth subjecting myself to again," Landis told ESPN.com's Bonnie D. Ford. "I don't have any reason to believe that CAS is any more sincere.

"Money is a large part of it. I have to consider my family when I consider risking everything I have left. It might be like putting all my money in a slot machine."

"The only way this could have come out any differently is if one of the arbitrators was drunk and checked the wrong box," he said. "There's something going on here other than trying to figure out the science."

"This is not a rewarding thing to be a part of right now," Landis said. "I would advise athletes all over the world to stop giving urine samples until these guys clean up their act."

Before Floyd Landis decides what his next decision will be in regard to cycling (or one more futile appeal), he might be best advised to take that look inside at the man he is and attempt to figure out what is best for his and his families’ future. Clearly – if Floyd Landis is going to move forward with his life he’ll only be able to do so when he begins to forgive himself for what may or may not have taken place at the 2006 Tour de France. Floyd Landis another in a long line of athletes who are making the wrong choices for the worst possible reasons – a fleeting chance at fame.

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

Wednesday, September 19, 2007

The plight of former National Football League players heads back to the Senate

Sunday’s many of these men, where men among men, titans of the gridiron. Life after the cheering hasn’t been kind too many of these football heroes, years later, faced with the aftermath of debilitating injuries that have left these men without the quality of life many of their peers are now enjoying. And worse, many are penniless, close to be wards of the state unable to support themselves. How could men who we cheered, cherished, loved and respected be forced to suffer in their twilight years? Who exactly is responsible? And what if anything can be done to right this terrible wrong?

Tuesday, led by Football Hall of Fame members Mike Ditka and Gale Sayers, joined by National Football League Commissioner Roger Goodell and NFL Players Association Executive Director Gene Upshaw these group of former and current NFL executives addressed a U.S. Senate Committee on the Oversight of the NFL Retirement System.

Nearly three months ago the same committee held hearings that featured Ditka, Sayers and other members of the Gridiron Greats a group formed by Ditka and former Green Bay Packers Jerry Kramer to help former NFLers in need. Goodell and Upshaw didn’t appear at the June 26, 2007 hearings and where roundly criticized for what was perceived as their inaction. Tuesday, the two acknowledged leaders of the $7 billion industry (better known as the NFL) shared how they felt about the issue of the NFL Retirement System.

Upshaw enshrinement in the Football Hall of Fame isn’t based on what he has done with the NFLPA, a lengthy career that played itself out long before the NFL became an economic engine.

“Prior to becoming Executive Director in 1983, I played 16 years in the National Football League. I know the risks and rewards of the game.

“I am distressed when I hear about any former player who is hurting and in need. Remember I played with a lot of these guys. I have spent my entire professional career fighting for the rights of players. I also recognize these are very emotional issues but we cannot overlook the facts. The facts are the facts. I ask permission to submit for the record our detailed “White Paper,” which describes the retirement, disability, health care, and other benefits currently available to NFL players.

“Our benefits were forged in collective bargaining. In 1993, as part of my first collective bargaining agreement as Executive Director, we dramatically improved both pension and disability benefits for all players.

“I want to make three simple points.

“First, the NFLPA is proud of the job we have done for NFL Players both active and retired. NFL Players are well compensated and enjoy an outstanding benefits package. Unlike many businesses, where benefits have been reduced, benefits for NFL players have been maintained and repeatedly improved. We represent the best practices of labor relations.

“Second, we are not finished. I think all of the active players respect and empathize with the emotions and concerns expressed by retired players. This is why we established a Retired Players organization as a division of the NFLPA in 1984. And, in 1990, we established the Players Assistance Trust (PAT), funded by the active players to help former players in need. In the past 18 months, this fund has disbursed over $1.5 million to former players in need of financial assistance.

“When I became Executive Director in 1983, about 30% of NFL revenues went to the players. That has now doubled, to 60% of all revenues. Our union went through some dark times. We had to renounce our union status – "decertify" – to bring the legal challenge that ultimately led to our present success. I don't think any other union has ever done that; everyone said we were crazy. But we made it work. We shifted the battle from the picket line to the courtroom, and forged the partnership with the owners we are proud to have today. With labor peace, the game has grown enormously, and all have benefited – players, owners, and fans.

“This success has allowed us to win against the prevailing trend of reducing benefits to workers. Before we get into the hype, let's look at the facts. The NFLPA has fought hard to increase benefits -- especially pensions, disability, and health care.

