Thursday, January 31, 2008

Countdown to Super Bowl XLII Kickoff – Patriot success and Robert Kraft I

In the simplest terms Robert Kraft is the best owner in professional sports today. Robert Kraft doesn’t have the profile of Dallas Cowboys owner Jerry Jones, or the soon to be retired New York Yankees owner George Steinbrenner or Dallas Mavericks owner Mark Cuban but in the last decade the New England Patriots have become the example not only sports organizations should follow but most businesses might emulate if they want to enjoy the success both on and off the field the New England Patriots have experienced with Robert Kraft at the helm.

Robert Kraft announced his intention to bring New England a championship the day he bought the Patriots in 1994. In the 13 years since, he has made good on that pledge several times over, as the Patriots have won an unrivaled three Super Bowls, four conference championships and seven division championships during that time.

Back in 1994, Kraft's talk of the Patriots winning championships was likely interpreted as delusions of grandeur from a man who had just invested an unprecedented amount of money to purchase the fl oundering franchise. In the four seasons immediately preceding Kraft's acquisition (1990-93), the Patriots compiled an NFL-worst 14-50 (.219) overall record, which included a 1-15 finish in 1990 and a 2-14 record in 1992. They were not only last in the standings, they were also last in attendance and in overall revenue.

But it didn't take long for Kraft's vision to come into focus. His personal investment in the team restored the faith of Patriots fans and rejuvenated interest throughout New England. The year he bought the team, season ticket sales soared to new heights, eclipsing 40,000 for the first time in franchise history. By the start of his first season, every game was sold out, a feat that had not been accomplished in the franchise's previous 34 seasons. The achievement ensured that local broadcast blackouts would be lifted and every Patriots game, home and away, would be televised throughout New England for the first time in team history.

That year, the Patriots won their final seven regular season games to qualify for the postseason, ending an eightyear playoff drought. By his fifth anniversary as owner, the Patriots had already established themselves as perennial playoff contenders, qualifying for the postseason four times, twice as division champions. In 1996, the Patriots qualified for the playoffs as division champions and won the AFC Championship to represent the conference in Super Bowl XXXI.

The transformation of the Patriots under Kraft's leadership constitutes one of the greatest long-term, worst-tofi rst revivals in sports history. In 2005, Forbes magazine valued the Patriots franchise at one billion dollars. The Patriots were just the fourth sports franchise in history to eclipse that financial plateau. That year, Forbes also named the Patriots "The Best Team in Sports."

In Kraft's first 14 seasons in the NFL (1994-2007), no other NFL team won more, or more often, than the New England Patriots. In addition to their many Super Bowl, conference and division championships under Kraft's leadership, the Patriots also earned the distinction as the NFL's winningest franchise since 1994. Entering the 2007 season, the Patriots recorded more victories (144), including playoff victories (15), than any other NFL team and own the highest winning percentages in overall games (.629) and playoff games (.714) in the last 13 seasons.

Few owners in the history of professional sports have experienced the level of success enjoyed by the Kraft family over the last six seasons. In that time, the Patriots have won three Super Bowls, three conference championships and a franchise-record four consecutive division titles. In 2003 and 2004, the Patriots compiled back-to-back 17-2 seasons that were highlighted by consecutive Super Bowl championships. The 34 total victories in a two-year span set an 85-year NFL record. During that time, the Patriots also claimed pro football's consecutive-win records with the longest win streaks in the postseason (10), regular season (18) and with an overall 21-game win streak. Along the way, the Patriots also won 21 consecutive games at Gillette Stadium, the longest home win streak in franchise history.

Kraft's impact on the Patriots was immediate and it didn't take him long to earn the respect of his NFL colleagues and peers. Since 1994, he has played an integral role on many of the NFL's most prominent league committees. As a member of the broadcast committee, he played a principal role in negotiating the two most lucrative broadcasting contracts in the history of sports. He was also instrumental in putting together a deal that made New England- headquartered Reebok International, Ltd. the official and exclusive apparel manufacturer for the NFL, helping to create a new model for the sports license apparel industry. Kraft is now widely recognized as one of the most respected and infl uential owners in sports.

Kraft began his business career with the Rand-Whitney Group, Inc. of Worcester, Mass., a company that converted paper into packaging for various industries. He later acquired the company. In 1972, he founded International Forest Products, a trader of paper commodities that now does business annually in more than 80 countries. Together, Rand-Whitney and International Forest Products comprise one of the largest privately-owned and fully integrated paper and packaging companies in the United States. Kraft founded The Kraft Group to serve as the holding company for the family's varied business interests, which are concentrated in five specific areas: the distribution of forest products, paper and packaging manufacturing, sports and entertainment, real estate development and private equity investing.

From 2000 to 2002, The Kraft Group's real estate development team oversaw the on-time and on-budget construction of Gillette Stadium, a privately-financed $325 million state-of-the-art stadium that the Patriots and their fans are proud to call home. The financial commitment from Kraft provided a solid foundation on which to build for the first time in the franchise's nomadic history. Moving from Foxboro Stadium into the majestic Gillette Stadium marked another worst-to-first transformation for the Krafts, who now operate New England's premier entertainment venue. After opening Gillette Stadium, Kraft was recognized as the Sports Executive of the Year and Sports Industrialist of the Year by two national publications.

The construction of Gillette Stadium was the first project of The Kraft Group's development team. Their current project, known as Patriot Place, is a 1.3 million square foot mixed-use lifestyle center and entertainment complex. The first phase of the project will be complete in 2007 and will feature New England's first outdoor superstore, Bass Pro Shops, as well as other large retailers. The next phase of the project will include a lifestyle center featuring a 14- screen Cinema de Lux movie theater, a state-of-the-art sports medicine and healthcare facility, a four-star hotel, a team pro shop and hall of fame as well as restaurants, retail shops and office space. Once completed, Patriot Place will forever change the landscape surrounding Gillette Stadium and will be the first super-regional lifestyle and entertainment complex of its kind.

Throughout Kraft's professional career, many of his biggest risks have yielded the greatest rewards. That was true throughout his pursuit of Patriots ownership, beginning in 1985 when he first purchased an option on the land surrounding the old stadium. It was a large investment for an underdeveloped parcel of land, but proved to be an important first step in a long process toward owning the Patriots. In 1988, he took another step by purchasing the stadium out of bankruptcy court. It was another large investment, this time to purchase an antiquated stadium that was eventually demolished. But, with a binding lease through 2001, the acquisition of the old stadium proved to be an invaluable asset in his quest toward owning the team.

When his opportunity came in January of 1994, Kraft faced a difficult business dilemma. He had to decide between committing over $172 million of family resources to purchase the Patriots or accept a lucrative $75 million buyout offer to void the final years of the team's stadium lease and allow the team to move out of New England. On Jan. 21, 1994, Kraft passed on the buyout offer, choosing instead to make an 11th-hour bid to buy the team. On Feb. 26, 1994, a day after Kraft earned league approval, season tickets for the 1994 season went on sale and Patriots fans showed their support for Kraft's decision in record numbers. By the end of the first business day, amidst a winter nor'easter, 5,958 season ticket orders were processed, shattering the previous single-day sales record of 979. The show of support validated Kraft's decision to buy the team and gave him the confidence to focus on another risky, long-term project: the construction of Gillette Stadium.

In 2000, Kraft took another risk when he surrendered a first-round draft choice to a division rival to acquire the services of Head Coach Bill Belichick from the New York Jets. The decision was heavily criticized at the time, but like so many of Kraft's decisions along the way, the risk was answered with great reward. Since then, the Patriots have recorded more wins and more championships than any other team in the NFL and Coach Belichick became the first head coach in NFL history to win three Super Bowls in four seasons.

For Kraft, a lifelong football fan, each decision represented a tremendous risk, but they were risks he was willing to take in pursuit of his goal of bringing New England a championship.

In 2001, the Patriots made their final season in Foxboro Stadium a memorable one. After a 1-3 start, the Patriots won 10 of their last 11 regular season games to claim another division title. In the final game at the 31-year-old stadium, the Patriots hosted the Oakland Raiders in a divisional playoff game under a heavy snowfall that created a heavenly ambience. The Patriots' 16-13 overtime victory over the Raiders is described by many as one of the most memorable games in NFL history. The victory propelled the Patriots through one of the greatest playoff runs in NFL history, as they advanced to score dramatic victories over two heavily favored opponents in championship games, including a 24-17 victory over the Steelers in the AFC Championship Game in Pittsburgh and a 20-17 victory over the St. Louis Rams on the final play of Super Bowl XXXVI.

In 2002, the Kraft family enjoyed a most memorable season opener when they celebrated the grand opening of Gillette Stadium with the unveiling of New England's first Super Bowl championship banner on Monday Night Football. That night, the Patriots defeated the Pittsburgh Steelers, 30-14, before the then largest home crowd in franchise history. Since its opening, the Patriots are 36-9 at Gillette Stadium and have won 32 of their last 38 regular season and postseason home games.

In 2003, the Kraft family enjoyed a historic 10th anniversary season that culminated with a second championship celebration just two seasons after winning the first title in team history. After suffering a season-opening loss, the Patriots rebounded to win 17 of their next 18 games and enjoyed a 15-game season-ending win streak. Only the 1972 undefeated Miami Dolphins enjoyed a longer single-season win streak.

In 2004, the Patriots became just the second team in NFL history to win three Super Bowls in a four-year span and the seventh club to win consecutive Super Bowl championships.

In 2006, the Patriots extended their franchise record by winning their fourth consecutive division championship, but fell short of their quest of another conference title when they relinquished their lead to the Colts in the final minute of the AFC Championship game in Indianapolis.

A native of Brookline, Mass., Kraft attended local public schools before entering Columbia University on an academic scholarship. Upon graduation, he received a fellowship to attend Harvard Business School, where he earned a master's degree in business administration.

Kraft first became a fan of the Boston Patriots in their AFL days during the early 1960s. He attended games at each of the team's Boston venues: Boston University Field, Fenway Park, Boston College Alumni Stadium and Harvard Stadium. When the team moved to Foxborough in 1971, he invested in season tickets for his family. Kraft credits the memories and experiences shared with his family and other Patriots fans at Foxboro Stadium for his passionate pursuit of ownership of the franchise.
"I care about the image of the team," Kraft told the Associated Press earlier this month. "I want us to represent something that people can connect with and feel good about."

And when it comes to the image of his players an example Kraft set for the Patriots in 1996 stands as a testament to the man Robert Kraft is. Whenever a member of the Patriots is linked to off-field issues the media loves to recall how longtime Patriots owner Robert Kraft handled the Patriots selection of Christen Peter in the fifth round of the 1996 NFL draft.

Kraft took a stand against employing players with criminal records. In the fifth round of the 1996 NFL draft, the Patriots picked Nebraska defensive lineman Christian Peter, who had been arrested eight times (and convicted four times) during college for a variety of offenses, including the assault of a former Miss Nebraska and the rape of another woman. When Peter's past came to light (it was Kraft’s wife who alerted her husband), Kraft cut the player before he was even offered a contract. "We concluded this behavior is incompatible with our organization's standards of acceptable conduct" said Kraft. While he received numerous letters of support from high school and college coaches, he was not praised by the NFL. Peter’s had a seven-year NFL career.

