SBJ/January 9-15, 2012/Opinion

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  • NFL season standouts, and ‘MNF’ matchups

    Another NFL regular season is in the books, and that allows for a look back at what stood out for me among the pregame shows and other programming.

    I agree with people who are throwing some love toward CBS’s “NFL Today.” I’m an AFC guy, but I never felt CBS provided the best pregame show. This year, however, I found myself watching more and more of “NFL Today,” and the reason is simple: Dan Marino, Boomer Esiason and Bill Cowher are the most insightful and informative talking heads on the air.They shed the stupid laughs and yucks. Marino continues to become more comfortable and outspoken, Esiason is unafraid to offer a strong opinion that he articulately supports, and I especially find Cowher’s perspective to be valuable. His to-the-point/economy-of-words style and his knowledge of the game clearly puts him above many of his peers. He knows the league, and it shows — even though the subject of his coaching future has been handled clumsily at times. The mid-show set-up, with the talent sitting in chairs talking about NFL issues, is one of the strongest segments in pregame programming. It’s not “news-driven” but is well thought out and provides smart points of view from those who understand the game and the personnel.

    Outside of CBS, other NFL-related shows have strong points. Jay Glazer and Michael Strahan need even bigger roles on “Fox NFL Sunday,” and I’ve long admired how well ESPN’s Adam Schefter and Chris Mortensen work together and don’t trip over themselves in providing their insider information. These two deserve credit in sharing the limelight informing viewers. As for the rest of ESPN’s “NFL Countdown”? The show may offer the most news, but to me, the format feels stale, even with the extra hour of coverage. I don’t find the personalities accessible anymore. There’s a lack of humility, and it often feels like the studio “debates” are forced.

    Finally, more kudos for the way Dan Patrick plays off both Tony Dungy and Rodney Harrison on NBC’s “Football Night in America.” It’s too bad they are competing with the late-game window, because both Dungy and Harrison deliver strong analysis and convincing commentary, and their disagreements seem genuine, especially when prodded by the talented Patrick.

    As a Time Warner Cable subscriber, I don’t have access to NFL Network.

    ■ ■ ■

    When the final NFL ratings come in, ESPN will see a drop of 8 percent in ratings and 10 percent in viewership this season for “Monday Night Football.” This is no great cause for concern, nor does it portend a negative trend for this long-held institution. “MNF” remained the most-viewed series on cable TV (for the sixth straight year) and drew 13 of cable TV’s 20 largest audiences.

    To me, it came down to ESPN’s schedule of games, and this is one network that will likely be visiting with Howard Katz and the others at the NFL’s schedule department. I know predicting schedules is an impossible and thankless task, and Katz does it better than anyone in sports, in my opinion, but ESPN was hurt this year by the lack of high-quality games. It had too many games like Tampa Bay-Indianapolis, Baltimore-Jacksonville, Kansas City-New England and St. Louis-Seattle, to name a few. This is one programming schedule to watch next season.

    Abraham D. Madkour can be reached at amadkour@sportsbusinessjournal.com.

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  • Equity deal can be smart-money play for athlete endorser

    It’s common knowledge that many professional athletes go through their money at a rapid pace. It’s rare to hear about players who view the financial opportunity laid out in front of them like a savvy CEO rather than a kid who just cashed his first paycheck.

    These are the individuals who understand their days tossing a ball around for super-sized checks are only a minor blip on the jumbo screen of life. They aren’t just players in a game; they are businessmen committed to ensuring their money outlives them instead of the other way around. All their peers would be smart to pay attention.

    Of course, there are the simple money-management steps that every person, star athlete or truck driver, should be following: invest your bonus, drive a Ford instead of a Bentley, contribute the maximum to your retirement plan and have insurance to protect your loved ones. But athletes who want to be elite off the field as well as on will take further action steps, like creating tax minimization strategies, diversifying with alternative investments and finding a way to structure endorsements like an owner rather than just an employee.

