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SBD/Issue 55/FranchisesPrint All
Leaving The Skins
Redskins President Stephen Baldacci "will soon switch from marketing the Redskins" to become a Senior Partner in VA-based marketing firm E. James White Communications, "one of the region's largest private advertising agencies," according to Sabrina Jones of the WASHINGTON POST. The firm's name is scheduled on December 9 to change to White & Baldacci, and Baldacci will be the agency's Vice Chair and President. The agency "plans to expand its consulting services to new industries such as sports and entertainment, health care and automotive." Clients include Amtrak, Pepco Energy Services and Hewlett-Packard. Before joining the Redskins in '99, Baldacci was a Senior VP at Snyder Communications, a marketing and advertising firm founded by Redskins Owner Daniel Snyder in '85. Baldacci heads national brand marketing, broadcasting and publishing for the Redskins (WASHINGTON POST, 12/2).
WRONG STORYLINE? ESPN.com's Len Pasquarelli wrote that Redskins execs "quickly debunked" last Tuesday's report in the Washington Times that Dir of Player Personnel Vinny Cerrato was placed in charge of the draft and VP/Football Operations Joe Mendes had been demoted. Pasquarelli: "What the story did was further magnify how disjointed and some might suggest dysfunctional the Washington front office can be at times. ... It's actually Snyder who makes the final call, and it will be up to him to straighten out the front office and to better delineate job descriptions there. ... The best move Snyder can make right now, though, is to get his front office in order" (ESPN.com, 11/29).
The Trail Blazers' "litany of legal problems has sent the team's marketing department scrambling for new ideas one concept at a time," according to Andy Giegerich of the PORTLAND TRIBUNE. While Ruben Patterson and Rasheed Wallace both recently arrested were featured in the teams's "one fan at a time" TV ads, Trail Blazers Exec VP Erin Hubert said that the team "has suspended the television ads until the players' problems are sorted out." Giegerich: "The move is part of the team's strategy that seems to center on contrition. It's a different tune for a team whose top-level officials are often criticized for seeming indifferent to the city." Thus far, the team's sponsors "are offering continued, if qualified, support." Bank of America spokesperson Rich Brown said, "We're very disappointed in the recent events involving the individual players. But we've had a long-term relationship with the Blazer organization, and we remain committed to that relationship." Tony Roma's restaurant Exec VP Ray Newberry said that he "also is disappointed but empathizes with the team's beleaguered public relations staff." Newberry: "This is no different than what we've seen for the last five or six years, and the PR people are doing everything they can to mitigate the damage. So at this point, I can't really say I feel there's any long-term damage." Meanwhile, Univ. of OR Warsaw Sports Marketing Center Exec Dir Rick Burton said of the team's role in the community, "They need a couple of guys to go out and say that they love living in Portland. They need to put something together that gives the media a different story to tell" (PORTLAND TRIBUNE, 11/29 issue). In WA, Greg Jayne wrote that with the recent arrests of Patterson, Wallace and G Damon Stoudamire, Trail Blazers President Bob Whitsitt "must resign. ... It's clear that Whitsitt's time in Portland has turned into an irreparable disaster" (Clark County (WA) COLUMBIAN, 11/27). A COLUMBIAN editorial stated, "Teams have trouble winning without character. Fans have trouble staying loyal without it, too. So do corporate sponsors and political supporters." Trail Blazers Owner Paul Allen and head coach Maurice Cheeks "should take note, as they spend more time cleaning up after ... the Jail Blazers" (COLUMBIAN, 11/27). In Chicago, Lacy Banks wrote, "It's a shame to see Whitsitt and Allen having to apologize for a bunch of overpaid, irresponsible, immature, arrogant ingrates" (CHICAGO SUN-TIMES, 12/1).
