SBD/January 28, 2011/Franchises

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  • Brewers Could Break Attendance Mark But Still Lose Money

    Brewers could surpass Miller Park attendance record of 3,068,458 set in '08

    Brewers Exec VP/Business Operations Rick Schlesinger said that if the team "returns to its winning ways, there is a good chance it can reach its all-time attendance mark," but noted that the team "could still lose money," according to Don Walker of the MILWAUKEE JOURNAL SENTINEL. The Brewers in ’08 set a franchise attendance record of 3,068,458 fans at Miller Park, and the team drew 3,037,451 in ’09, “before dipping to a still-solid 2,776,531 last season.” The team this offseason acquired Ps Zack Greinke and Shaun Marcum, and Schlesinger said that the “team's payroll, expected to be in the neighborhood of $90 million, is a significant investment for the team.” Schlesinger: "This is a big year for us, there's no question about it. This is the year we said to our marketplace: We are not going to settle for .500. This is a team that we built to win the division." But he added the Brewers are “not going to be making much money at 3 million fans.” Schlesinger: “Obviously, if we are able to achieve that kind of attendance, that means we had a pretty good year in the field, and that bodes well for 2012 and beyond. I don't want anybody to feel sorry for the Brewers that in 2011, we lose money or break even. It's great for our business model, but it shows you how difficult it is in sports, especially in baseball, to have a very competitive team and also make money." Brewers officials last week “announced the team had reached one million tickets sold, which tied the 2009 record for the earliest date the club had hit the milestone.” Still, Schlesinger said, "It is fair to say, without revenue sharing, the Brewers are not a viable, going concern." He added that the Brewers are the “poster child for the success revenue sharing has brought to baseball” (MILWAUKEE JOURNAL SENTINEL, 1/28).

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  • With Or Without You: U2 Concert Forces Mariners-Marlins Series To Seattle

    U2 concert forces Marlins to play home series against Mariners in Seattle

    MLB Thursday announced that due to a scheduling conflict, the Marlins "now will be playing their Interleague series with the Mariners in Seattle," and that the Marlins "will be the home team" for the June 24-26 series at Safeco Field, according to Joe Frisaro of MLB.com. The change "occurred because the group U2 had previously booked a concert at Sun Life Stadium." MLB has stated that the series "will be played under National League rules," so "pitchers will bat, rather than the designated hitter being used." The switch "hasn't affected Florida's season tickets, as the team invoiced its fans for 78 games, anticipating the series would be changed." Marlins President David Samson: "What happened was U2 had to reschedule for a year later, and the baseball schedule was such that there was no other way to have us at home that series. We obviously couldn't play at home, because we don't control the stadium. For one final season, we are tenants." San Juan, Puerto Rico, was "considered as an option for the switch of the series with Seattle." But "logistically, playing the June series with the Mariners there would have been difficult, because the Marlins are scheduled to face the A's in Oakland on June 28-30 before they visit the Rangers in Texas from July 1-3" (MLB.com, 1/27). Mariners VP/Communications Randy Adamack said that there is "still work to be done in terms of splitting the costs between the two clubs." Adamack: "The goal is to figure out a fair way to divide the revenues" (SEATTLEPI.com, 1/27). Adamack added that Mariners season-ticket holders "would likely have the first option to buy tickets for the games before the remaining tickets are released to the general public" (Tacoma NEWS TRIBUNE, 1/28).

    FISH OUT OF WATER: ESPN's Michael Wilbon said U2 "wouldn't be doing this if they were performing at Wrigley Field or Yankee Stadium. They wouldn't get three days." ESPN's Tony Kornheiser added, "People in baseball understand that the Marlins in three days cannot gross what U2 can." He also sarcastically said, "This is a hardship on the 300 fans that the Florida Marlins have" ("PTI," ESPN, 1/27).

