SBD/September 28, 2011/FranchisesPrint All
FS West last night filed a lawsuit in bankruptcy court against the Dodgers, alleging the club's plan to market its TV rights tramples upon the RSN's existing rights. The suit, filed in the U.S. Bankruptcy Court for the District of Delaware, seeks an immediate injunction against the Dodgers' proposed rights marketing process, as well as unspecified damages. Similar to MLB's recent motion to strip the club from Owner Frank McCourt, the FS West lawsuit seeks to put an immediate halt to the TV rights sale that is the centerpiece of McCourt's reorganization strategy. FS West's current rights with the Dodgers extend through the '13 season, including an exclusive negotiating period into November '12. "The telecast rights to the Los Angeles Dodgers baseball games are an inherently unique and irreplaceable asset and business opportunity," the suit reads. "[FS West] will suffer great and irreparable injury unless [the Dodgers] are enjoined and restrained by order of this Court from further breaches." FS West further asks the court to reject any sale that does not uphold the current rights agreement, which in addition to the exclusive negotiation period allows it to match other bids.
FANS WANT A SAY: The RSN, which also alleges the Dodgers shared confidential contract data with outside parties, was not the only entity petitioning the court yesterday. A group of season-ticket holders, thwarted over the summer in getting recognized as an official committee in the case by the U.S. Trustee assigned to the matter, filed a motion directly with Judge Kevin Gross seeking the recognition. "The reality is that [the Dodgers] have opposed the basic desire of its most loyal and financially invested fans on whose goodwill they are dependent -- the season ticket holders -- to have a seat at the table in this reorganization," the motion reads in part. "[The club's] assertions that the interests of the season ticket holders will not be adversely affected during this bankruptcy case is just plain wrong. ... Is the value of season tickets, which season ticket holders have a right to sell, being preserved or adversely affected by actions taken by the estates during these cases?" The motion further argues that the existing creditors' committee does not necessarily share the same interests and goals as the season-ticket holders. The matter is slated to be heard Oct. 25.
FILING AN OBJECTION: MLB, not surprisingly, late yesterday filed its own objection to an emergency hearing being held today on a variety of matters, most notably the league's motion to the court to order a sale of the team from McCourt. The Dodgers are seeking the emergency hearing in pursuit of an adjournment of that bid to strip the team. But MLB said, "There simply is no reason for considering the motion to adjourn on one day's notice" (Eric Fisher, SportsBusiness Journal).
STAR WATCH: In L.A., Bill Shaikin reported a memo sent to Dodgers players yesterday by the MLBPA indicated that the union "intends to monitor the Dodgers' off-season spending 'very carefully.'" MLBPA Exec Dir Michael Weiner in the memo wrote, "To date, all Dodgers players have received all the monies they are owed. ... While it is not at all clear how these issues will ultimately be resolved, we expect that the Dodgers' players will continue to be paid and we continue to receive assurances from MLB that that will be the case" (LATIMES.com, 9/27). Also in L.A., Dylan Hernandez noted under McCourt, the Dodgers "haven't shopped in the high end of the free-agent market." But Dodgers GM Ned Colletti said that that "could change, even if the player they want could cost them more than $150 million." Colletti said that he "is 'very conscious' of the Dodgers; declining attendance figures." The team for the "first time ever" was "outdrawn by the neighboring Angels." Asked whether the Dodgers would "consider signing a star-caliber player as a goodwill gesture toward an increasingly disgruntled fan base," Colletti said, "It can be taken that way. But you're still going to have to win" (L.A. TIMES, 9/28).
