Friday, March 30, 2012

John Lackey – his life can only go forward

The Boston Red Sox 2011 season ended in complete turmoil and disarray.  September was a calamity of errors for the Red Sox. After beating the Texas Rangers on September 3, the Boston Red Sox were 84-54. Although half a game behind the Yankees in the American League East, the Red Sox had a nine-game lead over the Tampa Bay Rays for the American League wild card playoff spot and roughly a 99.6 percent chance of making the playoffs. The Red Sox went 5-18 over their last 23 games, one of the more remarkable collapses in sports history, and on the last day of the season, failed to make the playoffs.
John Lackey’s 2011 season was emblematic of what went wrong with the 2011 Red Sox. In 28 starts, Lackey finished the season 12–12 with a 6.41 ERA and 1.62 WHIP, both career worsts. The 114 earned runs he allowed were the most in the American League, and his ERA was the highest in Red Sox history for a starter with at least 150 innings pitched. In the end of the 2011 season, Lackey and two other starting pitchers (allegedly Josh Beckett and Jon Lester) were in the center of a controversy that the three (and sometimes more) drank alcohol during games.
Lackey will head into the third year of a five-year, $82.5 million contract with the Red Sox. Lackey will not pitch for the Red Sox in 2012, following Tommy John’s surgery during the off-season. He also finalized his divorce from his wife – a divorce that became very public for Lackey and the Red Sox.
Lackey’s last 2011 start took place on Sunday, September 25, the last win the Red Sox would record for the 2011 season, a game played against the Yankees in New York.
The story, however, became what happened immediately following Sunday night’s Red Sox game. It may have shown more about the man John Lackey is, and it may provide some of the answers as to why Lackey became one of the reasons the 2011 season imploded in September.
A little more than two minutes into his post-game press conference, Lackey exploded on the media.
It all started with a harmless question from The Boston Herald’s Mike Silverman. "How do you think you pitched?" asked Silverman.
Lackey lost it and responded by saying, “thirty minutes before the game I got a text message on my cell phone from one of you, somebody in the media, talking about personal stuff. I shouldn't even have to be standing up here dealing with it.
"I'm sitting here, listening to music. I don't know who got my phone number, but that's over the line. Anything else you want to talk about?"
According to several members of the media covering the Red Sox, minutes before what was the most important game of the Red Sox 2011 season, Lackey was engaged in what ESPN Boston’s Gordon 
Ede called an “animated discussion with a club official about the text message and how his phone number had gotten out.”
Lackey’s rant directed at the media ended with Lackey saying "I can't believe … any of you who would get into that is going to have a serious problem." At the very least, Lackey’s abusive comments bordered on being a veiled threat to members of the media who followed the Red Sox throughout the 2011 season, and whose job it is to report on the Red Sox and John Lackey.
What led to John Lackey’s post game rant may speak more of the man, than the pitcher. What led to John Lackey’s post game explosion may speak more of his character – or lack thereof.
A celebrity gossip website (allegedly the people who sent Lackey what was an offensive text message 30 minutes prior to his Sunday night pitching appearance) reported that Lackey filed for divorce from his wife, Krista ... who was in the middle of battling breast cancer.
Lackey filed on August 30th, according to court documents in Texas, claiming "the marriage has become insupportable because of discord or conflict of personalities." The couple married in November, 2008.
Sources close to the family told TMZ ... Krista underwent a double mastectomy back in March and underwent chemo as recently as June.
Lackey was later linked to the beer-drinking, chicken-eating antics that fellow Red Sox starting pitchers Josh Beckett and Jon Lester had also been associated with.
Lackey is at training camp with the Red Sox. Lackey had a media-friendly reputation when he pitched with the Los Angeles Angels, prior to signing with the Red Sox. Lackey spoke with The Boston Globe’s Dan Shaughnessy, and Lackey’s temperament hasn’t changed. Shaughnessy didn’t ask Lackey about his divorce, but he didn’t shy away from asking Lackey about the issues that plagued the Red Sox clubhouse last year.
“This is stupid to even bring it back up . . . It was tough for a couple of us that got kind of thrown out there. You kind of wonder where those kind of things come from, first of all. It got blown out of proportion pretty big. I saw Josh a few times during the offseason. What can you do? Even talking about it right now is stupid, because it’s just bringing it back up.’’
Both Lester and Beckett talked about their involvement. The Boston Globe first reported what took place in the Red Sox club, and said Lackey was as much a part of the beer drinking that went on during games throughout the 2011 season, in the Red Sox clubhouse. Lackey wasn’t interested in Shaughnessy’s question.
“And there’s a good reason for that,’’ he said. “All you’re doing is re-hashing it. It kind of went away until you, right now.’’
As for suggestions, the drinking moved from the clubhouse to the Red Sox dugout?
“They [media] just see how far they can go,’’ he said. “That’s just a flat-out lie.’’
Is Lackey willing to acknowledge that mistakes were made? “I guess. Sure. They’re being made in every clubhouse in the big leagues, then. If we’d have made the playoffs, we’d have been a bunch of fun guys.’’
When exactly does John Lackey realize enough is enough? When will the Red Sox have enough of this malcontent? Lackey’s behavior late last season – the explosion in the locker room after his September 25 start, embarrassed the Red Sox.
His interview with Dan Shaughnessy showed whatever media savvy Lackey may have once had, has disappeared. Lackey plans on traveling with the Red Sox throughout the 2012 season. Lackey was a headache for the Red Sox in 2011, his first 2012 interview with Dan Shaughnessy was not good for the Red Sox or for John Lackey.
Major League Baseball contracts are guaranteed. The Red Sox owe John Lackey too much money to release him from his contract. The Red Sox could try to trade Lackey, however, given Lackey will have two years and close to $32 million owed on his contract, and he’ll be trying to return from elbow reconstructive surgery, it’s unlikely the Red Sox will be able trade Lackey.
If the road to hell is paved with good intentions, the Red Sox signing of John Lackey is an example of a number of things. The Red Sox may have overspent on Lackey, but the Red Sox can afford to overspend and to lose on players like John Lackey; and John Lackey can be replaced.  As a business, the Red Sox can afford to pay Lackey $16.5 million and not have him pitch.
On November 28, 2005, B.J. Ryan signed a five-year, $47 million contract with the Blue Jays. Ryan was a coveted free agent at the time of the signing and provided the Blue Jays with two good seasons. Ryan was released by Toronto in July, 2009 after going 2-4 in save opportunities to start that season. Two good seasons at the cost of $47 million makes BJ Ryan one of the worst signings in team history because B.J. Ryan’s lost three seasons with the Blue Jays, were tens of millions of dollars the Blue Jays could not afford.
The Red Sox are saddled with John Lackey for three more seasons. His injury issues are being addressed. His lack of tact with the media is an issue the Red Sox need to focus on. He didn’t do the organization any more favors when he talked to the Globe’s Dan Shaughnessy.  John Lackey should be held accountable for how he represents his employer with the media.
For Sports Business News, this is Howard Bloom

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Thursday, March 29, 2012

Magic Johnson saves the Dodgers

Late Tuesday evening, Frank McCourt sold the Los Angeles Dodgers for $2 billion to an ownership group led by Magic Johnson. The purchasing group includes Mark R. Walter as its controlling partner, as well as Johnson, Peter Guber, Stan Kasten, Bobby Patton and Todd Boehly. McCourt and certain affiliates of the purchasing group will also form a joint venture to acquire the Chavez Ravine property for an additional $150 million.

The once-proud franchise had been driven into bankruptcy protection by McCourt last June when they couldn't meet player payroll or pay bills after MLB Commissioner Bud Selig declined to approve a $3 billion agreement between FOX and the Dodgers to extend their television broadcast rights.

Based on a settlement with MLB and overseen by the bankruptcy court, McCourt had until April 1 to identify a winning bidder. The deal must close by April 30, the same day McCourt must pay his former wife, Jamie McCourt, a $131 million divorce settlement.

There were three final bidders in the auction conducted by Blackstone Advisory Partners on behalf of McCourt -- the winning group of Guggenheim, Johnson and Kasten; billionaires Steven Cohen and Patrick Soon-Shiong and agent Arn Tellem; and Stan Kroenke, owner of the St. Louis Rams.

The McCourts bought the Dodgers in 2004 from FOX for a net price of $371 million. With the $2 billion for the team and stadium, plus $300 million for the surrounding land and parking lots, the selling price is a total of $2.3 billion, just shy of $2 billion appreciation in eight years.

A spokesperson for the Los Angeles Dodgers stated, “This transaction underscores the Debtors’ objective to maximize the value of their estate and to emerge from Chapter 11 under a successful Plan of Reorganization, under which all creditors are paid in full.”

Frank McCourt stated, “This agreement with Guggenheim reflects both the strength and future potential of the Los Angeles Dodgers, and assures that the Dodgers will have new ownership with deep local roots, which bodes well for the Dodgers, its fans and the Los Angeles community. We are delighted that this group will continue the important work we have started in the community, fulfilling our commitment to building 50 Dream Fields and helping with the effort to cure cancer.”

Earvin "Magic" Johnson stated, "I am thrilled to be part of the historic Dodgers franchise and intend to build on the fantastic foundation laid by Frank McCourt as we drive the Dodgers back to the front page of the sports section in our wonderful community of Los Angeles."

The sale represents a game changer for the sports industry. Before Tuesday night’s $2 billion sale, Stephen Ross’ $1.1 billion purchase of the Miami Dolphins in 2009 represented the most a North American based sports franchise had ever been sold for.

The $2 billion sale of the Dodgers increases the value of many sports franchises. If the Dodgers were sold for $2 billion, what could the Steinbrenner family sell the New York Yankees for? If Jerry Jones was interested in selling the Dallas Cowboys, Jones could expect to sell the team for more than $2.5 billion, based on the selling price the Dodgers. The Yankees and the Cowboys represent stability, and like the Dodgers, brand power. Both the Yankees and Cowboys have strong leadership and ownership in their respective front offices. The Dodgers, under Frank McCourt, are at the other end of the spectrum, a sports franchise forced into bankruptcy protection.

After a failed attempt to purchase the Boston Red Sox in 2002, Frank and Jamie McCourt bought the Dodgers in 2004 for $377 million. The Dodgers, one of sports more fabled sports franchises, went from baseball’s penthouse to the sports’ outhouse in one short year, largely because of McCourt’s very messy and public divorce from his ex-wife Jamie.

