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  • Berthelsen predicts lockout in court testimony

    NFL Players Association interim executive director Richard Berthelsen predicted in a San Francisco courtroom last week that the league’s owners are likely to lock the players out in 2011.

    Berthelsen’s comments came while arguing to a jury, ultimately unsuccessfully, that punitive damages should not be assessed against the union after a ruling came down in favor of the group of retired players that brought forth the lawsuit.

    “Every indication, at this point, is that that’s what the NFL owners want to do,” Berthelsen said of a lockout, “and that’s what they’re threatening the players with.”

    While the forecast was directed at the jury, it serves notice beyond the courtroom that America’s top sport could be headed for all-out labor war.

    An NFL spokesman did not reply for comment.

    The NFLPA was planning to appeal or ask the judge to throw out the jury’s decision to award the class of more than 2,000 retired players $28.1 million for not paying them a fair share of licensing money and not marketing them.

    A potentially bigger impact of the decision, though, could be its effect on the labor issue. If the NFLPA has to pay the money, Berthelsen said it would damage the group’s ability to fight with the owners.

    The union is sitting on two large pools of money, the court testimony revealed. The first pool comprises two strike funds that together have $121 million in them as of February. There is an additional $98 million available in a fund that is not designated for specific purposes.

    In total, the union’s assets stood at $298 million at the end of February, according to documents presented during the trial. However, Berthelsen testified that given the current economic environment, it’s unlikely the NFLPA can count on sustaining the $81 million on average that the union reaps annually in licensing money.

    Richard Berthelsen

    “Frankly, the way the economy has turned in the last few months, there’s a concern by everyone in terms of revenues, because we are talking about discretionary spending of the American public,” he said.

    The union might not necessarily have to dip into its reserves to pay the retired players if it comes to that. Roman Oben, who recently retired and is a former player representative, said that for three consecutive years, the union has tabled proposals to increase the dues of $10,000 per player. With salaries having increased in that time, the union might increase the dues by 50 percent, he said. With 1,800 active players, that would bring in a new $9 million annually.

    Oben was not part of the class of retired players in the case at hand.

    NFL owners, in May, opted out of the collective-bargaining agreement, arguing it is too friendly for the players. That makes 2010 the last year of the deal and one without a salary cap.

    There have been no talks between the two sides since Gene Upshaw, Berthelsen’s predecessor, died on Aug. 20. One source said discussions might not begin until well after the NFLPA chooses its new leader, which is expected to happen in March.

    One of the NFL’s top outside advisers is Bob Batterman, who guided the NHL through its lockout of that sport’s players in 2004-05. Berthelsen commented to the jury about that work stoppage.

    “We recently saw how the hockey players were locked out and they lost an entire season,” he said. “Literally, hundreds of millions of dollars were lost as a result of that lockout.”

    The jury verdict forces the NFLPA to confront again how it handles matters of retired players versus active players, an issue that has dogged the union in recent years.

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  • CBS College Sports expands to 29M homes

    CBS College Sports will see its distribution increase to 29 million homes, thanks to carriage deals with Comcast, Bright House and Verizon.

    The deals, which will be announced this week, represent an additional 4 million subscribers.

    By comparison, CBS College’s biggest competitor, ESPNU, is in about 28 million homes.

    The Comcast deal will see the channel launch on the digital classic tier in Atlanta, and be upgraded to the digital classic tier in Minneapolis and Boston. The moves will happen before the end of the year.

    The Comcast deal, which represents 2 million homes, came about in part after CBS agreed to share weekend coverage of up to 12 PGA Tour events with the Comcast-owned Golf Channel (see SportsBusiness Journal, Oct. 13-19). Golf Channel will show morning coverage for events that air on CBS later in the day.

    Bright House Networks upgraded CBS College’s carriage in Central Florida and Tampa to digital basic earlier this month.

    Verizon will launch the channel and its high-definition feed on the FiOS sports package within the next two weeks.

    In other distribution news, The Ski Channel plans to launch Dec. 25 to 15 million homes, thanks to deals with DirecTV, Verizon, Time Warner Cable, Cox and Bright House.

    The Ski Channel is not a linear network. Rather, it provides video-on-demand programming to cable and satellite subscribers.

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  • CBS College Sports expands to 29M homes

    CBS College Sports will see its distribution increase to 29 million homes, thanks to carriage deals with Comcast, Bright House and Verizon.

    The deals, which will be announced this week, represent an additional 4 million subscribers.

    By comparison, CBS College’s biggest competitor, ESPNU, is in about 28 million homes.

    The Comcast deal will see the channel launch on the digital classic tier in Atlanta, and be upgraded to the digital classic tier in Minneapolis and Boston. The moves will happen before the end of the year.

    The Comcast deal, which represents 2 million homes, came about in part after CBS agreed to share weekend coverage of up to 12 PGA Tour events with the Comcast-owned Golf Channel (see SportsBusiness Journal, Oct. 13-19). Golf Channel will show morning coverage for events that air on CBS later in the day.

    Bright House Networks upgraded CBS College’s carriage in Central Florida and Tampa to digital basic earlier this month.

    Verizon will launch the channel and its high-definition feed on the FiOS sports package within the next two weeks.

    In other distribution news, The Ski Channel plans to launch Dec. 25 to 15 million homes, thanks to deals with DirecTV, Verizon, Time Warner Cable, Cox and Bright House.

    The Ski Channel is not a linear network. Rather, it provides video-on-demand programming to cable and satellite subscribers.

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  • Earthquakes sign William Morris to sell marketing deals

    The San Jose Earthquakes have signed the William Morris Agency to a broad representation agreement that will see the agency help with everything from securing jersey and stadium naming-rights partners to booking concerts and consulting on real estate development.

    The Earthquakes hope to open a new stadium in San Jose in 2011 and are in the process of finalizing a deal with the city that will see team owner Lew Wolff buy 66 acres of land from the city for $132 million.

    Wolff said the Earthquakes interviewed four other agencies before settling on William Morris.

    “What really impressed us is the team that they allotted to us,” Wolff said. “We talk all kinds of issues. If we develop a hotel there, they’re going to be involved making that exciting for us. It’s a very broad relationship that’s not as specialized as you might think.”

    The immediate focus of the relationship will be on securing a jersey partner and a naming-rights partner. Both could offer a significant boost to the Earthquakes’ bottom line. 

    Philip Button will lead the relationship for William Morris.

