SBD/Issue 156/Franchises

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  • Phillies Entering Rarefied Air After Signing Howard To Extension

    Phillies Have Signed Ryan Howard
    To A Five-Year, $125M Extension

    The Phillies signed 1B Ryan Howard to a five-year, $125M extension that will keep him with the team through at least ‘16, the latest in a series of transactions that has put the team “into that mega-powers group with the Red Sox and the Yankees,” according to MLB Network’s Tom Verducci. The team now has P Roy Halladay and 2B Chase Utley signed through the ’13 season, and there are “not many franchises that can continue to pay guys, keep them off the market.” The Phillies are a “tremendous success story (in) what they have done in that market.” Verducci: “They have the best TV ratings in the National League. Their attendance has gone through the roof. Their revenues have been rising every single season. It's an amazing success story, and I think it's something a lot of other franchises can follow." MLB Network’s Peter Gammons: “They love having that ballpark filled every night. They love the money that they're making" (“MLB Tonight,” MLB Network, 4/26). In Philadelphia, Sam Donnellon writes fans should "stand up and cheer" the Phillies’ ownership and front office, including President & CEO Dave Montgomery. They "did the right thing" by extending Howard's contract. The deal is "one of the richest in baseball history, but may end up being a bit of a bargain once potential 2011 free agents Albert Pujols, Prince Fielder and Adrian Gonzalez sign new deals" (PHILADELPHIA DAILY NEWS, 4/27). ESPN.com's Jayson Stark said, “Ryan Howard was not going to give them a discount. If they wanted to keep the guy, this was the price” (“Mike & Mike in the Morning,” ESPN Radio, 4/27). Meanwhile, SportsNet N.Y.'s Chris Carlin asked, "What do you think Albert Pujols is going to get, the real premier slugger in baseball, if Ryan Howard gets that kind of money?" ("Loud Mouths," SNY, 4/26).

    SPREAD TOO THIN? In Philadelphia, Bob Brookover reports the Phillies “have already committed more than $130[M] to 17 players for next season,” and RF Jayson Werth's free agency after this season is the “first case on the docket” as to how high the team’s payroll will go. If Werth signs a long-term deal, the club’s payroll “will likely soar above” $150M. Montgomery said, “We want to keep this group together as long as possible. Is it possible to keep everyone? Probably not. But we don’t want to rule anybody out at this point because they’re part of our club” (PHILADELPHIA INQUIRER, 4/27). ESPN's John Kruk said the deal is a "windfall" for Howard, but it could have an effect on other Phillies players as they near the end of their current deals. Kruk: "You get him, but you could lose others" (“Baseball Tonight,” ESPN, 4/26). In Philadelphia, John Gonzalez writes the Phillies "have admitted the payroll isn't unlimited and that they can't keep the entire team," but "that's the way it goes." Gonzalez: "You can't have everyone -- but you can have Howard" (PHILADELPHIA INQUIRER, 4/27).

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  • MLB Teams Offer Ticket, Concession Discounts To Lure Fans To Park

    A's Are Offering Fans Free Parking As
    An Incentive During Tough Economic Times

    MLB teams are "offering rock-bottom ticket and concession prices to lure cash-strapped fans to the ballpark," according to Michael McCarthy of USA TODAY. At least "nine of the 30 MLB teams are offering $1 ticket or hot dog promotions," while others like the A's are "dangling free parking as an incentive during economic hard times." A's VP/Sales & Marketing Jim Leahey said more MLB clubs are willing to sacrifice short-term revenue "if we can bring folks to the park who might not otherwise come." McCarthy notes the Braves are "pricing 2,092 upper deck seats at $1 for seven games this season" at Turner Field, while the Reds and Brewers are "offering dollar menus at some concession stands for the second year in a row." But there are "bright spots in 2010," as Twins Dir of Baseball Communications Mike Herman said that the team's average attendance through the first seven home games at Target Field is up 62.3% over the same period last year at the Metrodome. The Braves, Rangers and Reds also are seeing attendance increases, up 28%, 27% and 25%, respectively, "during their first homestands of the 2010 season" (USA TODAY, 4/27). The WALL STREET JOURNAL's Mike Sielski reports the Mets "already twice dipped below 26,000" fans at Citi Field this season, after drawing at least 35,581 fans to every game last season. Sunday's 1-0 rain-shortened win over the Braves drew an announced crowd of 27,623, which was "probably about 20,000 more than the number of people at Citi Field" (WALL STREET JOURNAL, 4/27).

    TRYING TO GET THEM IN: The GLOBE & MAIL's Hayley Mick reports the Blue Jays are offering a C$95 season ticket at Rogers Centre that includes "unlimited access to the 500-level nosebleed seats." Meanwhile, prior to last night's game against the Red Sox, the Blue Jays "invited season ticket owners ... to come see the Jays' pregame batting practice." The team also has "borrowed a tactic used by the NBA," instituting Tweeting Tuesdays, "allowing fans who use Twitter to communicate with some of the team's players and other fans." But some Blue Jays fans said that team officials "could do better ... to convince Torontonians to spend their evenings at the ball game," from "ladies nights to cheaper booze" (GLOBE & MAIL, 4/27).

