SBD/9/Sports Industrialists

Print All

         This week, THE SPORTS BUSINESS DAILY interviewed PAUL MUCH,
    a Senior Managing Director with the Chicago investment banking
    firm of Houlihan Lokey Howard & Zukin.  His firm recently co-
    published, with TEAM MARKETING REPORT, the 1995 edition of
    "Inside The Ownership of Professional Sports Teams."  Much
    specializes in the valuation of business and their securities. In
    the area of sports, he has advised clients on financial issues
    involving more than three dozen teams.  Excerpts from our
    conversation follow:
         THE DAILY:  Tell us about the findings in your book.
         MUCH:  What you will find is that the business of sports is
    the business of entertainment.  When you look at the corporate
    ownership of professional sports teams, there are over 40 public
    companies that have a piece of sports teams -- either controlling
    interest or a minority interest.  And of those, 2/3 of the
    companies are -- either primarily or as a secondary business --
    involved in entertainment. ... When you look at the entertainment
    business, specifically those companies that see sports as one
    part of their entertainment portfolio, you will see a synergistic
    benefit that will be an enhancement in franchise value.
         THE DAILY:  What is helping the growth of franchise values?
         MUCH:  There are two factors driving the expansion in
    franchise values. ... Currently, what you're seeing is an
    enhancement in franchise value principally as a result of stadium
    economics. ... and that will continue for the next few years.
    But, the long term increase on franchise value will come from
    synergy with corporate America.  And that's really the theme of
    our book.
         THE DAILY:  If there is a strong corporate presence moving
    into the sports industry now, what type of effect will that have
    on teams and leagues?
         MUCH:  It's a two-fold benefit.  Number one, it's providing
    another communications link to be able to provide the consumer
    with the entertainment they want.  Secondly, it's allowing the
    team to enhance it's revenue base to be able to compete more
    effectively for players.  No matter what league you look at, the
    players take more than 50% of the total revenue pie -- and that's
    been growing over time. ... What you see is players' salaries
    growing faster than revenues, and the team owners have to find
    additional revenue sources ... where they are able to continue to
    compete for playing talent.
         THE DAILY:  What other industries will get into sports?
         MUCH:  Ultimately, I do see consumer products companies
    moving into team ownership.  So far, what you've seen is
    entertainment media because you can see a direct link there. ...
    But you will see more and more of a movement.  What better source
    of advertising for a consumer products company -- Coca-Cola or
    Dial, for example -- than to be able to see the company name on
    the team name.
         THE DAILY:  What is the future of the NFL's cross-ownership
    rule?  Can the league afford to ignore some of the high finances
    from corporate America?
         MUCH:  You have two issues.  One is the corporate ownership
    prohibition and the other one is the cross ownership prohibition.
    Both of those will change gradually. ... There are too many
    economic incentives to ignore.  And they're not ignoring it, it's
    just a matter of how do they do it and do it the right way. ...
    What you're going to find is a gradual lifting of both of those
    bans.  You may even start to see it where there is a joint
    venture ownership structure in NFL real estate related
    transactions.  For example, you might see corporate sponsorship
    or partnership in some type of NFL stadium entertainment complex.

    Print | Tags: Coca-Cola, NFL, People and Pop Culture

         The Patriots announced that ANDY WASYNCZUK, VP/Business
    Operations, will also be in charge of the financial end of the
    football business.  He will oversee the team's management of the
    salary cap and player contracts (BOSTON GLOBE, 2/9)....DARRYL
    STRAWBERRY is expected to plead guilty to tax-evasion charges
    this morning at U.S. District Court in New York (N.Y.
    POST)....Warriors Coach DON NELSON has missed the last two games
    due to a relapse of his pneumonia, and team officials have
    persuaded Owner CHRIS COHAN to "prepare for the possibility that
    Nelson will not be able to finish the season" (SAN JOSE MERCURY
    NEWS, 2/9)....Michigan State AD MERRILY DEAN BAKER resigned from
    her position with two years remaining on her contract (CHICAGO
    TRIBUNE, 2/9)....SHAQUILLE O'NEAL plans on campaigning for a role
    in Terminator 3 with ARNOLD SCHWARZENEGGER (USA TODAY, 2/9)....
    "ET" reported on MICHAEL JORDAN's birthday party last night.  The
    party raised money for the Michael Jordan Foundation for needy
    kids ("Entertainment Tonight," 2/8).

    Print | Tags: Golden State Warriors, New England Patriots, People and Pop Culture

         The following is a list of those publicly traded companies
    that have an ownership stake in professional sports team. The
    level of ownership can range for 1% of a limited partnership to
    100% control.
    Ackerly Communication SuperSonics
    Adelphia Communications Sabres
    Adolph Coors Company Rockies
    Aluminum Company of America Pirates
    Anheuser-Busch Companies Blues & Cardinals
    Bank of Nova Scotia Raptors
    Boatmen's Bancshares Blues
    Boston Celtics, LP Celtics
    Cablevision Systems Corp. Knicks & Rangers
    Clear Channel Communications Spurs
    COMSAT Corporation Nuggets
    Dial Corp. Suns
    E.W. Scripps Company Rockies
    Emerson Electic Company Blues
    First Bank System Timberwolves
    Green Bay Packer Corporation Packers
    ITT Knicks & Rangers
    Jacor Communications Rockies
    Kinetic Concepts Spurs
    John Labatt, Ltd. Blue Jays
    Maple Leaf Gardens Maple Leaf Gardens
    May Department Stores Blues
    McDonnell Douglas Blues
    Mellon Bank Pirates
    Mercantile Bancorporation Blues
    Moffat Communications Jets (Winnipeg)
    Molson Companies, Ltd. Canadiens
    Monsanto Company Blues
    Multimedia, Inc. Reds
    News Corporation, Ltd. World League
    Northwest Sports Enterprises Canucks & Grizzlies
    Pinnacle West Capital Suns
    PNC Bank Corp. Pirates
    PPG Industries Pirates
    Southwestern Bell Blues & Spurs
    Supervalu/Wetterau Blues
    Tele-Communications, Inc. Braves & Hawks
    Time Warner Braves & Hawks
    Tribune Company Cubs
    Turner Broadcasting System Braves & Hawks
    U.S. Long Distance Corp. Spurs
    USX Corp. Pirates
    Valero Energy Corp. Spurs
    Viacom Florida Panthers

    Print | Tags: Anheuser Busch, Atlanta Braves, Atlanta Hawks, Boston Celtics, Buffalo Sabres, Cablevision, Chicago Cubs, Cincinnati Reds, Colorado Rockies, Denver Nuggets, Acushnet, Green Bay Packers, Labatt Brewing, Maple Leaf Sports and Entertainment, Minnesota Timberwolves, Montreal Canadiens, New York Jets, New York Knicks, Canucks Sports and Entertainment, Phoenix Suns, Pittsburgh Pirates, San Antonio Spurs, People and Pop Culture, St. Louis Blues, Toronto Blue Jays, Toronto Raptors, Vancouver Canucks, Viacom
Video Powered By - Castfire CMS Powered By - Sitecore

Report a Bug