“The Dodgers are in bankruptcy because Mr. McCourt has taken almost $190 million out of the club and has completely alienated the Dodgers’ fan base,” one baseball attorney wrote.

The Dodgers bankruptcy reeked of a business run amok under Frank and Jamie McCourt.

"Frank and I enjoyed the many perquisites and benefits that come with owning a Major League Baseball team," Jamie McCourt wrote in a court declaration.

In court documents, Jamie McCourt wrote of combined salaries for both McCourts in excess of $7 million a year, $46 million to buy side-by-side oceanfront estates in Malibu, $27 million to buy side-by-side homes near the Playboy Mansion, additional properties in Massachusetts, Montana, Colorado, Wyoming and Mexico, $400 dinners and $1,000-a-night hotels, private jet travel around the world, even house calls from hairdressers and makeup artists.

Their lifestyle was Lavish, perverse and completely over-the-top, to say the least. Whatever Jamie and Frank McCourt believed it took to own a sports franchise, they seemed to have forgotten the responsibility that comes with owning any sports franchise. You own the franchise in name only, the real owners are the fans who support and believe in their team.

The Dodgers represent a great deal to MLB. Based in Brooklyn, Dodgers General Manager Branch Rickey signed Jackie Robinson to a contract in 1946, breaking baseball’s color line. Appropriately, Magic Johnson becomes MLB’s first African-American owner.

As a businessman, Magic represents what the Dodgers need to restore their credibility. He runs Magic Johnson Enterprises, a company that has a net worth of $700 million; its subsidiaries include Magic Johnson Productions, a promotional company; Magic Johnson Theaters, a nationwide chain of movie theaters; and Magic Johnson Entertainment, a movie studio.

In 1994, Johnson became a minority owner of the Lakers, having reportedly paid more than $10 million for part ownership. He also held the title of team vice president. Johnson sold his ownership stake in the Lakers in October 2010. In 2006, Johnson created a contract food service with Sodexo USA called Sodexo-Magic.

The Dodgers day-to-day baseball affairs will be managed by Stan Kasten, who was the Atlanta Braves general manager during the 14 consecutive years the Braves made the playoffs. Kasten played a key role in MLB’s return to Washington for three years after he left the Braves.

"When you're talking about Magic and Stan Kasten, you're talking about people that have been a part of many championship clubs," current Dodgers General Manager Nick Colletti told "Magic and Vin Scully are two of the biggest names in the history of Los Angeles sports. It's important how deep in L.A. roots this group brings. In Magic, he's not only a Hall of Fame basketball player, but a great businessman in the city. It's a great combination.

“You think about Stan and Magic, they are guys that have won a lot. It's paramount with what they do," Colletti said. "They are all about winning. We're a good club with a chance to be better than good. Look at what Stan did in Atlanta, it's pretty impressive. Magic, in a lot of areas, has been remarkable. This group, and what I know of Guggenheim, they're about top-shelf people, top-shelf entertainment. They are very, very focused on being the absolute best."

John Henry, Tom Werner and Larry Lucchino purchased the Boston Red Sox in 2002. In the ten years the trio has owned the Red Sox, the franchise won their first World Series in 86 years in 2004 and again in 2007. Fenway Park, the home of the Red Sox, has been sold out for every game since May 16, 2003, a streak that is now at more than 700 games. Henry, Werner and Lucchino bought the Red Sox from the Yawkey Foundation and have increased the Red Sox’s brand and value from $380 million to $1 billion, per Forbes has listed as the 2012 valuation.

Forbes determined the 2012 Dodgers are worth $1.4 billion. Did the new owners pay more than they should have for the Dodgers? Yes and no. An auction for the Dodgers had been scheduled for Wednesday. McCourt negotiated an agreement that “satisfied” the team’s creditors. McCourt will make a great deal of money from the proposed sale.

According to Forbes: starting with the $2 billion sale, subtract $70 million for expenses associated with selling the team and $573 million in team debt; taxes of about 25 percent – bringing the subtotal down to just over $1 billion. Then McCourt owes his wife $131 million in the divorce settlement and another $25 million in legal fees.

There are tremendous possibilities for the Dodgers new ownership group. The owners will be able to sell the Dodgers local television rights. McCourt had sold the Dodgers local media rights to Fox Sports for more than $3 billion last April. The new group will be free to negotiate a new agreement with Fox Sports or Comcast cable, which are in the midst of launching their own Southern California-based regional sports network, or create their own regional sports network along the lines of what the Yankees did with the YES Network ten years ago.

The sale of the Dodgers for $2 billion, the right people in the right place at the right time, buying the right sports franchise, is a grand slam for the Dodgers, their fans and Major League Baseball.

For Sports Business News, this is Howard Bloom

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Wednesday, March 28, 2012

Roger Goodell – keeper of the faith

The NFL is finishing up league ownership meetings at the Breakers Hotel in Palm Beach, Florida. It’s been anything but business as usual for the $9 billion NFL this past week. Peyton Manning signed a five-year, $95 million contract with the Denver Broncos. The Broncos traded Tim Tebow to the New York Jets on Friday, bringing a media-driven circus to the Big Apple. But NFL commissioner Roger Goodell’s announcement of suspensions and fines relating to the New Orleans violation of the NFL’s bounty rule was the biggest news of the past week.

"I think the league has handled it well and appropriately," Atlanta Falcons Owner Arthur Blank told ESPN. "One of the other owners made this point, but I told the commissioner I totally agree with him, the NFL, outside of our stadiums, the only things we really own are our reputation, our integrity, our shield and the relationship and trust we have with our fans and our sponsors. Anything that's done that violates that or hurts that, is something that has to be dealt with. My view is that everything the commissioner has stood for since 2006, which has to do with the shield, the trust, the fans and player safety, etc. really that goes completely in the opposite direction based on the New Orleans experience.

"I think he dealt with it appropriately. I think it will be one of the most significant decisions he'll ever make as the commissioner. I think he'll be the commissioner for the next 30 years and I think people will look back and say he sent a message to the teams, the players, the coaches, everybody in the NFL and sent a message to the fans that 'This is not what we're going to have in this league.' I think it was appropriate. Obviously, it's going to be a hard hit on the Saints, but they'll recover and time will move on and it will be fine."

The Saints are paying a price they deserved for violating one of the most important NFL rules. More than making a mockery of the National Football League, Goodell’s punishment of the Saints sends a clear message to league’s other 31 teams – respect the game, respect the rules of the game, or be prepared to pay a price. Football players and football coaches should see the opportunity to play or coach football on Sundays as a privilege, not a right.

On Tuesday, Saints head coach Sean Payton, suspended for a year by Goodell, suggested he was going to appeal his suspension. Payton’s suspension is to begin April 1. If Payton appeals the suspension, the NFL has made it clear his appeal (which will be heard by Goodell) will be held and a decision will be rendered before April 1.

"I'm appreciative of the opportunity to appeal," Payton said. "I don't know if there would be a benefit."

Payton’s chance of a successful appeal, slim to none, and slim has left the building. Goodell will serve as Payton’s Judge, Jury and Executioner. Payton attending NFL ownership meetings suggested he understands and accepts Goodell’s decision.

“No, I accept this," Payton said. “I’ve heard that argument. I think trying to really look closely at how we and how I can improve is probably a better way for me to handle this than to kind of vent or to look outwardly at other programs and I’ve tried to take that approach."

The Saints succeeded on the field during the three years (2009 to 2011) the franchise violated the NFL’s bounty rule.

“I think the hardest thing is that this would possibly put a taint or tarnish the success we’ve had and I think our players feel that same way,’’ Payton said. “We’ve won 41 games in the last three years. That’s hard to do. And that’s done through hard work. It’s done through discipline. It’s done through execution. It’s done through having good football players that are very coachable. So when we found ourselves maybe in a two-game losing streak or relocated because of a hurricane or we found ourselves kind of going through some tough times, we’ve always responded well. So this is uniquely different, but I do think our players and coaches will take that same response. That starts with our captains, guys that have been in our program for the whole six years that we’ve been together.’’

Payton can believe whatever he’d like to, but when all is said and done, Goodell has the NFL’s support.

“First, let’s be clear – we discussed this with the clubs today – it is fair to say that non-contract bonus payments have been happening around the league more frequently than we had liked. It is going to be discontinued. The problem is those payments escalate and you get to what is more specifically referred to as bounties where you are targeting players for injury. We have not found any evidence that it is happening around the league, where players, coaches or anybody else have identified players to take them out of the game.

“We will continue to follow up on any information we have. We will not resist anyone who comes forward with that. We will look for continuing violations, and if we find it, we will aggressively pursue it.”

Payton’s appeal to Goodell will fall on deaf ears. The appeal is part of the process; Payton will have his “day in court.”

"You go through a range of emotions that kind of hit you,” Payton told the media Tuesday. "You're disappointed; you're disappointed in yourself that it got to this point. And then I think we're trained as coaches to begin preparation right away and I find myself reflecting on it and you go through a lot of emotions.

"Certainly you take lumps and I've taken them before, but I look forward to getting back and I look forward to winning and being successful and being a part of it," Payton said in the lobby of The Breakers hotel. "I think the biggest challenge is, you know, driving in here this morning this will probably be, 39 years, you know as a Pop Warner player, as a high school player, a college player and then a college coach, professional coach, this potentially is the first of 39 years where you're not directly involved in football for a season. But that being said, I look forward to getting back to this position, I look forward to winning and we'll do that.

"They've been difficult, challenging," he said of the six days since Goodell slammed the Saints with suspensions, lost draft pick and a hefty fine. "It's interesting, you find out how close some of your friends are and I said this in our statement our fans back in New Orleans have been amazing. My peers, guys that I'm very close with in this league, the players on our team, really it's like a family and so that's the thing that gets you through something like this."

Goodell’s decision needs to be applauded and embraced by the sports industry. Payton, as the Saints head coach, is responsible for his team’s on-field behavior.

