SBD/February 25, 2011/Leagues and Governing BodiesPrint All
The "usual deals transpired" ahead of Thursday's NBA trade deadline, but "another deal materialized this week: trading a key player with an uncertain future for considerable assets," according to Jeff Zillgitt of USA TODAY. Teams "took control," as the Jazz traded Deron Williams, the Nuggets traded Carmelo Anthony and the Celtics traded Kendrick Perkins. The NBA "wants more competitive balance," and that issue is "being addressed in collective bargaining talks." But until that is resolved, it is "not surprising some teams did what they thought was necessary" (USA TODAY, 2/25). The AP's Lynn DeBruin wondered, "Is there something the NBA should do to protect teams from losing their star players?" Jazz CEO Greg Miller: "This is a relatively recent phenomenon, but one that I believe is being watched very closely. ... I'm not interested in seeing a congregation of star players on a handful of teams throughout the league. I don't think it does the teams any good. It doesn't do the fans any good. It doesn't do the sponsors any good. I would like to see as much parity as there can be in the league" (AP, 2/24). In Milwaukee, Charles Gardner asks, "Can the Milwaukee Bucks and other medium to small-market NBA teams truly compete in a star-driven league?" Bucks GM John Hammond said, "We've always said our greatest opportunity to get a star player is through the draft." Gardner notes there are "other avenues for obtaining stars, but the big-market teams have certain advantages." Hammond: "We're not in the minority (of NBA teams); we're in the majority. You have to stay healthy, the team needs to jell and have cohesiveness, all of that" (MILWAUKEE JOURNAL SENTINEL, 2/25).
TRADES REVEAL BROKEN SYSTEM: SI.com's Ian Thomsen wrote the Jazz trading Williams to the Nets "highlights, underlines and altogether exposes everything that most of the owners have grown to hate about the current system." Thomsen: "Frustrated owners are going to have their say at the bargaining table, and the players aren't going to like the potential solutions: A hard salary cap, a franchise tag, salary rollbacks that may unduly affect the richest players." The "imbalance of talent has made the league extremely popular," but it also has "made a majority of the owners extremely miserable, because the league is growing popular at their expense." Thomsen: "A new era of parity will come forth" (SI.com, 2/24). The GLOBE & MAIL's Jeff Blair wrote under the header, "Convoluted Salary Cap Killing The NBA." The "more convoluted the salary cap and structure of contracts, the more agents become involved in the process." And the more that happens, the "more power goes to the players" and the "more behind-the-scenes manoeuvering takes place." There are rumblings that Anthony's trade to the Knicks "will be the impetus for small-market teams to stand up and demand a hard salary cap or maybe even the use of a 'franchise-player' designation." NBA Commissioner David Stern "needs to become a genius once again, because his league is already the most predictable in North American professional sports" (GLOBE & MAIL, 2/24).
TIME FOR A CHANGE: FOXSPORTS.com's Jason Whitlock writes under the header, "NBA Players Are Wrecking Their League." The players "have dramatically reshaped the league with their free-agent and impending free-agent maneuvers. In doing so -- in destroying basketball in Cleveland, Utah and Denver -- LeBron, Melo, Amar'e and Deron reinforced the perception among fans that teams don't matter." Whitlock: "As the NBA heads for labor unrest in an attempt to negotiate a new collective-bargaining agreement, Stern and the owners should be super aggressive in addressing this fundamental problem" (FOXSPORTS.com, 2/25). USA TODAY's Mike Lopresti wrote, "There are still 30 teams in the league, right? It's a little hard to remember because of how the NBA pecking order now works. A half dozen glittering franchises are put on the marquee with all the featured pianists, and everyone else is the warm-up act with kazoos." The NBA, "more than any other team sport, pushes individual prowess in a few strategic places over group effort," and the league "has gotten precisely what it has asked for: popularity from well-placed superstars." The "cost to the have-nots of the league is another matter" (USATODAY.com, 2/24). ESPN.com's Rick Reilly wrote, "This is what the NBA has become: very tall, very rich twenty-somethings running the league from the backs of limos, colluding so that the best players gang up on the worst. To hell with the Denvers, the Clevelands, the Torontos. If you aren't a city with a direct flight to Paris, we're leaving." Reilly added, "Hello, David Stern? Did you leave a wake-up call for the 21st century? Your clubs need to be able to protect their great players with a franchise tag, as the NFL does. If that isn't priority No. 1 in your lockout talks, you need the Wite-Out. ... The NFL finds a way to let cities that don't happen to have a Versace store hang on to their great players" (ESPN.com, 2/23).