    Mets third baseman David Wright received a minority
    share of Vitaminwater as part of his endorsement deal.
    Photo by: GETTY IMAGES
    What happens when an athlete agrees to an equity endorsement is relatively simple to understand. Instead of just taking a straight fee for representing a company, the athlete receives ownership in one form or another through stock, warrants or options. This means the worth of the endorsement contract is based on how well the company does. The athlete and the business are on the same side of the table. Mr. Pro now has a vested interest in how the company does and the manner in which he represents it.

    Owning shares of a prosperous enterprise can also be a great retirement planning tool for those who can have abbreviated career spans. Along with the possibility of stock price appreciation, they receive tax advantages and possibly cash dividends. Not only that, but anyone, athlete or otherwise, is more likely to spend cash that’s just sitting there, so having stock is like a forced savings plan.

    These equity endorsements are becoming more common the last few years due to prominent deals like David Wright chugging Vitaminwater and Tom Brady donning Under Armour. Like with any endorsement, there will always be more opportunity for the big names, but lesser-known players with proactive agents can receive ownership opportunities as well if they show some personality and an image that reflects the brand that company is building. An athlete who is well-respected, active in the community or just plain interesting for whatever reason will have chances for these types of deals. But it’s also important to understand that many companies won’t bring it up, so it’s the responsibility of the athlete and his agent to be aggressive and go after that ownership stake.

    Now, it’s not all fun and games when it comes to these fancy endorsements. As with any equity, there’s always a possibility that it can drop in value. If the business starts to fail, there’s probably not much the athlete will be able to do to prevent it. An understanding of the risk involved beforehand is necessary. But logic can tell an athlete that a company trying to sell cheeseheads in the Windy City or South Beach apparel in Cleveland might not be the best in which to take equity.

    Patriots QB Tom Brady’s deal with Under Armour came with an equity stake.
    Also, quite often it is smaller or newer companies that offer equity because they aren’t capitalized well enough to have a big-name player sport their brand for cash. In those types of situations, the athlete is taking on more risk and with less cash up front should get a bigger bite of the equity to compensate for that.

    Perhaps the most crucial element to the equation is to have a team of professionals around these athletes (financial adviser, CPA, agent) that is well-versed in these deals and can structure them in a manner that most benefits the player. These outside professionals should make sure everything is covered, including cash calls and anti-dilution provisions, which prevent further issuing of stock that would water down the value of the athlete’s shares.

    In the end, it comes down to a business decision. Is the risk of wasting the player’s time promoting a company worth the possibility that the company is the next Vitaminwater? Does the company have the same set of values that the athlete has? Does he understand the tax consequences?

    For years, corporate executives have earned salaries with the possibility of a big payoff coming from equity they receive in their companies. Now, some athletes view themselves as more than a guy, or girl, playing a game and have started copying that model with big success.

    The bottom line is that, if structured properly with good companies, and with solid due diligence, equity endorsements are a play all pros should consider adding to their game. The added complexity and negotiating work is well worth the fact that they are transitioning themselves into businessmen and women who will be financially sound many years after their playing days have ceased.

    Derek Swedberg (derek.swedberg@rbc.com) is a financial adviser with RBC Wealth Management in Minneapolis, specializing in financial management for athletes. This article was prepared in cooperation with RBC Wealth Management. The information included in this article is not intended to be used as the primary basis for making investment decisions nor should it be construed as a recommendation to buy or sell any specific security. RBC Wealth Management does not endorse this publication. RBC Wealth Management is a division of RBC Capital Markets LLC, Member NYSE/FINRA/SIPC.

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  • 2012 shaping up as bright Olympic year

    It doesn’t seem that long ago that we were marveling at the pageantry and power of the Olympic opening ceremony in Beijing. Strong audience numbers for NBC (211 million viewers over 16 days) and strong competitive numbers for the U.S. team (110 medals, overall No. 1) coupled with the unique backdrop of China made the 2008 Games one of the most successful on record.