    The largest jersey sponsorship sale in MLS in value is the Los Angeles Galaxy’s $4 million-a-year deal with Herbalife, while the smallest is the Columbus Crew’s $1 million-a-year deal with Glidden. Real Salt Lake signed the most recent stadium-naming-rights deal in the league with Rio Tinto for $2 million a year.

    William Morris hasn’t decided if it will package both sponsorships together or sell them independently. Both remain a possibility, Wolff said.

    “The stadium isn’t perfected, so we’re not ready for that,” he said. “We’re not immune — nor is anyone — from the current state of the economy today.”

    Once the stadium is completed, William Morris will handle all music booking and programming for the venue.

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  • Gap in audience size between cable, broadcast shrinks

    Broadcast audiences still bring in bigger audiences than cable, in general, but the difference is open to interpretation. If you listen to the cable networks, they say the gap between broadcast and cable is shrinking. Broadcasters say it’s still significant.

    Take the NFL, for example, where NBC’s “Sunday Night Football” is averaging a 10.0 rating so far this season, compared with ESPN’s “Monday Night Football” averaging a 7.8 U.S. household rating. But that gap has been closing. Ten years ago, the broadcast network ABC pulled a 13.9 rating for Monday night and cable drew a 6.1 rating for Sunday night.

    Broadcasters might point out that the closing of the gap coincides with ESPN’s distribution gains. Ten years ago, ESPN had 77 million homes and now it’s close to 98 million.

    MLB provides another example. This year’s ALCS on TBS (an average of 5.474 million homes) outdrew the NLCS on Fox (an average of 5.321 million homes), showing cable can command similar audiences. The ALCS was a  more competitive series, featuring seven prime-time games on TBS, compared with the NLCS’s four prime-time (and one day game) on Fox.

    Fox probably would rather compare this year’s ALCS Game 7 on TBS with last year’s ALCS Game 7 on Fox. The broadcast network drew 19 million viewers for the Indians and Red Sox in 2007, versus TBS’s 13 million for the Red Sox and Rays last month.

    — John Ourand

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  • Ho-hum evolution for NASCAR’s Chase

    As it ends its fifth edition, the playoff-style Chase for the Sprint Cup has generated as much or more debate than any facet of NASCAR. The radical departure it represented from NASCAR’s roots was hailed as both a revolutionary move by NASCAR CEO Brian France and a slap in the face to the sport’s traditionalists.

    But the question hovering over the Chase is whether it’s really changed anything on the business side.

    It would be hard to tell by asking Ed Clark, president of Atlanta Motor Speedway, who cheerfully surrendered an October slot in the 10-race Chase for a date on Labor Day weekend, two weeks before the Chase begins.

    “We had to weigh that, but honestly, it didn’t take us long to make that decision,” Clark said of the opportunity to move to a holiday weekend and run at night.

    NASCAR’s playoffs, designed to elevate interest at the end of the season and keep the competition closer, has succeeded in creating more story lines on the track, even though Jimmie Johnson appeared to be on his way to his third straight championship. But it has not delivered the playoff-style lift in TV ratings or ticket demand.

    Attendance for Chase races continued its downward trend against last year in the mid-single digits in percentages, just as they have all season.

    Title sponsorships to Chase and non-Chase races work off the same rate card. There’s little to no premium attached to title sponsoring a Chase event, according to track officials.

    Texas Motor Speedway charges fans a premium for tickets to its Chase race, but it’s one of few tracks to do so. At most venues with two dates, the first race in the spring drives more robust ticket sales than the fall race.

    CHASE FOR THE CUP RATINGS
    Track
    2004
    2005
    2006
    2007
    2008
    Change 2004-08*
    New Hampshire
    2.8
    3.4
    3.1
    3.3
    3.8
    35.70%
    Dover
    3.1
    3.1
    3.1
    3.5
    3.3
    6.50%
    Kansas
    5.4
    4.5
    4
    3.1
    3.5
    -35.20%
    Talladega
    4.2
    5.3
    4.8
    4.6
    4.6
    9.50%
    Lowes
    4.9
    5.1
    4.7
    4.2
    3.8
    -22.40%
    Martinsville
    4.4
    4.7
    4.1
    3.7
    3.3
    -25.00%
    Atlanta
    4.6
    4.7
    4.8
    4
    3.6
    -21.70%
    Texas
    5.1
    5.1
    4.3
    3.7
    3.7
    -27.50%
    Phoenix
    4.9
    5
    4.7
    3.8
    3.6
    -26.50%
    Homestead-Miami
    6.2
    5.9
    4.7
    4.2
    NA
    -32.30%
    Average
    4.6
    4.7
    4.2
    3.8
    3.7**
    -19.60%
    NOTE: All ratings are U.S. ratings. Chase races at New Hampshire and Dover aired on TNT until 2006, with the remaining Chase schedule airing on NBC. Starting in 2007, all Chase races aired on ABC.
    NA: Not available at press time. * Change for 2004-07 for the Homestead-Miami race. ** Average through nine Chase races; does not include the 2.9 rating for the final 36 minutes of the Phoenix race, which was moved from ABC to ESPN2.
    Source: SportsBusiness Journal analysis of Nielsen Media Research data

    TV ratings, once a silver lining to NASCAR’s season, slumped to the finish, with ESPN experiencing declines for Atlanta, Martinsville and Charlotte, while the Texas race was flat. The 3.7 Chase average going into last weekend’s season finale was trending just below the 3.8 number for all 10 Chase races last year. Only three of the 10 Chase races have seen their ratings grow from the first year of the Chase in 2004, and two of those appeared on TNT in the Chase’s early years.

    All in all, Julie Sobieski, ESPN’s vice president of programming and acquisitions, gives the Chase a 5 on a scale of 10, while Speed President Hunter Nickell describes it as a work in progress.

    “We still see this as a great opportunity to grow the Chase into a playoff and see the lift in key metrics — ratings, ticket sales, sponsorship sales — that other sports get during their championships,” Sobieski said.

    “For us, the Chase is our big investment. It’s at a time of year when it’s highly competitive for eyeballs, for sponsor dollars. … If we can get the last race in Miami to pull the same number as the Daytona 500, everyone will benefit.”

    But there are significant obstacles to growing the Chase, namely that none of NASCAR’s crown jewel events are part of it. Treated as an entity itself, the Chase is the fourth-most-promoted event on the NASCAR schedule, most marketers agree.

