Cincy goes big for All-Star spotlight Sports Media: Death of a merger BMW takes VIP cue from Masters How Bama, CLC rolled to $100M extension Breaking Ground: New opportunities Gardens take root Red Wings free up space for amenities People: Executive transactions OneTwoSee to provide X1 tech content U.S. Olympic Museum in fundraising mode
SBJ/June 9 - 15, 2003/Other NewsPrint All
Beleaguered cable operator Adelphia Communications says it intends to restructure Empire Sports Network, the Buffalo-based regional sports network it owns. That could mean shuttering the network, which serves all of upstate New York and has rights to the Buffalo Sabres.
"Management has determined it is necessary to consider alternative business arrangements or structures for Empire Sports Network," said spokesman Eric Andrews in a prepared statement. "We expect to complete this assessment and decision-making process over the next several months."
Empire was dealt a harsh blow this year when it was moved to a digital sports tier on Time Warner Cable systems in several markets in upstate New York. It is one of the few regional sports networks in the country with rights to only one major league team.
— Andy Bernstein
The Chicago Bulls are freezing season-ticket prices for next season, the fifth consecutive year of sustained prices for a team that has been rebuilding since Michael Jordan left in 1998.
"Team performance, player payroll, inflation, the general health of the economy, issues related to team profit and loss; all are considered and a decision is made as to what is deemed to be in both the best long- and short-term interests of the franchise," said Steve Schanwald, executive vice president of business operations for the Bulls.
The cost of a full-season Bulls ticket plan ranges from $990 to $3,825. Unlike a growing number of NBA teams that sell mini-plans to drive attendance, the Bulls sell just one partial-season plan: an 11-game package.
The price-freeze strategy is a departure from the 1990s, when the Jordan-led Bulls were busy racking up six NBA championships — and increasing the price of tickets, luxury suites and sponsorships nearly ever year.
"There were years in the 1990s where we raised ticket prices, but not nearly as much as we could have," Schanwald said, "because while it would have generated more revenue in the short term, it might not have been the best strategic decision in the long term."
After Jordan left the Bulls, interest in the team steadily waned. In 2001, the Bulls said they would not raise prices for season-ticket renewals for the next three years. Holding prices steady for new season-ticket purchases, too, has been aimed at helping the Bulls maintain robust attendance despite the club's on-court struggles.
The franchise has not won more than 30 games in a season since 1998-99.
The strategy has paid off. The Bulls this season posted an average attendance of 19,617 in the 21,711-seat United Center, up nearly 4 percent from 2001-02 and ranking as the fifth-highest attendance in the NBA, despite the team's 30-52 record, the seventh-worst record in the league.
Bullish attendance The Chicago Bulls have maintained a strong average attendance in recent years despite a decline on the court. Season Avg. per-game
Record 2002-03 19,617 30-52 2001-02 18,934 21-61 2000-01 21,674 15-67 1999-2000 22,124 17-65 1998-99 22,400 13-37 1997-98 23,988 62-20 1996-97 23,865 69-13 1995-96 23,638 72-10 Source: Chicago Bulls
Several hard-fought series and the NBA coaches' version of musical chairs have bolstered business for nba.com at the end of an already record-setting year.
Even before the tip-off of the NBA Finals last week, nba.com already had seen a 63 percent hike in postseason traffic compared with last year's playoff numbers, including a single-day record of 2.6 million visits on May 16.
Demand for news about an ever-changing coaching picture was the driving force behind the boost in traffic and a spike in sign-ups to nba.com's audio and video subscription package, according to Brenda Spoonemore, vice president of interactive services for NBA Entertainment.
Spoonemore would not provide figures, but she said the number of new sign-ups to NBA Inside Ticket in the last month was "comparable" to sign-ups in November. The $14.95-a-month package, offered in conjunction with RealNetworks, includes daily highlights and live press conferences.
The NBA also was particularly pleased, Spoonemore said, with the 30,000 people who registered for the new wireless MVP voting promotion with Verizon Wireless, which during the conference finals and NBA Finals pushed MVP ballots to the phones of customers who signed up on nba.com.
