SBD/Issue 197/Leagues & Governing Bodies

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  • Tony George Steps Down As IRL, IMS CEO, Will Remain Board Member

    George To Remain On IMS BOD,
    Continue Leading Vision Racing Team
    IRL and Indianapolis Motor Speedway (IMS) CEO Tony George yesterday "relinquished all three of his major job titles," resigning as CEO of IMS, the IRL and Hulman & Co., according to Curt Cavin of the INDIANAPOLIS STAR. George will remain on the IMS BOD and in charge of the Vision Racing team. He was "asked to remain in charge of the IRL but declined." The changes "come amid pressure from family members who make up the board," and financial concerns over IMS' "shrinking bottom line are believed to be at the core of the power struggle." IMS CFO Jeff Belskus will take over control at the track, with IRL President & COO Brian Barnhart, IRL Commercial Division President Terry Angstadt, IMS President Joie Chitwood and IMS Productions President Charlie Morgan all reporting to him. IMS General Counsel Curt Brighton will become Hulman & Co. President & CEO. Cavin notes George's family members "have been concerned about the financial commitment to the IRL," and BOD members last month "declined to continue funding the second Vision car" driven by Ryan Hunter-Reay. The news of George's departure has been rumored since May, but his formal departure "still shook the sport." George "has not said what aspects of the business he will concentrate on as a board member only, but he figures to have the interest of the IndyCar team owners at heart as they struggle to remain viable in these tough economic times" (INDIANAPOLIS STAR, 7/1). George yesterday "refused to comment, saying he would release a statement next week" on his departure (AP, 6/30).

    IRL NOW ON ITS OWN: ESPN.com's Terry Blount reported the moves yesterday indicate the IRL "will have to make it on its own and become financially viable without extensive financial support from IMS." George's three sisters, who are IMS BOD members, "felt it was time for the IRL to make things work without the monetary pillow from the family fortune of Hulman & Co. and IMS." The racing circuit has not made a profit during its 14-year existence, and Blount wrote this is a "defining moment for the IndyCar Series." George's departure "will cause IRL competitors to question where things are headed." The change "will cause some uncertainty about the future," and it "might even push Danica Patrick closer to a move into NASCAR." Meanwhile, the "surprise" from yesterday was that George did not become IMS Chair and replace his mother, Mari Hulman George, who was "expected to retire" (ESPN.com, 6/30).

    NO IMPACT EXPECTED ON SPONSORSHIPS: The INDY STAR's Cavin reports George's departure from IRL is "not expected to have an adverse impact on the series' ability to attract additional sponsorship." Just Marketing Founder & CEO Zak Brown, whose company is an IRL consultant, said, "People aren't that close to the sport, so their questions are more marketing- and commercial-related. ... I don't think Tony George leaving his position has an impact on those questions. He doesn't bring a commercial value, if that makes sense." But Brown called George's departure "unsettling for the industry." He added that sponsors "will be eager to hear" from Belskus. Brown said sponsors will "want to know what are the strategic decisions to make the league profitable." Penske Racing Owner Roger Penske said Belskus and Brighton are "good people and capable people, and they represent the family's interest." Meanwhile, IRL Panther Racing co-Owner John Barnes "does not expect IMS Corp. to reduce its commitment to the league." Barnes: "From the league standpoint, IMS and the IRL are hooked at the hip. Only a fool would believe that's not the case" (INDIANAPOLIS STAR, 7/1).

    Kalkhoven Says People Will Have To Wait
    And See What Happens With IRL
    KEEPING THEIR SUPPORT OF RACING: Hulman George in a statement stressed the moves with George do not change the family's "commitment to the growth of the Indy Racing League and the sport of open wheel racing." IndyCar driver Tony Kanaan said, "When I first heard about this last month, I'll admit it was a big worry because I knew Tony put out all the money and gave his life to the IRL. So I'm glad to hear the direction the Hulman-George family is taking for the league." KV Racing Technology co-Owner Kevin Kalkhoven, who was a co-Owner of the Champ Car World Series before it unified with the IRL last year, said, "We'll have to wait and see. I don't know where we go from here but it sounds like the family wants to keep things going and maintain tradition" (SPEEDTV.com, 6/30).

    LASTING IMPACT: USA TODAY's Gary Graves notes George oversaw the arrival of NASCAR, F1 and Moto GP motorcycles during his 19 years at IMS, the "outer walls of which are lined with padded SAFER barriers George introduced to racing in 2002 to enhance chances of surviving a hard crash." George "modernized other parts of the century-old facility while retaining many of the original touches that have made the Brickyard a destination for racers, fans and tourists." George's contributions to IMS and the IRL "required a huge financial commitment that ultimately factored most in Tuesday's IMS board power shift." Just Marketing's Brown said, "The league was losing a lot of money, and given that and the world economy there was a lot of concern at [IMS]. At the same time he's (nearly) 50 and has a life away from the league, and he probably felt he has done his job and decided to leave" (USA TODAY, 7/1). FANHOUSE.com's Holly Cain noted George "spearheaded the unification between America's top two open-wheel series last year" (FANHOUSE.com, 6/30).