    The season-opening Daytona 500 and Speedweeks easily rank first, while the Brickyard 400 at Indianapolis and Charlotte’s May combination of the Sprint All-Star Race and Coca-Cola 600 would be second and third.

    How can the Chase become a marquee property without any historically marquee events?

    “You’re talking about icons on the schedule,” said NASCAR’s Jim Obermeyer, managing director of brand and consumer marketing. And the race date is an important ingredient in making a race iconic.

    Would Indianapolis Motor Speedway surrender its July date as the first event on ABC/ESPN’s 17-race schedule and all the promotion that goes with it for a spot in the Chase?

    “That’s an interesting premise,” said Joie Chitwood, the speedway’s president and COO. “We’d look at it, but it’s not as easy as saying yes or no. We’d be giving up a lot.”

    What about Bristol Motor Speedway and its ultra-successful August date that has sold out 53 straight races and seats 160,000 fans. Think track President Jeff Byrd would swap his date for one in the Chase?

    “We wouldn’t change unless a significant majority of our fans wanted to change it,” he said. “In this economy, if you do anything to upset the fans, you’re going to pay for it. As things stand now, that date is part of our tradition. People plan for that weekend. A lot of our ticket holders are still on summer vacation, so it’s really convenient for them.”

    Convincing NASCAR fans that the race for the championship is just as important as the race for the checkered flag that day is another obstacle.

    “The No. 1 reason fans go to the track is to see who wins that day,” said Mark Dyer, CEO of Motorsports Authentics and a former NASCAR executive. “The championship is secondary. … I think it does require a sort of cultural change for the fans.”

    That’s a task that NASCAR, the tracks and sponsors can attack jointly, said Steve Gaffney, director of sports marketing for Sprint.

    “Part of our responsibility is to make them care what’s going on with the points,” Gaffney said. “Why don’t we actively engage the fans, whether it’s with SprintVision or FanView, and have a point machination so that they’re reminded of the big picture. That’s on us, to make the Chase more visible.”

    That cultural change extends to those marketing the Chase as well. NASCAR convened a group of influential decision-makers at its New York offices last January to tackle the issues facing the Chase.

    Eight of 10 racetracks, including Talladega
    (above), bought in to the branding plan to
    use signage and infield inventory
    to promote the Chase.

    Among those there were track operators Speedway Motorsports and International Speedway, ESPN, Sprint and Octagon, the marketing agency that represents Sprint.

    A branding plan was conceived to present the Chase with more consistency, from the broadcaster to the tracks to the promotions.

    “We wanted to make the visibility of the Chase unique from the other 26 races,” Obermeyer said. “When you see that red, white and blue bunting at a baseball park, you know it’s the playoffs. We want the Chase races to have that identity, whether it’s in signage, tune-in messages or the infield grass.”

    Eight of the 10 tracks in the Chase bought in, using the black and yellow branding. Texas and Atlanta were the two that declined, saying that the signage, grass infield and other visible track assets were too valuable to donate.

    “We have seen the fruits of the cooperation in the branding and consistency, but it’s still a property in its infancy,” Gaffney said. “The devil in the details is that you’ve got 10 Chase races and 10 different track promoters all looking to fill the stands. They have to make decisions in the best interest of their track. The Chase has not been the draw that they hoped it would be, but that’s why it’s important to move it up in stature.”

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  • Is cable the new home of champions?

    Sports television is on the cusp of a seismic shift if the BCS follows through with its plan to spurn the power of broadcast television and put all four of its bowl games on ESPN, the cable channel that reaches 20 million fewer homes than the major broadcast networks.

    What makes this shift significant is not just that ESPN appears poised to outbid Fox by a startling $100 million over four years to secure the annual marquee bowl games. It’s that if ESPN’s bid is accepted, none of the broadcast network sports departments would have mounted a significant bid. Though Fox was the incumbent and CBS and NBC air college football games regularly, none appeared able to come close to the price being bandied by ESPN.

    The future impact is clear. As sports properties continue to sell their rights to the highest bidder, it’s becoming increasingly evident that there are fewer bidders at the table. And those bidders increasingly are coming from cable rather than broadcast.

    It appears the broadcast networks can’t and won’t compete with ESPN’s or Turner’s dual revenue stream of affiliate fees from cable operators and advertising fees, especially given the current economic conditions.

    The fourth quarter ad market has been soft across all sports, putting greater importance on the affiliate revenue that cable networks collect. Plus, broadcasters’ parent companies have seen their stock prices drop sharply from the beginning of the year, with CBS falling 75 percent, News Corp. dropping 63 percent and GE falling 53 percent. Disney, by comparison, has seen its shares drop 32 percent.

    LSU celebrated its victory in the Allstate BCS
    National Championship Game in January on Fox.

    At deadline for this story late last week, the BCS deal hadn’t been finalized, and Fox still had the right to match any offer until today. But most executives familiar with the discussions believe that a broadcast network that depends solely on ad revenue, like Fox, cannot match the amount a cable channel like ESPN can put on the table.

    The Rose Bowl is negotiated separately from the other four BCS bowls and has a deal with ABC/ESPN that runs through 2014. If ESPN wins the rights to the other BCS bowls, it would trigger a clause in its Rose Bowl contract that would allow it to take the game from its home of 21 years on ABC to the cable channel.

    If the deal is completed, and all signs suggest that ESPN will wrap it up soon, the BCS would become the biggest property to play its marquee games entirely on cable TV.

    And viewers should be braced for further moves. At Disney, which owns all of ABC and 80 percent of ESPN, sports events steadily have migrated from the broadcast network to the sports flagship during the last several years. ESPN executives are frank about stating their wish to pull more high-profile sports off the broadcast network.

    “It is a nice old-fashioned notion that you need your championship on broadcast,” said a senior ESPN executive, who asked not to be identified due to contractual issues with various leagues.

    Disney’s sports-on-cable strategy started two years ago. That’s when Disney moved “Monday Night Football” from ABC to ESPN, and declined to bid on the Sunday night prime-time broadcast package.

    That was also the year when ESPN officially became Disney’s sports brand, and ABC Sports was rebranded as “ESPN on ABC.”

    But the trend accelerated last week.

    First, Disney made a not-so-subtle statement when it moved the end of one of NASCAR’s final races in its Chase to the Sprint Cup from ABC to ESPN2 to allow the broadcast network to air “America’s Funniest Home Videos.”