Major League Baseball contracts are guaranteed. National Basketball contracts are guaranteed. National Hockey League contracts are guaranteed. Of the four major North American sports, National Football League contracts are not guaranteed. Only the bonus money NFL players’ receive as part of their contracts, is guaranteed. If an NFL player is injured in a game, his contract and his ability to earn a livelihood can end at that moment in time. The Saints perversion of the NFL’s bounty rule is inexcusable. Sean Payton believes he will be coaching at the start of the 2013 season. What Sean Payton needs to realize – his actions nearly cost him that right. Hopefully, Payton has learned those who break the rules, never prosper.

For Sports Business News, this is Howard Bloom

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Tuesday, March 27, 2012

Jerry Sandusky and Penn State’s Athletic Department – An American Embarrassment

A week ago, the Canadian Justice system sentenced Graham James a former junior hockey coach, for the rape of two teenage boys who had been entrusted to his care, to a two-year prison sentence. Canadians expressed indignation at the injustice. How could a man who had ruined the life of two boys (now adults) receive only two years for ruining the lives of two people? Former Penn State assistant football coach Jerry Sandusky allegedly has raped boys as young as eight years old. Sandusky has been indicted on more than 50 charges relating to his rape of eight to ten-year-old boys over a period that spanned decades.

Sandusky is looking for a very different type of justice than Canadian Graham James received. James pleaded guilty to the charges that he was facing. Not only does Sandusky believe he is innocent, but on Thursday, Sandusky’s lawyer, Joe Amendola, asked the judge to dismiss all charges against Sandusky. Amendola believes some of the counts Sandusky is facing are not specific enough, evidence is lacking in others, and the statute of limitations may have run out regarding eight of the 10 alleged victims.

"We raised a number of issues that we thought were pertinent for various reasons," said Amendola. "But the judge will have to decide that. We'll see what happens."

Amendola is doing what lawyers do, defending his client’s rights. A foundation of the American justice system – the accused are entitled to the best possible defense. Nonetheless, Amendola is defending a man whose crimes to the untrained observer make him indefensible, a man whose alleged crimes are reprehensible.

Sandusky worked for Penn State University from 1969 to 1999 as one of the school’s football coaches. Penn State remains at the center of the Sandusky story. On Friday, NBC News reported internal Penn State files that date back to 1998 suggest psychologist Dr. Alycia A. Chambers, the therapist for one of Sandusky’s alleged victims, warned university police that his actions fit that of a “likely pedophile’s pattern.”

If correct, Dr. Chambers chilling insight offers one of the most “if we knew then, what we know now” analogies ever.

“There was very little doubt in my mind (Sandusky) … was a male predator, someone that was in the process of grooming a young man for abuse,” said Chambers, speaking publicly for the first time, with the permission of her client’s family, in an interview with NBC News. “I thought…my report was strong enough to suggest that this was somebody who should be watched.”

The November 4, 2011 indictments focused on allegations Sandusky raped a ten-year old boy in Penn State’s football team locker room in 2002, charges Sandusky is facing based in large part on the testimony from former Penn State Assistant Football Coach Mike McQueary.

Chambers’ alleging she believed Sandusky was a danger to children in 1998, four years before Sandusky allegedly terrorized a ten-year-old, and six years before he raped a boy in 2004, and was indicted for that after the November 4, 2011 charges were filed.

Penn State University could be facing its greatest fear. Proof the school was well-aware of the man Jerry Sandusky was in 1998 and chose to ignore the allegations and report filed by Dr. Chambers.

Penn State’s Athletic Department has been searching for “dignity” following the November Sandusky indictments. Penn State’s Board of Trustees fired their legendary Hall of Fame football coach, the late Joe Paterno, on November 9, because in large part they believed Paterno had failed as a leader, failed to deal with the aftermath of Sandusky’s reported 2002 rape of a ten-year-old in the football team’s locker room.

If only the Penn State’s Athletic Department had taken charge after they first learned Jerry Sandusky was allegedly a danger to young boys in 1998, what happened in 2002 and again in 2004 might never have happened.

How many boys could have been saved? Sandusky was reportedly on Penn State’s campus as late as October 2011. Sandusky was allowed to conduct football camps at Penn State as recently as two years ago – where was Penn State when Jerry Sandusky was allowed to roam the Penn State campus?

“I was horrified to know that there were so many other innocent boys who had their hearts and minds confused, their bodies violated,” said Chambers. “It’s unspeakable.”

When contacted by NBC News, Joe Amendola dismissed Dr. Chambers 1998 report.

“I understand that there are some people who could look at this behavior and say it’s a pedophile problem. But there are others who will say, ‘This is somebody who loves kids and loves to be around them’ … It’s the old story, you get your expert and I’ll get my expert.”

Sandusky is facing a trial that is scheduled to start May 14. But how will Penn State be held accountable for their actions and the alleged cover-up?

“My consultants agree that the incidents meet all of our definitions, based on experience and education, of a likely pedophile’s pattern of building trust and gradual introduction of physical touch, within a context of a ‘loving,’ ‘special’ relationship,” Chambers wrote in her report.

“One colleague, who has contact with the Second Mile, (a nonprofit organization for children founded by Sandusky) confirms that Mr. Sandusky is reasonably intelligent and thus, could hardly have failed to understand the way his behavior would be interpreted, if known,” Chambers continued. “His position at the Second Mile and his interest in abused boys would suggest that he was likely to have had knowledge with regard to child abuse and might even recognize this behavior as a typical pedophile ‘overture.’”

Why wasn’t Penn State more pro-active in following up Chamber’s 1998 report? The same reasons why Penn State covered up the 2002 Sandusky allegations – the business of Penn State football.

There are few college campuses where college football is big as it is at Penn State. During the 2007-08 season the Nittany Lions football program generated $91,570,233. During the 2009-10 football season, according to Department of Education records, Penn State’s football program generated a $50.4 million profit based on total revenues of $70.2 million. Penn State's football team made $53,228,446 last season. Beaver Stadium, the home for Penn State football, has increased from 29,000 to 108,000 seats since Joe Paterno became head coach in 1966.

Penn State’s football program generates a profit in excess of $50 million a year. Financially Penn State’s football program is one of the biggest in college sports. It appears Penn State’s football program is morally and ethically bankrupt, and for that, should it be forced to pay a price that will never be measured in dollars?

For Sports Business News, this is Howard Bloom

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Monday, March 26, 2012

“Tebowmania” in the Big Apple – The Great Unveiling

When a National Football League franchise trades a first-round pick two years after they drafted that player for a fourth-round selection, they are admitting drafting that player was a mistake. NFL teams build their teams around their first-round picks. The Denver Broncos selected Tim Tebow with the 25th overall pick in the 2010 NFL Draft and traded Tebow for a fourth-round pick in April’s NFL draft to the New York Jets. Tim Tebow may represent a great deal when he isn’t playing football, but the NFL sent Tebow a resounding message about his ability as an NFL quarterback – he is no better than a back-up quarterback.

Tebow’s 2011 season represented just how polarizing a football player and person Tebow can be. Tebow started the Broncos 2011 season as the team’s fourth-string quarterback. By week seven, Tebow had become the Broncos starting quarterback. Two weeks later, the Broncos released Kyle Orton. Orton was the Broncos starting quarterback. The Broncos won the 2011 AFC West Division title, their success was built on their tremendous defense, and had little to do with Tebow’s ability.

The Broncos won several come-from-behind games late in the fourth quarter, highlighted by the Broncos January 8th home playoff game against the Pittsburgh Steelers. Tebow threw for a career high 316 yards and two touchdowns, including an 80-yard TD to Demaryius Thomas on the first play of overtime, as the Broncos won 29–23. Tebow completed 10 of 21 passes in the contest, setting the franchise record for quarterback ratings in a playoff game (125.6) and an NFL record for yards per completion (31.6) in a playoff game. Media sources noted Tebow's passing yards (316) and yards per completion (31.6) evoked the Bible's John 3:16. The Nielsen ratings for the game also peaked at 31.6. The top search item on Google the next morning was John 3:16 (Bible passage), followed by Tebow and Tim Tebow.

Broncos General Manager John Elway anointed Tebow the Broncos starting quarterback, until the Broncos signed Peyton Manning to a five-year $95 million contract last week, the same Peyton Manning, who is now 36, had four neck surgeries in the last two years and missed the entire 2011 NFL season. Elway, a Football Hall of Fame quarterback, never believed Tim Tebow had the ability to become an NFL starting quarterback. He also must have believed Tebow couldn’t sit on the Broncos bench and serve as Peyton Manning’s backup. Elway may have only received a fourth round-pick for Tebow, but Tim Tebow is now the New York Jets problem.

Tebow’s arrival in New York is being portrayed as the “second coming.” Tebow will be introduced to the media at a nationally-televised press conference today in New York. This will be the first time the arrival of a backup quarterback received attention, let alone a nationally televised press conference. The press conference and the attention it’s receiving, should serve as both a warning and an embarrassment to the Jets. The Jets are in an impossible position – the first time anything goes wrong on the field with Mark Sanchez, the Jets $50 million starting quarterback, the Broncos 2011 season will be repeated. Jets’ fans will be demanding Tebow replace Sanchez.

Tebow’s arrival has been circus-like. Saturday evening Tebow attended “Wicked” on Broadway. On Sunday, the New York tabloids were filled with coverage.

ESPN New York reported the famous Carnegie Deli in Manhattan will introduce the Jetbow sandwich on Monday, in honor of new Jets backup quarterback, Tim Tebow. The meal will be about 3.5 pounds and contain corned beef, pastrami, roast beef, American cheese, lettuce and tomato on white bread, and will be introduced Monday to coincide with Tebow's press conference.

"He's the poster boy for every parent and what they want their kids to be," owner Sandy Levine said. "Very religious, very clean-cut, an outstanding student, he does charity work. What more do you want as an athlete than him?"

Tebow's arrival will actually create history at the deli, renowned for its larger-than-life sandwiches. For the first time, the restaurant will be using white bread and mayonnaise in a sandwich created for a celebrity.

Tim Tebow has little, if anything, to do with the reaction to his arrival in New York. Tebow always presents himself as a humble, modest athlete. At the same time, Tebow doesn’t shy away from the attention he generates. How will Madison Avenue, the heart of the adverting industry, react to Tebow’s arrival?

“He’s now in a market 10 times the size of the one he came from,” says Bill Glenn, senior vice president at The Marketing Arm in a Forbes report. “By default, that’s going to offer him a bigger range of sponsors.”

