SBJ/September 30 - October 6, 2002/This Weeks Issue

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  • ABC, ESPN plan more high-definition action

    ABC Television and ESPN announced plans last week to expand their sports coverage in high definition.

    ABC will broadcast championship and high-profile events in high definition, including next year's Super Bowl, NBA Finals and Stanley Cup Finals, along with the entire 2003 season of "Monday Night Football."

    ESPN, which, like ABC, is owned by Walt Disney Co., will launch a high-definition simulcast service of the network beginning in April. Dubbed ESPN HD, it will include 100 live telecasts, including live game coverage of games from the four major pro leagues.

    An ESPN spokesperson said 200,000 to 300,000 high-definition TVs are in use today.

    The broadcasting industry has been struggling over when and how to move up to higher-definition signals and what standards to adopt.

    For the Super Bowl last year, Fox decided not to do a high-definition broadcast. Instead it transmitted the game through a digital signal compatible with high-definition equipment but not at quite the resolution of what's called HD.

    The Federal Communications Commission has been pushing for over-the-air broadcasters to begin transmitting programming through a digital signal, and for television manufacturers to make TVs able to process those signals. But to this point, cable and satellite television has been most aggressive in the high-definition space.

    Mark Cuban's HDNet is available on DirecTV and is looking to expand to digital cable and split into three channels, one of which would be devoted exclusively to sports. HDNet carried NHL games last season and MLB games this year. League sources said both were one-year deals, but HDNet and the NHL are in talks about an extension.

    ESPN HD will be managed by ESPN Vice President Bryan Burns and be part of the ESPN Enterprises division under Rick Alessandri.

    Its high-definition programming will be delivered to cable systems and satellite providers in high-definition format. ESPN will also digitally convert the rest of the existing ESPN signal to the high-definition format for viewing on high-definition television sets.

    Print | Tags: ABC, ESPN, Fox, MLB, NHL, This Week's Issue, Walt Disney Co.
  • Ad campaigns intersect

    The Nashville Predators have recently added several new sponsors and more than doubled the commitment from one, in an unusual deal with the Tennessee Department of Transportation (TDOT). The highway department is using several sponsorship elements to add some punch to its seatbelt-use and responsible-driving campaigns this year. The idea is to raise TDOT's message above the typical public-service announcement, said Art Victorine, director of the Governor's Highway Safety Office.

    The team and TDOT will co-produce two 30-second television spots that begin with star players and law-enforcement officials delivering the message that while the team has nicknamed its arena "Smashville," fans should drive responsibly at all times.

    Victorine said the deal cost TDOT just over $500,000, but he said the Predators are giving the state agency considerably more value for the sake of the public-service element. Victorine said TDOT currently has a $100,000 sponsorship with the University of Tennessee and is close to a low-six-figure deal with the Memphis Grizzlies.

    State department of transportation money has a large federal component, and some of that money can be used for advertising. Victorine said the Predators deal, which includes a presence at all Gaylord Entertainment Center events, not just hockey games, reaches a core demographic — active young men.

    The arena will be festooned with "road sign" signage for TDOT, with messages like "Zamboni Crossing," "Men At Work" and "Puck Speed Limit 100 mph."

    "This ties into the Smashville fictional city," said Tom Ward, executive vice president for business operations for the Predators. "We're marrying two campaigns." In addition, there are 27 TDOT-themed signs located at exitways from the arena seating area, Victorine said. The deal is for one year.

    The team signed Caterpillar to a multiyear deal that is in the lower half of the team's fee range, according to Ward. The team's Zamboni will be modified to look like a front-end loader and painted Caterpillar colors.

    Caterpillar does few deals on the major league level — it sponsored the San Antonio Spurs last year — and this deal came about because it meshed several company aims. Cat Financial, the company's financial arm, is based in Nashville and employs about 1,000 people. And there's a large local dealer network in Tennessee. "So it's really a three-way deal, with Cat Financial, the corporate office and the dealer network," Ward said.

    The team added Shell Oil and Ford as new sponsors this year, in deals in the lower half of its fee range. The Shell deal coincides with the rebranding of its Tennessee Texaco stations and will involve 10 live remote radio broadcasts with team players from Shell stations around the area. A wide range of stations will be used to increase the reach, Ward said.

    The Ford deal brings the team its fifth car sponsor, as Ford joins Toyota, Mercedes, Chevrolet and Dodge. The deal is for signage, media and tickets. "In this market, you may not have one automaker who can swallow the sponsorship pill," Ward said.

    Print | Tags: Ford Motor Co., Gaylord Entertainment Co., Hockey, Memphis Grizzlies, Nashville Predators, This Week's Issue
  • Airline rebooking with NYC Marathon

    Continental Airlines reached an agreement in principle to renew its sponsorship of the New York City Marathon for another four years after this autumn's race, at a cost of mid-six figures annually plus free tickets for elite runners and marathon personnel.

    The airline also plans to announce today a sweepstakes on eBay for its frequent-flier members that will allow them to bid on marathon-related prizes, including riding in the lead car on race day (Nov. 3). The airline has similar programs with six major league sports teams, including the New York Yankees. This year, a winner bid 247,000 frequent-flier miles for a luxury suite for himself and 38 friends at a Yankees game.

    Continental officials expect the top marathon prize, including the lead car seat, to go for around 100,000 frequent-flier miles, or the equivalent of one round-trip, first-class ticket to Europe.

    Continental will continue its sponsorship of several events during marathon weekend, including the Mayor's Cup, a competition between New York firefighters and police during the big race.

    The airline has bought more than 20 30-second ads during race weekend on WNBC, which broadcasts the marathon locally, including 16 spots on Nov. 3 alone.

    While the New York Road Runners, the club that stages and owns the race, touts the event's international appeal, Continental said the primary benefit of the sponsorship is local.

    "The ability to move market share in New York is the greatest source of revenue we could achieve," said Kevin Gallagher, the airline's manager of sponsorship marketing. "We want people to understand the scope of the services we have in New York."

    Continental, which will have been a marathon sponsor for eight years after this year's running, is one of 29 race sponsors but is among the top seven as designated by the Road Runners.

    Mary Wittenberg, the New York Road Runners' chief operating officer, said the eBay initiative marks the club's first Internet venture with a sponsor to promote the marathon.


    Elite NYC Marathon sponsors

    Asics

    Continental Airlines

    Foot Locker

    J.P. Morgan Chase

    The New York Times

    Rudin Family

    Runner's World magazine

    Source: New York Road Runners

    Print | Tags: Continental Airlines, New York Yankees, This Week's Issue
  • Arbitrator finds for NBA in NBPA grievance

    An arbitrator ruled last week that a plan by the NBA to withhold luxury tax and player escrow money from high-spending teams does not violate the collective-bargaining agreement, throwing out a grievance filed by the National Basketball Players Association.

    Arbitrator Charles Renfrew ruled that because the players association had agreed in the collective-bargaining agreement how to distribute the money, there was no violation of the agreement.

    "The NBA bargained for the right in the CBA to decide how the escrow and tax money would be used," said NBA general counsel Rick Buchanan in a statement. "We are pleased that the arbitrator enforced the terms of the agreement."

