Thursday, May 31, 2012

Stanley Cup Fever – with a dose of NHL Armageddon 2012


The Stanley Cup Finals began in New Jersey last night, with the Los Angeles Kings wining a thrilling 2-1 game in overtime. Before the Finals began NHL Commissioner Gary Bettman held his annual State of the NHL. It’s been a very good year for the NHL, off the ice – the business of the NHL has never been better than it is today.

“During the regular season, we played to nearly 96% of capacity and attracted about 21.5 million people, and we're at nearly 102% of capacity for the playoffs.

“In the face of what remains a challenged economy, we estimate that we did $3.3 billion worth of business, which is another record for revenues for us. I can't thank adequately our fans, business partners and broadcasters for all of their support.” Bettman noted.

The National Hockey League is never going to generate the $9 billion the National Football League did in 2011, or the more than $7 billion Major League Baseball reportedly collected in 2011. The NHL remains far behind the National Basketball Association in total revenue generated but $3.3 billion they did collect this year stand as a record the NHL should be proud of.

There is a dark cloud on the NHL’s horizon – the current collective bargaining agreement is set to expire on September 15. 

Seven years ago the Tampa Bay Lightning defeated the Calgary Flames in a thrilling seven game Stanley Cup Final. The Lightning captured the hearts of northern Florida. On September 15, 2004 NHL owners locked out the players. The National Hockey League cancelled the 2004-05 season becoming the first North American professional sports league to lose an entire season to a labor stoppage.

“We also look forward to finally beginning meetings with the Players' Association. The goal obviously is to reach a Collective Bargaining Agreement that can take the game and the business to even higher levels than have been reached over the past seven seasons.” Bettman said.

Bettman was asked several questions about the possibility of a labor dispute delaying the start of the 2012-13 NHL season. The commissioner refused to deal with speculation, time and time again reiterating that the two sides haven’t even begun negotiating a new CBA.

That indeed may be the point the Bettman is missing. Bettman ‘hopes’ the two sides will be able to begin meeting in two weeks (after the finals end). That would suggest the NHL and the National Hockey League Players Association may not meet before mid-June giving the two sides four months to negotiate a CBA that took the NHL and the NHLPA two years to negotiate seven years ago.

The two sides were at polar opposites seven years ago. The NHL hired economists to suggest NHL franchises were collectively losing hundreds of millions of dollars. On the eve of game seven of the Lightning-Flames 2004 Stanley Cup Final anyone close to the game advised hockey fans to enjoy game seven, the last hockey game they would see for some time. The same level of animosity doesn’t appear to exist between the NHL and the NHLPA in 2012.

“I don't want to be presumptuous and characterize where we may or may not be right now because we haven't begun the formal exercise.

“But if you go back in history, one of the reasons we wound up where we did, people who were covering us at the time, remember, we had told the executive director then of the Union, at least four years in advance, the systemic problems that had become obvious to us at the time, and we were mightily for a long period of time. At that point the Union was aware of it and chose to do nothing about it.

“We're in a completely different situation. There's a new executive director who has gotten himself up to speed, new people, new relationships. Time will tell how this all sorts out.

“I'm hopeful that it sorts out easily because labor peace is preferable to the alternative.”

The new executive director Bettman referred too – Don Fehr.  Bob Goodenow was the NHLPA’s executive director seven years ago. Seven years later, Fehr is the third person who has managed the NHLPA since Goodenow was fired in July of 2005. Fehr’s reputation is second to none. Fehr replaced Marvin Miller as the Major League Baseball Players Association executive director. Miller is the founding father for collective bargaining and players rights being protected. Fehr battled MLB for more than 20 years, never blinked and never lost to ownership. 

Fehr who has worked with the NHLPA for two years spoke with the Globe and Mail and offered this: “All I can say is, with all the talk about other sports, the one that is far and away the most stable is baseball,” said Fehr.

“I find myself always wondering if I actually understand it right, so I want to make sure. That’s why I have a good staff. I’m talking to players all the time. That’s why I’m not the slightest bit bashful about asking questions and seeking assistance from anybody who may be able to assist the players in this regard.

“But if the question is, am I worried about our ability to negotiate the agreement, I’m not.” Fehr told the Globe and Mail.

The NHL has owned the Phoenix Coyotes for three years. The NHL hopes to be in the midst of concluding the sale of the franchise for a reported $170 million to former San Jose Sharks president Greg Jamison, a sale that has yet to be completed.

