Monday, October 31, 2011

A well deserved victory lap for Bud Selig

In what may be a case for Ripley’s Believe it or Not, Major League Baseball Commissioner Bud Selig is more respected today than NBA Commissioner David Stern.

The NBA is embroiled in a maddening labor dispute that has seen Stern cancel NBA regular season games through November 30. Selig and MLB just completed an exciting World Series and are poised to sign a historic collective bargaining agreement with the MLB Players Association.

"I would not be ashamed to tell you that [Thursday] night in the 11th inning after everything that went on, I told a couple of people, 'I'm really proud tonight to be the Commissioner of a sport that can produce what just happened,'" Selig said following the classic Game 6 that ended with a David Freese walk-off home run in the 11th.

"But it wasn't only [Thursday] night. Since September, we've really had an incredible [couple of] months, topped off by Sept. 28, which everyone said we couldn't replicate. But you play Spring Training, a 162-game season, a month of postseason games, and it all came down to Game 7. I said to my wife on the way over, 'This is the one time all year you can say there's no tomorrow.'"

Speaking with the media during an impromptu press conference Selig touched on a number of important issues, starting with the status of the current CBA negotiations between baseball’s management side and the MLBPA. The current CBA expires on December 11, 2011.

“Look, they've been quiet, they've been thoughtful, they've been constructive, both sides. And given where we used to be, given where -- you've heard me say that, Marvin and Bowie used to stand in the middle of the ring like Zale-Graziano and just bang at each other, you guys are all too young to remember that, and just bang at each other. We've come a long way, and this is what I like.

“Nobody could have conceived, starting with me, that 16 years ago we'd have labor peace. You just couldn't -- you had labor in '72, '75, '76, '80, '81, '85, and ‘90. You couldn't have conceived of it. What I think in retrospect that I really have come to understand is how badly that hurt us. So I will give Michael Wiener and Rob Manfred a lot of credit. There's a lot of work to be done yet, so I won't do that, but the talks have been constructive and very thoughtful. Very thoughtful.”

While a new CBA wasn’t announced during the 2011 World Series it’s all but a certainty to be announced in the not too distant future. Regardless, don’t expect MLB owners to lockout the players like the NFL, NBA and NHL owners have in the past 6 years.

MLB owners have learned hard lessons in starting a season without a CBA in place (the 1994 World Series cancelation) and will never put themselves in a position were the players can force the owners hands. It’s really just about dotting the I’s and crossing the T’s right now.

The 2011 World Series will long be regarded as one for the ages. Down ten and a half games in the National League wild card race on August 25, the champion Cardinals comeback and subsequent World Series win creates an opportunity for Selig to promote his idea of adding one more wild card team to each league in time for the 2012 season.

The two wild card teams would play a one game playoff elimination game with the winner moving into their respective league divisional playoff series.

Selig made one point clear Friday night – even if more teams are added to MLB’s playoff mix baseball will do what it needs to do to ensure the playoffs are completed in a timely manner.

“I must say, you know how I feel about November.

“I told you there would be a little sarcasm every so often, so here we are on October 28th.
You know, I don't know that. We'll have a meeting shortly, and that will be -- but I like the tightened schedule anyway. And I do think -- you can have an off-day here and there, but the tightening up really has been helpful, and we've avoided November and done okay. That's a question that we'll deal with.”

The idea of a one-game playoff elimination, while exciting, may not work in terms of allowing teams to set up their pitching rotation for the playoffs. It will, however, reward excellence for teams winning their division.

The Tampa Bay Rays and the Cardinals completed remarkable comebacks on the last day of the regular season. Under Selig’s new system the Red Sox would have met the Rays and the Braves the Cardinals in a one-game elimination.

Baseball has been slow to accept technology. While instant reply is now a part of determining if a homerun is indeed a homerun, the Lords of the Diamond seem determined to remain stuck in the infield when it comes to expanding the use of instant reply.

“We'll do some minor things, talk about things. He (Joe Torre) said the other day, which is absolutely correct. We'll always look at things, we'll look at what we do. We've made a lot more changes than I would have guessed 18, 19 years ago when I started in a lot of things.

“But you know how I feel about the pace of the game, and surprisingly they all do, too. That committee has been great, and I talked to a lot of baseball people, a lot of managers, a lot of general managers. And look, fair, foul, down the line, things like that, there's things we can do, but we'll continue to discuss that.”

What baseball needs is what technology offers – the opportunity to ensure whoever won the game wins the game. Umpires aren’t perfect and from time to time they’ll miss a call on an out. The technology exists were baseball can determine on close plays at any base if a runner is out or safe. Ninety nine per cent of the time the umpire will be right, but if that one per cent costs a team a game and that game costs that team a chance to win a championship then baseball owes it to that team, its fans and to the integrity of the sport to get it right by more effectively using technology.

Selig made one issue clear as his game seven press conference ended – he still expects to retire at the end of the 2012 season. Who might replace Selig, as Selig noted first baseball has to put a Selig succession plan in place.

“There isn't a mechanism in place, but it's something that I've thought a lot about and we'll continue to talk about it. I know it's a year from December 31st, and there are some people on both sides of the room, starting with my wife, I'm happy or sad to say, but she's somewhat skeptical. I'm trying to be kind to others in the room. So on that happy note, we'll continue to look at things. But there isn't at the present time.”

Cardinals’ manger Tony LaRussa Monday announced his retirement as a baseball manager – 33 years and three World Series later LaRussa had a great career as a manager. Selig’s lasting legacy has yet to be determined but at the end of the day he’ll likely leave the sport in better shape then it was when he became interim commissioner in 1992. The 2011 season may be baseballs finest both on and off the field for all the right reasons.

"Somebody said on television, baseball has had a coming-out party since Labor Day," Selig said. "I don't think so. I think it's always been there. I've said over and over and over, and I believe it of course, that it's the greatest game in the world. I've believed it since I was 5 years old. It's produced for this country, really, a remarkable chain of events.

"[Baseball] binds generations together. It does it like nothing else, but it takes moments like this to understand it. The game has never been more popular. There's no doubt about that by any criteria you want to use. But its impact is greater than it's ever been. This has been a proud moment for the great game of baseball."

Bud Selig earns an astounding $18 million annually as MLB commissioner – more than any major sports commissioner. MLB revenues will exceed $7 billion for 2011. All in all the business of baseball and Bud Selig is pretty good right now.

For Sports Business this is Howard Bloom

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Sunday, October 30, 2011

NBA Armageddon 2011 – back to the future

A week ago the NBA’s labor negotiations blew up in everyone’s faces as talks broke off on October 21. The two parties met in marathon talks Wednesday and Thursday. On Friday, when it appeared the two sides might have been close to an agreement, talks broke down.

Heading into Friday’s meetings, it was believed that not only was a new labor deal about to be signed but the entire 82 game schedule would be played. Soon after the talks ended, NBA commissioner David Stern announced NBA games through November 30 were now cancelled and there was no hope the entire 2011-12 NBA schedule would ever be played.

“As you know, we've had, until this afternoon (Friday), a pretty good several days of give and take, a lot of things were reaffirmed, a lot of concessions went back and forth. We made some major progress on length of contract. Previously we had conceded on guaranteed contracts, that we had agreed that all players currently under contract would receive payment in full under their contracts, even if that took us above any pre agreed percentage. We had restored a variety of exceptions having to do with Bird rights and early Bird rights and non Bird rights for your veteran free agents and the like, and there was a lot going on,” Stern added.

“There were two or three open items left on the system issues, on which, as I said, we made good progress. Then we turned to the subject of how to divide basketball related income. I summarized the positions of the parties previously and said that the NBA owners were willing to go to 50 percent in their BRI on their percentage split of BRI, in effect a 50/50 split.

“Billy Hunter said that he was not willing to go a penny below 52, that he had been getting many calls from agents, and he closed up his book and walked out of the room. And that's where we are.” Stern said.

"Derek (Fisher) and I made it clear that we could not take the 50-50 deal to our membership. Not with all the concessions that we granted," Hunter said. "We said we got to have some dollars."

"We made a lot of concessions, but unfortunately at this time it's not enough, and we're not prepared or unable at this time to move any further," Hunter said.

Following the breakdown Hunter told the media that NBA owners lowered their basketball related income offer (BRI) to the players from 50% or 47% but then increased their offer back to 50% during Friday’s talks.

"We're here, we've always been here, but today just wasn't the day to try and finish this out," NBAPA President Derek Fisher added.

According to the two sides agreed on most of the mechanics relating to a new CBA but remain stuck on the BRI split. The pervious agreement had the split at 57/43 in favor of the players. The players who were steadfast that they would never go below a 53/47 split in their favor have now agreed to a 52.5/47.5 split.

Are we really talking about 2.5% and do the owners really believe a 50/50 split in BRI will result in a profitable NBA?

“Including enormous expense cuts in other areas by the League. I mean, that was something we've been talking about with the players from the beginning, that in essence we weren't suggesting we would move to break even or profitability on their backs, as they would say, that in order to change the economic model that underpins this league, we needed to reduce expenses across the board,” NBA Deputy Commissioner Adam Silver commented.

“Given that we pay out currently 57 percent of revenue roughly to the players, we made clear to them that cuts would have to come in their salaries, but there's that other 43 percent plus of expense, it's plus because we lose money, and we've told them that we were looking to cut costs in every other aspects of our business, and because those other aspects of our business are not controlled by collective bargaining agreement, we've been doing that over the last two years. And in fact, have lost hundreds of jobs in other areas, in those places where we had controllable costs.

“To David's point, the reduction to 50 percent along with other expense cuts in our business would allow us to move to profitability over time as revenue continues to grow.” Silver said.

The players fear remains a seemingly inevitable force that is drawing the NBA towards a hard NHL style salary cap.

"We've told them that we don't want a hard cap. We don't want a hard cap any kind of way, either an obvious hard cap or a hard cap that may not be as obvious to most people but we know it works like a hard cap," Hunter said. "And so you get there, and then all of a sudden they say, 'Well, we also have to have our number.' And you say, 'Well wait a minute, you're not negotiating in good faith.'"

Silver did his best to clear up the issue relating to a hard salary cap.

"We don't think it's a hard cap. ... We've all been wasting our time if they believe this is a hard cap. We've been spending literally hundreds of hours negotiating the specifics of a system, where they're now saying is the equivalent of a hard cap. We've been clear from the beginning from a league standpoint we would prefer a hard cap."

A grim David Stern made it clear Friday evening if the players expected things were going to be get better they had better think about that.