Browns President Carmen Policy "reticence to be in the public eye should not ... be taken as a sign that he might leave" the team, according to Patrick McManamon of the AKRON BEACON JOURNAL. Policy: "I have absolutely no plans to go anywhere. Unless they don't want me. There's still work to be done, and I really feel that we have to come as close as humanly possible to what (late Owner Al Lerner) wanted to accomplish out of respect to his memory." Policy said that he has been "working closely" with Chair Randy Lerner, Al's son, and "things are going well." But McManamon wrote "there was some logic to the thinking" that Policy might leave the team, as Randy Lerner "might want to bring in his own man to run the team, and after five years, Policy would have his 10[%] ownership. League scuttlebutt said Policy could return to California if a team were placed in Los Angeles or if the Chargers moved there, or (in the most far-out of scenarios) go to Seattle to run the Seahawks if Paul Allen fires Mike Holmgren." Policy said that the "reason he has referred to this year and next was because it coincided with the end of the original five-year plan he and Lerner developed." Policy: "We laid everything out in a five-year plan. Everything from our finances to community involvement to the role we would play at the league level and ultimately to where we were competitively" (BEACON JOURNAL, 12/1).
The Expos' '03 features 59 home games at Olympic Stadium and 22 games in San Juan, Puerto Rico. The club's first regular-season homestand will be in San Juan, April 11-20 against the Mets (April 11-14), Braves (April 15-17) and Reds (April 18-20). The Expos will open their Olympic Stadium schedule April 22 against the D'Backs (Expos). While the Expos remaining San Juan homestands feature the Angels (June 3-5), Rangers (June 6-8), Marlins (September 5-7) and Cubs (September 8-10), MLBPA Associate General Counsel Gene Orza said, "The games require the approval of the players' association. They have not yet given their approval. [The Expos] should not have put out the schedule." But MLB President & COO Bob DuPuy said MLB Exec VP/Labor Relations & HR Rob Manfred and the union "are working to get approval of the Puerto Rico games, and I assume that will be forthcoming" (AP, 11/27).
PLANNING THEIR FUTURE: Atlanta business exec Charles Vaughn said that he has "revamped his international investor group and will make his formal pitch" to MLB to buy the Expos before Christmas. Vaughn said that the names of group members, which include several investors from Puerto Rico and two from the U.S., "will be released after the application is submitted." In Atlanta, David Markiewicz noted promoter Angelo Medina is "no longer part of the Vaughn investor group, but is involved in the 22-game [San Juan] schedule." Vaughn said, "In no way do those games distract us or take away our focus. What we're proposing is Puerto Rico's team, not the ... Expos playing in Puerto Rico. It's a different product entirely" (ATLANTA CONSTITUTION, 12/1). In Toronto, Geoff Baker wrote the RICO lawsuit by 14 former Expos limited partners "just might keep the Expos in Montreal for several more years to come." While the partners "aren't happy about the Expos playing games in Puerto Rico," attorney Jeffrey Kessler said that it is "doubtful they'll seek a court injunction to block that move." But Kessler "warned that the former partners would seek an injunction if someone tries to permanently move the team." Kessler: "My speculation is that baseball was well aware that if they tried to move the team this year, they would have been faced with a preliminary injunction from us." Robert Kheel, an attorney for the commissioner's office, said that the lawsuit "hasn't affected baseball's long-term plans for the Expos" (TORONTO STAR, 11/30).
VARIABLE PRICING: In N.Y., Phil Mushnick criticized the Mets for implementing variable pricing and wrote, "The notion that all Braves-Mets games will provide more satisfaction than all Brewers-Mets games thus Braves-Mets tickets should cost more is a ridiculous one. ... Where is the media on this? Where is its outrage, its mightier-than-the-sword muscle? Where's its sense of consumerism, its sense of sport and plain, old-fashioned fair play?" (N.Y. POST, 12/1). SSG President & COO Michael Cramer said of the Rangers possibly adding variable pricing: "I like the idea. We don't have to decide yet [about 2004], but I'm inclined to do something like that for Friday-Saturday nights or the big series. I think we will look at it very hard over the course of , and it's something we'll strongly consider. ... It's supply-and-demand. It's [about] what games do people want to see. And it's crazy to turn even one person away on a night that's a pretty slow night, if price is the issue" (DALLAS MORNING NEWS, 12/1).
