NBA owners will vote Monday to "void the final three years" of its CBA, "setting the stage for a potential lockout at the end of the season," according to officials cited by David Moore of the DALLAS MORNING NEWS. The league's Board of Governors will officially meet in Dallas on Monday, and each of the league's 29 teams received the report by the Labor Relations Committee appointed by NBA Commissioner David Stern. The 17-page document "strongly recommends the owners exercise a trigger clause" to re-open the CBA and the "owners are expected to embrace that recommendation." League officials have "canvassed clubs" on the vote and "indicate that at minimum of 21 or 22 teams" will vote to re-open. A simple majority of 15 votes is required to re-open (DALLAS MORNING NEWS, 3/20). NBPA Exec Dir Billy Hunter told USA TODAY's Greg Boeck that he expects owners to vote to re-open the CBA: "This doesn't come as a surprise to me" (USA TODAY, 3/20). WHAT THEY WANT: On ESPN SportsZone, David Aldridge writes that league "[p]eople I've talked to in the last couple of weeks don't sound like they want to crush the union or force huge player concessions. They sound like businessmen who want to make a deal that's good for them. But not one that's horrible for the players." Among issues owners "have to have relief on" include reducing the percentage of income spent on players salaries; redoing the rookie cap and three-year contract for draft picks, and modifying the 20% rule where salaries rise a maximum of 20% over the previous season (ESPN SportsZone, 3/18).
Leagues Governing Bodies
The Fox Group's purchase of the Dodgers "is the latest in a string of notable programming buys by entertainment conglomerates that are changing the face of the business," according to Sallie Hoffmeister of the L.A. TIMES. Across the "spectrum of entertainment, companies have been paying what on the surface appear to be irrational prices for signature products that can break through the clutter of consumer choices created by new satellite, digital and internet technologies" (L.A. TIMES, 3/20). In DC, Heath & Farhi write that the Dodgers may be Murdoch's and MLB's "ticket to the largely unexploited international market and its billions of potential viewers. Murdoch owns satellite TV systems reaching baseball-hungry markets in Latin America, Japan and Asia." Former MLB Commissioner Peter Ueberroth: "Within another three years, all teams will be owned by major corporate entities, most of whom will be associated with some media company." Rick Burton, Dir of the Warsaw Sports Marketing Center at the Univ. of OR: "Sports is a global battlefield ... and the next evolutionary step is the international network. Murdoch someday is going to be able to offer any game, any where, any time of day" (WASHINGTON POST, 3/20). In N.Y., Steve Zipay writes the "wave of new media and entertainment emperor/owners continues to change the shoreline of professional sports" (NEWSDAY, 3/20). On "Market Wrap," Jerry Cobb said that media companies acquiring sports teams is "becoming increasingly common, because the economics of sports and the needs of broadcasters are creating a marriage of convenience." Cowen's Gary Farber: "The cable industry spends approximately $6 billion a year on programming alone. By buying sports properties, it's essentially buying the programming, but rather than leasing it, they're going to own it." Farber: "It's an entree to so many under-leveraged businesses. Besides just the actual real-estate involved, there's the brand that it creates, brand awareness, there's substantial merchandising opportunities and corporate sponsorship" (CNBC, 3/19). In N.Y., Jon Elsen writes on the growing trend and adds, "So far, buying sports has worked out well for the media giants" (N.Y. POST, 3/20). Former Dodgers Owner Peter O'Malley, on approaching the various media conglomerates' interest in MLB: "If I was baseball, I'd sit them down all day to discuss it -- ask them, encourage them. What needs to be done? Communications. Kids' programs. International telecasts" (L.A. TIMES, 3/20). CONFLICT: With Murdoch holding national broadcast rights to MLB as well as cable TV rights to 22 of MLBs teams, some raise the question of potential conflict of interest. But Acting MLB Commissioner Bud Selig said, "We live in a new world. Obviously every sale will be looked at in regard to conflicts of interest. I thing there are a number of examples of baseball owners being partners in other ventures. The thing that does remain the same is that you can't have ownership interest in more than one club." In N.Y., Bill Madden: "In other words, baseball is resigned to the fact that, by going corporate as it has, there is no avoiding entangling alliances involving its owners" (N.Y. DAILY NEWS, 3/20). In DC, Thomas Boswell quotes NFL Commissioner Paul Tagliabue on media ownership of sports teams: "The ownership of an NFL team by a media conglomerate or a media owner would present a conflict of interest in competitive situations. You're better off dealing with the networks directly. We always want our outlets to have but one interest. That might be compromised." Boswell says that MLB made its decision on Murdoch based on "only two considerations," the $311M franchise fee and the fear of an antitrust lawsuit (WASHINGTON POST, 3/20). In Philadelphia, Stephen Seplow writes under the header, "Murdoch Deal: Did Someone Say 'Conflict Of Interest?'" (INQUIRER, 3/20).