“We're going to have to recalculate how bad the damage is. We've lost approaching $200 million in the loss of the preseason, and we're going to lose several hundred million dollars more. So the NBA's offer will necessarily its next offer will reflect the extraordinary losses that are starting to pile up now, and you can assume that our offer will change to reflect the changed economic circumstances.”

True Hoops’ Henry Abbott asked a very good question – if a poll were taken of the entire NBAPA would the union support the actions of their current leadership or would they accept the latest offer from the owners and get back to work?

Abbott suggested that players had contacted him and told him they want to play basketball.

Hunter announced that all current NBA players will be sent $100,000 in ‘strike pay” but that’s a far cry from the $5.4 million the average NBA player receives. Hunter did acknowledge that NBA players wouldn’t be missing any paychecks until November 15 when they would have received their first checks from their respective teams.

What happens to that “all for one and one for all” among the players when that first paycheck doesn’t come?

Union vice president and Spurs forward Matt Bonner is one of the people charged with assessing the mood of the rank and file. He told ESPN that he believes the union is strong.

"As disappointing as today is, we made progress," says Bonner. "It's a process and hopefully it will continue again soon. In the meantime, I think the players are united and prepared to hold strong. We've made significant gives in every system issue and on BRI, so now it's the owners' turn to step up and make a move!"

When the two sides appeared on the verge of an agreement Friday many believed neither side could afford to miss an entire NBA season. That may be true but this is real.

NBA owners are billionaires and if reports are correct those NBA owners have lost hundreds of millions of dollars in the last few years. NBA owners want games played in their arenas, want to sell tickets and honor their sponsorship agreements.

At the end of the day – NBA owners will survive if the entire 2011-12 NBA season is not played. On the other hand the average NBA career has a finite number of years. The average NBA salary is $5.4 million a year. NBA players can’t afford not to play basketball.

It’s not a matter of if but when NBA players will be faced with the reality they are a lot like salmon swimming upstream and they’d better make a deal now before they die along the riverbank.

For Sports Business News this is Howard Bloom

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Thursday, October 27, 2011

Is there a more polarizing athlete than Tim Tebow?

Tim Tebow – a winner on and off of the field? Loved by millions, not appreciated by just as many, the Denver Broncos quarterback led the Broncos Sunday to an improbable win over the Miami Dolphins in his first 2011 starting assignment. Tebow, who started three meaningless games during his 2010 rookie season, is now the Broncos starting quarterback – after media pundits suggested during the Broncos pre-season Tebow was fourth on the Broncos three-man quarterback depth chart.

Forbes reported Tebow was directly responsible for bringing the Dolphins an additional $1 million in marketing and ticket revenues. Tebow played his college football for Florida Gators; his return to South Florida helped the Dolphins sell 10,000 additional tickets.

Forbes’ Kurt Badenhausen believes, Tebow could have a similar effect in upcoming road games against divisional foes: Oakland Raiders, San Diego Chargers and Kansas City Chiefs; the next three away games on the Denver schedule. All three teams have struggled selling tickets in recent years, but have a good shot at securing sell-outs thanks to the popularity of Tebow.

Tebow, and his huge fan base, is doing his best to jump start the economy. His jersey is one the league’s best-sellers since he was selected 25th overall by the Broncos in the 2010 NFL draft. His book, Through My Eyes, debuted at No. 6 on the New York Times bestseller list in June.

Tebow’s partners, Nike and EA Sports, have also seen the power Tebow can have. Electronic Arts put Tebow on the cover of its NCAA Football 11 video game and saw first month sales jump 8%. The game eventually sold 850,000 units at a cost of up to $60 apiece. Nike released 500 limited edition blue and orange Tim Tebow cross-trainers last year and the shoes sold out online in five minutes.

Billboard companies in the Denver area got a boost in September when fan groups bought space on the boards clamouring for Tebow to replace Kyle Orton as the Broncos starting QB. A new Tebow Jockey billboard also just went up in Denver. The undergarment maker is another sponsor in the Tebow stable.

For an example of the polarizing Tebow, look no further than his 2010 Super Bowl ad, one of the most talked about Super Bowl ads ever. Tebow and how mother appeared in two commercials that ran during the 2010 Super Bowl game. The Super Bowl is televisions biggest annual event with a 30-second ad costing in excess of $2.5 million. More than 100 million watch the Super Bowl each year.

The ads featured Tebow and his mother Pam. Against the advice of her doctors, pregnant with Tim while living in the Philippines with her husband and Tebow's father, who worked as a missionary, Pam gave birth to Tim.

Focus on the Family, the religious group, reached out to the Tebow’s with the idea of creating two Super Bowl ads that would focus on Pam and Tim. The word abortion was never mentioned during the commercial, nor did either spot take a stand against abortion.

That didn’t stop everyone from talking about the ads before and after the Super Bowl. While many Super Bowl advertisers choose to preview their ads in advance of the Super Bowl, Focus on the Family, wisely decided they get the biggest bang for their buck if they didn’t show the ads in advance of the Super Bowl.

“Tim and Pam share our respect for life and our passion for helping families thrive,” Jim Daly, president and C.E.O. of Focus on the Family said in a New York Times report. “Focus on the Family is about … strengthening families by empowering them with the tools they need to live lives rooted in morals and values.”

Days before the 2010 Super Bowl The National Organization for Women, NARAL Pro-Choice America and other women’s groups sent CBS letters asking that the two Tebow spots be removed from the broadcast.

A New York Times Op-Ed offered this on the eve of Super Bowl 2010: the would-be censors are on the wrong track. Instead of trying to silence an opponent, advocates for allowing women to make their own decisions about whether to have a child should be using the Super Bowl spotlight to convey what their movement is all about: protecting the right of women like Pam Tebow to make their private reproductive choices.

CBS was right to change its policy of rejecting paid advocacy commercials from groups other than political candidates. After the network screens ads for accuracy and taste, viewers can watch and judge for themselves. Or they can get up from the couch and get a sandwich.

How women feel about the infamous commercials that have appeared on recent Super Bowl broadcasts wasn’t, and has never been, addressed by these groups. It’s easy to believe that exploits and stereotypes women during their Super Bowl commercials in hopes it will product promote their products and services.

Focus on the Family, well known for their conservative opinions, is something that may have served as the catalyst for the reaction to the Tebow Super Bowl spots.

''It makes the Super Bowl a bit of a controversial event,'' said Tim Calkins, a marketing professor at the Kellogg School of Management at Northwestern University.

''They want to be entertained; they want to see funny ads,'' George E. Belch, a professor of marketing and advertising at San Diego State University offered the New York Times. ''Now, does this become a forum where we start to debate controversial issues?''

Today, as it was in February 2010, if a company or product is ready to invest as much as $3 million in a Super Bowl spot they are the arbitrator of their message being seen by 100 million.

''Whether someone wants to talk about an issue, that's their business,'' said David Angelo, chairman and chief creative officer at David & Goliath, the agency for Kia.

Heading into the 2010 NFL Draft most projections had Tebow being drafted in the third round, despite having led the Florida Gators to a National Championship and having won a Heisman Trophy. The Broncos stunned those at the draft by picking Tebow with the 25th overall pick in the first round.

"I definitely want to repay Coach (Josh) McDaniels for the faith he showed in me," Tebow said on draft day, "I want to be a great quarterback. I want to pursue that. I've wanted to be a quarterback in the NFL for a great many years. That's my goal and has been my goal since I was 6 years old, and I'm going to do whatever it takes to get there."

McDaniels was fired after the 2010 season casting doubt on Tebow’s future with the Broncos.

In late September, a group of Broncos fans decided they want to see Tebow quarterback their team. Saving for a trip to see a Super Bowl, employees at Denver’s Multiline International Imports spent more than $10,000 on a digital billboard that read: Broncos Fans to John Fox: Play Tebow!” The image then rotated to show a picture of Tebow coming out of the tunnel at the Broncos’ stadium.

“We have the best fans in the NFL,” said team spokesman Patrick Smyth in a Denver Post report. “This is another example of their unrivalled passion and enthusiasm for the Broncos.

Shortly after the billboard appeared Broncos head Coach John Fox announced that Tebow would replace Kyle Orton as the Broncos starting quarterback.

Tebow set an NFL Draft record for jersey sales. He also had the best-selling jersey in the entire NFL each month since being drafted. The Broncos, as a whole, led the NFL among all teams in jersey sales, as well.

On July 29, 2010, Tebow signed a five-year contract with the Broncos that had a base value of $11.25 million (he can make as much as $33 million through certain performance-based incentives). The contract also included $8.7 million guaranteed.

Is Tim Tebow a winner on the field? It’s hard to argue that he doesn’t have what it takes to lead a team to victory after last Sunday’s overtime win over the Dolphins. The Dolphins are winless, and maybe the worst team in the NFL this year, but when you’re team is losing 15-0 and there are less than five minutes left in the game and you lead your team to victory it certainly proves you have what it takes. Does he have the necessary skills to lead the Broncos (or any NFL team) to consecutive winning Sundays? That remains to be seen. Remember, he led the Gators to a National Championship and won the Heisman – winners, not losers, accomplish those things.

Are Tim Tebow’s religious convictions an issue? No. If Tim Tebow is a Christian, he has as much right to believe in his religion, as did Baseball Hall of Fame member Sandy Koufax who chose to not pitch for the Los Angeles Dodgers once on the Jewish High Holiday of Yom Kippur. Tebow’s beliefs have no impact whatsoever on his abilities as an NFL quarterback. In fact, one could argue that his convictions make him even more determined to succeed every Sunday. You may not agree with Tim Tebow but you have to respect how he conducts himself both on and off the football field.

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

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Wednesday, October 26, 2011

Gentlemen Start Your Engines – Formula One in Jersey

The current economic recession has impacted the sports industry on many different levels; none greater than sponsorship. Corporate America is looking at cutting back expenses. One of the biggest areas they have cutback back, other then payroll, has been sponsorship; supporting and buying into sports properties. Automobile racing - NASCAR, F1 and Indy Car Racing - is driven (pardon the pun) by sponsorship dollars. Racing teams unable to secure needed sponsorship dollars have been forced to skip races on both the NASCAR circuit and what’s left of the Indy Racing League series. The tragic death of Indy Racing League star Dan Weldon casts a shadow on the future of the open-wheel racing series. And now, a New York based group has announced their plans for a Formula One race for New Jersey in 2013. Based on the history of Formula One racing in the United States, that could be destined to fail even before the cars start their engines.

The Grand Prix of America hopes to run a Formula One event along the banks of the Hudson River (the Jersey side) with Manhattan’s skyline serving as the background – stunning to say the least.

"New Jersey remains a leader in hosting all types of national and international sporting events," New Jersey Governor Chris Christie said, adding the Grand Prix of America to a list that includes last winter’s East Regional NCAA tournament in Newark and the Super Bowl in 2014.

