SBJ/October 24 - 30, 2005/Other News

Print All
  • AEG tells 2 top sellers: ‘You’re hired!’

    Anschutz Entertainment Group stole a page from “The Apprentice” this month when it had job applicants apply their ticket-selling skills as part of the interviewing process for the company’s Major League Lacrosse expansion team.

    The top two sellers — Nekaya Carter of Long Beach, Calif., and Phillip Cardona of Playa Del Rey, Calif. — were given jobs as transitional sales representatives for the MLL team, which begins play in 2006.

    AEG, which owns Staples Center, the Los Angeles Kings, The Home Depot Center and four MLS teams, including the Los Angeles Galaxy, selected eight applicants from a field of 104 to compete in a contest to see who could sell the most Galaxy tickets. The field of applicants was selected from TeamWork Online, AEG career fairs and standard referrals.

    From Oct. 3-14, the eight finalists sold ticket packages for the Galaxy’s next two home games, the season finale on Oct. 15 and the first playoff game Oct. 23, both against the AEG-owned San Jose Earthquakes.

    Carter, the top seller, sold 44 packages for a total of 183 tickets, while Cardona sold 27 packages for a total of 111 tickets. Overall, the contest generated $10,967 from the 513 tickets sold by all eight participants.

    Michael Hitchcock, the Galaxy’s vice president of ticket sales and mastermind behind the contest, said Carter and Cardona will become full-time AEG employees and will be given six-month contracts with benefits and base salaries plus standard ticket-sale commissions. The winners begin work Nov. 28.

    Hitchcock said the contest allowed the team to get a hands-on look at its finalists while also increasing ticket sales for its sister franchise. Final attendance numbers were not available at press time for the playoff game, but the season finale sold to capacity at 27,000.

    The Galaxy led the MLS in attendance this year with an average of 24,204, roughly 9,000 more than the league average.

  • Examining sports’ interaction with the world

    The Sports & Social Responsibility Executive Forum, presented by Street & Smith’s Sports Group’s SportsBusiness Journal and SportsBusiness Daily, was held Oct. 18 and 19 in New York City. At the inaugural forum, executives from across the industry discussed sports and the many roles it plays in society. For more from the event, Faces and Places.

    Panel: Violence On and Off the Playing Field: The Role of Upper Sports Management in Preventing and Addressing Bad Behavior

    Moderator: Jimmy Roberts, reporter, NBC Sports

    Panelists: Debbie Yow, athletic director, University of Maryland; Barry Mano, founder and president, National Association of Sports Officials; Dr. Edward Cornwell, director, John’s Hopkins Adult Trauma Service; and Ron Klempner, attorney, National Basketball Players Association

    University of Maryland athletic director Debbie Yow addresses violence and sports.
    Yow: “The first thing we have to do is establish a culture. The second thing we have to do is enforce that culture. And the third thing we have to do is respond with integrity. … To really enforce that culture, we have to put framework around it.”

    Mano: “When this association started in 1980 this issue of bad behavior in sports was not even on the radar screen. Today, roughly 25 to 30 percent of our time is being spent on this issue.”

    Cornwell noted the NBA’s stringent punishment plan against fighting has done well in curbing on-court violence: “They have essentially stopped … [fighting]. The NBA has done a good job stopping violence with that rule [that players who leave the bench are punished]. The NHL could do it tomorrow if they wanted to and they choose not to.”

    Roberts: “Alcohol is so deeply entrenched in the sports culture and, quite frankly, a lot of it is because of the large sponsorship presence that it brings to the game.”

    Panel: Diversity in Sports Business: Progress or Promises?

    Co-moderators: Sue Rodin, president, Stars and Strategies; and Abraham Madkour, executive editor, Street & Smith’s SportsBusiness Journal/SportsBusiness Daily.

