April 11 - 17, 2011 Vol. 13 — No. 49

Top Stories

  • Networks resist IOC timetable

    The International Olympic Committee’s initial plan to host bidding for its TV rights package starting in mid-May ran into resistance from U.S. network executives, who said that the proposed date interfered with television’s important upfront selling season.

    As a result, media sources said the IOC pushed back the date of bidding from May 16 or 17 to a day in early June. The IOC and networks still are trying to settle on an exact date. The move to push back the bidding by three weeks also caused the IOC to push back the earlier date it was going to require networks to submit letters of interest. Those letters originally were expected April 8. They now are expected to be submitted later this month.

    The upfront selling season, when networks preview their coming programming slates for advertisers, is one of the most important events for the TV networks and demands the full attention of the top network executives. The delay shouldn’t have a significant effect on the IOC, which already has delayed the sale of the rights for nearly three years

    These developments follow a series of recent meetings the IOC held with top executives from all the major U.S. television networks: CBS, ESPN, Fox, NBC and Turner. The meetings, held in late March at Banco Popular’s New York offices, marked the first time IOC leaders met with network executives to outline a timeline and process for the bidding of rights to the 2014 and 2016 Games. The Olympic bidding process will be the biggest rights negotiation for the year and traditionally has been used to set the market for other sports.

    At the meetings late last month, IOC leaders told network executives they officially wanted to know by the end of last week whether they were planning to bid. Those that expressed interest were then scheduled to receive contracts to review.

    Ultimately, bidders will end up in Lausanne, Switzerland, in early June, where they will be given two hours to make their presentations. Once the presentations are over, they will submit a sealed bid containing what they’re willing to pay for the rights.

    The IOC and the networks declined to comment on the meetings. IOC executive board member Richard Carrión previously said he plans to name a television partner before the IOC meets in July.

    The meetings were led by Carrión and Timo Lumme, IOC director of TV and marketing services. They were joined by Vincent Chupin, IOC vice president of television and audiovisual rights, and the IOC’s outside counsel, O’Melveny & Myers. U.S. Olympic Committee Chairman Larry Probst and CEO Scott Blackmun also attended.

    The networks were represented by their top executives, including NBC Sports & Olympics Chairman Dick Ebersol; CBS Sports Chairman Sean McManus; ESPN President George Bodenheimer; Fox Sports Chairman David Hill; and David Levy, Turner’s president of sales, distribution and sports.

    At the meetings, IOC leaders told network executives that they are looking for bids to the 2014 Sochi Games and 2016 Rio Games. They also said they would consider bids for a package that includes the 2018 and 2020 Games. The host cities for those Olympics haven’t been selected.

    The IOC told network executives to bid on a package that includes television, digital and mobile platforms. Unlike in its current agreement with NBC, the IOC told the networks that the rights to the U.S. Olympic trials will not be included in the contract. Those would be negotiated with the USOC, which owns the rights.

    An Olympic channel will not be part of the bidding process, either, according to executives who attended the meetings. IOC leaders told network executives that any branded, Olympic channel can’t be launched without the approval and participation of the U.S. rights holder, the IOC and the USOC.

    NBC paid $2 billion for rights to the 2010 and 2012 Olympics, and Carrión has said he expects the IOC to match or exceed that for the 2014 and 2016 Olympics.

    Network executives said it was unclear how much weight the IOC will put on a network’s vision for how it will present the Games versus what it is willing to pay for the Games. The IOC wants to partner with a network that respects the Olympic values and showcases the Olympic movement.

    By all accounts, NBC, ESPN and Fox are considered the most serious bidders. CBS and Turner have not showed the same level of interest.

  • MLB agent Close joins with Schwartz's NBA firm

    MLB agent Casey Close, best known as agent to New York Yankees shortstop Derek Jeter, has joined the practice of NBA agent Jeff Schwartz as a partner in a deal that will make the firm Schwartz founded, Excel Sports Management, a player across two major sports.

    Casey Close
    In addition to Jeter, Close, who recently left CAA Sports, is expected to bring with him clients Ryan Howard and Derrek Lee, among others. Under an agreement with Close and CAA, Close will continue to serve as Jeter’s and Howard’s baseball contract player agent, but Close and CAA share the marketing responsibilities of Jeter and Howard.

    Schwartz and his New York-based firm Excel represent a number of NBA stars, including Paul Pierce, Blake Griffin, Kevin Love, Jason Kidd and Lamar Odom. Financial terms of the deal were not disclosed, but Close and Schwartz confirmed that Close is joining the agency as a partner.