According to Forbes, Tebow already has endorsement deals with Jockey, Nike and EA Sports, which net him a reported $1 million to $2 million annually.

“That’s probably the one market where you can do regional stuff and still get some seven-figure deals, maybe for a car or a financial institution,” says Bob Dorfman, executive vice president at Baker Street Advertising in San Francisco in a Forbes report. “It’s probably worth a few million to him just in terms of local New York area deals.”

And remember this is for an NFL quarterback who, according to those who understand what it takes to play and star in the NFL, do not believe has the ability to have an on-field impact in the NFL.

“Tim Tebow can be the king,” marketing expert Ronn Torossian, the CEO and president of 5W Public Relations in New York told the New York Daily News. “In terms of the Tebow brand, I think that Tim Tebow is already a national celebrity. He’s known off the field. There is no bigger place to shine than in New York City and I think the Tebow brand is one that transcends sports. I think the guy can get unlimited sponsorships in New York City.”

Torossian’s assessment is correct. Tim Tebow and the people who represent him in the marketplace, have done a wonderful job selling Tebow’s image. Tebow’s face will be on billboards throughout the Greater New York area (29 million people), and in commercials on one of countless New York television stations. There are more than 100 TV shows taped in New York City, many of those shows will be interested in having Tebow appear on their shows – Tim Tebow has always been interested in taking advantage of every media opportunity he has been presented with.

Tim Tebow’s arrival might be the most heralded New York athlete arrival since Reggie Jackson arrived in the Bronx in 1977 as a member of the New York Yankees. Reggie had ability and delivered on the field. Tebow can’t deliver on the field, but he can deliver off the field. The problem and the challenge Tebow and the Jets face – football games are played on the field, not in a boardroom where advertising and marketing gurus decide who can sell products.

For Sports Business News, this is Howard Bloom

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Friday, March 23, 2012

Tebowmania in the Big Apple – a disaster waiting to unfold

Late Wednesday evening, the New York Jets completed what one day may be recognized as one of, if not, the most nonsensical trades in National Football League history – picking up Tim Tebow from the Denver Broncos. The Jets and the Broncos exchanged two late round 2012 selections in April’s NFL Draft and the Jets fourth round pick for Tebow. Tebow, a second string NFL quarterback who believes he should be an NFL starting quarterback, will create turmoil and unrest in the Jets locker room.

“I don’t think they know what they’re doing over there right now. . . . I’m baffled,” former Jets and Hall of Fame Quarterback Joe Namath said on ESPN Radio on Wednesday. “They’re kind of mixed up over there. I’m talking about the folks that are making the decisions.

“Come on. This is crazy,” Namath said. “I don’t know what it’s about. It appears the Jets are trying to grab headlines once again just by making noise.”

Two weeks ago the Jets signed their current starting quarterback Mark Sanchez to a three-year contract extension for $40.5M and he now has five years remaining on his deal for a total of $58.25 million.

Sanchez will earn $20.5M guaranteed over next two seasons. The Jets starting quarterback, their leader on the field is Sanchez.

Now add the arrival of Tebow, one of the most polarizing players in National Football League history. He was drafted by the Denver Broncos as the 25th overall pick in the 2010 NFL Draft. Two NFL seasons later, Tebow was traded for a fourth round draft pick. The Broncos were forced to trade Tebow after signing 36-year old NFL free-agent Quarterback Peyton Manning to a five-year $95 million contract Tuesday.

Loved by millions, but not appreciated by just as many, Tebow led the Broncos to an improbable 2011 AFC West Division title. He started three meaningless games during his 2010 rookie season, became the Broncos starting quarterback during week seven of the 2011 season – after media pundits suggested Tebow was fourth on the Broncos three-man quarterback depth chart during the Broncos pre-season.

Kyle Orton started the 2011 season directing the Broncos offense. The Broncos started their 2011 season winning one game, while losing the team’s four other games. In late September, a group of Broncos fans decided they wanted 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.

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

Sanchez took the Jets to the AFC title game in his first two years as the Jets starting quarterback. The Jets didn’t make the playoffs last year. The 2011 Jets season ended with the team losing the last three games of the regular season, on the outside looking in, as the playoffs began. In a tear-filled wrap up to his team’s season, Jets head coach Rex Ryan admitted his team had been dysfunctional on and off the field.

The Jets imploded near the end of the 2011 season, unnamed teammates criticizing Sanchez in the New York media in the days leading up to the Jets season ending loss to the Dallas Cowboys that cost the Jets a playoff spot.

"It is a gutless thing to do," Sanchez said during an interview on "The Michael Kay Show" on ESPN1050 in New York, in reference to the anonymous attacks earlier this month.

Later, in a 25-minute interview with the media, Sanchez added: "If you're not going to put your name on something, why waste anybody's time? Obviously, they had strong opinions about it, but not strong enough to say who they were. "

Into this mix, Tim Tebow and “Tebowmania” arrive in the biggest NFL market. Nine daily newspapers, two cable sports channels, three all-sports radio stations – the arrival of Tim Tebow is a disaster waiting to happen.

As for reactions from current Jets, TE Jeff Cumberland tweeted, "Welcome a bored [sic] Tebow."

"I think for the Jets this is an abject disaster," former player Mark Schlereth said on ESPN NY 1050.

Jets Cornerback Antonio Cromartie, took to Twitter on Wednesday to express his confidence in Sanchez and the offense as structured before the deal was finalized.

"Y bring Tebow in when we need to bring in more Weapons for (at)Mark_Sanchez," Cromartie tweeted. "Let's build the team around him. We already signed to 3 year ext."

Tim Tebow, the new NY Jets quarterback, will be a big hit like Jeremy Lin on Madison Ave., only adding to the challenge Jets Head Coach Rex Ryan faces when Tebow arrives at the Jets training camp in July.

“Tim Tebow can be the king,” marketing expert Ronn Torossian, the CEO and president of 5W Public Relations in New York told the New York Daily News. “In terms of the Tebow brand, I think that Tim Tebow is already a national celebrity. He’s known off the field. There is no bigger place to shine than in New York City and I think the Tebow brand is one that transcends sports. I think the guy can get unlimited sponsorships in New York City.”

Torossian’s assessment is correct. Tim Tebow and the people who represent him in the marketplace, have done a wonderful job selling Tebow’s image. Tebow’s face will be on billboards throughout the Greater New York area (29 million people), and in commercials on one of countless New York television stations. There are more than 100 TV shows taped in New York City, many of those shows will be interested in having Tebow appear on their shows – Tim Tebow has always been interested in taking advantage of every media opportunity he has been presented with.

The spotlight Tim Tebow is going to attract everyday he is in New York as the Jets backup quarterback isn’t going to help Mark Sanchez. The spotlight Tim Tebow is going to attract everyday he is in New York isn’t going to help Jets Coach Rex Ryan gain control of the Jets dysfunctional locker room. The Jets have a rapid fan base, and the first time Mark Sanchez makes a mistake in a Jets game, Broncos fans putting up billboards in the Denver area will seem like a non-reaction when compared to how vocal and demonstrative Jets fans will be in wanting to see Tebow play for the Jets.

Tim Tebow heading to the York Jets is a disaster waiting to happen.

For Sports Business News, this is Howard Bloom

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Thursday, March 22, 2012

Roger Goodell senses a clear and present danger (and delivers)

In what will be long-remembered as one of his defining moments as National Football League Commissioner, Roger Goodell suspended New Orleans Saints Coach Sean Payton on Wednesday for the entire 2012 season, suspended former Saints (and current St. Louis Rams) Defensive Coordinator Gregg Williams indefinitely, Saints General Manager Mickey Loomis for eight games and Saints Assistant Head Coach Joe Vitt. The Saints were fined $500,000. In addition, because the violation involves a competitive rule, the Saints forfeited their selections in the second round of the 2012 and 2013 NFL drafts.

The suspensions and fines imposed on team management are for violations of the NFL’s long-standing “bounty” rule that endangered player safety over a three-year period. Each of the suspensions also includes a loss of salary. Sean Payton lost $8 million on Wednesday.

“We are all accountable and responsible for player health and safety and the integrity of the game,” Commissioner Goodell said. “We will not tolerate conduct or a culture that undermines those priorities. No one is above the game or the rules that govern it. Respect for the game and the people who participate in it will not be compromised.”

“A combination of elements made this matter particularly unusual and egregious,” Commissioner Goodell continued. “When there is targeting of players for injury and cash rewards over a three-year period, the involvement of the coaching staff, and three years of denials and willful disrespect of the rules, a strong and lasting message must be sent that such conduct is totally unacceptable and has no place in the game.”

Goodell’s decision effectively turned the 2012 New Orleans Saints into the New Orleans “Aint’s.” New Orleans will host Super Bowl XLVII on February 3, 2013. The Saints had been building a team that many football insiders believed would represent the NFC in the Super Bowl, becoming the first team to play a Super Bowl game in their home stadium.

The Saints issued the following statement late Wednesday: “Today, Commissioner Goodell apprised us of the severe penalties facing our club, as proposed by the NFL.

“We recognize our fans’ concerns and we regret the uncertainty this episode has created for them. We are humbled by the support our organization has received from our fans today in the wake of this announcement, and we ask them to continue to stand with us, as they have done in the past, when both our team and our city have overcome greater adversities.

“To our fans, the NFL and the rest of our league, we offer our sincere apology and take full responsibility for these serious violations.

“It has always been the goal of the New Orleans Saints to create a model franchise and to impact our league in a positive manner.

“There is no place for bounties in our league and we reiterate our pledge that this will never happen again.”

Saints Owner Tom Benson has yet to speak out regarding how he feels about the actions of his head coach and general manager. Payton’s Saints won Super Bowl XLIV on February 7, 2010. Nonetheless Benson would be justified if he fired Payton with cause. Goodell made it clear that Benson didn’t have any idea his team had violated the NFL’s Bounty Rule multiple times in a three-year period. As the team’s head coach, Payton is the Saints’ leader on and off the football field. Payton’s lack of leadership represents a complete failure.

Goodell has made player safety one of his most important platforms as commissioner. More than 300 former NFL players and their families are in the midst of multiple lawsuits against the NFL with issues directly related to player safety. The complaints against the NFL allege fraud and negligence; and accuses the league of hiding medical evidence about the risks of concussions and failing to warn players they risked permanent brain injury if they returned to play too soon after they sustained a concussion.