NOTES: N.Y. officials said that the Mets owe the city "at least $1 million in back rent" for Shea Stadium, which covers the last several years. The Mets pay about $10M in rent annually, and Mets Senior VP/Business & Legal Affairs Dave Howard said, "We do have some issues we're disputing. We're not saying we don't owe any money, but not to that level" (N.Y. POST, 11/28)....In Boston, Jim Baker wrote a subject that "goes ignored ... is how uncomfortable some [Boston] Globe reporters and columnists are with the broad perception of a conflict of interest with their New York Times ownership with the [Red] Sox hierarchy. These Globies work for the paper that's among the team ownership structure and they appear on NESN, which is owned by the Sox" (BOSTON HERALD, 12/1). The N.Y. Times ran an extended story on the Red Sox last Thursday, which included the recent hirings of Bill James and GM Theo Epstein (N.Y. TIMES, 11/28).
Insurance companies have made disability coverage for baseball players "a costlier and riskier business" in recent years, and contract coverage "may be the most significant element of signing players that clubs don't talk about publicly," according to Murray Chass of the N.Y. TIMES, who noted, "As an industry, [MLB] spent $55[M] in premiums the past year." John Scotti, Founder of Pittsburgh-based Team Scotti, the largest broker for disability insurance in MLB, said that premiums have risen over 300% in the past 30 months, coverage has been reduced from five years of a player's contract to three years, and the amount of coverage a broker can issue immediately is $18-20M, down from $42-50M two years ago. Scotti: "Losses in the business have been substantial, but reinsurers also have had a lot to deal with, including 9/11." Cardinals GM Walt Jocketty said, "It's become so expensive that it's a cost item we really have to look at when you put your payroll together. If you're going to insure players, you almost have to include that as part of your payroll." Orioles COO Joe Foss said initial coverage now being restricted to the first three years of a player's contract "is going to have an impact on clubs' appetite for the length of contracts." Chass: "The Tom Glavine negotiations could be a case in point." Expos GM Omar Minaya added, "When you're negotiating a contract, the insurance issue comes up more and more, especially now that it's three years. When you take on a guy in a trade, you always ask what's the insurance situation." D'Backs GM Joe Garagiola Jr.: "The companies are more aggressive in trying to exclude conditions from policies. We don't do a lot of policies. Mostly our insuring is confined to pitchers. But our experience is you can have a policy effectively excluded out from under you. You can have a disability policy on a pitcher, and exclusions can cover injuries to his shoulder and elbow" (N.Y. TIMES, 12/1).
Wizards F Michael Jordan announced last Thursday he will retire after the '02-03 season, and in DC, Steve Wyche noted Jordan "plans to resume his role" as Wizards President of Basketball Operations after the season. However, Jordan "did not say whether he would rejoin" the Lincoln Holdings minority ownership group, led by AOL Vice Chair and Capitals Owner Ted Leonsis. But sources said that Jordan "plans to repurchase a stake in the team" (WASHINGTON POST, 11/29). In Philadelphia, Stephen Smith wrote on Jordan's announcement: "Don't shed any tears. If the ... Wizards were worth $150 million before he decided to come back, they're worth $300 million now. Since Jordan will regain partial ownership, he'll profit in at least some measure from all of this" (PHILADELPHIA INQUIRER, 12/1).
IT'S NOT EASY BUYING THE GREEN: In Boston, Steve Bulpett noted Boston Championship Basketball LLC (BCB), which is headed by prospective Celtics Owners Wycliffe Grousbeck, his father, H. Irving Grousbeck, and Stephen Pagliuca, "came through with another $2.5 million [Friday] to extend the closing date for purchase of the team." The deadline is now December 31, and "this time BCB would need permission from ... [outgoing Chair] Paul Gaston to extend the closing" (BOSTON HERALD, 11/30). Boston-based Game Plan LLC Chair Robert Caporale, who is an advisor to the new ownership group, said that the deal "is on track to close by the end" of December (BOSTON HERALD, 11/28). BCB is "predicting that the team's value will soar," rising 8% a year, to as much as $777M by 2013. Sports economist Andrew Zimbalist: "Those are very aggressive numbers, particularly since they are paying a premium price for the franchise." But Caporale said, "What we have here is a league that is progressively improving in terms of television, attendance and entertainment value" (BOSTON HERALD, 12/2).