    Players union officials could not immediately be reached for comment. NBPA chief Billy Hunter previously has told SportsBusiness Journal that the league's policy was "a double-tax" that had a chilling effect on the player market.

    Print | Tags: Basketball, NBA, This Week's Issue
  • Blue Jackets tinker with sponsor summit

    The Columbus Blue Jackets recently gathered 120 representatives from the team's 90 sponsors for a Partner Activation Summit. It was the team's third annual summit, but it had a new format that appeared to pay dividends immediately.

    Previous summits were oriented toward introducing the team, its goals and personnel, along with rudiments of sponsorship activation. This year's event covered those basics in a 90-minute morning session for 14 new sponsors; the afternoon session featured talks by Scott Carmichael, the NHL's vice president of club marketing; a representative from Scarborough Research discussing Blue Jackets fan demographics and psychographics; and a University of Dayton professor on how to use tickets and hospitality for marketing benefits.

    A panel discussion involving team sponsors Ohio Health, the Dispatch Media Group and General Motors wrapped up the day. The companies discussed their sponsorship-activation strategies.

    The summit produced immediate discussions among sponsors, according to Michael Humes, team senior vice president of business operations. Ohio Health made tentative plans to partner with General Motors, Stanley Steemer International and Tim Hortons about a gift package for each of the 15,000 babies born in its hospitals each year.

    Humes said the team plans to schedule the fourth summit next spring, so that sponsors have more time to benefit from ideas and relationships fostered at the event.

    Print | Tags: Columbus Blue Jackets, Hockey, NHL, This Week's Issue
  • Cingular Wireless deal one of UConn’s largest

    Cingular Wireless signed a five-year deal with the University of Connecticut's athletic department to become the Huskies' exclusive wireless partner.

    The deal, for more than $1.6 million, is among UConn's largest, said E.J. Narcise, whose company, Team Services, is a consultant to the athletic department and helped broker the deal. Earlier this year the Huskies signed an unprecedented 10-year, $10 million sponsorship with People's Bank.

    Cingular's deal is a significant step toward UConn's efforts to establish itself as a Division I-A football school, said UConn associate athletic director Jim Marchiony.

    UConn moved up to the NCAA's highest football division three years ago. The program has played as an independent since the move but will become a Big East member in 2004.

    "UConn is the premier brand to be affiliated with in the state," said Chris Renstrom, a sales and marketing manager for Cingular Wireless. "This will be a fantastic program for us."

    In addition to typical marketing rights such as signage and hospitality, the UConn agreement gives Cingular sponsorship rights to the student section at the Huskies' soon-to-be-completed 40,000-seat football stadium, Rentschler Field.

    Print | Tags: This Week's Issue
  • Gatorade stays in racing with deal for victory lanes at ISC's tracks

    Some two months after Gatorade passed on renewing its 18-year-old NASCAR sponsorship because of cost considerations, Pepsi's isotonic brand has fashioned an alternative. It signed a deal with International Speedway Corp. tracks and added NASCAR rookie drivers Jimmie Johnson and Ryan Newman to a Gatorade Racing Team roster that already included Mark Martin and Matt Kenseth.

    Central to Gatorade's new NASCAR activation strategy is the branding of victory lanes at the various ISC tracks. The ISC tracks will have Gatorade logos painted on and around victory lane, along with the usual assortment of branded coolers and cups found on NFL and NBA sidelines. So perhaps the traditional Gatorade bath given to winning NFL coaches will now become an integral part of winning a NASCAR race — at least those held at ISC tracks.

    A computerized mock-up of the Gatorade Victory Lane that ISC's Kansas Speedway will get.

    The branded victory lane gives Gatorade a distinct and highly leverageable marketing asset at some of the most important NASCAR tracks, including Daytona International Speedway, Talladega Superspeedway, Homestead-Miami Speedway and nine others. Gatorade marketers were concerned about the value of their old NASCAR deal, so the question came down to what the NASCAR logo was worth.

    "The Gatorade brand is now associated with the most visible part of NASCAR," said Tom Fox, vice president of sports marketing. "Fans' focus in this sport is with drivers and tracks, so that's where we are focusing our efforts now."

    Gatorade was slated to unveil its new NASCAR marketing initiative at Sunday's Protection One 400 race at the Kansas Speedway.

    The ISC deal also includes isotonic pouring rights to the ISC tracks at branded "Gatorade Refueling Stations." Also packaged with the deal is designation as the "official sports beverage" for all ISC tracks; TV ads on the Motor Racing Network, along with post-race coverage in the Gatorade Victory Lane; and five Pole Day sponsorship opportunities at tracks during the year (three Winston Cup and two IRL races), which may be passed through to Gatorade retailers. The tracks will provide Gatorade products to pit crews.

    Gatorade's ISC ties are more than 10 years old, and the brand will continue to sponsor the Gatorade 125's — the qualifying races that determine starting positions for the Daytona 500.

    Coke's PowerAde brand grabbed the NASCAR rights as soon as Pepsi failed to renew. Gatorade's new strategy of using tracks and driver sponsorships puts Gatorade more in line with the tactics of its parent PepsiCo. Since Coke is a huge NASCAR sponsor, Pepsi leverages through track deals and driver sponsorships, principally with Jeff Gordon.

    HERE & THERE: A deal under which Dallas-based Marketing Arm was to have outsourced its athlete representation business to Assante has fallen through, sources said. There's been no decision on what The Marketing Arm will do with that business. The firm has been concentrating on corporate consulting for some time.

    Reebok agency The Arnell Group filmed an encore to last season's ad with Allen Iverson and Jadakiss in Philadelphia earlier this month. Agency types said they were pleased to find that Iverson, recently cleared of all charges stemming from a domestic dispute this summer, showed up an hour early for the shoot. Of course, there was at least one cynic who suggested that Iverson got the date wrong and was actually tardy by 23 hours, but that suggestion was rejected by Reebok.

    SFX Sports has signed two up-and-coming female athletes: skier Julie Mancuso and WUSA star Abby Wambach.

    Terry Lefton can be reached at tlefton@sportsbusinessjournal.com.

    Print | Tags: International Speedway Corp., Motorsports, NASCAR, PepsiCo, Reebok, SFX, This Week's Issue
  • Host shrinks NCAA role

    Host Communications will no longer be the sponsorship sales agent for the NCAA.

    In an agreement reached last week between Host and CBS Sports, CBS said it will assume all corporate partner marketing sales and servicing responsibilities for the NCAA.

    CBS, which holds NCAA television and marketing rights under its new 11-year agreement with the association, which began Sept. 1, subcontracted marketing rights to Host for $575 million for the duration of the deal. The first year of the deal called for $40 million in payments, $10 million of which was due Sept. 1. No one on either side would say whether Host was able to make that payment.

    Under the new agreement reached late last week and approved by the NCAA, Host will continue under a two-year deal to administer the NCAA's domestic and international licensing programs, publication of NCAA championship game programs and production of Hoop City fan fests at the men's and women's Final Fours.

    CBS, Host and NCAA officials were not immediately available to comment on why the agreement had changed.

    Industry sources, however, said that the original agreement, which had CBS and Host jointly selling marketing rights and media for the NCAA, was too complicated. As of press time, only one corporate partner, Coca-Cola, had been signed under the original CBS-Host arrangement.