“I spoke to Greg Jamison early today. He continues to do the two things he needs to do to secure the future of the Coyotes where they are, in Arizona: One, working to conclude a set of documents with the City of Glendale on the building management situation. And he continues to put his equity together.

“The City of Glendale I believe next week is supposed to vote on the management agreement. Once that's in place, I think Greg will be able to conclude hopefully the finalization of his equity raise.” Bettman reported.

It was during last year’s Stanley Cup Finals Bettman announced the Atlanta Thrashers would be moving to Winnipeg. The Winnipeg Jets sold out their first five NHL seasons when they put season tickets on sale in early July. There has been a great deal of speculation if Jamison fails to complete his purchase of the Coyotes the team would be sold to interests in Quebec City.

Bettman made it clear the NHL has no Plan B when it comes to where the Coyotes will play their 2012-13 season if it isn’t in Phoenix. It appears the Coyotes who have finished last in NHL attendance for the last three years will be playing in Phoenix regardless of who owns the team next year.

One issue Bettman briefly noted was whether or not the NHL would allow their players to participate in the 2014 Sochi Olympic Games.

“The benefits from the Olympics have to be evaluated as we balance it against the impact that it has. I think in that regard we have to take into account where the next two Winter Olympics are going to be.

“Having said all that, I see this as joint problem solving that we need to do with the Players' Association. I don't think it's anything other than a joint issue, joint decision, that we need to do in the best interest of the game and the players.”

The NHL was happy to participate in the 2002 Salt Lake City Games and the 2010 Vancouver Olympics. The 2014 Games are in Sochi and the 2018 Winter Games are heading to Pyeongchang, South Korea. NHL players and in particular the Russians who play in the NHL want to play in the 2014 Games but with the next two Winter Olympics in Asia it’s likely the NHL is having sober second thoughts allowing their players to represent their countries in the Olympic Games.

For Sports Business News this is Howard Bloom

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Wednesday, May 30, 2012

Warren Sapp – what’s wrong with the National Football League

Warren Sapp represents everything that is wrong with today’s professional athlete. He is today what he has always been, an arrogant, self-righteous man whose sense of entitlement suggests he believes he is above the law.

Selected by the Tampa Bay Buccaneers with the 12th overall pick in the 1995 NFL Draft, Sapp was paid close to $63 million during his 12 year NFL career. Since his retirement he has worked for the NFL Network (his contract ends on August 31, 2012). He was paid $540,000 per year as an analyst at the NFL Network. On April 4, 2012 Sapp declared Chapter 7 bankruptcy, according to some media reports to avoid going to jail.

"Do you think I wanted to declare bankruptcy?'' Sapp told the Tampa Times in April. "Do you think if there was any other way possible I would have done it? It was either this or go to jail. Those were my choices.''

Sapp believes his financial troubles are tied to a failed construction project in Hollywood, Florida. According to published reports, “Sapp's $6.45 million in assets includes 240 pairs of Jordan athletic shoes worth almost $6,500, a $2,250 watch and a lion skin rug worth $1,200. He also reported losing his 2002 Super Bowl ring with the Bucs and his 1991 national championship ring from the University of Miami.”

The court documents were filed in the U.S. Bankruptcy Court in Fort Lauderdale on March 30. Sapp's average monthly income is $115,881, according to the filings, and includes $45,000 for a final contract payment with Showtime, $48,000 for an appearance with CCA Sports and $18,675 as an advance for a book deal.

Jamal Lewis who earned more than $41 million in his 9-year NFL career declared bankruptcy last week.
It would seem impossible to the most football fans how Sapp and Lewis could burn through tens of millions of dollars in so short a time.

Jack Brewer a former Giants/Vikings/Cardinals/Eagles player, who attended Harvard Business School while still in the NFL. He went on to work as a private wealth manager at Merrill Lynch, post-NFL and later started his own firm, a sports marketing company has some of the answers as to why things go so wrong for most NFL players.

“As a player, I wanted as much of the revenue as possible, given the fact that I was playing a game that cuts your total life expectancy to 52 years old. This is the harsh reality of playing the most violent team sport on the planet.

“But the real tragedy is the fact that over 80 percent of the players are bankrupt shortly after taking their last snap.” Brewer wrote in an op-ed piece for CNBC.

Brewer a five year NFL veteran always saw the forest for the trees, focused his NFL career on creating a life after football.

“Let’s be honest, most football players are from lower economic groups and communities, football is a
violent sport, the most violent sport today.”