U.S. District Court Judge Jed Rakoff "awarded both sides a partial victory" yesterday when he issued a decision allowing Bernie Madoff trustee Irving Picard's suit against Mets Owners Fred Wilpon and Saul Katz "to go forward, but limiting how much money the trustee may ultimately be able to recover," according to Richard Sandomir of the N.Y. TIMES. The judge allowed Picard's claim that the Mets owners "were willfully blind to warnings that Madoff was possibly engaged in a fraud during their many years of investing with him." Rakoff also "seemed to clear the way" for Picard to "force the men to return some of the profits they earned from their investments with Madoff." But as a result of Rakoff's ruling, Picard "at most could force Wilpon and Katz to turn over $300 million to $400 million." Rakoff ruled that Picard "produced sufficient -- if 'less than overwhelming' -- evidence that the men might have indeed been blind to warnings about Madoff for that claim to go to trial." He also ruled that Picard, "in his effort to recover money from Wilpon and Katz, could pick only a sliver of time from their long years of investing with Madoff." The judge ordered both sides to appear before him today "to chart the next phase of the lawsuit." The 18-page decision "preserves the chance of a possible settlement," but absent an agreement, the case is scheduled for trial March 5. Sandomir notes the Mets "would probably feel satisfied if, through trial or mediation, they end up paying the trustee only $80 million -- a sum Wilpon and Katz would probably be able to raise by selling some of their real estate and other assets, or even a stake in SNY, the cable network they control." Mets holding company Sterling Equities in a statement said it was "pleased that the court today dismissed 9 of the 11 counts in the Trustee's complaint, and that the lone remaining count in which the Trustee seeks to recover payments from the Sterling Partners is limited to a two-year period." Sandomir notes the decision in some ways "gave Wilpon and Katz reason to hope they could survive financially and hold on to the team they cherish as something of a family trust" (N.Y. TIMES, 9/28).
FROM THE BEAT: SI.com's Michael McCann noted Wilpon and Katz "received decidedly mixed legal news" yesterday. Rakoff "refused to dismiss the most damaging counts: that Wilpon and Katz earned $295 million in fictitious profits through investing in a scheme that they knew to be too good to be true," and that they "should return their $700 million principal, as well." Unless the parties "agree on a settlement that would likely require Wilpon and Katz to pay tens of millions, if not hundreds of millions, a trial will probably be scheduled in the coming months." But Rakoff also ruled that Picard "can only go after the $700 million in principal if he proves that Wilpon and Katz were intentionally blind -- as opposed to unreasonably inattentive -- to Madoff's fraudulent actions." Picard, therefore, will "have to establish that Wilpon and Katz had substantial and informed suspicions," requiring him to show "considerable evidence pointing to what Wilpon and Katz actually thought" (SI.com, 9/27). The WALL STREET JOURNAL's Bray, Rothfeld & Futterman cite legal sources as saying that the high standard of proof "could be a very difficult burden for the trustee to meet" (WALL STREET JOURNAL, 9/28). In N.Y., Kaja Whitehouse notes Wilpon and Katz "came back from behind," but they are "far from safe." The "late-inning decision to throw out much of the case also significantly raises the bar for the bankruptcy trustee" (N.Y. POST, 9/28). ESPN N.Y.'s Adam Rubin noted the Mets Owners "received favorable news," but "are not fully off the hook" (ESPNNY.com, 9/27). In Newark, Andy McCullough wrote Wilpon and Katz "received a batch of good news" (NJ.com, 9/28).
Newly hired Rick Welts "comes to the Warriors as the final key piece to their managerial makeover," according to Marcus Thompson II of the SAN JOSE MERCURY NEWS. Welts is "essentially filling the same position with the Warriors that he had with the Suns," serving as the team's President & COO. As the "replacement for former president Robert Rowell, he will oversee the business side of the Warriors." Team co-Owner Joe Lacob said, "He's a superstar. Seriously. One of the very best." After the Warriors and Rowell "mutually decided to part ways in June, Lacob said he identified a few available candidates and was into the process of interviewing them" until he got a call from Suns Managing Partner Robert Sarver to "tell him that Welts was resigning and moving to Northern California." Sarver suggested that the Warriors "make a run at Welts." Lacob: "A good president could take a year to find. Finding a great leader is extremely hard, because the great ones are usually employed. So we were very fortunate." Welts "was expecting to take some time off after leaving the Suns on Sept. 9" (SAN JOSE MERCURY NEWS, 9/28). Lacob yesterday said, "I want the best executive possible. All I care about -- all we care about -- is winning. That's it. This guy is simply the single best executive we could have possibly hired" (SACRAMENTO BEE, 9/28). Welts has promised that he "will not get involved in roster decisions as Rowell had done before him, but the basketball and business operations will be integrated" (S.F. CHRONICLE, 9/28).