    "With two companies selling the same thing, there becomes a point where lack of communication can lead to a lot of he-said, she-said type conversations," said one source.

    The changed agreement marks an end to Host's long-standing relationship with the NCAA as its sponsorship sales arm.

    Prior to the $575 million CBS/Host deal, Host had contracted directly with the NCAA for marketing rights. Host has had a relationship with the NCAA since 1975 and established the corporate partner program for the NCAA in the early 1980s.

    Print | Tags: CBS Broadcasting Inc., Colleges, Host Communications Inc., NCAA, This Week's Issue
  • Importer of Chinese beer follows Yao to Rockets

    Editor's note: This story is revised from the print edition

    The Houston Rockets have signed a six-year, multimillion-dollar deal with the U.S. distributor of a top-selling Chinese beer, a sign that adding Chinese superstar Yao Ming to the roster could reap big financial benefits for the team.

    Harbrew Imports of New York will pay the Rockets a minimum of $1 million a year to spearhead its marketing efforts for the Yanjing beer brand. The deal could be worth more with marketing options in coming years. Team officials said the deal is the largest import beer sponsorship package in the NBA, and it includes media, courtside signs and team promotions.

    "This is one of the most integrated import deals across the league," said Jason Bitsoff, director of corporate development for the Rockets. "Typically, import beer deals are year-to-year, but this is a precedent-setting deal for the category."

    The deal does not include a marketing relationship with Yao, who is unsigned and whose rights the Rockets do not control in any way. But Rich DeCicco, president of Harbrew, said the importer would discuss an endorsement deal with the player's representatives eventually.

    The Rockets have high hopes that they'll find other ways to leverage Yao's international appeal.

    "We are talking with Asian [marketing] agencies, and we are looking at Asian-based companies that want a presence here," Bitsoff said.

    Yanjing is the No. 2 beer in China. Harbrew introduced Yanjing to the United States in December, and it expects to spend an additional $1 million or so promoting the beer in the next year. Yanjing is distributed in 38 states, but DeCicco expects sales in 2002 of just a few hundred thousand cases, a fraction of the sales for top imports Corona and Heineken.

    "Houston is rapidly developing as our launching pad for the beer, and that has to do with Yao Ming," DeCicco said. "We will also look for other sports properties, and Yanjing will most likely be the official beer of the 2008 Olympic Games in Beijing."

    DeCicco stressed that the deal focuses on U.S. promotion, as the brand looks to define itself simply as a good beer and not as a novelty import. "Heineken and Corona are the model," he said. "I doubt most people even know where Heineken is brewed."

    Outside marketers don't see deals like this proliferating. "I would see a foreign beer deal with a domestic team being the exception, not the rule," said Ray Clark, CEO of The Marketing Arm. "I've seen more American companies have a foreign player endorse a domestic company and take that promotion back to the player's home country. But I think Yao has an exceptional personality, and he commands the type of intrigue that would make the sponsorship compelling. Even though Yao isn't [officially] part of this deal, the attachment is clearly visible."

    With Rockets games expected to have wide television distribution in China this season, the brand should get a boost there through the visibility of courtside signage. But DeCicco stressed that the deal was made by the importer, not the brewery.

    The deal allows Harbrew to opt out should Yao fail to sign with the Rockets or wind up with another team during the six-year term. But DeCicco said he's not concerned the player won't sign. "I believe he's due in Houston on Oct. 17, and I wouldn't be surprised if he's signed on Oct. 16," he said. "That's just how business is done in China. And with the Olympics in China in 2008, the Chinese know there's a lot at stake here."

    Print | Tags: Basketball, Houston Rockets, NBA, This Week's Issue
  • Kia after good Agassi mileage

    Kia's COO calls
    Andre Agassi the perfect
    match for a sporty brand.

    Andre Agassi is pitching Kia Motor Co.'s models in his latest endorsement, a low-seven-figure annual deal that includes two cars and will push Agassi's annual income, with prize money, to more than $20 million.

    "Andre and Tiger [Woods] are the only guys I can think of that have multiyear car deals," said Perry Rogers, Agassi's personal manager. "Andre's dedication to his career, his performance recently, his endurance ... people have grown up with Andre to a certain extent. He has become part of a sports fan's life."

    But don't expect to see Agassi selling cars in the United States anytime soon. The advertising and sponsorship deal excludes North America and is focused primarily on Australia and Asia, Kia's main markets, Rogers said. Officials with the car company, which unveiled the Agassi endorsement last week in South Korea, could not be reached for comment.

    Mark Juhn, the 58-year-old company's chief operating officer, said in a prepared statement: "Kia is positioning itself as a young, sporty and friendly brand. Andre Agassi is a perfect match for our brand values, and this advertising campaign will be a major step in repositioning Kia around the world."

    Unlike U.S. team sport athletes, tennis players like Agassi are far more international stars, with the deals to prove it. In addition to Kia, Agassi endorses Japanese camera giant Canon, Austrian tennis racket maker Head, German cellular provider Deutsche Telekom, and American sneaker giant Nike and razor Schick. Rogers said there was one more major deal in the pipeline. Details were not available. Agassi briefly endorsed Mazda in 1997 in Asia.

    Kia this year became a major sponsor of the Australian Open, replacing Ford Motor Co. Rogers cited the Aussie connection as one reason Agassi agreed to the two-year pact, because he wanted to support a company that backs tennis.

    In 2001, Kia, a unit of Hyundai Motor Co., posted revenue of $9.3 billion and earnings of $417 million, according to Hoovers.com.

    Print | Tags: Ford Motor Co., Kia Motors, Tennis, This Week's Issue
  • McKinsey & Co. will look for men's tennis improvements

    The ATP has been using consulting firm McKinsey & Co. since July to review its operations. McKinsey will present a review of the men's tennis group and recommended changes to the ATP board at its meeting in Shanghai in early November during the season-ending Masters Cup.

    ATP Chief Operating Officer Larry Scott said McKinsey was reviewing all aspects of the tennis group, from commercial operations to organizational structure, but he wouldn't provide further details.

    The ATP already has an advisory board that includes the world's largest ad firm, WPP Group, and Telstra Corp., Australia's largest telephone company. Scott said that board provides only occasional advice and that something more thorough was needed.

    McKinsey is not new to tennis. The U.S. Tennis Association has used McKinsey before, though Scott said he did not know what services the consultant provided the association.

    McKinsey officials declined to comment.

    Other sports organizations that have used McKinsey include MLB and the NBA, Scott said.

    — Daniel Kaplan

    Print | Tags: ATP, MLB, NBA, Tennis, This Week's Issue
  • MLS examining Sooner State sites

    Less than a year after eliminating two teams in Florida, Major League Soccer is looking at expanding into Oklahoma.

    The league has talked with representatives from Tulsa and from the Oklahoma City area about bringing a team to one of those cities, starting in either the 2004 or 2005 season.

    Earlier this month, the Metropolitan Tulsa Chamber of Commerce approved spending $100,000 on an expansion-franchise feasibility study conducted by Convention, Sports & Leisure International of Dallas. Bill Rhoda, a partner at the firm, said he expects the analysis to take three months.