The race’s lead organizer, Leo Hindery, is behind the bold business move. According to the Newark Star Ledger, Hindery has a 10-year agreement for the Grand Prix of America with Bernie Ecclestone, the British billionaire who controls Formula 1 racing. Hindery said the race had been approved by the Formula 1 sanctioning body, the Geneva-based Federation Internationale de l’Automobile. Ecclestone reportedly in one of the “silent” investors in F1’s first New York City based event. Ecclestone has long coveted holding an event in the New York area.

Hindery is Managing Partner of InterMedia Partners VII, LP, along with Peter M. Kern.

Until October 2004, Hindery was Chairman, and until May 2004 Chief Executive Officer, of The YES Network, the nation’s largest regional sports network. He founded the network in June of 2001 as the television home of the New York Yankees.

"We are standing next to what will soon be the state-of-the-art Formula racing track in all of the world," said Hindery, who told reporters Formula One is the safest form of auto racing in the world.

“The Jets play in New Jersey, and they’re called the New York Jets. Same with the Giants,” Hindery told The New York Times. “And the local government has been just a spectacular ally.”

Austin is scheduled to host a Formula One event in November 2012 and has a contract through 2021 to host an event in Texas. Texas taxpayers are supporting the Austin event with $25 million in taxpayer dollars. According to Hindery the New Jersey event won’t be asking for any public support.

“From the start we’ve said that we’d pay for the privilege, without public expenditure,” he said. During a Q&A period after Tuesday’s conference, Mr. Hindery told The York Times that tickets to the weekend event would cost “on the order of $360 for the three days,” accounting for two days of practice sessions before the race, which would be held on the Sunday following the Montreal Grand Prix in June (the 2013 Formula One calendar has not been set.) The Montreal event traditionally has been held the second weekend of June, moving the Jersey event to Father’s Day weekend.

Mr. Hindery mentioned the cost savings of running a race on existing streets rather than a purpose-built course, like the one in Texas.

“There’s not a yard of dirt being moved,” he said. “We’re pennies on the dollar compared to Austin.”

Optimism aside – Formula One’s history in the United States has been anything but successful, littered with failed events.

Formula One style events have been run in the United States on and off since 1908, when it was known as the American Grand Prize. The race later became part of the Formula One World Championship. Over 41 editions, the race has been held at nine locations, most recently in 2007 at the Indianapolis Motor Speedway.

Recent history (the last 35 years) has to make one wonder why anyone would seriously consider holding a F1 event in the United States.

In 1976, the Long Beach Grand Prix became a Formula One event, making the United States the first nation since Italy in 1957 to hold two Grand Prix in the same season (the other was at Watkins Glen, New York which held an event from 1961 through 1980). The United States Grand Prix West, as it was called to distinguish from the United States Grand Prix East at Watkins Glen, was held until 1983, after which CART became the headliner series. The Caesars Palace Grand Prix was a non-starter in 1980, debuting in 1981; it would only last two years with Formula One, before CART took over the race for another two seasons. 1982 saw the inaugural Detroit Grand Prix, making 3 Formula One races in the United States that year. Detroit would last until 1988, after which it too became a CART event. A one-off Dallas Grand Prix was held in 1984, plagued by track problems exacerbated by extremely high temperatures. The CART racing series folded into the Indy Racing League after their 2007 racing season.

A new Grand Prix in the New York City area was announced for the 1983 season, to be held either at the Meadowlands Sports Complex, Meadow Lake in Flushing Meadows, or Mitchell Field in Hempstead, Long Island (on the same site as the 1936 and 1937 Vanderbilt Cups). However, the race was first postponed and then cancelled, as CART started their own race at the Meadowlands, and titled it the "United States Grand Prix".

Only the three teams (six cars) with Bridgestone tires started the 2005 United States Grand Prix, and the event was considered a disaster. Many commentators questioned whether a United States Grand Prix would be held in Indianapolis again, but the 2006 United States Grand Prix was held the next year, on 2 July 2006, without controversy.

On July 12, 2007, Formula One and the Indianapolis Motor Speedway announced that the 2007 U.S. Grand Prix would be the last one held at IMS for the foreseeable future, as both sides could not agree on the financial terms for the event. It was thought that the race would return to Indianapolis for 2009 on the track configuration that was used for the 2008 race in the MotoGP championship. The Indianapolis Motor Speedway CEO of the time, Tony George, claimed that the USGP would not return to Indianapolis unless it made financial sense. Due to the expensive fees paid to host a grand prix, the race would require a title sponsor to be economically viable. Ultimately, the United States Grand Prix was not on the Formula One calendar for 2009.

The $25 million Texas taxpayers are paying to hold the Austin event – it’s an annual contribution – is a $250 million investment in F1 racing.

Steve Sexton, Circuit of the Americas president of the Austin based event, said in a statement, "The announcement of a New Jersey-based Formula 1 race is great news for motor sports fans in North America. It will be a unique street course race and is yet another acknowledgement of the viability, demand, economic benefit and prestige a Grand Prix brings to a region.

The New Jersey race also demonstrates F1's strong commitment to elevating awareness of the sport, which can only help build the fan base."

"There's no public subsidy that's being put into the running of the race," New Jersey Gov. Chris Christie said talking about the New Jersey event.

"It won't work anywhere else in the area (the greater New York region)," Hindery said adding that the cities of Weehawken and West New York would be compensated by the promoters for expenses incurred in hosting the race.

The Wall Street Journal asked what could be considered the most important question: “Formula One Coming to New York, But Will Fans Care?

“While such an announcement would electrify Northeastern racing fans who for years have cultivated rumours of a New York F1 venue, it is still unclear whether anyone else will be interested enough to turn out for the races.

Despite its near-religious following in Europe, Asia and elsewhere around the globe, Formula One, with its cutting-edge open-wheel racers hasn’t truly stirred the souls of U.S. spectators since the 1970s when there were two Formula One races in the U.S..

H.A. "Humpy" Wheeler, a former president of Charlotte Motor Speedway in North Carolina (and one of NASCAR’s former kings), spoke at the news conference announcing the New Jersey, New York based F1 event. He believes New Jersey’s is "the best thought-out project I’ve seen since I’ve been in the racing business," and expects local business owners will agree.

"Ask all your local folks to look at their bank accounts after the race," he said, "and compare the amount that’s in there to last year."

Bob Varsha, the Voice of Formula One on SPEED TV (the F1’s American rights holder) offered this on the news that the United States is poised to host a second event in 2013 (after not holding any events since 2007):

“Formula One is predicated on taking the world’s most popular form of motor sports to the world’s greatest cities. I think a glaring omission in recent years – and really throughout the history of Formula One – has been New York City. So, I think this is huge. It’s the center of the world’s financial markets, it’s the center of the world’s media markets and it’s the center of the world’s entertainment markets. If there’s anything that’s bigger than Formula One – it’s New York. It’s just a natural they would go together. Having said that, it’s ironic that there really hasn’t been a race track incorporated in New York, a place where everything imaginable can be seen or done. The Meadowlands (New Jersey) was a compromise. There were some permanent tracks out on Long Island (New York) and events like the Vanderbilt Cup. New York does really loom large in the history of motor sports, so it’s only right that it should have a Formula One race. It’s going to take a significant effort, but I’m just delighted to see that it’s happening.”

Are two events two events too many for the United States after it will have been five years between the Indianapolis 2007 event and the 2012 Austin event? Not if both the Austin and New Jersey events have the right management teams and the financing behind their events.

The death of Dan Weldon has cast a negative shadow on open-wheel racing in the United States and the future of the Indy Racing League is murky at best. IRL could be gone in the next year or two. History tends to indicate that the long-term success for two F1 American based events is questionable at best. However, it does appear, with a real commitment from Texas taxpayers, the Austin event is on solid financial ground. With the Grand Prix of America having Leo Hindery and "Humpy" Wheeler behind the New Jersey/New York event, it appears to have the right management team with a proven record.

At least in the short-term times appear to be brighter for Formula One racing in the United States.

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

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Tuesday, October 25, 2011

Is the NCAA ready to show “some but not all” college athlete the money?

At long last, it appears the largest labor pool of unpaid professionals, college athletes, are about to be “paid” for the services they offer NCAA institutions. College athletes receive full scholarships (tuition, room and board) which can cost as much as $50,000 per year. While a majority of college athletes do not generate a significant return on the investment schools make in them, those who participate in revenue generating sports (football and men’s basketball) have long believed they deserve a piece of the NCAA money pie.

NCAA President Mark Emmert told members of the Knight Commission on Intercollegiate Athletics that the NCAA was ready to look at offering college athletes additional financial support that goes beyond what the current system offers.

"We are going to create a model that would allow -- probably ... up to $2,000 in addition to" tuition, fees, room and board, books and supplies.

“I believe the presidents are committed to creating rapid change to benefit the student-athletes on their campuses. We need to take serious action now to improve the student-athlete experience and make sure our conduct aligns with our values,” Emmert said. “All of these changes will happen in short order and will have a positive impact on the enterprise.”

According to the NCAA the changes go well beyond increases financial assistance and include:

•Increased emphasis on academic performance, including a minimum academic standard to qualify for postseason competition.
•More rigorous initial-eligibility standards, including tougher core-course requirements coming out of high school.
•Increased standards for two-year college transfers.
•Increased assistance to student-athletes, including up to an additional $2,000 miscellaneous-expense allowance toward incidental educational costs above tuition and fees, room and board, and books.
•Allowing institutions to award multi-year grants in aid.

The NCAA is expected to review Emmert’s series of proposals as early as Thursday.

In what was a well organized media event, that included more than 300 NCAA athletes from Arizona, Georgia Tech, Kentucky, Purdue and UCLA, a petition was released asking the NCAA to "realize its mission to educate and protect us with integrity."

According to ESPN the “document asked the NCAA and college presidents to set aside an unspecified amount of money from what it estimates is $775 million in recently acquired TV revenues in an "educational lock box" for football and men's basketball players.”

In a written statement, NCAA spokesman Bob Williams said the NCAA "redirects nearly all of its revenue to support student-athletes."

"Of its approximately $775 million in annual revenues, the NCAA invests 96 percent, or 96 cents of every dollar, in student-athletes through direct distributions to individual campuses and conferences; the funding and administration of national championships; and other direct support, such as the Student Assistance and Academic Enhancement funds in Division I. "

"I really want to voice my opinions," said Georgia Tech defensive end Denzel McCoy, a redshirt freshman told ESPN. "The things we go through, the hours we put in, what our bodies go through, we deserve some sort of (results). College football is a billion dollar industry."

