Friday, November 30, 2012

Spurs coach Gregg Popovich makes a Stern coaching decision

Thursday night San Antonio Spurs coach Gregg Popovich made a great basketball coaching decision, made the right choice for his team, sending three of three members of his starting five Tim Duncan, Tony Parker and Manu Ginobili, along with 25-year-old shooting guard Danny Green back to San Antonio and not to the Spurs scheduled game against the defending NBA champions Miami Heat, in Miami. The Spurs were playing their fourth road game in five nights. Duncan, Parker and Ginobili are each well past their 30th birthdays.

Popovich claimed he made the decision to rest his aging superstars in July when the NBA schedule was announced. The Spurs – Heat game was game one of TNT’s nationally televised Thursday night NBA doubleheader.

“It has nothing to do with the Miami Heat or TV, or anything,” Popovich said. “You deal with the schedule as best you can and do the wisest thing for your particular team.

“If our best players were 23 years old or 25 years old, we might have done something different,” Popovich said. “It’s pretty easy to understand. I don’t think it’s so amazing.”

With less than a minute to go in the game the Spurs were winning 98-97, losing the game 105-100.

"Everybody has to make decisions about their schedule, about players playing and back-to-backs and trips and that sort of thing," Popovich said before the game. "In our case, this month we've had 11 away games, after tonight. We've had an eight-day trip and a 10-day trip, and we're ending it with four (games) in five nights here. I think it'd be unwise to be playing our guys in that kind of a situation, given their history."

NBA commissioner David Stern sent out a release before the game began after Stern and the NBA heard about Popovich’s decision to send players back to San Antonio, the Spurs dressed nine players for the game.

“I apologize to all NBA fans. This was an unacceptable decision by the San Antonio Spurs and substantial sanctions will be forthcoming.”

Stern’s reaction didn’t come as a surprise. It is well within Greg Popovich’s right to decide how he should best use his roster for any particular game. However, to send players back to San Antonio is a blatant insult to the integrity of the National Basketball Association. David Stern is responsible for protecting the NBA’s brand.

The average price for a Miami Heat ticket is $58, parking cost $25. The Fan Cost Index based on four tickets, souvenirs and concessions (those experiences families enjoy once a year) is $352.20 for a Heat game. The Spurs visited Miami’s American Airlines Thursday night was their only appearance in South Florida one of the more interesting games for NBA fans. Fans that purchased tickets for the game had every right to expect to see Duncan, Parker and Ginobili in the Spurs lineup.

"I've gotten letters from those people before when I've done it and I understand their perspective totally," Popovich said. "If I was taking my 6-year-old son or daughter to the game, I'd want him or her to see everybody. And if they weren't there, I'd be disappointed. So I understand that perspective. Hopefully, people in that position will understand my perspective, what my priority is — the basketball team and what's best for it."

Playing a late season game in Portland during the truncated 2011-12 NBA season (the NBA crammed 66 games into a schedule that began on Christmas Day), the entire Spurs roster was in Portland for the Spurs regular season game last April. Popovich decided to rest many of his star players, the Trailblazers beat the Spurs by 40 points. Duncan, Parker and Ginobili where in Portland for the game, they didn’t play very much in that game. A difference yes, if the difference is Duncan, Parker and Ginobili were at the game.

After the Portland game NBA Deputy Commissioner Adam Stern offered this on Popovich’s decision to rest his star players: "The strategic resting of particular players on particular nights is within the discretion of the teams. And Gregg Popovich in particular is probably the last coach that I would second-guess."

It’s easy to suggest the difference between Thursday night’s game in Miami and last season’s debacle in Portland is subtle at best, at the end of the day what Popovich did Thursday night was the next step in deciding to not play his players in a road game, this time he decided to send his players back to San Antonio to get additional rest, as opposed to having them sit on the bench.

"I don't think Pop was in the wrong," NBA player of the year LeBron James told the media after the Heat barely survived. "Pop runs his team how he wants to run his team. He's a great coach. There's nothing you can really say about him. He's done it before, and he has a great feel for his team. And you can't question him as a leader or question him as a coach.

"It's not in the rules to tell you that you can't send your guys here or send them home or whatever the case may be," James said. "But the commish makes his decisions, and everybody else will deal with it."

"He's paying attention to his guys' body and what they need and what they don't need," former Boston Celtic and now a member of the Heat Ray Allen, 37 added. "Doc was similar when we had opportunities to rest our guys, for sure. The pounding, over time, it's a long season. The good teams in this league want to play until June. So that's where you're measuring a game in November, December and January, and you're like, 'Well, I want these guys to be fresh going into the end of the year.'"

David Stern is expected to announce his decision on whatever “sanctions” he intends to impose on Popovich and the Spurs before San Antonio’s home game Saturday evening against the Memphis Grizzlies.

Friday evening the NBA made the following announcement: the San Antonio Spurs organization has been fined $250,000 for its decision to send four players home prior to the Spurs' Nov. 29 game in Miami. The Spurs' actions were in violation of a league policy, reviewed with the NBA Board of Governors in April 2010, against resting players in a manner contrary to the best interests of the NBA.

NBA Commissioner David Stern stated: “The result here is dictated by the totality of the facts in this case. The Spurs decided to make four of their top players unavailable for an early-season game that was the team’s only regular-season visit to Miami. The team also did this without informing the Heat, the media, or the league office in a timely way. Under these circumstances, I have concluded that the Spurs did a disservice to the league and our fans.”

The NBA doesn’t have a rule preventing what Popovich did Thursday night from taking place. No rules were broken, how can Stern justify suspending Popovich? The Heat won the game by five points, the Spurs were winning with less than a minute to go in the game, and the game was both entertaining and competitive. Stern announced before the game a price would be paid for the coaching decision Popovich had made – imagine if the Spurs had won the game, what action could David Stern have taken then? 
 The NBA doesn’t have a rule preventing what Popovich did Thursday night from taking place. No rules were broken, how can Stern justify suspending Popovich? The Heat won the game by five points, the Spurs were winning with less than a minute to go in the game, and the game was both entertaining and competitive. Stern announced before the game a price would be paid for the coaching decision Popovich had made – imagine if the Spurs had won the game, what action could David Stern have taken then?

For Sports Business News this is Howard Bloom

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Thursday, November 29, 2012

College football coaches – were it pays to be hired to be fired

Wednesday, reports emerged LSU football coach was Les Miles was looking at five-year $27.5 million contract to coach the Arkansas Razorbacks. LSU where Miles currently coaches the football team won a national championship with Miles in 2007. Miles was the 2011 Coach of the Year; has an eight-year record of 85-20 at LSU going into its 2012 bowl game. He has won 81 percent of his games since coming to Baton Rouge in 2005, the fifth best winning percentage in the history of the SEC, while taking the Tigers to the best eight-year record in school history. He has led LSU to four top five finishes, two Southeastern Conference titles and the BCS National Championship in 2007. Two years in a row LSU has posted the second best Graduation Success Rate in the SEC, trailing only Vanderbilt. They really like Les Miles coaching their football team at LSU.

“Les Miles is one of the premier coaches in the country and has LSU in contention for championships year in and year out,” Vice Chancellor and Director of Athletics Joe Alleva said. “Only two coaches in the 119-year history of LSU football have coached as many years at this school and only one has won more games. Les Miles has made a commitment to LSU and LSU is solidifying its commitment to Les Miles.”

Miles is winning and winning pays. Miles' previous contract paid about $3.75 million annually through 2017. He has not received a raise since 2008, though he has since received an extension and raises for assistants. Wednesday, LSU announced they were rewriting the five remaining years of Miles’ current contract and adding two years to the contract through 2019.

Losing doesn’t create renegotiated contacts, quite the opposite, coaches are fired, and contracts are bought out.

Saturday afternoon in an interesting two-hour period five major college football programs fired their football coaches, sending a message to their donors, their alumni and their students, a winning football team is very important as to how we manage the day-to-day business of our university. The five schools who fired their head coaches Saturday owe a total of $14 million in buyouts to their head coaches. The $14 million does not include any monies owed to assistant football coaches hired by the fired head coaches.

“It’s shameful,” said Raymond D. Sauer, chairman of the department of economics at Clemson University and president of the North American Association of Sports Economists in a New York Times report. “We can understand the market forces at work, but all that money being burned up that way is a high cost of doing business.”

Two years ago Gene Chizik led the Auburn Tigers to the National Championship. Cam Newton was Chizik’s quarterback. Football fans don’t have to feel too bad for Gene Chizik. Auburn announced the total buyout for Chizik and his assistant coaches is $11.09 million. Chizik's buyout will total $7.5 million and be paid in monthly installments of $208,334 for the next 36 months.

"After careful consideration and a thorough evaluation of our football program, I have recommended that Coach Chizik not be retained," Auburn athletic director Jay Jacobs said in a statement. "President (Jay) Gogue has accepted my recommendation. Earlier this morning, I informed Gene that he will not return as head coach."

"I'm extremely disappointed with the way this season turned out and I apologize to the Auburn family and our team for what they have had to endure," Chizik said. "In my 27 years of coaching, I have gained an understanding of the high expectations in this profession. When expectations are not met, I understand changes must be made."

Two years ago the Auburn Tigers went 14-0, last year Auburn was 8-5. The Tigers went 3-9 and (0-8 in the SEC) in 2012, losing their final three league games by a combined 150-21. Off the field the 2010 team, four members of the team were involved in a robbery in March 2011 (Auburn won their BCS Championship in January 2011.) Antonio Goodwin was convicted in April and sentenced to 15 years in prison. Dakota Mosley, Michael McNeil and Shaun Kitchens are awaiting trial.