    "We'll do an evaluation of the community's ability to support MLS in ticket sales, suite sales [and other areas]," he said.

    Representatives from Edmond, Okla., have talked with J.E. Dunn Construction Co., a Kansas City firm, about building a soccer stadium in Oklahoma City.

    According to Mark Abbott, chief operating officer of MLS, the league hopes to expand to 16 teams from its current 10 before the decade ends.

    "It'll be a mix of market sizes," he said. "The key driver is appropriate facilities."

    MLS is looking for a guarantee from expansion candidates to construct soccer-specific stadiums that can hold up to 25,000 fans. Only one of its franchises, Columbus, played in a soccer-only facility this year.

    Abbott said the league is speaking with other cities beyond the two in Oklahoma but wouldn't reveal their names. One is believed to be Winston-Salem, N.C. Convention, Sports & Leisure International has already completed a feasibility study for the Carolina Soccer Foundation about bringing an expansion franchise to that area.

    Print | Tags: MLS, Soccer, This Week's Issue
  • New ads ask: Is it live or is it EA Sports?

    Electronic Arts will launch its newest NBA video game with a trio of television ads that continue to explore the diminishing gap between sports video games and sports itself. The latest under EA's "Life Imitates Art" campaign from ad agency Odiorne Wilde Narraway & Partners depicts NBA players practicing their moves on the court and on the virtual hardwood of EA's NBA Live 2003.

    Cover boy Jason Kidd

    Shot last week in and around New York, the ads feature Jason Kidd, who'll also grace the cover of the game's packaging. Former NBA Live cover boys Steve Francis and Tim Duncan also appear in spots, along with fellow NBAers Malik Rose, Richard Jefferson and Steve Jackson.

    All of the ads explore the blurring line between sports games and sports reality. Thus, Kidd is seen laboring to perfect a spin move on court; eventually the camera pulls back to reveal he is emulating the same move from NBA Live 2003, which is displayed on the arena's Jumbotron.

    Another ad shows Duncan in the locker room, apparently practicing post-up moves. The payoff shot shows he's actually concentrating on a flat screen display on which he's playing NBA Live.

    Still another spot shows Francis leaving practice at an urban site. He's then motivated to perfect a 360-degree dunk after seeing an NBA Live version on a display of 20 or so TVs in the window of an electronics store.

    "So many pro athletes are gamers now, these are getting easier and easier for us to do," said Jeff Karp, vice president of marketing for EA Canada. "And the [creative] work gets our point across that EA is as real as you can get without bouncing a ball."

    The ads should break around the middle of October, coinciding with the game's release date. Specific buys are not set, but Karp said EA is talking to Turner about coming back as a sponsor of its NBA package.

    Print | Tags: Electronic Arts, NBA, This Week's Issue
  • Owner of Isotopes is in his element

    Ken Young didn't need another minor league baseball team. He especially didn't need one across the country from where he lives and works. He understood that as a businessman, but not as an enthusiast. Now he's the managing general partner of the Pacific Coast League's Albuquerque Isotopes, 2,000 miles from home.

    You don't see this happening at plastics plants or paper mills. But sports, while undeniably a business, touches Young in a way that many of us can identify with. It's why hardened tycoons spend a few hundred of their precious millions to buy an NFL or MLB team late in life, why some entrepreneurs don't mind losing money on the way to winning championships.

    Ken Young, who built up a minor league baseball franchise in Norfolk, Va., is trying to do the same thing in Albuquerque, N.M.

    Young is an amiable 51-year-old with a crinkly, Charlie Brown smile. He has spent his entire professional life in sports, mostly in food service. He hasn't gotten rich, but he has done well enough. Maximizing his income isn't at the top of his list of priorities anymore, if it ever was.

    "The thing that gives me the rush is putting on a good show and seeing the appreciation the fans get from it," he says. "It comes from watching the adults watching their children, and seeing the fun in their eyes. I get to do that every night."

    He loves the rush so much that when the chance came to do it in a second city, two time zones distant from his base as part owner and managing general partner of the Norfolk (Va.) Tides of the International League, the New York Mets' top farm club, he didn't let the logistical problems deter him. "I wanted to see those same faces in another city," he said. "I wanted to bring family entertainment the way we do it to a new market and see it react the way Norfolk did."

    Young is one of however many dozen team owners spread across the different sports and leagues from top to bottom who has made his avocation his vocation. Like others, he added business to pleasure. The entry price at this level isn't as onerous as it is at Dan Snyder's or even Howard Schultz's, but Young and his partners paid $10 million for the Pacific Coast League franchise they moved to Albuquerque, and the $7 million Young and company paid for Norfolk a decade ago was a record at the time.

    What makes him unique is that he isn't a magnate or a stockbroker who struck gold. He could be the guy you see mowing his lawn on a Saturday afternoon who always waves. He is a businessman, but he isn't setting up shop in a neighboring state or creating an economy of scale like the downtown seafood place that opens a branch in a wealthy suburb. What he's doing makes little sense in terms of ego gratification and even less in terms of dollars. It really only makes sense in his heart.

    Albuquerque's new ballpark, shown in a rendering, is to be ready for play next spring.

    So there he was in Albuquerque the other day, starting the whole process again. Far from home, an East Coaster gone west, he sat in the temporary office quarters of Albuquerque Baseball Inc. and set the city's new team in motion. Across the street, the skeleton of a ballpark was rising on the site of the Albuquerque Sports Stadium, where the Albuquerque Dukes had played as a Los Angeles Dodgers farm club for 29 years.

    Every time he drives past the construction site, Young can't help but stare, and not only because he and his partners will be paying $700,000 of annual rent for the facility that emerges from the girders. Where he sees cranes and hard hats, he envisions the same kind of reaction he gets in Norfolk. He's selling baseball, the green grass set against a starry night. "I like to position myself where I can see the fans as they walk in and get their first glimpse of the field," he says. "I want to see the look on their faces. When it comes down to it, that's why I'm in this business."

    Young and some partners negotiated to buy the franchise a year ago, when it was still operating as the Calgary Cannons. The sale was contingent on Young's negotiations with the city of Albuquerque. The Class AAA Dukes had departed for Portland in 2000 after two decades as the primary option for affordable family entertainment in town. Albuquerque wanted baseball back. It agreed to pump $25 million into the Sports Stadium to seal the deal. Young, who'd never spent time in Albuquerque before, became its unlikely savior.

    Why unlikely? He already owned a 15 percent interest in the Tides, and he's the face of that team in Norfolk. He'd experienced the ego gratification of walking the ballpark, shaking hands and slapping backs as the owner. His sons had manned the concession booths and his daughter had swept off home plate and, invariably, the umpire's shoes, with a broom. They're in college now and won't be doing that again.

    And Young still has a food service company serving arenas and stadiums. He sold 55 percent of Ovations Food Services to Comcast-Spectacor several years ago, but he continues to run it as it continues to grow. The Tides play in Norfolk, of course, and Ovations is run out of Tampa. The Comcast home office is in Philadelphia. That's already one city too many, maybe two, for a sane man.

