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SBD/March 8, 2013/FranchisesPrint All
The NFL Panthers on Thursday said that the team “made $66.5 million during the 2010 and 2011 seasons, after an audit of the team was published” by Deadspin, according to a front-page piece by Steve Harrison of the CHARLOTTE OBSERVER. The audit showed that the team’s “net income for those two seasons was just under $100 million,” and a net income of “nearly $72 million for the year ending in March 2011, after the team went 2-14.” The Panthers said that the team’s profitability “is much lower,” and its “cash flow -- before taxes -- for those two seasons was $66.5 million.” The Panthers said the figures are an “isolated snapshot … during an unusual time as the NFL lockout loomed.” The team said that it had “purposefully reduced spending before a labor agreement with players was reached.” The Panthers said that the “audit shows how difficult it is to compete in the NFL while also trying to undertake a large renovation of their stadium.” The team is seeking “more than" $200M in public funds to renovate Bank of America Stadium. The audit “doesn’t cover the most recent season.” It said the team made $112M in “income from operations in 2011 and 2012.” The team had $14.7M in “interest expense” those two years, reducing its net income to $97.3M. The audit said the team’s “net cash” from operations was $26.7M in ‘11 and $39.8M for the fiscal year ending in March ‘12. During that same year, the Panthers’ “total revenue" was $254M. That includes the team’s “share of the national television and radio contract," along with $47M from NFL Ventures (CHARLOTTE OBSERVER, 3/8).
ON THE SURFACE: Univ. of Oregon business professor Dennis Howard said, "These franchises are a license to print money. This team is pretty damn healthy." Howard estimated that under the terms of the league’s TV deal, the Panthers “could bring in an additional $60-$65 million in annual TV revenue alone.” DEADSPIN’s Tommy Craggs in the original report noted the Panthers last fall “began drawing up plans for renovating Bank of America Stadium.” The Panthers “figured renovations would cost $300 million, $200 million of which, they'd hoped, would come out of the public till.” The city of Charlotte “has been eager to help, to the tune of $144 million.” But the state of North Carolina “thus far has been less accommodating, and with good reason.” Howard in an e-mail wrote, "Based on the team's financial condition, there is absolutely no justification for such a large public subsidy" (DEADSPIN.com, 3/7).
ON THE FLIP SIDE: In Charlotte, Tom Sorensen writes the revelation “might be business as usual in the NFL,” but fans “don't know how much other teams make.” In Panthers Owner Jerry Richardson’s “defense, he's entitled to make money.” He had “hoped to invest $300 million and make middle-aged Bank of America Stadium, one of the NFL's best, less old,” with $200M “from the city and state, $100 million from the Panthers.” Although Charlotte's investment “makes sense economically, the pressure on Mayor Anthony Foxx and the city council to assess their commitment will be enormous.” It is “not about truth.” It is about the “appearance of truth.” Sorensen: “How do the Panthers ask people who on a big day might have $112 in their wallet to support a team that, in a two year span, allegedly made $112 million?” (CHARLOTTE OBSERVER, 3/8).
Aides to Sacramento Mayor Kevin Johnson said that his efforts over the next six weeks to keep the NBA Kings from moving to Seattle "will closely resemble a political campaign," according to Lillis, Kasler & Bizjak of the SACRAMENTO BEE. The "key element of that push is Think Big, a public relations machine funded by private donations assembled to galvanize local support for the cause." Think Big has "another task as well: catching the attention of national media outlets in an attempt to sway the opinions of key NBA officials." Johnson's team has "identified 'swing votes' on the NBA's board of governors who could be sympathetic to Sacramento's cause and vote against the Kings' relocation attempt." One group Johnson is "expected to target: the four men who own franchises in both the NHL and NBA." That is because Penguins co-Owner and Kings bidder Ron Burkle is "well respected among the hockey league's other owners." In order to "block the sale" to the Seattle group led by hedge fund manager Chris Hansen and Microsoft CEO Steve Ballmer, Johnson "must persuade eight of the NBA's 30 team owners to side with him when they meet" in mid-April. The Seattle contingent "is conducting its own intense lobbying effort, having already paid" a $30M deposit to Kings Owner the Maloof family. A source said that reps of Hansen and Ballmer "have been contacting NBA team owners to push for their deal to buy the team and move it to Seattle in time for" the '13-14 season (SACRAMENTO BEE, 3/8).
WANTING TO GET INVOVLED: In Sacramento, Ailene Voisin notes former NBAer Mitch Richmond is "among the investors who each have committed" $1M to the Kings and are "bidding on the seven percent share being auctioned in bankruptcy proceedings." Richmond, a six-time All-Star in Sacramento, "quietly revealed" that if the potential Kings ownership group of Burkle and 24 Hour Fitness co-Founder Mark Mastrov "prevails, he will pursue a position in the basketball front office" (SACRAMENTO BEE, 3/8).