    With the 2012 Games in London ahead, I contend that they are on track for even greater success. Here are the four elements to watch for in the build-up and delivery of these Games:

    Sponsor activation: Since the closing ceremony in 2008, the U.S. Olympic Committee has been on a strong campaign to add new sponsors in new categories. Activating around their first Summer Games of a new contract will be: Dow, Deloitte, Procter & Gamble, BMW, BP, DeVry, Citi and TD Ameritrade. I cannot think of another sports organization in the U.S. that has added such a solid group of blue-chip sponsors in the last three years. The combined impact of these companies turning on the Olympic marketing spigot will be greater awareness, greater engagement and greater promotion, driving consumers to watch these Games.

    Television viewership: The numbers from China were impressive (the 2008 Games represent the most-viewed event in U.S. TV history, according to Nielsen). In a fragmented television viewing market, we still tuned in en masse to get the latest scoop from Bob Costas and the rest of the NBC Universal team. The average nightly rating was a 16.2, the best since Barcelona in 1992. You could contend that the TV market has become only more fragmented since 2008, and that should suggest NBC will be faced with its toughest challenge yet. Despite that, NBC recommitted to the broadcast rights, at an even higher investment level. It is the network’s belief, with a greater ability to schedule live broadcasts (with a better overall time difference than China) and a greater investment in the NBC Sports Network (previously Versus), coupled with increased ability to use social media and the Web to drive viewership, London will become “must-watch television” and show that live sports and compelling Olympic drama will continue to deliver big audiences.

    London: China was unique. We wanted to get a peek at a society that few truly understood, and a place even fewer Americans had ever seen. London is the opposite. The backdrops of Buckingham Palace and Big Ben will feel comfortable to the American audience. And for the most part they even speak the language. Throw in a couple Royal celebrity sightings (“Is that Pippa wearing Ralph Lauren?”) and you have the makings of some fantastic pageantry leading to great daily water cooler conversation.

    The strength of the USOC: In 2008, the USOC was globally accepted to be in conflict with the International Olympic Committee. Baseball and softball had been taken off the Olympic sport list, and U.S. membership was conspicuously absent on all IOC commissions and the IOC executive board. Add to that Chicago’s failed bid to host for 2016, a contentious debate about revenue sharing, and instability in USOC leadership and it becomes clear that the relationship was in disrepair. Now there is stability in leadership — Scott Blackmun and Larry Probst have steadied the boat. They chose not to bid for 2020, deciding instead to use that time to strengthen ties without the pressure of winning votes. They were immediately rewarded by the appointment of four U.S. members to the 2018 evaluation commission, Probst has been placed on the international relations commission, Blackmun on the marketing commission, and there is open positive discussion about the future of revenue sharing.

    Each of these factors is setting up 2012 to be a very big Olympic year.

    Gordon Kane (victorysm@comcast.net) is the founder of Victory Sports Marketing and consults for companies such as Deloitte on Olympic sponsorship maximization.

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  • College athletics shows diversity progress, room for growth

    Lapchick
    Two reports issued late in 2011 highlight some of the positive changes regarding hiring practices in college sports, as well as some of the areas where college athletics is terribly behind the rest of sports regarding issues of diversity and inclusion.

    The Black Coaches and Administrators 2011 Football Hiring Report Card showed the power and impact that the BCA and other forces have had on changing the demographics of the sport and how the hiring process operates. Separately, the Campus and Conference Leadership Study highlighted not only the improvement in football, but also how far there is to go in terms of opportunities for women and people of color in decision-making roles at the FBS schools.

    The fact is that 91 percent of our presidents are white, 88 percent of our athletic directors are white and 100 percent of our conference commissioners are white. In those positions, 82 percent, 96 percent and 100 percent, respectively, are men. Overall, whites hold 333 (91 percent) of the 365 campus leadership positions reported in the leadership study. Even though there was progress toward diversity, we can hardly say we are close to looking like America when it comes to who is leading college sports.