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  • NHL Investigating Discrimination Suit Against Ducks' Former Minor League Team

    The NHL is “investigating what could be an explosive lawsuit filed by minor league player Jason Bailey against the Anaheim Ducks, alleging he was subject to systemic and repeated abuse while in the Ducks' farm system because he is Jewish,” according to Scott Burnside of ESPN.com. The suit, filed Tuesday in California, refers to a period of time when Bailey “was playing with the ECHL Bakersfield Condors, then a farm team of the Ducks.” Among the allegations in documents are that Condors coach Martin Raymond and assistant coach Mark Pederson “repeatedly made racial slurs referring to Bailey's Jewish faith.” Raymond allegedly told Bailey that Raymond's ex-wife was Jewish "and that she was a 'bitch' for taking all of his money." The suit also claims that when the team was “discussing who should look after monies collected for a team party,” it is alleged Bailey's name came up and Pederson said, "Well, I don't know if we can trust him with the money. He's Jewish." Burnside noted Ducks Owners Henry and Susan Samueli are “well-known philanthropists who have been lauded for their generous support of Jewish causes.” The NHL had no comment, but sources said that the league is “investigating the allegations to try to find out if the claims of abuse are true and what the Ducks knew about the situation, when they knew about it and how they responded.” Among the “most damning pieces of the lawsuit are letters of apology from both coaches for their comments to Bailey.” In an undated letter included in the statement of claim, Raymond wrote in part, "It was not my intention to offend you. The intent was to have a jovial moment. … Now that I understand that you were offended, I will no longer engage in this type of behavior nor condone it." In a letter dated March 2, 2009, Pederson wrote in part, “It was not intended to insult or hurt you in any way, but it did, and for that I am truly sorry” (ESPN.com, 1/27).

    WHAT DID THEY KNOW? In California, Curtis Zupke noted Ducks management is “not specifically named in the complaint.” Bailey’s attorney, Keith Fink, Thursday said that Bailey brought the issue to Ducks GM Bob Murray and Senior VP/Hockey Operations David McNab in ’09 and “was told that Raymond would be fired and the Ducks would cease their partnership with the Condors.” Fink: “For Anaheim to claim to have no knowledge of this is an outright lie.” Raymond remains the head coach of the Condors, but the Ducks no longer have an affiliation with the minor league team (OCREGISTER.com, 1/27).

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  • Forbes' NBA Valuations Up Slightly; Knicks Overtake Lakers At Top

    The average value of an NBA franchise is $369M, up 1% from last year, according to Michael Ozanian as part of FORBES' annual valuations. But "several of the league's 30 teams have not fully recovered from the recession, and as a result values are still 2.6% below the $379 million average they hit two years ago." The "bad economy and a few suspect markets (Minnesota, Sacramento, Indiana among others) drained profitability during the 2009-10 season due to lower ticket receipts." Operating income fell to an average of $6.1M, down 22% from last year and the "lowest figure since the 2002-03 season." Additionally, 17 teams "lost money, the most since the lockout-shortened 1998-99 season." Ozanian noted the Knicks replaced the Lakers "as the NBA's most valuable team, worth $655 million, up 12% from last year." Meanwhile, Heat F LeBron James signing with the team and leaving the Cavaliers "accounted for both the biggest gain and drop in team values." The Heat's value increased 17% to $425M, while the Cavaliers' value fell 26% to $355M (FORBES.com, 1/26).

    RK
    TEAM
    VALUE
    1-YR
    % +/-
    DEBT/
    VALUE
    REVENUE
    OPERATING INCOME
    1
    Knicks
    $655M
    12%
    0%
    $226M
    $64.0M
    2
    Lakers
    $643M
    6%
    19%
    $214M
    $33.4M
    3
    Bulls
    $511M
    0%
    11%
    $169M
    $51.3M
    4
    Celtics
    $452M
    5%
    40%
    $151M
    $4.2M
    5
    Rockets
    $443M
    -6%
    16%
    $153M
    $35.9M
    6
    Mavericks
    $438M
    -2%
    46%
    $146M
    -$7.8M
    7
    Heat
    $425M
    17%
    38%
    $124M
    -$5.9M
    8
    Suns
    $411M
    -4%
    45%
    $147M
    $20.4M
    9
    Spurs
    $404M
    1%
    10%
    $135M
    -$4.7M
    10
    Raptors
    $399M
    3%
    34%
    $138M
    $25.3M
    11
    Magic
    $385M
    6%
    29%
    $108M
    -$23.1M
    12
    Warriors
    $363M
    15%
    41%
    $119M
    $14.3M
    13
    Pistons
    $360M
    -25%
    0%
    $147M
    $31.8M
    14
    Trail Blazers
    $356M
    5%
    30%
    $127M
    $10.7M
    15
    Cavaliers
    $355M
    -26%
    56%
    $161M
    $2.6M
    16
    Jazz
    $343M
    0%
    5%
    $121M
    -$3.9M
    17
    76ers
    $330M
    -4%
    23%
    $110M
    -$1.2M
    18
    Thunder
    $329M
    6%
    43%
    $118M
    $22.6M
    19
    Wizards
    $322M
    3%
    40%
    $107M
    -$5.2M
    20
    Nuggets
    $316M
    -2%
    9%
    $113M
    -$11.7M
    21
    Nets
    $312M
    16%
    224%
    $89M
    -$10.2M
    22
    Clippers
    $305M
    3%
    0%
    $102M
    $11.0M
    23
    Hawks
    $295M
    -4%
    63%
    $105M
    -$7.3M
    24
    Kings
    $293M
    -4%
    32%
    $103M
    -$9.8M
    25
    Bobcats
    $281M
    1%
    53%
    $98M
    -$20.0M
    26
    Hornets
    $280M
    5%
    69%
    $100M
    -$5.9M
    27
    Pacers
    $269M
    -4%
    56%
    $95M
    -$16.9M
    28
    Grizzlies
    $266M
    4%
    56%
    $92M
    -$2.6M
    29
    T'Wolves
    $264M
    -1%
    19%
    $95M
    -$6.7M
    30
    Bucks
    $258M
    2%
    21%
    $92M
    -$2.0M