If Robert Kraft’s stand against Peter meant nothing after Peter ‘enjoyed’ the benefits (financial and personal) of being an NFL players, is there any explanation for why NFL owners allow players whose off-field behavior is out of the boundaries of the law? SportsBusinessNews.com spoke with John F. Murray, Ph.D., Licensed Clinical and Sport
Performance Psychologist in Palm Beach, Florida early in 2007 regarding professional athletes and their sense of entitlement.

“I think all owners would like to have a totally clean image and completely law abiding players. It only helps their franchise in their own community, helps the image of the NFL which they have an obvious stake in and ultimately helps their team perform better with fewer distractions. The problem is that there is also a great temptation to take a player who might not have the halo over his head if he can bring immediate improvement to the team, and there is competition for these on-field talents. Another problem I believe is that owners could invest more wisely in player evaluations. I have seen some of the evaluations conducted in the NFL, and while they are thorough in many areas, one area that appears to be still lacking is the solid evaluation of mental skills and psychological factors, and this is an area that presents a huge upside in talent evaluation in the future. There are so few legitimate sport psychologists, but they need to be more involved in assessment,” Murray told SBN.

Tomorrow in Part II of SBN’s Insider Report look at Robert Kraft -- a look at Patriots Place, Kraft’s innovative plans to work with the CBS network and his reaction to Spygate – the one event that indeed may have been the catalyst that has propelled the Patriots to the brink of the immortals – the greatest team in professional sports history.

Kraft’s the line in the sand approach that he took towards Christen Peter speaks volumes about both the man and professional sports team owner Robert Kraft is. Cowboys owner Jerry Jones will be a mere spectator Sunday – it was Jones who signed Tank Johnson in November after Johnson was suspended for the first eight games of the 2007 NFL season for violating the NFL’s Player Conduct Code. Rest assured while Tank Johnson may have earned a second chance at playing on Sunday – the Tank Johnson’s of the NFL will never wear the Patriots colors on any given Sunday.

For Sports Business News this is Howard Bloom

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Wednesday, January 30, 2008

Countdown to Kickoff – Super Bowl XLII Perfect Ticket Storm

The Super Bowl has evolved into one of the single greatest economic events. From hotels, to commercials – to the resell of tickets, the Super Bowl is an event that dwarfs every other sports event. And when it comes to ticketing, specifically the reselling of tickets, the melding of technology and the law of supply and demand has created a buying frenzy that if nothing else is a ticket version of shock and awe. This years average ticket price -- $4,322 per ticket!!

University of Phoenix Stadium will seat 75,000 for Super Bowl XLII. The Patriots and Giants each received 17.5 percent of the available tickets. After each team dealt with their own needs (key sponsors, owners and others), they each held ticket lotteries to distribute the remaining tickets to their season ticket holders. Usually Super Bowl teams weight the lottery based on the number of years someone has been a season ticket holder. The Cardinals received five percent for hosting the game. The other 29 NFL teams split 34.8 percent of the tickets. Most tickets allotted to individual teams are shared with corporate sponsors and season-ticket holders. The NFL offices retained 25.2 percent of the seats, most of which end up with sponsors and league officials. The 1,000 tickets made available to the public come out of the league's share.

Over the last few years the Internet has afforded many “entrepreneurs” to use the power of the Internet to drive and create businesses. The secondary ticket market has exploded and the Super Bowl presented the perfect storm for the likes of Stubhub.com, Razorgator.com and Tickets.com.

The National Association of Ticket Brokers reports that there are more than 650 ticket brokers nationwide, virtually 100 percent doing most of their business online. The days of buying two tickets from street scalpers outside an arena or a stadium have long since passed. You can be very sure of one thing Sunday, football fans won’t be walking around Dolphins Stadium with thousands of dollars burning a hole in their pockets ready to hand that money over to a complete stranger hoping they’re buying legitimate (non-counterfeit) Super Bowl tickets.

"The street business has really died," said Don Vaccaro, who has been selling tickets since 1979 and is the founder and chief executive of Vernon, Conn.-based TicketLiquidator.com in an Associated Press report. "The old-time brokers are saying, 'Look, you got a bunch of geeks selling tickets now.' It's really a lot more brains going in now."

"It used to be, buy a ticket, triple your profit," Vaccaro said. "Now it's buy a ticket and you're lucky if you get 20 percent."

Face value for Super Bowl XLII tickets: $700 and $900. “Street” or resell price – surging close to $4,000 for impatient football fans who have to have tickets today for Sunday’s game.

Asking prices for the Feb. 3 game range from $2,450 to $19,446 at StubHub, a unit of eBay Inc. and the biggest of the online resellers. Officials there say the average price so far is $4,300 for tickets that the National Football League originally priced at either $700 or $900.

"It appears our face value is under priced based on demand and what people are willing to pay," said NFL spokesman Brian McCarthy in an Associated Press report, who seems resigned to the fact that the league is mostly powerless to stop the profitable turnover of tickets.

Ticket scalping or the reselling of sports tickets above face value existed long before the Internet. Ticket scalpers have moved from street corners to wherever “entrepreneurs” can find an Internet connection.

What may have seemed unimaginable a year ago became reality on December 18. It had been said in the very pages of Sports Business News “Would the National Football League ever seriously consider a league wide sponsorship with a secondary ticket operator? Never, it wouldn’t make sense to potentially taint the NFL’s brand with the perception of being directly linked to anyone selling NFL tickets for more than face value. Leave that to other sports leagues; leave that to those ‘desperate’ enough to accept money from anyone.”

On December 18 the National Football League gave Ticketmaster the right to resell NFL tickets from its TicketExchange website, which fans will be able to access from the NFL’s site and Ticketmaster’s. Specific financial terms were not disclosed, but the agreement spans multiple years, and could cost Ticketmaster an estimated $20 million in annual payments to the NFL. The NFL, a sports league that held itself to the highest of all possible ideals, offered their brand, logo and everything else associated with an NFL sponsorship to a business committed to selling tickets above the face value of their tickets.

"The ticketing marketplace continues to evolve and sports fans demand more creative opportunities to experience our games. We will now be able to meet their expectations with our safe, consistent, and guaranteed service. The new partnership also will enable us to work with Ticketmaster to further develop fan-friendly ticketing programs and innovations," Eric Grubman, the NFL's Executive Vice President and President of NFL Ventures, said in a statement.

StubHub! and viagogo currently have deals with several teams for the next few years, and this new Ticketmaster/NFL deal will not unseat those agreements. Earlier this year, StubHub! and Major League Baseball cut a similar, exclusive deal, under which StubHub! is the official secondary ticketer for the league, but that deal came as a whole with all 30 MLB teams under the StubHub! umbrella at once.

“The league’s endorsement is very attractive,” said StubHub! spokesperson Sean Pate of the Ticketmaster/NFL deal, “but at the end of the day, is it going to drive more traction with the fans?”

StubHub! bid for the NFL contract, but Pate said that Ticketmaster landing the deal “doesn’t markedly change the landscape” because StubHub! still has agreements with several teams. “Unless this system has the same open, fan-friendly platform that StubHub! has, remains to be seen.”

"Fans expect and deserve to be able to resell their tickets in a safe, convenient and legal way," Eric Korman, Executive Vice President of Ticketmaster, said in a statement. "We are thrilled that the NFL has entrusted Ticketmaster as its partner to provide to NFL fans everywhere the best possible resale experience. This is a great win for fans, who benefit from the unparalleled security and efficiency of our technology, which will connect the league, the majority of NFL teams, and millions of NFL fans around the country."

"You gotta mortgage your home to get into the game," said Michael Hershfield, a former lawyer who recently started the ticketing Web site LiveStub.com. "There's this recipe that's been spiced up for a very exciting, very hot event. With all the changes in the industry, this combination has created this current wave of supply and demand."

According to an Associated Press report: StubHub figures show the march higher of scalped tickets in recent years. Tickets it handled for last year's game between the Bears and the Colts averaged $4,004. That was sharply higher than the Steelers-Seahawks in 2006 at $3,009, the Eagles-Patriots in 2005 at $2,659, the Patriots-Panthers in 2004 at $2,290, and the Raiders-Buccaneers in 2003 at $2,767.

"You gotta mortgage your home to get into the game," said Michael Hershfield, a former lawyer who recently started the ticketing Web site LiveStub.com. "There's this recipe that's been spiced up for a very exciting, very hot event. With all the changes in the industry, this combination has created this current wave of supply and demand."

"The pursuit of the perfect season and the matchup against the New York Giants have really helped the increase in sales" says James Holzman, President of Boston based Ace Tickets. "Even people who have seen 1 or 2 Patriots Super Bowls in person are heading out to Phoenix for this one."

And this little gem from ESPN: each year, the NFL gives the local host committee about 750 game tickets. Sullivan's group used theirs primarily for fund-raising. It put together packages ranging in price from $4,000 (for a ticket, a parking pass and access to pregame and postgame hospitality areas) to $100,000 (for 10 tickets and a table for 10 at the Big Ticket gala, where Jay Leno will provide the entertainment).

The committee still had 15 packages for sale … until last week. Then last Tuesday, two days following the NFC conference championship game, a big swarm of orders started coming in from the Big Apple. The packages sold out in, well, a New York minute. The host committee put another 30 packages on sale Saturday, nearly half of which had been sold by Monday.

At TSE Sports & Entertainment (a national company but one based in New York), which sells Super Bowl tickets-and-travel packages, "the phone started ringing off the hook after the Packers game," says Robert Tuchman, the firm's president. Those calls weren't just coming from midtown Manhattan. Many were from companies based elsewhere; wanting to be sure their New York offices were stocked with corporate America's most valuable late-January currency: Super Bowl tickets. Tuchman estimates he'll sell 1,000 packages, typically priced at $6,000, which about equals last year's total.

The good news patient might have it reward for those willing to wait a few more days, at least based on how the reselling ticketing for Super Bowl XLI played out. Two days before Super Bowl XLII, the free market system is working to the advantage of the consumer. Earlier in the week ticket prices stood at $4,100 for end zone seats at Dolphins Stadium dropped to $1,800 per ticket by Friday morning.

Mike Nowakowski, co-owner of Ticket King in Minneapolis, told the Minneapolis Star Tribune little if anything affects the price of Super Bowl tickets.

As for this year's market, he said, "Minnesota is not a hotbed for Super Bowl tickets unless the Vikings or the Packers are in it."

Right now, "the market is about $3,000 to get in the door," he added, and that's very similar to years past." For those on the fence about when to jump in and get a ticket or two, Nowakowski said, "My gut tells me the price is gonna come down on this ticket just because of the amount of seats flowing around."

And how much did tickets cost for Super Bowl I? $6 and $12 – and the Los Angeles Coliseum, the host of Super Bowl I wasn’t even sold out that first Super Sunday when the Green Bay Packers beat the Kansas City Chiefs.

For Sports Business News this is Howard Bloom. Sources cited and used in this Insider Report: The Associated Press, ESPN and The Minneapolis Star Tribune

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Tuesday, January 29, 2008

MLB in Tampa – Destined to Fail

A report in Saturday’s St. Petersburg Times said it all. Rays president Matthew Silverman announced during a televised appearance he made Friday afternoon, the franchise has lost between $20-million and $30-million since 2005. As terrible as that may sound, many local media pundits believe the Rays have been losing close to $20 million annually.

The business hasn't been self-sustaining in the past," Silverman said at a Suncoast Tiger Bay Club meeting, shown live on BayNews 9. "... We're getting close to getting back on our feet."