Spoonemore would not say whether nba.com was profitable, but NBA Commissioner David Stern recently told SportsBusiness Journal that "it's close."
Lou Lamoriello is president of two major league teams. One, the New Jersey Nets, has made it to the NBA Finals in both his years at the helm. The other, the New Jersey Devils, has made it to the Stanley Cup Finals three of the last four years, and won two championships during his tenure.
Why then, is there all this talk that Lamoriello may soon be out of at least one of his jobs?Lamoriello
The answer lies in the mix of fractious politics that surround the affiliated companies that own both teams, along with Lamoriello's reputation for being a martinet who is much more concerned with enforcing his vision of internal discipline than he is with connecting with fans.
Widespread reports say that when the NBA season ends, no matter what the results of the championship series, Lamoriello will no longer be running the Nets. Someone who works for both clubs said Lamoriello's future has not been discussed by either team's board, but that no one has publicly disputed that a major leadership change could take place.
Lamoriello is arguably the best team-builder in sports today, but the most challenged when it comes to marketing them.
Neither the Nets nor Devils sold out their playoff games during the first two rounds. Despite their competitive accomplishments, both fell below the league average in regular-season attendance, playing to acres of empty seats at Continental Airlines Arena.
The Devils were borderline profitable when they were bought by Puck Holdings, an affiliate of YankeeNets, for $186 million in 2000, according to several people with knowledge of the team's finances. Now, they're widely reported to be losing $10 million to $20 million a season, as payroll growth has outpaced revenue.
Both the Nets and Devils had microscopic cable television ratings this season, averaging a 0.4 rating, or 28,000 homes, per game. Across the river, the New York Rangers averaged a 1.1 rating, despite missing the playoffs for a sixth straight season.
The YankeeNets ownership group, which includes George Steinbrenner, Lewis Katz and Ray Chambers, has reportedly been feuding. One insider with close ties to both Lamoriello and the ownership group said Katz and Lamoriello don't get along and that the owners themselves don't see eye to eye on most issues. "If they were all drowning, they'd fight over what lifeboat to get into," this source said.
None of the parties involved would comment on Lamoriello's future, but Lamoriello did take up the topic of marketing the teams.
"You cannot market these teams any better than we have, from the aspect of winning and also the publicity that has been received," he said last Wednesday, just before the Nets tipped off for Game 1 of the NBA Finals and the day before the Devils would host Game 5 of the Stanley Cup Finals. "The moneys that have been spent [on marketing] exceed any moneys that should be allocated. You get to that point where there's not a return on the investment."
Lamoriello is widely respected for his personnel and hockey operations decisions during his 16 years as president and general manager of the Devils, as the team has won its division in five of the last seven seasons. But his personal style has spawned as much criticism as praise. For example, he won't allow team employees to place photos of their spouses or loved ones on their desks. Behind his back, Nets employees reportedly refer to him as "Tal-Lou-ban," likening him to the religious zealots who ran Afghanistan.
Said to be paternalistic and controlling, Lamoriello even told the Devils where they could and could not take the Stanley Cup after they won it in 2000, said an agent for a Devils player.
League officials quietly admit to great frustration in trying to get Lamoriello to participate in any leaguewide initiatives.
The in-arena presentation at Continental Airlines Arena is a point of distress for both the NHL and NBA, and the NBA reportedly took over that function for the Nets in the late rounds of the playoffs during the last two years.
Raising the profile of stars such as Jason Kidd of the Nets and Martin Brodeur of the Devils runs against Lamoriello's philosophy, leaving two of the best athletes in the world in their respective sports in relative obscurity.
While the Nets and Devils may indeed put dollars behind their community outreach, running television commercials, posting billboards and placing print ads to support ticket sales (even during the playoffs, despite the embarrassment that brought), the teams don't appear to have ever connected with the population of New Jersey.
