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

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

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

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

What a difference an owner can make – Tom Benson saves the Hornets

On Monday afternoon, the National Basketball Association announced the 2014 NBA All-Star Weekend will be played at New Orleans Arena, home of the Hornets, pending the completion of the arena and hotel agreements. This will mark the second time the NBA All-Star Weekend will be hosted in New Orleans, having previously been held in the “Crescent City” in 2008.

“There is no better place to celebrate and showcase the NBA than in New Orleans, a city with a rich tradition of hosting major events that is second-to-none,” said NBA Commissioner David Stern. “Our 2008 NBA All-Star festivities proved a terrific experience for everyone involved, and we anticipate 2014 will be even better.”

Monday’s announcement capped a remarkable four days for the Hornets and the NBA in New Orleans. On Friday, New Orleans Saints Owner Tom Benson bought the Hornets for $338 million from the NBA, saving the Big Easy from losing their NBA franchise for the second time.

The NBA first arrived in New Orleans in 1974 when the league added New Orleans as an expansion team. The New Orleans Jazz left for Salt Lake City in 1979, becoming the Utah Jazz. The NBA returned to New Orleans at the start of the 2002-03 season when George Shinn moved his Charlotte Hornets to New Orleans after calling Charlotte home for 14 years.

Shinn moved the Hornets to New Orleans after he became embroiled in a sensation trial that was televised by Court TV. In 1999, a Charlotte woman accused Shinn of kidnapping and sexual assault. While the charges were later thrown out of court, Shinn did admit to having two sexual relationships outside his marriage. His reputation lost (Shinn reportedly has never returned to is His Charlotte), Shinn moved his NBA team to New Orleans.

In April 2010, Shinn began considering selling his majority share of the Hornets to Gary Chouest, who bought 25% of the team. The negotiations stalled due to the team's ongoing financial issues. Because Shinn was not in a financial position to continue to run the team, the NBA purchased the team and began looking for local ownership. The NBA completed their purchase of the Hornets from George Shinn and Gary Chouest in December 2010 for $318 million.

Not only did NBA owners get back what they paid for the team, each NBA team walked away with a profit of about $660,000.

Benson surprised many people when he bought the Hornets. In the years leading up to Hurricane Katrina, Benson talked about moving the New Orleans Saints. He purchased the Saints from John Mecom in 1985 after he learned from Governor Edwin W. Edwards that the team was on the verge of being sold to parties interested in moving the team to Jacksonville, Florida.

During the Saints' 2001 negotiations with the state of Louisiana, rumors began circulating that Benson would seek relocation if his requests — which included renovations to the Superdome, a new practice facility in suburban Metairie, and escalating annual payments from the state to the team — could not be met. Benson, born in New Orleans, owned a number of automobile dealerships in San Antonio. Time and time again Benson made veiled suggestions he was ready to move the Saints unless he received what he wanted from the state of Louisiana when it came to the Superdome (the Saints home).

NFL commissioner Paul Tagliabue (since retired) worked closely with Benson and the state of Louisiana, reaching out to both groups creating a long-term solution that would keep the Saints in New Orleans. In the aftermath of Hurricane Katrina, Benson stood by the rebuilt city and ended any discussions about moving the NFL franchise. The Saints resurgence was seen as a key New Orleans post-Katrina recovery. New Orleans will host the Super Bowl in February.

There was a growing concern in New Orleans after the league had owned the Hornets for two seasons, if the NBA didn’t find a local owner in the immediate future the league would sell the team to interests outside of New Orleans and the franchise would relocate. How and why could the NBA convince Tom Benson, who but for the perception of moving his NFL team out of New Orleans following Hurricane Katrina, to save the New Orleans NBA franchise?

“I told (brother) Larry I was a little bit concerned, even though (Bhathal – NBA rep) said he wasn’t going to do it, the first downturn he’d be looking to go to California or some place,” Benson said when the sale was announced Friday night. “That wasn’t very good.

“We really never stopped talking to (the NBA). With out-of-state owners … I called David and said, ‘Look, I’m the only guy you can count on who’s really going to stay here. Let’s work this thing out.’ ”

Sports marketing expert Marc Ganis helped put the deal together. Benson had made an offer to buy the team several months ago. That proposal was turned down by the NBA. Ganis told
the New Orleans Times Picayune he believed Benson was the perfect owner for the Hornets.