Two-time 1,000-yard rusher Mike Dyer transferred to Arkansas State with Malzahn after being indefinitely suspended before the BCS bowl game.

Freshman quarterback Zeke Pike was arrested in June for public intoxication and later dismissed from the team. Starting center Reese Dismukes was suspended for the opener against Clemson following a public intoxication arrest.

“This could be a prophylactic move by Auburn — we know what’s coming, let’s get on the front end of this and maybe lessen sanctions,” said Robert H. Lattinville, chairman of the sports division of the law firm Stinson Morrison Hecker, which represents numerous coaches.
Boston College fired Frank Spaziani after four years of losing records in the ACC, an inglorious 2-10 in 2012 sealed Spaziani’s fate. Spaziani had three years remaining on a contract that paid him $1.1 million per year.

"This is a very performance-based business," new Boston College Athletic Director Brad Bates said at a news conference at Alumni Stadium to announce his first major move since being hired by BC last month. "Ultimately, winning and losing make a great deal of difference."

"Obviously this is a sad day for my family and me," Spaziani said in a statement released by the school. "Boston College has been my home for more than 16 years, and I have been fortunate to work with some amazing student-athletes. I will always treasure my relationships with them and the BC staff. Boston College is a tremendous place, and I am extremely thankful for my time there. I wish the current and future Eagles nothing but the best."

"We want someone that oozes with integrity, someone who genuinely cares about the students, and we want someone who is going to win," Bates said. "Spaz clearly is a man of integrity. He genuinely cared about his students. The performance, obviously, in the last couple of years, suffered."
Spaziani may be a good man, a man of tremendous integrity but he failed to win games on the football field – that’s what counts in college football.

Colorado fired Jon Embree after the Buffalos went 1-11 in 2012. The contract Embree signed in 2011 called for a $500,000 buyout if he was fired in 2012. Athletic director Mike Bohn announced they are ready to pay their next football coach as much as $2.5 million annually – Embree’s contract called for a base pay of $750,000. Colorado who joined the Pac last year is set to receive $21 million in television fees from their Pac-12 television agreement. Bohn’s message – he wants to win, and he’ll pay for a winner to coach his football team.

N.C. State fired Tom O’Brien after the Wolfpack went 7-5 in 2012. According to The Raleigh News & Observer it will cost N.C. State $1.2 million over the next four years to buy out O’Brien’s contract. There’s also the matter of paying a consulting firm, Parker Executive Search, to help find O’Brien’s replacement and the three assistant coaches who are under contract for the 2013 season.

Why fire a winning coach and a football team bound for a bowl game? N.C. State athletic director Debbie Yow fired O’Brien who compiled a 40-35 record in six seasons because in large part season ticket sales were falling for Wolfpack football. Yow told The Raleigh News and Observer the school has lost more than 1,000 season-ticket holders in the last six years, which cost the athletic department more than $1.4 million. N.C. State are heading to either the Russell Athletic Bowl or the Franklin American Mortgage Music City Bowl.

Purdue fired Danny Hope the Boilermakers head football coach Saturday. Hope went 22-27 in his four years as the Boilermakers coach, taking Purdue to the Little Caesars Bowl in Detroit last December (and winning). Hope had a contract through the 2016 season. The contract included a $600,000 buyout if Hope was fired at the end of Purdue’s 2012 season. The Boilermakers who are 6-6 and bowl eligible are heading to the Meineke Car Care of Texas

"I think when it became clear to me that no matter how hard one was working, it was going to be difficult to reverse the image and the view of the program," athletic director Morgan Burke said. "I don't like people to have to continue to put 120 percent effort in -- and Danny is a 150 percent effort guy, he gives it all he's got -- and to recognize that there are forces beyond your control. As the season progressed, it became increasingly clear to me that we were probably going to have to make a change."

Les Miles and LSU are heading to either the AT&T Cotton Bowl or Chick-fil-A Bowl. Miles is getting paid more and more every year he coaches the Tigers – he wins, he makes more money.

“The coaching business is a competitive one and it is important to compensate our coach for his accomplishments and his worth,” Alleva said. “Les has not received a pay increase since his salary was automatically elevated following our national championship in 2007 and he has continued to keep LSU on the national stage.

“Our intent was to address his contract following this year’s bowl game, but speculation about other job opportunities accelerated our process a little,” Alleva said. “I think we have accomplished the important step of securing Les Miles as our head coach for the long-term good of the program.”
Miles received a two-year extension to his current contact; Miles received a raise for each of the seven years of his new contract.

For Sports Business News this is Howard Bloom

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Wednesday, November 28, 2012

Marvin Miller – enshrinement in the Baseball Hall of Fame

Major League Baseball generated close to $7 billion in revenues in 2012. Forbes 2012 believes the average Major League Baseball team rose 16% in value during the past year, to an all-time high of $605 million. The business of baseball is flourishing – in large part thanks to the impact Marvin Miller had on baseball. Miller led the Major League Baseball Players Association for 17 years, after being hired as the organization`s first executive director in 1966. The Baseball Hall of Fame needs to enshrine Marvin Miller, the Hall of Fame isn`t a Hall of Fame without Marvin Miller included.

Five times between 2003 and 2010 the Hall of Fame`s Veterans Committee had an opportunity to correct what has been a miscarriage of justice, all five times the Veterans Committee failed to do what was right, elect Marvin Miller as one of the most important builders in MLB history.

"His Hall of Fame speech would have been something special, something magical," longtime agent Tom Reich was saying Tuesday, the day Marvin Miller passed away at age 95 in an ESPN report.
"I'm sure he would have had something very powerful to say about upholding the standards of propriety he fought so hard to uphold. But his greatest satisfaction of all would have been seeing, all these years later, how the sport was flourishing like never before."

In 2007 after receiving only 3 of 12 votes, Miller told The New York Times: “You really could have done this in advance,” he told The Associated Press. “I think it was rigged,” not to keep him out but to elect others with pro-management pedigrees. That year, those others were Bowie Kuhn, the nemesis he frequently outmaneuvered; Walter O’Malley, the Brooklyn Dodgers owner who relocated his team to Los Angeles; and Barney Dreyfuss, a long-ago Pittsburgh Pirates owner.

“Bowie Kuhn was a negative factor for baseball,” Miller, who was 90 at the time of his third rejection in 2007, told The New York Times. “Without any question, if he hadn’t existed, we would have had
to invent him.”

Bowie Kuhn being in the Hall of Fame, the same Bowie Kuhn who battled Miller during 14 of the 15
years Kuhn served as MLB commissioner (1969 to 1984), Kuhn and not Miller in the Hall of Fame – suggests the Hall of Fame voting process is anything but honorable. Kuhn was inducted into the Baseball Hall of Fame in 2008, after having been elected by the Veterans Committee nine months after his death.

In 1968 (Kuhn was MLB’s general counsel at the time, negotiated the CBA with Miller on behalf of MLB), Miller led a committee of players that negotiated the first collective bargaining agreement in the history of professional sports. The agreement raised the minimum salary in baseball from $6,000 – the level at which it had been stuck for two decades – to $10,000 and set the tone for future advances.

In 1970, Miller helped players negotiate the right to arbitration to resolve grievances – an achievement Miller considers the most significant of the union’s early years. The impartial dispute resolution process paved the way for nearly all of the gains the players would achieve in ensuing years.

That breakthrough led five years later to free agency when Andy Messersmith and Dave McNally played out the option year of their contracts and challenged the “reserve clause” before arbitrator Peter Seitz. The arbitrator’s decision in favor of the players was later upheld in federal court.

A compromise that allowed all players free agency after six years’ service was formalized in the next collective bargaining agreement. Miller embraced the compromise knowing that the six-year waiting period would limit the supply side of the market and drive salaries upward through competitive bidding.

In all, Miller helped players collectively negotiate enormous advances in salaries, benefits and working conditions over five collective bargaining agreements with the owners during his tenure. To reach those agreements, Miller guided the players through strikes in 1972, 1980 and 1981 as well as lockouts in 1973 and 1976.

Miller and Kuhn negotiated head-to-head against each other five times; Miller defeated Kuhn all five times.

In 2010 Miller fell one vote short of receiving baseball’s greatest honor. Miller suggested it was more of an attempt to keep anyone linked to the Major League Baseball Players Association out of the Baseball Hall of Fame.

“You can leave individuals out, but you can’t leave out an organization,” he said. “You can’t leave out the impact the union has had. You can’t be anything but fraudulent if you pretend that you are the archivist and recorder of the history of an institution like Major League Baseball and leave the union out of it.” He added, “I have more fame than I would have had in the Hall of Fame.”

The Veterans Committee which meets at Baseball’s Winter Meetings includes current Hall of Fame members, baseball executives and media members. The numbers vary each year (the 2012 Hall of Fame includes 16 members), appearing on 75 percent of the ballots is needed for election to the Baseball Hall of Fame. The former baseball players (all current Hall of Fame members) owe the millions they were paid to Marvin Miller and what he accomplished for baseball players.

"Marvin Miller took on the establishment and whipped them," crowed Reggie Jackson, one of the many players to benefit immensely from Miller's stewardship. Miller, though, had a more tempered view of his success: "It's not difficult to make strides," he once said, "in an industry a hundred years behind in labor relations."