The NFL generated more than $6 billion in revenues last year. That figure is expected to come close to $7 billion this year/ The NFL’s television contracts collectively generate $3.75 billion a year. Current NFL players receive 60 percent of all football related revenues. The average NFL salary in 2006 was $1.4 million. And that average salary has been over the $1 million a year threshold for some time. The average salary of $1,169,470 for the 2001 season reflected a 5% increase over 1999, according to NFL Players Association documents. It topped the previous high of $1,137,800 set in 1998.

Everything changed for NFL players in 1982. The players went on a 57-day strike (no not the strike that inspired the movie “The Replacements”), but a work action that led to a 9 game NFL season. Among the ‘goodies’ the players negotiated with the owners – the right to obtain copies of all individual contracts.

Before NFL players obtained that right it was anyone’s guess what players were being paid. Former Kansas City guard Tom Condon, now a super-agent, told USA Today’s Gordon Forbes in 2001 he remembers learning in a shower conversation that his backup was earning $65,000, or $15,000 more than his own salary. The Chiefs dug down and gave Condon $65,000 plus 2 more years, each with a $10,000 raise.

"I was just happy as hell and said, 'Let's sign,' " Condon said. And when the NFLPA's first salary survey came out in 1982, Condon learned that the Chiefs were an equal opportunity employer. Condon (10th round), right tackle Charlie Getty (second) and left tackle Matt Herkenhoff (fourth), all from an offense-heavy 1974 draft, each earned $130,000 in base salary in 1982. Left guard Brad Budde, their first-round pick in 1980, earned $90,000. Jack Rudnay, a Pro Bowl center, earned $175,000. Shockingly, Bill Kenney, the starting quarterback, also earned $130,000.

The players that are suffering the most, those being forced to live on next to nothing played their football (with Upshaw) before 1983. Today’s NFL players who are guaranteed 60 percent of all football related revenues (60 percent of the $7 billion) are the ones who at the end of the day determine how those who built the NFL into a money making machine are going to be treated.

Roger Goodell said as much in his testimony to the committee Tuesday.

“In considering the subject of benefits for retired players, I begin from a premise which I think no one seriously disputes – the men who played professional football decades ago deserve our respect and recognition, and their contributions to our game must never be overlooked. I honor them and their achievements and neither I nor the NFL clubs will turn our backs on them.

“Second, while it might be tempting to say – as some have – that this is Gene Upshaw’s problem to solve that is neither fair nor accurate. The responsibility for addressing the needs of retired players belongs to all of us. The retired players, the current players, the clubs, Gene as head of the Union, and I as the Commissioner – all of us have a role to play. We will continue to address this issue in a way that is compassionate, creative, and realistic.

“Third, just as it would be wrong to say this is Gene Upshaw’s problem to solve, it would be wrong to say that the NFL can or should solve the problem by itself. While some may not believe this, the fact is that we cannot solve every problem of every type that has been identified, and certainly not in a way that will satisfy everyone. NFL clubs currently spend close to 60 percent of their gross revenues on player benefits and salaries. Our clubs contributed almost $150 million last year to finance medical, disability, and retirement benefits for former players, and during the term of our current collective bargaining agreement, we project that our clubs will spend more than $700 million to fund just this package of player benefits. Owners are responsibly addressing these concerns, but they are simply not in a position to absorb significant incremental costs.”

Goodell went on to address the committee pointing out how well today’s players are treated – essentially missing the point of the hearing, today’s NFL players may indeed enjoy a great benefit package but with the average NFL salary estimated at $1.4 million for the 2007 season, today’s NFL player stands to earn between $3 million and $5 million if he plays for the NFL average of 3.5 seasons. Before 1983 the average salary was less than $100,000 per year.

“Commissioner Goodell and I do not decide disability claims. Disability claims must first go to a two-person Disability Initial Claims Committee (required by Department of Labor regulations since January 2002). If the Committee deadlocks or a player is not satisfied with its decision, the player may appeal to the full Retirement Board. The Board has six voting members; three appointed by the League and three appointed by the NFLPA. The 3 members appointed by the NFLPA are retired players: Tom Condon, former President of the NFLPA, played 11 years in the NFL; Jeff Van Note, former President of the NFLPA, played 18 years for the Atlanta Falcons; and Dave Duerson, who played 11 years, and was an All-Pro safety. The NFL appointees are team owners William (Bill) Bidwell (Arizona Cardinals), Clark Hunt (Kansas City Chiefs) and Dick Cass (President, Baltimore Ravens). If a player is dissatisfied with the Board’s decision, a player may seek review in federal court.