New York investor Stuart Sternberg took control of the Rays from founding owner Vince Naimoli on October 6, 2005. If one wants to understand the issues linked to the Rays economic plight, all one needs to do is look back at the reign of terror associated with Naimoli’s days as owner.

Forbes Magazine suggested a 2004 Financial Valuation of $176 million for the D-Rays, and offered these benchmark financial valuations over the last six years: $225 million in 1999, $163 in 2000, $150 in 2001, $142 in 2002, $145 in 2003 and the increase to $176 million for 2004 (all figures in millions of dollars).

And how does Forbes regard the D-Rays? As the most horrific baseball franchise of the modern era. The Tampa Bay Rays have never come close to a winning season since their inaugural 1998 season and have lost at least 100 games twice. The franchise is known for squabbling owners, low-budget rosters, lousy public relations and teams that are out of the pennant race by July 4. The home town fans are more passionate about the Yankees' visits than they are about their own club. Bright spot? The team had the most wins last season-per-dollar-of payroll (that because the team has the lowest payroll in baseball).

Problems ensued from Day One, emblematic of not only a terrible owner, but a businessman who set goals that could never be reached. The Devil Rays put their inaugural season single game tickets on sale in December 1997. Namoli boasted the team would sell out 20 of its games that day. They had sold nearly 29,000 season tickets, leaving 16,000 single game tickets available for each game. The team managed to sell out one game that day (their first ever game). They managed to sell out only that one game in their first six years.

The St. Petersburg Times offered a laundry list of mistakes, and as the paper points out not all of the mistakes could be blamed on Namoli:

Major League Baseball put the new owners in a financial hole before the team ever took the field, raising the expansion fee to an unprecedented $130-million and forcing them to forfeit millions in national TV revenue at a time when the overall costs of competing were soaring. The financial wherewithal of the Tampa Bay ownership group was immediately challenged, and has been a persistent concern.

Just how often have those who own professional sports franchises taken a greedy approach when it comes to establishing the parameters for expansion? Well it’s tough enough of a challenge to pay a $130 million franchise fee, and next to impossible when MLB decided to ‘penalize’ the D-Rays by denying the franchise MLB national TV revenues. When Bob McNair paid the National Football League a $700 million expansion fee for the Houston Texans he was immediately eligible for the league’s lucrative network TV deal.

While the Rays stocked their inaugural roster with veteran players, they fielded too many rookies in key management positions. The owner Naimoli, had never owned a sports team; the general manager, Chuck LaMar, had never been a general manager; the manager, Larry Rothschild, had never managed. Of the six department-leading vice presidents on the 1998 staff, only one had done his same job before.

It’s almost amusing to note the Devil Rays followed a pattern similar to the NHL’s Tampa Bay Lightening. Then Lightening General Manager Phil Esposito believed the only way he could build awareness for hockey in Florida was with established players. Baseball is a known and established product in Florida. The D-Rays paid a price for making bad decisions,

The promising Tampa Bay baseball market turned out to be something of a mirage. Projections for massive fan support turned out to be overly optimistic, as the Rays have ranked at or near the bottom of the league in attendance the past six seasons. They struggle to cross the regional barriers that define the area and to connect with transient fans who preferred to stick with their successful "home" team. In a recent Times survey, less than 30 percent of Tampa Bay area baseball fans named the Devil Rays their favorite team.

As for the market, the same can also be said for the Florida Marlins, who despite winning two World Series in the last eight years, have suffered at the box office as do the Rays. One can make a pretty strong business case it never made any sense for Major League Baseball to expand to Florida. Floridians love spring training, or at least the dollars spring training brings to the state.

However those who live in the Sunshine State year round love football most. The state is home to three NFL franchises, seven Division I programs, including three of the premier college football powerhouses and arguably the best high school football anywhere. For Florida sports fans there is only one season: football. Baseball will never find a place in the hearts, minds and disposable incomes of Florida sports fans.

In compiling one of the worst cumulative seven-year records (451-680) of any expansion team, their plan for building has changed repeatedly and many of their high-profile, big-dollar player acquisitions have been huge busts, whether through bad scouting, bad decisions or bad luck.
They handed $10.2-million to a 1996 high-school phenom, Matt White, who has yet to pitch in the major leagues because of injuries; gave a $12.5-million, two-year deal to an oft-injured veteran, Juan Guzman, who lasted five outs in his first game and never pitched again; and paid $82-million in multiyear deals to supposed stars Wilson Alvarez, Vinny Castilla and Greg Vaughn, who were all released. Their 1997 trade of future All-Star outfielder Bobby Abreu for pedestrian shortstop Kevin Stocker is still ridiculed.

Bad decision after bad decision. The player personal decisions made by the Devil Rays have made the organization the laughing stock of professional sports.

Tropicana Field was nearly 10 years old by the time the Rays moved in, and proved to be a cheaply built, generic, multipurpose stadium rather than a new vibrant, retro-style ballpark that would become a fan destination. The Rays spent $35-million to enlarge the facility and enhance the experience, but couldn't - and still can't - dispel its poor reputation, nor the perception that its downtown St. Petersburg location is inconvenient.

Both Florida MLB franchises are forced to suffer with terrible stadiums. With the Marlins playing in a football stadium, and the Rays in Tropicana Field….the best baseball facility in the Tampa area is Legends Field, the spring home of the Yankees. There are no less then six Florida State League baseball franchises within driving distance of The Trop. The ambiance of Tropicana Field doesn’t exist and as Major League Baseball has come to understand since Camden Yards opened in 1992, the in-game experience is a key to any teams’ success. Just what were The Lords of the Realm thinking when they awarded a franchise to a city that didn’t have a proper facility to play in? That’s easy to figure out- the $130 million expansion fee.

Armed with an apparently ironclad contract, Namoli has been, and continues to be, the face of the franchise, which may not be a good thing. The same hard-nosed, bulldog style that earned him praise for acquiring the team has not played well in public, and his controversial actions have often reflected negatively on the team and, according to a former partner, hurt sales efforts. What seemed a stellar ownership group of successful Tampa Bay area businessmen fell victim to philosophical differences and in-fighting, with five of the six general partners (all but Namoli) selling their shares last May to New York investor Stuart Sternberg. And the dysfunction made its way to the field as the Rays head into their fourth consecutive season of having the smallest payroll in the major leagues.

As for Namoli, one of the first indicators he would live in infamy as one of the worst owners in Major League Baseball history took place after the St. Petersburg Times published a negative story about Namoli and his ownership of the team early in the team’s history. The Times was a team sponsor at the time. One of the benefits they enjoyed as a sponsor was the right to position newspaper boxes throughout the facility. Not an important financial consideration for the paper, but a benefit that offered good visibility to the paper. Namoli became so enraged when the editorial appeared that he ordered his staff to collect all of the Times newspaper boxes located throughout Tropicana Field and leave them on the facility’s loading dock to be removed by the paper. That despite signing a sponsorship agreement that clearly stated the paper had the right to sell their papers in Tropicana Field, and of course the paper didn’t agree to succeed editorial control to one of the papers corporate partners.

Sternberg headed a group that acquired about 50 percent of the Devil Rays in May 2004. He originally had an agreement to take control from Naimoli in January 2007 but was willing to pay the managing general partner to step aside early.

"I can't speak to the arrangement I have with Mr. Naimoli," Sternberg said when asked about a report that the former managing general partner may have received an extra $4 million to $6 million to accelerate the timetable.

On November 28, 2007 the Rays announced an ambitious $1 billion plan to build a new state of the art ballpark.

"Our vision is to build a breath-taking and contemporary waterfront ballpark," said Sternberg. "It will be an iconic landmark for the entire Tampa Bay region and showcase all that is great about Major League Baseball in the State of Florida."

At a press conference conducted in the outfield of Progress Energy Park, home of Al Lang Field, Sternberg and the Rays introduced renderings of the proposed ballpark which will provide an intimate baseball venue and offer sweeping views of the picturesque St. Petersburg waterfront. The design draws upon the 100-year history of baseball and spring training on the Al Lang site. In addition to modern fan- and family-friendly amenities, the ballpark will feature 360 degree circulation, air-conditioned concourses with open views to the playing field, the smallest upper deck in baseball, and a new public park that will seamlessly link the waterfront park system to the north of the ballpark with the emerging cultural district to its south.

The ballpark design also includes a unique retractable roof which will shield the playing field and fans from the elements yet still maintain an intimate environment. The roof will be comprised of a light weatherproof fabric that will be pulled along cables that are suspended between arches on one end, and a central mast structure on the other. It will take approximately 8 minutes to open or close the roof, and, even when the roof is deployed, the feel of an open-air ballpark will be maintained. The Rays have worked closely with a team of architects and engineers, led by HOK Sport, on the design. The total cost for the ballpark is estimated to be $450 million.

The design also takes advantage of the Al Lang site's proximity to the existing interstate highway network and over 12,000 publicly-accessible parking spaces in downtown St. Petersburg. In addition, 5,000 overflow parking spaces will be available on the Tropicana Field site.

The Rays and the City of St. Petersburg have been evaluating financing alternatives for the facility. The ballpark financing will include a large contribution by the Rays. An essential component of the financing is the redevelopment of the Tropicana Field site into a major retail, entertainment, and housing development. The Rays also expect to seek financing assistance from the State of Florida.

"We are eager to advance our discussions with the City of St. Petersburg, Pinellas County, and the State of Florida to reach agreement on an appropriate financing plan for these projects," said Rays President Matt Silverman. "We believe this ballpark can be built without any new taxes, and we will work in partnership with the public to make these projects a reality."

The Rays have partnered with Hines, a leading national developer of high-quality and environmentally-friendly mixed-use projects, to develop a site plan on the Tropicana Field redevelopment. Hines envisions creating an entirely new community at the Tropicana Field site, with new shops and restaurants, residential buildings (including affordable workforce housing), street-level retail, entertainment venues and new parks and open spaces.

"We are excited about this opportunity to work with the Rays and the City of St. Petersburg," said Hines Senior Vice President Michael Harrison. "We can transform Tropicana Field and its parking lots into a thriving neighborhood of residences, shops, entertainment and parkland."

The waterfront ballpark and Tropicana Field redevelopment projects are estimated to bring more than $1 billion in investment to St. Petersburg, create thousands of construction and permanent jobs, and generate tens of millions of dollars in increased tax revenue for St. Petersburg, Pinellas County and its schools. The Rays expect both the new ballpark and the Tropicana Field redevelopment will qualify for LEED-certification, the highest standard of environmentally responsible construction.

"We look forward to working with the community to develop this vision for the future of St. Petersburg," said Michael Kalt, Rays Senior Vice President of Development and Business Affairs. "These twin development projects will be a significant economic development engine, drawing visitors from around the region into the heart of downtown, and extending greater economic opportunity into Midtown and beyond."

November’s announcement kicked off a year-long public process for the two projects. The Rays will conduct extensive public outreach to present plans and gather feedback on all aspects of these developments. Hines must also compete for the rights to redevelop the Tropicana Field site through a Request for Proposal (RFP) process managed by the city. In addition to the RFP process on the Tropicana Field site, the City Council would also need to approve adding to the November 2008 ballot a referendum to authorize the construction of the new ballpark on the site of Al Lang Field. Following referendum approval, construction on both sites is anticipated to begin in mid-2009, with the new ballpark ready by Opening Day 2012. The retail, commercial, and housing development on the Tropicana Field site is scheduled to open in 2011 and continue through approximately 2013.

