SBD/SBJ Top Ten: Sports Business Stories Of The Year

The SBD/SBJ editorial staff compiled the ten top sports business stories of ‘07, in no particular order. Today we present the last five stories. See the December 19 issue of THE DAILY for the other five stories. 

Donaghy Scandal Brings Gambling In Sports' Spotlight

The NBA’s “Worst Situation”: One of the darkest moments in NBA history came in July when former referee Tim Donaghy was implicated in a betting scandal that challenged the league’s integrity and represented the worst nightmare for any sports organization. David Stern said one of his first thoughts when learning about the investigation was, “I can’t believe it’s happening to us.” An investigation found that Donaghy acted alone, limiting the damage to the league, and, in October, he pleaded guilty to federal felony conspiracy charges alleging that he passed along inside information on NBA games. The NBA adopted an aggressive strategy to guard against future incidents, including hiring attorney Lawrence Pedowitz to review the league’s officiating policies, as well as implementing more detailed background checks of referees and a closer watch of statistical trends in NBA games and how they correspond to gambling trends. Not just for the NBA -- the Donaghy affair put the rules and regulations of all sports organizations under the microscope.

Earnhardt Jr. Moving From DEI To Hendrick Motorsport Has Far-Reaching Effect

Dale Jr. Hits The Road: Earnhardt family drama evolved into one of the biggest business stories of the year in NASCAR when Dale Earnhardt Jr. decided to break from his father’s company, Dale Earnhardt Inc., and move to Hendrick Motorsports. Junior’s move created a wave of changes within the sport, as he shifted away from Budweiser as his primary sponsor to Mountain Dew Amp and National Guard. Budweiser then moved to Kasey Kahne’s No. 9 car, creating an unlikely pairing between the beer and the youthful-looking driver. The change reverberated beyond the track. For example, racing merchandiser Motorsports Authentics said it would lose $45-50M this year in part because it got stuck with warehouses full of Junior’s Bud merchandise. As if there was any doubt about Junior’s stature as the most powerful selling force in NASCAR, the driver picked up new endorsements with adidas and Sony.

Henry's (r) Venture Into NASCAR Signals New Direction In Team Ownership Model

Changing Face Of NASCAR: While the drama surrounding Dale Earnhardt Jr.’s moves captured the headlines much of the year, the influx of new investors in NASCAR could leave a bigger mark. The entry of John Henry and George Gillett, both of whom bought into NASCAR teams this year, signaled a new direction for the sport. Henry and Gillett bring an outside perspective from their ownership of other teams, but, perhaps most significantly, they offer new sources of income to the spiraling costs of the sport. The changing face of NASCAR was not limited to ownership. Juan Pablo Montoya’s rookie season essentially put a welcome sign on NASCAR’s door for drivers from the open-wheel world. Dario Franchitti, Jacques Villeneuve and others not only have the potential to broaden NASCAR’s base of fans domestically, they also bring fans from other countries, where open-wheel racing dominates the landscape.

Goodell Makes His Mark: This year was not what Roger Goodell would have expected, with dogfighting, sideline videotaping and public smackdowns with the cable industry dominating headlines. The heir to two of the longest-tenured and most successful commissioners in pro sports, Goodell had big shoes to fill when he took over in September '06. And, by and large, he has received positive reviews for dealing sternly with lawbreakers like Michael Vick and rule breakers like the Patriots. But it has been his aggressive action on player conduct that has received the most buzz and notice by industry executives. Goodell fully realizes the possible long-term implications of player behavior on the NFL shield and is not afraid to deal with it. Goodell’s off-field challenges are sure to continue, with the NFL Network’s battle with the cable industry over distribution continuing, all while league owners appear to be preparing for a labor battle with the union. So if '07 was a trying year for the new commissioner, '08 is shaping up to be even more so.

Sports Fans Beneficiaries Of Major Growth Of Online Content

The Promise Of The Digital World: Ten years of Internet hype and promise finally became a full, unqualified reality this year with a massive expansion in the quantity, quality and depth of sports content online, particularly for video, and in turn gave rise to a mature, large-scale business. There was major growth in content consumption, traffic and advertising support, as well as a new wave of content partnerships, acquisitions and syndications. The business is front and center, and people are making money on it. But valuation and monetization still has its challenges. The growth has also created growing pains and conflict. The NFL drew criticism from rivals and potential partners by withholding all online game highlight video for its own relaunched NFL.com. The NHL has found itself in a legal skirmish with Madison Square Garden and the Rangers over control of interactive media rights. Intellectual property protections became a paramount concern for every content owner. The story to watch in '08 will be NBC’s digital execution from Beijing, which becomes much more a digital play than ever before.