    Panelists: Richard Lapchick, director, sports business management, University of Central Florida; Donna Lopiano, CEO, Women’s Sports Foundation; Karlyn Lothery, chief diversity officer, USTA; Renee Brown, chief of basketball operations and player relations, WNBA; and Linda Bruno, commissioner, Atlantic 10 Conference

    Lopiano, on social change: “Social change is the result either of public embarrassment or somebody going to court. That is how to change the system the fastest. And it is very hard to go to court on employment issues. It is very expensive. It is confrontational. You are assured that you are not going to get another job in the industry. Worse than that, I tell this to women all the time: You go to court and I guarantee you that nine times out of 10 you will win, but you will have to settle out of court. You’ll get money, but you’ll have to sign a confidentiality agreement and then everybody thinks you lost.”

    In a keynote presentation, Atlanta Falcons owner Arthur Blank talked of his mission in team ownership: “Do we establish ourselves as role models, do we lead as role models, do we become part of this community, create a different kind of environment? My view is that not only do we have a responsibility to give back, we have an opportunity to make a disproportionate difference in the lives of other people and to turn the pedestal … into a platform for positive change.”

    On player interest in giving back: “I find that most of our players … want to give back but they don’t know how to give back. They went to college to play football, hopefully they went to college to get grades, they didn’t go to college to understand how to … give back.”
    Lapchick, on fielding a call from MLS after giving the league an F in gender diversity last year: “I thought they were going to chastise me and say, ‘What the hell are you doing and why are you badmouthing us?’ Instead their take was, ‘What can we do so this never happens again?’ And they put in place the most extensive hiring package for all positions in Major League Soccer. Women and people of color came into that hiring process and they went from an F to a B in a year. ”

    Bruno, on challenges in finding diverse talent: “One of the problems we run into is that we get very talented minorities, particularly minority females, graduating from college who get snapped up by corporate America at a higher level than we can pay them.”

    Lothery, on hurdles to practicing hiring diversity: “The resistance that people perceive isn’t so much ‘I don’t want to do it because I’m not on board with it,’ it is that ‘I don’t know what to do.’”

    Lopiano, on the same issue: “It is really important to understand that the world is not full of racist and sexist employers. It is full of people who are a little bit lazy and a little afraid of going outside their comfort zone. They hire people who they know, who look like them.”

    Panel: Cause Marketing and the Role of Corporate America in Making the Sports Industry More Socially Responsible

    Moderator: Terry Lefton, editor-at-large, Street & Smith’s SportsBusiness Journal

    Panelists: Barbara Paddock, senior vice president, strategic event marketing, JP Morgan Chase; John Lewicki, senior director of alliance marketing, McDonald’s; Vada Manager, director of global issues management, Nike; Sue Tougas, assistant vice president, corporate communications, MassMutual; and John Cordova, group director of sports marketing, Coca-Cola

    Lewicki, on bridging sponsorship assets and cause-marketing assets: “Every sponsorship agreement that we are involved in, every partnership that we are involved in, Ronald McDonald House Charities plays a role. Every athlete that we have a relationship with has a role with Ronald McDonald House Charities.”

    Manager, on how Nike measures the effectiveness of cause-marketing initiatives: “You really kind of measure it in some ways such as the basics for us: revenues, sales, etc. There really aren’t any real specific metrics. I think we are trying to now begin to quantify certain investments, but it is hard to do that for an investment in girls’ education, for example. You could measure it in terms of how many more girls may go to school, if you’re talking about a place like Bangladesh or Vietnam. These are very difficult places to achieve that. ”

    Paddock, on measuring effectiveness of cause-marketing: “We are putting a lot more pressure on the nonprofits for the results and the measurement, particularly in our focus areas, which are community development, education, arts and culture.”

  • Fellows plots to get Callaway on course

    George Fellows, the executive who came in from the outside, would seem to have been at a disadvantage when he became president and CEO of Callaway Golf on Aug. 1. He had never worked in the golf industry — much less the sports industry — and the most notable calling card on his resume was being head of Revlon in the mid- to late 1990s.

    Though lipstick and lob wedges seem unrelated, Fellows sees common ground between the two companies, beyond the fact that they both produce consumer products.