    SMALL SAMPLE, BUT A SIGN OF THINGS TO COME? A's GM Billy Beane said of overall attendance during the first three weeks of the season, "You have to recognize it's a small sample size." However, even with that being the case, Beane indicated that if the trend "continues, it could be worrisome for baseball as a whole, and not just for small-market teams trying to make a go of it in tough economic times." Beane: "I watched the Kansas City-Toronto game the other night, and it really struck me how small the crowd was. We've had plenty of nights like that in Oakland. My concern is that of the (fans') perception of how the season will play out. People may be afraid to get emotionally involved with teams like that." FANHOUSE.com's John Hickey notes that perception could be that teams "playing well -- the A's are in first place and the Jays are over .500 -- aren't teams that are going to be in contention" later on in the season, and that "may work to suppress attendance" (FANHOUSE.com, 4/27).

    ATTENDANCE NOT REALLY THAT BIG OF A DEAL: Bloomberg TV's Michele Steele reports MLB home attendance does not matter "as much as you would think." Despite only 10,924 fans coming out to see the Padres-Marlins last night, "both of these teams make plenty of money." Steele said while the Marlins are "among the worst teams in terms of attendance, in terms of profitability it's a different story. The Marlins led the league in operating income -- $46(M), $6(M) more than the next club, the Boston Red Sox." Steele: "While it would be nice if more teams offered more freebies and promotions to get you out to the ballpark, most of them are actually doing pretty well on their own" (Bloomberg TV, 4/27).

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  • Prokhorov's Imminent Nets Takeover Comes With Great Anticipation

    Prokhorov Could Capture The Interest
    Of Basketball Fans In New York

    Mikhail Prokhorov is "expected to assume control" of the Nets within the next few weeks, and the transaction "may be the most anticipated ownership change in NBA history," according to Howard Beck of the N.Y. TIMES. The 44-year-old Prokhorov, the second-richest man in Russia, is "relatively young, wealthy, charming, tall, athletic and adventurous, a modern-day renaissance man with an air of cold war mystique." His arrival is "inspiring hope and wonder, a timely distraction from the Nets’ catastrophic 70-loss season." Mavericks Owner Mark Cuban in an e-mail said, "If Mikhail’s personality matches his wallet and he is available to Nets fans, they will love him and come to the games in droves." But Beck notes creating interest in the franchise "may prove to be the easy part." Prokhorov must "rebuild an atrophied roster and revive a dispirited fan base, even as the Nets awkwardly straddle two cities." He understands "star power and the value of mystique," agreeing to very few interviews in order to "prolong the speculation about his plans." His public image is "undeniably cool, and surely appealing to the young athletes he will soon try to recruit." Beck notes "all of this sets Prokhorov apart from his new rival in New York," Knicks Owner James Dolan, who is "older, shorter and unathletic, with a gravelly voice and a gruff demeanor." Where Prokhorov is "light-hearted and self-effacing, Dolan is defensive and inarticulate in interviews, when he chooses to do them at all." The Knicks have not recorded a winning season in nine years and have "no definable personality," so New York's basketball loyalties are "surely up for grabs" (N.Y. TIMES, 4/27).

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  • Arsenal Fans Watch Kroenke As He Moves Closer To 30% Ownership

    Kroenke Sits Just Nine Shares Shy Of 30%, A
    Mark That Would Trigger Full Takeover Attempt

    Stan Kroenke sits just nine shares shy of a 30% stake in Arsenal that would require a full takeover attempt of the EPL club, and "whether Kroenke buys them, or what he'll do if he buys them, remains just as big a mystery as it was three years ago," according to John Henderson of the DENVER POST. Kroenke has "kept his plans private," and that silence has "English soccer fans spooked." Nigel Phillips, spokesperson for the Arsenal Supporters Trust fan club, said, "People think he's got something to hide. Personally, I think given his record as a sports investor, I don't have a concern. But he needs to persuade people, because of the overwhelming negative American experience in ownership of English football." Manchester United has gone $1B in debt since the Glazer family acquired the club in '05, while Liverpool has gone $364M in debt since Tom Hicks and George Gillett took over in '07. Henderson notes it is "understandable why Kroenke wants Arsenal," but what "isn't clear are his intentions should he acquire it." Henderson: "Would he borrow heavily, as the Glazers and Hicks did, and then try to sell it? Will he fork over the money to sign a needed goalkeeper and central defender?" Phillips said, "I'm not saying he's losing the PR battle, because he's not even in it. ... He can be a good owner. But he must convince people he will be a good owner" (DENVER POST, 4/27). In St. Louis, Tom Timmermann wrote "any intrigue that surrounds" Kroenke's attempt to buy the Rams "may pale in comparison" to his involvement with Arsenal. While Kroenke has voiced his intention to buy the Rams, "it's not even clear that Kroenke wants to buy Arsenal, an effort that could cost him as much" as $700M. The Guardian's Arsenal beat writer David Hytner said, "Stan has kept silent, in the background. There's some kind of reassurance to that in these times" (ST. LOUIS POST-DISPATCH, 4/26).