Most of the revenue television generated from college football including the multi-billion dollar BCS contract is divided up by the conferences when they sell their rights. The NCAA's $10.8 billion, 14-year deal for the men's NCAA basketball tournament with CBS/Turner Sports iscontrolled by the NCAA.

The National College Players’ Association, an advocacy group that focuses on issues relating to how college athletes are treated by the NCAA, released the results of the petition to the media.

“We the undersigned student-athletes are hereby calling on the NCAA and college presidents to use a portion of the $775 million in new TV revenues to increase graduation rates, decrease NCAA violations, and provide basic protections. This would include:

- Dividing a portion of new TV revenues evenly among FBS football players and Division I men’s basketball players. This money would go into an educational lockbox (a trust fund) that we can receive if we abide by NCAA rules and graduate, or to pursue our undergraduate degree when our eligibility expires. This would increase our graduation rates and decrease violations.

- Raising our scholarships equal to the cost of attendance so our schools can fully support our education – an average increase of approximately $3200/year per full scholarship athlete.

- Allowing our schools the option to prioritize our education by providing multi-year scholarships.

- Preventing permanently injured players from losing their scholarships.

- Ensuring we are not stuck with sports-related medical expenses.

These are some of many solutions that can finally allow the NCAA to realize its mission to educate and protect us with integrity. Any Title IX requirements related to the above reforms can and should also be funded with new TV revenues. We endorse the NCPA’s call for comprehensive reform to occur in October.”

Purdue quarterback Rob Henry is recovering from knee surgery to repair a torn ACL suffered just before the start of this football season. He stated, “I have been very fortunate with my situation and Purdue paying for everything. I know there are cases in which players at other schools don’t have the same fortune, and this is morally wrong.” Henry gathered his teammates’ signatures on the petition and said they were surprised to learn about how much new money was being generated. He said, “Everyone on my team was astonished. They were very supportive of the petition, and have been very inquisitive about reform since they signed the petition. It’s amazing how little players knew about the financial situation of the NCAA before our scholarship shortfall and TV revenue studies.”

UCLA football player Jeff Locke, who circulated the petition among his teammates and the basketball team, is concerned that the NCAA might delay important reforms. He stated, "As almost $800 million in new TV revenue streams into college football next year alone, it is important that we address these issues surrounding college athletics immediately. If the NCAA pushes back these issues, the schools will find other ways to spend this money, whether it is put into new facilities or to increase coaches’ salaries, and the players will not be able to receive the basic protections they need from the billions they help generate."

Arizona wide receiver David Roberts stated, "I felt that it was important that the student-athletes who make up the core of NCAA have their voices heard, which is why I brought the petition to the attention of my teammates. I, along with those who signed the petition, hope that more will be done to benefit future student-athletes that make many sacrifices to be successful on and off the field; but their finances should not be a part of those sacrifices. My teammates and I hope to welcome better protections that will provide a proper experience for student-athletes."

Kentucky cornerback Anthony Mosely, who gathered signatures from his teammates, stated, “I felt it was important for the petition to be circulated because of the information it held in its contents. The players should know the details that deal with their collegiate future. We as players put so much time, energy, and pride into what we represent. To be under-supported within the NCAA given all of the new money that we’re generating for our schools is just horrible.”

The NCPA believe that:

• The average scholarship shortfall (out-of-pocket expenses) for each “full” scholarship athlete was approximately $3222 per player during the 2010-11 school year.
• The room and board provisions in a full scholarship leave 85% of players living on campus and 86% of players living off campus living below the federal poverty line.
• The fair market value of the average FBS football and basketball player was $121,048 and $265,027, respectively.

"Yeah, we're going to school for free, but when I'm 40 years old, I've got a good degree and everything, but if I can't walk up a flight of stairs, what did I get out of it besides a few bowl games, some rings, things like that?" McCoy told ESPN.

"Without identifying a funding mechanism, it is hard to see how many of these schools would be able to pay this added amount, which -- depending upon the number of student-athletes -- could approximate $1 million a year," Purdue athletic director Morgan Burke, a member of the NCAA Division I Leadership Council added.

There are many questions that need to be asked? College athletics have long believed in a system whereby all (or most) athletes are created equally. Is a women’s basketball not as committed to her school as a men’s basketball player? Does a football player at Notre Dame generate more money for his school then a football player at Boston University? What about college hockey players? Their sport generates some revenues, obviously not as much as men’s basketball and football, but should men’s (and women’s) hockey players not receive their share of the pie?

Purdue quarterback Rob Henry, who asked more than 70 teammates to sign the petition, told ESPN that the belief that college athletes should be grateful for receiving a mostly-free education is misplaced. He called the player demands a matter of simple fairness.

"Without the athletes, there are no Division I sports," he said. "There are no TV contracts, there are no coaches' contracts. Athletes should be the number one priority."

“I’ve heard a lot of people say, ‘Well, you want to do this $2,000 cost-of-attendance thing to reduce the probability of students breaking rules,’ and that’s nonsense,” Emmert told the Knight Commission on Intercollegiate Athletics during a three-hour meeting at Washington’s Ritz-Carlton. “People break rules because they break rules.”

The concept is easy to understand but at the end of the day will it create a two-tier NCAA? Will it create an NCAA where the best athletes go to the schools that can afford to pay them that extra $2,000? And how bad is that at the end of the day?

“President Emmert said some conferences will do this and some won’t, and it’s pretty clear to me who will and who won’t,” Boise State’s president, Robert Kustra, said to the New York Times. “There’s already a great divide between larger conferences and the smaller conferences, and this is just going to exacerbate the gap between the haves and have-nots.”

Thomas Ross, the president of the University of North Carolina system, acknowledged Kustra’s fears. “It does create an edge for the big guys,” he said.

Louisiana State’s chancellor, Michael Martin, told The N his university could probably afford the added expense, but he would not be surprised if it was met with resistance on his campus.

“I’ve got 1,400 faculty members who would love to have $2,000 more a year having gone four years without any pay raise,” Martin said.

Martin, who was previously New Mexico State’s president, also said he empathized with the possible plight of a university that did not have the needed resources. He told the Times that adding another $2,000 per athlete per year at New Mexico State could make it “almost impossible to do anything but hang onto the edge.”

Change, especially when it comes to groups like the NCAA, rarely happens overnight. These changes will be met with resistance at first but at the end of the day the bigger schools will pay the price, the smaller schools won’t and the best athletes will go to schools were they’ll receive the biggest bang for their talent. A step forward, yes and no, but a debate that is certain to continue.

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

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Monday, October 24, 2011

Bud Selig – one of a kind

The 2011 World Series will end Wednesday or Thursday in St. Louis. The Fall Classic will end without Major League Baseball Commissioner Bud Selig doing something NFL Commissioner Roger Goodell does at the Super Bowl, NBA Commissioner David Stern does (this year’s is in doubt) at the start of the NBA Finals, and NHL Commissioner Gary Bettman does just before game one of the Stanley Cup Finals – hold a major press conference at their sport’s championship event. Selig holds a press conference and an interactive fan event during the All-Star break; both Stern and Bettman do the same thing and offer a season ending media opportunity during their All-Star events. The media savvy NFL makes Goodell available throughout the NFL season. Bud Selig did one major appearance during the World Series an interview with Bob Costas, in Costas’ capacity as a correspondent with the MLB Network. And unlike how the NFL, NBA and NHL work with the media, MLB did not make a transcript of Selig’s chat with Costas available to the media.

Allan “Bud" Selig, Jr. is the Commissioner of Major League Baseball, a role he has held officially since 1998, and held on an interim basis (as Chairman of the Major League Executive Council) before that, starting in 1992. Selig replaced Fay Vincent.

Selig, a native of Milwaukee, Wisconsin, began his participation in Baseball as a majority shareholder of the Boston Braves in the early 1950s. After the Braves moved to Atlanta in 1965, he sold his stock in the team, and five years later, he purchased the bankrupt Seattle Pilots franchise and moved it to Milwaukee, renaming them the Brewers.

Under Selig's guidance, the Brewers reached the World Series in 1982, but failed to reach the postseason until they made it to the National League Championship series earlier this month. The Cardinals beat the Brewers in six games. After taking over as MLB Commissioner, he transferred ownership of the team to his daughter, Wendy Selig-Prieb, although the team was later sold.

In 2006, Selig announced that he plans to retire from his position at the end of his contract in 2009 and later decided to change that to the end of the 2012 season.

Accomplishments and Criticisms

Bud Selig has presided over a variety of changes in Major League Baseball since 1992. Many of these transitions have been credited for helping to increase the game's popularity, while others have drawn criticism. Among the events occurring under Selig's watch:

• 1994 - Players union strike and cancellation of World Series.
• 1995 - Realignment of divisions, and institution of wild card and divisional playoffs
• 1997 - Implementation of interleague play
• 2000 - Consolidation of the American and National Leagues under a single administrative office.
• 2001 - One-week postponement of games after terror attacks
• 2002 - Meets with Pete Rose regarding Rose's reinstatement efforts; Rose remains banned from the game and is not expected to be reinstated as long as Selig remains MLB commissioner
• 2002 - In Milwaukee, declares All-Star Game a 7-7 tie after 11 innings
• 2002 - MLB and players union reach a collective bargaining agreement, for the first time without a work stoppage
• 2003 - First year in which home-field advantage in the World Series is awarded to the team whose league wins the All-Star Game
• 2005 - Steroids scandal and subsequent changes in drug testing
• 2006 - Japan wins inaugural World Baseball Classic
• 2007 – the release of the Mitchell Report
• 2008 - Introduction of instant replay in the event of a disputed home run call
• By the end of the current collective bargaining agreement (expiring in December), baseball will have gone 16 years without a strike or a lockout, the longest period of labor peace since the inception of the collective bargaining relationship. The two sides are expected to sign a five-year CBA extension in the coming days or weeks.
• Revenues have increased more than five-fold, from $1.2 billion in 1992 to nearly $7 billion in 2010. (expect 2011 revenues to at least match 2010’s $7 billion)

On August 31, 2002, Selig engineered an historic labor agreement with the Major League Baseball Players Association that avoided a work stoppage and provided significant economic concessions to the clubs. Those concessions have brought on greater competitive balance among the clubs. For the first time in 30 years, the clubs and the Players’ Association were able to reach a labor agreement without either a strike or a lockout. The unprecedented era of labor peace continued as the clubs and players reached a new, five-year pact on October 24, 2006. The contract, which terminates in December 2011, is the longest labor contract in baseball history. By its end, baseball will have gone at least 16 years without a strike or lock-out, the longest period of labor peace since the inception of the collective bargaining relationship.