    Bloggers Express Unease For IRL's
    Future Without George In Charge
    BLOG REAX: MYNAMEISIRL.com's Jeff Iannucci wrote, "I don't know how to react. I mean, this can't be good simply because it indicates a level of uncertainty this sport doesn't need." The timing of this "in the middle of an IndyCar season is probably the most troubling. ... I can't tell who's in charge of the actual league now, and I'm sure teams and sponsors are sitting in the same boat of ambiguity right now. And that ain't good" (MYNAMEISIRL.com, 6/30). OIL PRESSURE's George Phillips writes IMS "will be in good hands and will continue to function and thrive." The question is "who is running the IRL?" The league "appears to be structured with two Presidents with distinctly different roles. Brian Barnhart is in charge of the competition side, while Terry Angstadt heads up the commercial side. Who reports to whom? Who is accountable?" Phillips: "No matter how you spin it, a rudderless ship is never a good thing. Poor leadership is better than no leadership" (OILPRESSURE.com, 7/1). IRLDEFENDER.com writes the future leadership of the IRL "seems up in the air. Maintaining a healthy Indy Car Series is vital" (IRLDEFENDER.WORDPRESS.com, 7/1). IRLORAMA.com wrote, "I wouldn't be surprised if in five years, the IRL has more road courses than ovals, and even more races in other countries. The future of the IRL now rests in the hands of the almighty dollar" (IRLORAMA.BLOGSPOT.com, 6/30).

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  • Economy, Ticket Sales, Salary Cap Could Hinder NBA Free Agency

     
    A "variety of factors -- including a poor economy, weak season-ticket sales, a declining salary cap and the LeBron sweepstakes itself -- could conspire to make this an unhappy off-season for most free agents," according to Howard Beck of the N.Y. TIMES. Only four teams are "expected to have significant salary-cap space, and not all are expected to use it." Beck notes the salary cap is "not expected to change much" from last season's $58.7M figure, but it "could drop by 10[%] next season, by some estimates." The luxury-tax threshold "could also fall, forcing teams to rein in spending now." One Eastern Conference GM: "No one knows what the marketplace is going to be. It's a brand new world in that respect. This year, the top-flight free agents will go quickly. Then, it will be a long free-agent period" (N.Y. TIMES, 7/1). In Newark, Dave D'Alessandro wrote if the NBA is an "authentic reflection of society at large, this is the summer when consumers ... are likely to start socking away their disposable income." The "vast majority of the 158 players looking for a fair wage will learn that very few teams have the budget to be fair anymore." Nets President Rod Thorn: "Everyone realizes the economic situation, and everyone's alert to it." D'Alessandro noted most GMs "believe only a handful of players in this market will merit more than midlevel exception money" (Newark STAR-LEDGER, 6/30).

    TAKING A HIT: The GLOBE & MAIL's Michael Grange writes free agent players like Fs Shawn Marion and Rasheed Wallace and G Allen Iverson are "still potentially effective players with lots of basketball left," but collectively they are "staring at a pay cut in the range" of $30-35M next season. One Central Division exec said, "There's just not any money out there for anybody, they'll be lucky to get the mid-level." Grange notes "just four teams have room under the salary cap to go bidding for free agents." While that means the "other 26 teams can use the mid-level provision to go after players," Raptors President & GM Bryan Colangelo "didn't foresee a rush." The salary cap and luxury tax thresholds are "expected to be flat compared to last year, but that's worse than it sounds." One Western Conference exec said, "This time last year teams were basing their budgets on the salary cap going up to about $62[M] (a team), so that's already a hit" (GLOBE & MAIL, 7/1). ESPN The Magazine's Chris Broussard said NBA agents and team execs are "really wondering what's going to happen in this free agency" period due to the economy. Broussard: "Right now, it looks like a lot of players are in for a rude awakening" ("Outside the Lines," ESPN, 6/30). The WASHINGTON POST's Paul Tenorio added, "It's going to be tough for some of these mid-level players to get any type of big money. … I think you're going to see a lot of guys that maybe in the past would have opted out of their last year going into this summer … stick around and play out that final year" ("Washington Post Live," CSN Mid-Atlantic, 6/30).

    SIGN OF THINGS TO COME? The Bucks earlier this week indicated they would not offer F Charlie Villanueva a qualifying offer, making him an unrestricted free agent. ESPN.com's Jackie MacMullan said the reason is "purely economics," as Bucks Owner Herb Kohl "needs to save money." L.A. Times columnist Bill Plaschke: "It is about the economy, but it's not just Milwaukee. It’s everywhere. This is the first sign the NBA this summer will be all about people saving money. This is the first example" ("PTI," ESPN, 6/30).