    Two days later, news leaked that the BCS was considering allowing ESPN to carry all of its bowl games, including the BCS title game.

    Privately, BCS officials say they are not concerned by the fact that ESPN doesn’t command as big an audience as the broadcast networks. According to one executive who asked not to be identified because the deal has not been completed, several factors steered the BCS toward ESPN, in addition to the extra $100 million ESPN was offering.

    First, there’s the federally mandated digital transition coming in February 2009, when broadcasters have to turn off their analog signals and go all digital. Cable executives believe the switchover will cause many broadcast-only homes to begin subscribing to cable and satellite services. At an investor conference earlier this fall, Comcast President Steve Burke said his company could see an increase of 3 million subscribers thanks to the transition. So, by the time this BCS deal starts in January 2011, the gap in households between broadcasters and cable/satellite channels will narrow considerably from the current 20 million homes that don’t get cable or satellite, BCS officials believe.

    Plus, BCS executives were heartened by news that the British Open would shift exclusively to ESPN starting in 2010 (see SportsBusiness Journal, July 21-27 issue). That soothed fears that the BCS was flying solo in moving exclusively to cable. Rather, it proved that the BCS would be part of a trend of big events migrating to cable, the BCS source said.

    While various sports events and regular-season programming has shifted to cable since the NBA moved the bulk of its schedule from NBC to ESPN for the 2002-03 season, the top U.S. sports leagues are not anxious to follow suit with their championship events.

    Sources from the NFL, MLB and NBA all told SportsBusiness Journal last week that they are not willing to allow any cable channel to carry their final championship games, at least not yet.

    Of the three, the NFL is the biggest proponent of broadcast television and still is committed to carrying all of its regular-season games on over-the-air broadcast television. Commissioner Roger Goodell credited this policy with helping the league grow.

    “We’re unique among leagues in doing that,” he said earlier this month.

    The NFL ensures that even games on ESPN and NFL Network are carried on over-the-air stations in the local markets, a policy that the BCS is not likely to share.

    MLB and the NBA have made more inroads with cable television, even putting more playoff games on cable in the last couple of years. TBS has carried one of MLB’s two League Championship Series for the past two seasons, and the NBA has allowed TNT and ESPN to carry its conference finals since 2002. The NBA also puts one of its season highlights, the All-Star Game, on TNT.

    While the NHL and MLS have their championships on broadcast TV, sources with both leagues believe that it is inevitable that major championships will migrate to cable. Though MLS still prefers that its MLS Cup is on ABC, the league’s Dan Courtemanche said the move of his league’s marquee All-Star game from ABC to ESPN has been successful.

    “Our sponsors like it, ABC/ESPN likes it and we like it,” he said. “We haven’t seen any negative aspects to our decision.”

    Staff writers Michael Smith and Tripp Mickle contributed to this story.

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  • J&J won’t renew TOP deal with IOC

    Less than three years after announcing that it would become a worldwide Olympic partner, Johnson & Johnson has decided not to extend its sponsorship through 2012.

    “We are not renewing that sponsorship to enable us to focus on other business priorities,” J&J spokeswoman Lorie Gawreluk wrote in an e-mail. “We are proud to have been a sponsor of the [International Olympic Committee] and the Beijing Olympics, which was a success for the company.”

    Despite its decision not to return as an IOC partner, J&J may remain affiliated with the Olympics by sponsoring the U.S. Olympic Committee, other national organizing committees and possibly the 2010 Vancouver Games, sources familiar with the company said.

    The decision to discontinue the top-level sponsorship was made over the last three weeks in part because of the economy and the expiration of key patents that J&J faces in the coming years. It leaves the IOC without a sponsor that would have delivered approximately $100 million in its renewal over four years and helped the organization achieve its goal of $1 billion for The Olympic Partnership program running from 2009-12.

    J&J left Beijing pleased with its experience as a TOP partner but undecided about its future in the program. The IOC granted J&J special permission to wait and make a decision after the company had analyzed its marketing performance following the Olympics. Both J&J sponsorship and IOC officials were optimistic that the company would renew but understood that it wasn’t guaranteed.

    Speaking in Beijing during the Games in August, Owen Rankin, J&J vice president of corporate equity and Olympic sponsorship, said, “When we get back we’ll look at the rest of the data points and say, ‘Does this make sense as a place for us to be?’”

    J&J’s multimillion-dollar exhibit
    in Beijing included ancient
    Terra Cotta Warriors (top).

    The answer was not as simple as “no.”

    Sources familiar with the company’s decision said Johnson & Johnson paid for its 2006-08 TOP and 2008 Beijing Olympic sponsorships out of its corporate budget, with the estimated outlay pegged at more than $73 million, because China was such a crucial market for the company. But this time the company wanted its brands to contribute to the cost of the sponsorship from their individual marketing budgets. The sponsorship division was able to pull that funding together but failed to get corporate approval because of economic pressure facing the pharmaceutical industry, which is expected to see revenue drop by as much as $10 billion next year.

    While J&J officials spoke highly of their experience in Beijing, the company was one of the sponsors frustrated by the lack of foot traffic on the Olympic Green, where it spent millions of dollars building a showcase to expose its brands to Chinese consumers. The Beijing Olympic Organizing Committee (BOCOG) and IOC had told J&J and others to expect upward of 10,000 visitors a day, but the first weekend only 3,000 to 5,000 visited each day because of security restrictions. BOCOG corrected the problem later in the week by relaxing some of their security measures, but J&J and other sponsors were still frustrated.

    J&J activated heavily during the Beijing Games. In China, it provided informational J&J branded books about the Olympics to children across the country, and in the U.S., it backed a special area on NBC-Olympics.com called the “Family Room” that featured webisodes of eight U.S. athletes preparing for the Games. J&J is the fourth partner to discontinue its IOC TOP partnership since last year. The others from the 2005-08 quadrennial are Kodak, ManuLife and Lenovo. The IOC was able to replace Lenovo with Acer, but it returned ManuLife’s insurance category rights back to the 200 national organizing committees and added Kodak’s digital camera category rights to Panasonic’s sponsorship. As the official health care products partner, J&J will be difficult, if not impossible, to replace.

    An IOC spokesman said: “The TOP program receives a lot of interest from a number of corporations from around the world looking to partner with the Olympic Games and the Olympic Movement … (and) further announcements are expected to be made regarding new members” in 2009.

