SBJ/November 17 - 23, 2003/Other News

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  • Milwaukee owners sue over AFL fee

    Owners of the defunct Arena Football League franchise in Milwaukee have filed a lawsuit contending they are owed nearly two-thirds of the $16 million expansion fee paid by the new ownership group in Philadelphia.

    According to the complaint, filed this summer in Cook County, Ill., by the owners of the defunct Milwaukee Mustangs, the AFL signed an exclusive sales agreement giving the first $5 million of the team's sale to Andrew Vallozzi, owner of the Mustangs. In addition, the agreement stated that all proceeds above the initial $5 million would be split evenly between the AFL and the Mustangs. The AFL contracted the Mustangs in 2002, citing arena difficulties at the Bradley Center.

    In August, the league completed a deal to expand into Philadelphia with a franchise sold to a group led by rock singer Jon Bon Jovi and former Philadelphia Eagles quarterback Ron Jaworski. The group paid $16 million for the Philadelphia franchise, and lawyers for the Mustangs franchise claim that deal falls under the terms of the sale agreement with Vallozzi.

    "We believe that the AFL essentially sold the Mustangs when the AFL expanded into Philadelphia, and they don't want to pay us the fee," said Vallozzi's attorney, Kevin Finger.

    Mustangs lawyers also state that because they think AFL Commissioner David Baker receives 5 percent of any expansion fees as part of his employment contract, Baker had no interest in selling the Mustangs because he wouldn't have received any money from the sale.

    Chris McCloskey, AFL vice president of communications, wouldn't comment on the lawsuit, other than to say that its claims are baseless. Regarding the claim that Baker's contract awards him 5 percent of expansion fees, McCloskey would only say, "It is one of the many inaccuracies in this lawsuit."

    Print | Tags: Football, Philadelphia Eagles
  • News in brief from The Sports Business Daily


    GUESS WHO'S BACK?: ESPN acknowledged it is developing a reality show around flamboyant former NBA player Dennis Rodman. The show, tentatively titled "Rodman on the Rebound," will not dwell on the negative aspect of Rodman's troubled past, according to an ESPN spokesperson, but rather on his desire to return to the NBA. The series is scheduled to begin Dec. 4.


    NO LOVE FOR L.A.: WTA Tour CEO Larry Scott said the Bank of America WTA Tour Championships will leave Los Angeles in 2005. Scott said there is interest from China and Europe, as well as other U.S. cities, in hosting the tournament. Anschutz Entertainment Group and Octagon each own 50 percent of the event. AEG President Tim Leiweke said he was surprised Scott made the news public right before this year's finals. Leiweke noted it would "make the job of his sales team that much more difficult" if next year's event is viewed "as a lame duck."


    LEONSIS' CAPS $100M IN HOLE: The Washington Capitals have

    lost nearly $100 million since Ted Leonsis and other investors bought the team for $85 million in 1999, according to team sources cited by The Washington Post. The report said the team could lose up to $30 million this season. Leonsis: "We're kind of like the poster boys for what's wrong with the league. We're spending a lot of money and we're losing a lot of money."


    JETS LANDING NEW STADIUM?: Business Week Online reported that the New York Jets are expected to announce within two months that they will build a $1 billion, retractable-dome stadium on Manhattan's west side. The Jets would pay for the bulk of the project, which also would serve as a convention center and arena and would likely be a big boost to New York's bid to host the 2012 Olympics.

    JUST A SMALLTOWN COWBOY: Rowlett, Texas, a suburb of Dallas with a population of about 50,000, has expressed interest in the planned $1 billion project for a new stadium, hotel and entertainment complex for the Cowboys. Rowlett is by far the smallest of the cities to express interest. Rowlett has offered $80 million in infrastructure improvements to the site and an estimated $400 million from county taxes. Cowboys director of corporate communications Brett Daniels said, "We met with them to get their information, and we're open to their ideas, but [we're] moving forward with the two primary sites [downtown Dallas and Irving's Las Colinas development]."


    GUILTY PLEA: Former Charlotte Hornets President Spencer Stolpen has agreed to plead guilty to bank fraud and filing a fraudulent bank loan application as part of a deal that calls for him to serve 15 months in prison. The bill of information alleges that Stolpen, "facing mounting overdue debts in 2002, engaged in a scheme to defraud banks." He is accused of forging a $110,000 check drawn on a checking account that he "knew had been closed and depositing the fraudulent check into his personal checking account," according to The Charlotte Observer.