    NOT A FAN: In Ft. Worth, Dwain Price notes Mavericks Owner Mark Cuban "doesn't give any credence" to Forbes' rankings. Cuban: "That's just useless. There's nothing useless as evaluation than what Forbes does. It's worthless. It's meaningless and worthless. You can quote me on that." He added, "No one ever looks at buying or selling a franchise based off of Forbes' numbers. You might as well go to a second grader and ask him how high can they count" (FT. WORTH STAR-TELEGRAM, 1/28).

    AT THE CENTER OF IT ALL: FORBES' David Whelan notes the Magic lost $23M last year in their final season at Amway Arena, "with $38 million in ticket sales and $70 million in broadcasting and other revenue not fully covering $86 million in payroll compensation and $45 million in other costs." But despite Orlando's "free-falling economy and 12% unemployment rate," the newly opened Amway Center this season is "pulling in $24 per fan visit in addition to the ticket price, 50% more than the team's previous home did." The Amway Center in total this year "will add $30 million in gross revenue from ticket sales, luxury boxes, advertising and improved concessions." Magic Owner the DeVos family during the early part of the decade "wrote a $5 million to $10 million check annually to cover losses," and by last year the team said that the "shortfall reached $40 million." But Whelan writes the "arena is the difference maker, unique in its ability to make fans stay and spend" (FORBES, 2/14 issue).

    A TRAIL TO FOLLOW: In Portland, John Canzano noted the Trail Blazers are valued "at $103 million more than" the team was valued in '07. Canzano: "Would we even be talking lockout if the league's financials looked like the Blazers? Because if anything here is clear, it's the operating model that the Blazers have set up is profitable and, also, features a product that is playing above-.500 while others are drowning." The team's numbers were "so strong in Wednesday's valuation that you wonder if the organization shouldn't be more focused on raising payroll some and taking measures to become a true contender now." Canzano wrote he has "always maintained that the Blazers organization's greatest asset wasn't a star player, or the Rose Garden Arena, rather, a forgiving fan base and a monopoly among local sponsors." The Trail Blazers have "only two primary sponsors (Wells Fargo and Comcast) that trade on the major stock exchanges," and the rest of the sponsorship revenue "is coming from regional affiliates or local companies, and it turns out that this has been a healthier business model during a recession" (Portland OREGONIAN, 1/27).

    Print | Tags: NBA, Basketball, Franchises
  • MLB Franchise Notes: Wilpon Optimistic About Mets, Defends Payroll

    Wilpon defends team's payroll, which he estimated at $150M

    In N.Y., Dan Martin reports Mets Owner Fred Wilpon is "more optimistic about his team's future than he's been in a while -- especially after admitting he was 'very upset' after last season." Wilpon said that he "realizes that a lack of additional stars may make it hard for some people to believe that they are actually headed in the right direction," but he "stood up to critics who said his team wasn't spending enough money." Wilpon: "When you look through all of it, our payroll is approaching $150 million, it's not at $48 million." But Martin notes Wilpon "may have overestimated the payroll by about $10 million." Wilpon: "It's a high payroll. It's true, some people have not produced in the past and we're still carrying it and maybe we won't carry it" (N.Y. POST, 1/28). Meanwhile, Wilpon said that he wants former GM Omar Minaya to "return to the organization in an advisory role" (ESPNNEWYORK.com, 1/27).