The NHL BOG will meet this week in Phoenix to "discuss the fate of some of [its] troubled franchises," according to Al Strachan of the TORONTO SUN, who noted it is the first BOG meeting in six months. Now that NHL Commissioner Gary Bettman has the Sabres' sale "settled, he is moving on to the next crisis point" the Senators. Strachan: "This is a team that has a huge debt and no equity. It is a team that repeatedly has had to go to the league to get cash advances to meet its payroll. There's a share offering out at the moment but, if it fails, will the Senators do the same?" (TORONTO SUN, 11/30).Lou Lamoriello Looks For
New Devils Arena
DEVILISH DENIAL: Devils President & CEO Lou Lamoriello said that the franchise "is on sound financial ground and that nothing has happened to infringe upon short- or long-term operations." Lamoriello: "There is no problem with the financial status of the team. ... For me to deny that we lost some money last year, I'm not going to do that. To what extent, I'm not going to get into, but it's not uncommon that when you don't go further than the first round [of the playoffs] that you don't make money. That's why we're looking to have a new arena [in Newark]." Meanwhile, Lamoriello said of a Newark Star-Ledger report that the YankeeNets BOD voted last week not to buy a 20% stake in the Devils: "I can tell you this, [in that story] nothing was true. There was a meeting, but it had nothing to do with that. I was in the [NHL] general managers' meetings all day. Would I have been there all day if this was going on?" (Bergen RECORD, 11/30). More Lamoriello: "Let me put it this way: This organization is unquestionably in a stable position. There's no problem" (N.Y. DAILY NEWS, 11/28).
SABRES: In DC, Eric Fisher wrote that the fate of the Sabres "will prove to be something of a lab experiment for all struggling small-market teams, regardless of the sport. That's because the Sabres are facing just about every possible hurdle in their quest to regain solid footing competitively and financially." Prospective Sabres co-Owner Mark Hamister said, "Right now, we're still the students. There's a lot to learn from places like Minnesota, with the Wild, that have thriving [hockey] teams in somewhat smaller markets. But ultimately, we believe very strongly that if we study and act upon all our opportunities, ... we can stabilize this franchise and get it turned around" (WASHINGTON TIMES, 12/1). In Toronto, Mike Zeisberger examined OHL Erie Otters Owner Sherry Bassin's bid for the Sabres. Bassin said, "We sure mishandled the process. ... You could say we fumbled it" (TORONTO SUN, 11/30).
STILL SHOPPING: Predators Owner Craig Leipold said that he is "still looking for a local investor or investment group to buy" 20-30% ownership in the team. In Nashville, John Glennon noted that Gaylord Entertainment "exercised its option to sell back its 20% share of the Predators earlier this year, and Leipold bought back that portion of ownership." Leipold said that he "intends to keep the remaining 70-80% ownership" (Nashville TENNESSEAN, 11/28).
The Heat Group and the WNBA formally announced Wednesday that after the Sol's operating agreement with the league expired, the organization decided not to assume ownership of the team (Heat). In Palm Beach, Jamey Eisenberg wrote the Heat Group "did not feel [the Sol] could operate under the WNBA's recent restructuring." The league will "assume control of the franchise, with a move to a new city the most likely possibility." Heat Group President of Business Operations Eric Woolworth said that the South FL market is "saturated with pro teams," and that the Sol "does not have a corporate base as large as other WNBA cities," including N.Y., L.A. and Houston. Woolworth: "Most of the sports teams in this market work very hard to get national corporate dollars for support, and that's difficult for us with the Sol." Eisenberg noted that the Sol is "believed to have never turned a profit," and Woolworth acknowledged, "We have suffered losses." It is estimated that the Heat Group spent about $2M a year on the Sol, including coaches' salaries, players' housing, car rental, travel and food expenses. The league paid players' salaries (PALM BEACH POST, 11/28). In Ft. Lauderdale, Sharon Robb cited team officials as saying that the Sol lost $7.5M since its inception in '00. The officials said that a "lack of corporate support and an added $1[M] worth of players salaries the Sol would have to pay made it fiscally unworkable to take over ownership of the team." While the WNBA's investment banking team has valued each franchise at $10M, "there was one interested unnamed party" to purchase the Sol, "but he declined to purchase the team and keep it in Miami" (SUN-SENTINEL, 11/28). Woolworth said that attendance, which averaged 8,828 last season, "was not a factor" in the move to cease operations. In Miami, Marissa Silvera reported season-ticket holders were "shocked and upset by the news." Heat VP/Sports Media Relations Tim Donovan said that refunds will be given for season-ticket deposits (MIAMI HERALD, 11/28). The Sol ranked seventh in the 16-team league in attendance in '02 (THE DAILY).