Theories abound as to why — some assail the location and environs of the 30-year-old Continental Airlines Arena, others say that most New Jersey residents have little local pride and more affinity to the New York teams — but much of the blame ultimately is pinned on Lamoriello, fairly or unfairly.
"I have the utmost respect for Lou Lamoriello as a team operations guy; however, I don't think he has any interest in marketing," said sports marketing veteran Frank Vuono, who has been a Devils season-ticket holder since the team moved to New Jersey in 1982. "I think he believes if you win, you sell tickets."
As long as there are empty seats at the Meadowlands, Lamoriello will face criticism. And as long as his teams rack up wins, he'll have a powerful defense.
"The prime focus is winning," he said. "I hope a lot of teams continue [to focus more on marketing]. Those teams are losing more money than we ever think of losing."
"Good Morning America" movie critic Joel Siegel will preview some major summer movie releases during halftime of Game 4 or Game 5 of the NBA Finals on ABC. The films selected will include ones with a major advertising presence in the broadcast, such as Universal's "Incredible Hulk," and ones from ABC corporate parent Disney, such as "Pirates of the Caribbean." Siegel also will make some of his own selections.
Also on tap from ABC is an exclusive interview with Lakers star Kobe Bryant by Robin Roberts. It will air either during halftime of Game 6 or during a pregame show if it looks like the series won't go that long.
— Andy Bernstein
General Electric and its television networks, including NBC, MSNBC and CNBC, retained U.S. rights to the Olympic Games on Friday with a landmark $2.201 billion winning bid that pays for broadcast rights and a newly created global sponsorship category.
GE/NBC, outbidding Disney (ABC/ESPN) and News Corp. (Fox), agreed to pay the International Olympic Committee $820 million for the rights to the 2010 Olympic Winter Games and $1.18 billion for rights to the 2012 Games, plus an additional $160 million to $200 million during an eight-year period to secure for GE a place among the 11 existing members of The Olympic Program (TOP) designating global sponsors.
The TOP sponsorship tied to the TV rights is unprecedented. The agreement makes GE a global sponsor for 2005-2008 and 2009-2012, and marks a dramatic increase in that fee during a four-year period. Existing TOP sponsors for 2005-2008 are expected to pay $50 million to $60 million for global rights.
"The TOP commitment made it a very compelling offer," said Richard Carrion, chairman of the IOC's finance commission, in a media conference call from Lausanne, Switzerland, site of the rights bidding Thursday and Friday. He said the actual rights category GE will own has yet to be determined because "we just received the offer a few hours ago," suggesting it was unexpected.
The GE/NBC bid exceeds by 32.6 percent the $1.507 billion combined rights fee paid for the 2006 Winter Games in Turin, Italy, and 2008 Summer Games in Beijing. The massive financial commitment is in place even though the host city of the 2010 Games will not be decided until July 2, and the host of the 2012 Games, for which New York is a candidate, in 2005.
The U.S. Olympic Committee's 12.75 percent cut of the TV fee will be $255 million in the 2009-2012 period.
As part of the multi-tiered deal, GE/NBC is committing $12 million to broadcasts of U.S. Olympic Trials for both the Winter and Summer Games and $10 million to the development of enhanced Olympic video archiving technology.
The Olympic Games are "the only thing that puts mom, pop and the kids in front of the TV at the same time," said NBC Sports and Olympics Chairman Dick Ebersol. "[And] the Olympics are very good business for NBC."
Rising rights fees Year City Ratings U.S. rights fee 2012 TBD TBD $1.18 billion 2010 TBD TBD $820 million 2008 Beijing TBD $894 million ** 2006 Turin TBD $793 million ** 2004 Athens TBD $613 million ** 2002 Salt Lake City 19.2 $545 million 2000 Sydney 13.8 $705 million 1998 Nagano 16.3* $375 million 1996 Atlanta 21.6 $456 million 1994 Lillehammer 27.8* $295 million * On CBS. All others telecast on NBC
** Part of a $2.3 billion three-Olympic bid
Sources: Street & Smith's SportsBusiness Journal research, U.S. Olympic Committee, Nielsen Media Research