"Downtown St. Petersburg has undergone a tremendous renaissance in recent years," said St. Petersburg Mayor Rick Baker. "We look forward to exploring this opportunity with the Rays."

The Rays will continue to operate under their current lease agreement at Tropicana Field during this process. Tropicana Field was completed in 1990 as a multi-purpose stadium. Tampa Bay was awarded a Major League Baseball franchise in 1995, and the facility underwent an $85 million renovation before the Rays (then named the Devil Rays) began play in 1998. The domed Tropicana Field, one of only five multipurpose stadiums in baseball, was the last baseball stadium constructed before Oriole Park at Camden Yards in Baltimore ushered in a new era of ballpark design and innovation.

Not surprisingly, the financing for the project remains a very big question. When Sternberg announced the ambitious plan it included a $60-million state subsidy to help pay for a new downtown waterfront stadium. The team announced in early January that it was withdrawing their request for state financial assistance.

"We said from the beginning that we don't see (the state money) as crucial," Team senior vice president Michael Kalt said. "It's nice to have, but it's not essential. We're not in the business of pushing things through that we think are unrealistic."

According to a report in The St. Petersburg Times, the Rays' decision came days after the Times reported it would be next to impossible for the franchise to receive state money. In the Times' Saturday editions, the overwhelming majority of the Rays' hometown lawmakers - the 12 members of the Pinellas County delegation that would be most likely to push the team's interest - sounded unwilling or uninterested in aiding the Rays this spring.

"The timing couldn't be worse," said Sen. Dennis Jones, R-Treasure Island. "Maybe in 10 years things will be different, but right now everywhere we go people are talking about property taxes and insurance. I can guarantee you they're not worried about a baseball stadium."

How the organization finds the money needed to finance the stadium will be determined over the next year, but this issue is certain – without a new stadium the Tampa Bay Rays are dead in the Tampa/St. Petersburg market. Major League Baseball was wrong to award a franchise to both Miami (in 1993), and St. Petersburg in 1997 without each franchise having a plan in place to build a baseball specific stadium. The Rays and Marlins are the lat two major league teams who either aren’t playing in a baseball specific stadium, or have plans for one. The day of the multi-purpose stadium is gone – as will be the Rays if their dreams of a billion dollar stadium plan don’t come to fruition.

For Sports Business News this is Howard Bloom. Sources cited and used in this Insider Report: The St. Petersburg Times

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Monday, January 28, 2008

The State of the National Hockey League

The National Hockey League held its All-Star Weekend in as much of a non-traditional hockey market as one can imagine – Atlanta. The NHL was a miserable failure in Atlanta in the 1970’s and the Thrashers could be on life support in the not too distant future. Through 41 home games the Thrashers are averaging 15,500 at the Philips Arena or 83.1 percent capacity. Last year the team averaged 16,229 or 87.5 capacity. While on the surface the numbers may not that bad, if one looks below the surface the truth may be a very different story.

A March 2007 Globe and Mail report suggested the Thrashers led the NHL's 30 clubs in the dubious honor of most ticket giveaways each game. The league's numbers show the Thrashers gave away an average of 2,827 tickets a game in their first 25 home games. This appears to be part of a promotional effort this season, as it is a whopping jump of about 840 per cent from last season, when the team's average was 336 a game.

"Our comp tickets are high and need to come down, no doubt," Thrashers president Don Waddell told the Globe and Mail. "But our gate receipts are up this year. That's the important thing." He also argues that the tickets for seats in the luxury suites, which are rented annually, are included in the giveaways because the league has no other category for them.

There are two thoughts in placing the NHL’s in-season showcase event in a market like Atlanta. One it offers a franchise an opportunity to showcase the sport in a market that needs to create greater brand awareness for the NHL. The other, the NHL’s All-Star Game gets lost in a market where hockey doesn’t matter. It would be easy to place the NHL’s All-Star Weekend in a market where fans live for and love hockey (the 2009 game is in Montreal). But it does make a lot of sense to bring the event to a non traditional hockey markets like Atlanta along with cities like Montreal.

Gary Bettman held his semi-annual “state of the NHL” Saturday. Overall, two and a half seasons after losing the 2004-05 season to a protracted labor dispute, the health of the NHL isn’t great but at least the NHL has a heartbeat – and that’s something the Lords of the Rink might not have believed they’d be able to say after the lockout ended.

“We’ve come a long way since the loss of 2004-2005. Franchises are much more stable from a business standpoint. Our competitive balance is nothing short of outstanding. 28 of 30 teams, if the regular season ended today, would be either in the playoffs or within six points of making the playoffs. It's probably an inarticulate way of saying just about everybody's in it and we should have exciting races, and we think that's terrific for the game and for our fans.

“Our fans continue to support us in record numbers. The partnership between the League and the Players' Association is showing the most constructive signs that I can recall, and this now enables us to move forward on ambitious, cooperative initiatives such as the Winter Classic and overseas games. And I think that's good for everybody, most importantly our fans.

“Of course, I would like our League to improve on our 92% of capacity for attendance league-wide, and all clubs, I know as do we, work towards that objective every minute of every day. I would love to increase TV viewership in the United States, even more than it's been increasing. But we're finding new and additional ways to touch our fans using digital media and the like and we view it as our number one priority to find the best ways to connect with our fans.” Bettman said.

It’s interesting to note in his opening remarks Bettman chose to suggest “The partnership between the League and the Players' Association is showing the most constructive signs that I can recall, and this now enables us to move forward on ambitious, cooperative initiatives such as overseas games.”

That may not be true Commissioner Bettman. Soon after Bettman remarks and the NHL’s announcement the Ottawa Senators, Pittsburgh Penguins, New York Rangers and Tampa Bay Lightening would open their 2008-09 seasons in Europe, Paul Kelly the NHL Players Association Executive Director sent a clear message to Bettman and the Lords of the Rink – all is not well and the NHL had better slow down and talk to the NHLPA before making decisions about teams going to Europe.

According to the Globe and Mail’s David Shoalts (in Atlanta for the All-Star festivities) the union leader was especially excited about the Victoria Cup (an exhibiton game linked to the NHL’s European initiative). With the NHL still trying to make a new player transfer deal with the International Ice Hockey Federation, Kelly thinks agreeing to exhibition games should be used to help get a new deal.

"The Victoria Cup was very much in the air just days ago," Kelly said. "Until I read about it in their press release, I was unaware of the fact they had done a 180 as to the Victoria Cup and frankly, given the open transfer issues that are still pending with the IIHF and the Russians, I'm not so sure why we would so readily agree to the Victoria Cup.

"Because I think quite frankly the two of them are linked. Bill [Daly, the NHL's deputy commissioner] said just that last week. If I sound a little bit more miffed about that one, it's because I am."

"This kind of falls into the general category of: If they want the players' association to be a true business partner, then they have to include us in discussions about these matters at the earliest stages. We shouldn't read about it in the press and we shouldn't find about it after the fact," he said.

"We keep saying 'Guys, get us the details' because the devil is in the details. It's not good enough for [Rangers president and GM] Glen Sather to say that my guys are onboard. That doesn't cut it," Kelly said.

Now Kelly isn’t suggesting the NHLPA won’t support the leagues plans – he’s just saying ‘look if this is going to be a partnership than the right hand has to know what the left hand is doing.’

One the more positive marketing concepts the league successfully tried this year – the Winter Classic held at Buffalo’s Ralph Wilson Stadium on January 1. One report from Atlanta – NHL governors are less than enamored about the idea after learning that despite more than 72,000 attending the Penguins – Sabres game, they game lost money.

“We learned a lot about the logistics of doing it. And while it was a great event, I think there are things we can do even better. I also think I don't want to tempt fate as much as we did in terms of the amount of time we left ourselves to build the rink. Some of that was determined by when Ralph Wilson Stadium was accessible and they couldn't have been better. But they had a football game scheduled that impacted when we could get in.

“This is a terrific event for us. The elements cooperated, a little bit of snow was nice and created an aura about the game. It's not something we want to overdo. If we're going to do it in the future, we want it to remain special. Lots and lots of clubs and places and stadiums have approached us and we have not yet made any decisions. That's probably something we'll do over the next couple of months, taking into account a whole variety of factors. My anticipation is we will do another one. I can't tell you where or when. But I assure you we're not going to do too many. We want to keep them special because it was a very special day.” Bettman related.

One interesting suggestion the NHLPA has offered the NHL – the players will consider adding two more games to the regular season schedule as long as the owners drop two games from the NHL’s pre-season schedule. Remember players aren’t paid for pre-season games. If the NHL’s regular season schedule did grow by two games it likely would impact player salaries. Bettman did his best to downplay the rumors.

“I had seen reports saying that this was something that was going to be voted on. And the issue is way too embryonic for it to be considered by the Board yet. The Players' Association has suggested that they might be interested in providing two more regular season games that would give us more scheduling flexibility in turn for reducing the number of exhibition games. It's a proposal that we found interesting, but has a lot of moving pieces to it -- the number of preseason games that have been committed to for next season, what the right number of preseason games would be; how long training camp would be, which we just shortened in collective bargaining by a week already.

“So we have lots and lots of issues to talk about. How we would use the games in the scheduling matrix is also another factor. We may have one idea, the players may have another. So with all of that to be resolved, with the fact that clubs have commitments for next season, we have commitments to start the regular season at a certain point in time. It's not ready for primetime consideration. But it's something that we will continue to talk to the Players' Association about.

“I'm delighted that Paul Kelly suggested this as something that we should consider. It's another indication of the open exchange of ideas and dialogue between us. Whether or not it's right, whether or not it works, way too premature.”

One interesting issue raised during Bettman’s State of the NHL: would the NHL consider follow the NBA’s lead and think about holding an NHL All-Star Weekend in Las Vegas, and is the NHL looking at expanding to Sin City?

“I'm not sure that doing a neutral site All-Star Game at this point makes any sense. Because lots and lots of our teams want the All-Star Game you know, we could probably award it off the top of my head for the next six years for NHL teams that are anxious to have it. From our standpoint, we'd only go to a neutral site, if, for whatever reasons, clubs decided that it was too much of an imposition to have the All-Star Game. Therefore, we needed to explore other options, but that's not something that we're thinking about doing right now.

“I can't other than to tell you that there continues to be expressions of interest from Las Vegas and other places such as Seattle and Winnipeg. We, the board, haven't decided to move forward and do anything yet, so there is no time line. I suppose at some point in time that could change. But as we sit here today, there is no formal process. There is no time line. But we are talking to people about their interests but nothing more formal than that.”

One franchise related business issue Bettman did note during his remarks – how pleased he is the issues associated with the Vancouver Canucks ownership have been settled allowing the team to move forward.

“I'm delighted that it's resolved because it's one less distraction. I'm equally if not more delighted for the Aquilini family, and Francesco Aquilini. They've been terrific owners and guardians of that franchise. And I know that they're pleased and relieved to have this behind them. I only knew what was going on in the lawsuit from afar, because we weren't a party to it. But I was constantly scratching my head about why the city of Vancouver and the Canucks as an organization were being put through this. The lawsuit didn't make a whole lot of sense to me, and based on the judge's decision, I guess, the ultimate conclusion was that there was no wrong doing, and Francesco Aquilini and his family are the rightful owners of the Canucks. I think that's great news for their fans.”