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  • Toronto Star Looks Into NHL Club Foundation Spending In Canada

     

    More than half the money raised in the name of charity by Maple Leaf Sports & Entertainment last year was "spent on fundraising and administration," and the story is "much the same at many professional sports foundations across Canada," according to an investigation by Robert Cribb of the TORONTO STAR. Experts said that "well-run charitable operations should be directing less than 20[%] of their charitable income on fundraising and administration." But "lavish gala dinners, golf tournaments and lotteries held by Canadian NHL club foundations routinely eat up between [40-65%] of revenues -- and as much as 80[%] in the case of the Edmonton Oilers' foundation in 2008 -- intended for disadvantaged children and community development." Fundraising and administration consumed 55% of the C$1.5M raised by MLSE's Team Up Foundation last year, according to self-reported figures to the Canada Revenue Agency, compared to 17% for the Montreal Canadiens Children's Foundation, which boasts the "lowest figure among the country's six NHL club foundations." Foundations for the Senators, Flames, Oilers and Canucks last year "reported internal costs of between" 42-65%. Canada's federal Charities Directorate, which regulates the country's 83,000 registered charities, said fundraising of more than 35% of revenues triggers an examination "to determine if there is a trend of high fundraising costs." The Toronto Star investigation revealed that while "five of the six NHL team charity foundations exceed that threshold," all "continue to operate without penalty."

    RAISING QUESTIONS: Financial experts and forensic accountants said that the figures from MLSE's Team Up "raise questions about the charity's oversight of charitable dollars." Forensic accountant Ken Froese, who reviewed Team Up's filings, said, "It should be the leading example in Canada for a sports foundation. But the foundation is a way of raising money and a lot of the use of the funds gives you advertising for the Raptors or the Toronto Maple Leafs." MLSE Senior VP/Finance and Team Up Treasurer Kevin Nonomura: "We understand, from an outside perspective, it doesn't look very good. ... We're trying to look at diversifying the way we raise money and try and find more efficient ways, effective ways to raise money" (TORONTO STAR, 4/24). Imagine Canada VP/Operations Cathy Barr said the fundraising and administration costs for the NHL foundations are "definitely on the high side in terms of what [is] widely perceived to be acceptable in the sector" (TORONTO STAR, 4/25).

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  • Franchise Notes

    Jets Say Upper Deck At New
    Meadowlands Stadium Is Sold Out

    In Newark, Jenny Vrentas notes the Jets are "not giving specific numbers," but said that the upper deck at New Meadowlands Stadium is "sold out and sales in general picked up during this past season's playoffs push." The Jets said that they "reduced the PSL's of 6,000 seats near the goal line earlier this year, from $10,000 to $7,500, but don't anticipate any further changes." Ticket holders said that they have "received e-mails from the Jets as recently as last week offering a $250 parking or food voucher for referring a buyer." Meanwhile, a Giants spokesperson said that the team has "about 1,500 club seats left to sell" at the stadium (Newark STAR-LEDGER, 4/27).

    BEEHIVE OF ACTIVITY: In New Orleans, Jimmy Smith cited a source as saying that talks between Hornets Owner George Shinn and Minority Owner Gary Chouest “aimed at a Chouest purchase of the club are continuing,” and “look more favorable than they did on Friday when sources indicated negotiations were at an impasse.” There do not seem to be any other possible buyers interested in the team in New Orleans, “an indication that Friday’s news may have been nothing more than posturing from one side or another” (NOLA.com, 4/26).

    WHAT'S THE HOLD UP? SI.com's Jon Heyman reported there is "still said to be up to a $50[M] difference between Tom Hicks and Chuck Greenberg in the negotiations to sell" the MLB Rangers, and "folks are getting more pessimistic about it" (SI.com, 4/26). ESPN.com's Buster Olney wrote Hicks "hasn't exactly warmed the hearts of folks in" MLB. The "perception within baseball is that he keeps creating impediments in front of the impending sale of the team because he wants more money." The sale of the team to Greenberg "has become complicated" due to funding, and MLB owners "will probably have to throw in more money" to complete the sale (ESPN.com, 4/25).

    LEADER OF THE PACK: In Houston, Richard Justice wrote the Astros "have made a dramatic turn around," from 0-8 to 8-10, and "leadership has been a big part of it." Astros Owner Drayton McLane is "at his best when times are tough." Justice: "He believes that's when strong leadership is vital. He may be dying on the inside, but on the outside he's the same as ever" (CHRON.com, 4/26).

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