    “There’s a very interesting and unique element to cosmetics and, for that matter, golf. In neither industry does the consumer buy a new product because the old one is worn out,” Fellows said.

    “No one buys a lipstick because the tube is empty, and no one buys a new driver because it’s worn out or it’s broken. They buy it because there’s a new technology or there’s some issue that’s interesting about the new product.”

    Fellows is taking over a company that is no longer the powerhouse it used to be, particularly since founder Ely Callaway died of pancreatic cancer in July 2001. The company has lost money on its venture into the golf ball business, including its purchase of Top-Flite. New products failed to keep up with industry trends. Callaway has announced that it predicts a third-quarter loss of 6 to 12 cents a share, based on sales of $215 million.

    Fellows acknowledged that executional details at Callaway have not been at the level they should have been.

    “We’re in the process of remapping the entire developmental process to make sure we’re starting projects early enough and that we’re giving them enough time to be completed in an appropriate fashion so we’re not rushing towards the end to meet some arbitrary ship date,” Fellows said.

    Fellows is moving more ballast around as he endeavors to right the ship. In a move announced late last month, Callaway is cutting 500 jobs, slightly more than 15 percent of its work force, in a restructuring intended to save $70 million over two years. According to published reports, the restructuring will cost about $12 million.

    Also, golf ball manufacturing, which has been conducted on both coasts, will be merged into Top-Flite’s facilities in Massachusetts and New York to improve efficiency. As part of the move, Callaway’s golf ball manufacturing facility in Carlsbad, Calif., which Ely Callaway had built from scratch, will be closed before the end of the year.

    Fellows said Callaway is expected to have “a very complete and robust new products program” in 2006. The new products, some of which will begin shipping in January, include a new Odyssey Tri-Ball SRT (Saturn Ring Technology) putter, new Big Bertha irons, an X series of woods and irons and Ben Hogan Apex irons.

    Fusion technology, as in the company’s new FT-3 driver, will be at the core of what Callaway will be doing for the immediate future. But beyond that …

    George Fellows says cosmetics and golf equipment both depend on the next big thing.
    “If another technology comes on that supplants it, we’ll be there,” Fellows said.

    Callaway intends to attack its golf ball woes with a number of new product introductions on the heels of its new HX Tour 56 ball. The recently completed consolidation of Top-Flite into Callaway is expected to help, with a lot of research and development efforts going toward Top-Flite.

    Fellows is re-examining Callaway’s marketing mix and intends to increase the marketing and advertising budget in 2006, but wouldn’t divulge figures.

    “We are going to be more aggressive in our marketing to make more people aware of what we have,” Fellows said.

    Fellows said his charge from the board of directors is “to restore the profitability of the company to the levels it had traditionally enjoyed, regain whatever share erosion existed in small parts of the business and essentially restore the company to its pre-eminent position in the golf industry.”

    While he is working toward that, Callaway has received several unsolicited bids to buy the company. One, a group including MacGregor Golf and Bain Capital Inc., was reported by the Los Angeles Times to offer $16.25 a share, or about $1.24 billion. The other, from Thomas H. Lee Partners and insurance mogul William Foley, was reportedly for $15.73 a share, or $1.2 billion.

    After the announcements of the job layoffs, Callaway’s stock jumped 56 cents, to $15.09, but had since dropped to $13.45 at the close of the market Oct. 19.

    Fellows called the possibility of a buyout “nonsense” and has called the bids too low. When asked whether he is completely ruling out the possibility of Callaway being sold, Fellows said, “That’s not my call. … That is in the hands of the board.”

    Fellows has a clause in his contract that calls for him to get $7 million if the company is sold during his first year. Fellows said the clause is fairly standard for an executive at his level, especially since he moved from New York to California to take the job.

    Bob Seligman is a writer in New York.