As one would expect when Gary Bettman talks about the health of the National Hockey League, his glass is always going to be half full. Ratings for NHL games on Versus, the NHL’s cable TV partner, remain somewhat of a mystery (at least when it comes to determining if anyone is watching the NHL on Versus). According to report in last Wednesday’s New York Times: through 29 games during the 2007-08 NHL season thus far, Versus’s 0.3 rating is modest, but it is 50 percent higher than the 0.2 average at the same time last season. In that period, viewership swelled to an average of 261,760 a game from an average of 195,666 a game last season. The NHL’s over-the-air TV deal is with NBC. Last weekend’s opening weekend of NHL coverage on NBC produced the same lackluster national numbers from last year.

During the 2006-07 season, Versus’s NHL rating stayed flat at a 0.2, but because of the overall growth of subscribers, viewership rose 31 percent to 212,366.

“I think we have lots of casual fans. And it's really a question about getting our fans, casual hockey fans and casual sports fans to activate. We came back from a year off stronger than any business could ever have assumed it would. And for us the first priority was to get our fans back and get our business back, and we've done that in record numbers.

“What we've now done in terms of the relationships we have on television, how we're using digital technology, the access we're giving our fans to the game is all unprecedented and a lot of it is a testament to the cooperation that we now get from the players and the Players' Association which we never had before, by telling our stories of the game and of our players we can do a better job of connecting people to the game. Whether or not they're avid hockey fans or casual sports fans or they've never seen it.

“So it's our job to market and promote the game, which we're doing better than ever before. Providing more access and more opportunities for us to tell the stories. That was not possible in an era where we didn't have cooperation from the players like we're getting now.”

For Sports Business News this is Howard Bloom. Sources cited and used in this Insider Report: The Globe and Mail

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Thursday, January 24, 2008

When it comes to Jose Canseco – the apple never falls far from the tree

Thursday’s New York Times offered an insightful look into the true nature of former Major Leaguer Jose Canseco. The New York Times reported Canseco in the midst of writing his second tell-all baseball steroids book, agreed to keep Detroit Tigers six-time All-Star outfielder Magglio Ordóñez out of the book if Ordóñez agreed to “invest” in an upcoming movie Canseco is planning. Canseco was quick to deny the allegations.

“Absolutely not,” Canseco said in a telephone interview Wednesday with the New York Times.

Late Thursday evening the USA Today’s A.J. Perez reported that indeed Magglio Ordóñez can look forward to seeing his name in print when “Vindicated” is released on March 31.

Vindicated is the sequel to the 2005 New York Times bestselling book Canseco wrote – “Juiced”. Published in January 2005 Juiced saw Canseco not only detail his rampant use of steroids and other performance-enhancement drugs but Canseco claimed to have precipitated steroid usage by Mark McGwire, Juan González, Rafael Palmeiro, Iván Rodríguez, Dave Martinez, Tony Saunders, and Wilson Alvarez.

He inferred steroid usage based on physical body changes in Jason Giambi, Barry Bonds, Sammy Sosa, and Bret Boone. He also suggested Brady Anderson, Roger Clemens and Miguel Tejada probably used steroids, based on the improvements in their performances.

In Juiced he claimed that he personally injected McGwire, Palmeiro, González, and Rodríguez when they were teammates, and that he gave steroid information to multiple other players in baseball. Canseco also claimed that Major League Baseball--specifically the players' association, media, and owners--all had knowledge of steroid use after the 1994 baseball strike, but chose to turn a blind eye because steroids made the game more exciting, especially given the McGwire and Sosa home run chase.

Canseco was vilified by everyone close to major league baseball when he released Juiced: Wild Times, Rampant 'Roids, Smash Hits, and How Baseball Got Big. Published in January 2005, – the book directly led to the March 17, 2005 Congressional Steroid Hearings. When that day ended, Canseco long viewed as a villain by many for writing Juiced, suddenly Canseco was still regarded as a ‘bad person’ but the only honest man in a den of thieves.

In naming names two of the biggest major leaguers fingered by Canseco, Mark McGwire and Rafael Palmeiro. Both sluggers had surpassed baseball’s magical 500 career home run record – a surefire first ballot election to Baseball’s Hall of Fame. The Congressional Hearings will long be remembered for three memorable moments. McGwire refusing under oath to admit he had used steroids, Palmeiro pointing his finger at the Congressional members’ angrily saying he had never used any steroids and Sosa smiling and claiming he couldn’t speak English anymore.

Meanwhile Canseco continued to promote his book at the Hearings, by now a New York Times bestseller by suggesting everyone else was lying under oath. McGwire was blasted by the media, Sosa laughed at. Palmeiro initially portrayed as a hero for his tough stand ended up humiliating his legacy, his career and any real chance he has of getting into the Hall of Fame when Major League Baseball announced on August 1, 2005 that Palmeiro had tested positive for the use of performance-enhancing drugs.

A lot has transpired since Palmeiro tested positive for steroids, and Canseco promised even more stunning revelations in his next book. He started talking about his second book a few months after the publication of his first book.

``This is just the tip of the iceberg," Canseco said. ``We're going to be shocked about the players who took them and who knew they were taking them. More and more names will come out."

The latest banned substance being talked about isn’t steroids which baseball tests for, but for Human Growth Hormones (HGH) something Canseco has used and baseball doesn’t test for. Revelations that Arizona Diamondbacks pitcher Jason Grimsley had used HGH surfaced last month after it was announced that Grimsley like Canseco had named names. However, Grimsley unlike Canseco had chosen a book to name names. Instead, Grimsley allegedly spoke to Federal Investigators. Grimsley has since left the Diamondbacks. His career, like Palmeiro came to an end after allegations became true.

Canseco's personal life has also had its troubles. In 1989, his first wife, Esther Haddad, whom he married in November 1988, accused him of domestic violence after he allegedly ran his car into hers. That was the beginning of a series of accusations and run-ins with the law while Canseco was in the public spotlight. He divorced in 1991.

He remarried in August 1996, to Jessica Sekely; he was arrested in November 1997 for allegedly hitting her. In January 1998 he was sentenced to probation and required to have counseling. The couple divorced in 1999. In October 2001, he and his brother got into a fight with two California tourists at a Miami Beach nightclub that left one man with a broken nose and another needing 20 stitches in his lip; Canseco was charged with two counts of aggravated battery.

In 2005, his ex-wife, using the name of Jessica Canseco, was featured in the September issue of Playboy magazine.

Canseco and his ex-wife Jessica have one child, Josie.

Canseco was featured in The Simpsons season 3 episode "Homer at the Bat" when he joined the Springfield Nuclear Power Plant's staff as a ringer on the corporate softball team. He was unable to play because he was rescuing infants, cats and furniture from a burning house at the time of the game.

In his book he admits that he met Madonna and that she asked him to marry her, but he claims that he was never interested in her, and was just fascinated with her as a person.

He was a cast member on the 5th season of the VH1 series The Surreal Life.

For those who have forgotten (or never bothered to watch the VH1 show) Canseco’s housemates included:

Janice Dickinson: "I am the world's first supermodel, and I'm one angry bitch sometimes."

Sandy "Pepa" Denton: "You know me as Pepa from Salt-n-Pepa. You can push it, but you betta not push me."

Carey Hart: "I ride bikes and break bones for a living. People expect me to be this wild, crazy Evel Kneivel, but I'm a really mellow person."

Caprice: "I am an international model. The fact that people stereotype me, used to bother me, but now I try to use it to my advantage."

Bronson Pinchot: "You know me as Balki from Perfect Strangers. I like to do whatever I've been told not to do."

Omarosa: "Most people see me as a villain from The Apprentice. No bitches here; just pure diva."

If nothing else, non baseball events during Canseco’s career illustrated how much of an opportunist the first player to ever hit 40 home runs and steal 40 bases in one season.

In the film Teenage Mutant Ninja Turtles, Canseco was mentioned by Raphael in a fight with Casey Jones. As Casey attacks Raphael in Central Park with a baseball bat and other various sport equipment, Raphael says "A José Canseco bat? Tell me you didn't pay money for this."

In the film Liar Liar, when Jim Carrey is being taken away by a bailiff, he refers to himself as José Canseco.

In the My Way Entertainment Power Rangers parodies, the Red Ranger frequently calls himself "José Canseco" while shouting many references to steroids.

Spike TV's reality show "Pros vs. Joes" Season 2 featured Canseco on the premiere episode on January 25, 2007.

In early 2007, Canseco participated in a Full Tilt Poker tournament with Erick Lindgren, Daniel Negreanu, John Juanda, Phil Ivey and Cheryl Hines.

In December 2007, Canseco revealed that he, together with Herschel Walker, have begun training for an upcoming mixed martial arts reality television series featuring former celebrity athletes.

The story of how Vindicated is being published or more precisely how it almost wasn’t published offers the suggestion that not everyone in the publishing industry supported Canseco’s literary efforts.

Canseco began talking about the sequel to Juiced soon after the March 18, 2005 Congressional Steroid Hearings. Don Yaeger who has been a part of some of the more influential, interesting and entertaining sports books in the last decade had agreed to work with Canseco on Vindicated. Among the books Yaeger has been a part of: Pros and Cons the Criminals (Oeb) Who Play in the NFL, Never Die Easy: The Autobiography of Walter Payton and Sole Influence: Basketball, Corporate Greed and the Corruption of America's Youth are thus three of the many bestsellers Yaeger has been a part of.

Yaeger has a solid reputation. His books may be controversial but his books are filled with the truth. Yaeger announced in late December that he was pulling out of the project as did the original publisher, Berkley Books, an imprint of Penguin Group USA. Canseco's sequel now will be published by Simon Spotlight Entertainment, a division of Simon & Schuster. Berkley pulled out of their deal with Canseco last week; Simon agreed to publish the book earlier this week.

Yaeger, who Canseco told the USA Today he only spoke with once, said he reviewed a 9,000-word transcript given to him by Canseco's people and spoke with Canseco several times before he determined there wasn't enough to warrant a new book.

"You could see what was and wasn't there," Yeager told the USA Today in a telephone interview.
The New York Times reported Canseco has hired a new ghostwriter, Pablo F. Fenjves, a former National Enquirer writer who wrote “If I Did It” with O. J. Simpson.

Jennifer Bergstrom, Vice President and Publisher of SSE, said "Since Juiced was published four years ago, the issue of steroids in baseball has only gotten bigger. VINDICATED is a compulsively readable book that should act as a call to action for Major League Baseball."

"Believe it or not, Juiced just scratched the surface of the steroid issue for me," Canseco said. "I still have a lot more to say to help save the game I love."

As thrilled as Bergstrom is about publishing what might be a best seller, Bergstrom didn’t offer The New York Times any comment on the New York Times report regarding the Times report relating to Magglio Ordóñez inclusion in the book.

For his part Canseco continues to use the media as his personal platform to promote the book. If nothing else – Jose Canseco offers some of the best sports related media sound bites in recent memory.

Canseco offered the USA Today Thursday evening why he believes his second book was nearly killed: representatives of Detroit Tigers outfielder Magglio Ordonez or Major League Baseball officials bothered his original publisher.

"When I first met with them, they loved it. Then out of the blue they decided not publish it. I thought that was strange," Canseco said in a telephone interview Thursday. "I think some pressure came down from either Major League Baseball, Ordonez's people or both."

MLB denied Canseco's claim. "None of this is true," said Rich Levin, vice president of public relations. "We had nothing to do with" his book being dropped by the Penguin Group. Penguin reportedly decided to drop the book because they believed the book wouldn’t be ready for its March 31, 2008 publication date.