POTENTIAL IMPACT: In Oakland, Monte Poole writes, "Hiring Welts won't win a single game for the Warriors, but it's an impressive and intriguing move -- and another landmark victory for the new owners of the franchise." Poole adds that the openly gay Welts was welcomed by Lacob and co-Owner Peter Guber, both of whom "surely realize the potential benefits of having Welts in the socially conscious Bay Area, provides the latest peek at their goals for the long-slumbering organization" (OAKLAND TRIBUNE, 9/28). CSNBAYAREA.com's Ray Ratto wrote, "Welts is far less important than, say, David Lee. But he is more important than many others, if in fact he will be given real responsibilities that help impact the day-to-day running of the franchise. Put another way, he will be as important as Lacob allows him to be, and he will be as successful as his personality and the on-floor product will permit." Ratto: "What he will be remains to be seen. And the sooner he is viewed in a Warriors context rather than a gay executive context, the better we suspect he will like it" (CSNBAYAREA.com, 9/27).
PROFESSIONAL LIFE, NOT PERSONAL LIFE: Welts appeared on Comcast SportsNet Bay Area's "Chronicle Live" last night to discuss his new job, and co-host Greg Papa asked whether Welts' sexual orientation was discussed during the interview process with the Warriors. Welts said, “Not once. Never brought it up. ... They're just looking for people to build a world-class organization and felt that I was somebody that could actually help them achieve that goal and that’s all they cared about” (“Chronicle Live,” Comcast SportsNet Bay Area, 9/27). In S.F., Scott Ostler writes under the header "In Bay Area, Warriors' Hire Of Gay Man Is Big Yawn." Ostler: "The part about Welts being an openly gay exec in a manly-man's manly sport is interesting and noteworthy, but is it big news? Only in that it's not big news" (S.F. CHRONICLE, 9/28).
The Marlins today announced Ozzie Guillen as the team's new manager, and the franchise is "about to have the big-name manager they have craved as they head into their new stadium" next season, according to Jon Heyman of SI.com. The White Sox released Guillen from his contract Monday night, and the Marlins are reportedly going to give him a four-year, $16M contract. The Marlins "desperately wanted a marquee man to manage their team, one that can help market their revenue-challenged team," and Guillen is "about to become the star of the South Florida show" (SI.com, 9/26). In Miami, Israel Gutierrez writes the Marlins are bringing in a "man who will immediately take the title of largest sports personality in town, and it won't even be close." Hiring Guillen is the "most glaring signal the Marlins can offer to show they're willing to not just spend to improve their on-field product, but that management is willing to change its ways if it means creating a winning product." Paying Guillen $4M annually "would signal that the purse strings will be loose now that the new stadium is set to open." Gutierrez: "You wouldn't think the Marlins are naive enough to believe Guillen alone is going to draw fans once the new stadium has lost some of its luster. So you would assume that major on-field personnel moves would follow" (MIAMI HERALD, 9/28). In Ft. Lauderdale, Mike Berardino writes Guillen "is the right man at the right time for this Marlins franchise." Berardino: "I'm not sure his name alone is enough to pack the Marlins' new ballpark after next season. ... But I'm pretty confident Guillen ... will do what it takes to make the Marlins relevant again, both on the field and off" (South Florida SUN-SENTINEL, 9/28).
WELL WORTH THE RISK: ESPN’s Bomani Jones said fans will "have more interest in the Florida Marlins than they have, even with two World Series,” with Guillen joining the team. He instantly makes the Marlins more "relevant moving into this ballpark. ... You put him there, they have something to focus interest on around that team. And he can manage" ("Jim Rome Is Burning,” ESPN2, 9/27). SportsNet N.Y.’s Marc Malusis said Guillen “is going to raise the Q-level for the Marlins going into a new stadium” ("The Wheelhouse," SportsNet N.Y., 9/27). ESPN's Tony Kornheiser said Guillen will “put people in there, fannies in the seats. He’ll make money, which is all he said he cares about” (“PTI,” ESPN, 9/27). MLB.com's Alden Gonzalez wrote signing Guillen is a "risk, no doubt, but it's a risk worth taking." Gonzalez: "The Marlins are all about creating a buzz, generating interest and ultimately selling tickets in this stage of the franchise's existence. And Ozzie, more so than any other manager, can help do all that" (MLB.com, 9/27). Comcast SportsNet Chicago's Todd Hollandsworth said, "They’re saying, 'We want to make this guy the face of our franchise.' How many managers out there today are truly the face of their franchise? Typically it’s a player. ... The community is going to rally around him, and they’re going to love him” (“Chicago Tribune Live,” Comcast SportsNet Chicago, 9/27).