  • Focusing on perception of athletes

    Panel: How Media Coverage Affects and Impacts the Perception of Sports and Today’s Athlete

    Christine Brennan, Kellen Winslow (center) and panel moderator Daniel Okrent.
    Moderator: Daniel Okrent, former New York Times public editor

    Panelists: Terry McDonell, managing editor, Sports Illustrated; Christine Brennan, columnist, USA Today; Phil de Picciotto, president of athletes and personalities, Octagon; ESPN’s Stuart Scott; and Kellen Winslow, director of planning and new event development, Disney Sports Attractions

    McDonell: “When I look across the landscape, what I see is a celebrity landscape that very much now mirrors what came ahead of sports in show business, where you have celebrities who are sophisticated enough … that they use the media and their celebrity to sell this or that.”

    De Picciotto, on creating relationships between the media and players: “The problem is specifically the limitation of access. When you limit access, when you tell the media that they can’t do something … you’re creating exactly the problem that you don’t want to have.”

    Winslow: “It’s a trust factor, that you’re going to take what I say in the context in which I mean it and you’re going to communicate it.”

    Brennan: “I think the problem is like with the presidential election in 2004 with the bloggers and all the stuff going on. There are so many people out there armed now with a computer and a Web site that they are dragging all of us down.”

    McDonell: “The idea that the media is really owed something is really a false thing that people throw around.”

    Panel: Defining the Athlete’s Role In Society: Role Model, Promotional Vehicle Or All of the Above?

    Moderator: Lesley Visser, reporter, CBS Sports

    Panelists: Johann Olav Koss, president and CEO, Right To Play; Pam Wheeler, director of operations, Women’s National Basketball Players Association; Zina Garrison, founder, All Court Tennis Academy; Steve Mills, president and COO, MSG Sports; Jim Scherr, CEO, U.S. Olympic Committee

    Mills: “Athletes, whether they like it or not, are role models. … And I think as executives in organizations, our responsibilities to the athletes is to make sure that we educate them and position them in a way that they are able to embrace that and use it.”

    Scherr: “Athletes have to be careful to not market themselves as perfect human beings, as the ultimate role model, and build a marketing machine around that because everybody’s human and everybody makes mistakes. I think that’s a real trap that athletes, teams and sports entities fall into.”

    Koss: “The media is getting more and more aggressive in the sense of getting the stories out there. … I think that puts a much larger responsibility on the athletes in a sense where you have to really live an error-less life.”

    Garrison: “Especially individual sports, you don’t really have that opportunity to decide who you are. The public decides who you are and then the media or the sponsorship comes around it and they try to form the package. In all of that it creates very strong pressure.”

    Panel: The Role That Sports Plays In Society

    Sports Illustrated’s Terry McDonell says sports has become more like show business.
    Moderator: Len Elmore, senior counsel, LeBoeuf, Lamb, Greene & McRae

    Panelists: Myles Brand, president, NCAA; Julie Foudy, former co-captain, U.S. Women’s National Soccer Team; Ozzie Smith, 2002 Baseball Hall of Fame inductee; Rob Manfred, executive vice president/labor relations, Major League Baseball; Sean McManus, president, CBS Sports

    Brand: “We have to understand that sports by itself will not get social change done, nor will it come without controversy. Let me name two historically and critically important such changes. One was Jackie Robinson breaking the color barrier. That was a step towards civil rights, but it certainly didn’t get us all the way there. And despite Jackie Robinson’s incredibly courageous actions, it was highly controversial and it took a long time after that. The other historically important issue I would point to is Title IX. Title IX by itself did not create a level playing field — to use that metaphor — for women in society and the workplace. And it didn’t come and still doesn’t come without controversy, but it does begin to shape the challenges and make some important differences. It is a statement.”

    McManus, on the media’s coverage of unfavorable events: “We look at ourselves as reporters of what is going on in sports and we try to put on the screen what we think is the most entertaining. There are times when we are definitely at fault, as are newspapers and news programs, of highlighting not the best, but the worst. … In a lot of ways, television is part of the problem, but it is also a potential cure for the problem.”