    Kevin Sumlin, who moves to Texas A&M after four years at the University of Houston, was one of three African-American coaches hired at season’s end.
    Photo by: GETTY IMAGES
    However, on the football playing field, significant progress continues to be made among FBS head football coaches. At the beginning of the 2011 season, there was an all-time high of 19 head coaches of color, including 17 African-American head coaches. Six new coaches of color were hired for the 2011 season after a record of seven were hired before the 2010 season.

    There have been landmark meetings discussing these issues with many of the power brokers in college and professional sport. The NCAA held an Inclusion Summit in September that brought together some of the leading voices advocating change, along with a group of presidents who brainstormed together in the afternoon after opening presentations.
    The espnW Summit, held in October in Arizona, brought together almost all of the key figures regarding Title IX implementation and opportunities for women, including Billie Jean King.

    Nonetheless, college sports is still far behind professional sports regarding equal opportunities for the top jobs. For the most part, white men are still running college sports. White men held 100 percent of the FBS conference commissioner positions. Those are the most influential positions in college sports. White men held 75 percent of the 120 president positions and 84 percent of the 120 athletic director positions at FBS football programs. Of faculty athletics representatives, 94 percent of faculty athletics representatives are white and 34 percent are women. Those are the positions where the decisions are made.

    Since 1982, there have been 520 head football coaches hired in the Football Bowl Subdivision. African-Americans have been hired 51 times through the 2011 football season. Willie Jeffries was the first, when Wichita State hired him in 1979. There have been two Latino coaches in the history of the FBS schools.

    Since the initial BCA Football Hiring Report Card in 2004, African-American head coaches have been hired 31 times. More than half of all the African-American coach hirings have been in the eight years since the publication of the first BCA report card. Furthermore, 27 of the 28 hirings have been in the past six years; 23 of the 28 have been in the last four years. Several coaches have been hired more than once. The BCA Hiring Report Card is clearly an effective tool.

    Following the 2011 season, 26 FBS head coaching positions became vacant. Only Penn State has yet to hire a coach to replace Joe Paterno. Of the 25 positions filled, three institutions selected African-Americans to lead their football programs (Texas A&M, Tulane, and Alabama Birmingham). Three African-American coaches were fired, while Kevin Sumlin left Houston to become head coach at Texas A&M. As of the new year, there are 18 coaches of color, of which 15 are African-American.

    “It is refreshing to have an opportunity to acknowledge success in the equitable hiring of ethnic minority coaches in Division I collegiate football. I believe it is one of the most shining examples of positive change on the landscape of intercollegiate sport in recent times as it pertains to diversity and inclusion efforts,” said Floyd Keith, executive director of the BCA.

    The BCA formula has worked by emphasizing the hiring process, including who is on the search committee, who is interviewed, how long the process takes and whether or not the schools sought help in identifying candidates of color from the BCA and the NCAA Minority Opportunities and Interests Committee.

    The NFL took a giant step toward opening its hiring process with the adoption of the Rooney Rule in 2003. Bud Selig, in 1997 on the 50th anniversary of Jackie Robinson breaking the color barrier, mandated that Major League Baseball have a diverse pool of candidates for manager and general manager positions.

    Transparency works, and perhaps it is time that all major positions in college athletics are subject to just that so that the leadership positions will have the great leap ahead that has taken place in college football.

    Richard E. Lapchick (rlapchick@bus.ucf.edu) is chairman of the DeVos Sport Business Management Graduate Program and the Institute for Diversity and Ethics in Sport at the University of Central Florida. His co-authors of the BCA study were Simone Jackson and Andrew Lilly. Michael Kuhn co-authored the leadership study.

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  • Cartoon: Spike in unemployment

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