Brewer noted that football players are paid millions of dollars over the four months of the National Football League season, believes it might help players if their contracts were paid over 12 and not four months.

“By simply changing the way that young, unvested players — 4 years in the NFL or less — get paid, the league would dramatically decrease the number of players who end up in embarrassing and detrimental financial situations.

“NFL players are paid over a four-month period, which causes obvious budgeting issues and never really affords these young professionals the opportunity to learn fiscal responsibility. You hear horror stories about bad financial advisors and agents stealing from athletes all the time.

“The fact of the matter is, the way players are paid adds more financial turmoil than the bad advisors or agents.

“If you were to pay young, highly qualified executives in any industry their salaries over a four-month period, they would probably have trouble budgeting their money. Players should have no choice but to take their paychecks and bonuses over a 12-month period. They should also have the option to defer a portion of their compensation, given their short career spans and young retirement ages. The current system is financial suicide.”

CBS and Showtime announced Friday Sapp would no longer be a part of "Inside the NFL". His current NFL Network contract expires in August. The chances of Sapp’s NFL Network being renewed -- slim and none and as the saying goes, “slim has left the building”.

The NFL owns the NFL Network. On March 21 the day NFL commissioner Roger Goodell handed down his Bountygate ruling Sapp told Pro Football Talk: “My source that was close to the situation informed me that [name omitted] is the one that was the snitch initially, I trust my source unequivocally. …I did not call anybody at the league and I did not receive any information from the league. ...

“That's the information that I got and I trust my source. I was given that information and I went with it, by a reliable source.”

Sapp then went on Twitter and named former Saint Jeremy Shockey as the former Saint who contacted the
NFL about the Saints bountygate program.

There is no proof that Shockey was the “whistle blower”. What made Sapp’s allegation even more shocking, while Sapp and Shockey never played together, both played college football at the University of Miami. Offering unsubstantiated reports on Bountygate was likely the final nail in Sapp’s NFL Network coffin. However it was not the only time he embarrassed his employer.

On February 7, 2010 Sapp was arrested in South Florida and charged with domestic battery. Sapp was in Florida to appear as an analyst for the NFL Network's coverage of Super Bowl XLIV, but following the arrest an NFL Network spokesman said Sapp would not appear. On March 24, the charges against Sapp were dropped.

What message does Warren Sapp send out about a National Football League player? In fairness to Sapp none of us (other than professional athletes) can understand the lifestyle of a professional athlete and how they deal with the millions of dollars they are paid. Sapp wasn’t the first and won’t be the last NFL player to lose the tens of millions of dollars. As Jack Brewer pointed out, the system is set up for the players to fail.

Sapp however has to be held accountable for “outing” Jeremy Shockey. Sapp works for the National Football League. Sapp should have understood that he needed to respect the process and not dive into Bountygate. Embarrassing the NFL hurt Sapp, and likely served as an opportunity to remind the NFL about what took place at Super Bowl XLIV in Miami.

Warren Sapp has lost a fortune and now is going to lose a job that paid him more than $500,000 annually. He’s losing his job because it appears he lacks “common sense.” The NFL Network has to fire Warren Sapp; he represents too much risk and not enough of a reward.

For Sports Business News this is Howard Bloom

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Tuesday, May 29, 2012

The NFL Concussion lawsuit – the price to be paid


There are now more than 2,200 former National Football League players and/or their families looking for justice. They are looking for a day of reckoning. The largest group of retired National Football League players ever gathered are together as one, united by their belief the National Football League knowingly withheld safety information while they played on Sundays, punishing their bodies while NFL owners made hundreds of millions of dollars and then billions of dollars at their expense.

A week ago a large group of retired players led by Football Hall of Fame member Eric Dickerson and two-time Pro Bowler Hoyle Granger alleged that the NFL did not do enough to prevent the long-term damage caused by concussions. The lawsuit was filed in the Southern District of Texas by the law firm Provost Umphrey.

According to nflconcussionlitigation.com the lawsuit also included the Estates of David Lunceford and Hall of Famer Ernie Stautner. The lawsuit alleges that both players were suffering from Alzheimer’s at the time of their death. Lunceford died at the age of 75 in May 2009, and Stautner died at the age of 80 in February 2006.

Former Browns running back Jamal Lewis is also part of the lawsuit. Lewis spoke with the Cleveland Plain Dealer about how he is living his life today – his life after football as a 32-year old. Lewis was taken as the fifth overall pick in the 2000 NFL Draft by the Baltimore Ravens. After spending his first seven seasons with the Ravens, Lewis signed a free agent contract with the Cleveland Browns prior to the 2007 season.