    “What I think about this partnership that is particularly exciting is that we are combining our industry experience, knowledge and relationships typically associated with a big agency with the hands-on, personal approach of a boutique agency,” Close said, in a phone interview last week. “Our plan is to make sure we are industry leaders in both baseball and basketball as well as client marketing. We want to be known for that, while looking for strategic opportunities in other representation and marketing businesses.”

    Schwartz said Excel is not planning to acquire any new companies or businesses right away. “Right now, we’re going to focus on building baseball and basketball for the short term,” he said. Both Schwartz and Close will work out of New York.

    Close and Schwartz have a friendship spanning 19 years, going back to when they were first hired as young agents working in the Cleveland office of IMG in the summer of 1992. Schwartz said that the two worked “30 feet away from each other” in those offices. “I was there in 1993 when Casey signed Derek and have watched him strategically build Derek’s off-court brand over the last 18 years,” Schwartz said. “Casey has done a fantastic job navigating the corporate world and determining the right deals to do for him but also the ones to pass on.”

    Jeff Schwartz
    Both agents said last week they have similar personalities and philosophies. “With Casey’s talented roster of athletes, combined with his established relationships, I am confident that he will be a great addition to the Excel team as we continue to grow both the basketball and baseball businesses, as well as explore additional strategic opportunities,” Schwartz said. 

    Schwartz was originally a tennis agent but later became a basketball player agent and formed Excel in 2002.

    Close left IMG and joined CAA in 2006, along with then-IMG NFL player agent Tom Condon, which marked the beginning of CAA Sports.

    Schwartz said that at the time Close left IMG, they had discussed him joining Excel, but the timing wasn’t right.

    “Once I decided to leave CAA,” Close said, “Jeff and I re-engaged in a serious conversation about teaming up and we decided we were ready to make it happen.”

    There have been plenty of big agencies acquiring the businesses of sports agents over the years, but this merger of two very prominent agents in different sports is a bit unusual. Prominent sports agents tend to specialize in one sport and generally do not have close relationship with agents specializing in other sports that lead to such business combinations, industry sources said.

  • Wasserman stakes claim in golf representation with deal

    Wasserman Media Group is expected to announce today that it has acquired SFX Golf, giving the global sports and entertainment company a major presence in the representation of golf stars, including Zach Johnson, Rickie Fowler and Scott Verplank.

    In addition to the nearly 50 golf clients that SFX Golf brings to the deal, the acquisition is expected to bolster WMG’s corporate consulting business. WMG counts American Express, Northern Trust and Nationwide Insurance as clients, and each has a notable golf presence as part of its overall marketing platform.

    “They have built a powerful golf representation firm over the past two decades, and clients will collectively benefit from the Wasserman platform by now also having access to our pre-eminent management, consulting and sales disciplines,” said Arn Tellem, WMG prinicipal, management.

    John Mascatello, CEO of SFX Golf, will lead the new WMG golf division, and SFX golf agents Bud Martin, Terry Reilly, Brad Buffoni and Sam MacNaughton will also join the company as part of the acquisition.

    Neither WMG nor SFX Golf officials would discuss the financial details of the deal, but Mascatello said all the SFX Golf agents had committed to stay at the combined operation in the long term.

    Meanwhile, golf agent Jay Danzi, who joined WMG in 2007 — his hiring essentially launched the golf division — recently left the company, Tellem confirmed.

    “I don’t want to get into the details of why Jay left except to say we wish him the very best and we are appreciative of what he did when he was here,” Tellem said.

    Said Danzi, “It was a difficult decision to leave Wasserman, as I really enjoyed my time there and am proud of the golf division which we created. That said, after reviewing the direction of the company, I decided to leave and I am excited about pursuing new opportunities in the golf business.” He declined to comment further.

    Neither Tellem nor Danzi identified clients who left with Danzi, but Tellem said “many of his clients have stayed.” Among those clients are PGA Tour star Hunter Mahan and Nick Taylor, winner of the 2010 Ben Hogan Award, which recognizes the outstanding male amateur and collegiate golfer of the year.

    Additionally, WMG recently signed LPGA Tour star Morgan Pressel.

    WMG, which was built through a combination of acquisitions of agencies and hiring agents who focus on global sports, is expected to be a big player in golf. The company already has large soccer, basketball and action sports athlete representation practices, and with this move, it becomes a larger player competing against bigger golf agencies, including Gaylord Sports Management, International Sports Management and IMG.

    Other golfers that SFX is bringing to WMG include PGA Tour players D.J. Trahan, Rory Sabbatini, Mark Wilson and John Daly, and LPGA Tour Rookie of the Year Azahara Munoz.