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  • NFLPA Exec Dir Smith Educating Players On Business Of Football

    Smith Has Been Meeting With
    Players The Past Two Months
    NFLPA Exec Dir DeMaurice Smith yesterday met with player reps to "plot strategy for the upcoming negotiations in what may become the NFL's most intense labor standoff in two decades," according to Matthew Futterman of the WALL STREET JOURNAL. Saints QB Drew Brees said, "There is an urgency. We’ve been in a period of labor peace for a long time, and this is the first time you really feel the potential for a battle." Smith has been meeting with teams the past two months in an attempt to "educate players about how the league operates." Smith: "I’d say the learning curve for both the players and for me is pretty steep right now." Seahawks WR and former Bengals player rep T.J. Houshmandzadeh: "I didn’t know any of this stuff until I met De a month ago. I don’t ever remember hearing stuff in depth like that." NFLPA outside counsel Jeffrey Kessler: "The re-education process is a constant battle. You have to start over every year, and you hope some of the veterans bring the newcomers along." Futterman notes late NFLPA Exec Dir Gene Upshaw "took a top-down approach to his organization, sharing information only when he felt it necessary." NFL players said that Upshaw "told them that he would take care of their business -- and in large part they let him -- with decent results." However, Seahawks DE Patrick Kerney said that Upshaw's visits to teams would "occasionally descend into mudslinging, as players would challenge everything from his $6[M] annual compensation package, to whether he flew first class or on a private jet to meet them" (WALL STREET JOURNAL, 7/1).

    PERCY GRANTED NO MERCY: NFL Network's Steve Wyche reported Vikings first-round draft pick WR Percy Harvin was excused from attending the NFL’s Rookie Symposium due to an illness. Wyche: "Harvin tried for most of the day to get here … but was given some medicine and told to stay home and rest. He is excused, but he is going to have to attend the Rookie Symposium next year because this is a mandatory session by the NFL.” Harvin is “very concerned about his image,” and despite his illness, he "thinks people are trying to take some of the things that happened to him at the University of Florida and at the Combine and lump them into a negative light” ("NFL Total Access," NFL Network, 6/30).

    JUDGE AND JURY: With NFL Commissioner Roger Goodell reportedly thinking about an indefinite suspension for WR Plaxico Burress for his felony gun charges, PRO FOOTBALL TALK's Mike Florio reported there is a sense that QB Michael Vick's possible reinstatement "will hinge primarily if not exclusively on whether he can convince Goodell that [he] deserves a second chance." Florio wrote if Goodell "believes that stiff suspensions for Burress and/or Vick are required, then stiff suspensions will be imposed" (PROFOOTBALLTALK.com, 6/29). L.A. Times columnist Bill Plaschke said, "This is not about morality police, it's not about trying to be a tough cop. It's about business. At the end of the day it's about business and Michael Vick right now is bad for the business of the NFL." FanHouse.com's Jay Mariotti: "The stance he's taking against problem children to me (is) the biggest thing a commissioner has done in professional sports in a long time. He sets his own rules" ("Around The Horn," ESPN, 6/30). Boston Globe columnist Bob Ryan: "Roger Goodell has clearly established himself as a strict law and order commissioner. In his view, playing in the NFL is a privilege" ("PTI," ESPN, 6/30).

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  • NLL Retains George Daniel As Commissioner Through '11 Season

    Daniel Had Been Serving As Interim
    Commissioner Since January
    The NLL has retained George Daniel as Commissioner through the '11 season. Daniel, who has worked with the league in a variety of roles since '00, had been serving as Interim Commissioner since the departure of Jim Jennings in January. The league’s BOG unanimously confirmed Daniel’s appointment at their annual meetings in Philadelphia three weeks ago. Philadelphia Wings Owner & President Russ Cline said there were others interested in the position, but after reviewing Daniel’s qualifications, the BOG decided to move forward. “George was the perfect person at this particular time,” said Cline. “In his interim role he really stepped up in the eyes of ownership to the leadership we needed.” Cline said the league’s governors wanted to rework the commissioner role to have the person in that position spend more time on issues such as labor negotiations, while finding outside help for issues such as marketing and media. To that end, Daniel currently is leading negotiations with IMG for the league’s media and sponsorship rights. “We were looking for a person who will direct our daily operations, manage staff effectively, deal with finishing up our player contract, enforce the bylaws of the league and have governors integrally involved in the operation,” said Cline. He added the new commissioner in the next two years will be charged with working on the league’s relationship with the players' association and managing the league’s budget.