In 2009 after falling two votes short of being elected to the Hall of Fame Miller told ESPN: "I'm kind of amused by it.

"I asked not be included on any ballots and gave them notice in writing, and they got their backs up
and said, 'Nobody can tell us what to do.' It was a reasonable request in light of the circumstances. Why would they keep putting me on a list and, at the same time, rigging the election so I can't be elected?"

There remains wide-spread support for Miller’s election to the Baseball Hall of Fame. Former MLB commissioner Fay Vincent told ESPN in 2009 after the Veterans Committee failed to honor Miller:

"That's like blaming Thomas Edison for putting the candle industry out of business," Vincent said.
"It's preposterous that Marvin Miller isn't in the Hall of Fame," Vincent said. "It's an embarrassment. Some of it is bitterness against Marvin for having taken baseball to its knees over the years, and some of the people who are negative about him are just being small-minded. I don't think a fair-minded person can have any question.

"Marvin Miller brought players out of indentured servitude. They were basically slaves. How can you argue that it was anything other than a great thing? It meant that baseball became part of the modern world."

"The failure to acknowledge Miller," baseball statistician guru Bill James once told SI, "is a sort of symbolic holding on to the past, in the worst sense -- holding on to grudges, refusing to forget, refusing to move on."

Marvin Miller left an indelible mark on Major League Baseball, a positive one. There are those who “might” suggest Miller’s impact was negative given the average baseball salary was $19,000 when Miller joined the MLBPA in 1966 and now stands at $3.44 million, but anyone who believes Miller shouldn’t be in the Baseball Hall of Fame because baseball players are paid a great deal of money doesn’t realize or understand how baseball owners have benefited from the growth of the game, and Miller legacy is tied to that growth.

Shortly before his death Tuesday Miller offered this: "When I began . . . there were 20 major league franchises and they had a combined revenue of $50 million for the whole year. Last year, revenues exceeded $6 billion. That's the industry we've ruined with higher salaries."

Time for everyone associated with Major League Baseball and the Hal of Fame to do what is right, honor Marvin Miller as one of the definitive builders in Major League Baseball history with enshrinement in the Baseball Hall of Fame.

For Sports Business News this is Howard Bloom

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Tuesday, November 27, 2012

Babe Ruth, Jackie Robinson and Marvin Miller – baseball giants

The baseball world and the sports industry lost one of the games giants Tuesday when Marvin Miller passed away at the age of 95. Along with Babe Ruth who ignited Americans to baseball in the 1920’s, Jackie Robinson breaking the sports color line when he joined the Brooklyn Dodgers in 1947, Miller changed baseball and sports landscape forever when he was hired as the first executive director of the Major League Baseball Players Association in 1966.

When Miller left the United Steelworkers of America (Miller was an economist at US Steel) for the MLBPA, the average MLB salary was $19,000, the minimum salary stood at $6,000. Major League Baseball teams had a reserve clause tied to player to whatever organization they had signed their first contracts with the organizations they signed too as youngsters for life. Effectively, the reserve clause represented slavery.

Taking over the reins of the Major League Baseball Players Association in 1966, Miller served as the MLBPA head for 17 years and remained closely associated with the union until his death. The success of the baseball players association fueled collective bargaining advances by unions in the other major team sports.

"Marvin Miller was a highly accomplished executive and a very influential figure in baseball history," Commissioner Bud Selig said. "He made a distinct impact on this sport, which is reflected in the state of the game today, and surely the Major League players of the last half-century have greatly benefited from his contributions. On behalf of Major League Baseball and the 30 clubs, I extend my deepest condolences to Marvin's family, friends and colleagues."

Miller guided the MLBPA through five collective bargaining agreements (CBA) negotiations with Major League Baseball, growing players’ rights through each CBA.

Miller’s impact, a handful of the meaningful changes Marvin Miller had on MLB:

In 1968, Miller led a committee of players that negotiated the first collective bargaining agreement in the history of professional sports. The agreement raised the minimum salary in baseball from $6,000 – the level at which it had been stuck for two decades – to $10,000 and set the tone for future advances.

In 1970, Miller helped players negotiate the right to arbitration to resolve grievances – an achievement Miller considers the most significant of the union’s early years. The impartial dispute resolution process paved the way for nearly all of the gains the players would achieve in ensuing years.

That breakthrough led five years later to free agency when Andy Messersmith and Dave McNally played out the option year of their contracts and challenged the “reserve clause” before arbitrator Peter Seitz. The arbitrator’s decision in favor of the players was later upheld in federal court.

A compromise that allowed all players free agency after six years’ service was formalized in the next collective bargaining agreement. Miller embraced the compromise knowing that the six-year waiting period would limit the supply side of the market and drive salaries upward through competitive bidding.

In all, Miller helped players collectively negotiate enormous advances in salaries, benefits and working conditions over five collective bargaining agreements with the owners during his tenure. To reach those agreements, Miller guided the players through strikes in 1972, 1980 and 1981 as well as lockouts in 1973 and 1976.

"Marvin was the most extraordinary man I ever met," said broadcaster Tim McCarver, a Major Leaguer from 1959-80. "You know, the players knew nothing before Marvin took over. The minimum salary had been the same for 22 years. Riding trains was considered first-class travel, and West Coast teams were involved by then. That the standard player's contract was unchanged for so long is mind-boggling. We knew so little that he had to teach us before we could move on anything. And he taught us and we did move on."

The numbers (baseball salary numbers) are staggering. The average baseball salary in 1966 was $19,000. The average baseball salary in 2012 $3.44 million. The minimum baseball salary in 1966 $6,000. The minimum baseball salary in 2012 $480,000.

“I would like to thank somebody who definitely has had an impact on me and my family and many ballplayers sitting in this audience today. And that was Marvin Miller. When I broke into the Major Leagues, the minimum salary was $7,000, and I had to go home in the wintertime and get a job. And the first year that I was in the big leagues, the job I had was at a service station pumping gas from 3-9 p.m. and closing the service station so Ruth and I could live through the winter until baseball season started. She worked in a bookstore at the college. And because of Marvin's efforts and the people in baseball, we brought that level up to where the players weren't put in that situation. Marvin, I appreciate the job that you have done and the impact that it's had on my family. Thank you." Nolan Ryan, Hall of Fame induction speech.

"I am saddened to hear of Marvin Miller's passing," Texas Rangers CEO and president Nolan Ryan, a Hall of Fame pitcher, said. "Marvin had a tremendous impact on the game and always had its best interests at heart. He helped create a true partnership between ownership and the players."

Major League Baseball generated close to $7 billion in total revenues in 2012, not quite as much as the $9.4 billion the National Football League did, but a stunning total. Baseball owes much of its success to its players, and baseball players owe their success to both their God Given talent and to everything Marvin Miller accomplished during his years leading baseball players from servitude through freedom, to earning millions of dollars.

"All players -- past, present and future -- owe a debt of gratitude to Marvin, and his influence transcends baseball," MLBPA executive director Michael Weiner said. "Marvin, without question, is largely responsible for ushering in the modern era of sports, which has resulted in tremendous benefits to players, owners and fans of all sports."

"Marvin possessed a combination of integrity, intelligence, eloquence, courage and grace that is simply unmatched in my experience," said Don Fehr, executive director of the MLBPA from 1983-2009 who was general counsel from 1977-82. "Without question, Marvin had more positive influence on Major League Baseball than any other person in the last half of the 20th century. It was a rare privilege for me to be able to work for him and with him. All of us who knew him will miss him enormously."

“Marvin exemplified guts, tenacity and an undying love for the players he represented. He was a mentor to me, and we spoke often and at length. His most powerful message was that players would remain unified during labor strife if they remembered the sacrifices made by previous generations to make the game better. His passion for the players never faltered, and men in women across all sports are in a better place thanks to his tireless work.” NFLPA executive director DeMaurice Smith

Marvin Miller embodied leadership, he defined success. Miller was steadfast in his belief that a hallmark of labor negotiations was never giving back anything a labor union, association or group had bargained for in good faith. MLB players owe more to Marvin Miller than the money they’ve earned playing baseball. Miller stood and believed in justice, in what was right and above all else if you were exceptional at what you did you deserved to be paid accordingly. Marvin Miller – a true sports luminary.

For Sports Business News this is Howard Bloom

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Monday, November 26, 2012

The big business of Major League Baseball and Television

The Los Angeles Dodgers are in the midst of agreeing to the most important local television agreement in baseball history. Deadline.com reported the Dodgers and Fox Sports are close to an agreement that would pay the Dodgers between $6 billion and $7 billion over the 25-years of the proposed agreement. The Dodgers would receive more than $280 million annually, twice what any MLB currently receives for their local rights, an incredible $1.73 million a game for each of the 4,050 scheduled during the lifetime of the agreement.

Wednesday, 49% of the YES Network was sold to Fox Sports for $3.4 billion. The YES Network (Yankees Entertainment Sports) was created by the New York Yankees, own New York regional television rights to both the Yankees and the Brooklyn Nets. While not owning a controlling interest in YES, Fox’s 49% essentially offers Fox Sports a strong ownership stake in the most successful regional sports network.

The Dodgers deal according to Yahoo Sports Jeff Passan is so big the “Dodgers will make more money from local TV alone than 26 franchises take in from all of their revenue streams. Only the Yankees, Red Sox and Cubs do better, according to Forbes' annual franchise valuations, though they'll soon be joined by the Angels, Rangers and Phillies. The first two have their own $3 billion TV deals.”