Lewis last week filed for filed for Chapter 11 bankruptcy protection, according to TMZ.com. According to the published report Lewis is calling his bankruptcy a 'reorganization', not total liquidation. The issue Lewis has is that he owns a lot of stuff, with assets totalling $14.45 million. Here's the problem - He also is $10.56 million in debt, and with a net worth of about $4 million, he just doesn't have the cash to pay his bills.

According to the report, he has five homes, a fleet of cars, and a 50-percent share in a Columbus, Ohio water park. Lewis made close to $41 million in his ten-year NFL career, more than enough money to last several lifetimes.

Lewis believes during his football career, a career that spanned high school football and four years at Tennessee that he suffered damage to his brain that he’ll never recover from.

"You got your bell rung," Lewis says. "You got dinged. You don't know that, 15 years from now, this hit or this situation can actually hurt you for a lifetime. Somebody's always fighting for your spot. So it's like, 'Suck it up. Get me back out there. Put me in, coach.' "

Lewis recalled the Browns opening game of the 2009 season, a game the Browns played in Cleveland against the Minnesota Vikings. Early in the second quarter Lewis and member of the Vikings defence ran into each other – their helmets colliding.

"My head was just ringing, and everything was like complete silence," Lewis remembers. "I could hear the [Vikings] coach saying, 'Jamal! Jamal!', asking if I was all right. But that's the only person I could really hear. It was like I was zoned out."

A few plays later (in the same game) Lewis’ replacement was injured, Lewis went back in. The next day an MRI showed a neck bruise, but no one, he told the Cleveland Plain Dealer, mentioned a concussion or ordered a neurological exam.

According the Plain Dealer report: “Lewis had migraines. Insomnia. Blurry vision. Bright lights bored into his skull like an ice pick. He couldn't keep food down, including his traditional pre-game steak. His brain was woozy, his concentration shot. When the quarterback called two plays at a time in the huddle, Lewis would repeat the assignments over and over, trying to hold them in his head.”

He never said anything to the Browns; he was concerned he would be benched. Lewis was in the last year of a three year $18 million contract he signed in 2007. NFL contracts are not guaranteed. Lewis had already been paid close to $35 million in his first nine NFL seasons. If the Browns had cut Lewis (NFL contracts are not guaranteed) Lewis stood to lose more than $6 million.

Lewis read about Dave Duerson, the former NFL all-pro safety whose life unraveled and who suspected his numerous football concussions were to blame. Duerson, killed himself last year. He shot himself in the chest, leaving instructions that his brain should be examined after his suicide.

"I'm 32," Lewis says. "Thank God I'm 32, but it's like, where is this thing going? You wonder what you've already done."

"The NFL has a responsibility," Lewis says in the Cleveland Plain Dealer report. "It's a game that a lot of guys want to participate in, but just because it's a privilege . . . doesn't mean that you should be shorted the information. I know I can go out and tear up my knee or my ankle or my shoulder. But I never knew that from these constant hits to your head, they could cause long-term effects.

"I probably wouldn't have done some of the things I did. A lot of the hits I went to take on for one yard, when I already got 30, I wouldn't have done. I looked at a lot of [running] backs who used to jump out of bounds like, 'You sucker!' But now I look at that guy and say, 'You were a smart runner.' "

Is Jamal Lewis another victim? Lewis earned $41 million in ten-years. Today he is bankrupt. How is it possible anyone could earn $41 million in his 20’s and be bankrupt by the time he turned 32? Lewis made bad business decisions, decisions that cost him a fortune. At the end of the day Jamal Lewis has to take responsibility for his financial troubles.

However is Lewis responsible for what took place in 2009 his last NFL season? Imagine suffering a debilitating injury wherever you worked and knowing that if you decided to report that injury to your employer you stood to risk losing your job and in Lewis’ case losing more than $6 million. It’s easy to suggest Jamal Lewis may have damaged his life, may have suffered permanent brain damage by not telling the Cleveland Browns he was suffering, but Jamal Lewis did not have the benefit of any workers compensation. His employer had the right to cut him and he would be paid nothing.

Of the four major North American sports leagues: the NFL, Major League Baseball, National Basketball Association and National Hockey League, only NFL contracts are not guaranteed. If a hockey player suffers a career ending injury while playing hockey, he is paid the full value his contract. If Lewis had reported he was suffering head trauma the Browns could have cut Lewis and not paid him the $6.5 million he earned in 2009.