The significant changes to baseball's economic system have helped the sport achieve competitive balance, made evident by many developments: 15 different clubs earned the 16 postseason slots available in the 2006 and 2007 seasons; eight different clubs occupied the eight World Series berths from 2005-2008; and eight different clubs won the nine World Series from 2001-2009. In the most recent decade, Major League Baseball produced eight different World Series Champions, which exceeds the comparable figures of the other major American professional sports during that span, and 14 different Clubs earned the 20 available slots in the World Series in the 10 years, which is also unsurpassed among the results of the other leagues.

On January 13, 2005, Major League Baseball and the Major League Baseball Players’ Association announced an historic agreement to expand its drug-testing program to include random, year-round testing, immediate discipline, and a broader list of banned substances. Although this new program was as strong as any in professional sports, it was further enhanced 10 months later. On November 15, 2005, the parties implemented an even tougher drug-testing program, resulting in a 50-game suspension of first-time offenders, a 100-game suspension for a second offense, and a lifetime ban for a third. The new agreement also banned the use of amphetamines, implementing a testing plan and a disciplinary policy for the use of those substances. MLB has the toughest drug-testing and disciplinary policy in American professional sports, and in July 2010, MLB became the first U.S. professional sports league to conduct blood testing for the detection of Human Growth Hormone (HGH) with the start of testing among Minor League players.

MLB has taken an aggressive, wide-ranging approach on the fronts of awareness, education and research in the fight against performance-enhancing substances. MLB continues to work closely with the Partnership for a Drug-Free America. A founding partner of the Taylor Hooton Foundation in 2005, MLB extended its commitment to the grassroots anti-steroid educational program through 2011. In 2008, MLB became a founding partner of the Partnership for Clean Competition (PCC), a landmark research collaboration designed to further curtail the use of banned and illegal substances in sport. The fellow founding partners were the United States Olympic Committee, the United States Anti-Doping Agency and the National Football League. The PCC combines the resources and expertise of leading sports entities to underwrite cutting-edge anti-doping research. Don Hooton, President of the Taylor Hooton Foundation, said in May 2010, "Major League Baseball has singularly dedicated more resources to supporting anti-steroid educational programs than any other entity in the United States, including the federal government."

The bad news – the cancellation of the 1994 World Series regardless as to how MLB spins the tale will forever be a blight on MLB and on Selig’s legacy. The good news, since 1994 MLB has enjoyed labor peace. And, in fairness, Selig has to receive his share of the credit for that labor peace.

Baseball has yet to fully accept that the sport experienced an era where its biggest stars allegedly (the Mitchell Report named 89 current and former MLB players) used performance enhancement drugs (PED). Sammy Sosa, Mark McGwire, Roger Clemens and Barry Bonds (baseball’s home run king) all had Hall of Fame careers. They might never make it to Cooperstown. MLB needs to accept during a period when PED’s were readily available to athletes, baseball players used PED’s. Sosa, McGwire, Clemens and Bonds are Hall of Famers – baseball needs to ensure that happens.

Baseball, like every sport, is destined to being forced to accept an era where performance-enhancing drugs were a plight on the sport. As long as owners are willing to pay salaries based on performance athletes will attempt to abuse the system. You can test athletes as often as you’d like, but as soon as a chemist discovers another drug that can beat the latest drug test (building the best mouse trap) athletes will abuse the system. The system invites abuse, more systematic of an industry that has become one of the leading economic sectors today. Selig and the Lords of the Diamond have done their part to clean up the game, but they need to accept the era when there were no safeguards (drug testing) and move forward.

In 2009, the Commissioner established the "Special Committee for On-Field Matters" comprised of an accomplished group of baseball veterans - owners, general managers, field managers and others - that examines all on-field related issues. The Committee reviews all aspects of the game on the field, including scheduling, playoff formats, umpiring, pace of game, instant replay and any other issue that can improve the game.

Under Selig's leadership as Executive Council Chairman and Commissioner, new ballparks have opened in Arizona, Atlanta, Cincinnati, Cleveland, Colorado, Detroit, Houston, Milwaukee, Minnesota, New York (for both the Mets and the Yankees), Pittsburgh, Philadelphia, San Diego, San Francisco, Seattle, St. Louis, Texas and Washington, D.C. Major League Baseball returned to the nation's capital in 2005 with the debut of the Washington Nationals, and 2008 ushered in a new era of baseball in Washington with the opening of Nationals Park. A new ballpark in Miami is slated to be ready for the 2012 season to serve as the home of the Marlins.

Economically MLB is generating in excess of $7 billion annually. Selig has to receive the Lion’s share of the credit for that taking place. Selig experienced what it was like to own a small market baseball team. He used what he learned while owning the Milwaukee Brewers to help create revenue sharing and created a luxury tax that allows the New York Yankees to spend whatever they want on their payroll but once they exceed a threshold pay a penalty to smaller market teams so they might be able to remain somewhat competitive.

And what will be the legacy of Bud Selig if, as expected, he retires at the end of the 2012 season? The Bud Selig before the historic 2002 labor agreement was a terrible commissioner. The Bud Selig since MLB and the MLB Players’ Association reached an agreement that saved the 2002 season (and MLB) might be the best commissioner MLB has ever had. Overall, Bud grew wiser as the years went on – even though for reasons only Bud understands he doesn’t like dealing with the media.

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

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Sunday, October 23, 2011

NBA Armageddon 2011 – it’s about to get ugly

National Basketball Association Commissioner David Stern called in sick. Bombastic Cleveland Cavaliers owner Dan Gilbert suggested that NBA players trust he knows what he’s doing.

NBA Players Association President Derek Fisher suggested the NBA owners were lying to the media. Labor negotiations had broken down after it appeared the two sides might reach an agreement.

Just another day in the ongoing NBA labor talks.

“These talks and meetings and the mediation process did not end because of ultimatums made by us. They were clearly made by the league and by the NBA and they tried to pre-condition the rest of our talks trying to get us to agree to a 50/50 split on the BRI and what we clearly said is, "That is not a place we are willing to go right now, if ever." However, we are ready to continue some talk on the system and the issues and if we can reach some agreements there, it could have some impact on what the final number could be, but they said it's a take-it-or-leave-it situation." Fisher told NBA TV's David Aldridge, after Aldridge asked Fisher about the suggestion said that the NBA had lied to the media as to why the latest round of negotiations had broken down.

“I think from the NBA standpoint and from our labor relations committee, we felt we made several significant compromises, proposed compromises, in an attempt to get a deal done. We understand the ramifications of where we are. We're saddened on behalf of the game. We recognize that we're disappointing millions of fans, not just in the United States but around the world. We're having a huge impact on thousands, if not hundreds of thousands, of jobs in this country related to NBA basketball. So I just want to assure everyone that we don't take anything we do lightly at all, but we have certain core beliefs that I'm going to let Peter address, which we think are absolutely necessary to achieve before we continue to play NBA basketball, and ultimately we were unable to bridge the gap that separates the two parties, and at this time we have no further discussions scheduled with the union.” NBA Deputy Commissioner Adam Silver offered in place of David Stern who missed Thursday’s session after coming down with a very bad case of the flu.

San Antonio Spurs owner Peter Holt, who joined Silver in addressing the media, offered this on why things broke down, “We've been talking for the last couple years; particularly obviously the competitive issues are as big an issue for us as owners of these teams as the economic issues are, and particularly for the small markets. And so on both sides of those issues, we went back and forth and have been going back and forth for two years, and we're still pretty far apart.

“And this is extremely important for all elements involved. I'm talking about the players, the owners, and particularly our fans, and we want to get to the point where all 30 markets have an opportunity, nothing guaranteed, but an opportunity to be competitive and an opportunity to make a few bucks. We all understand that down in San Antonio I'm not going to make the kind of money that New York or LA is going to make. But we're trying to get it where we have a system where all 30 teams have those opportunities.

“And so we're just very far apart, and it was a disappointing last 30 hours or 40 hours or whatever amount of time. We've met over 45 times in the last two, two and a half years, and we can't seem to quite bridge the gap, and so it was very disappointing for us, and with that we're sitting here with no meetings scheduled.”

With talks at a standstill an all-star roster of players finalized plans for a six game international tour expected to start October 30 in Puerto Rico. There will also be two games in London, one in Macau and two in Australia.

An ESPN report suggested the tour, being organized by Atlanta businessman Cal Darden, would pay players salaries ranging from six figures up to a million dollars.

Players expected to participate include NBA MVP Derrick Rose, Kobe Bryant, LeBron James and Dwyane Wade.

The owners and the players met for more than 24 hours with federal mediator George Cohen before talks fell apart.

“The issue that led to us breaking off Thursday evening was an issue we've struggled with since the beginning, and that is the split of revenue between the union and the owners, and I know there was a lot of back and forth in the last two weeks over where we stood, and as you heard from David Stern, our last former proposal was at 47, and their last proposal was at 53 percent. We did make clear to them yesterday that we were willing to go to 50 percent in an effort to compromise and that despite the fact that we already suffered enormous losses that we were trying to look over the impact over a long term deal and that we could see our way at a 50 percent deal to growing in essence out of the economic issues we have now, and the response back from the union today was they made a slight move from 53 to 52.5 percent of BRI, and that's where we broke off. They made it clear that if our position was that we were unwilling to move beyond 50 percent, there was nothing else to talk about, and that's when the discussions broke off Thursday.” Silver said Thursday evening.

For his part Fisher made it clear the NBAPA wants to continue negotiations.

“We would be talking about everything. Myself, our executive committee and our staff has spent the past two plus years and these past few weeks here. Personally, that was time away from my kids and my family. This is serious.

“There are a lot of livelihoods at stake that far outreach NBA players and that's been a major concern of ours this entire time. That's why we continue to make the concessions that we have made; it's more about them then us. But that's not a place the NBA wants to go right now and I think we have said all along that we felt there was a predestined plan to lock us out as long as it takes to get us to where they wanted us to go. Right now as players, we are not willing to go to that place to try and continue these negotiations. But, we are willing to continue to talk. We are here and we will be here as long as it takes to get a deal done."

Cohen didn’t have a great deal to offer but did say "no useful purpose would be served by requesting the parties to continue the mediation process at this time."

What can NBA fans expect in the next few days?

• The NBA will cancel games through December 18 (if not December 25) in the coming days.

• The NBA All-Star tour will be announced in the next 48 hours. The tour will be a disaster; none of the games will be played in NBA cities (NBA arenas are controlled by NBA owners and teams). All-Star games aren’t what basketball fans are looking for (anywhere in the world). The players (hopefully) will get paid. Promoter Cal Darden will lose millions of dollars.