After the Yankees sold 49 percent of the YES Network ESPN’s Darren Rovell reported the Yankees have an extra $500 million they can now spend on their player payroll. In March Yankees managing partner Hal Steinbrenner suggested the Yankees free willing spending days were coming to an end. Steinbrenner was determined the Yankees 2014 payroll would fall behind the $189 million Major League Baseball luxury threshold.

“Is it a requirement with baseball that we be at 189? No, it’s not a requirement. But that is going to be the luxury tax threshold, and that’s where I want to be.” Steinbrenner said at the Yankees 2012 spring training camp in looking ahead to how he saw the Yankees 2013 team payroll.

A key to their agreement with Fox Sports, the Yankees have agreed to keep their games on YES for an additional 20 years. The current agreement called for the Yankees to remain on YES through the 2021 Yankees season. YES currently pays the Yankees $85 million annually, with escalators built in at an annual rate of 4 percent.

The question that needs to be asked and hasn’t been answered – how will these agreements impact baseballs completive balance. Major League Baseball remains the only sport of the four major North American sports (Major League Baseball, National Football League, National Basketball Association, and National Hockey League) which doesn’t have a salary cap or a salary floor.

"I'm a finance geek. I guess I always have been. That's my background; budgets matter and balance sheets matter. I just feel that if you do well on the player development side and you have a good farm system, you don't need a $220 million payroll. You can field every bit as good a team with young talent." Steinbrenner said in March.

The Yankees projected 2013 payroll stood at $220 million in March, when Steinbrenner set a goal to cut that payroll to $189 million. The Yankees have more than $114 million in payroll tied up with six players on their roster including Alex Rodriguez, Mark Teixeira and CC Sabathia. Will the Yankees 2013 payroll exceed $189 million – likely with Fox investing $3.4 billion in the YES Network.

On August 25 the Dodgers and the Boston Red Sox completed a trade that saw the Dodgers pick up Adrian Gonzalez ($21.9 million), Carl Crawford ($20.4 million), Josh Beckett ($17.0 million) and their respective 2013 salaries. Add Hanley Ramirez’s 2013 salary ($15.5 million) whom the Dodgers picked up from the Miami Marlin in July –those four players will be paid a combined $74.8 million by the Dodgers next season.

The Dodgers opening day payroll in 2012 was roughly $105 million for 32 players. Between previously signed contracts, contract extensions and player acquisitions during the season, the team's projected payroll for 2013 is now over $192 million. The Dodgers will owe nearly $150 million to 10 players alone in 2013.

The Dodgers current local television rights agreement expires at the end of the 2013 MLB season. Fox Sports and the Dodgers set Friday as the deadline to finalize their new agreement that will pay the Dodgers $280 million annually.

Desser Sports Media, who negotiated the Lakers/Time Warner regional television rights agreement ($120 million annually – the most paid to any NBA team) told Forbes in August they believed the Dodgers could receive as much as $175 million and $225 million annually from their local television rights…or $4.5 billion over a 20-year deal, nowhere near the $280 million the Dodgers will be receiving from Fox Sports.

Frank McCourt was forced to sell the Dodgers by MLB commissioner Bud Selig after the end of his marriage to Jamie McCourt forced Frank to place the Dodgers in bankruptcy protection. McCourt had been negotiating a 20-year, $3 billion package with Fox (Bud Selig looks like a genius now for voiding that agreement).

MLB forces teams to share 34 percent of their local television agreements (the Dodgers will be giving up $80 million of their local television money), but as Yahoo Sports pointed out: “That still leaves them with a bigger deal than any team – and upwards of 20 times that of Atlanta, one of the best franchises in baseball that happens to be saddled with the sport's worst television contract for 20 more years as a term of its sale.”

Baseball games are won on a baseball diamond and not in a boardroom or as a result of a television agreement. The Dodgers may have the necessary financial resources to buy (build) a winner but they still have to make the right decisions.

The Dodgers have the right baseball person in Stan Kasten to make those baseball decisions. Kasten the Dodgers team president had similar roles in building both the Atlanta Braves and Washington Nationals. Kasten must feel like the kid in a candy store, more money than he ever imagined he might be able to spend to build a baseball team, and the knowledge if something goes wrong he can buy a replacement part – that that is the difference between the Dodgers, Yankees, Red Sox, Phillies, Rangers and the rest of Major League Baseball.

The Toronto Blue Jays owned by Rogers Communications projected 2013 payroll stands at $130 million. In the last two weeks the Jays have acquired Jose Reyes, Mark Buehrle, Josh Johnson and John Buck from the Miami Marlins and then signed Melky Cabrera, who batted .346 last season before being suspended for violating the sport’s drug policy to a two-year $16 million free agent contract.

The Blue Jays are “all-in” for 2013. Rogers gave Blue Jays general manager Alex Anthopoulos more than they could justify spending on the Blue Jays, after Blue Jays president Paul Beeston (Beeston was also the Blue Jays president when the Blue Jays won the World Series in 1992 and 1993) convinced the powers that be, now was the time for Rogers to invest in the Blue Jays.

If the Blue Jays do not win in 2013, if any of the players they picked in their trade with the Marlins are injured or fail to produce, the Blue Jays cannot afford to buy replacement parts. The Dodgers, Yankees and the Red Sox may not advertise what happens if they fail, but given the near unlimited financial resources each of those teams enjoy – they can buy their way out of their mistakes, that’s an unfair competitive advantage those franchises enjoy and teams like the Blue Jays fear.

For Sports Business News this is Howard Bloom

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Sunday, November 25, 2012

NHL Armageddon 2012: it’s always darkest before the dawn

The week that wasn’t for the National Hockey League could be categorized as somewhere between an unmitigated disaster and the end of the world as the NHL once knew it. Reports suggest the NHL Players Association is looking at decertifying their union, several NHL players have taken to Twitter to threaten the life of NHL commissioner Gary Bettman, these are the worst of times for the NHL – the end indeed be a lot closer than anyone had ever imagined.

A week ago the NHLPA presented the NHL with an offer, a proposal that was summarily rejected by Bettman and his management team Wednesday.

"I think it's frustrating for everybody and disappointing for everybody that's it's taken this long and we're still far apart," said Bettman, in his third lockout as commissioner.

"On the big things there was as of today no reciprocity in any meaningful sense, no movement on the players' share, no movement on salary-arbitration eligibility, no movement on free agency eligibility, no agreement on a pension plan," union head Donald Fehr said.

The NHLPA did move in the direction the NHL wants the players to be, just not quite close enough for the NHL to agree on a new collective bargaining agreement.

"We have moved far more than halfway," Fehr said. "It is about as good as we can do.

"Gary said we were $900 million or $1 billion apart," Fehr said, referring to the gap over a five-year deal. "At the moment we are exactly $182 million apart."

Friday, the NHL canceled games through December 14, along with the 2013 NHL All-Star Weekend that had been scheduled for Columbus.

A total of 422 regular-season games – 34.3 percent of the season – were scheduled for Oct. 11 through Dec. 14.

“The reality of losing more regular-season games as well as the 2013 NHL All-Star Weekend in Columbus is extremely disappointing,” said NHL Deputy Commissioner Bill Daly. “We feel badly for NHL fans and particularly those in Columbus, and we intend to work closely with the Blue Jackets organization to return the NHL All-Star events to Columbus and their fans as quickly as possible.”

“On Wednesday, the players presented a comprehensive proposal, once again moving in the owners’ direction in order to get the game back on the ice. The gap that remains on the core economic issues is $182 million. On Wednesday, NHL Commissioner Gary Bettman said that the league is losing $18-20 million per day during the lockout, therefore two more weeks of cancelled games far exceeds the current economic gap. It makes the NHL’s announcement of further game cancellations, including the 2013 All-Star Weekend, all the more unnecessary, and disappointing for all hockey fans – especially those in Columbus. The players remain ready to negotiate but we require a willing negotiating partner.” NHLPA executive director Don Fehr offered Friday after the league announced the cancelation of additional games and the All-Star Weekend.

The most important words Fehr said in his statement: “The players remain ready to negotiate but we require a willing negotiating partner.”

Why are those words so? If the NHLPA believes the NHL is NOT a willing negotiating partner the suggestion the NHLPA could move to decertify could become reality, and if that were to take place – all bets are off; the NHL will truly be facing Armageddon.

If the NHLPA dissolves (their union or association whatever the group is) Fehr and whatever leadership is left will begin a complex series of legal maneuvering focused on targeting anti-trust legislation in the United States (there are 23 American based NHL teams and seven located in Canada).

According to most legal experts if the lockout gets declared to be a violation of U.S. antitrust law then the players’ damages are going to be tripled, however that is a lot easier said than done. It could take years for the case to move through the legal system – that won’t help remedy what is taking place right now. And there are a different set of labor laws in Canada where seven of the NHL’s 30 franchises call home.

Current player NHL contracts – all become null and void, everything becomes subject to individual negotiations. The NHL entry system – the draft, ceases to exist.

“If [the negotiations go] in this direction, it certainly makes the cancellation of the season much more likely, because it’s going to delay things in all likelihood,” says Michael McCann, a law professor at the University of Vermont who specializes in sports law and writes about legal issues for Sports Illustrated in a Canadian Business report.