“The message was sent to everyone in football – from the Pop Warner level all the way up to the National Football League: player safety and integrity of the game are the two most sacrosanct areas in football today, and if you violate either of those dictums – and, in this case, basically all of them were violated – then you’re going to get a severe, severe penalty. … What really affects the field this year is the loss of the heart and soul of the team, the head coach, who had his fingerprints on every facet of the organization,” former Indianapolis Colts General Manager and current ESPN NFL Analyst Bill Polian offered.

There have been suggestions “bounties” are part of how football is played. Goodell made it clear on Wednesday – bounties have no part in the NFL.

“Bounty programs have no place in our game,” Commissioner Goodell stated. “They are incompatible with our efforts to promote sportsmanship, fair play, and player safety.”

Going forward, Commissioner Goodell said the annual certifications required of each club under the league’s “Integrity of the Game Policy” will be modified to include specific references to bounties and pay-for-performance programs. The prohibition on pay-for-performance programs includes not just “bounties,” but any form of non-contract bonus payment. Owners and head coaches share the responsibility for ensuring adherence to these rules and for promoting player safety and the integrity of the game.

Goodell held himself together Wednesday afternoon in an interview with NFL Network’s Rich Eisen. There had been rumors the Saints had violated the NFL’s bounty program time and time again. Each time when the league asked the Saints about the allegations, the team said there was no truth to the rumors; they said the rumors had no foundation.

“Clearly we were lied to. We investigated this back in 2010. We were told that it was not happening. It continued for another two years until we got credible evidence late in the 2011 season. We were able, obviously, to identify significant information that verifies from multiple sources that this was going on for a three-year period,” Goodell told Eisen.

“Unfortunately, I’ve been dealing with this over the past few months. As you find out what’s going on, you are disappointed, angered. There are a lot of great people who coach, play and are involved and care deeply about this game. The game doesn’t need to be played this way. That has been made clear by the players and coaches that I’ve spoken to. We need to change the culture. This is another step in changing that culture. This type of behavior and accepting this type of a program is not going to be tolerated.”

Roger Goodell acted in the best interest of the National Football League. He also acted in the best interests of the New Orleans Saints. Any anger over Goodell’s decision should be directed at Sean Payton and the New Orleans Saints.

The Saints have admitted they are guilty; Payton has admitted he is guilty; Gregg Williams admitted he is guilty; Mickey Loomis has admitted he is guilty; Joe Vitt has admitted he is guilty. They are guilty, they have embarrassed their chosen profession, and they have shamed professional football. They acted without honor. Roger Goodell honored the National Football League Wednesday by making it clear – deviant and abhorrent behavior is unacceptable in the National Football League.

For Sports Business News, this is Howard Bloom

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Wednesday, March 21, 2012

Graham James: an unspeakable crime – justice for no one

Graham James -- The Hockey News’ “Man of the Year” in 1989 was sentenced on Tuesday to two years in a Canadian prison, two years for raping two teenage boys, two years for stealing the hopes and dreams of two teenage boys, two years for being a predatory child molester more than a hockey coach.

Judge Catherine Carlson could have imposed James to as many as six in jail, two years, three years or even six years – tossing James down the sewer he deserves to be in might have been enough; Judge Carlson did what she believed was best, for the unspeakable crimes James committed against Theo Fleury and Todd Holt.

"There is no sentence this court can impose that will give back to Mr. Holt and Mr. Fleury that which was taken from them by Mr. James. The court expects there is no sentence it can impose that the victims, and indeed many members of the public, will find satisfactory," Judge Catherine Carlson during sentencing.

James abuse of teenage boys he had been entrusted to coach, to lead and to mentor, is a message that needs to be sent to every parent who has a youngster playing sports. Parents have always warned their daughters when they left the safety of their homes to be careful, make sure no one touches you or does something that makes you feel uncomfortable. The same wasn’t true for their sons. A son playing for a team was an honor, a triumph for father, mother and son. It was a right of manhood. Parents must today educate both their sons and daughters about men like Graham James.

The Fleury and Holt families had to believe they were living the Canadian dream in the 1980’s when their 14-year-old sons were selected to play for a hockey team coached by Graham James. He was a community treasure, a trusted leader, a man who would help their sons become men. Graham James could make their dreams come true.

"What happened to Mr. Fleury and Mr. Holt is every child's worst nightmare and every parent's worst nightmare," Judge Carlson offered.

Holt and Fleury both spoke out, the victims having a better understanding of whether justice was served on Tuesday in a Winnipeg courtroom.

Here is the statement Holt read to a news conference about the sentence, which was also on behalf of Fleury:

“I stand here today, on behalf of not only myself & my cousin Theoren Fleury, but as a voice for Everyman. For all the young boys, the old men & the ones that got stuck somewhere in between because of the most devastating type of abuse; sexual abuse inflicted on us by someone in a position of trust & authority. Theo and I were two of those who got stuck in that middle place between boy & man; we made some terrible choices & watched the life we were meant to lead spiral down the drain.

“No longer.

“Theo and I speak to men all over and we tell them: YOU, like us, are not alone; the effects are far-reaching & sometimes feel never ending, but there IS a place & time for healing. It is NOW. I stand here today, a Victor over sexual abuse & I, along with Theo, offer you our voice.

“This sentence today is nothing short of a national travesty because we know that childhood sexual abuse has reached epidemic proportions in our country. Graham James once again perpetrated his crime and spread his sickness right through the courts of Canada. He conned the judge with his “poor me” and “I regret” statements. His lawyer defended the indefensible, and he’s been rewarded for doing so and Graham James is laughing all the way back to the life he’s always led knowing that justice for him is but a blip on the radar.

“Today as we speak, there is a boy out there going about his life, dreaming his dreams and hoping his hopes…until…Graham James crosses his path. And cross his path he will, because that’s what he does; he preys upon the unsuspecting, all the while knowing not much will happen to stop him. The courts of Canada have guaranteed that. The saddest part is that there are MANY Graham James; different names, in different towns & cities, in your own communities & yes, possibly even in your own families. Yes, I said it. They are everywhere. It is time that the predators know that they need to take notice and be scared ~ there is no place for you to hide; we are shedding light in those dark corners where you cower.

“Theo and I call upon all Canadians, those who have suffered, and those who stand with the suffering, to demand that our government change the laws and empower justice to be all that it could be, and to do all that it should. We are calling out to our politicians to stand up for the 1 in 3 girls and 1 in 5 boys who will be sexually abused before the age of 18 in our country. We are standing up against a weak justice system and demanding change now. Theoren & I are calling out to YOU, the people of Canada & the World to take this issue NOW, to our politicians, & DEMAND change. Ask for, & receive answers, for CHANGE & REAL JUSTICE, or simply refuse to cast your vote for that constituent.

“My name is Todd Holt and I stand today, with Theoren Fleury, & with ALL those who have suffered or are suffering, as a Victor over sexual abuse and an Advocate for change.”

Fleury played in the NHL for 16 years; he represented Canada at the Olympic Games and at the World Junior Hockey Championships. He also once had a gun to his head, driven to the brink of suicide in part by the pain James inflicted on him. Fleury sees hope in what happened on Tuesday.

“This is not about me anymore. This was never about personal revenge. What does revenge do? Nothing.

“This is about doing our utmost to eliminate the biggest epidemic we have on the planet. You have kids. I have kids. What’s important is that not one more kid has to go through what I did. What Sheldon (Kennedy) did. What Todd (Holt) did. That’s the reason for this entire exercise.

“I think Canada’s reaction to the sentence is a very positive step. The country is outraged. If you read what’s on Twitter right now, we’re starting to get the kind of reaction we need in order to make change.’’

Theo Fleury offers hope and a clear path as to what must next happen. Revenge, as Fleury pointed out, accomplishes nothing but anger and a resolve to create a better understanding to ensure what happened to Fleury, Holt, Sheldon Kennedy and to the victims Jerry Sandusky is alleged to have raped; that they never again have that opportunity. There have to better safeguards, parents have to be more vigilant when they allow and encourage their sons (and daughters) to become part of a team. Only through greater awareness can men like Graham James be stopped!

For Sports Business News, this is Howard Bloom

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Tuesday, March 20, 2012

Joe Paterno and the renaming of Beaver Stadium

On November 9, 2011, Penn State University’s Board of Trustees did what they believed was in the best interests of Penn State University. They fired the man who built Penn State University-- they fired Joe Paterno, the school’s longtime head football coach. Seventy-eight days after he was fired, the 84-year- old Paterno died on January 22, 2012.

Less than two months later, a Quinnipiac University poll (Connecticut) indicated a majority of Pennsylvania voters wanted Beaver Stadium, the home of the Penn State football program renamed in honor of Joe Paterno.

“There is lingering respect for Joe Paterno,” said Tim Malloy, assistant director of the Quinnipiac University Polling Institute.

“One has to wonder: If the Sandusky scandal had never happened whether support for renaming the stadium would have approached 100 percent.”

The renaming of Beaver Stadium would create a lasting legacy between Paterno and Penn State University. The legacy Joe Paterno created has to include what took place in the days that followed Jerry Sandusky’s indictment on November 4, 2011 on more than 50 charges related to child sex abuse allegations, charges that included an alleged event that took place in the Penn State football locker room in 2002.

On Saturday, October 29, Penn State beat Illinois 10-7 giving Paterno his 409th win, surpassing Eddie Robinson's record for most wins by a college football coach. “JoePa” (as he was affectionately called) was presented with a plaque by then Penn State President Graham Spanier and Athletic Director Tim Curley. The plaque read "Joe Paterno. Educator of Men. Winningest Coach. Division One Football." Six short days later, life changed forever for Paterno, Spanier, Curley and many more when former Penn State Assistant Football Coach Jerry Sandusky was indicted.

Sandusky’s arraignment created an international firestorm in the days and weeks that followed, resulting in Paterno, Spanier and Curley’s firing. While the anger directed at Penn State has subsided, the original issue remains – why did Penn State and the athletic department seemingly cover-up allegations Sandusky raped young boys in the Penn State football locker room first in 1998 and again in 2002?