“I asked (Benson) a number of times: ‘Why do you want to do this?’ ” Ganis said. “I want them to know why they’re doing it. Don’t get caught up in a bidding war, or the ego of it. His answer was consistent from (the beginning) all the way to today. He wants to make sure this team stays in New Orleans, makes sure the team is successful in New Orleans and is an important part of the community. This is not a deal that’s going to generate some windfall profits return.

“I asked David: ‘Why do you want to keep the team in New Orleans?’ If he had an interest in maximizing the profit for the league, he very easily could have sold the team to someone who could have relocated it to San Jose, Anaheim, Seattle, Las Vegas. That wasn’t his interest. That was important. Asking each of them this question independently at different times, both of their answers were the same — that’s why this deal came together.

“Both principles had the same motivation (of keeping the team in New Orleans). David said, ‘We have a commitment to the fans of New Orleans who want the team to stay there, and we’re going to do everything we can to make that happen.”

Along with paying the NBA $338 million for the franchise, Benson also assumed the $125 million in debt the team has on the books.

Forbes Magazine determined in their latest NBA franchise valuation the average NBA team had a value of $393 million. The Forbes 2012 NBA list published in late January determined the Hornets value to be $285 million. The NBA selling the Hornets for $53 million more than Forbes subjective value for the franchise, suggests not only did the league do extremely well in selling the team for $338 million, but the value of an NBA franchise has increased substantially since Forbes January report.

For Sports Business News, this is Howard Bloom

The Sacramento Kings arena deal – why the deal died

Joe and Gavin Maloof legally own the Sacramento Kings. However, if their business is going to succeed in Sacramento, the Maloof’s, as most owners of sports franchises, need to work with the local business community and have the support of the local population. As simple as that sounds, the Sacramento Kings uncertain future in Sacramento is for the most part based on the local business community and the Sacramento community no longer prepared to work with the Maloof’s.

The Kings arrived in Sacramento in 1985 after failing to find success in Kansas City. The arena seats 17,317, the lowest capacity of any current NBA facility. The arena cost $40 million to build and opened in 1968 and features none of the revenue-generating amenities most NBA arenas include. The arena has 412 club seats and 30 suites. Most NBA arena arenas have between 1,500 and 2,000 club seats and more than 100 suites.

During the NBA All-Star Weekend in Orlando, the Maloof’s and the City of Sacramento announced plans to build an arena. “Under the proposed terms of the deal, the city will contribute $200-$250 million to the estimated $387 million arena, mostly by leasing out parking garages around the facility,” said a person with knowledge of the negotiations in an ESPN report. That person, speaking on condition of anonymity, because the full financing plan will not be made public until at least Thursday, said Sacramento also will create revenue through a ticket surcharge.

“The Maloofs have agreed to contribute $75 million in upfront cash, which includes the sale of land around the team's current suburban arena, along with paying off a current $67 million loan to the city and contributing more over the course of the deal. Arena operator AEG also agreed to pay almost $60 million.”

That agreement blew up in the faces of the Maloof’s and the NBA on Friday night. There is no longer an arena agreement and the Kings face a very uncertain future in Sacramento.

The deal began falling apart Thursday evening when a group of 24 Sacramento business leaders published a letter in the Sacramento Bee, a letter they had sent to NBA commissioner David Stern. In that letter, the business “strongly suggested” Stern and the NBA encourage the Maloof’s sell the Sacramento Kings. The release of the letter was timed with an update the Maloof’s were providing Stern and the NBA Board of Governors in New York.

Late Thursday night, Sacramento Mayor Kevin Johnson (who played more than 12 seasons in the NBA) took an overnight flight to New York, meeting with Stern and NBA owners on Friday in hopes of making one last attempt to save the proposed Kings’ arena agreement.

“I think that upon closer review, which was their right, the owners of the Kings wanted to reexamine certain assumptions that everyone understood in Orlando (where the agreement was announced) about projections and the like.

“And it made them increasingly uncomfortable…they recognized that the fact that it was necessary to bring in a third party, AEG, because we needed their funds to finance, together with their existing funds, that were necessary for the NBA to advance, came with a cost that further burdened the team, and they ultimately decided that this was not a transaction that they wanted to go forward with, and that's their right.” Stern said Friday evening.

Was it really as simple as a bad deal -- one they should have never agreed to?

“It was a bad deal. The main thing was … the projected revenues were too high. They were at 2005 levels, before the housing bubble burst and the economy went down. We kept telling (NBA attorney) Harvey Benjamin that. He didn't listen, he didn't listen.” Joe Maloof told the Sacramento Bee Saturday.