BUSTING THE BUDGET: In West Palm Beach, Joe Capozzi reported the Marlins "plan to look at top free agents this winter as they tinker with their roster," and the team is "poised to have a franchise-record payroll next year." The team would not disclose the amount, but a source said that it "could be nearly twice its present $58 million." Marlins President David Samson is "encouraged that season-ticket sales are ahead of their budgeted pace." While Samson did not disclose any figures, he said that "many new customers have never attended a game at Sun Life Stadium." He added that the Marlins are "seeing increased group sales from Palm Beach County and the Treasure Coast as well as the Florida Keys and Naples." Meanwhile, Samson said, "The whole organization views the new ballpark as having a honeymoon period of about five innings in the first game. So, in order to keep fans coming from Year 1 to Year 30 is a combination of game-day experience and on-field performance" (PALM BEACH POST, 9/27).
A new Sharks policy that "forbids ticket holders from promoting 'other entities'" at HP Pavilion may have the team "on the verge of a First Amendment showdown," according to Bruce Newman of the SAN JOSE MERCURY NEWS. Sharks management “announced the policy shift during the offseason by sending a warning letter" to Bad Boys Bail Bonds. The company's co-Owner, Jeffrey Stanley, has used T-shirts emblazoned with his company’s logo as a “gorilla marketing campaign -- a fixture of every TV close-up of the Sharks’ bench for the past three seasons.” Stanley is “convinced he’s being stripped of his boldface blouse in retaliation for his decision to drop the Bad Boys’ paid sponsorship of the home team’s bench and visitors’ penalty box, for which he paid $70,000 last season.” However, Sharks Exec VP/Business Operations Malcolm Bordelon said that the Bad Boys’ T-shirts “would apply a visual hip-check” to the Porsche car ads that now adorn the Sharks’ bench. Bordelon: “That type of ambush marketing is what we’re trying to protect them from” (SAN JOSE MERCURY NEWS, 9/24). YAHOO SPORTS’ Greg Wyshynski noted since Stanley received his letter about the policy change, he “has worn his shirt to a preseason game with no punishment or recourse from the Sharks and their arena personnel.” Stanley and his family also "intend to wear" the shirts during the Sharks' regular-season home opener Oct. 8 (SPORTS.YAHOO.com, 9/27).
The MLB Giants will miss the playoffs this season after winning the World Series last October, and incoming CEO Larry Baer said the team’s payroll in ’12 will be “probably a little more than” the $120M it reached this year.” Baer, appearing on Comcast SportsNet Bay Area’s “Chronicle Live,” said the team is “going to have the resources to put together enough player payroll resources to win.” Baer said that outgoing Managing General Partner & CEO Bill Neukom's three-year span in the position was full of “baseball passion.” Baer: “What's important is the people at the Giants in the ownership and the people … who have been the CEOs have been lifelong Giants fans first and foremost. They want to win and they care about winning, and with Bill at the helm, we won.” Baer will succeed Neukom as CEO but will not take on the Managing General Partner title because the team is “going to a different model.” Baer: “In the past, we’ve had owner operators. … They were investors, came into the Giants as investors. I come into the Giants as a professional manager, somebody that is trained. A lot of teams operate with this model. We're not going to have another Managing Partner as such” (“Chronicle Live,” Comcast SportsNet Bay Area, 9/27). Meanwhile, in San Jose, Andrew Baggarly noted the Giants "set an all-time franchise attendance record Monday, selling out for the 79th consecutive time to draw 3,303,060 fans” for the season (SAN JOSE MERCURY NEWS, 9/27).
In St. Petersburg, Michael Van Sickler writes even if the Rays "sell out Tropicana Field today and all of the club's games in the playoffs -- if they get there -- it will be hard to forget how few fans attended Monday night's game that tied the race" for the AL Wild Card. The 18,772 fans who attended Monday's game against the Yankees "didn't come close to filling the stadium's 34,078 capacity." Van Sickler: "One of the biggest games in franchise history, and the Trop was barely half-filled." St. Petersburg Mayor Bill Foster said, "Short of the economy, I'm out of excuses. There's a huge sense of urgency, and we have to figure it out." The Rays are "drawing an average of 4,064 fewer fans to games than they did last season, placing them 29th out of 30" MLB teams (ST. PETERSBURG TIMES, 9/28).