Pennsylvania Attorney General has made it clear when the indictments were announced-- legally Joe Paterno had followed the law in dealing with what he was first told by then-graduate football Assistant Coach Mike McQueary on a Saturday morning in 2002. Paterno told Jenkins he had “no inkling” that Sandusky might be a sexual deviant.

Penn State’s Board of Trustees who decided to fire Paterno, will ultimately decide what Penn State will offer to Paterno’s lasting legacy.

The Board of Trustee’s released a statement last week, four months after they fired Paterno and seven weeks after Paterno’s death, explaining why they decided to fire the man who had coached their football team for 46 years.

“On Nov. 9, the Board unanimously made the decision to remove Coach Paterno for the last three games of the season. He had announced earlier that day that he would be retiring at the end of the season.

“Our most important reason – by far – for this difficult decision flowed from what we learned on Nov. 5, for the first time, from a “presentment” (report) by a Pennsylvania Grand Jury about Coach Paterno’s early 2011 sworn testimony.

“The report stated that a Penn State graduate assistant had gone to Coach Paterno’s home on Saturday morning, March 2, 2002. The report quoted Coach Paterno as testifying to the Grand Jury that the graduate assistant told him that he had seen Jerry Sandusky, the coach's former assistant coach up to 1999, "in the Lasch Building showers fondling or doing something of a sexual nature to a young boy."

“While Coach Paterno did his legal duty by reporting that information the next day, Sunday, March 3, to his immediate superior, the then Penn State Athletic Director Tim Curley, the Board reasonably inferred that he did not call police. We determined that his decision to do his minimum legal duty and not to do more to follow up constituted a failure of leadership by Coach Paterno.

“Many alumni, faculty, staff and students are inquiring about how we plan to honor Coach Paterno’s many contributions to the University. It has always been the Board’s intention to fulfill his employment contract and to name him head coach emeritus. Other options also are under consideration, but the Board feels it would be premature to make any final decision at least until the final report of the independent counsel Judge Louis Freeh is publicly issued in conjunction with the Special Investigations Task Force.”

The most telling statement from the Board of Trustees: “We determined that his decision to do his minimum legal duty and not to do more to follow up, constituted a failure of leadership by Coach Paterno.”

Joe Paterno’s football program generated $50 million in revenue for Penn State University annually in the last decade; making Paterno the most powerful man at Penn State. In the simplest of terms – Joe Paterno and Penn State had 50 million reasons to do their best to cover-up the crimes Jerry Sandusky is alleged to have committed in the school’s football locker room.

Paterno suggesting to his superiors in 2002: “We got a problem, I think. Would you guys look into it?’” is as unacceptable today as it was when Mike McQueary first told Paterno about the horrific scene he witnessed in the locker room.

Paterno had three sons, two daughters and 17 grandchildren. As unimaginable a picture as Mike McQueary had painted for Paterno, he had to know what happened was wrong, and he had to take charge. Paterno had to know what he was being told would forever taint Penn State football and Penn State University. As the de facto leader of the Penn State community, Paterno had to know what to do, but he didn’t take on the leadership role.

The test of a real leader is how they react to the toughest of challenges. It’s easy to react to the peaks; the challenge is in what you do when you’re in the valleys.

The greatness of Joe Paterno, his legacy is in large part the hundreds millions of dollars he raised for Penn State and the profile he created for Penn State, allowing Penn State to become one of America’s leading universities. It’s also in the many men he coached, how he helped shaped their lives. But it’s also in how he didn’t properly handle the Sandusky allegations.

How should Penn State honor Joe Paterno? The school needs to and should do something. Paterno is at the center of one of the biggest embarrassments in Penn State history, but he is also responsible for much of the success and positive profile Penn State has enjoyed. Renaming Beaver Stadium, at least in the short term isn’t the right idea. Time might heal many of the wounds that have been opened, but that time isn’t now.

For Sports Business News, this is Howard Bloom

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Monday, March 19, 2012

Theo Fleury, Shame and honor – telling the truth

The sports industry experienced a terrible end to 2011, stung by allegations of coaches closely linked to two of America’s most important college sports programs had abused children entrusted to their care. Early November began with former Penn State Assistant Football Coach Jerry Sandusky’s indictment on more than 50 charges of sexually abusing children. Syracuse’s men’s basketball program was tainted by allegations long-time associate Head Coach Bernie Fine had abused two former Orange ball boys.

In the mid-1990’s, Canadian hockey felt the shame of adult male predators taking advantage of, and ruining the lives of, the young men in which Canadian hockey parents had put their faith.

Graham James was elected The Hockey News “Man of the Year” in 1989 after coaching the Swift Current Broncos of Western Hockey League (major junior league and the premier NHL development league) to the WHL title. James began his junior hockey coaching career in 1984.

In 1996, former National Hockey League player Sheldon Kennedy and another unnamed man came forward with allegations that James had abused them in 1984 and 1985. On January 2, 1997, James pleaded guilty to 350 sexual assaults against the two players, and was sentenced to three-and-a-half years in jail. He was paroled in 2001. James was handed a full pardon from the Canadian government in 2007 – exonerated for the unspeakable sins he had committed. Kennedy and the unnamed victim weren’t the only young men to be abused by James.

Graham left Canada soon after he was pardoned, settling in Spain, where he resumed coaching young hockey players. He was banned from ever coaching again in Canada after his 1997 conviction. That ban didn’t extend to Europe. When the Canadian Hockey Association learned that James was coaching in Spain, the CHA notified European ice hockey officials and he was fired.

Theo Fleury’s National Hockey League career lasted 16 seasons, 16 seasons most hockey insiders never believed Fleury would play. One of the smallest players of his generation, Fleury played in a physical style that often led to altercations on and off the ice.

As a junior hockey player representing Canada, Fleury was at the center of the infamous “punch-up” in Piestany, a brawl that resulted in the disqualification of both Canada and the Soviet Union from the 1987 World Junior Ice Hockey Championships. Fleury collected over 1,000 points during his NHL career and was a member of the Calgary Flames 1989 Stanley Cup championship team.

Fleury battled demons throughout his NHL career – drugs and alcohol. Fleury endured a very different battle, as a 14-year old when he first met Graham James.

In his 2009 autobiography “Playing with Fire” Fleury alleged he had been sexually abused by James as a 14-year-old. The book became a best-seller in Canada. The increased interest in Fleury's story led to police filing additional abuse charges against James, who subsequently pleaded guilty to charges of sexual assault. Fleury has since become an advocate for sexual abuse victims, and has developed a career as a public speaker.

In December, James was convicted of abusing Fleury and another young hockey player. James will be sentenced in a Winnipeg court on Tuesday for the crimes he committed against Fleury and the other unnamed victim.

Fleury read a heart wrenching victim impact statement at Graham James’ sentencing hearing last month in Winnipeg: “At 14, I figured I could get through it myself. I planned to wrap myself up in a blanket at bedtime again. I still had some fight left in me.

“I was billeted with a woman named Mrs. Bennett, but Graham James insisted I sleep over at his house at least twice a week. The days I had to go over to Graham’s filled me with dread. From the moment I woke up I would start making up excuses, which never worked. I could say, “My dad died.” “So what? You’re comin’ over and you’re not getting a paycheque if you don’t.” I couldn’t rub two nickels together. And I couldn’t ask my parents for money, because they had none. I relied on Graham for everything. And that’s the way he wanted it. I could not shake him with a sledgehammer. Then he would pull the “poor me” stuff. “You don’t like me. You think I haven’t done anything for you.” I fought him off for a long, long time. I would get absolutely no sleep. None. I was on guard.

“He’d wait until the middle of the night, and then he’d crawl around the room in the dark on his hands and knees. He had the blinds duct-taped to the windows so no light could get in. It was the same every time. He would start massaging my feet and I wouldn’t move, pretending to be asleep. He would try to come up higher, but with that blanket wrapped so tight, he couldn’t get at me. The whole charade was taking a toll. I would drag myself to school the next day and fall asleep in class.

“Graham convinced me that, if not for him and his help, I would not be going to the National Hockey League. As far as I was concerned, the reason for my whole existence was to make it to The Show. My only worth to anyone was my ability to play hockey. What was the point of living if I had no value? He was in my ear that whole year. He told me I had to listen to him, do as he said because he was my only chance to make it. No one else had been beating the door down to draft me. I hadn’t grown much, and although I ate non-stop I put on maybe fifteen pounds, tops. A guy my size in the Western Hockey League was unheard of.

“It took a full year, but finally, on the night we heard that Winnipeg had sold the Warriors to Moose Jaw and we would be moving there, he just broke me down. I was exhausted. He had put himself in a position of full power and control. In 2005, I read an article in the New York Times that described how military doctors at Guantanamo Bay in Cuba advised interrogators on how to break prisoners down by increasing their stress levels and exploiting their fears. Boy, did I relate to that.

“At least twice a week that first year, Graham would bother me and I’d fend him off. But that night, I left the blanket on the bed. I was 14. Kids are funny. Each time I stayed over, I hoped that maybe he would leave me alone. I mean, he would act perfectly normal all evening. We’d watch a movie and he would make popcorn. We’d talk hockey and strategy. He would give no indication about what he was planning to do.

“The first few times he got at me weren’t so bad because I was gone. I would open my eyes and he would be standing over me. I knew something had happened, but I was not sure what. The mind can do some amazing things. Even years later in therapy, when telling the counselor about it, I would check out — leave my body. She’d have to literally shake me to bring me back. But I wasn’t always able to do that. He started a routine whenever I was over — masturbate on my feet, perform oral sex, then let me sleep.

“I thought about telling, but who could I turn to? Who would believe me over him? And what would happen if I did tell? I wasn’t stupid; I could see how it would play. I would have been stigmatized forever as the kid who was molested by his coach. The victim. Would minor hockey have said, “Wow, we better watch out for Theoren and protect him because he told the truth?” No. It would have been, James was a pervert and Fleury “let him” molest him. Or I would be the equally pervy kid who had a “relationship” with his coach. Would I have been invited to the Hockey Canada camp that led to Piestany, which led to the NHL? Get real.”

Theo Fleury has spent a lifetime haunted by what Graham James inflicted on him when he was 14, too young, too impressionable and too naïve to fight back. Fleury and Sheldon Kennedy were two of Graham James many victims, two men who managed to overcame the shame Graham James made them feel to play in the National Hockey League.