    The IOC has nine partners for 2009-12 and already has raised more than the $886 million it received from 2005-08, but it hasn’t topped its goal of $1 billion for the quadrennial. It is exploring sponsorships in additional categories, including automotive, personal care products and others.

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  • LPGA schedule familiar for ’09, murky for ’10

    LPGA officials will announce a 2009 schedule on Wednesday that looks similar to this year’s group of events, but which could change dramatically in 2010 because of uncertainty about the economy and expiring contracts with title sponsors and television networks.

    The LPGA schedule consisted of 34 official money events this year and should get close to that number in 2009, depending on the outcome of sponsor searches for three tournaments. The former Safeway International in Phoenix and the SemGroup Championship in Tulsa, Okla., are trying to find new sponsors so that they can stay on the schedule, and the Wegmans LPGA in upstate New York is working on an extension. The tour is expected to leave slots open for those events.

    The Fields Open in Hawaii and Ginn Tribute in South Carolina will not return in 2009 because title sponsors opted not to continue. The future of the LPGA-owned ADT Championship in Florida, which lost its title sponsor, is also uncertain.

    For now, said Chris Higgs, chief operating officer of the LPGA, the lone addition is the Honda LPGA Thailand, which returns to the 2009 schedule after a one-year absence. The tour will also stage the biennial Solheim Cup next year, a Ryder Cup-style team competition that will be played in Illinois.

    The schedule forecast for 2010 could be more ominous given the state of the economy and the number of title sponsorships that expire in 2009.

    Of the 24 tournaments sanctioned by the LPGA in the U.S. and Canada this season, only five have contracts with title sponsors for 2010, according to officials with each tournament (see chart).

    LPGA tournaments signed past 2009
    09 Tournament Signed through
    Safeway Classic 2010
    Stanford International 2010
    CN Canadian Womens Open 2010
    Bell Micro LPGA Classic 2011
    Kraft Nabisco Championship 2013*
    *Kraft has a five-year deal that renews each year

    That list could soon include Longs Drugs, which reportedly extended its tournament in Northern California for 2009 and 2010. Also, Corning has a one-year option in upstate New York for 2010, and tournament directors of the SBS Open in Hawaii and the Navistar LPGA Classic in Alabama said extension talks were under way. Terms could not be obtained for the nine international events on the 2008 schedule, but Higgs said a “greater degree” of those tournaments are signed for 2010 and beyond.

    He also said it was too early to be concerned about the potential holes in the schedule.

    “I think a lot of [current and prospective sponsors] are hoping to get themselves through 2008 and just take a breath before they start looking at 2010,” Higgs said. “We’re cautiously optimistic.”

    While most tournaments cited the economy as the main obstacle to finding new title sponsors, the LPGA’s rising sponsorship and sanctioning fees under Commissioner Carolyn Bivens, who took the post in September 2005, have created some obstacles in small to medium-size markets. Tulsa, which lost SemGroup as a title sponsor when the company filed for Chapter 11 bankruptcy protection earlier this year, has not found a new sponsor, in part because of the higher price tag.

    “It was a tough sell at $2 million a year and now you’re coming back two years later with a $4 million price tag?” said a source close to the tournament. “That’s not an easy proposition.”

    Higgs said it was too early to predict whether the economy would force reductions in title sponsorship fees but hinted that was a possibility.

    “The cream of the crop of English Premier League football are looking at corrections and retractions in their sponsorships, and you realize that nothing is immune,” he said.

    The challenges at the tournament level come as the LPGA is trying to sell a mid-seven-figure umbrella sponsorship for a series of events starting in 2010. Stanford Financial, which will temporarily shelve its tournament in South Florida to title sponsor the LPGA’s season-ending event in Houston in 2009, is among those looking at the deal.

    One sticking point with any suitor remains the LPGA’s lack of a television deal starting in 2010. The tour held informal talks with CBS and NBC about splitting a package of eight events, but it has not discussed a deal with either network since late this summer.

    The LPGA is still talking with Golf Channel, which is building a wall-to-wall live programming strategy on Saturday and Sunday that could include live or taped coverage of the LPGA.

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  • NHL adopts disclosure policy for owners

    NHL owners accustomed to minding their own business now have to disclose it, courtesy of a new policy instituted by the league in late September.

    In response to a series of unknown financial arrangements between former Nashville Predators owner William “Boots” Del Biaggio and two other NHL owners, the league’s board of governors adopted a new policy that requires owners to disclose any and all business and financial relationships between one another.

    The rule means that an owner like AEG, which owns the Los Angeles Kings, must submit to the league every single one of the arenas that it manages that also serve as home to an NHL club, like Jobing.com where the Phoenix Coyotes play. The same is true for Jeremy Jacobs, who owns the Bruins and Delaware North, an arena concessions company with business throughout the league.

    All 30 of the league’s clubs have complied with the new rule since it was instituted in late September, said league sources who spoke anonymously because of the privacy of the new policy.

    The rule also extends to potential new owners. As part of the application process for NHL ownership, future buyers of NHL clubs will be required to disclose any business ties with other NHL owners at the time of the potential purchase.

    Leipold

    The rules are a response to the disclosures that Minnesota Wild owner Craig Leipold and AEG loaned $10 million and $7 million, respectively, to Del Biaggio before his purchase of the Predators last year. The league was unaware of the loans and caught off guard when they were disclosed this summer in a bankruptcy filing by Del Biaggio.

    Part of the reason the rule extended beyond financial loans to all business arrangements was because AEG Chief Executive Tim Leiweke told the New York Post that his loan was made so AEG might win management rights to the Nashville arena. He said it wasn’t given to influence the Predators to relocate to the arena AEG operates in Kansas City.

    In addition to requiring clubs to disclose business relationships, the NHL also has begun requiring owners to notify the league when they begin a sales procedure. The league has often found out about potential team sales through the press, but in the future, owners will be expected to alert the league as they begin to put together a sales pitch — even if that pitch is just for a percentage stake in a team.

    The league feels that both rules will help it respond to questions regarding not only relationships between owners but also potential franchise sales, sources said.

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  • Pepsi names veteran Dubiel head of sports marketing

    Pepsi’s new vice president of sports marketing is Jeff Dubiel, a marketing veteran of the $39.5 billion beverage and snack food giant. Dubiel has held the title of vice president of premium beverages since 2006, and comes to the company’s sports division after stints at SoBe and the Starbucks/Pepsi beverage partnership. He was a marketing manager at the Gallo Winery before joining Pepsi.