    On a visit in early September, Young is laying the groundwork for Albuquerque's Opening Day. He's completing negotiations with a radio station, wondering who gets to choose announcers and why that hasn't been spelled out in the agreement. He's ordering phones for the new offices and getting to know the two sales associates hired by general manager Mel Kowalchuk. He's attempting to huddle with the mayor and plan a hot-dog lunch honoring the ballpark construction workers, who are ahead of schedule. None of this is fun, exactly, but without it, the fun couldn't happen.

    Most important, he's announcing the name of the new team to the city. Popular sentiment favors the Dukes, but popular sentiment doesn't know Ken Young. He wouldn't bother to be here if he was just going to do the same old thing.

    "I think people need to realize that we have a brand new stadium, we have a brand new team, we have a brand new type of baseball coming in," Young tells the Albuquerque Tribune, the city's afternoon daily, in an interview a few hours before the press conference to announce the new name. The Tribune's reporter, who has been here for decades, just nods, slowly and a bit sadly. He knows what is coming next. As rumored, Young has decided to name the team the Isotopes.

    This will come as a disappointment to the mayor, who had pushed hard for the rebirth of the Dukes, and to much of the city's old guard. In Albuquerque, minor league baseball is taken very seriously. Among sports, it sits second or third in the ranking of relative importance, behind University of New Mexico basketball but perhaps ahead of New Mexico football, depending on whether that team is up or down. Isotopes seems frivolous. A marketing gimmick.

    The origin of the name is actually rather astonishing. In March 2001, the Fox cartoon television series "The Simpsons" ran an episode in which Albuquerque tries to steal away family patriarch Homer Simpson's favorite team, the Springfield Isotopes. So Homer stages a hunger strike and the team decides to stay in Springfield.

    Young had never seen an entire "Simpsons" episode. He knew as much about "Simpsons" history and lore as about, well, nuclear physics. But when several local radio stations ran a contest to name the team last summer, with voting done by Internet, mail and phone, more fans suggested Isotopes than any other name. The Albuquerque Tribune did the same on its Web site later on, choosing five names, including Dukes and Isotopes, and asking voters to select between them. More than 120,000 votes were tallied, and Isotopes received more votes than all the other choices combined.

    Obviously, these weren't just "Simpsons" fans voting. To the younger generation of Albuquerque, a city just a little too small and remote to be on anyone's radar screen, naming a team after a cartoon episode seemed a wonderfully subversive act. Young liked that.

    At the same time, there were marketing benefits to choosing Isotopes. Minor league teams around the country have understood for years that names like Carolina Mudcats, Brooklyn Cyclones and Kannapolis Intimidators attract more regional and national attention than, say, the Iowa Cubs. They also sell more T-shirts and other memorabilia, at the ballpark and over the Internet, which is a not insignificant source of revenue for a minor league team.

    At the press conference, more than 50 media representatives jam into a small conference room. The morning newspaper alone sends five of them. They're there to see a black, yellow, red and silver logo of an A‚ with atomic particles and a baseball orbiting. T-shirts and hats, freshly made that morning by a local supplier, are distributed. The traditionalists grumble, but most everyone else has to admit that there's something fetching about the cartoonish letters and the unlikely name.

    Ken Young smiles for the cameras, patiently explaining the rationale. What he doesn't quite say is that naming the team the Albuquerque Isotopes is fun. In the end, that's why he chose it. In fact, the name itself can be seen as shorthand for his entire philosophy. It speaks to family entertainment. It describes a franchise that doesn't take itself all that seriously. Ultimately, Young hopes, that will come to be seen as an asset by the entire community, not just the teenage subversives.

    Isotopes also happens to play to New Mexico's atomic heritage, though when asked the proper definition of the word at the press conference, Young smiles and allows that he isn't certain what it means. Food-service executives don't routinely get involved in splitting the atom.

    The positive implications of such a name eventually set in. Young smiles again; smiling comes easy to him. In the corporate, franchised world of professional baseball, where it isn't always easy to find the fun behind the clutter of all that business, being an aberrant element doesn't seem a bad idea at all.

    Bruce Schoenfeld (bschoenfeld@sportsbusinessjournal.com) is senior correspondent for SportsBusiness Journal.

    Print | Tags: Baseball, Fox, MLB, New York Mets, NFL, This Week's Issue
  • Phoenix suburb pins growth on sports

    What's the dateline worth on a story involving a major league hockey or football team? Glendale, Ariz., a heretofore obscure suburban burg abutting Phoenix on the northwest, thinks it's getting a bargain by committing $228 million in public support for such attention.

    That is what the city or its agencies will lay out to be the site of new homes for the Phoenix Coyotes and Arizona Cardinals.

    Glendale's rationale for laying out the money runs counter to a sizable body of evidence that casts a fishy eye on the value of sports as an economic engine.

    "It's not a sports deal, it's the creation of a destination draw," insisted Jim Colson, Glendale's director of economic development. "If we were some blighted urban area, the arguments against using public money for sports construction might be valid, but we're not close to being that. We're a fast-growing part of a fast-growing corridor, so it'll work for us."

    While it will be some time before the returns are in on the Glendale projects, it's already certain that they weren't obtained without considerable wear and tear on its region's municipal fabric. The Cardinals' deal capped a bruising, two-year struggle between area communities that ended in late August, only weeks before a state-imposed deadline that might have forced the team to look elsewhere for a home.

    The stadium was first ticketed for a site in Tempe, whose Sun Devil Stadium is the Cardinals' current base. Almost incredibly, the Federal Aviation Administration waited until just before construction was to begin last year to decide that the edifice would be a hazard to flights at Sky Harbor Airport in Phoenix, and the project found itself back on square one.

    The battle to supplant Tempe pitted community against community.

    Glendale, a late entry into the fray, prevailed in part because it had its political ducks in a row. That was because of a broad bonding authorization its voters had OK'd a few years previously, and what the local newspaper, the Glendale Star, called the "go ahead and get it done" mind-set of the city's leadership. Said Glendale Mayor Elaine Scruggs: "The Cardinals never really had a chance of going anywhere but Glendale. They just never knew it."

    The Coyotes did have a chance of going elsewhere. In fact, they were supposed to.

    In 1999, voters in Scottsdale, a tony eastern suburb of Phoenix, twice approved the underpinnings of about $100 million in public financing for a hockey stadium as part of a larger, entertainment-centered project that real estate developer Steve Ellman touted as a revitalization blueprint for a derelict shopping center he owned there.

    But when the negotiations over specifics began, things began to come apart. Popular parts of the plan were jettisoned, and deadlines passed unmet as Ellman turned his focus to buying the Coyotes.

    Then, in July 2001, the team finally in his hands, Ellman suddenly announced he was abandoning Scottsdale for a better deal with Glendale, which had quietly offered to put up the arena's full $180 million construction cost. Glendale also offered to exempt the team from local property taxes and let it keep all the hockey revenue from the building, plus most from other events there. In return, Ellman said he'd erect an adjacent, multiuse (and tax-generating) "urban village" on the 233-acre site, a much-larger project than he'd pledged for Scottsdale.

    Scottsdale officials were taken aback by the end run, a feeling that was exacerbated by the fact that Ellman had leveled his old shopping center's buildings but left the rubble in piles while talks with Scottsdale sputtered along. After the negotiations broke down, the city had to threaten legal action to get the rubbish removed.

    Scottsdale's mayor, Mary Manross, maintains that she harbors no ill will toward Glendale. "That's business," she said.