IS A LOCKOUT NECESSARY? CBSSPORTS.com's Gregg Doyel wrote NBA owners "have to lock out the players." Doyel: "I'm sorry, but I don't see any way around it. ... For the long-term good of the game." The Anthony trade "did demonstrate just how broken the NBA could get, how irrelevant three-fourths of the franchises could become without a major adjustment to league rules." Even with a salary cap, the NBA is "looking more like cap-free Major League Baseball than the hard-capped NFL." Doyel: "As Carmelo Anthony reminded us, stars want to play with other stars. A humbled city still has a shot at a franchise-altering superstar in the draft, but as soon as it's feasible, that star is gone" (CBSSPORTS.com, 2/24).
DON'T JUMP YET: In Boston, Bob Ryan wrote, "Are things really as dire as they seem in David Stern's league? What happened in Denver is something that happens every year in baseball and basketball. Star X will become a free agent at the conclusion of the season and has made it known to current management that he wants to move on. ... Afraid of losing him with no compensation, the team is forced into a trade posture." After LeBron James and Chris Bosh joined Dwyane Wade on the Heat last summer, it is "not possible for NBA folk to view the Anthony deal in isolation." There is "no guarantee that Superteam Triumvirate II will ever become assembled, but owners are nervous regardless." Ryan: "It is far more likely we have already seen the one and only power alliance we will ever know than it is we will see three, four, five or 10 more. That's not the threat" (BOSTON GLOBE, 2/24). SPORTING NEWS TODAY's Sean Deveney writes the NBA "has never been about parity, and the league does not thrive on an anyone-can-win-a-title platform." The "peak eras of the league were the 1990s with Michael Jordan's Bulls and the 1980s with the Celtics and Lakers dominating." Of the 64 championships won in league history, 42 of them "belong to four franchises" (SPORTING NEWS TODAY, 2/25).
Federal Mediation & Conciliation Service Dir George Cohen Thursday said "some progress" has been made in the CBA negotiations between the NFL and the players' union, but "very strong differences remain" on the core issues of the dispute, according to Mark Maske of the WASHINGTON POST. Cohen said in a statement, "I recommended and the parties have agreed to resume the mediation process in my office commencing next Tuesday. ... During the intervening weekend, the parties have been asked by us to assess their current positions on those outstanding issues." League and union reps "met at the agency's offices in downtown DC on each of the past seven days." The owners are "scheduled to meet next Wednesday and Thursday at a hotel near Dulles Airport." The current CBA is set to expire March 4, though the league and union "could agree to postpone the deadline for a new deal if progress toward an agreement has been made by then." Maske wrote, "Perhaps more than ever, the sport appears headed to a labor confrontation between the owners and players, with Cohen's involvement in the negotiations so far failing to produce an agreement between the two sides about how much of the sport's approximately $9 billion in annual revenues should go to the players under a salary cap system" (WASHINGTONPOST.com, 2/24).
ALL FOR SHOW? ESPN's Chris Mortensen said, "Public relations is a part of this factor, certainly, between these two sides." When the two sides meet "for seven days and even the mediator comes out and says there remains strong differences on the all-important core issues, they're not going to resolve those issues right away." Mortensen: "There's certainly a sense that maybe this is stringing along to prevent the union for filing for decertification. ... Right now both sides (are) preparing very much for a work stoppage" ("NFL Live," ESPN, 2/24). Cohen "asked the two sides to 'assess their current positions on those outstanding issues' before mediation resumes," and in N.Y., Ralph Vacchiano writes if the two sides "remain entrenched on those issues -- which include the NFL's desire to cut the percentage of revenues directed towards players and the possibility of an 18-game season -- a lockout will almost certainly occur" (N.Y. DAILY NEWS, 2/25).