“More recently the NFLPA/NFL formed an “Alliance” bringing together an initial $7 million fund to pay for joint replacement surgery and address other financial hardships of retired players. The joint replacement surgeries will be available at no cost to retired players without insurance at designated hospitals across the country.

“All of these benefits and improvements are paid for by the active players.

“Our CBA allocates a fixed percentage of Total NFL revenues for player salaries and benefits. As you can see, last year alone the current players voluntarily gave up $147.5 million to help former players. None of this $147.5 million went to current players.

“That's $96.5 million to fund pensions, $20 million to fund disability benefits, and $31 million to fund medical benefits. Just for former players. And these numbers are growing. Because of the pension increases in the 2006 CBA, the cost of funding pensions alone for former players more than doubled --from $39 million to $96.5 million -- a 147% increase in one year.

“In the process each active player essentially reduced his salary by $82,000.”

And while what Upshaw said is correct it is the essence of the problem. NFL owners negotiated and bargained in good faith a collective bargaining agreement that guarantees NFL players 60 percent of all football generated revenues. It is up to the players what they want to do with the money the owners’ grantee the players. Nonetheless Upshaw did offer three suggestions to Congress as to how he believed this problem might be solved.

First, we need federal standards for workers compensation. The current state-by-state system often causes the vast majority of hurt workers, not just NFL players, to settle for a lump sum, and give up their rights to lifetime medical care for their injuries on the job. Congress should impose federal standards that allow injured workers to get immediate medical help and keep lifetime coverage.

Second, Federal law does not allow unions to manage their own plans, even when, as here, the negotiated contribution by employers is fixed and plan actions cannot impose extra liability. By proposing this I do not suggest that any of the six trustees have not acted in good faith and in accordance with their fiduciary duty. But since the NFLPA has been criticized when applications are denied (even though a majority vote of the six trustees is necessary for a decision), and since current players are funding the system, it makes sense for the players to be the ones making the disability decisions.

Third, in 2002, the Department of Labor imposed an extra level of decision-making in disability decisions – a new Initial Claims Committee – before our six trustees can hear the evidence about a particular player’s disability. I ask Congress to eliminate this requirement. I opposed the creation of this extra committee when the Department of Labor proposed it.

When the initial hearings where held three months ago Congressional leaders who attended the hearings where outraged at the plight of these seemingly forgotten football heroes, expressing outrage – suggesting in no uncertain terms something had better be done to help these former heroes of the gridiron and it had better be done sooner rather that later. The only real difference between the first hearing on June 26, 2007 and yesterday’s on September 18, 2007 was the appearance of Goodell and Upshaw.

What may or may not be a surprise, the lack of reaction this time from the politicians who took the time to attend the hearing and listen to what was said.

According to ESPN.com’s Lester Munson who attended the hearing and reported on the day’s events for the worldwide sports leader -- the senators apparently have little desire to do anything about the issue.

"I hope we never have to act and set up some sort of accountability," said Sen. John Kerry (D-Mass.). "People must wonder why we are even in this. My hope is the league will act."

Sen. Byron Dorgan (D-N.D.), who chaired the meeting, agreed according to Munson.

"I'm not interested in legislating," Dorgan said.

After Upshaw and Goodell addressed the hearing – things seemed to get a great deal worse according to Munson, “At one point, when Ditka made his suggestion about a board of doctors, the only two senators in the room ignored it. Dorgan was conferred with an aide, and Sen. Ben Nelson (D-Neb.) abruptly changed the subject completely and suggested that the NFL somehow could learn something from the military's veterans disability system, which is in complete disarray.”

One senator, however, did offer some sympathy for the players' plight according to the ESPN report

"I never played football. I was a cheerleader," Sen. Claire McCaskill (D-Mo.) said. "I didn't have any big linemen chasing me."

Then she paused and corrected herself: "Maybe I did."

McCaskill suggested that the players should operate the fund.

"If it is money that is set aside for the players [in the $1.1 billion player pension and disability fund], then why are the owners involved in the decisions?" she asked.

It almost makes the comments the politicians who attended the pervious hearing seem nonsensical. Attendance, interest and intent seem to have changed almost overnight with the Senate Commerce Committee looking at this issue. Again the only difference between the hearings was three months and the attendance of Goodell and Upshaw. The question that begs to be asked – was the first hearing nothing more than political opportunism and did any of the members of the Senate Committee ever really care about the fate of these broken down football players?

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

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