    Smith, on players’ responsibilities: “We have an inherent responsibility, whether we want it or not, to present ourselves in a very positive way. I think it starts with having pride in who you are and what you do. If you have pride in what you do, then you take on that challenge as a professional athlete. … I’ve always taken [my responsibilities] very seriously knowing that the young people who sit down and watch us perform day in and day out, we have a direct impact on the way they see things in society.”

    Brand, on organizational responsibilities: “We put too much emphasis on the responsibilities of athletes. They do have responsibilities. They are accountable. But sometimes I think we forget another level of accountability and that is organization or team accountability. … The organization itself has a level of accountability or responsibility that is often overlooked to the degree of its importance because we so pick on the individual athletes and single them out that we forget that they are not operating in a vacuum.”

    Foudy, on the need for more women in executive roles: “I think it is critical. We have seen the impact women can have by being great athletes on the field and the impact that can have on young girls. … The same rings true for the business place. You need something that is tangible, that you can … relate to.”

    McManus, on performance-enhancing drugs: “Taking steroids is cheating. And just like Bernie Ebbers at MCI or Kenneth Lay at Enron, they had a choice. They could have run their businesses honestly or they could have cheated. They felt that by cheating they would give their companies a big advantage and make more money, so they made that decision. It is the same decision an athlete makes, whether to cheat or play fairly. … If you don’t play the game fairly, you should be out of the game. Period. And if you cheat in business, you go to jail.”

  • Life After Hockey gives NHLers a second shift in job market

    On the weekend before the NHL’s Nashville Predators got back on the ice for the first time in more than a year, Stu Grimson was also in Nashville, hunkered down with his homework.

    It wasn’t a pretty picture: lots of reading for his labor law class, almost as much for a course on copyright and at least a few hours to spend on the case of an elderly client whom Grimson is representing in a consumer protection matter for a legal clinic.

    It sounds like the usual combination of intellectual drudgery, interspersed with moments of exhilaration, that define a law student’s life. Except that Grimson is anything but the typical law student.

    In 2002, Grimson, aka the Grim Reaper, retired from the NHL after 13 seasons as a hard-nosed, reliable defenseman with Calgary, Chicago, Anaheim, Detroit, Hartford, Carolina, Los Angeles and Nashville. The following year, he enrolled at the University of Memphis School of Law, where this December he expects to graduate, a semester ahead of his class.

    For that laudable achievement, he can thank his wife, who has kept the home fires burning for nearly three years as he has commuted weekly from classes in Memphis back to his home in Nashville, three hours away, where the rest of the Grimsons (including four children) live. Grimson is also quick to point out that he owes a debt to Life After Hockey.

    If the Life After Hockey program had a valedictorian, it would be Grimson. Three years ago, the NHL, the NHL Players’ Association and the NHL Alumni Association launched the program to help current and former hockey players pursue their education or move to new careers.

    The program, based at Quinnipiac University in Hamden, Conn., offers a range of services, from “life coaches” who work one-on-one with players seeking career counseling to a sports broadcasting workshop held at the Quinnipiac campus during the summer.

    Grimson, 40, is a big fan of Life After Hockey.

    “I can’t stress how important a resource [it] is to ex-players,” Grimson said. “A lot of folks, having done one thing professionally for a very long time, have a hard time shifting in another direction. It is as true of professional athletes as anyone. No matter how hard you prepare, it isn’t easy.”

    Grimson, noted for his aggressive, fearless style as a player, was one of the first clients of Life After Hockey. In 2002, soon after ending his playing career, he got in touch with the program to help him sort out plans to complete his college requirements.

    Before his pro career, Grimson had played college hockey at the University of Manitoba, where he had picked up credits toward a degree in economics. Over the years he’d added more credits from correspondence courses but was short of graduation and feeling stymied.

    Counselors at Life After Hockey helped Grimson overcome that.

    “He was under the impression he would have to uproot his entire family and go back to Manitoba to finish his degree, which he wasn’t willing to do,” said Duncan Fletcher, who is director of the Professional Athlete Transition Institute, which oversees the hockey career program at Quinnipiac. “We were able to act as educational brokers.”