Rangers President of Baseball Operations & GM Jon Daniels on Thursday said that he "was never offered the opportunity to be the team’s" CEO, a title Nolan Ryan currently holds, according to Evan Grant of the DALLAS MORNING NEWS. Daniels acknowledged that ownership "did present him with some other variations of the promotion he received on Friday, but that 'all of those discussions involved me reporting directly to Nolan.'" A source said that one of the variations "was that Daniels was offered the title of president, which would have left [President of Business Operations Rick George] out of the loop." In that scenario, Daniels "still would have reported to Ryan and both would have had input on baseball and business decisions" (DALLASNEWS.com, 3/7). Grant notes Daniels was "left as the lone Ranger to speak for the organization and found himself having to deny a report he was offered all of Ryan’s titles." Sources have "depicted how the situation developed and the major flash points over the winter." Grant: "Remarkably, those major flash points, taken individually, seem to be rather minor." Over the last six months, there have been "incidents involving the firing of a minor league instructor, a coach’s future and the petty jealousies and credit-seeking that grow at the edges of any successful business." The "frustration over disagreements has only been exacerbated by fractures in the organization between Team Daniels and Team Ryan." Sources said that "some members of Daniels’ inner circle of associates have been jealous of the credit Ryan has received for the organization’s success." Some members of the "Ryan Posse are concerned about their futures if he leaves." The stories "get around and the bad blood only rises" (DALLAS MORNING NEWS, 3/8).
THE SILENT GAME: The Dallas Morning News' Barry Horn said Ryan is "not talking, but he’s speaking volumes by not talking." Horn: "By not talking, he’s saying something. I’ve listened to Jon Daniels, and he’s nervous. He cannot wait for this whole thing to go away" ("SportsDay On Air," FS Southwest, 3/7). In Ft. Worth, Randy Galloway wrote, "Damage control in Arlington is in full spin." Any "perception that Ryan has been wronged will be met with fan hostility, and the backlash is now hitting home." This backlash "worries the heck out of everyone involved, including Daniels, who really did nothing wrong here, at least as far his promotion goes." Daniels "didn’t promote himself." Bad "blood has been spilled at the ballpark for years." There are "two camps: Nolan’s camp and Daniels’ camp." The bad blood on baseball decisions is "probably more intense within those camps as opposed to Nolan vs. Daniels, but that tainted blood is there, period." There is "absolutely nothing cozy about the relationship." And the "irony is that to take his name off the PR backlash list, Jon Daniels is now praying that Nolan stays, and I don’t blame him" (FT. WORTH STAR-TELEGRAM, 3/7).
HELLO, HOUSTON: MLB.com's Richard Justice wrote Astros Owner Jim Crane by hiring Ryan could "restock his franchise with credibility and goodwill." He can "bring fans back to the ballpark, too." Simply "having Ryan associated with the Astros would elevate the franchise in the hearts and minds of Texans." But Crane "must hire Ryan for a real job, not a figurehead one." Ryan must be "involved at every level and must have a voice in decisions" (MLB.com, 3/7). ESPN.com's Johnette Howard wrote "don't go sleeping" on the Astros' "chances of a reunion" with Ryan. The Astros "should woo Ryan until he gives them a yes or no" (ESPN.com, 3/6).
The MLS Dynamo's opening of BBVA Compass Stadium last May "propelled" the team into the top quartile of income generators in the league by "offering a premier corporate entertainment site in southeast Texas and by attracting a club record of 12,000 season-ticket holders," according to Ian Thomson of the N.Y. TIMES. Maintaining the Dynamo's "gloss and burgeoning support is the focus for the club’s front office." Dynamo Exec VP/Business Development Steven Powell said, "You’ve now got a professional soccer team in Houston with a larger season-ticket base and a higher average attendance than the Astros Major League Baseball team and the Rockets NBA franchise. That’s the thing we’re most proud of." The Dynamo's approach to business partnerships has been to "appeal to a restricted group of household names that are given greater value from their investments." Companies such as AT&T, Kroger, Mazda and Statoil "joined BBVA Compass as founding partners" for the stadium last year. Exclusive seating areas have "allowed the Dynamo to maintain cheaper, affordable pricing for general admission seats and concessions." Houston's average attendance "surged 19 percent last year," although club officials have been "disappointed by chunks of empty orange seats at some home games." Powell added, "We think we know some of the reasons for that." He cited "afternoon kick-offs in the searing Texas summer." Day games in June, July and August have been "eliminated from this year’s schedule." Securing a new jersey sponsor is "another issue that the Dynamo is looking to address in the coming weeks." Discussions with potential successors to previous jersey sponsor Greenstar Recycling are "under way" (NYTIMES.com, 3/8).