"They said it could be a No. 1 bestseller," Canseco said of his new publisher. "They're obviously not feeling the pressure that Penguin felt, which is smaller publisher. I think (Penguin) felt overwhelmed."

For Sports Business News this is Howard Bloom. Sources cited and used in this Insider Report: The New York Times, USA Today and Wikipedia

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Wednesday, January 23, 2008

The National Hockey League – the cable TV deal that makes no sense (or does it)?

The NHL All-Star Weekend is set for Atlanta with Versus providing America with its television window. Tuesday, the league and Versus the Comcast owned cable sports network announced their current cable television agreement will be extended for another three years. Published reports suggest the cable sports network, which is paying $72.5 million for the league’s rights this season, will pay inflationary increases over the next three years.

“We’ve really benefited from our relationship with the N.H.L.,” said Gavin Harvey, the president of Versus in a New York Times report. “It was a game-changer for us. We certainly feel we’ve seen great growth, but there’s major growth ahead. We feel positive momentum.”

Ratings remain somewhat of a mystery (at least when it comes to determining if anyone is watching the NHL on Versus). According to report in Wednesday’s New York Times: through 29 games during the 2007-08 NHL season thus far, Versus’s 0.3 rating is modest, but it is 50 percent higher than the 0.2 average at the same time last season. In that period, viewership swelled to an average of 261,760 a game from an average of 195,666 a game last season.

During the 2006-7 season, Versus’s N.H.L. rating stayed flat at a 0.2, but because of the overall growth of subscribers, viewership rose 31 percent to 212,366.

“You don’t renew at these levels unless you feel you have a property that’s reached the objectives you’ve set,” said Bill Daly, the N.H.L.’s deputy commissioner. “Versus exercising its option tells you a lot about how they value the league.”

But is it really a good deal for The Lords of the Rink. At $72.5 million each NHL team receives a little more than $2.4 million annually.

The NHL biggest problem remains what it has been since the league agreed to its initial three year contract with Versus after the NHL’s missed the entire 2004-05 season – Versus remains the cable sports network that sports fans cannot find.

Versus paid the NHL a $65 million rights fee in the first year of the agreement, $2.1 million per team. As ludicrous as it may have seemed at the time, NHL owners believed it made more sense to accept a paltry sum from a fledging cable network that no one had ever heard of, instead of ESPN – the cable sports network that ate the sports industry.

ESPN wanted the NHL under the same terms and conditions the league agreed to with NBC coming out of the 2004-05 lockout, a no money down revenue sharing plan. In an era when NFL teams ($106 million), NBA teams ($26 million) and MLB teams ($25 million) are each receiving from their national TV partners $2.4 million may not seem like much of anything, but in a gate driven league like the NHL $2.4 million could be the difference between being able to afford to keep the lights on or facing some serious power issues.

In December 2006, The New York Post’s Larry Brooks reported that ESPN refused to accept paid advertising from the National Hockey League. Was it because ESPN’s available commercial inventory was sold out at the time? Ask any ESPN sales representative – there’s always room at the inn for anyone willing to buy advertising, except the pariah better known to ESPN officials as the National Hockey League. NHL deputy commissioner Bill Daly and NHL Enterprises president Ed Horne each told Brooks that ESPN wasn’t interested in doing business with the National Hockey League.

It’s almost as if ESPN was mocking the National Hockey League. When was the first time any advertising driven media (ESPN or any media outlet) suggested an organization’s money wasn’t good enough. It’s inconceivable that ESPN had the gall to refuse to accept the NHL’s money and advertising content. ESPN sent a message in no uncertain terms to the National Hockey League – ESPN doesn’t want anything more to do with the National Hockey League. If ever there was an indication that represented how little ESPN respects the NHL, it’s sending a message to NHL officials that their money and commercials aren’t good enough for ESPN to accept.

Which brings the NHL back to where they are with American cable television current agreements, the one that locked out ESPN, and the one that saw ABC end their long-standing agreement with the NHL. Versus, owned by Comcast, are expected to extend their current agreement for one year. All that will serve to accomplish is illustrating how terrible the decision was to leave ESPN.

Versus reached 65 million homes two year ago. A year later, according to a Los Angeles Times report the fledging cable network reached 71 million homes. Meanwhile ESPN and ESPN2 each reach more than 100 million homes. ESPN had planned on placing NHL games on ESPN2. ESPN has taken cable television to another level averaging more than 10 million viewers weekly through the first ten weeks of ESPN’s Monday Night Football coverage. While ESPN and their family of networks report on NHL games, without NHL hockey ESPN canceled their nightly NHL magazine show “NHL Tonight” last year.

"ESPN provides the sort of Good Housekeeping stamp of approval," said Paul Swangard, managing director of the Warsaw Sports Marketing Center at the University of Oregon and a hockey fan in a Los Angeles Times report. The NHL, he said, "would be better off finding a working partnership between themselves and ESPN. If it were my decision, and not knowing the reason, this league needs as many symbolic attachments to maintain their position as a major professional sport."

A few years ago, there was a belief Comcast was going to attempt to build a second national sports network to compete directly against Disney owned ESPN. Versus had talked about securing the last available NFL TV package, the eight late season Thursday/Saturday night games the NFL kept for themselves to build the NFL Network. Whatever reasonable opportunity Comcast had to create a major national sports cable network all but ended in January when the NFL made the best move they could for their cable network, putting actual live NFL games (sports most valuable property) on their own network. Cable operators are balking at paying the NFL the carrier rights they are demanding to carry the NFL Network. Versus may be much cheaper but with a menu of NHL games and little else, Versus is doomed to failure.

The problem went from bad to worse during last year’s NHL playoffs. The NBA playoffs (which run in roughly the same time period the NHL playoffs run) are on TNT and ESPN in 100 percent of the cable ready homes in America. NBA fans can follow their favorite NBA teams’ pursuit of the NBA title.

And the NHL? According to a report in New York Newsday during last spring’s NHL playoffs: Versus was in only 61 percent of homes in metro Detroit, the nation's foremost hockey hotbed. Versus was in only 59 percent of the cable ready homes in the Los Angeles market forcing Anaheim Ducks fans to search for ways to watch their teams’ second round series against the Vancouver Canucks. In New York games one and four of the Rangers/Buffalo second round series appeared on Versus, ran on Cablevision’s digital basic service which was only in 80 percent of the cable ready homes in New York. That 20 percent may not seem like a great deal, but if you’re a major sports league you’re either in all the homes in each market (let alone major markets where teams have made the playoffs) or you’re not a major sports league.

Versus remains the exclusive NHL cable rights holder for NHL games in the conference finals and for the first two games of the Stanley Cup Finals. The Anaheim Ducks hosted the first two games of the Stanley Cup Final at the Duck Pond, 41 percent of the greater Los Angeles market couldn’t watch their home team play games in their home – that is not how you run a sports league in 2007.

Versus Executive Producer Mike Baker during last spring’s NHL playoffs told The Palm Beach Post he "couldn't be happier" with how it's gone."

"The games have just been incredible," Baker said. "It's actually made our job tougher because the games are so fluid, with the increased intensity, we have to stay on top of it from a production standpoint. It's a fantastic sport. If we can get people out of that mind-set that, 'If the local team isn't playing, I'm not watching,' it doesn't get any better than right now."

Fair enough Mr. Baker we agree with you on how great the games have been, too bad the network that no one can find was missing in action when the Conference Finals took place along with the first two games of the Stanley Cup Finals. The NHL’s CBA directly links hockey generated revenue (54 percent) to the league’s salary cap. How important is the three year $200 million Versus agreement to the leagues’ players?

"The players have a direct relationship to what's going on with revenue. There has to be a voice from the players' side to some extent," said former Carolina Hurricanes forward Kevyn Adams, a member of the NHL Players' Association's executive committee in a report in The Raleigh News & Observer.

"The ultimate question comes to, 'How can the game in the long run be the best?' When the deal was signed with Versus, there were a lot of things out there they were going to do to help promote and grow the game that ESPN wasn't willing to do. It became a situation where it was a natural fit.

"What I hope to see going forward is Versus being a channel that when you get into a hotel room, you turn it on. That's the way it is with ESPN in a hotel or bar."

The issue isn’t the original agreement the NHL signed with Comcast, Versus parent company but the three year extension. Three years ago Comcast talked the talk in regard to Versus (then known as the Outdoor Life Network).

Comcast talked about building a national cable sports network that would rival ESPN. The NHL would anchor Comcast’s ambitious plan that reportedly included securing the eight game late season NFL games the NFL awarded to their own NFL Network and the MLB regular and post season package TBS secured. It would have been reasonable for the NHL to have made it clear to Versus if at the end of their first three agreement if Versus and Comcast hadn’t moved forward and secured additional major sports properties and/or wasn’t in 100 percent of America’s cable ready homes, the NHL would have the option of taking their product elsewhere. Instead for some inexplicable reason the NHL remains the ‘fools on the hill’ stuck in what is now a six year agreement with a cable network that features bull-riding, the World Combat League, the National Lacrosse League, the Tour de France along with various fishing and outdoor life programming.

In early February 2007, ESPN announced phase two of their marketing efforts with NASCAR’s Busch Series. Not only is ESPN committing their marketing resources to NASCAR’s “B” series, ESPN and NASCAR officials are working together on securing a lead sponsor to replace Anheuser-Busch who will be ending their title sponsorship at the end of the year. ESPN who purchased a minority stake in the Arena Football League on December 19 now have a vested interest in moving the AFL forward. In early August, ESPN and Major League Soccer announced a comprehensive agreement that includes a minimum of 26 regular season games on ESPN2. Those are benefits ESPN extends to all of their “partners” and while Versus has been good for the NHL in terms of their programming commitment at 71 million homes Versus doesn’t have the reach ESPN does.

What’s essential in understanding the error in judgment the Gary Bettman led National Hockey League is the nature of the recent rights agreements ESPN has reached with Tier II sports like the National Hockey League. The National Football League, National Basketball, Major League Baseball, the Nextel Cup and the NCAA men’s basketball and football do not need ESPN, ESPN needs those sports properties as their partners. ESPN have taken the next level of sports properties (Tier II where the NHL resides) and created marketing and broadcast partnerships. That’s what the NHL needs, to realize it’s no longer a major sports in America and must follow the lead of other Tier II sports properties.

Let’s get back and focus on “the bottom line” and for argument sake let’s use one of the small market NHL franchises (small market in terms of revenue generation), the Nashville Predators. Does it make more sense for the Nashville Predators to add $2.4 million to their bottom line or does it make more sense for the Nashville Predators to enjoy the promotional value in a partnership with ESPN? To a big market team (the Detroit Red Wings) it’s a rhetorical question – it makes much more sense to be on ESPN. But to the Nashville Predators the $2.4 million might represent the teams’ ability to sign a free agent.

Nonetheless – if you’re a North American based sports league in 2008 and you’re not on ESPN – you’re not a North American sports league. The dollars may have made sense to the Lords of the Rink – but at the end of the day there’s more to managing a sports league than $2.4 million per team.

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

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Tuesday, January 22, 2008

Is NASCAR losing their way?

If NASCAR’s glass remains half filled --- great news Tuesday. Tuesday Sprint NASCAR’s lead sponsor announced that despite significant financial losses the company wouldn’t be leaving NASCAR, instead they’ve decided to rebrand what for the past four seasons has been known as the Nextel Cup tour. There's a new name for the all-star exhibition (the Sprint All-Star Race), a Daytona 500 pre-race show featuring musical acts from Brooks and Dunn to Chubby Checker, new features for wireless telephone customers and new commercials featuring snarling racecars.

