SBD/August 31, 2011/FranchisesPrint All
EPL club Manchester United this week will "report record operating profits" of more than $163M (all figures U.S.), and is "set to use Thursday's financial results as a springboard for a bid to raise" up to $1B by floating a minority stake on the Singapore Stock Exchange, according to Owen Gibson of the GUARDIAN. An increase in revenues, reportedly topping $489M (£300M) for the first time, "has been driven by new overseas sponsorship deals that are likely to have pushed commercial income" above $163M (£100M) for the first time. That figure "does not include" the new $16.5M a year training kit sponsorship with DHL, nor "other recently signed contracts." ManU is "likely to point out that operating profits have more than doubled" since the Glazers acquired the club in '05. The club also is "expected to record a net profit for the year ending June 2011," a contrast to last year's record losses of $135.8M. Still, Gibson notes for the "ambitious flotation scheme to succeed when it goes ahead in mid-October, Manchester United will have to overcome doubts about the way it is structured." The club reportedly "will pursue a dual share structure, whereby investors will have to purchase one 'non-voting' share for every voting share, allowing the Glazers to raise funds while staying in control of the club." Sources indicated that it is "modelled on the US sports model, where clubs in the NFL and the NBA must have a single designated owner, and will allow for strategic long-term planning and swift decision making." But corporate governance experts said that it "was out of step with best practice and increasingly frowned upon by investors" (GUARDIAN, 8/31). Sources indicated that ManU's "goal remains to raise" up to $1B by floating a stake of up to 30% in the club (GUARDIAN.co.uk, 8/30).
READY FOR A DUAL? The FINANCIAL TIMES' Brown & Blitz cite sources as saying that the ability to use a dual share structure "was an important reason for the club’s decision to switch the IPO from Hong Kong to Singapore." One source said, "There will be a dual share structure because that makes most sense for the business. The club could not have done that in Hong Kong and it is an important reason why they chose Singapore. But it is not the main reason." The "disclosure of the proposed dual share structure will trigger fresh debate about the corporate governance standards at the club under the Glazers, since two-tier shareholding structures are often regarded as inequitable" (FINANCIAL TIMES, 8/31). The WALL STREET JOURNAL's Nisha Gopalan notes the listing plan "is a blow to Hong Kong," which was the favored listing destination before it "refused to give Man U a waiver" (WSJ.com, 8/29).
The Pirates are "raising ticket prices for next season," the first increase since '02, according to Bill Brink of the PITTSBURGH POST-GAZETTE. The average price of a Pirates ticket at PNC Park will increase from $15.30, reportedly the lowest in MLB this season, to $16.11 in '12. Prices for seats in the lower bowl "will have the largest increase," and the Pirates "will charge more for seats closer to the front of the sections." In addition, the price of season tickets will increase “by as much as $30 per game for seats directly behind home plate.” Brink notes the decision was “independent from the team’s surprising success earlier in the season and their poor performance since the All-Star Game.” Pirates President Frank Coonelly said that because it “did not raise prices for several years ... the organization fell behind the rest of the league." During that time, the "average ticket price in the majors rose 40 percent.” Coonelly said that the Pirates announced the changes in pricing “now because they recently mailed renewal forms to their season-ticket holders.” Coonelly added that the team "will use the increased revenue in a variety of areas," including the MLB Draft, international signings and "capital improvements to PNC Park in addition to the team’s payroll” (PITTSBURGH POST-GAZETTE, 8/31). In Pittsburgh, Bob Cohn notes the Pirates “had the fourth-lowest Opening Day payroll this year, but the club has invested more money in the draft than any other club during the past four years.” Coonelly emphasized that the Pirates "are not trying to ‘make up lost ground’ in raising ticket prices." He noted that "most tickets would stay the same, decrease or go up $3 or less” (PITTSBURGH TRIBUNE-REVIEW, 8/31).
The NHL Kings yesterday announced that they are dropping purple from their color scheme as part of changes to team colors and uniforms, beginning with the '11-12 season. The official team colors will be black, silver and white. The Kings' primary home uniform will be the black-silver-and-white uniform they have worn as an alternate jersey the past two seasons. The Kings will wear a newly created white version of that jersey for all road games this season (THE DAILY). Kings President of Business Operations Luc Robitaille said, "There was an overwhelming sentiment from our fans and from our players that has led us to this change. Our fans really like the late '80s and early '90s-era Kings uniforms which are very similar to this uniform." The team's "primary home jersey -- which prominently features 'LA' on the jersey crest, has not been altered and will now be worn for most Kings home games -- also reflects the club's primary logo going forward." As part of the "switch, the Kings' former primary mark, a crown featuring the color purple, now becomes the club's alternate logo with one change -- the crown is now black and silver and features no purple" (LATIMES.com, 8/30). CBSSPORTS.com's Brian Stubits writes the Kings are taking "a step back toward the Gretzky era jerseys when it was just black and white" (CBSSPORTS.com, 8/31).