“Because then court papers are going to be filed, hearings will be scheduled. Courts move slowly—they don’t respond to the wishes of leagues and players in terms of scheduling.”

A year ago the National Basketball Association embroiled in a lockout with the NBA Players Association reached a settlement with the NBAPA 12 days after the NBAPA voted to decertify. Last year the National Football League Players Association tried a similar tactic in advance of their settlement with the NFL that resulted in a 10-year CBA.

“Now, the purpose of the union is not so much to prevent exploitation, but it’s really to protect the owners,” Ron Klempner, associate general counsel of the NBPA, said in May. “The purpose of decertification, if we do it the next time, will be because the collective-bargaining process has pretty much run its course in professional sports,” he added.

Neither side is winning the public relations battle; both sides have failed miserably in gaining any public sympathy. NHL deputy commissioner Bill Daly continues to speak on behalf of the management side for the most part, Don and Steve Fehr on the NHLPA side. The owners and management are under a Gary Bettman imposed ‘gag’ order, say anything and face a six figure fine.

There are more than 700 current NHL players. Don Fehr hasn’t been able to control what the players have been saying to the media and in particular on Twitter. While it may only a take a few apples to spoil a barrel, the actions of a few NHL players have served to embarrass NHL players.

Chicago Blackhawks center Dave Bolland Friday reposted a Twitter entry that read: "can I get a RT for wanting Bettman dead?"

The retweet later was deleted.

"It was a mistake, I never meant to retweet that out," Bolland told ESPN.com's Pierre LeBrun. "I like to retweet for a lot of my fans, and I just retweeted the wrong thing. I feel bad about it."

Detroit Red Wings defenseman Ian White recently called Bettman an "idiot," and Florida Panthers forward Kris Versteeg referred to Bettman and deputy commissioner Bill Daly as "cancers."

Jeff O'Neill who last played in the National Hockey League five years ago alleges that his Twitter account was “hacked” Wednesday after a Tweet appeared on O’Neill’s Twitter account “make whole’ in Gary Bettman’s head”. O’Neill then tweeted “My last tweet was inappropriate. Someone hacked my acct.”

There can and will be a settlement in the NHL’s current labor wars. The wasn’t going to be a settlement before American Thanksgiving and it doesn’t appear if one is reached to save at least part of the 2012-13 NHL season it be in the immediate future. It will take a few more weeks before anything might happen and those few weeks will include anger, frustration and threats.

Forget about the players’ anger and frustration. It’s only to get worse later this week when the players miss their fifth paycheck. Forget about “media reports” that suggested there was a crack in the owners resolve that focused on Philadelphia Flyers owner Ed Snider. A week later after an angry Snider denied the report, the Philadelphia Daily News report doesn’t appear to have much substance to it. Does Ed Snider want to see a settlement reached – of course he does as do the other 28 NHL team owners (remember the NHL owns the Phoenix Coyotes).

The two sides are closer today than they were a week ago. Forget about the rhetoric, ignore the bluster and focus on this and this alone. The NHL and the NHLPA are reading the same book “finally”; they are not on the same page yet, but least they’re reading the same book. Gary Bettman and Don Fehr want to reach an agreement; they remain steadfast in what is in the best interest of their respective side they represent.

Much sooner rather than later the Bettman and Fehr will understand if they don’t work towards an agreement, if the NHL cancels the entire 2012-13 season the fallout will beyond belief, the current NHL will cease to exist.

For Sports Business News this is Howard Bloom

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Thursday, November 22, 2012

Irish eyes are smiling – the big business of Notre Dame Football

Notre Dame plays their biggest football game in decades Saturday night at the Los Angeles Coliseum, ranked number one for the first time in decades, the Irish meet the USC Trojans. If the Fighting Irish beat USC, Notre Dame will play in the BCS title game January 7, 2013 in Miami. The 2012 football season has been a wonderful and magical ride for the Irish, the pot at the end their rainbow filled with gold.

Days before the Irish kicked off their season September 1 in Dublin beating Navy 50-10, former NFL player and Fighting Irish radio analyst Allen Pinkett offered this sound byte on Chicago radio.

“I’ve always felt like, to have a successful team, you gotta have a few bad citizens on the team,” Pinkett told Chicago’s The McNeil and Spiegel Show. “I mean, that’s how Ohio State used to win all the time. They would have two or three guys that were criminals. That just adds to the chemistry of the team. I think Notre Dame is growing because maybe they have some guys that are doing something worthy of a suspension, which creates edge on the football team. You can’t have a football team full of choir boys. You get your butt kicked if you have a team full of choir boys. You gotta have a little bit of edge, but the coach has to be the dictator and ultimate ruler.”

“I don’t want any mass murders or rapists,” Pinkett said. “I want guys that maybe get caught drinking that are underage, or guys that maybe got arrested because they got in a fight at a bar, or guys that are willing to cuss in public and don’t mind the repercussions of it. That’s the type of criminal I’m talking about.”

When given a chance to clarify his comments, Pinkett wasn’t backing down.

“I absolutely meant that,” he said. “Chemistry is so important on a football team. You have to have a couple of bad guys that sorta teeter on that edge to add to the flavor of the guys that are going to always do right. … You look at the teams that have one in the past. They always have a couple of criminals.”

Pickett wasn’t fired for his comments, he was suspended for three games, he’ll be in the broadcast booth Saturday night. How misguided do Pickett’s comments appear to be on now?

The Irish are 11-0 heading into Saturday’s night’s game, assured of appearing in a BCS bowl. If the Irish beat USC they will be be off to the title game, if not, one of the remaining BCS bowls will try and entice the Irish to accept an invitation to appear in their game.

Global Strategy Group for ESPN Research and Analytics, along with SportsCenter asked more than 1,025 college football fans on November 20 if the resurgence of Notre Dame football has fueled their interest in college football.

The survey found that 52 percent of self-identified avid fans say they are more excited about this season thanks to Notre Dame's resurgence. Not surprisingly, 77 percent of Notre Dame fans say their team's run to the top is a "major factor" in why they consider the season more enthralling than in the past.

The survey found that only 39 percent of avid fans would vote the Irish as No. 1 right now if they had a vote in the Associated Press poll, while 24 percent favor second-ranked Alabama. Despite that, Alabama is the pick of avid fans to win the national championship (40 percent, to just 29 percent for Notre Dame). Even among Irish fans, 47 percent think their team will win the title, while 37 percent think Alabama will win.

Regardless of the outcome from Saturday’s USC game, Notre Dame is heading to a BCS game and will receive $6.2 million for appearing in a BCS Bowl. Each of the other schools appearing in BCS Bowls receives $23.6 million, however each of the other schools (Alabama – SEC, Wisconsin – Big Ten) have to share their BCS bowl payout with the other schools in their conference. As an independent, Notre Dame will retain all of their BCS money.

The BCS standings began in 1998; this is the first time Notre Dame is on top of the BCS. The Irish ranked number one in the football polls where they are currently are hasn’t happened since 1993 – these are indeed heady days for Notre Dame’s football program.

Notre Dame as ESPN’s survey shows is the strongest brand in college football, arguably the biggest brand in college sports and one of the biggest brands in the sports industry. The last six BCS champions have come from the SEC; if Notre Dame wins Saturday they’ll meet the SEC championship game winner, a BCS title game for the ages.

Saturday ESPN airs College Gameday live from the USC campus – starting at 7 AM local time, the lead-in to ABC’s coverage of the Notre Dame – USC game Saturday night. ESPN has the rights to the BCS title game January 7 from Miami’s Sunlife Stadium. Notre Dame in the BCS title game – could set a new ratings record for a BCS title game.

According to SI.com’s Richard Deitsch “The most-viewed national championship game of the BCS era came in 2006 when Vince Young-led Texas defeated USC, which featured Matt Leinart and Reggie Bush. The game drew 35.6 million viewers on ABC and was the most-watched NCAA championship game since at least 1991, when Nielsen records began for college football. The second- and third-most-viewed games of the BCS era aired on Fox, including the 2007 title game (No. 2 Florida over No. 1 Ohio State, 28.8 million viewers) and the 2009 title game (No. 2 Florida over No. 1 Oklahoma, 26.8 million viewers). Last year's Alabama-LSU title game averaged 24.2 million viewers, down about 11 percent from the previous year.”

The resurgence of Notre Dame football has fueled merchandise sales.

“Notre Dame merchandise has been purchased from all 50 states this season, including one item from Puerto Rico,” said Meier Raivich, Vice President of Communications and Corporate Branding at Fanatics, Inc., a leading online retailer of officially licensed sports merchandise in a Forbes report.

”Since August 30, Notre Dame ranks as the second-best selling school in the country on Fanatics.com, up 76% from last year’s first six weeks of the season, and only behind #1 ranked Alabama in 2012 (Notre Dame took over the number one spot in mid-October).

”Notre Dame is a national brand, and along with the ease of going online to Fanatics.com to purchase Fighting Irish merchandise, the school’s resurgence is reaching fans across the country,” explained Raivich. ”91% of fans who have purchased Notre Dame merchandise on our website since the start of September live outside of Indiana.”

Notre Dame’s football is a lot like Howard Stern’s radio audience. You either love or hate Howard Stern but you listen (or listened as his audience continues to shrink) to Howard Stern on the radio. There is sense of entitlement Notre Dame fans have, similar to how New York Yankees fans act. Saturday night, Irish eyes will be focused on their beloved football game, along with those who aren’t fans of Notre Dame football, great news for ABC and the business of college football.