• Talks between the two sides will resume, but not before November 1 (at least any meaningful negotiations). The players are very angry at the owners right now; it wouldn’t make sense for the two sides to meet until both sides have had a chance to calm down.

• There won’t be much movement from the players until after November 1.

• The owners appear to have the resolve to wait out the players. Much was made of Portland Trailblazers owner Paul Allen attending the meetings. Allen is one of the world’s richest people. NBA owners are billionaires. If the NBA season isn’t played NBA owners will be fine. The same isn’t true for NBA players. NBA players can’t afford to miss an entire season.

Media reports suggest the two sides aren’t that far apart. At Thursday’s NBA press conference Silver was asked if it makes sense for the NBA to face losses in excess of a billion if the players are ready to accept a Basketball Related Income split of 52.5/47.5% in favor of the players. The previous CBA split was 57/43 in favor of the players.

“First of all, on the math, since we're proposing a ten year deal, that's a billion dollars, not $100 million to begin with. And number two, I guess you can always argue to one side, you moved, so why don't you move again; you moved, so why don't you move one more time. Again, our perspective is that we had made a move, a formal proposal back a week and a half or so to 47 percent. We thought that move was significant in terms of the economics we need to have 30 teams able to be in a position with revenue sharing to potentially be profitable. We then felt that and again, with facilitation from George Cohen that a move to formally split the difference because now we've proposed it and we're not falling back on concepts or hallway discussions or whatever else has been mentioned over the last two weeks, we've formally proposed to them that we would be willing to split the difference between 47 and 53 and move to 50 percent. I mean, there was some nuance discussed with them, as well, about a concept and a band, and that band concept is something we've been discussing with them around several different numbers for many months now.

“But the response we got back from them was that they were at 52 and a half in fairness to the union, they didn't say that there was no additional movement that they would make. They indicated that there was still an ongoing negotiation, but they wanted a commitment from us that we were open to continuing to move up in terms of the percentage of revenue beyond 50 percent, and what Peter and our other owners made clear to the players was that that was as far as we were willing to go, 50 percent of BRI.”

"It's extremely difficult because of the impact they have on each other. And for us as players, unless we have a feel for what type of system that will exist and what the revenue split will be, it's very difficult to say, "Ok we will agree with this number." Which is why we floated and consistently discussed a more balanced approach between where the NBA is in terns of 50, where we are at 53 and based on the success or lack of success on our gain, to determine which percentages are distributed to the players as opposed to going to the fixed hard place that we obviously can't agree on right now." Fisher reacted.

Stay tuned – this dark ride has only begun.

For Sports Business News this is Howard Bloom

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Friday, October 21, 2011

Nolan Ryan – ready to win the World Series

The first two games of the World Series are in the books, regardless of whether the St. Louis Cardinals or the Texas Rangers win the 2011 World Series, Rangers owner Nolan Ryan will forever be the symbol of the Fall Classic. Seeing Ryan sitting in the first row just to the left of the Rangers dugout will remain etched in the memories of not only baseball fans but sports fans everywhere. Ryan’s Rangers are heading back to Texas with the of best of seven series tied at 1-1, with games three, four and five scheduled for the Rangers Ballpark in Arlington. Ryan is telling everyone his Rangers have plenty of game left before the 2011World Series is decided, but what else would anyone expect from the Baseball Hall of Fame member.

The transition from being an athlete to sports executive isn’t easy. As successful as Magic Johnson has been as a businessman he hasn’t been a very good sports executive. Wayne Gretzky was part of the Phoenix Coyotes ownership group, Gretzky and the Coyotes didn’t work out for the Great One or for the Coyotes. It remains to be seen if Michael Jordan succeeds with the Charlotte Bobcats. Mario Lemieux has proved to be an exception to the rule. As the owner of the NHL’s Pittsburgh Penguins Lemieux played a key role in the Penguins 2009 Stanley Cup.

Clearly Nolan Ryan is a cut above most professional athletes when it comes to making that transition from the playing field to the boardroom, at least when that boardroom is linked to the playing field.

Ryan serves as CEO and President of the Texas Rangers. He is part of the team's ownership group, Rangers Baseball Express, which completed its purchase of the franchise on August 12, 2010. He oversees all baseball and business operations for the franchise after adding the title of CEO on March 11, 2011.

Baseball's all-time strikeout leader was named as the tenth President in Texas Rangers team history on February 6, 2008 and has had a dramatic impact on the franchise in his three years on the job. Off the field, he has instilled a renewed commitment to providing the best fan experience and making the Rangers a strong community partner. The Rangers had the highest per-game attendance increase in the majors from 2008 to 2009 and the third largest increase from 2009 to 2010.

His influence on baseball operations helped the Rangers advance to postseason in 2010 for the first time since 1999. He is the first National Baseball Hall of Fame player to advance to postseason play in the role as team President or General Manager since Stan Musial served as General Manager of the 1967 N.L. Champion St. Louis Cardinals. Ryan is the first individual to serve as President of a World Series participant and play in a World Series (1969 with the New York Mets) since Al Rosen, who played on World Series teams with the Cleveland Indians in 1948 and 1954 and was the President-General Manager of the N.L. Champion San Francisco Giants in 1989.

Ryan's pedigree as one of the greatest pitchers in major league history has also served as a positive influence as the Rangers develop and refine their pitching philosophies, which incorporate Nolan's trademarks of conditioning, hard work, good mechanics, focus, and mental toughness. The Ranger’s team-earned run average decreased from 5.37 in 2008 to 4.38 in 2009 to 3.93 in 2010, the latter figure being the team's best since 1990.

Ryan is just the third Hall of Fame player to serve as the President of a Major League Baseball franchise, joining John Montgomery Ward (1912) and Christy Mathewson (1923 and 1925), both with the Boston Braves, and the first to work for a World Series participant.

The 64-year-old Ryan was previously affiliated with the Rangers for nearly 15 years as a player and Special Assistant. Initially signing with Texas as a free agent on December 7, 1988, the right-hander spent five memorable years in a Rangers uniform before retiring after the 1993 season. He then served as Special Assistant to the President under his personal services contract, assisting in the club's baseball, marketing, and public relations activities until January 2004. He is an inaugural member of the Texas Rangers Baseball Hall of Fame (2003) and is the only player to have his number retired by the club (#34).

Elected to the National Baseball Hall of Fame in his first year of eligibility, Ryan was inducted on July 25, 1999 wearing a Rangers cap on his Hall of Fame plaque. Nolan was elected to the Hall of Fame on 98.79% of the eligible ballots, a figure which remains the second highest in history. He is the only player to ever have his uniform number retired by three different teams with the Angels (#30) and Astros (#34) joining the Rangers.

After leaving the Rangers, Ryan spent four years as Special Assistant to the General Manager for the Houston Astros after joining the organization in February 2004. In that capacity, he assisted the baseball operations staff in a variety of areas on the major and minor league level.

After his retirement as an active player, Ryan was able to pursue a number of business ventures. He is a Principal Owner of Ryan-Sanders Baseball, which owns and operates the Round Rock Express of the Pacific Coast League, a new Texas Rangers affiliate in 2011, and the Corpus Christi Hooks of the Texas League, a Houston Astros farm club. The two franchises have been among the most successful in the minor leagues over the last several years.

For a number of years Nolan owned and served as Chairman of the Board of The Express Bank in Alvin and The Express Bank of Texas in Round Rock, and he currently serves on the Board of R Bank in Round Rock. He has several working cattle ranches in South Texas.

In December 1999, Nolan became a limited partner in Beefmaster Cattlemen, LP, a branded beef company that markets Nolan Ryan Tender Aged Beef. He is past President of the Beefmaster Breeders United, a national cattle organization. His other civic involvements include serving on the Boards of Directors of the Texas Rangers Baseball Foundation, Nolan Ryan Foundation, and Justin Cowboy Crisis Fund. He served on the Board of Trustees of the Texas and Southwestern Cattle Raisers Foundation and is a member of the Texas Heart Institute's National Advisory Council.

The Nolan Ryan Foundation built the Nolan Ryan Center for Continuing Education at Alvin Community College, a facility which opened in 1996. He also sponsors the Nolan Ryan Scholarship Fund at Alvin Community College.

Ryan was appointed by then Governor George W. Bush to a six-year term as a commissioner with the Texas Parks and Wildlife Commission on Feb. 24, 1995. He served as Vice Chairman of the Commission from June 1, 1995-Aug 28, 1997.

On October 6 Wall Street Journal suggested that Ryan may be the perfect owner and that his hands are on nearly every facet of the Texas Rangers. It was Ryan, the Journal suggested, who made it clear the team was to forget about the pitch counts for the teams’ younger pitchers. It was Ryan who played a key role in the hiring of Hitting Coach Mike Maddux. Not to mention that after a pitcher is removed from the game, one of the games greatest often leaves his seat and takes the time to chat with the pitcher. A Hall of Famer offering his insight to a young pitcher – that’s what Nolan Ryan in part brings to the Rangers.

"For some of the young pitchers it might be an important moment where you can get some information to them that can help in their development," Ryan told the WSJ.

Ryan and Chuck Greenberg won the Rangers in an auction on August 5, 2010, winning the control of the Rangers over Dallas Mavericks owner Mark Cuban. The bidding resulted in a final sale price of $593 million, $385 million cash and $208 million in assumed liabilities.

Rangers Baseball Express, LLC, had previously signed a definitive agreement to purchase the Texas Rangers team from Tom Hicks and Hicks Sports Group on January 23, 2010. The sale fell apart resulting in the August 5, 2010 auction.

A series of business issues between Ryan and Greenberg saw Greenberg resign as CEO and sell his shares in the Rangers in early March. Ryan who is in the first of a five-year contract as the Rangers CEO and President met with Bob Simpson (Ryan’s co-CEO) and the Rangers’ moneyman. Simpson agreed to increase the Rangers payroll by 70% to around $100 million.

The Rangers are the first team since the 1992 Atlanta Braves to make it back to the World Series after making it to and losing the World Series the year before. The Rangers are hoping history doesn’t repeat itself. The Braves lost the 1991 World Series to the Minnesota Twins and the 1992 Series to the Toronto Blue Jays.

Ryan pushed Greenberg out of the Rangers for a lot of reasons – the most important was that he believed he was acting in the best interests of his team. The Rangers payroll increased to the $100 million range and with a new $1.5 billion TV contract does Ryan believe he’ll have even more money for the teams’ payroll?

“It's hard to say because it's hard to predict what your challenges are going to be; 2015 is the first year of that (deal). We don't look at it from that perspective. We look at it from the perspective of wanting to be competitive each year coming out of spring training.” Ryan told the USA Today.