“We feel like criminals, and we didn't do anything wrong. This was just the wrong time and this was the wrong deal. When the time is right, we'll do a deal. We'll look at another downtown deal or something at Natomas. Bring us a deal we can sign. Nobody wanted to get an arena done more than we did. We've been talking about it for 13 years. Everyone just needs to calm down. We all need to cool off.”

Maloof is correct in suggesting everyone needs to calm down, take a step back, and take a moment to reflect. What isn’t comforting is Joe Maloof’s believes that he and his brother feel like criminals. Maloof stepped pretty close to going over a line in attacking Sacramento Mayor Kevin Johnson Saturday in a USA Today report.

"I don't think I'd want to negotiate with the mayor," Maloof told USA TODAY Sports on Saturday. "Maybe there's someone else that I'd feel more comfortable with.

"We're disappointed in comments made by the mayor that we feel were shots to us that were unfair and not truthful."

Mayor Kevin Johnson's office shot back.

"As their bizarre press conference laid bare for all to see, dealing with the Maloofs is like dealing with the North Koreans— except they are less competent," Chris Lehane, executive director of Think Big, a committee formed by Johnson to keep the Kings in Sacramento, told USA TODAY Sports in a statement. "In Maloof-world, facts are fiction; truths are half-truths; and promises are broken promises. The City of Sacramento deserves better."

The arena agreement was announced as a March NBA deadline was approaching regarding whether or not the Maloof’s were going to relocate the team to Anaheim. The Maloof’s had to let the NBA know where their team was going to play during the 2012- 13 NBA season. The City of Anaheim actively negotiated an agreement with the Maloff’s that would have the Kings relocating to Anaheim next year.

There is little, if any, trust between the Maloof’s and Sacramento following Friday’s news. The business community took a very strong stand – demanding the Maloof’s sell the team before the arena deal fell apart on Friday. Is the Maloof’s next and last move to play the year in Sacramento and a year from now announce the franchise will be moving?

“That's not true, that's not true. I swear that is not going to happen. I don't care what rumors are out there. It's our team. We're not selling, and we're not leaving. Our identity is the Sacramento Kings. That's how we're known,” Joe Maloof said in a Sacramento Bee report.

There are a multitude of issues facing the Maloof’s. If they’re going to stay in Sacramento, those challenges start with trust.

An arena agreement was announced six weeks ago and that agreement is now dead. Joe Maloof can suggest the agreement made no sense but why did he and his brother move forward with that agreement only to realize six short weeks later it made no sense? And if the city of Sacramento and the Kings manage to negotiate another arena agreement, is there anything to suggest Joe and Gavin Maloof might walk away from that agreement?

If Joe and Gavin Maloof decide it’s in their best interest to move their NBA team, would the city they move to have any trust issues with the Maloof’s?

Will Rogers once said: “It takes a lifetime to build a good reputation, but you can lose it in a minute.” For Joe and Gavin Maloof, the mishandling of an agreement to build a new arena for their NBA team might cost them much more than that arena deal, it might cost them their reputations.

For Sports Business News, this is Howard Bloom

Lamar Odom – why contracts shouldn’t be guaranteed

Lamar Odom has been paid $24.6 million to play basketball for the last three NBA seasons. Odom played a key role in the Los Angeles Lakers 2010 NBA championship. Last year, Odom was selected as the NBA’s sixth man. Earlier this week, Odom was asked to leave the NBA team he played for this year.

On December 11, 2011, Odom was traded to the Dallas Mavericks for a first-round draft pick and an $8.9 million trade exception after NBA commissioner David Stern vetoed a proposed three-team trade with the New Orleans Hornets involving Odom that would have sent him to the Hornets, Chris Paul to the Lakers, and Pau Gasol to the Houston Rockets. Odom felt "disrespected" after he learned of the Hornets trade publicly, and he requested a trade from the Lakers to another contending team. Later that day, the Lakers traded Odom to the Dallas Mavericks – the defending NBA champions.

The Mavericks and Odom ended their relationship earlier this week. Instead of releasing him, the team listed Odom inactive for the remainder of the season. Odom and the Mavericks didn’t work. Odom missed three Mavericks games after the NBA All-Star break for what was called personal reasons. The Mavericks sent Odom to the Texas Legends of the NBA D-League on March 2. A day later, the Mavericks cancelled the move. On March 24, Odom did not play in a 104–87 loss to the San Antonio Spurs, the first time he could remember not playing due to a coach's decision.