For Sports Business News this is Howard Bloom

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Wednesday, November 21, 2012

College football – a very big business

Sunday evening CBS’ “60 Minutes” offered an inside look at the big business of college sports, focusing on the University of Michigan and how important the Spartans football program is to the University. The same day The Baltimore Sun and ESPN reported the University of Maryland and Rutgers were ready to move to the Big Ten, both moves business and financially related.

Monday Maryland announced their move to the Big Ten, Tuesday the Big Ten became the Big 14 when Rutgers said they would be leaving the Big East for the Big Ten. Maryland and Rutgers left their respective conferences to join the Big Ten for one reason and one reason alone – the big business college athletics have become.

Insider Higher Education offered some of the numbers associated with Maryland’s move from the Atlantic Coast Conference (ACC) to the Big Ten. Maryland will pay the ACC $50 million for the right to leave the conference after the 2013-14 academic/athletic calendar (Rutgers reportedly will attempt to pay a $10 million to $20 million exit fee to the Big East next year). Currently Maryland receives $17 million from the ACC annually. Big Ten schools currently each receive an annual payout of $24.6 million. According to the Insider Higher Education Maryland’s athletic department is losing $5 million annually.

Losing more than $5 million annually, Maryland’s athletic department cut 27 varsity sports teams in an attempt to help defray their multi-million deficit in June.

“Perhaps the most painful thing we have ever had to do is to look a student-athlete in the eye and tell them that, no, we could no longer support your team,” Maryland President Wallace D. Loh said at a news conference Monday afternoon. “By being members of the Big Ten Conference, we will be able to ensure the financial sustainability of Maryland athletics for decades to come.”

The Big Ten includes some of the most powerful college football programs in America. Ohio State,
Michigan, Michigan State, Nebraska and Penn State are all members of the Big Ten, some of the biggest money making machines in college sports.

Michigan athletic director Dave Brandon told 60 Minutes that football accounts for 75% of the Michigan’s $133 million athletic budget. Even more interesting, 60% to 75% of the endowments “gift giving” Michigan receives during a 12 month calendar year take place during the four months (September to December) when the football team plays its games.

Maryland and Rutgers bring two average football programs to the Big Ten, but two very big potential television markets to the Big Ten.

There are more than 15 million cable ready homes in New York, Philadelphia, Baltimore and Washington D.C. markets where Rutgers and Maryland are located. SI.com’s Pete Thamel suggests that if the Big Ten Network moved to basic cable in those areas (ESPN, CBS Sports Network and NBC Sports Network are each of basic cable in those areas) at $1.25 per household, the Big Ten Network could generate an additional $200 million annually by 2017.

Thamel believes the Big Ten annual payout will grow to between $30 million and $35 million by 2017 (when the Big Ten will be negotiating new TV agreements) as a result of the decision to add Rutgers and Maryland.

"It's a long fight," an unnamed television executive told Thamel, who has no connection to the move, said of the Big Ten cashing in on Maryland and Rutgers. "That's the potential. There's a lot of negotiating to happen before that.

"Rutgers is the wild card here," said the executive in the SI.com report. "Rutgers in New Jersey and New York City isn't Ohio State in Ohio. Is it possible that the interest in Rutgers in the corridor is so marginal that no one is willing to carry it in that corridor? Is it possible that Rutgers doesn't resonate enough to justify 1.25 across any of the subscribers?"

The payout when compared to the Big East for Rutgers – a night and day difference. Currently the Big East, who do not have their own cable television network pay their member institutions $10 million annually (Rutgers actually received $8.4 million last year. If the Big Ten hits Thamel’s conservative projection $30 million, the difference will be astronomical over a ten year period.

Big Ten commissioner Jim Delany told ESPN the decision to add Rutgers and Maryland to the Big Ten had everything to do about where the schools are geographically, and less about what the two schools might bring to the conference athletically.

"It's a lot about that," Big Ten commissioner Jim Delany told ESPN.com on Tuesday from New Jersey, where he's attending the announcement of Rutgers' admission to the league. "There's a lot of awareness of different sports brands in different parts of the world, but it's very hard to get beyond awareness if you're not there. Now that we're here, we expect to work awful hard and be impactful.

"We're not going to be dominant, no one's going to be dominant. This is probably the richest corridor in the world."

Maryland was a member of the ACC for more than 60 years. Rutgers joined the Big East football conference in 1991 and became a full member of the Big East in 1995. Nebraska who joined the Big Ten this year was an original member of the Big 12 when the Big 12 was formed in 1996. Nebraska had been members of the Big Eight which added four Texas schools in 1996, becoming the Big 12. Nebraska was one of the keys to the formation of the Big Eight in 1928.

Tradition has little if anything to do with today’s college sports landscape. Maryland and Nebraska both turned their backs on long standing traditions and geographical collegiate partners for the lure of significant financial benefits. The bottom line is just that in college athletics today – show me the money and when you show me the money I’ll be your best friend and new conference partner.

For Sports Business News this is Howard Bloom

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Tuesday, November 20, 2012

The National Football League barely taking care of its own


Monday, the National Football League announced the suspension of safety Ed Reed of the Baltimore Ravens without pay for one game for repeated violations of the rule prohibiting hits to the head and neck area of defenseless players.

The news of Reed’s suspension follows a speech NFL Commissioner Roger Goodell offered at Harvard Thursday on the importance the NFL is placing on player safety, and an ESPN report that suggests the NFL has long been aware NFL players have been suffering concussions as a direct result of playing in the National Football League.

According to an ESPN/PBS report the NFL’s retirement board paid at least $2 million in benefits to NFL players in the late 1990’s and early 2000’s. The benefits were paid to three players, including Mike Webster a member of the Football Hall of Fame and the center on the four Pittsburgh Steelers 1970’s Super Bowl winning teams. Webster retired following the 1990 NFL season, finishing his career with the Kansas City Chiefs.

After his retirement, Webster suffered from amnesia, dementia, depression, and acute bone and muscle pain. Tragically he lived out of his pickup truck or in train stations between Wisconsin and Pittsburgh, despite friends and former teammates offering to rent apartments for him. In his last years Webster lived with his youngest son, Garrett, who though only a teenager at the time, had to act as the parent to his father. Webster's wife (Pamela) divorced him six months before his death in 2002. He was only 50 years old at the time of his death.

The seven-member NFL retirement board includes three owner representatives, three player representatives, and a non-voting representative of the NFL commissioner. Among its duties is deciding individual disability claims.

Bob Fitzsimmons, a Wheeling, W.Va., lawyer who represented Webster in his disability case and is co-director of the Brain Injury Research Institute, described the retirement board’s conclusions in his late client’s case as “the proverbial smoking gun.”

“It’s pretty devastating evidence,” Fitzsimmons told ESPN, who is not part of the lawsuit against the NFL. “If the NFL takes the position that they didn’t know or weren’t armed with evidence that concussions can cause total disability — permanent disability, permanent brain injury — in 1999, that evidence trumps anything they say.”

There are more than 4,000 former NFL players and their families suing the National Football League claiming the NFL withheld critical information about player safety from the 1920’s (when the league was founded) through 2009. The suit also claims the NFL deliberately allowed NFL players to play in games after they had suffered a concussion during an NFL game.

The NFL has claimed for years they didn’t understand the relationship between concussions and playing football.

ESPN’s Outside the Lines report suggests not only was the NFL aware of the inherent dangers associated with playing football, but with three player representatives on the NFL retirement board (and the board offering benefits to former players) the players were also aware of the dangers associated with playing football.

“Professional football players do not sustain frequent repetitive blows to the brain on a regular basis,” members of the NFL committee wrote in a December 2005 paper in Neurosurgery, the official journal of the Congress of Neurological Surgeons. Whoever was on that NFL committee either wasn’t aware or ignored what the NFL retirement board had done a few short years earlier.

“The Retirement Board determined that Mr. Webster’s disability arose while he was an Active Player,” wrote Sarah E. Gaunt, director of the NFL’s retirement plan, in a May 8, 2000 letter to Fitzsimmons. The medical reports, she wrote, “indicate that his disability is the result of head injuries he suffered as a football player with the Pittsburgh Steelers and Kansas City Chiefs.”

The NFL which is trying to have the concussion lawsuit currently being heard in a Philadelphia Federal Court dismissed has had little to say since Friday’s ESPN report. The ESPN report represents both an embarrassment and a public relations nightmare for the National Football League but has a legal precedent been established, does the report move forward the claims made in the biggest lawsuit in sports history?

According to ESPN’s Lester Munson, the Webster case will have little if any impact on the lawsuit that is not sitting in a Philadelphia Federal Court and involves more than 4,000 different cases. Munson believes each case has to be treated separately, each concussion was different, and no two were alike.

The NFL insisted for years it never did anything to hide the potential harm relating to concussions, Munson contends the Webster case is just one case.

“Even though the Webster decision is clearly favorable to the players and embarrassing to the league, it may hurt the players in an ironic and unexpected way. The Webster decision was made by a board that was originally established by collective bargaining between the players and the owners. The owners, fearful of the amounts juries may award to hometown players, want the concussion claims to be resolved in arbitrations that would be conducted under the terms of the union contracts that were in force during a player's career.” Munson told ESPN.

“If Judge Brody is impressed with the board's decisions on the Webster group of cases, she may decide to send all of the current claims into arbitration. It would be a terrible setback for the players, and it would be the result of player triumphs in the earlier cases.”