    Dubiel moves to Pepsi’s top sports post after the recent promotion of former sports chief Ralph Santana to vice president of colas, N.A. Santana ran the company’s sports media and interactive marketing division for around two years. Agency sources said Dubiel’s new slot will not include the media responsibilities that were held by Santana. Since Santana left in September, John Stamatis, director of sports marketing, led the department.

    Pepsi touts a broad sports portfolio that includes MLB and NFL league and team deals, title sponsorship of the AST Dew Tour and deals with NASCAR icons Dale Earnhardt Jr. and Jeff Gordon. So Dubiel takes on a role that is daunting at any time. However, a current comprehensive $1.2 billion relaunch of key Pepsi beverage brands over the next three years will increase pressure on Pepsi marketers.

    “Jeff’s very pragmatic in his approach,” said a Pepsi agency source. “Whether it is sports, music, or entertainment. It’s all about building brands and moving cases.”

    Like almost every consumer brand, Pepsi is feeling pressure from the economic slowdown. It recently reported a decline in third-quarter profits, citing soft domestic beverage sales — marking the first time it had missed Wall Street expectations since 1999. Accordingly, agencies and sports and non-sports properties are now scrambling to grab a piece of the big Pepsi relaunch planned for 2009 that will include events such as New Year’s Day, Inauguration Day and the Super Bowl, where Pepsi has been a fixture as an advertiser.

    Additionally, Pepsi is looking to combine some aspects of sports marketing between its cola and Gatorade units, which have been operated separately. John Galloway, Pepsi’s top sports marketer from 2001 to 2006, started in Chicago in July as vice president of marketing at Gatorade, shortly after former Nike marketer Sarah O’Hagan was installed as Gatorade CMO in June.

    Pepsi’s move with Dubiel continues a marketing reorganization, which began in July, when Cie Nicholson, Pepsi-Cola North America senior vice president/CMO, resigned and Dave Burwick was named CMO, beverage brands.

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  • Rays’ Web site racks up exposure

    The brand receiving the most exposure during the recently completed World Series broadcast wasn’t an MLB sponsor, nor was it a Fox advertiser; it was the Tampa Bay Rays’ Web site, Raysbaseball.com, according to a brand-exposure study from Repucom.

    Founded in Australia in 2004, Repucom is an international sponsorship measurement agency that uses image-recognition technology to assign a cash value to a brand’s broadcast exposure based on the location, size, duration and number of impressions that brand’s logo receives during a game.

    World Series Brand Exposure Listed by Value
    Ranking/
    brand
    Repucom
    value
    Seconds
    on air
    1. Raysbaseball.com
    $8,540,384
    2,815
    2. Chevrolet
    $7,337,621
    2,141
    3. Taco Bell
    $4,558,498
    1,479
    4. Gatorade
    $4,023,121
    1,582
    5. New Era
    $3,460,765
    1,139
    6. Phillies.com
    $3,361,820
    1,292
    7. World Series
    $1,938,315
    717
    8. DirecTV
    $1,936,389
    581
    9. Budweiser
    $1,935,460
    642
    10. Gillette
    $1,923,813
    581
    Source: Repucom

    The agency’s exposure study of the World Series on Fox had Raysbaseball.com as the most seen brand on screen, with 2,815 seconds, which also earned it the top exposure value at more than $8.54 million, based on ad rates for the same amount of time. MLB sponsors Chevy and Taco Bell — two of the biggest World Series spenders — finished second and third in exposure value.

    Phillies.com and MLB’s own World Series logo, which appeared on outfield, fascia, dugout and signage painted on the field, were sixth and seventh, respectively. Including the Raysbaseball.com top score, that means that three of the top seven most visible logos during Fox’s telecasts were MLB brands. Combined, Raysbaseball.com. Phillies.com and the World Series logo received more than $13 million in exposure value during the World Series — far exceeding any paying sponsor/advertiser.

    Traditionally, outfield wall signage has been the crown jewels among MLB team inventory — and has been priced accordingly. However, some brands with only dugout and behind-the-plate signage achieved appreciable visibility during Fox’s broadcasts.

    Such placement put Gatorade and New Era in the top seven in total exposure and exposure value even though each had negligible presence outside the dugouts. Gatorade ranked second overall in brand exposure, measured by time, and was fourth in dollar value, even though its “signage” was limited to branded cups, coolers and towels. Raysbaseball.com and Phillies.com had dugout and behind-the-plate signage, making outfield wall signs seem less valuable than they appear from the seats.

    The exposure helped drive traffic at Raysbaseball.com, which saw a 78 percent increase in traffic and 132 percent increase in the number of page views during the postseason versus the month of September.

    Repucom’s technology helps sponsors
    measure brand exposure
    during broadcasts.

    “The biggest mistake marketing executives make in buying sports signage is walking around a venue and seeing how it looks to fans, whereas the real value brands are buying is TV exposure,” said Repucom founder and President Paul Smith. “We’re working with some teams to re-price signage inventory, and that’s the kind of thing they have to keep in mind.”

    Repucom’s analysis of behind-the-plate signage during Fox broadcasts has Taco Bell first and Chevy second in terms of duration and value received. Two films also got prime exposure, with “Four Christmases” placing fifth and “Yes Man” eighth. The Fox TV show “House” was ninth. The Boys and Girls’ Clubs, MLB’s official charity, got enough exposure behind the plate to rank it 13th — ahead of three MLB sponsors: MasterCard (13), Holiday Inn (19) and Bank of America (20).

    Since setting up shop in the U.S. a year and a half ago, Repucom has built a roster of clients that includes more than 14 NBA teams, the NFL, NASCAR, Geico, Gatorade and Pepsi. And its data already is impacting how teams and clients value their signage.

    The NBA and Boston Celtics reviewed Repucom data before deciding to move a portion of their rotational signage to the end sidelines last year. It’s a move the team believes will boost TV impressions of sponsors as much as 250 percent.

    Brands also have used the agency to make decisions about signage and improve exposure to negotiate sponsorship fees.

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  • Stats data will top Google results

    Stats LLC has struck a multiyear deal with Google to have real-time sports scores and data available within the Internet powerhouse’s search engine as well as iGoogle, the company’s personalized home page offering.