As reprehensible as the allegations are that Jerry Sandusky is facing, if it’s possible, Graham James took the sexual abuse of young men to an even lower level. James convinced Fleury, Kennedy and countless other young hockey players – teenagers – that he held their fate, their dreams and if they told anyone what he had done to them – their lives, their dreams would end.

Fleury and Kennedy must have felt unimaginable shame. At times, they must have found it impossible to face their teammates, their friends, and their family. They were boys becoming men, suffering abuse day after day from a predator. Tuesday, Graham James will face justice.

For Sports Business News, this is Howard Bloom

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Wednesday, March 14, 2012

Daniel Snyder and his Washington Redskins – this time it might be for real

Washington Redskins owner Daniel Snyder remains one of the most polarizing figures in sports today. Beloved by those who Snyder would say understand his management style; hated by those who look at the brash businessman who does whatever he wants and believe he is a failure and misunderstood by most, Snyder and his Redskins were front and center this week as the National Football League began its 2012 free agency signing period.

On Saturday, the Redskins made one of the biggest trades in franchise history, picking up the number two selection in April’s NFL draft. The Redskins may have mortgaged their future for the right to draft Heisman Trophy winner Robert Griffin III, a QB from Baylor. The Indianapolis Colts are expected to take another quarterback, Stanford’s Andrew Luck, with the first overall selection. The Redskins traded three first-round draft picks and a second-round draft pick to the St. Louis Rams for the second pick in the draft.

One of the keys to the NFL’s interest in having a league that offers competitive balance, teams operate on a level playing field when it comes to their team payroll with a league mandated salary cap. During the 2010 season, the NFL operated without a salary cap during their ongoing negotiations with the NFL Players Association relating to the collective bargaining agreement the two sides were working toward at the time. The NFL’s request was regarded as an unwritten rule, a “gentleman’s agreement.” Teams were told not to structure player contracts to gain an unfair competitive advantage when the salary cap returned. The Redskins and the Dallas Cowboys violated the spirit — if not the letter — of the NFL’s wishes.

The owners of the 30 other NFL teams contacted NFL commissioner Roger Goodell and demanded that Goodell take action against the Redskins and the Cowboys.

“All the clubs were warned not to do anything to create a competitive advantage when the salary cap came back, and that’s what [the Redskins] did,” said one of those familiar with the matter in a Washington Post report. “They were very obvious about it. A lot of people were very angry about it. The ramifications could have been far worse for them. They could have lost draft picks. Some people recommended that to the commissioner.”

The NFL has reduced the Redskins’ salary cap by $36 million over the next two seasons; and at least half must be subtracted this year.

Former Indianapolis Colts wide receiver Pierre Garcon agreed on Tuesday to a five-year, $42.5 million contract within the first hour of free agency. They followed that by agreeing to a deal with wide receiver Josh Morgan and pursuing Eddie Royal.

The question has been asked before – is Daniel Snyder a good or a bad sports team owner? And how do the events of the past few days impact on his legacy as the owner of the Redskins?

Snyder’s life has been consumed by an enduring love for the Washington Redskins. Growing up in the D.C. area, his youth and young adulthood were shaped and inspired by his devotion to the team. Now in his second decade as owner, Snyder has put his passion into action. He has consistently led the franchise to new prominence in the community, the business world, and the National Football League. Under his leadership, the team has raised millions of dollars for charities and maintained its place in the top tier of the world’s most valuable sports franchises.

Snyder, 47, is prominent in the affairs of the NFL, where his expertise in the fields of marketing and media have been recognized with appointments to the Broadcast Committee, the Business Ventures Committee, the Digital Media Committee, the Hall of Fame Committee (which oversees the Pro Football Hall of Fame in Canton, Ohio) and separately, as a member of the Board of Directors of the Pro Football Hall of Fame.

The Redskins, who continue to be ranked among the world’s most valuable sports franchises on Forbes magazine’s annual list, remain at the forefront of NFL marketing and business organizations. Since buying the team, Snyder has launched a highly successful retail arm, with more than a dozen Official Redskins Stores in Virginia and Maryland, as well as mobile units for use at home games and other events.

FedEx Field, the team’s wholly-owned stadium, has the largest seating capacity in the NFL with nearly 92,000 seats. Tickets to Redskins games have been sold out for more than 40 years. Since he purchased the team, Snyder invested more than $100 million in improvements to the facility, including high-speed escalators to the upper deck, updated signage, more than 1,000 flat-screen TVs on concourses and other areas, as well as the League standard-setting Owner’s Club East and Owner’s Club West private luxury suites. During the 2010 offseason, the Redskins installed two new video boards – 30 feet high and 100 feet wide – in each of the end zones at FedEx Field.

The screens feature state-of-the-art high-definition LED displays and are triple the size of the previous end-zone video displays. The team will also enhance the fans’ game-day experience with all new game clocks, play clocks, other in-stadium video displays, and the Party Deck Platform on the Club Level.

The Club’s media ventures include Redskins Nation, a daily 30-minute television show produced by the Redskins Broadcast Network, television and radio broadcasts via, a robust editorial staff, professional sports‘ first full-time independent blogger, and, the team’s fan forum with more than 100,000 registered members. The team also produces a variety of other television programs, broadcast independently as well as in partnership with local television outlets.

However, the Redskins have made some of the worst player decisions in NFL history – overpaying free agents that produced little, if anything, for the team on the field.

Bruce Smith -- five-years, $23 million in 2000. He played 62 games for Washington in four years Antwaan Randle El -- seven-years, $31 million in 2006. He played 63 games over four years
Mark Brunell -- seven-years, $43 million in 2004. He played 33 games in four years.
Laveranues Coles -- five-years, $35 million. He played 32 games in two seasons.
Jeff George -- four-years, $18.25 million in 2000. He played 8 games over two years before retiring. Albert Haynesworth -- seven years, $100 million in 2009. He has played 16 games with Washington, but only 4 in 2010.
Deion Sanders -- seven-years, $56 million in 2000. He played 16 games with Washington in just one season.

The key to a successful football team is their quarterback. Robert Griffen, III could be a franchise quarterback, a player who could lead the Redskins for the next decade. The Redskins biggest challenge over the last few NFL seasons has been with their quarterbacks. If Griffen becomes the quarterback the Redskins have been searching for, the decision to trade draft picks for Griffen might be the best decision the Redskins have made in recent memory. The team will need to sign free agents to make the Griffen trade work. The good news, the Redskins like signing free-agents, the bad news is their history of signing the wrong free agents.

The NFL’s decision to reduce the Redskins payroll by $36 million over the next two years won’t help the team’s efforts to sign free-agents, but it won’t hurt as much as people might believe it will. Griffen needs a year or two to begin to develop as an NFL quarterback. When his third season begins, the Redskins will (at least financially) be in a position to sign the key free-agents they’ll need to complement their quarterback.

Daniel Snyder’s biggest problem is his reputation to micromanage the Redskins. New England Patriots Owner Robert Kraft might be the best owner in sports today. Kraft leaves all of the Patriots on-field decisions to their general manager and head coach Bill Belichick. The Patriots have won three Super Bowls and played in two others in the last ten years. The Redskins haven’t been to a Super Bowl since 1984. Kraft manages the Patriots business off the field. Given the success the Patriots have enjoyed over the last decade, maybe it’s time Snyder starting following the style and example Robert Kraft has set for managing and owning an NFL team.

For Sports Business News this is Howard Bloom

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Tuesday, March 13, 2012

Walking the fine line – Don Cherry and the future of Hockey Night in Canada

There is a fine line that on-air media talent walks every day. Controversy generates interest, interest generates ratings and ratings generate advertising dollars. Rush Limbaugh referred to Sandra Fluke, the Georgetown law school student, as a “slut” and a “prostitute in a recent radio broadcast, which created national controversy resulting in an apology from Limbaugh.

Carbonite and AOL walked away from their existing ad commitments to Limbaugh's show. Other hallmark marketers including Allstate, Capital One, J.C. Penney, Netflix, and Sears announced that any of their commercials that had run on Limbaugh's show had been put there by mistake and that they did not want to be associated with his program in the wake of his three-day attack of a student. Limbaugh’s reaction – other companies were lining up to sponsor his show. The Limbaugh/Fluke story was covered on national news broadcasts. His apologies aside – Limbaugh’s brand awareness grew, his ratings increased and while he did lose sponsors, those sponsors will be replaced. Limbaugh walked a fine line but he survived.

The most valuable Canadian sports property is Hockey Night in Canada (HNIC). Hockey Night in Canada is primarily associated with CBC's Saturday night NHL broadcasts, a practice that began in 1931 on the CNR Radio network and its predecessors, and debuting on television (CBC) beginning in 1952. Initially only airing a single game weekly, the modern incarnation airs a weekly double-header, various segments during the intermissions and between games (such as Don Cherry's Coach's Corner), and pre and post-game coverage of the night's games.

The current contract the CBC has with the NHL expires after the 2014 Stanley Cup playoffs. CTV Canada’s largest television network is expected to aggressively bid for the rights to HNIC. CTV’s parent company, Bell Globe Media, owns TSN Canada’s largest sports cable network. Bell Globe Media and Rogers Communications (who own SportsNet Canada’s second largest cable sports network) purchased a controlling interest in Maple Leaf Sports and Entertainment (owners of the Toronto Maple Leafs) in December 2011. If Bell Globe Media (or Rogers Communications) gains control of HNIC, they would be positioned to become the dominant Canadian television sports rights holder. If the CBC loses HNIC, their sports broadcasting future would be in doubt.

The CBC created Coaches Corner, a segment that features former Boston Bruins coach Don Cherry in 1981. Throughout the last 31 years, Coaches Corner has been a ratings winner for the CBC. The segment has generated significant advertising dollars for the CBC. Cherry’s key to success – being controversial, and walking the same fine line Rush Limbaugh did when he spent three days talking about Sandra Fluke.

Brian Burke, the Toronto Maple Leafs general manager, fired the Leafs Head Coach Ron Wilson on March 2, 2012. Cherry used the March 3 Coaches Corner to criticize Burke.