Roger Goodell continues to make player safety one of his biggest concerns as NFL commissioner.
Goodell’s long-term legacy might be tied to both the outcome of the lawsuit and player safety.
The damage to the reputation and to the image of the National Football League could hurt the sport in the eyes of the tens of millions of millions of people who watch and attend NFL games. Even more damaging could be how the league’s sponsors react. General Motors ended their relationship with the Super Bowl, moving away from the NFL and embracing soccer.

The NFL needs to settle this lawsuit. The league needs to reach an arrangement with its retired players offering their retired players better long-term medical benefits and a better pension plan. The NFL generates more than $9 billion in revenues annually. The NFL has a television contract that pays the NFL more than $4 billion a year. What will the average American and more importantly corporate America believe if the NFL making billions of dollars can’t and won’t take care of its own.

For Sports Business News this is Howard Bloom

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Monday, November 19, 2012

NHL Armageddon 2012: Throwing darts at Gary Bettman

National Hockey League labor negotiations resume Monday evening in New York City, somewhat of a surprise after NHL commissioner Gary Bettman suggested the NHL and the NHL Players Association enjoy a two week “moratorium”. Talks between the NHL and the NHLPA broke down on November 11, Bettman’s rationale for a hiatus – a belief a break in the talks would help bridge the gap.

"We can confirm that we have tentatively agreed to get back together on Monday, either late in the afternoon or early evening," NHL deputy commissioner Bill Daly said in an email sent to the media.
"The meeting was requested by the union and it's their agenda. We will see what they have to tell us."

Gary Bettman hasn’t commented on what happened to his two-week hiatus, NHL players took to Twitter and spoke with the media throughout North America expressing how they felt about Bettman, the man who has been the NHL’s commissioner since 1993.

"I gotta be honest: I personally think he's (Bettman) an idiot," seven year NHL veteran Ian White told The Detroit Free Press. "Since he's come in, I think he's done nothing but damage the game."

When Gary Bettman became NHL commissioner In January 1993 the NHL generated just a shade over $1 billion annually in league wide revenues. At the end of the 2011-12 NHL season the NHL reported revenues of $3.3 billion.

"The whole process has just been frustrating," White said. "I think, just where we stand now, you'd think that we're close to making a deal if they're willing to come a little bit our way. It's something that could have been done even in the summer. So it's frustrating. There's just absolutely no need to be missing games and doing this kind of damage."

White has every right to express his frustration, and indeed as White suggests the two sides might be able to reach an agreement if the NHL moves a little closer to where the NHLPA believes the new CBA should be. White calling Bettman an “idiot” embarrassed the NHLPA, it’s a nonsensical statement. The NHL and the NHLPA will reach a new CBA sooner rather than later, when the NHL begins playing hockey again, Ian White’s inane comments about Gary Bettman could come back to haunt him. White has played for five different NHL teams since joining the Toronto Maple Leafs late in the 2005-06 season.

Chris Chelios was even more critical of Gary Bettman during the first NHL lockout in 1994, Chelios played in the NHL for 18 years. Chris Chelios is now the Executive Advisor to Ken Holland, the general manager of the Detroit Red Wings, a role that Steve Yzerman held with the Red Wings before leaving to become general manager of the Tampa Bay Lightning. Chelios now works on the management side, the same side Gary Bettman does.

Chelios famously issuing a veiled threat against Bettman during the 1994 NHL lockout, suggesting that Bettman should be "worried about [his] family and [his] well-being", because "Some crazed fans, or even a player [...] might take matters into their own hands and figure they get Bettman out of the way."

Chelios is expected to be a part of the NHL’s 2013 Hall of Fame class. If Ian White wants to get into the Hockey Hall of Fame he’ll have to buy a ticket, an admission ticket.

Chelios could say what he wanted too Chelios had a Hall of Fame career. White calling Gary Bettman an idiot was ill, advised comments that could cost White his job. There are risks when you say anything, Mike Illitch owns the Red Wings – White represents nothing more than causal labor to the Red Wings. Throwing darts at Gary Bettman isn’t likely to sit well with Illitch.

Monday’s talks are nothing more than window dressing at this point. Never say never, but no one close to the NHL labor talks believe the two sides are close to reaching an agreement.

The distrust – continues to grow, the innuendoes and rumors, heading from bad to worse.
Friday, citing unnamed multiple sources, the Philadelphia Daily News reported that Philadelphia Flyers owner Ed Snider, “once seen as a supporter of the Bettman's push to rein in the players' share of revenue, has soured on the process after it became apparent that a deal would not be brokered in time for a Dec. 1 puck drop.”

Snider released a statement Saturday afternoon, saying: “An article appearing in today's Philadelphia Daily News is absolutely erroneous. I am a solid supporter of National Hockey League Commissioner Gary Bettman and the League in this unfortunate situation. Like all fans, players, owners and League officials, I am extremely hopeful that an agreement can be reached and we can eventually be playing hockey again soon. League rules prevent me and all owners from making any comments on the labor negotiations. I will continue to honor that and not make any further comments."

The media has sided with the NHLPA throughout most of the NHL stoppage now in its 65th day. Other than occasionally speaking at media conferences Gary Bettman hasn’t talked to the media, his Bill Daly his deputy has handled most of the media requests. On the player side many NHL players have talked to the media. NHLPA executive director Don Fehr like Bettman has let his number two Steve Fehr (his brother) handle most of the media requests. The players speaking with the media represents a gold mine for the media, Ian White precious sound bites.

The NHL and the NHLPA will reach an agreement on a new CBA sooner rather than later. Last year the NBA and the NBA Players Association reached an agreement that ended NBA lockout on Friday November 25, the day after Thanksgiving Day. Could the NHL duplicate the NBA’s magical 2011 Thanksgiving weekend labor gift? Not likely, but expect the NHL and the NHLPA to agree on a new CBA sometime in the next three weeks, with the NHL season starting between Christmas Day and New Year’s Day.

For Sports Business News this is Howard Bloom

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Friday, November 16, 2012

Tebow, Woody Johnson and the Jets mess

The New York Jets are 3-6.in last place in the AFC east, heading to St. Louis to meet the Rams Sunday afternoon. The Jets have lost of their last three games and unless something magical and unexpected happens on the football field, the 2012 Jets season is a disaster. The Jets are in trouble both on and off the football field. The center of the Jets ills the off season decision to acquire Tim Tebow.

The Jets picked Tim Tebow up from the Denver Broncos along with the Broncos' 2012 7th round draft pick, in exchange for the Jets' 4th and 6th round picks. The Jets introduced Tebow to the New York media March 26, a press conference the team was forced to move to their practice facility to accommodate the more than 150 media requests. At the press conference Jets special teams’ coordinator Mike Westhoff, suggested the Jets planned to use Tebow on special teams.

Nine games into the Jets 2013 season Mark Sanchez remains the Jets starting quarterback. Nine games into the Jets 2013 season confusion better describes the Jets, and the roles Sanchez and Tebow are playing during games. Sanchez is the Jets quarterback for most of the team’s offensive plays, the problem Tebow has taken an average of seven snaps in Jets first nine games and no one seems to know when Tebow is going to take one of those seven snaps. One of the biggest issues there seems be no there is no rhyme and very little reason.

One of the challenges the Jets face with Tebow, the New York media. With six major daily newspapers, three all-sports radio stations, the Jets can’t hide from the media.

Wednesday, Tebow was blasted in a The New York Daily News story. Citing unnamed teammates, more than a dozen members of the Jets told the Daily News Tebow was a terrible quarterback.
Jets coach Rex Ryan in the line of fire made it clear in a Jets team meeting he wasn’t happy members of his team were talking about a teammate behind that teammates back.

“Did I address it? I absolutely addressed it,” Ryan said of the meeting. “Because I think it’s a cowardly thing. If you’re not going to put your name to it, I think that’s about as cowardly of a thing as there is.”

Tim Tebow won a Heisman Trophy and led the Florida Gators to a national championship at Florida. Tebow was drafted in the first round of the 2010 NFL draft by the Denver Broncos. Tebow became the Broncos starting quarterback mid-way through the 2011 season. The Broncos made the 2011 NFL playoffs, won their first playoff game against the Pittsburgh Steelers, before losing in the second round of the 2011 NFL playoffs to the New England Patriots.

Tebow was a key to the success the Broncos had on the football field, he earned the respect of his teammates.

“I’ve had criticism somewhat my whole life playing football,” Tebow said. “You got to do your best at handling it. On one side, you try to make it motivate you. But . . . it always has somewhat of an effect on you. You’re human. It’s not always fun having people saying negative things about you, but you try to be stronger from it. It always has made me stronger in the past and it will continue to make me stronger.”

The Jets acquiring Tim Tebow in a trade was a disaster from the moment the Broncos decided they had to unload Tebow. The Broncos had two choices after Peyton Manning signed with the team – release Tebow or trade him. Broncos’ general manager John Elway did what he had to do; he made the best possible deal for his team. Tebow and the Jets were never the right mix.

“That’s not who I am,” Tebow said. “I’m more secure in who I am as a person, as a football player than that to look and wonder or wonder why. . . . I don’t need to stop and wonder why. That doesn’t help me. That doesn’t help you do anything. (It) just makes you think about it more. It can be a little frustrating or saddening, but at the same time, you’re always motivated to go out there and keep working.”