Orioles President of Baseball Operations Andy MacPhail has "reached a decision on his future" with the team, and sources indicated that MacPhail "plans to leave the organization after his contract expires Oct. 31," according to Bob Nightengale of USA TODAY. MacPhail, who has been with the team since '07, plans to "wait until season's end before announcing his intentions." Nightengale notes the Orioles are "one of several franchises that might be changing GMs." The Cubs "are targeting four candidates to replace" former GM Jim Hendry, while the Astros, "whose sale to Jim Crane has been stalled, and the Los Angeles Dodgers, who are in bankruptcy court, also could change GMs" (USA TODAY, 8/31). MacPhail "declined to comment" on the USA Today report, but said, "You can get two sources to say the moon is made out of green cheese." In Baltimore, Jeff Zrebiec notes most people "close to MacPhail feel that he's entering his final months in his role with the Orioles." MacPhail's "refusal to publicly express interest in returning -- or approach [Owner Peter] Angelos about a contract extension -- has been interpreted as a sign that he is not interested in coming back." Zrebiec notes that point of view "has been fueled even further by the fact that Angelos and manager Buck Showalter have been meeting regularly -- with MacPhail's blessing -- about the state of the club" (Baltimore SUN, 8/31). Also in Baltimore, Dan Connolly writes, "It would be a surprise if he returned to his post. There's been conjecture that maybe he takes another, less visible role with the Orioles. But I think the safe money has always been on MacPhail leaving altogether" (BALTIMORESUN.com, 8/31). CBSSPORTS.com's Danny Knobler said that MacPhail "had been expected to resign or be fired all season, with Angelos and MacPhail fed up with each other" (CBSSPORTS.com, 8/30).
The Dolphins' plan to celebrate the '08 Univ. of Florida national championship team during its Oct. 23 game against the Broncos generated a lot of discussion on the afternoon TV talk shows yesterday. ESPN's Michael Wilbon said selling tickets is “what this is about.” The Dolphins are "facing the prospect of not selling out all their home games for the first time in like 13 years," and they "want to sell some seats." Wilbon: "If you say the words ‘Tim Tebow’ loud enough anywhere in the state of Florida, a 100,000 people will fill your house." However, the Univ. of Miami feels that "their home NFL team is kicking them while they’re down." Wilbon said, "I get that, but they also turned down a chance to be honored by the Dolphins.” ESPN's Tony Kornheiser said, "It’s the state school and you want to sell some tickets because Tebow’s back in town” (“PTI,” ESPN, 8/30). L.A. Times columnist Bill Plaschke said the team is "just trying to sell tickets.” Plaschke: “What’s wrong with putting butts in the seats which creates more income for workers down there?” Dallas Morning News columnist Tim Cowlishaw said, “I don’t have a problem with it because it’s just a promotion." However, he added, "I don’t know why people in Miami aren’t buying Dolphins tickets. They love the Dolphins. They’ve bought tickets when they were worse." But ESPN's Bomani Jones said of the idea, "It’s so contrived and it’s so ridiculous. And on top of that, the University of Miami for the last 25 or 30 years has been the team for the city of Miami. It seems to me from this distance that it is insulting to that program" (“Around The Horn,” ESPN, 8/30). Miami-based WAXY-AM's Jorge Sedano said, “It’s almost like inviting people to root for the opponent. I don’t understand that logic.” Sedano said Dolphins Owner Stephen Ross, “having grown up in Miami Beach, has to really be a Dolphins fan." Sedano: "He just doesn’t know how to be an NFL owner yet” (WAXY-AM, 8/31).
HOW THE MIGHTY HAVE FALLEN: Comcast SportsNet Mid-Atlantic's Ivan Carter said of the Dolphins' UF promo, "One of the worst ideas marketing-wise I have ever heard. I know they want to sell tickets, but … dumb.” Carter later asked, "Is that what that franchise, once proud franchise, has gone down to? They used to just have to open the door and they would pack that place.” Washington Post columnist Jason Reid: “When you look at where this organization once was, where this franchise once was, and where it is now, the fact that they felt this was even something that should be thought about -- it’s kind of sad” (“Washington Post Live,” Comcast SportsNet Mid-Atlantic, 8/30).
Astros Owner Drayton McLane said yesterday that he "expects the pending sale of the club to a group led by Houston businessman Jim Crane to be approved by Major League Baseball, perhaps by the middle of next week." Astros officials said that they "haven't been informed that Crane's bid is in trouble." McLane maintained that MLB's "dealings with the Dodgers -- who are in bankruptcy -- and last weeks' hurricane that affected the East Coast have pushed the vote on the Astros sale further to the back burner." McLane: "It's just gotten more complicated at the Commissioner's Office. Hopefully they're going to get back on it this week" (MLB.com, 8/30).
SPENDING FRENZY: In Boston, Fluto Shinzawa noted Sabres fans "are reeling" this offseason because their penny-pinching club is burning through cash." Former Sabres player Daniel Paille said, "Definitely a new scene. When I was there, they were more stingy with spending the money. Now they have an owner who wants to win. They have that enthusiasm right now." The "free-spending Sabres will need to clear more than $3 million in salary to become cap-compliant before the start of the season" (BOSTON GLOBE, 8/28)
FILLING SEATS: Lynx Exec VP Roger Griffith said ticket sales for his WNBA club, which has a league-best 24-6 record thanks in part to rookie F Maya Moore, "are up 30 percent" this season. Griffith added, "The number of fans in the arena is up 60 percent. That's always been a frustration -- the number of people with a ticket and they don't show up. People who have a ticket are showing up. We've already sold more season tickets for next year than we did for all of last season" (ST. PAUL PIONEER PRESS, 8/30).
TICKET MONSTER: In N.Y., Ken Belson profiled Fenway Park's sellout streak, which "is scheduled to hit 700 games on Friday." It has been "more than eight years since a seat went unsold at Fenway." According to Fansnap.com, the average resale ticket price for games at Fenway Park is "$139.95, by far the highest" in MLB. In addition, the wait list for season tickets to Red Sox games at Fenway "now has 8,500 names" (N.Y. TIMES, 8/30).