UNCERTAINTY AHEAD: In N.Y., Judy Battista reports NFL coaches have said publicly that they are "preparing for a normal off-season." But privately, teams that have made coaching changes or that "will have considerable roster overhauls are concerned that a lockout will put them at a competitive disadvantage against more established teams, especially those with established quarterbacks" (N.Y. TIMES, 2/25). FANHOUSE.com's Dan Graziano noted in the event of a lockout, players "would not be allowed access to team facilities, coaches or trainers." There would be "no minicamps, no OTAs, no chance for the teams with new coaching staffs to install their new systems at a normally critical time of year." There also would be "no free agency," which means evaluating draft prospects at this week's NFL Combine "may take on even greater importance than usual." Jaguars coach Jack Del Rio: "Clearly, there are some things that would have to be addressed, but we don't have to address them now. We're just trying to prepare for the draft and go through the normal preparations we would always be going through this time of year" (FANHOUSE.com, 2/24). Meanwhile, NFL Coaches Association Exec Dir Larry Kennan predicted that in the absence of a new CBA, "many teams likely will start docking the pay of their coaches." Kennan: "In almost every coach's contract, there are lockout clauses. In the event of a lockout March 4, coaches will take a pay cut in varying degrees, team-by-team" (INDIANAPOLIS STAR, 2/25).
NFL GMs and coaches were briefed Thursday night in Indianapolis on how they could contact current NFL players and draft prospects if the NFL locks out players after the NFL CBA expires March 4, sources said. The NFL routinely holds a meeting of coaches and general managers in Indianapolis during NFL Combine week, but this meeting drew much more interest from the press than usual because of the NFL labor negotiations. Sources said GMs were briefed on contact with NFL players and NFL agents and given generally more leeway to deal with players who are expected to be drafted in April, if there is a lockout. National sports media, as well as the Indianapolis press, camped out at the GM and coaches meeting held at the Westin Hotel Thursday night, and most coaches and GMs left the meeting declining comment. But Jaguars coach Jack Del Rio did address the press and acknowledged that the one-hour meeting addressed the contact NFL personnel could have with players and prospects. Del Rio said the briefing included "a review of where we are and where we hope to get something done and in case it doesn't, some of the scenarios that could play out." Asked if coaches and GMs were provided with an update of CBA negotiations, Del Rio, said "No" before adding, "Only that they continue to talk." Asked if they were briefed on ground rules for contact with players going forward, Del Rio acknowledged there was "a little bit of an informational exchange" on that topic, but declined to discuss it further (Liz Mullen, SportsBusiness Journal). NFL Senior VP/PR Greg Aiello said, "It was a presentation on issues related to the possible expiration of the collective-bargaining agreement." On Long Island, Bob Glauber notes it "was the same presentation that was made to other club people in December in Fort Worth" (NEWSDAY, 2/25). NFL Network's Jason La Canfora called the meeting "a non-event for the most part" ("NFL Total Access," NFL Network, 2/24).
U.S. District Court Judge David Doty Thursday heard NFLPA lawyers seek his reversal of a decision by Special Master Stephen Burbank that league owners can retain $4B in broadcast rights fees in '11, even if there is a lockout of the players this fall. Referring to internal league documents, union lawyer Thomas Heiden said the owners' proactive decision to redo TV deals so they could build a lockout war chest was all about, “Leverage, leverage, leverage” and inflicting “economic harm to the players.” Heiden and Jeffrey Kessler, another union lawyer, asked Doty to issue an injunction halting the league’s access to the TV payments, which would be made throughout the year. But NFL lawyer Gregg Levy told Doty that the NFL has long had work stoppage payment provisions in its TV deals, that its efforts to gain that cash during '11 was not “malevolent” and that the union, Levy said, “wants this court to put its thumb on the scales of the collective-bargaining process.” He called the possibility of a reversal of Burbank’s decision “repugnant.” Indeed, Doty himself called Burbank’s work on the decision “masterful.” At the end of the three-hour-long hearing, Doty allowed that he understood the magnitude of any decision on the TV money. Responding to Levy’s allegation about the union’s intent that he put his “thumb on the scales of collective bargaining,” Doty said of the CBA talks, “I hope they settle the matter and I hope in settling it they settle this dispute with it.” Doty added that he was mindful that his decision in this TV matter could “weigh very heavily on the parties” (Jay Weiner, THE DAILY).
TRYING NOT TO SHIFT THE POWER: In Minneapolis, James Walsh reports Doty “seemed leery of doing anything that would shift the balance of power to one side or the other while negotiations on a new [CBA] are ongoing.” Doty said to union attorneys, “It appears that what you would like the court to do is put its thumb on the scales.” Kessler replied, “We think their violations put their thumb on the scales” (Minneapolis STAR TRIBUNE, 2/25). Also in Minneapolis, Mark Craig notes Doty “made it clear in his closing statements that he will expedite his decision.” He has been “considered a favorable judge for the union since his role in the case that produced the NFL’s current free agency system in 1993” (STARTRIBUNE.com, 2/24).