    Grimson enrolled at Belmont University in Nashville, where he completed the undergraduate credits he needed. The following fall he was in law school.

    Now, a little more than two years later, Grimson could be any other middle-age, second-career law school student. Well, any 6-foot-5 student.

    “Sometimes, people are a little taken aback. It piques their interest to know that you were a professional athlete and now you’ve chosen to do this,” Grimson said, laughing.

    “What I’ve appreciated most about law school is developing my ability to think abstractly, to analyze a problem from different viewpoints,” he said.

    A job search looms for Grimson in December. He said he would welcome a chance to stay near hockey as an agent or with the NHLPA. Grimson was a player delegate and a vice president on the players’ executive committee.

    For now, though, you’re more likely to find the Grim Reaper in the law library in Memphis. Only now, Grimson’s classmates refer to him by a new nickname, one that reflects his new obsession before and after class. Meet the Grim Reader.

    Mark Hyman ( is a lawyer and writer.

    Print | Tags: Anaheim Ducks, Boston Bruins, Buffalo Sabres, Calgary Flames, Carolina Hurricanes, Chicago Blackhawks, Colorado Avalanche, Columbus Blue Jackets, Dallas Stars, Detroit Red Wings, Edmonton Oilers, Florida Panthers, Los Angeles Kings, Minnesota Wild, Montreal Canadiens, Nashville Predators, New Jersey Devils, New York Islanders, New York Rangers, NHL, Ottawa Senators, Philadelphia Flyers, Arizona Coyotes, Pittsburgh Penguins, San Jose Sharks, St. Louis Blues, Tampa Bay Lightning, Toronto Maple Leafs, Vancouver Canucks, Washington Capitals
  • Nets pay price to cover operating losses

    The New Jersey Nets borrowed $60 million last month from a hedge fund at very rich terms to cover operating losses, financial sources said. The move came after team owner Bruce Ratner approached limited partners to cover the shortfall, but the team opted for the pricey borrowing instead, the sources said.

    The Nets are losing money at Continental Airlines Arena but hope to be flying high at a new home in Brooklyn.
    Fortress Investments lent the Nets the money at a rate of more than 10 percent, which caught the attention of the NBA. Sources said the league had concerns about the rate and reviewed the deal with the assistance of an outside consultant, though NBA approval was not required.

    The Nets, who now have $210 million of debt, declined to comment. An NBA spokesman said league policy is not to comment on team financials.

    The transaction highlights the risks new owners such as Ratner assume for teams that often sell for hundreds of millions of dollars and can lose substantial sums of money. Ratner paid $300 million last year for the Nets after a contested auction drove up the price.

    “If you want the highest prices, you have to get creative on the financing,” said Mitchell Ziets, a sports business adviser with his own firm, MZ Sports. In particular, when limited partners are hard to find or, in the case of the Nets, may be resistant to throw in more money, pricey loans are an answer, Ziets said.

    It’s no secret the Nets are losing money playing in northern New Jersey’s Continental Airlines Arena, where crowds were modest even during the team’s march to two NBA Finals several years ago. That is why Ratner plans to build a new arena in Brooklyn, N.Y., by 2008.

    “The Nets are currently operating at a loss and are projected to continue to operate at a loss as long as they remain in New Jersey,” said Forest City Enterprises, which owns 15 percent of the team, in its annual 10-K filing with federal regulators in April.

    The Nets have been funding losses through a reserve in the team’s credit facility, Forest City said last month in a quarterly filing.

    Recently, however, Ratner went to his dozens of limited partners to help cover the club’s losses, the financial sources said. Precise figures for the loss could not be determined, but the sources described the situation as one in which not all the limited partners were willing to give Ratner money, leaving him with a $20 million hole.

    Another source said it also was possible Ratner decided in the end it was better to borrow from Fortress for tax purposes because that debt would be deductible, whereas payments to equity investors are not. Equity investors can require a guaranteed rate of return.