COULD IT HAVE WORKED? Sol execs said that they "worked all fall to figure out how they could make the ... team a success in Miami, but the numbers from attendance to sponsorship dollars just didn't add up." Woolworth, on the WNBA's new ownership structure, under which teams are owned individually: "I think that's a model that will probably work very well for the league in New York and L.A. and Houston and Cleveland and cities that have good corporate bases. I think that's a model that, ultimately in Miami, is not going to work" (Sarah Talalay, Ft. Lauderdale SUN-SENTINEL, 11/28). ABC Radio's Keith Olbermann: "The WNBA's failure to grow is easily explained. Instead of selling a slicker version of the women's college game in which passing and teamwork are at a premium, the WNBA has for some reason emphasized physicality, and given the impression that the dream of each of its women is to play against men" (ABC Radio, 11/27). Meanwhile, in Ft. Lauderdale, Dave Joseph wrote that 99.9% of the "general population didn't care about the Sol, and 90.9 percent probably didn't even know they existed." More Joseph: "The Sol was nice, but, like the [MLS] Fusion and Bobcats and women's football, not necessary" (SUN-SENTINEL, 11/28). In Miami, Linda Robertson wrote, "In concept, the Sol should have worked, with affordable games for families who can't spend $200 on Heat, Dolphins or Panthers events and who don't want to drive home from rain-delayed Marlins games at 11 p.m. ... The WNBA season was in the dead of summer, when there's nothing to do ... and the humidity sends us tromping like zombies into air-conditioned shelter" (MIAMI HERALD, 11/28). A MIAMI HERALD editorial, on the Sol: "This is a sad loss and not just for the value that the Sol provided in sports entertainment during its three seasons. The team's players also sent a great message to girls and young women about the value of competitive sports and teamwork" (MIAMI HERALD, 12/1).
Beginning yesterday, the Chargers have 60 days to "trigger an escape clause in their Qualcomm Stadium lease, the first step toward potential relocation," according to Sam Farmer of the L.A. TIMES, who cited sources as saying that the team will activate the clause once "certain financial conditions are met." Farmer: "Further complicating matters, San Diego is hosting the Super Bowl on Jan. 26, leading some people to believe the Chargers will wait until a day after the game to activate their out clause." Upon activating the escape clause, the Chargers are "free to shop around for offers from other cities. When the clause is triggered, the clock starts ticking on a 90-day negotiating period between the Chargers and San Diego. But if plans for a new stadium are not already in the pipeline, it's unlikely much will be accomplished during that three-month span." Chargers stadium consultant Mark Fabiani: "Our basic position is we need to start talking soon." San Diego Super Bowl Host Committee Chair Ron Fowler said, "About 20% of the people here really want to keep the Chargers, and another 20% would really like to see them go. The other 60%, the silent majority, is on the fence about the whole thing" (L.A. TIMES, 12/1). More Fabiani: "We believe we have tried everything possible to avoid being in the trigger situation, but the mayor's response has been to defer completely to his task force, which from the beginning was not scheduled to finish its work until after the trigger period." In San Diego, Norberto Santana Jr. wrote that the Citizens' Task Force on Chargers Issues "is expected to see a presentation by the Chargers in mid-January on the team's redevelopment options for the city-owned 166-acre Qualcomm Stadium site. The panel is then scheduled to issue a report on its recommendations to the City Council in February" (SAN DIEGO UNION-TRIBUNE, 12/1). Meanwhile, in San Diego, Tim Sullivan wrote, "Waiting on a Task Force recommendation is specious. ... What's the problem with seeking a suitable frame for the Task Force's work in progress? What's [San Diego Mayor Dick] Murphy's point in summarily rejecting the Chargers' proposal as 'ridiculous,' without advancing a more palatable plan?" (SAN DIEGO UNION-TRIBUNE, 11/30).