    The deal will be limited to scores, standings and schedules. Still, it extends Stats’ initiative to expand its global footprint, an effort that this year has seen the creation of a Dubai-based outlet to service the Middle East. It also calls for the addition of 111 sports to the company’s coverage plan, bringing that count up to 234 sports overall.

    “We’ve been working on this, literally, for a few years, but it’s really important for us in terms of becoming a truly global player,” said Greg Kirkorsky, Stats senior vice president of sales. “This isn’t a traditional portal deal where somebody like a Yahoo! or an AOL is using this type of data to help build out a sports channel. This is about simply connecting people with information.”

    Terms were not disclosed. The deal is to be announced this week.

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  • Stats data will top Google results

    Stats LLC has struck a multiyear deal with Google to have real-time sports scores and data available within the Internet powerhouse’s search engine as well as iGoogle, the company’s personalized home page offering.

    The deal will be limited to scores, standings and schedules. Still, it extends Stats’ initiative to expand its global footprint, an effort that this year has seen the creation of a Dubai-based outlet to service the Middle East. It also calls for the addition of 111 sports to the company’s coverage plan, bringing that count up to 234 sports overall.

    “We’ve been working on this, literally, for a few years, but it’s really important for us in terms of becoming a truly global player,” said Greg Kirkorsky, Stats senior vice president of sales. “This isn’t a traditional portal deal where somebody like a Yahoo! or an AOL is using this type of data to help build out a sports channel. This is about simply connecting people with information.”

    Terms were not disclosed. The deal is to be announced this week.

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  • Study: Fantasy players spend big

    Fantasy sports players are voracious consumers, strongly outspending the general population in many leading product categories, according to new research commissioned by the Fantasy Sports Association.

    81% of fantasy sports players use a credit card at least once a month
    73% of sports fans in general
    72% of the U.S. population
    Source: Ipsos Public Affairs study

    The data, to be released this week and conducted by Ipsos Public Affairs, aim to give depth to earlier general studies commissioned by the FSA and the Fantasy Sports Trade Association regarding the overall size of the fantasy sports market.

    The most recent studies have positioned the fantasy sports market at nearly 30 million players in the United States and Canada with an average household income of more than $94,000. The new research seeks to build on that by tracking fantasy player spending within several leading product categories, including beer, air travel, credit cards and wireless.

    In many of those sectors, fantasy players consumed products at a rate well in excess of both the general population and sports fans at large. In the beer category, for example, 73 percent of fantasy players made a purchase within a month of the study’s September and October compilation, compared with 47 percent of the general population and 52 percent of all sports fans.

    Fantasy players, real (strong) buyers
    Fantasy sports players are stronger consumers of many goods and services than sports fans in general or the overall U.S. population, according newly compiled data.
    In the past 30 days, purchased:
    Fantasy players
    Sports fans
    General population
    Beer
    73%
    52%
    47%
    Other alcohol*
    68%
    52%
    48%
    Fast food
    92%
    87%
    86%
    Soft drinks
    94%
    91%
    89%
    In the past 12 months:
    Flown on an airline
    52%
    42%
    42%
     
    At least once per month:
    Read a sports magazine
    63%
    49%
    48%
     
    General:
    Own a computer
    97%
    95%
    96%
    Have cable/satellite service
    95%
    91%
    90%
    Use a cell phone
    93%
    89%
    88%
    Own athletic shoes
    90%
    80%
    77%
    Own a video game system
    58%
    42%
    40%
    * Includes wine, vodka, whiskey/bourbon, rum and tequila.
    Notes: Results from online polling of more than 1,200 fantasy sports players between Sept. 5 and Oct. 10.
    Source: Ipsos Public Affairs study conducted for the Fantasy Sports Association

    Double-digit spreads were also seen in air travel, ownership of athletic shoes and video game systems, and sports magazine readership (see chart).

    Specific brands that were particularly popular among fantasy players compared with the general population include Bud Light, McDonald’s, Subway, Visa, Nike, Sony and Sports Illustrated.

    The research, the result of a series of interviews conducted by Ipsos, will be used as the fantasy industry continues its pursuit of major corporate advertisers.

    “We need to tell Madison Avenue that we’re not just this small, nichey geek audience,” said Greg Ambrosius, FSA president and editor of the Krause Publications-owned Fantasy Sports Magazine. “This gives us the next step into really seeing who the fantasy consumer is. In the ’90s, we were often positioned simply as fantasy geeks. But looking at this, we’re really big-time consumers.”

    FSA paid $30,000 to conduct the research. Ipsos has performed many of the prior studies for the FSTA and obtained the consent of that organization before beginning the FSA study.

    While the FSA generally represents larger fantasy operators than the FSTA, there is some overlap among the members of the two groups, including Ambrosius.

    “This is sort of common sense looking at what the prior research [and] income numbers suggested. But some of the best research is common sense, and with this, we didn’t know until we did the research,” said Aaron Amic, Ipsos vice president. “Still, you don’t necessarily have a lot of ‘Wow’ moments in research, but in this, there was a bit. These are definitely hyper-consumers we’re talking about.”

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  • Talks continue on Superdome lease, upgrade

    Stadium manager SMG and the New Orleans Saints continue their talks to extend the team’s lease at the state-owned Louisiana Superdome, a deal that could result in building 12 to 15 more suites and adding 3,000 seats in the lower bowl.

    Those upgrades, based on a study sports architect Ellerbe Becket did in 2002, would produce more game-day income for the Saints and reduce their need for the roughly $20 million in state subsidies the team collects annually for playing in one of the NFL’s smallest markets.

    Decreases in tourism revenue after the 2001 terrorist attacks and Hurricane Katrina in 2005 forced state officials to tap into other sources of funding to pay those subsidies to the Saints, and discussions have centered on easing that burden, SMG officials confirmed.

    Doug Thornton, SMG’s senior vice president in New Orleans, said the two sides are getting closer to signing an agreement that would keep the team at the venue for a minimum of 15 years. The Saints’ lease expires after the 2010 season.

    “I’m confident that the Superdome will continue to be their home,” Thornton told the audience at a recent sports management conference in Columbia, S.C.

    “I don’t see a new stadium on the horizon in New Orleans at any time in the near future. There is no way we can finance it.”

    Saints spokesman Greg Bensel said, “We have a very good relationship with the state, and we look forward to continued dialogue with them.”

    Two key components tied to the lease renewal include reconfiguring the lower bowl to make the multipurpose facility “more football friendly” and widening the plaza level concourse from 18 feet to 50 feet to create space for additional food concessions, Thornton said.