    The $350 million construction price tag on the Cardinals' stadium is almost twice as large as the one for the Coyotes' home, but Glendale sees the hockey deal as the more important of the two. That's because the football stadium (for which the local share will be $48 million in facility-district revenue bonds) will be surrounded by parking lots and park land, while the hockey facility is to be the focus of Ellman's commercial development and, it hopes, others that will follow.

    Thomas Hocking, Glendale's Phoenix-based financial consultant, says he's well aware of studies that downplay sports developments as community boons, but insists that Glendale's situation is "significantly different" from others of its sort.

    "The stadiums will bring in construction and staffing jobs, and generate sales tax revenues, and that's good. But it's not what we're in it for," he said.

    "With Glendale's growth pattern and the people the stadiums will attract from outside, we'll create the critical mass needed for diverse and important business growth. There's no downside to it as far as I can see.

    "The kind of publicity that goes with big-league sports status will be a big factor in this. Not many cities our size [Glendale's population is about 225,000 people] have a major league team. We'll have two."

    Others, however, see possible difficulties. While Ellman and Glendale officials have talked about having 6 million square feet of commercial space rise around the Coyotes' arena — a truly massive project — all the developer has contracted to build are l.6 million square feet: 800,000 within six months of the stadium's targeted December 2003 completion date, and 800,000 more within 72 months of that. That means the initial phases might not be completed until mid-2010.

    The earliest buildings are supposed to be heavy with restaurants, specialty retail stores and movie theaters. Such enterprises might not relish the prospect of their customers sharing the roads and parking lots with the hockey crowd 40 to 50 nights a year, or battling the ongoing construction activity that's planned for the site. The reluctance of those kinds of businesses to line up for tenancy was cited as one reason Ellman's Scottsdale plan crumbled.

    Further, Ellman's here today-gone tomorrow performance in Scottsdale has given some in Glendale pause. "I'd have to be an idiot to say it didn't cause concern, but I've read the contracts and think we've done everything we can to protect ourselves," said Glendale City Councilman Phil Lieberman.

    Glendale will raise $30 million of the hockey arena's cost through general obligation bonds, with the remaining $150 million to come from bonds backed by taxes from the adjacent commercial properties. Lieberman said bond repayments will be heaviest when those taxes kick in, so "if the agreed-upon projects go through as they're supposed to, the city should at least break even."

    Beyond that, though, he won't venture. "We might not get the whole [6 million-square-foot project] for 30 years, and maybe not ever," he said. "A lot of things can change in that time."

    Frederick C. Klein is a writer in Arizona.

    Print | Tags: Arizona Cardinals, Football, Hockey, Phoenix Coyotes, This Week's Issue
  • Princeton Video, with Cablevision cash, switches marketing focus to sponsors

    A new management team at Princeton Video Image Inc. says that a fresh strategy, backing from Cablevision and profits from its Latin American subsidiary should be enough to keep the company going, but an additional $15 million to $20 million in financing wouldn't hurt, either.

    James Green, who joined the virtual advertising company three months ago as president and COO, said PVI is in no danger of going out of business and is becoming less of a technology provider and more of a "media services" company, marketing its product directly to sponsors.

    "The way the company used to be positioned, we would allow the use of the technology for whatever people wanted to do," said Green, who started the Internet ad-serving company Sabela Media in 1997 and later sold it for $75 million. "Going forward, we'll allow you to use the service for free but take a percentage of the advertising revenue generated."

    Former Turner Sports head of sales Keith Cutler recently joined the company as executive vice president of sales and marketing to lead those efforts.

    Seasoned sports executives Mervyn Trappler and Lon Rosen also joined the company this year, although there were far more subtractions than additions. PVI laid off about 25 percent of its worldwide staff, which had numbered more than 150.

    PVI's quarterly financial statement filed in August said there was "substantial doubt" about the company's "ability to continue as a going concern" and its future depended on new financing.

    Cablevision Systems Corp., already a major shareholder in PVI, made an additional $5 million investment in June. Green said he hopes to raise $15 million to $20 million from investors to avoid future layoffs, but the company would be able to pare further if the financing did not materialize.

    Making the money raising more difficult is the decrease in PVI's stock price, which dropped from a high of $3.60 a year ago to less than 70 cents last week. The company lost $3.5 million during the second quarter and $8.5 million for the first six months of the year.

    Green said that the picture has improved since those documents were filed and that the company's Mexico division is a moneymaker.

    Through its affiliation with Cablevision, the company hopes to provide virtual advertising to MSG Network and other regional cable networks that Cablevision operates. Cutler said PVI is actively trying to get pro sports leagues that don't allow virtual ads in game broadcasts to reconsider.

    "We're simultaneously talking to the NHL and the NBA," he said. "The message we're getting from the leagues is that [using the technology on a] local level is a good way to test it."

    Print | Tags: Cablevision Systems Corp., NBA, NHL, Princeton Video Image Inc., This Week's Issue
  • Raiders look to spring for new trial in their $1.2B lawsuit against NFL

    According to papers,
    one juror told others that
    he hated the Raiders and
    Al Davis.

    The Oakland Raiders could begin a new trial as early as next spring of their $1.2 billion lawsuit alleging that NFL officials unfairly destroyed the team's plan to build a privately funded stadium in Los Angeles, Raiders general counsel Jeffrey Birren said.

    A Los Angeles Superior Court judge last week gave the Oakland Raiders a new trial against the NFL, ruling that the 2001 verdict in favor of the league was tainted by juror misconduct. The judge, Richard Hubbell, has set Dec. 3 as trial-setting conference date, assuming the league does not appeal the decision, Birren said.

    NFL spokesman Greg Aiello said the league was disappointed with the decision but had not yet decided whether to appeal it. He declined further comment.

    Birren said it is difficult to get a new trial. "But the facts were so egregious that it cried out for this decision," he said.

    According to court papers filed by the Raiders, one juror told other jury members that he hated the Raiders and team owner Al Davis but did not disclose his feelings on the juror questionnaire. Another juror, who said she worked in the legal profession, wrote out her interpretations of the law and taped them to the walls of the jury room.

    Print | Tags: Football, NFL, Oakland Raiders, This Week's Issue
  • Samsung-backed event strives for Super Bowl status

    This trailer, sporting sponsor logos, visits U.S. qualifying sites for the World Cyber Games.

    In a day when kids just home from school are more likely to reach for a keyboard or joystick than a bat or ball, an organization funded by Samsung Electronics is trying to build the Super Bowl of PC gaming.

    Competition is under way for the World Cyber Games, with U.S. qualifying matches being held at Comp-USA stores via a sponsorship by the computer retailer. The U.S. finals will be Oct. 5-6 at the Web2Zone Internet café in New York. Contestants compete in one of five PC-based shoot 'em-up or strategy games to qualify for the world championship Oct. 28-Nov. 3 in Korea.

    "We're not ready to hold this in an 80,000-seat stadium yet," said Joe Moss, executive director of United Cyber Games Association, the organizer of the U.S. leg of the world's largest global video gaming championship.