    BLUE JAY WAY: MLB.com's Gregor Chisholm reports "approximately 500 people" attended the Blue Jays' annual State of the Franchise event Thursday night at Rogers Centre. Blue Jays GM Alex Anthopoulos, President Paul Beeston and manager John Farrell were in attendance for the "town hall-style format, where fans had a chance to pose questions and comment on the direction the organization has taken over the past 12 months." Beeston is "confident in the direction his team is taking." He said, "We don't want to over promise, we want to over deliver. We're not here to be a competitive baseball team. We're here to win the World Series -- and we're here to win the World Series on a sustainable basis. How long that's going to take, I'm not sure. But I do know one thing, we're headed in absolutely the right direction" (MLB.com, 1/28). The NATIONAL POST's Jeremy Sandler writes the event "seemed like a love-in for the team and its fans" (NATIONAL POST, 1/28).

    OFF BASE: In Houston, Jerome Solomon wrote there is "something odd about the Astros' 'Multicultural Caravan' that hits parts of the city in the next couple of days." The team should "have an Astros Caravan, go to different parts of the city and spend time with fans to get people fired up about the season." But Solomon wrote, "Must you designate what type of fans and what parts of the city you are going to see on a particular trip? ... What's next, a 'culturally diverse' section at Minute Maid?" (CHRON.com, 1/27).

    PERSONA NON GRATA: In L.A., Bill Shaikin noted Angels Owner Arte Moreno Wednesday said that he had "'no interest' in meeting personally" with agent Scott Boras and "would not even use the name of baseball's most powerful agent in answering questions about him." Moreno "had deflected a question about Boras" by saying, "My mother always told me, 'If you can't say anything nice, don't say anything at all.'" But Boras "did not fire back" at Moreno. Instead, he "tipped his cap toward the Angels." Moreno said that GM Tony Reagins and "other club executives could handle the Angels' business with Boras, a point with which the agent concurred" (LATIMES.com, 1/27).

    Print | Tags: MLB, Baseball, Franchises
  • Franchise Notes

    Hawks are no longer tied to Philips Arena as collateral

    In Detroit, Gregg Krupa cited a source as saying that Chicago-based Blue Media, LLC President Eric Lefkofsky was "approached about purchasing the Pistons and Palace Sports & Entertainment, but Lefkofsky expressed no interest in the purchase and, so far, there has been no follow-up on the solicitation." The source: "It was really nothing more than someone saying: 'Are you interested in looking at it, as a good opportunity?' There are no legs, other than that" (DETNEWS.com, 1/27).

    FREE AS A BIRD: In Atlanta, Kristi Swartz reports the Hawks are "no longer tied to Philips Arena as collateral in case its owners default on long term bond payments -- making it easier for the owners to tap into [the] NBA's credit facility and for the team to be sold -- according to a bond refinancing document from the City of Atlanta and Fulton County Recreation Authority." Documents indicated that Atlanta Spirit "refinanced the remaining $124.5 million of debt remaining on the arena in August 2010, just before the start of the 2010-2011 NBA season," and that the refinancing "pledges operator revenues up to the maximum annual lease payment as collateral for the bonds instead" (ATLANTA CONSTITUTION, 1/28).

    TESTING THEIR PATIENCE: In St. Louis, Bernie Miklasz wrote the "fan support has been terrific" for the Blues, who have sold out their "first 26 home games of the season." Blues fans "have signed off on the rebuilding, the youth movement, the entire process," and they have "voted with their cash and their credit cards." Blues Owner Dave Checketts is "appreciative of the support," and he "knows that the St. Louis hockey public has demonstrated a willingness to wait it out." But Miklasz wondered, "At what point does the free pass expire? When will Blues fans be rewarded for their devotion and faith? ... There comes a time when a franchise has to recognize the need to change the mix, increase the urgency, and adjust a plan that isn't producing the anticipated results." Bill Laurie "hasn't owned the team since the 2005-2006 season," so "how long do we keep pointing the finger of blame at him?" (ST. LOUIS POST-DISPATCH, 1/27).

    MR. BRIGHTSIDE: In Phoenix, Paul Coro notes Suns Managing Partner Robert Sarver's outlook "remains bright despite experiencing his first losing season since his group bought the Suns in 2004." He acknowledged that his team is "in a transition but wants to remain competitive throughout it." Sarver said that the Suns have "various plans for the future, based on whether collective bargaining agreement negotiations get done before next season, delay next season or cancel next season and all the parameters a new CBA might set" (ARIZONA REPUBLIC, 1/28).

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