There has been a great deal of speculation that Ryan and the Rangers are going to welcome the Houston Astros to the American League’s Western Division next year when MLB realigns.

“If that happens, it puts another team in the Western Division that's in our time zone, and I think that's important. We're somewhat disadvantaged being the only team in the West that's in the Central time zone. We start so many 9 o'clock games out on the West Coast, and I think it hurts our viewing audience because of the late start.

“If you had the Astros in there, it would give you a few more games in your time zone, and when they get competitive again, it would be a natural rivalry, and it would be good for baseball in Texas.”

Back to back American League pennants, a $1.5 billion TV contract in the not too distant future, the soft spoken Ryan told the USA Today, he’s having a good time working in baseball long after his career ended.

“Some days I really enjoy it, like, and some days it's not nearly as fun. But I like the challenge of it, and I like being associated with a major league ballclub. The pluses certainly outweigh the minuses.”

The Houston Astros signed Ryan to baseball’s first million dollars a year contract in 1980. Ryan retired after the 1993 season as a member of the Texas Rangers, long before baseball players and in particular pitchers were being paid tens of millions of dollars to play baseball. There have been reports that if New York Yankees ace "CC" Sabathia opts out of his Yankees contract he might sign with the Rangers. If that is going to take place Nolan Ryan, baseball strikeout king and the man who pitched seven no hitters, will be front and center paying a baseball pitcher more money then Ryan made in his entire career to pitch for the team he is the President and CEO of.

For Sports Business News this is Howard Bloom Sources cited in this Insider Report:

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Thursday, October 20, 2011

MLB Labor Armageddon – not in the cards in 2011

The National Basketball Association is in the midst of a labor dispute that has resulted in the cancellation of the first two weeks of the NBA’s 2011-12 regular season and in the next few days the NBA is expected to cancel most the league’s scheduled games through Christmas after talks broke down Thursday evening.

The National Hockey League lost the entire 2004-05 season to a labor lockout.

The National Football League didn’t miss any games on their 2011 schedule, but the ownership forced a lockout that ended shortly before the regularly scheduled start of the season.

Major League Baseball, whose strike shortened 1994 season resulted in the cancellation of the World Series, is set to extend its current collective bargaining agreement in the next few days.

"Both sides understand where we are in the contract. There is no lack of urgency," current MLBPA executive director Michael Weiner said.

The St. Louis Post Dispatch reported that both sides are meeting daily in hopes of announcing an extension to their current labor agreement. The announcement could happen during the World Series, as it did in 2006.

"Both sides have been working hard — and very professionally — and I'm sure both sides will continue to do so," Weiner said, adding that a lack of public comment benefits the process.

Speaking to the media during the National League Championship Series, MLB commissioner Bud Selig agreed with Weiner’s views without putting a timetable on when their new five-year agreement might be announced.

"Just keep working, make progress, continue to make progress, and I think things will work out well," the commissioner said.

"The sport, I've often said, was stuck in neutral for 25 years. And that's one of the reasons. It was brutal. It was really brutal. Every two or three years we went back to this," Selig said at the same time recognizing baseball’s troubled labor history. "The fans got tired of all that, got tired of hearing about it. And I don't blame them. So, 16 years of labor peace has really, really helped us."

"Both sides are very constructive and have work to do and understand that trying this in the media is not a good thing," the commissioner said. "That was the problem in the '90s. Every day you spent the first half of the day either mad at some reporter for something he wrote or who leaked it to who."

"We're past all that now," he added.

Baseball and labor have had a profound impact on the evolution of Major League Baseball.

Year Stoppage Days Games Key Issues
1972 Strike 14 86 player pensions, binding arbitration
Work stoppage lasted from April 1 - 12
Result: Players union and owners reach accord on a new collective bargaining agreement. Owners eventually agreed to add an additional $500,000 to the pension fund. Players forfeit payment for games missed during strike, but gain the right to salary arbitration.
1973 Lockout 12 0 salary arbitration
Work stoppage lasted from Feb. 8 - 25
Result: Camps open late but season starts on time with a new three-year collective bargaining agreement. Owners raise their contribution to the pension plan and increase minimum salaries from $13,500 to $15,000 in the first year and to $16,500 in the third year.
1976 Lockout 17 0 free agency, re-entry draft
Work stoppage lasted from March 1 - 17
Result: Federal judge John Oliver issued order making pitchers Andy Messersmith and Dave McNally free agents, upholding a ruling made the previous year by baseball arbitrator Peter Seitz. Commissioner Bowie Kuhn orders camps opened and a new Basic Agreement is negotiated.
1980 Strike 8 0 free agent compensation
Work stoppage lasted from April 1 - 8
Result: Final eight days of spring training lost, but season starts on time and a four-year agreement is reached, with a clause allowing the free agency issue to be re-opened in 1981.
1981 Strike 50 712 free agent compensation
Work stoppage lasted from June 12 - July 31
Result: Players' strike cancels 712 games. Owners lose right to have clubs directly compensated for the loss of free agents. Owners win right to retain players for six years and to be compensated with other players, as well as amateurs from the draft.
1985 Strike 2 0 salary arbitration
Work stoppage lasted from Aug. 6 - 7
Result: Owners agree to contribute $33 million for the next three years to the pension fund and $39 million in 1989. The players' minimum salary increases from $40,000 to $60,000.
1990 Lockout 32 0 salary arbitration, salary cap
Work stoppage lasted from Feb. 15 - March 18
Result: Camps open late. Owners raise their annual pension fund contribution to $55 million. Salary arbitration eligibility agreed to for 17 percent of the players with between two and three years of experience. The minimum salary increases to $100,000.
1994-95 Strike 232 938 salary cap, revenue sharing
Work stoppage lasted from Aug. 12 - March 31
Result: Postseason is cancelled. Judge's ruling ending labor dispute orders that 1995 and 1996 seasons must be played under previously existing labor conditions. New agreement is signed in March of '97 with implementation of a luxury tax on big-market owners for overspending.

The MLBPA, time and again, has beaten management. Consider what happened after the owners lost to the players after 1985’s brief player strike, and what took place after the two sides agreed to a new collective bargaining agreement.

Despite industry growth, owners repeatedly tried to find ways to thwart free agency rights won by the players. None of those efforts were more cynical than when owners collectively decided not to pursue free agents in the player markets following the 1985, ’86 and ’87 seasons.

Only four of 35 free agents signed with new teams following the 1985 season. Great players like Kirk Gibson, Tommy John and Phil Neikro were not offered contracts.

The following season owners acted in concert again to restrain the free agent market. Players like Tim Raines, Bob Boone and Jack Morris were unable to get offers from other clubs.

The MLBPA filed grievances alleging ownership collusion in early 1986 and again in February 1987. In September 1987, arbitrator Tom Roberts ruled the owners had violated the Basic Agreement in the first collusion case and later, in January 1988, determined damages of $10.5 million.

In October 1989, arbitrator George Nicolau ruled that owners had again violated the Basic Agreement in the second collusion case, awarding damages of $38 million.

In January 1988, the MLBPA filed a third collusion grievance after an off-season players market for which the owners created an “information bank’ to share information and restrain salaries.

The players prevailed in that grievance as well and in November of 1990 they reached a final settlement to all three collusion cases in which $280 million in damages was awarded to players.

Baseball, the only major sport without a salary cap, finally has a revenue sharing plan that appears to be working. The success of small and middle market teams like the Tampa Bay Rays, Texas Rangers and the 2010 World Series Champion San Francisco Giants shows that having the right people in your front office is just as important as how much money a team has to spend on their payroll.

"The MLBPA's position is that revenue sharing should not be used to pay down club debt," union executive director Michael Weiner told Baseball America. "We have consistently expressed to the commissioner's office that using revenue-sharing proceeds to pay down debt does not improve a team's performance on the field."

Baseball had grown concerned franchises that benefited from revenue sharing were taking the money and using that to help cover their financial losses. There are no safeguards in place to prevent that from happening.

"Overall, the Commissioner's view is that revenue-sharing recipients have made appropriate use of revenue-sharing proceeds over a very long period," Rob Manfred, MLB's executive vice president of labor relations said in a Baseball America report.

"Clubs at low-revenue spectrum have always gone through cycles when they develop with less expensive young talent, in a way like Tampa Bay did, that moves them along to field a very competitive team. When you're at that low-revenue period, you're still going to be getting your revenue-sharing. Clubs can then position themselves for a much higher player payroll when that roster matures, and one of the ways you may decide to position yourself is reduce your debt load so that you don't have to pay debt when your roster then matures."

At the same time, revenue sharing remains a thorn in the side of those who are forced to pay those who need.

“Over a billion dollars has been paid to seven chronically uncompetitive teams,” Red Sox Owner John Henry said. “Five of whom have had baseball's highest operating profits.”

So How did revenue-sharing work during the current CBA?

All 30 teams pay 31 percent of their local revenues into a pot each season. This pot is then evenly distributed among the 30 teams. A team in New York or Chicago will pay more into this pot than a team in Tampa Bay or Kansas City.

Major League Baseball distributes a portion of their Central Fund, comprised from sources like the television contract with the various networks, among the 30 teams with those with the lowest revenues getting the bulk.

There is also a 'luxury tax' where a team must pay a percentage on the portion of their payroll that exceeds a pre-set limit. The Yankees usually have the highest luxury tax bill.
The system isn’t perfect but it seems to be working.

Why hasn’t baseball had a major dispute since 1994? In part because MLB owners realized they weren’t going to beat the players. The resolve of the MLBPA is as strong today as it was when Marvin Miller took over the MLB Players Association in 1966.

Miller instilled in the players a number of principles, namely to never give back anything you bargained for in good faith.

Nine years ago in August 2002 the MLBPA nearly went on strike. Then union head Donald Fehr and Commissioner Bud Selig reached an understanding that was partially based on what they believed what was in the best interests of the two groups they represented.

More importantly they knew after the 1994 World Series had been cancelled the two sides couldn’t risk damaging the game again. A lesson learned in 1994 paid off in 2002, 2006 and is about to pay dividends again in 2011.

For Sports Business News this is Howard Bloom

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Wednesday, October 19, 2011

Is Bryant Gumbel a racist (redux)

On August 23, 2006 Sports Business News asked a question: “Is Bryant Gumbel a racist” Today we ask the same question. Is the host of HBO’s Real Sports a racist? And more importantly should HBO Sports hold Bryant Gumbel accountable for this actions. They didn’t in 2006 and unless Hell Freezes over they’re likely not going to fire Gumbel this time.