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  • NASCAR Working To Connect With Fans As Demographics Change

    ESPN Sports Poll Says 60% Of NASCAR Fans
    Live Outside The South While 41% Are Female
    NASCAR is "coping with maintaining the interest of a fan base that increasingly reflects the country's 21st-century sophistication," according to a sports-section cover story by Nate Ryan of USA TODAY. The shift has occurred as fans "have become a focal point for re-energizing a phenomenon whose once-surging popularity has lost steam." TV ratings and attendance are in a "three-year dip after steady growth for more than a decade," and NASCAR "has refocused on catering to a constituency that seems vastly different from the redneck stereotype some associate with stock car racing." Richard Petty Motorsports co-Owner Richard Petty: "We have to play the game a little different than what we did 15 or 20 years ago, because society is dictating they want to see something different. It makes it really tough from NASCAR's standpoint (of), 'What is the fan really looking for?'" An ESPN Sports Poll indicated that 60% of fans "live outside the South and 41% are female." Since '00, fans "making $100,000 or more have jumped from 7% to 16% of its fan base." Sports Business Group President David Carter said as fans have "moved out of their Southern roots and penetrated big metro markets, the demographic of their casual fan base has become more diversified." Ryan notes NASCAR last year "created a 12,300-member, Internet-based 'fan council' representing all 50 states for the purpose of conducting opinion surveys." The creation of the council is "part of an industrywide push to make a circuit always billing itself as 'fan friendly' even more accommodating to those buying tickets." But former SMI President & CEO Humpy Wheeler said that NASCAR "should remain mindful that its fan base is 'pretty much blue collar.'" Wheeler: "There are upper-middle-income fans, but mostly they came from modest backgrounds. They are very conservative, flag waving, and yes, they drink beer. You have to be so careful with what you do. ... They got away from the roots, and the roots don't change very fast" (USA TODAY, 7/1).

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  • League Notes

    DuPuy Responds To USA Today 
    Column About Steroids In MLB
    MLB President & COO Bob DuPuy in a letter to the editor of USA TODAY responded to a column by Christine Brennan last Thursday that suggested that MLB Commissioner Bud Selig "had done nothing to address the steroids problem in baseball." DuPuy: "Nothing could be further from the truth." Selig, "to the extent that it is possible," has "cleaned up the sport and has done so despite fierce resistance from" the MLBPA. DuPuy noted MLB under Selig's leadership also is "funding scientific research into the development of a test for human growth hormone." Meanwhile, Brennan in asserting that MLB is "responsible for a purported epidemic of steroid use among young people, ... fails to point out that over the past decade, Selig has developed strong relationships" with several organizations that "conduct anti-steroid educational programs for youths and fund cutting-edge anti-drug research." DuPuy: "Brennan, of course, is free to express her opinion, but it should not be so flagrantly uninformed" (USA TODAY, 7/1).

    ACROSS THE POND: MARKETING MAGAZINE's Ed Kemp notes an interactive NBA van that will begin a tour of London tomorrow includes a Court where fans "can play one-on-one games and can participate in a number of contests." Meanwhile, adidas is launching the adidas NBA 5 United Tour, which will "visit five European cities." Also, Kemp notes the NBA and EPL club Chelsea are "in talks to develop mutually beneficial marketing activity to boost their brands overseas." Chelsea "may make players available for promotional activity ahead of" the October 6 Jazz-Bulls preseason game at London's O2 arena, with other joint promotional activity, "such as videos, online viral activity and social networking opportunities also being explored" (MARKETINGMAGAZINE.co.uk, 7/1).

    WORK LEFT TO DO: FOXSPORTS.com's Michael Rosenberg wrote MLS has done a "very nice job of building its niche brand," but the problem with the league is that it is "not the best soccer in the world." Many "serious fans would rather follow games played six time zones away than attend a lesser game nearby." There was a "time when the U.S. economy was so strong that one could imagine the best soccer players in the world coming here for the money," but now is "not that time." Soccer is a "growing niche sport here," and "nothing more and nothing less" (FOXSPORTS.com, 6/29).

    ONE WAGE FOR ALL: NFL.com’s Jason La Canfora noted the UFL is currently offering one-year, $35,000 salaries across the board -- “at least that’s what they are telling agents of prospective players, with an additional $15,000 possible in playing-time incentives.” There is also “some wiggle room” for starting QBs to make a “little more in incentives.” UFL reps previously told agents that they were “toying with the idea of a three-tiered salary scale, and perhaps down the line they could still go with that” (NFL.com, 6/30).

    ALL-STAR SELECTION: Women's Professional Soccer yesterday announced that Swedish club Umea IK will be the opponent for the inaugural WPS All-Star Game at Anheuser-Busch Soccer Park in Fenton, Missouri, on August 30. The season-ending match will air nationally on Fox Soccer Channel and regionally on select FSN affils (WPS).

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