    There is also a plan, based on Ellerbe Becket’s findings, in which the press box on the 300 level could be moved one floor above to the upper deck, freeing up space to build up to 15 new suites. There are 137 suites at the dome, 73 on the third floor.

    The Saints sell the suites for $90,000 to $150,000 annually, depending on size and location. The skyboxes have been sold out since the team moved back to the dome in 2006 after spending 2005 playing home games in three different stadiums.

    An alternative to developing new suites would be building a premium club in the area vacated by the press box, Thornton said. The dome’s post-Katrina upgrades included four new 20,000-square-foot corner lounges that opened in 2007 on the club level.

    Signing a long-term extension would give the Saints and SMG a better chance to sell naming rights for the Superdome, but that opportunity is still a long shot given the state of the financial markets, Thornton said.

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  • Union requires pre-arbitration update

    The MLB Players Association is now requiring agents to consult with the union before they negotiate contracts for arbitration-eligible players.

    Agents are now also required to apprise the union of the personnel who will prepare and present an arbitration case for the player if it goes to a hearing, said Michael Weiner, general counsel for the MLBPA.

    “If we think it is not satisfactory, we talk with them about it and make suggestions,” Weiner said. If the person designated by the agent is not satisfactory, “We have people we can suggest and recommend. There are a bunch of attorneys who do this kind of work,” he said.

    The move comes as some veteran agents have complained privately that other agents have agreed to long-term, below-market deals in order to secure client fees for themselves.

    Some top agents are worried about a trend of multiyear deals for arbitration-eligible and pre-arbitration players that take them through their arbitration years and, in some cases, through their first few years of free agency. Some of those deals have included multiple club options, in which the club, not the player, decides whether to extend the deal at a prearranged price.

    MLB players become free agents after six years of major league service. They are eligible for arbitration in their third, fourth and fifth years.

    MLB arbitration hearings
    Period
    Avg. yearly
    hearings
    % won by
    players
    1980-1992
    21
    45%
    1993-2001
    11
    37%
    2002-2008
    6
    31%
    Source: SABR; MLB.com

    The new policy “wasn’t spurred by any particular deal or set of deals from last year,” Weiner said.

    “Over the years, I think there have been some deals that were less favorable to the players than they should have been because of lack of preparation on the agent’s side,” Weiner said, but he declined to be more specific.

    “If we were pleased about the level of preparation, we would not have to do this.”

    Agents negotiating multiyear deals that would cover clients’ arbitration-eligible years also must now consult with the union, Weiner said. Nearly 90 percent of arbitration-eligible cases are resolved before they reach arbitration hearings, statistics show.

    Agents have been told of the new requirements and have already been meeting with the union about their players and the personnel on their arbitration team, Weiner said.

    If the agent hires an outside attorney, the agent and player will decide which pays the cost of the attorney.

    The MLPBA intends to ask the executive board of players who govern the union to incorporate the new requirements into the agent regulations in December, Weiner said.

    Weiner noted that the MLB commissioner’s office has had a mandatory arbitration consultation program with clubs for about 10 years.

    Rob Manfred, MLB executive vice president of labor relations and human resources, said that he and former MLB labor attorney Frank Coonelly started the arbitration consultation program when they joined the league in 1998. (Coonelly has since become president of the Pittsburgh Pirates.)

    “What I have been led to believe is they will engage in the same kind of activity that is similar to our salary arbitration support program,” Manfred said.

    Weiner said MLBPA officials had for years encouraged agents to consult with the union about arbitration negotiations and their arbitration team. The new requirements are “making formal what we had done on an informal basis,” Weiner said.

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  • Union requires pre-arbitration update

    The MLB Players Association is now requiring agents to consult with the union before they negotiate contracts for arbitration-eligible players.

    Agents are now also required to apprise the union of the personnel who will prepare and present an arbitration case for the player if it goes to a hearing, said Michael Weiner, general counsel for the MLBPA.

    “If we think it is not satisfactory, we talk with them about it and make suggestions,” Weiner said. If the person designated by the agent is not satisfactory, “We have people we can suggest and recommend. There are a bunch of attorneys who do this kind of work,” he said.

    The move comes as some veteran agents have complained privately that other agents have agreed to long-term, below-market deals in order to secure client fees for themselves.

    Some top agents are worried about a trend of multiyear deals for arbitration-eligible and pre-arbitration players that take them through their arbitration years and, in some cases, through their first few years of free agency. Some of those deals have included multiple club options, in which the club, not the player, decides whether to extend the deal at a prearranged price.

    MLB players become free agents after six years of major league service. They are eligible for arbitration in their third, fourth and fifth years.

    MLB arbitration hearings
    Period
    Avg. yearly
    hearings
    % won by
    players
    1980-1992
    21
    45%
    1993-2001
    11
    37%
    2002-2008
    6
    31%
    Source: SABR; MLB.com

    The new policy “wasn’t spurred by any particular deal or set of deals from last year,” Weiner said.

    “Over the years, I think there have been some deals that were less favorable to the players than they should have been because of lack of preparation on the agent’s side,” Weiner said, but he declined to be more specific.

    “If we were pleased about the level of preparation, we would not have to do this.”

    Agents negotiating multiyear deals that would cover clients’ arbitration-eligible years also must now consult with the union, Weiner said. Nearly 90 percent of arbitration-eligible cases are resolved before they reach arbitration hearings, statistics show.

    Agents have been told of the new requirements and have already been meeting with the union about their players and the personnel on their arbitration team, Weiner said.

    If the agent hires an outside attorney, the agent and player will decide which pays the cost of the attorney.

    The MLPBA intends to ask the executive board of players who govern the union to incorporate the new requirements into the agent regulations in December, Weiner said.

    Weiner noted that the MLB commissioner’s office has had a mandatory arbitration consultation program with clubs for about 10 years.

    Rob Manfred, MLB executive vice president of labor relations and human resources, said that he and former MLB labor attorney Frank Coonelly started the arbitration consultation program when they joined the league in 1998. (Coonelly has since become president of the Pittsburgh Pirates.)

    “What I have been led to believe is they will engage in the same kind of activity that is similar to our salary arbitration support program,” Manfred said.

    Weiner said MLBPA officials had for years encouraged agents to consult with the union about arbitration negotiations and their arbitration team. The new requirements are “making formal what we had done on an informal basis,” Weiner said.

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