    Nonetheless, in only its second year, the event is beginning to resemble a big-time sports championship, and Moss said there's a possibility some of the finals will be televised in Korea. Event organizers claim that about a million gamers (the most jaundiced geeks refer to themselves "cyber-athletes") will participate in the tournament, now being held in 53 countries. The 500 competitors that qualify for the finals in Korea will compete for a $300,000 prize pool.

    As the competition intensifies, it will bring with it all the trappings of a big sports event. In New York, for example, three blocks around Web2Zone's Cooper Square location will be blocked off and there will be a street fair, music, vendor booths and free gaming for those with laptops who want to plug in. Moss said Samsung's Times Square billboard will carry a Cyber gaming message soon.

    Looking to position its PC and video hardware as leading edge and reach the "early adopter" audience, Samsung has traditional sponsorship elements on-site, such as signs and product placement. International Cyber Marketing, which stages the games, is primarily funded by Samsung. The hard-core gamer market is one many that tech brands want to tap into; Intel sponsors a rival tour and has local sponsorships of the World Cyber Games in other countries.

    While Moss said some events actually attract cheering crowds, he acknowledged that his real mission is to grow the "sport" beyond its current base of basement dwellers.

    "We want to bring gaming out of dark rooms, break down the stereotypes and make this a real event," he said. "I would get killed by these guys [playing PC games], but me watching them play is not that different from me watching a guy throw a baseball 90 miles an hour. I can't do that either, but it's fun to watch it."

    Print | Tags: Samsung, This Week's Issue
  • Sources: Drop in owners' wealth changes Isles' loan

    Bank of America earlier this month was forced to restructure its $100 million loan to the New York Islanders because the net worth of the team's owners, Sanjay Kumar and Charles Wang, fell below a level required by the loan, according to two well-placed sources.

    Several sources confirmed the existence of the guarantee, which mandated that the Computer Associates' chief executive and chairman have a combined net worth of at least $500 million, half in stock of the business software concern. When Kumar and Wang bought the Islanders on April 26, 2000, the company shares they owned were worth $2.2 billion. Since then, the company's stock has fallen 83 percent, leaving their holdings at about $281 million.

    While the remainder of their existing personal wealth could not be determined, the two sources said that during the week of Sept. 16 Bank of America agreed to waive the net-worth guarantee for 12 months. The ability of Wang and Kumar to pay off the loan was not the issue.

    Bank of America wouldn't comment. The Charlotte-based financial services company and the four other banks that participated in the loan would have had to ask their internal credit committees to win approval of the change.

    Islanders chief financial officer Arthur McCarthy said, "Everything is great and we are very happy with our banks and bankers." He declined further comment.

    The NHL, which approved the 2000 loan, declined to comment. It is unclear if the league also had to approve the waiver of the net-worth covenant.

    The waiver is the most recent sign that the stunning stock market reverse of the last couple of years is taking a bite out of sports, from owners who have fewer financial resources to subsidize club losses to the shrinking number of people able to buy sports teams. Loan restructuring can now be added as another effect of the market's decline.

    "Unfortunately, it is probably happening in more cases than you or I would know," said Mitchell Ziets, chief executive and founder of MZ Sports LLC, a sports finance advisory firm.

    Personal wealth guarantees have become common in loan agreements, he added. Other bankers said they are particularly common in deals in which wealthy owners buy ailing teams that might not have had the revenue to justify the acquisition loan. The Islanders, mired in a long string of losing seasons at the time of their sale and playing in an outdated building, fit that description.

    But soon after Wang and Kumar agreed to buy the team, Computer Associates saw its stock begin its steep descent, victim of accounting issues, federal investigations, disaffected software customers and a sluggish economy.

    The banks that bought pieces of the recent Islanders loan as part of Bank of America's syndication are Citibank, Roslyn Bank, Bank Hapoalim and Société Générale, sources said. Lenders frequently sell pieces of loans to other financial institutions to minimize risk, a process called syndication.

    Print | Tags: New York Islanders, NHL, This Week's Issue
  • Tourneys still wait for prize money cuts

    By the time the ATP board of directors meets in Moscow this weekend, nearly four weeks will have passed since the conclusion of the U.S. Open Tennis Championships. On the meeting agenda: prize money reductions.

    For some in men's tennis, that is an outrageous fact, because the men's tennis group had pledged to its tournaments that the issue of prize money reductions would be resolved during the Open.

    "That promise was just not kept," said Mark Webster, managing director of Tennis Properties Ltd., the commercial arm of the Masters Series, the top 10 ATP events that this year will pay out $31 million to players. "In stark terms, we need prompt action from the governing body. There were various representations that we would have a resolution at the U.S. Open."

    The ATP's chief executive, Mark Miles, wouldn't comment.

    The Masters Series events were financially hard hit when ATP marketing partner ISL Worldwide went bankrupt last year, depriving the tourneys of significant revenue. Seven of them will lose money this year, sources say, and in 2003 many still face an unsettled fate.

    The events all raised prize money when ISL came on board, so they argued it stood to reason that prize money would come down with the agency's demise, particularly in the wake of 9/11 and a global recession.

    So far it hasn't worked out that way, in part because of the ATP's curious structure. Unlike team sports, in which players have their union and management its league, when the ATP was formed in 1988 it included both player and tournament interests on its board. So, three of the six board members are player representatives, whose interests are clearly not in reducing prize money. (Miles settles a tie vote.)

    "It's the [ATP's] structure that is at fault," said Ray Moore, co-founder of PM Sports, which owns half of the Pacific Life Open, a Masters Series stop. "It would be like me meeting with my employees and saying, 'I want you guys to vote on whether there is going to be a salary reduction.' "

    Player representative Harold Solomon said negotiations were continuing. While he said he understood that outside economic forces had an effect on the tennis world, at the same time he did not want the efforts of the players to be discounted.

    "They have provided value for the tournaments that has enhanced the value of their assets," Solomon said. "I am sure we will come to some resolution by 2003."

    Solomon is stepping down from the board in December.

    Efforts to contact the other two player representatives, Gary Muller and Tomas Carbonell, were unsuccessful.

    If the ATP, which hired PricewaterhouseCoopers at the end of last year to examine the prize money issue, does rule in favor of reductions, issues to watch will be how much comes out of the hide of doubles players versus singles competitors, and whether non-Masters Series events will also be allowed to lower their purses.

    Print | Tags: ATP, ISL Marketing, Tennis, This Week's Issue
  • Trial could shake up industry

    Agent Leigh Steinberg will ask a jury this week for more than $80 million in damages that he says he is owed by his former partner, David Dunn.

    Barring a last-minute delay or settlement, the trial to decide who is responsible for the high-profile breakup of athlete representation agency Steinberg, Moorad and Dunn is set to begin Tuesday in Los Angeles federal court.

    Check sportsbusinessjournal.com for trial updates starting Tuesday.

    Sports industry experts say the case could have a major effect on the industry, including determining what is fair and legal competition among agents and whether buying a sports agency is a good business investment.

    NFL players Drew Bledsoe, Kordell Stewart and Tony Gonzalez are among those expected to testify in person or by videotape during what is expected to be a star-studded trial.

    Dunn left his former agency in February 2001, taking a half-dozen employees and more than half of the firm's 86 football clients to his new firm, Athletes First. Dunn's attorneys claim that he left because of intolerable working conditions at the firm and that the athlete clients joined Dunn because they were getting poor service.