    When Ratner bought the team in 2004, he borrowed $150 million from JPMorgan Chase and paid the rest in cash with the help of a host of limited partners. Forest City Enterprises has a joint venture with Forest City Ratner Cos., the New York City real state developer that the Nets’ owner runs.

    Nets owner Bruce Ratner also is refinancing his original acquisition debt.
    With the Fortress money in hand, Ratner also is refinancing his original acquisition debt. The Nets plan to borrow $85 million from the NBA leaguewide credit facility, which lends money to teams at very low rates, in a transaction expected to close shortly. JPMorgan would then lend another $65 million to the team.

    But it is Fortress’ $60 million loan, which closed in September, that has the market buzzing.

    The league allows teams to borrow up to $100 million with the franchise as security. The interest rates for loans secured by franchises are very low.

    Teams that still have more debt needs often then create a holding company to borrow more money, with the collateral commonly being revenue generated by the team and ownership guarantees. Because the team is not part of the collateral, the money is more expensive at this level, though not exorbitantly so. The JPMorgan loan would be at this level.

    Usually after a holding company loan, the borrowing is done. But not in the Nets’ case. Financiers have dubbed the Fortress debt a “super holding company” loan, because it is even further removed from the franchise.

    Known in part for lending money to companies in poor shape, Fortress has dabbled in sports recently. It lent money to Frank McCourt to buy the Los Angeles Dodgers and is talking with Dave Checketts about financing his bid to buy the St. Louis Blues, sources said.

    Fortress declined to comment, and Checketts did not return calls.

    The firm’s money comes at a steep price. In banking, this type of borrowing is generally termed “mezzanine” financing.

    This means the lender is usually one of the last in line behind more senior creditors in the event of a bankruptcy. But that low-pecking-order rank also brings with it a high interest rate — higher risk, higher return.

    “I have never seen a rate that high,” said one sports lender who declined to be named, of the Fortress loan to the Nets.

    Fortress’ rate for the Nets is 650 interest points over the London Interbank Offered Rate, a floating rate index that today is about 4 percent. That means the Nets’ rate on the Fortress loan would be about 10.5 percent.

    Mezzanine financing is not new in sports, but it is uncommon. Jim Nash, head of Banc of America Securities’ powerhouse sports lending practice, recalled a mezzanine deal in 1990 that he did for a racetrack, but there have not been many since.

    But with team values having risen so much, Nash said, owners are increasingly looking to more complex means to cover costs and pay for the clubs. As a result, pricier debt is more fashionable, and that is why lenders such as Fortress have begun to eye sports.

    Ziets, the sports finance adviser, said he sees owners having a hard time finding limited partners. Whereas a decade ago limited partners might have put in a few million dollars, now they may be asked to invest tens of millions of dollars plus cover what can be substantial losses, as with the Nets.

    So, owners are looking for debt that can fill the gap left by equity shortfalls, he said.

    “Fortress has recognized this is a gaping hole in our market, the difficulty in finding limiteds,” Ziets said.

  • Special Address: David Stern, NBA Commissioner

    NBA Commissioner David Stern delivered a Special Address at the forum in which he detailed the league’s new NBA Cares platform. Among his comments:

    On corporate responsibility: “I think it has become an axiom of management in the private sector that there is a corporate obligation not only to serve customers, but to serve the broader community. The business of business is no longer simply business. There is more to it. And if we didn’t know that before, how can we not know it now as the problems of the world play out in front of us.”

    On the NBA’s evolution in regard to thinking about social responsibility: “We used to think it was about us. What is good for business? And then it was this stuff about community relations and public service. That’s a good idea. Let’s stand for something, because if you don’t stand for something, you might not stand for anything. And finally it was the preaching to the teams that it is the right thing to do. And so you can do good [things] and can do well at the same time because this is about community relations. Let’s make it a part of your business.”