If NASCAR’s glass is half empty remarks Monday from NASCAR chairman Brian France Jr. suggest not only might NASCAR be losing its way but it needs to reach back to its roots. With the 50th Daytona 500 to be run on February 17 – the next month promises to be interesting, informative and maybe even enlightening when it comes to the business of NASCAR. And as France made it clear Monday NASCAR is going to put its focus back on its fans.

“What's important to what we talk about going forward is making sure we're not missing anything. This whole change item that I spoke about in my earlier remarks, we're fans, too. It's hard to keep up with all the moving parts and different things that are going on. So we want to just focus on -- it's one of the reasons we sped up rolling out the Car of Tomorrow, Car of Today, the car, for now, for every event, so we didn't have more gradual this, that and the other things to keep up with. It's one car, it's the car.

“I think you're just going to hear us when there are initiatives. I think the 50th anniversary of Daytona, the 500, all those champions are going to be back at the Speedway, so we're going to be able to go back and recognize our history a little bit. That's important to our core fan. They like to reminisce and hear about that. We'll get an opportunity to do that.

“And we're going to minimize change and we're going to zero in on the best racing in the world. That's what we're going to do.”

While it may be difficult for France to suggest NASCAR is losing its way, former NASCAR champion and current TV broadcaster Rusty Wallace went right to believe what he feels is the heart of the matter in an interview with online racing publication scenedaily.com.

"I really think it was a mistake, personally, reaching out to the complete new crowd," he said Tuesday. "I personally felt like the sport alienated the original fan, the country and western fan, and I could see the day that that changed, and maybe it was a coincidence, but it all appears to me that when we lost Dale [Earnhardt] Sr., it's like somebody flipped a big switch in the sky, and all the sudden the sport changed. We went after that new fan, but we forgot the old fan, and that's a mistake."

Wallace thinks that NASCAR might have tried to turn the sport into something that it wasn't as it attempted to lure a new audience.

"When Dale Sr. passed away, instead of having country music for our music, we were listening to, we went to rock and roll. Then we went to a lot of acid rock and roll. Then we went to California. We went to people that, quite frankly, I didn't even know," he said. "And it all changed. We couldn't figure out how to do both. We just did one and really screwed up the other part, and NASCAR realizes that now."

The death of Dale Earnhardt Sr. on February 18, 2001 during the last lap of the Daytona 500 was arguably the most significant event in NASCAR history and one of the more important days in sports history, which resulted in the press calling this day a Black Sunday. The weeklong national media coverage inadvertently created tremendous brand awareness for NASCAR.

Wallace thinks that stance is necessary to allow personality back into NASCAR.

"I'll be quite frank with this," he said. "I think all that stuff has hurt the sport also. I think we need to see a lot softer side of NASCAR. Every time anybody does anything, everybody is getting penalties. We're getting penalized for everything in the world, and people are cooped up and camped out and afraid to do anything right now. And so the controversy and excitement that we've seen in the past is not there because drivers are scared of fines and points and monies. So NASCAR, I don't know if they've told you, but they've told me they're going to back off all these fines. They're going to be more lenient and stuff right now because they realize that all these fines are going to really hurt the sport."

Still, Wallace thinks things can be turned around and that the traditional fan can be recaptured. It's just going to take some time.

"They're making mistakes and learning from their mistakes, and I think they're going to come out of this no problem, I really do," he said.

Four years after sports sizmatic event (Earnhardt’s death) NASCAR signed a series of eight year television agreements worth an estimated $550 million annually, a 40 percent increase over their previous broadcast agreements. The broadcast agreements followed Nextel’s $700 million (annual) title sponsorship agreement signed in 2003.Nextel signed a 10-year agreement with NASCAR. Nextel stepped up to the plate replace longstanding NASCAR lead sponsor R.J. Nabisco (the Winston Cup).

According to a 2003 Forbes Magazine report: as NASCAR's value to both broadcasters and advertisers grows, it loses the very characteristic that originally made the sport so appealing to them: relative affordability. For years, the media saw NASCAR as an inexpensive way to land the valuable but elusive young male demographic, while the cost of broadcasting rights to other sports continue to spiral upward.

NBC and TNT told Forbes that NASCAR's ratings jumped 59% over the 2000-2002 period, and that the numbers continue to grow over the next few years leading to the multi-year agreement that again saw NASCAR’s rights increase by more than 40 percent to an estimated $550 million annually.

According to a report in The Tennessean: season-long TV ratings for the Sunday cup races, the most important in the sport, dropped 18 percent in 2007 from their record-high year of 2005, according to the Fox network, which shares the 10-month season of NASCAR broadcasts with ABC/ESPN and TNT.

"It is in a lull, and clearly the sexiness of the sport from a marketer's standpoint is not as great as it has been," said Brian Evans, director of client relations for Atlanta-based Verve Sponsorship Group, which matches corporate sponsors with racing teams.

Those close to NASCAR acknowledge the problems, but told The Tennessean it wouldn't be an easy fix.

"I think it might be in a little more than a lull," said Darrell Waltrip, a three-time Winston Cup champion and current NASCAR analyst for Fox television who lives in Franklin.

"Declining TV ratings in any sport is not a good sign. It's not a good sign for the sport, or the sponsor of the team. That is something, if I were in charge of NASCAR, I'd be saying, 'What do we got to do to stop this and fix this?' "

Fox Network, which airs the first 10 Sprint (formerly Nextel) Cup races of the season, says it's happy with its part of the schedule.

"Our ratings dipped from a 6.0 in 2005 to 5.6 in 2006, but we were back up to 5.9 last year," said Dan Bell, a Fox spokesman. The ratings indicate the percentage of U.S. households tuned in.

That's not the case for the rest of the season, though. In the last 16 races of the 2007 season, carried by ABC/ESPN, ratings dropped to 3.9 percent from 4.7 percent in 2006 and 5.2 percent in 2005.

Which brought a worried Brian France Jr. NASCAR’s chairman and just as important the protector of his families NASCAR legacy to the conclusion NASCAR had better start doing a better job of pleasing its core fans.

“Our initiatives, you saw our diversity initiative, which is very important to expanding our fan base, we're doing more not less in those areas. We always need to reach out and be as aggressive as we can.

“What I'm saying to you is this change issue, all the different things from the name of series to the format, different rules, the Car of Tomorrow, now the new car, whatever, all those things to our core fan, that's a lot to digest in a very short period of time. We know that.

“As I mentioned earlier, a lot of those things were on a track from many years ago. Some of those things were out of our control. It doesn't matter. They all happen. That's not helpful. Change is good to a certain point. We've got all the change we think the sport can stand and needs. Now we want to build on that.

“When I say "get back to the basics," it means we want to zero in on making sure that we kickoff the Daytona 500, it's the best 500 that we've ever had, that our new car continues to do the three things that we want it to do. First is safety, but we certainly want the competition to be better. We've got some work to do. We're working on our tests now to make sure we accomplish that.

“The verdict is in regarding cost. Cost is coming down for the teams. They're going to need less cars. They're already telling us they worked a lot less in the off-season than they ever have because they don't have to. We're pretty comfortable with the costs and we're going to be working on the other two.”

A fair issue to bring up with France if he’s starting to realize there are issues with how NASCAR is or isn’t reaching their fan base – further on down the road, just where does France see the Nextel Cup series and NASCAR in five years?

“Listen, those kind of things are necessary to run the business side of the sport. What we want to focus on, what we want to talk about, most of our race fans, most of them could care less about any of the management moves or moves that we made. They may care in the end when we manage things correctly.

“It's like I said, we want the story lines of the sport to be the focus, not changes, not management issues that we will always have one way or the other. If we do that, we'll be successful.”

France’s message – all isn’t doom and gloom, despite falling attendance, terrible ratings, at the end of the day Brian France Jr. does see his NASCAR glass as being half full.

“Look, we would love every single aspect of our business to be on the upswing and be perfect. There are business cycles that occur. You talk about ratings. Every sport is down significantly in ratings. Almost everything in television is down in ratings. American Idol is down in ratings. There's a reason for that. There's lots of new ways to get rich content either over the Internet, now over the phones. I think Paul Brooks quoted me the amount of video clips that were accessed on NASCAR were 25 million, maybe not that many, some large number.

“The point is, people are getting their information from lots of different places. Does that have an impact on all ratings? Sure. Was NASCAR online way up? It was. So there's things that cycle around. The economy is the economy. We are not immune from the economy. Every sport, and ours is no different, has some impact. If people have more money to spend on discretionary income, of course that's helpful when the economy's better.

“For all the things that are quoted, I think most -- I know about every auto racing series or league would like to have NASCAR's problems, I can tell you that. I can tell you that we're very pleased with where the sport is on balance.”

And yes, Tuesday the news that Sprint is staying right where they are as the lead sponsor had to bring a smile to Brian France Jr.’s face.

"Certainly there are some challenges with the business, and Dan Hesse, who has been our CEO for about four weeks, is working on those things, and making the decisions that need to be made," Dean Kessel, Sprint's director of NASCAR marketing, said Tuesday during the Lowe's Motor Speedway preseason media tour. "As it relates to what we're doing inside the Sprint Cup Series, we're singularly focused on Daytona and executing the things we talked about doing [Tuesday]. Our team is ready to go, and we have the resources to do what we need to do, and we're going to do it."

Sprint has six years remaining on its deal with NASCAR, worth a reported $750 million. The third-largest mobile telephone company in the United States, Sprint's rate of "churn" -- subscribers leaving the company -- was 630,000 in the fourth quarter of last year, markedly higher than the expected 500,000.

But those numbers, Kessel said, will not affect the NASCAR program. The series lost longtime title sponsor R.J. Winston after the 2003 season partly because of declining revenues within the tobacco industry.

"This program works," Kessel said "It works for us from a business standpoint, it works for us across a number of key platforms. ... Our customers, our database, who have said, 'Hey, I'm a NASCAR fan and I'm using your product because you support my lifestyle,' they churn less. They use more data. Our acquisition numbers are higher. The business case is still extremely solid for us remaining in this sport, and that's why we're not going anywhere."

For Sports Business News this is Howard Bloom. Sources cited and used in this Insider Report: NASCAR.com. Forbes and The Tennessean

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Sunday, January 20, 2008

Tabloid Journalism or Freedom of the Press – the firing of Golfweek’s editor


Friday the publisher of Golfweek decided they had had enough. Less than 48 hours after the publication of the magazine’s January 19 issue showing a noose to illustrate a controversial comment by Golf Channel anchor Kelly Tilghman about Tiger Woods; the publishers of the magazine did what they had to do – they fired their Senior Editor and Vice-President Dave Seanor. As the Senior Editor, Seanor ultimately bore direct responsibility for the decision to feature the humorless cover. Jeff Babineau replaces Seanor.

“We apologize for creating this graphic cover that received extreme negative reaction from consumers, subscribers and advertisers across the country,” said William P. Kupper Jr., president of Turnstile Publishing Co., the parent company of Golfweek. “We were trying to convey the controversial issue with a strong and provocative graphic image. It is now obvious that the overall reaction to our cover deeply offended many people. For that, we are deeply apologetic.”