It’s likely Rex Ryan had little if anything to do with Tebow ending up on his roster. The Jets have had ticket selling issues since the Jets and the New York Giants moved into MetLife Stadium at the start of the 2010 season. After the Giants won the Super Bowl in February the Jets must have believed they had to make a bold move to garner awareness. Media pundits believe Jets owner Woody Johnson was behind Tebow’s arrival in New York, Johnson’s rationale – Tim Tebow would help sell tickets for the Jets.

Johnson who hasn’t spoken with the media since the Jets season opening win, threw Ryan and Jets general manager Mike Tannenbaum under the bus earlier week, after speaking with the media Thursday during the team’s practice.

"I didn't sign up for a 3-6 season," Johnson said. "We haven't had one of these in a while. I'm not happy about it, yet I'm optimistic that some of these things can be corrected.”

Johnson’s quelled any rumors he had played a role in the Jets picking up Tebow from the Broncos.

"This, I really want to clear up," he said. "You guys have been accusing me, this phony story of me being more concerned with PSLs or cash or something else. My job – one, two and three -- is to win games. That's why I got into this to begin with. It's to win games. ... It's not to sell PSLs or to sell hot dogs."

What is taking place on and off the field with the Jets has little if anything to do with Tim Tebow. Tebow appears to be an average NFL quarterback with amazing leadership qualities. Once the 2012 NFL season ends Tim Tebow will but released or traded by the Jets, his likely destination, the Jacksonville Jaguars where Tebow will be appreciated regardless of what he does as a football player.
Ryan and Tannenbaum will both be fired once the season ends unless the Jets turnaround their 2012 season – on the football field.

Tim Tebow’s arrival in New York has been a disaster on the football field. Off the field the decision has been both a distraction and an embarrassment. More than anything else, Tim Tebow represents a terrible business decision by the New York Jets.

For Sports Business News this is Howard Bloom

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Thursday, November 15, 2012

The Red Sox – the Marlins a tale to two franchises

The Boston Red Sox blew up their player roster on August 25 trading Carl Crawford, Josh Beckett and Adrian Gonzalez and their contracts worth more than $250 million to the Los Angeles Dodgers. Red Sox Nation was elated, hailing general manager Ben Cherington’s bold move as an important step forward for the Red Sox. Tuesday the Miami Marlins traded Josh Johnson, Jose Reyes, Mark Buehrle, Emilio Bonifacio and John Buck and their contracts worth more than $166 million to the Toronto Blue Jays. South Flordia’s reaction, – outrage, indignation, no one in Miami is happy.

The Marlins invested close to $100 million in their 2012 roster, a team that lost 93 games and finished dead last in the American League East. The team was a disaster on the field, and thanks in large part to manager Ozzie Guillen an embarrassment off the field. Reyes and Buehrle among the free agents the team signed to long-term contacts.

"We finished in last place. Figure it out," a defiant Marlins owner Jerry Loria said when asked if he had conducted a fire sale, the classic term after a sports franchise dumps their high priced salaried players.

"We have to get better," Loria said. "We can't finish in last place. We finished in last place. That's unacceptable. We have to take a new course."

Loria is right in what he is saying, has actions that have baseball pundits wondering what Loria is talking about. Is Loria who conducted a fire sale after the Marlins won the 2003 World Series cutting salary, is Loria committed to fielding a competitive team in 2013?

"We sat down after the season and talked about the team and said we cannot keep finishing in last place," Marlins David Samson said in a radio interview. "It just doesn't make sense. We entrusted all of our scouts and development people and upper level baseball people, and said what can we do to possibly start this to turn around? What needs to happen? How can it work? All sorts of different plans were possible. It just happens we found a way to possibly in one fell swoop get a whole lot
better and get on the road to getting better.

"I absolutely recognize names coming back in a potential trade are not names people are familiar with, but in the baseball world people are familiar with them. What I really hope will happen and what we plan on happening is winning more games, each year starting to win more games.

“I'm not sure what range the payroll will end up at, but I know we'll have the players in place to do better than last year," Samson said. "That's what it's about. We tried the higher payroll and ended up losing more games. Whatever the payroll is, the real important part is having better players."

The bigger question – does anyone believe or trust Loria or Samson? Have the owners of the Marlins lost the public trust? The question Marlins fans are asking – after the organization spent close to $100 million on their 2012 payroll, will the team spend anywhere close to that in trying to field a competitive team in 2013. At this point the Marlins have committed $16 million to their 2013 payroll

At the other end of the spectrum are the Boston Red Sox. They too traded away key players cutting a staggering $250 million from their roster. There seems to be no concerns the Red Sox will spend money to field a competitive team in 2013. The Red Sox have committed $45 million to their 2013 roster that does not include arbitration-eligible players Jacoby Ellsbury and Andrew Bailey.

"It's harder to predict this offseason than it has been in previous offseason because in previous offseasons we've been closer to that, closer to where we'll end up," Ben Cherington said in an interview on Boston sports radio station WEEI. "Especially last offseason, when we were making more cosmetic changes.

"I know that we'll have a very strong payroll, a large payroll. I know that we're going to add to it this winter. I'm confident in saying that we'll be amongst the larger payrolls in the game. Exactly where it ends up, exactly what rank we are, I don't know that yet. I think it just depends on what we do. We're not going to shoot for an arbitrary payroll number just to say that we're going to get to this. We just have to look at each opportunity as it comes and figure out whether it's the right thing for the Red Sox."

One of the key cornerstones in building, marketing and selling any sports franchise is public perception of that team, and even more important trust ownership and management will do their best to field a competitive team each year. The Marlins lost any trust they had with sports fans in South Florida long before Loria and Samson blew their team up Tuesday night. Loria and Samson had their fire sale after the team won the 2003 World Series, similar to the fire sale owner Wayne Huzienga conducted after the Marlins won the 1997 World Series.

Much of the anger in South Florida is focused on the $2.4 billion South Florida taxpayers for several generations will be forced to pay, paying off a taxpayer built stadium Miami and Miami-Dade politicians decided Loria and Samson deserved. The stadium opened last year. Loria and Samson made many promises if taxpayers built the Marlins their own Taj Mahal, a competitive baseball team was at the top of their long list.

Taxpayers are on the hook for three-quarters of the reported $645 million price of the stadium and surrounding parking lots, the Marlins receiving all revenues produced through ticket and suite sales, concessions, advertising and any future naming rights. The $2.4 billion represents the pro-rated investment (that includes interest payments) on the more than $500 million taxpayers are being forced to pay. The ballpark cost $515 million to build with taxpayers kicking in $360 million (taxpayers paid the cost for two parking garages the team receives all of the revenues from.)

“Many times, on the record, they made a commitment that once they had a stadium, they would have a competitive team,” Carlos Gimenez, then a county commissioner, who was skeptical of the intentions of the team’s owner, Jeffrey Loria, and opposed a deal that seemed much too generous, particularly during a recession Gimenez said Wednesday of the Marlins’ ownership. Instead, he said, “the team seems to have indicated that they won’t do that now or in the future.”

Trust has to be earned. There are those who have questioned Red Sox owners John Henry, Tom Werner and Larry Lucchino. A few weeks ago the Red Sox resigned 37-year old designated hitter David Ortiz to a two-year $26 million contract. The Red Sox overpaid Ortiz. That isn’t the point. Ortiz is the last remaining link to the team’s 2004 and 2007 World Series teams. The $26 million the Red Sox invested in Ortiz is as much a gift to Red Sox Nation as it is a baseball move. It’s a message to the millions of fans who fill Fenway Park every summer – the Red Sox owe it to their fans to field a competitive team that includes fan favourites like David Ortiz.

Addressing the media at ownership meetings in Chicago Major League Baseball commissioner Bud Selig indicated he isn’t happy with the blockbuster trade the Marlins and Blue Jays made

“We have this entire matter under thorough review.

“My job is to do what’s in the best interest of baseball,” Selig said. “People have different views of that, on what you should do, and how you should do it. I’ve spent a lot of time on this.

“I know what the commissioner can do, can’t do, what his legal responsibilities are, and other things. I understand all of that. I understand the feeling. In the end, I’ll do what I’ve done in other past situations.

“People ask me, don’t you wish it never happened. There are a lot of situations that I wish didn’t happen. I have to do what I have do to.”

Bowie Kuhn overturned a series of trades Oakland A’s owner Charlie Finley attempted to make in 1975, selling his stars to the Boston Red Sox and the New York Yankees. Kuhn overturned the moves – believing the moves were not in baseball’s best interests. Finley tried to sell the players, the Marlins received players from the Blue Jays.

“I do think that the commissioner is always concerned when there’s an appearance of a fire sale, or of an owner giving up,” said sports economist Andrew Zimbalist in a Miami Herald report. “But I don’t think this is a battle that Selig would choose to fight.

“My guess is that the commissioner, although he will have some concerns, will say it’s up to the team owner to make that decision,” Zimbalist said.

After the Red Sox and the Dodgers completed their August 25 trade no one asked Bud Selig about the trade, unlike what has unfolded since the Marlins dumped their roster Tuesday. Selig won’t stop the Marlins player move. The Marlins didn’t do anything wrong in making the player moves they made this week. Loria and Samson are being portrayed as greedy owners who took taxpayers dollars to build a stadium, made promises they never intended to fulfill. If Loria and Samson want to prove they care and are committed to building and fielding a winner, they will have to spend a great deal more than the $16 million they currently have committed for the 2013 season.

For Sports Business News this is Howard Bloom

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