    BOXER SUES OVER "ROCKY": The Associated Press reported that former heavyweight boxer Chuck Wepner filed a lawsuit against Sylvester Stallone in state Superior Court in Jersey City, N.J., "claiming the 'Rocky' movie series was based on Wepner's own career." Wepner contends that Stallone "repeatedly credits [Wepner's 15-round loss to Muhammad Ali in 1975] as the inspiration for the film." Wepner's attorney, Anthony Mango, said Wepner is "entitled to part" of the $1 billion that Mango estimates the movie has made. The suit said that Stallone "made several promises to Wepner that he would be financially compensated over the years, but no payments were made." Michelle Vega, Stallone's publicist, declined comment.

    For more on these stories, visit our sister publication, The Sports Business Daily, at

    Print | Tags: AEG, Basketball, Boxing, Dallas Cowboys, ESPN, Football, Hockey, NBA, New York Jets, Olympics, Washington Capitals, WTA
  • This week in sports business history: Nov. 17-23

    1979: The Houston Astros sign pitcher Nolan Ryan to a four-year, $4.5 million contract, the richest MLB contract at the time.

    1994: Greg Norman and John Montgomery hold a news conference to announce an ambitious new golf tour, the World Golf Tour. The eight-event, $25 million tour for the top 30 players in the world is planned to begin in 1995, with each event awarding $3 million in prize money. Fox Television CEO David Evans signs a contract for Fox to own the TV rights.

    FOLLOW-THROUGH: The organizers of the World Golf Tour and the PGA Tour began a heated debate over the future of the World Golf Tour. Norman's venture never got off the ground. Eventually, in 1997, the International Federation of PGA Tours, which consists of the PGA Tour and various other worldwide golf tours, introduced the World Golf Championships, which began in 1999. PGA Tour Commissioner Tim Finchem: "It's different than the 1994 initiative that Greg Norman endorsed, in a couple of ways. Primarily, timing and structure." Said Norman: "I was really hung out to dry."

    1995: Doug Logan is named the first MLS commissioner, taking over for Alan Rothenberg, who spearheaded formation of the league but passed on the opportunity to become full-time commissioner.

    FOLLOW-THROUGH: The league failed to increase attendance and TV ratings under Logan, who lost the support of major MLS investors such as Lamar Hunt and Robert Kraft. In August 1999, Don Garber was named the new commissioner.

    1995: Time Warner Inc.'s Norman Pearlstine announces that Bill Colson has been named managing editor of Sports Illustrated. Colson had been assistant managing editor at SI since the summer of 1991. He succeeds Mark Mulvoy, who becomes editor of SI and is given top editorial responsibility for all Olympic projects outside the weekly SI Presents and SI For Kids. The announcement of Colson completes the "bake-off" competition with Life managing editor Daniel Okrent, in which each served a three-month trial period that culminated with "oral exams" with Pearlstine and Time Inc. editorial director Henry Muller.

    1997: After 33 years

    Jacques Villeneuve was riding on Goodyear tires in 1997’s Montreal Grand Prix.
    of supporting Formula One racing, Goodyear Tire & Rubber decides to pull out after the 1998 season. The company says its return on investment is no longer worth it. Goodyear says it would continue its exclusive sponsorship of NASCAR.

    FOLLOW-THROUGH: Goodyear remains the exclusive tire supplier to NASCAR.

    1998: Steve Bornstein is named

    ESPN chairman, while George Bodenheimer takes the reins as president. Bornstein is to remain head of ABC Sports.

    FOLLOW-THROUGH: In May 2002, Bornstein stepped down from his ABC-TV president post. At ESPN, Bornstein helped transform a single cable sports channel into an empire that now includes several networks, a magazine and branded restaurants. At the end of his reign at ABC Sports, however, the network had the smallest audience of the four biggest networks among the 18- to 49-year-old audience that advertisers covet.

    In January 2003, the NFL named Bornstein CEO of the new NFL Network, which debuted on DirecTV on Nov. 4.

    1999: The NCAA signs a record-breaking 11-year pact worth $6 billion, which gives CBS a bundled rights package that includes television rights to the Division I men's basketball tournament and other championships, as well as marketing and Internet rights. The deal begins on Sept. 1, 2002. Beginning with that school year, CBS is scheduled to pay the NCAA $360 million. That amount increases each year, so that in 2012-13 (the last year of the deal) the NCAA is scheduled to receive $764 million from CBS. CBS Sports President Sean McManus says, "We made what we considered a fair and reasonable bid that enables us to make a profit."


    1999: The NHL names ABC's Jon Litner executive vice president and chief operating officer. He replaces Steve Solomon, who left to run Univision's sports division.



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