RUNNING UNDERNEATH THE RADAR: SI.com’s Jim Trotter wrote it is “disappointing Thursday’s three-hour hearing hasn’t gotten more play because it carries more impact than any discussions taking place in Washington.” The owners have “argued that the TV extensions are important because they’ll enable teams to manage their debt service during a work stoppage.” Should Doty rule against the league, some owners “might have a hard time meeting their financial obligations during a lengthy lockout.” The players would be in a “tough spot if Doty ruled against them because, contrary to popular perception, this is not a battle of billionaires versus millionaires” (SI.com, 2/24).
The NFL had sound business reasons to renew its broadcast contracts in ’09 and ’10 and not just to amend work stoppage provisions, special master Stephen Burbank wrote in his report that is on appeal in a federal court. The redacted report, issued earlier this month, was made public for the first time late Thursday, along with the NFL’s and NFLPA’s briefs arguing their cases to the court. Burbank ruled against the NFLPA, allowing the NFL to receive the $4B in media fees it is due in ’11 even if there is a lockout. The NFL CBA expires next Friday, so the Minnesota federal court’s decision on the appeal could have a great affect on the negotiations. The NFLPA contended that the league had prematurely renewed the deals to insert work stoppage provisions into them, and in return agreed to lower rights fees than it otherwise could have had. The league has a duty under the CBA to maximize revenues. Burbank rejected the union's contentions on almost all points. “The depressed economy and depressed advertising market did not provide meaningful opportunities for the NFL to obtain more television rights fees for games already under contracts for 2009 and 2010, and it was not obligated by the [CBA] to do so,” he wrote. Burbank wrote the league exercised sound business judgment in not pursuing much higher fees because it would have meant asking for more money on existing contracts in newly lean years. He also agreed with the NFL’s contention that it was able to win important concessions from the networks for digital rights and use of live game action for Red Zone. The Red Zone channel is an important tool in the league’s effort to market NFL Network.
WORK STOPPAGE AGREEMENTS IMPORTANT FACTOR: Burbank did find that restructuring the work stoppage agreements (only DirecTV’s deal did not have the language) was an important factor in the new deals. Burbank wrote the NFL’s objectives in the negotiations included “securing work stoppage provisions that would … provide funding for debt service and operating expenses, thereby shifting leverage away from the players during a potential lockout.” Burbank also found that the NFL had committed a violation in the restructured ESPN contract related to the new work stoppage language, but found no damages. He found damages in the allocation of money for the NBC Sunday night game that ran against the World Series, for which he fined the league $6.9M. The NFLPA contends that Burbank is misinterpreting what is sound business judgment and that the NFL should have insisted on more money from the networks. The NFL in its brief pointed out that Burbank had agreed with its position that the union’s narrower view of the TV deals would hurt future revenue growth.
DEALS CARRY FUTURE ASSETS: The league argues the TV deals bartered a great deal of current and future assets: securing TV fees in uncertain times; getting league digital rights that could then be sold to Verizon; and the Red Zone rights. But the union’s position, the league said, is that each category should have been sold for cash. The union in its brief wrote the federal court should ignore the Red Zone argument because it was a completely unrelated business transaction, no different than a decision by the Vikings to raise ticket prices. However, part of the deals with CBS, Fox and ESPN were to allow Red Zone access to their games when teams were close to scoring. Red Zone could not have existed without those rights, and the league packaged Red Zone with NFL Network in selling to cable carriers. There is no mention in the briefs or in Burbank’s report of the restructured TV contracts having any ties to teams’ ticket prices.