    Tellem and Mascatello have known each other for years and worked together at the former SFX Sports Group, which Tellem ran, before it broke up in 2006. They said they started discussing the acquisition last fall.

    Mascatello said that joining WMG was attractive for a number of reasons, including that the company has offices all over the world and golf is becoming a much more global business. Additionally, WMG’s corporate consulting operation was
    attractive to SFX Golf’s clients.

    “With the consulting division, we see a lot of synergies there, both opportunities for the future growth of the consulting business of Wasserman as a whole, and, obviously, with the quality of our client list, there should be more and more corporate opportunities for our players,” Mascatello said.

    Said Tellem, “It was a huge part of it. We knew they would work well with our consulting group and hopefully work together to grow not only our golf practice, but also our consulting business.”

    Mascatello described his client list of golf talent as “a vertically integrated group” that appeals to a wide audience. “We have the veterans, the all-stars; we’ve got the young guns and the role players as well,” he said.

    But Mascatello added that both Tellem and WMG Chairman Casey Wasserman impressed on him early in the talks that they were not buying SFX Golf’s client list. What’s particularly notable, Tellem said, is that Mascatello and the other SFX Golf agents who are part of the deal have been
    together for many years.

    “The core of their practice, their clients and their executive team has been together a long time,” Tellem said. “It is unusual [in the sports business], but to stay together is a great challenge; not many people can do that. I think that says more about them than anything. These guys are great partners, they are great guys, and it is all about what is best for the client. And that is what we are trying to build here.”

    Partial list of clients who will be represented
    by the combined WMG/SFX Golf entity.

    Stephen Ames*
    Jason Day
    John Daly
    Rickie Fowler
    Charley Hoffman
    J.B. Holmes
    Zach Johnson
    Marc Leishman
    Hunter Mahan*
    Azahara Munoz
    D.A. Points
    Morgan Pressel*
    Rory Sabbatini
    Nick Taylor*
    D.J. Trahan
    Scott Verplank
    Mark Wilson
    * WMG client
    Sources: Agencies, published reports

  • Players' lawsuit prompts talk of 'free-market' NFL

    Early into the four-hour NFL lockout hearing in federal court last Wednesday, U.S. District Judge Susan Richard Nelson’s first query to the lawyer representing the players suing the league for antitrust violations was not to ask why she should order the league to open for business, but instead to question what that business would look like.

    Lost in the understandable media focus of whether Nelson lifts the now month-old lockout is the tectonic change the players’ antitrust lawsuit seeks. For the first time in pro sports, the lawsuit wants a sports league to organize under truly free market principles. If the lawsuit succeeds, most if not all free agency restrictions, almost certainly the draft, and not to mention the salary cap, would reside in the dustbin of NFL history.

    These restraints on player movement, agreed to through collective bargaining, have fueled professional sports for the last three decades and certainly are widely perceived as major contributors to the NFL’s success.

    “I am a big believer in capitalism and the free market and I have no doubt that can produce a pro-competitive, efficient outcome,” said Jeffrey Kessler, the class counsel for the players in Brady v. NFL, during a panel discussion at the IMG World Congress of Sports last month.

    Kessler envisions a league in which every player is an unrestricted free agent, including all incoming collegians, and teams are free to spend whatever they wish on payroll.

    What would that look like? To Kessler, because of the NFL’s healthy revenue sharing, unfettered free agency wouldn’t affect competitive balance while players benefit. To others, beyond high-revenue teams spending wildly and shaking the foundation of the NFL’s “Any Given Sunday” ethos, most players would suffer.
    “One has to be really careful what you wish for,” argued Phil de Picciotto, president of Octagon, which represents players, coaches and sponsors, speaking on the same panel and directly responding to Kessler. “If I were an owner, I would seriously consider advocating every player being a free agent every year. You will oversupply the market and lower player compensation by a song.

    “Most of the players in aggregate would be losers,” de Picciotto contended.
    Michael Weiner, executive director of the MLB Players Association and also a panelist, disagreed.

    “I find it fascinating … to suggest it wouldn’t be good for players to be in a world where owners could pay them whatever they wanted.”

    It’s unclear who’d win Brady v. NFL if it reaches trial, and advancing to that stage is by no means assured. The sides could settle, or a court could dismiss the case. Many of the past judicial decisions related to whether player restraints like drafts can pass antitrust muster are dated or focus on specific elements of narrow issues.