Golfweek devoted four pages of news and commentary on the Tilghman/Golf Channel situation. Tilghman was suspended for two weeks as a result of her comment.

Babineau, 45, has been with Golfweek for nine years, and has filled a number of roles with the magazine, including editor, deputy editor and senior writer. In his new role, he will report directly to Kupper.

“We know we have a job ahead of us to re-earn the trust and confidence of many loyal readers,” Babineau said. “Our staff is very passionate about the game. Our wish is that one regretful error does not erase more than 30 years of service we’ve dedicated to this industry.”

In a timely interview Seanor spoke with Yahoo! Sports golf editor Michael Arkush (great job Yahoo) hours after he had been fired. Seanor’s offered a number of insightful comments which included the decision to feature a tasteless noose on the cover and if there where any real objections from members of Golfweek’s staff to the decision to run the noose on the magazine’s cover.

“There wasn't that much else, really. We put together two or three different images of either Kelly or a noose. We did rough mock-ups that sat taped to the outside of a cubicle for a couple of days. They had either different photos of nooses or Kelly's picture.

“Not so much that people were offended by the image because they knew where we wanted to go with it. But people raised flags that this could stir something up among a certain element of people who might read it one way or the other, and we tried to mitigate that, we thought, with the headline.”

While Seanor pointed out there weren’t much reaction from his staff the racial makeup of Golfweek’s staff only includes three African-Americans. Seanor did acknowledge to Yahoo Sports that when it comes it issues of race and golf – the potential for creating a fire keg is very real.

“When race and golf are in the same sentence, people want to change the subject as soon as they can. People in golf don't want to talk about that stuff. I was on the floor at the PGA show, 20,000 people were milling around, maybe 30-40 of color.”

Seanor may have been less than honest when it came to his opinions concerning the options the publishers of Golfweek had regarding the January 19 cover that depicted the noose as Babineau told Dan Patrick on his radio show Friday.

“You can't say 'Sorry' enough," Babineau told Dan Patrick. "We had several mockup covers. One had Jason Day on it. If we had to do it over, we wish we could put that one out ... I don't think enough thought was put into it. The noose was there to depict Golf Channel's tough situation. More of us connected the image of the noose to that."

Asked about the editor's firing, Babineau said, "It was something we had to do to show people we're very sorry. A very good friend of mine lost a job and it's a tough pill."

The story took on a life of its own Thursday. The release of the January 19 issue timed with the annual merchandise show in Orlando created a perfect storm. The media and the golf industry converged in Orlando last week. Putting the media and the leaders of the golf industry together along with an incredibly poor decision offered a made for the media golf industry controversy. The media didn’t have to chase down the story; the media didn’t have to chase down leads for quotes – the story chased down the media. Making it that much more enticing, the story touched Tiger Woods and touched a media publication. Nothing seems to create a bigger media feeding frenzy than an opportunity for the media to eat its own.

The Tour's commissioner, Tim Finchem, criticized the publication.

"Clearly, what Kelly said was inappropriate and unfortunate, and she obviously regrets her choice of words," Finchem said in a statement. "But we consider Golfweek's imagery of a swinging noose on its cover to be outrageous and irresponsible. It smacks of tabloid journalism. It was a naked attempt to inflame and keep alive an incident that was heading to an appropriate conclusion."

The story began during the Golf Channel's broadcast on January 4 when analyst Nick Faldo joked that the young players of the PGA Tour may have to gang up on Tiger Woods to compete with him. His co-anchor, Kelly Tilghman, agreed and suggested with a laugh that Tiger's young rivals "lynch him in a back alley."

Tilghman later apologized on the air and directly to Woods. Mark Steinberg, Woods's agent at IMG, dismissed the incident, saying that Woods and Tilghman were friends and the comment was not malicious. Still, the network suspended Tilghman for two weeks after the controversy became a story outside the golf world and the Rev. Al Sharpton called for her dismissal. As is so often the case when it comes to Sharpton – the man never misses an opportunity.

The incident should have ended after The Golf Channel’s decision to suspend Tilghman. She apologized directly too Woods, Woods agent made it clear Tiger had no issues with the comment and the Golf Channel had taken appropriate action. Tilghman’s comments where nothing short of being ‘inappropriate’ but thankfully the owners of The Golf Channel took Sharpton’s comments with the grain of salt it deserved to be associated with.

Late Thursday soon after Finchem’s comments Seanor began to realize how much trouble he was in and began to appreciate he might have made a mistake.

"I was a little shocked by the commissioner's reaction," he said. "It was rather strong, particularly from someone who rarely comments on things on his own tour.

"I wish we could have come up with something that made the same statement but didn't create as much negative reaction," he said. "But as this has unfolded, I'm glad there's dialogue. Let's talk about this, and the lack of diversity in golf."

But Seanor choose to throw more gas on the fire by bringing up the long systemic issue of race and professional golf.

"Look at the executive suites at the PGA Tour, or the USGA, or the PGA of America. There are very, very few people of color there," he said. "This is a situation in golf where there needs to be more dialogue. And when you get more dialogue, people don't want to hear it, and they brush it under the rug. This is a source of a lot of pushback."

In an editorial in the magazine, the editors of Golfweek in the January 19, 2008 issue: "Like it or not, Tilghman's 'Lynch him in a back alley' remark about Tiger Woods was national news. The debate about the severity of her punishment -- at this writing a two-week suspension -- fueled heated debate on Web sites, in newspapers and on national TV. The furor begs rational analysis."

Democrat Presidential candidate Illinois Barack Obama speaking on American Urban Radio Networks commented Thursday on the Golfweek magazine "noose" cover controversy, saying that it showed "a lack of sensitivity to some of the profound historical and racial issues that are involved here and are obviously significant."

"We have to have a culture that understands that there's nothing funny about a noose. That's a profound history that people have been dealing with and those memories are ones that can't be played with."

Obama unlike Shapton’s January 9 comments didn’t call on anyone to be fired focusing his comments on the hurtful images associated with the cover and the comments.

Award-winning Kansas City Star columnist Jason Whitlock shared his insightful opinions through a recent Foxsports.com column: “Al Sharpton compared Tilghman's on-air remarks to Don Imus's "nappy-headed ho" controversy. Sharpton, as is normally the case, is wrong.

“What Tilghman did, despite her 12-year friendship with Woods, was much worse than what Imus did. Imus, a radio shock jock known for crude attempts at humor, cracked a bad joke on a morning radio show. Tilghman is an anchor on the Golf Channel. No one expects her to be racy, controversial or stupid.

“Also, Tilghman can't argue that she picked up the notion of "lynching Tiger in a back alley" from black popular culture. She came up with that nonsense all on her own.

“Do I think Tilghman is some bigot extremist? No. I think she's incredibly stupid and perhaps unqualified for her job. She's in good mixed company in that category.

“Should she be fired? No. She made a mistake, apologized to Woods privately and publicly and should be granted the opportunity to rebound. We all make mistakes. A decade ago, I screwed up in a New England press box, cracked a joke about Drew Bledsoe that made me appear homophobic. I apologized, sat out a two-week suspension and moved on.

“It is possible for people to learn from their mistakes. There is nothing positive to be gained from throwing a gigantic pity party for Tilghman or trying to bury her.”

Kevin Hench a contributor to FOXSports.com offered a much more pointed view in his column late last week: “The difference between the two incidents is as stark as that between manslaughter and premeditated murder. The adults at Golfweek — who know what a noose symbolizes in America — decided that it was worth offending, sickening even, a once-terrorized portion of the population because, even 10 years after Tiger's arrival, they are not a significant constituency in the golf community.

“The cover is a taunt: "So what's going to happen, we're going to lose all of our African-American subscribers? We'll survive."

“But who exactly is caught in Golfweek's noose?

“The subhead reads, "Tilghman slips up, and Golf Channel can't wriggle free."

“So you see, it's the Golf Channel that got caught in the noose. And what noose is that? Ah, that old chestnut, the asphyxiating chokehold of political correctness, which people at Golfweek — no doubt like many of their subscribers — see as a much more serious problem in America than racism.

"Was it an arresting image? Yes, it was," Seanor told USA Today. "We chose it because it was an image we thought would draw attention to an issue we thought deserved some intelligent dialogue."

“And what better way to spur intelligent debate than with the preferred method of murder by the Ku Klux Klan? I know when I saw the noose on the cover, my first impulse was, "OK, who wants to have a thoughtful debate on race and free speech?"

How disingenuous can you get? No, Mr. Seanor, your hope was not for intelligent dialogue. Your race-baiting cover was dangled out there in the hopes of attracting genuine, contemptuous fury. And I suspect you'll get some. So congratulations on that.”

Jim Thorpe, one of two black players on the Champions Tour, told The Associated Press the actions of a magazine editor "absolutely stupid'' for displaying a noose on the cover of Golfweek.

"That was absolutely stupid. That was just throwing fuel on the fire,'' Thorpe said in the AP report. "Why would you do that? He knew better.

“We know there was no racist intent,'' Thorpe said, referring to Tilghman. "It was just a bad choice of words. But the guy from Golfweek? Let him get barbecued. That's just a major mistake on his part.''

Thorpe reiterated to the Associated Press that Tilghman does not to be deserved to be fired but understands the strong reaction to her comment.

"I do understand the point from a minority standpoint or an African-American standpoint that things like that has to be approached because we need to leave the past in the past,'' he said.

Thorpe called golf a "gentleman's game'' and said he's never felt discriminated against in the sport.

"If you could play golf, you were going to get paid,'' he told The Associated Press.”It made no difference what color you were, what religion you are. If you can go out there and play, they're going to write you a check and pay you. That's the bottom line.''

Did the now fired Senior Editor and Vice-President Dave Seanor pay too high price – absolutely not. He deserved to be fired. As he told Yahoo Sports he’s been a journalist for 34 years the last 17 spent reporting on the golf industry. Freedom of the press remains a cornerstone of the life Americans fight so hard to not only preserve but it remains a mantra American society is based on. But as Don Imus learnt in April with freedom comes a responsibly – you are free to report whatever you wish but with the sense of freedom should come a set of rules that must be acceptable to the publishers of the publication the material is associated with.

In wasn’t the court of public opinion that led William P. Kupper Jr., president of Turnstile Publishing Co., the parent company of Golfweek to fire Seanor, it was Kupper’s belief that Seanor’s decision didn’t meet the beliefs that he felt needed to be associated with Golfweek.

Seanor told Yahoo Sports he hopes his 34-years of experience help him land another job. Everyone deserves a second chance, especially those whose decisions are as bad as Seanor’s was last week. Why – because if nothing else one has to hope not that Seanor will pay a price for his egregious error, but that he’ll never forget the price he made and the mistake he made last week. Maybe we’ll all learn a lesson from the mistake that was made and if we do maybe those working in the fourth estate will make sure the next time they’re faced with the choices Dave Seanor made consider all of the implications of their decision.

A fair question to ask Seanor – just what were you thinking when you decided on a cover that Seanor had to believe would generate a great deal of controversy?

“It's an easy question for someone to ask who has never sat in an editor's chair or worked in journalism. We were thinking, as unbelievable as that might seem to people. Perhaps we overthought it in a way. We weren't trying to be sensational. It's interesting that a lot of the objection, 'Oh, they're just trying to sell magazines.' We're 99 percent subscriptions. We're not even on the newsstand”

For Sports Business News this is Howard Bloom. Sources cited and used in this Insider Report: Foxsports.com, Yahoo Sports, Associated Press, ESPN

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