Odom’s Dallas career likely ended Saturday night during halftime of the Mavericks game in Memphis. Mavericks’ owner Mark Cuban visited the teams’ locker room during halftime. Odom had arrived late for the Mavericks home game Friday night and again for a team meeting Saturday morning in Memphis.
Cuban had enough of Odom.

"Well, yeah," Cuban told ESPN Dallas when asked whether that exchange was the final straw. "Just his response to it. Everybody goes through ups and downs. Every player does. We tried to put him in a position to succeed. You guys saw it, saw what we did. It didn't work.

Odom is an interesting off-court case study in what can go wrong for a professional athlete if his focus is taken away from the sport he’s being paid to play. He’s married to reality television personality Khloé Kardashian. Their wedding was featured on the E! reality-based series Keeping Up with the Kardashians, on which Khloé is a regular, with Odom appearing in a handful of episodes. On December 29, 2010, E! announced that it was planning another spinoff from the series featuring Lamar, Khloé and his two children from his previous relationship. The new series debuted on April 10, 2011.

Last year Lakers management voiced their displeasure with the camera crews that constantly followed Odom around.

The circus followed Odom to Dallas. Cuban told the Fort Worth Star Telegram he didn’t believe the camera crew following Odom bothered his team; he did believe the cameras had a negative impact on Odom.

"I do think that if you know you're on camera all the time, you know you're on camera all the time.''

And what precisely what does that mean?

"That means you pay attention to how you're going to look on camera,'' Cuban said.” If you're high enough visibility, you know there's a camera on you all the time and that it's going to show up somewhere, and that can influence your behavior.''

Mark Cuban is a passionate team owner, an owner who loves his team. When he purchased the Mavericks, one of his first decisions was to buy a plane because he wanted his players to travel in comfort. Cuban attends most of his team’s games in Dallas, and when the team is on the road. He’s often seen sitting somewhere near the team’s bench cheering for his team. He wears his heart on his sleeve.

"Everybody goes through ups and downs,'' Cuban said in a Dallas Morning News report. “Every player does. We tried to put him in a position to succeed. It didn't work. And I just asked him, 'Does he want to go for it or not?' I just didn't get a commitment. And that was the end.

"You can kind of tell sometimes when a guy's not focused and ready to play. This [at Memphis] was a big game for us, and he wasn't connecting to that. And if you're not positive energy, you're negative energy.''

Cuban never shies away from speaking his mind – telling the media how he feels. The confrontation between Cuban and Odom on Saturday night wasn’t the first time the two had talked about his attitude.

“I decided to try to help him and turn it into a positive. In any deal, sometimes you're on the right end. Sometimes, you're on the wrong end.

"Did I get my money's worth? No. I don't know that the word's 'cheated.' But did I get my money's worth? No.''

There are many people who do not like professional athletes. Countless people see professional athletes as overpaid and underachieving people. Lamar Odom could be the poster-boy for why so many people dislike professional sports and athletes.

Charles Barkley, a member of the Basketball Hall of Fame, told ESPN Dallas 103.3's while he will always stand by the players as far as the TNT broadcaster is concerned, Odom shouldn’t be paid the remainder of his 2011-12 salary or the $2.4 million buy-out for the final year of his contract.

"I mean, because he didn't earn his salary. He didn't earn it at all. I like Lamar as a person, but I'm disappointed about everything that happened in Dallas. And it's a shame that the Mavs got to pay him, to be honest with you, because he doesn't deserve to get paid for what he put out there this year. He doesn't deserve it, plain and simple.

"To sit at home and make that kind of money really pisses me off, to be honest with you, for the effort that he put out there," Barkley said. "He's going to make hundreds of thousands of dollars these next two paychecks…That's not fair to the Mavs. It's not fair to the game of basketball. I'm just disappointed in Lamar."

If an NFL owner believed a member of his team had underachieved on the football field, that owner could release that player and he wouldn’t have to pay him. NFL player contracts are not guaranteed. NBA, NHL and MLB contracts are guaranteed.

During the recent NBA collective bargaining negotiations, there were suggestions NBA owners wanted to create contractual agreements along the lines of how the NFL operates. If that had taken place, Mark Cuban wouldn’t have to pay Odom the balance of his $8.2 million 2011-12 contract or the buyout he’ll be forced to pay Odom.

Lamar Odom embarrassed himself and NBA players. Even more important, he may one day serve as the reason why NBA players might find it difficult to have their contracts guaranteed.

For Sports Business News, this is Howard Bloom