    “All the antitrust cases that actually judged the legality or illegality of player restraints in a player market are all very old cases and they are all from a different time,” said Bill Daly, deputy commissioner of the NHL, speaking on the same World Congress panel. “A lot of those cases were decided during a time when antitrust precedent wasn’t where it is today.”

    Even the U.S. Supreme Court’s decision last year in cap maker American Needle’s victory over the NFL ruled only that the league could not claim wide antitrust immunity. In fact, the justices wrote there were pro-competitive reasons for teams to work together. “We have recognized, for example, ‘that the interest in maintaining a competitive balance’ among ‘athletic teams is legitimate and important,’” they wrote unanimously. “While that same interest applies to the teams in the NFL, it does not justify treating them as a single entity for purposes when it comes to the marketing of the teams’ individually owned intellectual property.”

    In other words, the Supreme Court’s rejection of the NFL’s arguments that its decision to pool commercial resources should be excused from antitrust scrutiny does not necessarily carry over to other areas like player restraints.

    That may be why Kessler’s main argument about the draft, for example, is not that it’s an antitrust violation on its face, but that it does not actually enhance competitive balance. “Have all the top quarterbacks drafted in the first round worked out?” he asked. “Is there really a connection between your draft position and your competitiveness on the field?”

    De Picciotto retorted, “The draft is not designed to guarantee competitive balance, just like capitalism in America is not designed to make everyone immediately successful. It is designed for the opportunity to be competitively balanced.”

    To that thought, Kessler replied that what guarantees opportunity is untrammeled free agency.

    More immediately, the issue for the NFL is what to do if the lockout is lifted by Nelson, who should rule by the middle of next week, or on appeal by the 8th U.S. Circuit Court of Appeals. The league’s lawyer, David Boies, calls this the catch-22 problem: The players are suing to force the NFL to impose a system that is allegedly illegal.

    When Nelson asked players’ counsel Jim Quinn if there were any player services systems that satisfied him, he replied, “I believe there are systems that can pass [antitrust] muster,” without being specific.
    “It’s possible you could sit down and work out a plan?” Nelson asked.

    “Maybe not to the NFL’s liking,” Quinn replied, “but yes.”

    Correspondent Jay Weiner contributed to this report.

  • WEEI, SB Nation sign content and sales partnership

    Boston sports radio hub WEEI and Washington, D.C.-based national blog network SB Nation have signed a content-sharing and sales partnership, expanding the interactive local efforts of each outfit.

    The two will share each other’s work on their sites.
    In the pact, the editorial teams for each company will collaborate daily and feature selected pieces of each other’s work on their sites. New content features are being developed, such as a “Behind Enemy Lines” section on the Entercom-owned WEEI.com featuring SB Nation content from markets of Boston team opponents. The two companies will each sell advertising against their combined content.

    The initial contract is for one year, though both sides are eyeing a longer-term relationship, and possibly replicating the pact in other Entercom radio markets. Financial details were not disclosed, but the deal is built primarily around revenue sharing.

    The deal marks the first time SB Nation has partnered with such a market-leader station.

    “The distinguishing feature about this partnership is that it’s so much more integrated than typical deals of this type you usually see,” said Jim Bankoff, SB Nation chairman and chief executive. “Very often, all you see is link shares and very little contact between the parties until the contract is up for renewal. Instead, we’re after a very high degree of collaboration and a real joint sense of how we can each push ourselves to create something really relevant and new.”

    For WEEI, the deal continues an aggressive push into digital content over the last three years. In addition to a fully featured WEEI.com website that attracts more than 1.1 million unique visitors a month, the station has ventured into mobile applications for the iPhone, Android and BlackBerry platforms, generating more than 420,000 total downloads. The station holds contracts with New England Patriots coach Bill Belichick and quarterback Tom Brady, Boston Red Sox manager Terry Francona and Boston Celtics coach Doc Rivers, among others, for exclusive weekly on-air interviews, in turn becoming a frequent source of breaking news.

    “This is an incredibly competitive sports market, and we’re creating a strong, integrated multimedia strategy to reach fans wherever they are and whatever they’re doing,” said Tim Murphy, Entercom vice president of digital strategy and enterprise platforms. “With SB Nation specifically, we think the combination of our brands and the scope of our content will allow us to leapfrog the competition.”

    SB Nation, meanwhile, in the WEEI deal expands a local-market strategy first launched last June. Boston was among the first batch of local-market sites SB Nation created, and its current total of 21 local hubs combines for nearly 4 million unique visitors a month, according to internal metrics.

    “We see a great deal of traction in our local strategy, and this [WEEI deal] is definitely an instance where joining forces puts us in an even better position to go after local and super-regional sponsors,” Bankoff said.

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