Hendrick Motorsports remains NASCAR's "strongest and most valuable team," according to Kurt Badenhausen of FORBES. With a valuation of $350M on revenues of $177M in '10, Hendrick is "worth 56% more than the next-highest-grossing team, Roush Fenway Racing," which is valued at $224M on revenues of $140M last year. One team "on a roll" is Earnhardt Ganassi Racing, worth $76M, ranking it eighth in NASCAR. EGR's value is up 7% as Chip Ganassi became the first owner to capture the Daytona 500, Indianapolis 500 and Brickyard 400 in the same year. Sponsorship revenue for the team is "expected to be up 20% this year." The average value of NASCAR's top 10 teams slid 5% last year to $136M, "as prize money dropped and sponsors dialed back their commitment." But a "rebound in 2011 for the sport is a strong possibility." NASCAR's ability to "mobilize massive numbers of fans is its greatest strength, and why reports of NASCAR's demise are greatly exaggerated." NASCAR, "by many measures, is still the second-most-popular sport in the U.S." behind football, as it "counts 30 million people as avid fans." Attendance "may be down, but 100,000 people still show up to see each race" (FORBES.com, 2/23).NASCAR'S MOST VALUABLE TEAMSRANK
TEAMVALUE% +/-PROFIT1 Hendrick Motorsports$350M0%$18.2M2 Roush Fenway Racing$224M-6%$8.6M3 Richard Childress Racing$158M3%$5.9M4 Joe Gibbs Racing$152M6%$8.7M5 Penske Racing$100M-9%$4.5M6 Stewart-Haas Racing$95M-3%$5.9M7 Michael Waltrip Racing$90M2%$5.8M8 Earnhardt Ganassi Racing$76M7%$5.2M9 Richard Petty Motorsports$60M-52%$5.4M10 Red Bull Racing$58M-2%$2.8M
DALE JR. TOPS DRIVER LIST: FORBES' Badenhausen reported Dale Earnhardt Jr., "despite his lack of success in recent years on the track," is still NASCAR's highest-paid driver, earning $29M in '10. Earnhardt "remains NASCAR's highest-paid driver thanks to merchandise sales that are the best in the sport and reportedly account for one-third of all NASCAR licensed merchandise sales." Other income streams include an "eight-figure annual salary from Hendrick and a 50% share of his $4.9 million in winnings and bonuses in 2010 from Sprint Cup races." Earnhardt also has a "bevy of personal endorsements, including Chevrolet, Nationwide and Wrangler" (FORBES.com, 2/23).NASCAR'S HIGHEST-PAID DRIVERSRANK
DRIVER TEAMEARNINGS1 Dale Earnhardt Jr. Hendrick$29M2 Jeff Gordon Hendrick$25M3 Jimmie Johnson Hendrick$24M4 Tony Stewart Stewart-Haas$18M5 Kevin Harvick Richard Childress$15M6 Carl Edwards Roush Fenway$14M7 Kyle Busch Joe Gibbs$13M8 Kasey Kahne Red Bull$11.5M9t Denny Hamlin Joe Gibbs$11M9t Matt Kenseth Roush Fenway$11M
IndyCar CEO Randy Bernard said that the purpose of the $5M challenge allowing non-Izod IndyCar Series drivers to compete in the season-ending race at Las Vegas Motor Speedway is to "let his series drivers prove they are the best in the world on oval tracks by swatting down all comers." In Las Vegas, Jeff Wolf notes the "concept already has paid off for IndyCar, Las Vegas and the race." The offer has "received national print media coverage and was the main topic of conversation Wednesday on SiriusXM satellite radio's NASCAR channel." Such "widespread brand exposure is why" the Las Vegas Convention & Visitors Authority is "believed to be paying IndyCar up to $200,000 to be a yearlong sponsor" (LAS VEGAS REVIEW-JOURNAL, 2/25).
CHANGING OF THE GUARD: ESPN.com's Ed Hinton wrote a "monumental crossroads for NASCAR and its surrounding society occurred this past week" as Trevor Bayne won the Daytona 500. NASCAR fans "let go" of Dale Earnhardt with "every imaginable documentary, column, story, remembrance and fan salute on the 10th anniversary of his death." Then, as "suddenly as the postrace fireworks over the backstretch, we exploded into celebration of the youngest (20) -- and by all indications the nicest -- winner of the Daytona 500 so far." The governing body's "movement to transform the National Association for Stock Car Auto Racing into the National Association for Squeaky-Clean Auto Racing has been afoot for a quarter-century or so." But Hinton added, "Is that what the public really wants?" (ESPN.com, 2/24).
SETTING A GOOD EXAMPLE: ATP Int'l Group CEO Brad Drewett has "praised Dubai for leading the way in the promotion of men's tennis in the region." Drewett, speaking at the Dubai Duty Free Men's Open, said, "We think the growth of our tournaments in Asia and specifically in the Middle East in the last ten years has been terrific, starting with this tournament that has been so dominant in the world of tennis." Discussing the Qatar ExxonMobil Open in January, he added, "To have these two great, strong events here is good for men's tennis. And in terms of Asia, China has been a great success for the ATP. ... I think the strength of the game in this area is very clear." Earlier this week, Dubai was voted as "the best ATP 500 tournament for a record seventh time in eight years by the players" (GULF NEWS, 2/25).