    Steinberg's attorneys claim Dunn and other former employees of Steinberg, Moorad and Dunn engaged in a complicated conspiracy to steal Steinberg's football practice. An economist will testify that the actual damage to the firm was about $80 million, and Steinberg will ask for punitive damages as well, said David Cornwell, general counsel for the sports division of Assante Corp., which owns Steinberg's firm, now known as Steinberg & Moorad.

    Steinberg

    "I think the athlete witnesses will provide evidence that supports our allegation that they were solicited improperly by Dunn and others," Cornwell said.

    Dunn and other Athletes First employees deny any wrongdoing and assert that Steinberg & Moorad's allegations have painted the facts inaccurately, said Mark Humenik, general counsel for Athletes First.

    "This is simply a case of people — both employees and athletes — freely choosing to leave a dysfunctional place and choosing a place that focuses on quality representation and service."

    Dunn

    Sports industry experts say one of the reasons the case is important is that Assante, which bought Steinberg, Moorad and Dunn in 1999 for more than $100 million, lost millions when Dunn and the other employees defected.

    "This case could have a very significant impact on the valuation of sports agencies and buyers determining whether it is just too difficult to acquire them," said Randy Vataha, president of Game Plan LLC, which has advised both buyers and sellers of sports agencies. "Anybody who has an athlete representation agency that has built it up over the years will watch this case closely and will hope that [Steinberg] will prevail. Anyone who is thinking of leaving an agency and starting their own will be on the other side of that issue."

    Robert Berry, professor emeritus of sports law at Boston College, said the case could affect agent behavior.

    "The practice of client stealing goes on all the time, and if Steinberg wins, a lot of agents will be looking over their shoulders and not liking what they see," Berry said. "If Dunn wins, it will be business as usual."

    Print | Tags: Athletes First, Game Plan LLC, NFL, Steinberg & Moorad, This Week's Issue
  • Wizards double price of seats at courtside

    The Washington Wizards, trying to leverage the anticipated return of Michael Jordan, more than doubled the price of their most expensive tickets while adding new top-priced luxury suites in the MCI Center.

    Last season, courtside seats at the MCI Center were $325, but this season the Wizards raised the price of the same seats to $750 each. The team also raised choice main floor ticket prices to $110 a game from $100 a game and added four new luxury suites priced at $325,000 each to give the MCI Center a total of 114 suites ranging in price from $125,000 to $325,000. So far, the team has sold two of the four new suites.

    "We hadn't raised the price of season tickets for the last four years," said team spokesman Matt Williams. "This year, we've raised the price for less than 30 percent of all our seats."

    The Wizards dropped the ticket price for about 1,000 seats in the upper reaches of the MCI Center to $15 from $45.

    This season, the Wizards also are filling some of the retail space that has proved to be a tough sell since the arena opened in 1997. A McDonald's restaurant is under construction, and a McDonald's-owned Chipotle restaurant will open in the MCI Center as part of a new sponsorship deal with the fast-food chain.

    As press time, Jordan had yet to tell the Wizards whether he'll play next season, but league and team sources said they expect to see Jordan on the Wizards' roster.

    Jordan's return last season sparked a 33 percent increase in average paid attendance, pushing the number to 20,764 from 15,577 during the 2000-01 season. Last year, the Wizards had 38 sellouts, the most in team history.

    Print | Tags: Basketball, MCI Group, This Week's Issue, Washington Wizards
  • WUSA likes San Diego's customer-friendly, season-ticket-selling Spirit

    The WUSA's San Diego Spirit, despite never having made it to the league's playoffs, is making its mark as a leader off the field with its season-ticket marketing plans and fan interaction activities.

    "The Spirit is at the forefront with their planning when it comes to season-ticket renewals," WUSA spokesman Dan Courtemanche said. "Clearly the best sales tool we have as a league is our players. And I think the Spirit have recognized that in their decision to use them to call upon season-ticket holders."

    The team, which finished its season last month, recently had each of its players call season-ticket holders to thank them for supporting the Spirit.

    The Spirit this season sold more than 2,000 season tickets to a group of about 700 season-ticket holders, which meant each player had about 50 calls to make, said Vicky Lynch, director of operations and fan development for the Spirit.

    Shannon MacMillan signs for a fan in San Diego, where the Spirit specializes in interacting.

    "We had a great response," she said. "Some fans didn't believe they were getting the phone calls. Some wanted to chat for a few moments and some wanted players to also call their daughters at so-and-so house."

    In addition to the player thank-yous, the Spirit has rolled out two new season-ticket incentive plans in hopes of increasing its base by another couple of hundred tickets this year, Lynch said.

    "We knew that even though we led the league in season tickets in the second year, we couldn't rest on our laurels," Lynch said.

    The new plans are a way to give back to the fans and show them that the team is committed to producing a winning on-field product, she said.

    One plan rewards season-ticket holders who get others to sign up for season tickets. Under that program, which the team calls "Teammates," season-ticket holders who refer new season-ticket buyers to the team will be entered into a contest to win a private soccer clinic with Spirit players at their home field, Torero Stadium.

    The second plan, which is similar to plans recently put in place by other pro teams, promises season-ticket holders that the team will make it to the playoffs in 2003. If it does not make the playoffs, the team will sell its 2004 season tickets at 2001 prices, a move that Lynch said would mean a price reduction of 15 percent to 20 percent.

    STARS AND BOUNDS: Stars and Strategies Inc., the women's sports agency run by Sue Rodin, has been hired as the exclusive sponsorship sales agency for a new women's sports documentary and educational program called "In Leaps and Bounds."

    "In Leaps and Bounds," which is still in its development phase, will be a two-hour PBS special on the achievements of American female athletes, Rodin said. The program will include an education and outreach program for distribution to schools nationwide.

    The project is being produced by Los Angeles-based Samwill Inc. and led by Rebecca Carpenter and Emmy Award-winning producer Alan Blomquist. Emmy nominee Craig Rice will direct the project. Stars & Strategies will be responsible for seeking one or more corporate sponsors for the program.

    The earliest release date of the project would be sometime next year, either late summer or fall, Rodin said. The timing of the release depends on when a sponsor or sponsors can be secured.

    Rodin, whose firm is being paid a monthly retainer as well as commission, said a title sponsorship to the project would run about $1.75 million.

    SO LONG TO SPRING: The Longs Drug Challenge, an LPGA Tour event in Sacramento, announced it would move from its traditional spring tournament date to a fall date next season.

    The tournament, which is in its eighth year, will move to a Sept. 29-Oct. 5 slot next season to be part of the tour's fall West Coast swing. The event, which is owned and operated by Raycom Sports, also will increase its purse to $1 million from $900,000 this year.

    The Longs Drugs Challenge has been scheduled between two open weeks before the tour's Southeast swing.

    The changes are hoped to bring stronger player fields to the tournament and better weather, tournament officials said. The event has been a victim of inclement weather in each of the last five years. Stormy weather shortened the tournament to three rounds last year.

    Jennifer Lee can be reached at jlee@sportsbusinessjournal.com.

    Print | Tags: LPGA, Raycom Sports, Soccer, This Week's Issue, WUSA
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