MLS Rapids supporters groups Pid Army, Class VI and Bulldog Supporters Group have decided to consolidate into "one united Rapids supporters group called Centennial 38," giving the team "a unified group of about 1,000 ardent supporters" for its home opener Saturday versus the Union, according to Eric Gorski of the DENVER POST. The club's front office is "behind the effort." MLS Commissioner Don Garber this week said that the united group is "an important step toward improving the experience of attending a game." The three previously separate groups have varying backgrounds. Pid Army is a "band of ruffians with a spray-painted van who lead chants from the standing-only section behind the north goal known as the Terrace; Class VI, with fans who tend to be a bit older, may have kids, and prefer the seats and better sight lines of Section 108; and the Bulldog Supporters Group, another Terrace-based group that grew out of the downtown soccer pub The British Bulldog." Bulldog Supporters Group President Dave Wegner said that when leaders of the three groups "brought the idea of uniting to members, the response was overwhelmingly positive." Members were "given a choice: blow up all three groups and form one unified group or form an umbrella group that would oversee all three, allowing them to maintain their identities." Wegner said that members "voted 3-1 to start anew." He added that the Rapids' front office "supported the move, but the move was the supporters’ alone." MLS teams with "flourishing fan cultures -- Seattle and Portland top the list -- have downtown stadiums that make it easier to draw the Gen Y fans MLS desires." But Garber "singled out the benefits of the Rapids complex in Commerce City" (DENVERPOST.com, 3/7).
Trail Blazers President & CEO Chris McGowan is profiled by the PORTLAND TRIBUNE's Kerry Eggers, who notes it "didn't take long ... for McGowan to shake things up." Two months in, the team has "laid off 11 of their 167 full-time employees, including several long-time high-ranking executives." McGowan believes the Blazers are "pretty much past" layoffs, but said, "Every year you have to be willing to do what’s right for the business.'" McGowan: “We’ll add some more, for sure. Part of this is paving the way to add resources in areas we need." He added, "That’s the exciting thing with what’s going on with us right now. There’s a new influx of thinking that is taking people who have been here a long time and have only known the Trail Blazers, and they’re getting excited by it." Eggers notes McGowan has "learned quickly what the Blazers mean to many Portlanders." He said, “It’s an interesting platform to be in charge of. We need to operate like we are (the show), but in a humble way. This is a big institution in Portland, and we need to manage the business to that end.” McGowan: “I want to become a season ticket-holder-first organization, ensure they get the best access, the best service, the best pricing, the best benefits, and we tie a lot of it to tenure. I’m not so sure season ticket-holders feel that way right now."
GOALS GOING FORWARD: McGowan intends to "hire more sales people, to bring in more marketing experience, to perform a makeover of the Blazers’ websites and digital properties." He said, “I’m not happy with any of our websites." The Blazers are "at about 13,000 season tickets," but only "about 30 of the Garden's 57 all-events luxury suites are leased on an annual basis." McGowan said, "We need to be at 40 or 45 there, so we don't have to sell so many on a nightly basis." McGowan also noted, "If we can get a naming rights deal done and maintain relationship with our current partners, we’re going to be sitting exactly where we need to be on the sponsorship side.” McGowan and Premier Partnerships, the firm hired to assist with landing a naming-rights deal, have a "list of about 100 businesses -- some local, some national -- that have a likelihood of interest." Three or four presentations have "already been scheduled." McGowan: "I'm going to be very cautious about it. I'm not going to do a deal with the wrong brand" (PORTLAND TRIBUNE, 3/8).
The Dodgers' "ferver to land" 1B Adrian Gonzalez in last year's blockbuster trade with the Red Sox was about a lot of things, but the team is "perfectly willing to acknowledge the importance of Gonzalez's heritage in their efforts to court fans," according to Mark Saxon of ESPN L.A. Gonzalez gives the Dodgers "their biggest star of Mexican heritage since Fernando Valenzuela." The team was "not shy about taking advantage of Gonzalez's bicultural roots" during the offseason, as no Dodgers player made "more public appearances this winter than Gonzalez, who often had to drive 100 miles north" from his La Jolla home. Dodgers Assistant Dir of Multicultural & Business PR Yvonne Carrasco said, "I've only seen that level of excitement and connection with the fans in events I've done with Fernando." Saxon noted the excitement level "might never reach the pitch of Fernandomania in the 1980s," but Valenzuela "senses something like it could be building with Gonzalez." Valenzuela said, "They're receiving him pretty good and I think it's going to be great for all the Latins and Mexicans living in Los Angeles. It's going to be good, not only for the team but for the community" (ESPNLA.com, 3/7).