    On the future role of sports in community relations: “Taking stock of all that we’ve done, but mindful of all that needs doing, it is our obligation to do more. And to cause sports to lead the way in what I will call the private sector making the world a better place. And if that sounds corny, I accept the corn because I think that is our sacred obligation.”

    On launching NBA Cares: “We want to set the tone that says to our players, our rookies and our teams that this is the way it is. This is part of our DNA. This is part of our culture. … It is not acceptable for leagues with our celebrity to do anything less.”

    On the media focusing on negative issues: “The lowest or worst moment of one person feeds into the ability to characterize all athletes a certain way, and that is a real problem. Yes, I believe there is always a tinge of racism involved. It becomes easy when there is an event to say, ‘These guys are all thugs and punks.’ We read that based upon sensitivity a certain way because there is no ‘these guys.’”

  • The Days Ahead: October 24-30

    WTA Tour Generali Ladies Linz begins
    Location: Linz, Austria

    WTA Tour Gaz de France Stars begins
    Location: Hasselt, Belgium

    ATP Tour Davidoff Swiss Indoors Basel begins
    Location: Basel, Switzerland

    ATP Tour Grand Prix de Tennis de Lyon begins
    Location: Lyon, France

    ATP Tour St. Petersburg Open begins
    Location: St. Petersburg, Russia

    NFL Fall Meeting begins
    Location: Kansas City

    PBA Tour season begins (Bowling)
    Location: Tulsa, Okla.

    PGA Tour Chrysler Championship begins
    Location: Palm Harbor, Fla.
    TV: USA, ABC

    Champions Tour Charles Schwab Cup Championship begins
    Location: Sonoma, Calif.
    TV: The Golf Channel

    European Tour Volvo Masters Andalucia begins
    Location: Sotogrande, Spain
    TV: The Golf Channel

    Nationwide Tour Championship begins
    Location: Prattville, Ala.
    TV: The Golf Channel

    LPGA Tour CJ Nine Bridges Classic begins
    Location: Jeju Do, South Korea

    NBA preseason ends

    Breeders’ Cup World Thoroughbred Championships
    Location: Elmont, N.Y.
    TV: NBC

    NASCAR Craftsman Truck Series EasyCare Vehicle Service Contracts 200
    Location: Atlanta
    TV: Speed Channel

    NACAR Nextel Series Bass Pro Shops MBNA 500 (Race 7 of 10 of the Chase for the Nextel Cup)
    Location: Atlanta
    TV: NBC

    All events are subject to change. Information about coming events can be sent via e-mail to or via fax to (704) 973-1401, attn: Ryan Baucom.

  • ‘The women didn’t fail. Management failed.’

    Billie Jean King
    Tennis great, World TeamTennis founder and equality-in-sports pioneer Billie Jean King sat down for a question-and-answer session with CBS Sports’ Lesley Visser. Among her comments were:

    On the need to collaborate with men: “The media is controlled 90 percent by men, so everything is certainly framed from their point of view. Ninety percent of the media is controlled by men today, not back in the old days, but now. And so it is obvious that we need the men to be our allies if women’s sports are ever going to be truly professional across the board.”

    On collaboration: “If I could ask every male to start thinking about how you could help women achieve their dreams like you have for the boys, that would be my one request. We need your help. … Not to say we are going to sit on our backside. We are going to work with them.”

    On sharing: “I am very big on sharing, not dominating. I want men and women to walk hand in hand, people to walk hand in hand. We want a level playing field. We want to help each other.”

    On whether she expects World TeamTennis players to be role models: “No, I do not. I would like them to be. I would want them to choose to be, but I know that I cannot make them be a role model. I would try to influence them to be. What we are as a professional athlete, we are a motivator and inspiration to people. We are highly skilled in something. It doesn’t mean you are a good person.”

    On the demise of WUSA: “We were in love with the women’s soccer team. The girls were great athletes and smart and nice and all of America embraced them. What happened? The women didn’t fail. Management failed. Big difference.”

Video Powered By - Castfire CMS Powered By - Sitecore

Report a Bug