Cherry began his assault on Burke by insinuating Burke had contacted the CBC hoping to have Cherry fired: "I had my say about him [Wilson] three-and-a-half years ago, the blood is in the water," Cherry said. "The funny thing though, and here is what kills me, [Brian] Burke goes to my bosses and says I am a bad guy because I said something vicious about his coach; two weeks later he fires him, figure that one out folks!"

Cherry was only beginning his attack on Burke. Brian Burke is an American. Burke built the Vancouver Canucks into Stanley Cup contenders. The 2007 Anaheim Mighty Ducks won the Stanley Cup; Brian Burke was the Ducks general manager.

"Every team in the National Hockey League has a guy from Ontario except one, guess who it is? It’s Ontario's Toronto Maple Leafs," Cherry said. "Now if you want American college guys; if you want Americans you got the team … He has American college guys that play for him right now and that's the way I feel and I could go on and on about the whole deal."

Cherry believes Burke is responsible for the situation and is surprised the Providence, R.I., native hasn't decided to bring players from Ontario after failing to make the playoffs in the past three seasons.

"We pay his salary from Ontario, we are the fans out there from Ontario," he said. "Not make the playoffs for three years in a row, probably not four and not have one guy from Ontario, that's a crime as far as I am concerned. …

"I see these kids busting their tails and then they're going to think they won't make Toronto. They would love to make Toronto and that's all I got to say about that."

Don Cherry was playing with fire. Brian Burke’s record speaks for itself. He builds winners, has won a Stanley Cup. Suggesting Brian Burke isn’t interested in hockey players from Ontario doesn’t make any sense. Why then did Cherry say what he said – in part to generate ratings and build his own brand awareness. That’s not to suggest Don Cherry didn’t believe in what he said, but he said what he did because of his reputation.

The Globe and Mail’s (based in Ontario) Bruce Dowbiggen suggested in a March 4 report that the future of HNIC on the CBC could be directly linked to Cherry’s future with the network. Dowbiggen focused not only on the March 3 Coaches Corner segment, other Coaches Corner’s and NHL commissioner Gary Bettman’s refusal to appear on HNIC over the last year, as signs the NHL might walk away from the CBC.

There are other Canadian NHL teams who are concerned about the CBC’s handling of the NHL. During the NHL Board of Governors meeting held in January in Ottawa, the CBC’s future with the NHL was a topic of conversation. According to Dowbiggen, Burke led the assault but wasn’t the only Canadian NHL team executive to express concerns.

“I didn't comment at all on [Ron] MacLean or Cherry,” Ottawa owner Eugene Melnyk told The Globe and Mail. “My issue dealt with the number of games shown on HNIC that are not Sens games and my concern about how skewed they are to another team that you can easily deduce. ... I wasn't given any concrete response.”

“It got a little warm in there,” says Edmonton Oilers President Patrick LaForge. “If NHL realignment was a 3 on the Richter emotional scale, this was a 5. Having said that, it's not abnormal for our meetings to get that way. I just didn't think it was the right format for that discussion.”

The CBC and the NHL are partners. Fifty-five percent of the CBC’s budget comes from advertising revenues (Canadian taxpayers pay the other 45%). The single biggest source of advertising dollars for the CBC is HNIC. The CBC needs the NHL, but does that give the NHL editorial control on HNIC?

Yes and no; and that’s where Cherry’s nonsensical March 3 comments showcase why the CBC needs to fire Don Cherry. There is nothing to suggest in the 15 years Brian Burke has served as an NHL general manager for four different NHL teams that Burke has a bias against Ontario-born NHL players. Cherry’s inane statements on Coaches Corner embarrassed Burke, the NHL and the CBC.

Cherry’s March 3 Coaches Corner wasn’t the first time his comments have embarrassed both his employer and the NHL. The NHL has no right to censor what journalists say about the league. At the same time, the league’s broadcast partners have to be certain that there is sensitivity regarding what they say about the league.

The NHL does have the right to determine who they want to work with. If CBC has a future with the NHL that future isn’t going to include Don Cherry. Cherry has crossed over that mythical line in the sand too often.

For Sports Business News, this is Howard Bloom

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Friday, March 09, 2012

The Mets Mess – is it time for Bud Selig to act?

At the start of the 2011 Major League Baseball season, Commissioner Bud Selig acted in what he believed was in the best interest of baseball – taking control of the Los Angeles Dodgers. Dodgers’ majority owner Frank McCourt, and his ex-wife Jamie McCourt, were embroiled in a bitter divorce with ownership of the Dodgers. The start of the 2012 MLB is a month away and Selig must be wondering if he’ll be forced again to take control of another storied baseball franchise, the New York Mets.

Last Monday, Federal District Court Judge Jed S. Rakoff, ruled Mets owner Fred Wilpon “must pay millions of dollars to the victims of Bernard L. Madoff’s fraud and go to trial on the gravest accusation against them: that they blinded themselves to evidence that Madoff might have been up to no good during their many years of profitable investing with him.”

Last Sunday, New York Newsday reported the Mets' ballpark-related revenue, including parking, concessions, stadium advertising and more, has fallen by more than 30 percent since Citi Field opened in 2009, and premium-ticket sales have fallen almost 50 percent.

The Mets reportedly are in the midst of cutting their projected 2012 payroll to $91 million from the $143 million in 2011.

In one of the best examples of buyer beware – on February 3, 2009, the Mets signed pitcher Oliver Pérez to a three-year $36 million contract. On May 6, 2009, Pérez was put on the disabled list due to patellar tendinitis in his right leg. He returned to the rotation on July 8, 2009.

On August 26, 2009, Pérez was diagnosed with patellar tendinitis in his right knee and underwent undergo season-ending surgery. He finished the season 3–4 with a 6.82 ERA.

On May 15, 2010, Manager Jerry Manuel moved Pérez to the bullpen. After repeated attempts by the Mets' front office, Pérez refused a minor league assignment to work on his pitching, despite his poor pitching record. On June 5, 2010, the Mets placed Pérez on the 15-day DL due to a patella tendinitis of right knee. As Pérez was placed on the disabled list (DL) soon after refusing an assignment to the minor leagues a second time, the league investigated the timing of the DL stint, later clearing it. After July 21, Pérez made only six appearances, all in relief. Pérez finished the 2010 season 0-5 with a 6.80 ERA in just 46.1 innings pitched.

The Mets unconditionally released Pérez on March 21, 2011, still being responsible for the remaining $12 million on his contract.

Perez’s agent Scott Boras lashed out at the Mets for announcing they would lower the team’s payroll and focus on developing their team through player development.

"When they are not providing fans with the highest quality of play, and they take an attitude of 'we're going to take on a development role,' knowing that the TV contracts, the market size and such allow them revenues that far exceed many of the clubs that have to pursue those development policies, that impacts the game," Boras told ESPN New York. "The major franchises who are getting the majority of revenues should provide a product, or an attempt at a product, that has the near-highest payrolls commensurate with the markets they are in.

"If a player does not perform for the betterment of their team, then teams bring in other players. On the other side, there has to be an equation where there are requirements for ownership to perform at certain levels, and if they don't, they would lose their right to own a club and be replaced. I believe if we do that, we're going to have a better game."

It’s not as simple as Boras makes it out to be. It is always in the best interest of a professional sports franchise to build their team through player development. The Boston Red Sox 2012 payroll is expected to exceed $160 million. The Red Sox 2012 lineup is anchored by players the Red Sox have drafted and developed including: Dustin Pedroia, Jacoby Ellsbury, Kevin Youkilis, Clay Buchholz, Jon Lester and Daniel Bard.

Boras continued: "When you're seeing franchises in major markets not pursuing to the levels that the revenues and the fan base and the market provide, then I think you have an ethical violation of the game."

Who is Boras kidding? The New York Mets ownership challenges have little to do with an ethical violation of the game – the Mets are hemorrhaging money everywhere and have no choice but to cut their team payroll. That isn’t a moral or ethical dilemma as Boras suggests, but it does present Selig with a decision – should take steps to force Fred Wilpon to sell the New York Mets.

Speaking to reporters last week at the Mets spring training facility in Port St. Lucie, Florida, ESPN New York reported the Mets were on the verge of completing seven $20 million, 4 percent minority shares to investors, with Major League Baseball approval granted and the money sitting in escrow. The sales of two more shares are nearing approval by MLB, Wilpon added, while an additional two are "in the process."

In total, Wilpon told ESPN New York, as many as 12 shares may be sold, which would generate as much as $240 million into the organization. That would go toward paying off a $25 million loan from Major League Baseball, and pay down the first mortgage on the team and provide cash on-hand for franchise operations.

If the Mets are infused with $240 million, will they be forced to take $83 million that the trustee has sought from the proceeds of the sale, and give it to the victims of Madoff’s Ponzi scheme? And if so, how will that impact Wilpon’s ability to conduct the day-to-day business of the New York Mets? If, as New York Newsday reported, the Mets baseball revenue has dropped by as much as 30 percent, an $83 million hit to the Mets could cripple the Mets financially.

Selig has to be concerned if Wilpon is on the verge of doing harm to the image of Major League Baseball. The New York Times’ Richard Sandomir reported: “a greater, perhaps more perilous problem for the team’s owners, Fred Wilpon and Saul Katz, was that (Federal District Court Judge Jed S.) Rakoff cleared the path for a jury to sit in judgment of the competing claims at the heart of the lawsuit:

“Were the men, who invested some $1.6 billion with Madoff over two decades, innocent victims of a man they considered a friend and a financial whiz? Or were they sophisticated investors who, in myriad ways over many years, were shown evidence that Madoff’s returns were too good to be true, alarms they chose to ignore or discount because they and their businesses had grown too dependent on their Madoff profits?

“That trial will begin on March 19 in federal court in Manhattan, and it could see Wilpon and Katz testify under oath about the inner workings of their considerable real estate, sports and financial empire.”

On the verge of the 2012 season, the Mets are a mess of near biblical proportion. Bernie Madoff is one of the most hated men in recent American history. If Fred Wilpon is in any way connected to Madoff other than as another victim, Bud Selig must act in the best interest of baseball.

If the Mets ownership damages the reputation of Major League Baseball, and if Fred Wilpon no longer has the financial wherewithal to manage the business dealings of the New York Mets, Bud Selig will act in the best interest of baseball and force Fred Wilpon out of the game.

Insiders used in this Insider Report: The New York Times, ESPN New York. For Sports Business News this is Howard Bloom

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