The latest episode in Gumbel’s interesting choice of words took place Tuesday night on HBO’s award winning program Real Sports. Gumbel who has won an Emmy or two in his time directed venomous comments at NBA commissioner David Stern suggesting that Stern is "some kind of modern plantation overseer" and said the commissioner treats the players like they were "his boys" and "hired hands". The images of a plantation and “his boys” evoke a dark era in American history, linked with salivary when America’s African American population were treated as property, as slaves. A majority of NBA players are African-American. On every possible level Bryant Gumbel is wrong for evoking the image of African-American’s being treated as slaves and linking that to David Stern, regardless of how Gumbel feels about the NBA lockout.

"Stern's version of what has been going on behind closed doors has of course been disputed, but his efforts were typical of a commissioner who has always seemed eager to be viewed as some kind of modern plantation overseer, treating NBA men as if they were his boys. It's part of Stern's M.O., like his past self-serving edicts on dress code and the questioning of officials. His moves were intended to do little more than show how he's the one keeping the hired hands in their place." Gumbel announced as Tuesday nights Real Sports came to an end.

This isn’t the first time and given his track record won’t be the last time Gumbel plays the racist card.

Twice in 2006, Gumbel made would could be considered racially insensitive comments. One directed at Caucasian’s (commonly referred to as White Americans, as defined by the American government and Census Bureau), the other at the leading African-American leader associated with the National Football League at the time.

Comments Gumbel made in August 2006 on Real Sports at the late Gene Upshaw then the head of the National Football League Players Association Gene Upshaw were troublesome to say the least. Then National Football League commissioner Paul Tagliabue in the midst of his retirement on the eve of the 2006 NFL season took exceptions to comments Gumbel directed at the late Gene Upshaw. Both Gumbel and Upshaw are African Americans.

"Before he cleans out his office," Gumbel said on the August 15, 2006 edition of Real Sports. "Have Paul Tagliabue show you where he keeps Gene Upshaw's leash. By making the docile head of the players union his personal pet, your predecessor has kept the peace without giving players the kind of guarantees other pros take for granted. Try to make sure no one competent ever replaces Upshaw on your watch."

Bryant Gumbel’s remarks bordered on racism today as they did five years ago. For anyone, let alone for an African American to suggest another African American was being led around on a dog leash is hurtful and disrespectful. One of the terrible lasting images during a terrible period in American history is of white people leading around their black slaves using the leash Gumbel refers to.

At the time Gumbel was handling the play-by-play for the NFL Networks Thursday night late season games. The NFL Network chose to not renew Gumbel’s contract (after the 2006 season had been completed), but at the time continued their relationship with Gumbel, something Tagliabue took exception too.

"Having looked at how other people have had buyer's remorse when they took positions, I guess they suggest to me that maybe he's having buyer's remorse and they call into question his desire to do the job and to do it in a way that we in the NFL would expect it to be done," Tagliabue said at the time.

Troy Vincent, then the NFLPA president and Buffalo Bills safety, called Gumbel's comments "inappropriate" and "detrimental."

"He's entitled to speak his mind ... and he felt that was his forum to do so," Vincent told The Associated Press in 2006. "But I just thought the timing of things, there's too many good things going on — we just announced a new commissioner — in our sport to have these kind of blemishes."

The two incidents on HBO Real Sports tell only part of Bryant Gumbel’s racially insensitive past. Shortly before the 2006 Turin Games, Gumbel offered an interested opinion on why he didn’t particularly like the Winter Olympics. Once again Gumbel choose HBO’s Real Sports as his pulpit.

"Finally, tonight, the Winter Games. Count me among those who don’t like them and won’t watch them ... Because they’re so trying, maybe over the next three weeks we should all try too. Like, try not to be incredulous when someone attempts to link these games to those of the ancient Greeks who never heard of skating or skiing. So try not to laugh when someone says these are the world’s greatest athletes, despite a paucity of blacks that makes the Winter Games look like a GOP convention. Try not to point out that something’s not really a sport if a pseudo-athlete waits in what’s called a kiss-and-cry area, while some panel of subjective judges decides who won ... So if only to hasten the arrival of the day they’re done, when we can move on to March Madness — for God’s sake, let the games begin."

Others have been held accountable for comments that were deemed racially insensitive, more then remarks that can be called “politically incorrect”, but not the HBO broadcaster.

Al Campanis, a teammate of Jackie Robinson when Jackie broke baseball’s color line in 1946 with the Montreal Royals, then the Brooklyn Dodgers Triple-A affiliate crossed over that line. 41 years later speaking on ABC’s newsmagazine program Nightline, on a show (April 15, 1987) dedicated to celebrating Robinson joining the Brooklyn Dodgers, Campanis watched his life fall apart after making what were called racially insensitive remarks.

Campanis, who had played alongside Robinson and was known for being close to him, was being interviewed about the subject, and Nightline anchorman Ted Koppel had just asked him why, at the time, there had been few black managers and no black general managers in Major League Baseball.

Campanis' reply was that blacks "may not have some of the necessities to be, let's say, a field manager, or, perhaps, a general manager" for these positions; elsewhere in the interview, he said that blacks are often poor swimmers "because they don't have the buoyancy." He resigned as Dodgers general manager two days later. A lifelong commitment to baseball shattered overnight.

In an interview the following year, Campanis attempted to clarify that he was referring to the lack of African-Americans with experience in these areas, rather than their innate abilities; he also said that he was "wiped out" when the interview took place, and therefore not entirely himself. Many other figures in baseball, such as fellow Dodgers manager Tom Lasorda and former Dodgers player Don Newcombe, spoke out in Campanis' defense.

Less then a year later on Jan. 15, 1988, Jimmy “The Greek” Snyder had his own career ending experience. Dan Rather then the host of “CBS Evening News” aired a tape of comments Snyder had made earlier that day at Duke Zeibert's restaurant in Washington, D.C. Ironically the film was shot by WRC-TV, the Washington affiliate of network rival NBC, and WRC reporter Ed Hotaling acknowledged that The Greek had said he was speaking off the record during the interview, Rather decided Snyder's remarks deserved national coverage, in Dan Rather’s world this was an important news story.

"The black is the better athlete," The Greek said. "And he practices to be the better athlete, and he's bred to be the better athlete because this goes way back to the slave period. The slave owner would breed this big black with this big black woman so he could have a big black kid. That's where it all started."

After the segment ran, Rather did allow Snyder to apologize for his terribly insensitive comments.

"I'm truly sorry for my remarks earlier today and I offer a full, heartfelt apology to all I may have offended," Rather quoted Snyder as saying.

That didn’t matter to CBS. They fired the long-time member of CBS’ NFL pre game show the next day. Snyder’s segment at the end of each Sunday’s pre game show offered The Greek’s (Snyder was Jewish) handicapping and highlighting several games each week. It was the most popular segment on each week’s show; making CBS pre game show the highest rated NFL pre game show at the time. The Greek wasn’t just good for business, he was the business.

What was strange then as it is now about the NFL’s not firing Gumbel after he made his comments in August 2006, was the NFL’s history of how they dealt with an image created by the media they didn’t appreciate.

The National Football League was very upset with ESPN after the network produced the series “Playmakers” Based on a fictional NFL team, the show portrayed NFL players as womanizers, drug users and for the most part men without any shred of common public decency. The series debuted on August 26, 2003. ESPN and ABC (both with Disney as their respective parent companies) had two eight-year contracts worth nearly $9.5 billion with the NFL to show games on ABC and the sports network at the time (forget about how big the contract is five years later).

Once the 11-week series ended (why HBO has recreated the series remains a mystery (Tagliabue then the NFL commissioner) stepped into the debate, contacting the Disney president suggesting in no uncertain terms the NFL wasn’t happy with the show’s content. ESPN’s first decision was to stop running “Playmakers” promotional spots during ESPN’s broadcasts of Sunday night NFL games in 2003 (before they bought the rights to Monday Night Football). In early February 2004 ESPN made the only decision they could relating to the future of Playmakers – canceling the show after one season.

''We proved that we could succeed in doing a dramatic series,'' Mark Shapiro, then the executive vice president of ESPN, said after ESPN pulled the plug. ''Mission accomplished. It played to men and brought in women. We showed we don't have to be as reliant on games as we have in the past.''

But, Shapiro added: ''It's our opinion that we're not in the business of antagonizing our partner, even though we've done it, and continued to carry it over the NFL's objections. To bring it back would be rubbing it in our partner's face.''

The program was a ratings success for ESPN, averaging a 1.9 Nielsen rating, or 1.62 million households and groundbreaking programming for ESPN’s entertainment division, an important step in the evolution of ESPN as a business.

John Eisendrath, the creator and executive producer of the series, made it clear to the New York Times when ESPN pulled the plug on the show he believed that the cancellation had everything to do with the NFL’s views on how the league was portrayed in the series.

''The NFL is entitled to its opinion,'' Eisendrath said back in 2004, ''but I think they're wrong, and I think they're bullies. They're a monopoly. I think it fell to ESPN to have the strength to stand up to the NFL's opinion. It's offensive to me that they would bully ESPN that way, so I'm most offended by the NFL's attitude, which is blatantly hypocritical considering some of the things that go on in the league, which far exceed anything I wrote about.''

Gumbel didn’t care in 2006 and he likely doesn’t care today what anyone thinks about his comments, something he made clear Tuesday night: "Some will of course cringe at that characterization but Stern's disdain for the players is as palpable and pathetic as his motives are transparent," Gumbel said.

Let’s clear up a few issues, the current negotiations between the NBA and the NBA Players Association has nothing whatsoever to do with slavery or David Stern not respecting anyone. Anyone who has ever met or spoken with David Stern (an honor this writer has had several times) knows the NBA commissioner is asking in what he believes are the best interests of the 30 NBA teams, the cities they play in and the people who own those 30 teams. Those interests may not be the same as the men (a majority who are African American) but they are racist nor should David Stern’s actions be considered to be racist. Bryant Gumbel has every right to be upset about the NBA lockout and to blame David Stern if he so chooses, but its his words that need to questioned.

The bigger question – is Bryant Gumbel a racist? Given his record of comments that at the least border on being racist it’s a very good question to ask and one that needs to be debated. Bryant Gumel is a very smart man, one whose opinion is well worth the questions that are being asked in this column and someone for the most part worth listening too.

There is a fine line in the sand between asking raising legitimate issues, offering your opinion and making racist comments. If it had happened once; Bryant Gumbel’s comments may be considered provocative. If it had happened twice maybe Bryant Gumbel’s comments would be considered insensitive. But this is the third time Bryant Gumbel has made comments that can be considered racist and if this were a baseball game – three strikes and Bryant Gumbel is out. Only Bryant Gumbel knows if Bryant Gumbel is a racist but its time HBO Sports held Bryant Gumbel accountable for his actions.

For Sports Business News this is Howard Bloom

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