BALANCE OF POWER MOVING WEST: With the start of the MLB season a little over three weeks away, CNBC’s Larry Kudlow wondered whether the Dodgers “are becoming the new New York Yankees” and whether the “center of baseball gravity moved from the East Coast to the West Coast." Kudlow asked, "Are these big California payrolls going to produce World Series victories?” CNBC’s Brian Shactman, reporting live from the Dodgers' Spring Training home in Glendale, said, “In terms of wins and losses, who knows if they’ll supplant the Yankees. But when it comes to money, they already have.” Dodgers Owner Guggenheim Partners “want to win (and) they’re willing to spend to do it.” Dodgers GM Ned Colletti said having a large payroll “allows us to think about any player that we think can help our club instead of being restrictive and looking at a salary figure and saying, ‘We have no chance to go there.’" Colletti: "Now we can make a baseball decision” ("The Kudlow Report," CNBC, 3/7).
The Cubs and ad agency Schafer Condon Carter, Chicago, on Friday are launching a new marketing campaign, dubbed "Committed," in conjunction with the start of single-game ticket sales. Creative will feature stories about the team from actual fans. Ads will appear in print, online, radio and out-of-home platforms, including area public transportation, with TV ads to launch in April. Michael Walters Advertising serves as the team's media buying agency for the campaign (Cubs). In Chicago, Danny Ecker reported many of the fans who will appear in the campaign "were plucked from the crowd at this year's Cubs Convention." Among the stories being told include a couple from Indianapolis "who got engaged at Wrigley Field" and a man "with a tattoo of a Cubs logo and Ron Santo's signature" on the back of his head. Schafer Condon Carter this season is replacing Brooklyn Brothers, N.Y., as the team's ad agency. Brooklyn Brothers was behind the Cubs' "Baseball Is Better" campaign last year, while DraftFCB, Chicago, created the "It's a Way of Life" theme used in '10 and '11 (CHICAGOBUSINESS.com, 3/7). Also in Chicago, Rob Manker noted the Cubs' campaign includes a "series of ad slogans including 'Not if. When' and 'Nothing worth having ever comes easy.'" Meanwhile, the White Sox "rolled out their 'Make an impact' ad spot, including the social media-friendly Twitter hashtag, '#Makeanimpact,' a slogan befitting a team that may not be the favorite to win its division but could find itself again in the hunt." A 33-second video posted on WhiteSox.com "shows Sox players hard at work in the weight room preparing in the offseason to 'make an impact' come Opening Day" (CHICAGOTRIBUNE.com, 3/7).
YES WE CAN: The Giants will enter the '13 season looking for their third World Series win in four years, and the team's promo campaign via Baker Street Advertising, S.F., is called, "Together We Can." Baker Street Advertising Creative Dir Brian Bacino said the campaign “is really a continuation of ‘Together We're Giants,’ a campaign started just after the World Series in 2010." Bacino: "The club was very interested in paying homage to its fans and giving credit to that incredible run to their fans, and we've kept that going. ... What you're going to see all season are fans and players sort of interacting, trying to help each other out.” He noted the players “are fantastic” to work with on the ads because “they're so into it and because they're doing it together and they're doing it as a group." Bacino: "There's some one-upmanship that comes along with it” ("Chronicle Live,” Comcast SportsNet Bay Area, 3/7).
Astros Owner Jim Crane on Thursday said that the team is "considering relocating" the Triple-A PCL Oklahoma City Redhawks to "an area north of The Woodlands" near Houston. Crane said that the Astros "want to streamline their minor-league operations and are evaluating all of the club's properties." Crane acknowledged that the Astros have "lost ground in the state" to the Rangers. He said that the "Astros 'like' their situation" with the Double-A Texas League Corpus Christi Hooks, "but the team is owned by a Nolan Ryan-led group" (CHRON.com, 3/7).
BILLY BALL: A's VP & GM Billy Beane on Thursday appeared on CNBC's "Fast Money Halftime Report" with Brian Shactman, who noted it has been over 10 years since Michael Lewis released "Moneyball." Shactman asked, "What's changed in that stretch of time because you haven't won a lot in the interim?" Beane said, "The business has become certainly more competitive. The people running baseball teams now are really bright guys." Beane: "Our situation is somewhat burdened by our venue. We still share a stadium with the Raiders. We're trying to secure a new venue someway, somehow. But until that point comes we have to operate very much like a business where we're spending what we have and no more" ("Fast Money Halftime Report," CNBC, 3/7).
ALL IN: D'Backs President Derrick Hall said of rumors about him going to work for MLB, "I don't plan on going anywhere. I'm home, we love it here, and I want to be in this job for the next 25, 30 years" (ARIZONASPORTS.com, 3/7).