TAKE ONE FOR THE TEAM: One day after manager Ozzie Guillen was released from his contract, White Sox GM Kenny Williams said that he "has tried to give up his general manager chair multiple times." Williams said that he "would take another role in the organization if it would help turn around the club's fortunes." Williams: "I offered it because, listen, I'm a big believer in self-analysis and self-assessment. ... If I'm the cog in the machine that is tripping us up, and my decisions are such not that they don't warrant, or my style doesn't warrant more opportunities to get that done, that's fine. I've been sitting in this chair for a long time anyway" (ESPNCHICAGO.com, 9/27).
PLAYS WELL WITH OTHERS? Yankees COO Lonn Trost yesterday said that the team "offered the Mets $250,000 last week in exchange for permission to temporarily relocate one of their minor-league teams to Newark." Trost said that negotiations "broke down after the Mets demanded the right to permanently relocate one of their minor-league affiliates to either Long Island or Connecticut." The WALL STREET JOURNAL's Brian Costa notes the Yankees "were looking to move their Triple-A team to Newark's Riverfront Stadium for one year while their home ballpark in Moosic, Pa., is being renovated." But under MLB rules, the Mets and Yankees "share territorial rights to the region." A Yankees source indicated that the team is "now considering splitting its Triple-A home games between several sites in upstate New York in 2012" (WALL STREET JOURNAL, 9/28). Yankees GM Brian Cashman yesterday said, "The Mets blocked us to go to Newark, N.J. That's where it begins and ends on that one. I didn't talk to them. We'll find somewhere soon to play Triple-A" (N.Y. POST, 9/28).
FULL HOUSE: An ARIZONA REPUBLIC editorial is written under the header, “Diamondbacks Earn Their Roaring Crowd.” The editorial: "When the 2011 season began and players started noticing the thin crowds in attendance, [D’Backs Manager Kirk] Gibson told them that it was their job to build back the fan base, not the other way around. He told them they would have to earn fan love the hard way. ... Just win. And just keep winning. And, eventually, the fans will come back, he said. And they did” (ARIZONA REPUBLIC, 9/27).
In Phoenix, DiAngelea Miller reported the Suns are expanding their “social media efforts and are looking for a social media sideline reporter.” The position is believed to be “the first of its kind for a major pro sports team,” with the reporter being responsible “for providing updates during home games.” Interested candidates must submit “a 60 second audition video showing their knowledge of the Suns and social media.” The team recently hired “social media specialist Greg Esposito to further its involvement via social media outlets” (BIZJOURNALS.com, 9/27).
RIDING THE WAVE: Packers Dir of Marketing & Corporate Sales Craig Benzel said that “despite the lockout earlier this year, the Packers essentially retained all of [their] corporate partners from the season before.” He added that his marketing and sales team “was aggressive about generating new business because of the Super Bowl win.” Benzel: “As Super Bowl champions, we didn’t let the work stoppage have an impact. It had an impact, but we didn’t let it impact us to get back to even. We grew our business pretty substantially.” In Milwaukee, Don Walker noted the team this season “went after some non-traditional sponsors,” securing deals with Caterpillar and Case IH (JSONLINE.com, 9/26).
SALUTE TO THE TROOPS: The Rams and Boeing are teaming up to provide 1,000 tickets to the USO for the Rams’ military appreciation game against the Seahawks on Nov. 20. The tickets will be given to military members and their families. The Rams and Boeing are also making another 2,000 tickets available to military members and their families as well as veterans at a discounted price for the game (Rams).
NOT A FAN: The WALL STREET JOURNAL’s Jason Gay writes about the Nets' decision to retain their nickname when they move to Brooklyn in '12 under the header, “Brooklyn Deserves A Better Name.” Gay: “Still, standing pat with ‘Nets’ -- and not searching out the perfect new nickname -- feels like a missed opportunity” (WALL STREET JOURNAL, 9/28).