More than 2,200 retired NFL players are suing the National Football League. A growing number have been enshrined in the Football Hall of Fame. Most earned far less than the $41 million Lewis was paid during his NFL career. These men all share in pain and suffering, and most believe their pain and suffering could have been avoided if the NFL had taken better care of their health and welfare during their careers. In the not too distant future the NFL will be forced to deal with what has happened to the thousands of retired football players whose bodies were broken and battered.

For Sports Business News this is Howard Bloom

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Monday, May 28, 2012

SportsBusinessNews.com celebrates 15 years of service

May 28, 1997 was a Wednesday. On that day, SportsBusinessNews.com published the first edition of the DailyDose. The internet was very different in 1997 with the medium being in its infancy. High speed internet was in the future and 14.4 (whatever that meant) was as fast as most people who were trying to create websites could go as far as speed. As unimaginable as it may seem today to being forced to deal with speeds like 14.4 and 28.8, a passion for excellence was born 15 years ago to deliver the latest and breaking sports business news.

On Saturday, Forbes released a list of the top 10 Influencers in The Business of Sports. Much to SBN’s pleasant surprise, yours truly Howard Bloom, was number five on that list. The list isn’t based on who has the most Twitter followers or who has the most likes on Facebook (SBN does not currently have a Facebook page, or the audience we can reach). Seemingly it is based on industry leaders who can influence how people look at the business of sports.

SportsBusinessNews.com began as an offshoot of Horizon Management. Back in 1997 Horizon, then as it is now, is a company focused on working with sports organizations to help in the producing of events, communications, sponsorship sales and fundraising. SBN’s clients wanted a web presence to help promote and market their events and properties. The DailyDose was created to help drive traffic to the websites Horizon Management had created for clients.

Canadian based CHUM media started an all-sports radio station in Ottawa in 1998. An opportunity to offer daily sports business commentary and a weekend sports magazine program offered SBN opportunities to create build and finally develop a brand. The short lived Team Radio network extended those opportunities. CHUM ended their Team Radio network in September 2002 and an association with Ottawa’s Team 1200 ended in February 2003.

When one door closes another door often opens. In January 2003 CTV, CBC and Canadian superstation CHCH opened the door for television commentary, bigger audiences than radio and a chance to continue to grow the SportsBusinessNews.com brand.

Nine years later and hundreds of national television appearances television has offered SBN audiences that go so beyond what radio had offered for five years.

A few weeks ago Fred Wallin and Darren Kelly presented an exciting opportunity to yours truly. A return to regular radio, a syndicated program called SportsBiz Today. The show airs Monday to Friday from Noon to 1 PM debuted on May 21. The show is syndicated on CRN Digital Talk Radio, Passionate Talk Radio, Mile High Radio and a growing list of affiliate radio stations - mostly based in the United States (including one in New Zealand). The show can also be heard online at http://sportsbusiness.co/

It is very special to be honored by Forbes.

There are countless people to thank for their support. From day one SportsBusinssNews.com meant a great deal to everyone who has contributed to our success. The DailyDose began publishing five days a week and quickly began offering one weekend edition. On August 2, 2004 in the midst Athens Olympic Games SBN became the first and only sports business publication to publish seven days a week, 365 days a year. The rationale is as simple today as it was on the eve of the 2004 Summer Olympics. The business of sports doesn’t take holidays, issues happen each and every day. Our readers deserve and have come to expect that kind of commitment.

The sports industry has grown tremendously as a business in the last 15 years. When SportsBusinessNews.com began our journey 15 years ago, sports fans had little if any understanding as to what happened in the boardrooms of their favourite teams or sport.

Baseball fans remained focused on the 1994 strike that cancelled the World Series. Both the NBA and the NHL experienced prolonged labor work stoppages. In the late 1990’s sports franchises continued to believe they could hold communities hostage demanding stadiums and arenas be built at taxpayer expense. 15 years later taxpayer dollars are still be used to build stadiums and arenas but more than ever arenas and stadiums are now being built with both private and public dollars.

SportsBusinessNews.com will continue to try and be what Forbes sees in our efforts – a determined, committed and passionate commitment to excellence each and every day. We will continue to embrace our mission, to offer our readers and followers an understanding that what happens on a football field, on a baseball diamond, on a basketball court, on an ice rink, on a race track and in countless college sports facilities is determined by what happens off the field, through the business of sports.

For Sports Business News this is Howard Bloom