In an "unexpectedly one-sided vote," MLB owners yesterday "overwhelmingly approved the purchase" of the Dodgers by Rupert Murdoch's Fox Group for "about" $311M, the "most ever paid for a professional sports franchise," according to Newhan & Hiltzik of the L.A. TIMES. The vote "puts one of baseball's most storied ballclubs in the hands of one of the world's most unsentimental and pragmatic businessmen." Despite "rumors that Murdoch's aggressive business practices might stir up serious opposition to the deal from other owners," only the Braves and White Sox voted against the transaction, while the Mets abstained. Some owners were concerned over whether Murdoch "would comply with bylaws requiring that" overseas rights to all games be negotiated by MLB, not the individual clubs; whether he would "bid too aggressively for top players" and if he would use his cable deals with 22 teams to "impact the local revenues of those clubs." But the Fox Group "agreed to several changes" in its deal with MLB, assuring even Fox's "long rumored ... opposition," including Padres Owner John Moores and Giants Managing General Partner Peter Magowan. Even Disney, which was expected to abstain, approved the deal (L.A. TIMES, 3/20). Magowan: "They did a good job answering our questions" (N.Y. TIMES, 3/20). News Corp. President Peter Chernin, on owners' fears that Fox would use its 22 local deals to its advantage: "We just sort of explained to [other owners] the way these businesses run. That we have so much money invested in Fox Sports Net, that we're not going to do anything to jeopardize that by playing around with the Dodgers" (CNBC, 3/19). In Milwaukee, Tom Haudricourt writes MLB owners "decided it's best not to bite a hand that feeds them" (JOURNAL SENTINEL, 3/20). ESPN's Tim Kurkjian: "A lot of owners ... got the idea that this isn't necessarily Rupert Murdoch who is buying the Dodgers, it's more the Fox Group, which has a very good relationship with baseball" ("SportsCenter," ESPN, 3/19). THE PLAYERS: In L.A., Jim Newton writes, "Quietly but with characteristic determination, Murdoch is burrowing into the fabric of Los Angeles, joining its most powerful circle of insiders." But while others are "long steeped" in L.A.'s business and political culture, Murdoch is a "bruising, right-wing outsider" (L.A. TIMES, 3/20). Also in L.A., James Bates profiles Chernin and Chase Carey, Murdoch's "top two lieutenants," who have "survived and flourished in the mogul's Darwinian management culture." While Carey is "somewhat introverted, seemingly more comfortable behind the scenes," Chernin is "more comfortable ... mingling with Hollywood talent, listening to pitches and making public appearances" (L.A. TIMES, 3/20). NO TCI INTEREST? While TCI's Liberty Media, partners in the Fox Sports RSNs, once had an option to participate in Murdoch's purchase, Liberty Media President Robert Bennett said they "waived that a while back." He did not know if such an option "might arise again" (DENVER POST, 3/20). SOME TV CHANGES, MORE STADIUM SIGNAGE? The Dodgers "traditionally" have fewer games on local TV than any other team in MLB, but with the Fox Group now in charge, "that is going to change," according to Larry Stewart of the L.A. TIMES. The number of cable telecasts will jump from 40 this season to 80 in '99. Fox made that announcement Thursday, one day after the settlement of a lawsuit filed by KTLA against Fox and the Dodgers last year. The "settlement allows for more cable games." All 40 Dodger cable telecasts will be on Fox Sports West 2, but in the future, some games "also could be carried on Fox Sports West." KTLA will carry 48 over-the-air games (L.A. TIMES, 3/20)....Dodgers President Bob Graziano said that "any other changes, such as more signage at Dodgers Stadium and installation of luxury boxes will be gradual" (Hal Bodley, USA TODAY, 3/20). NOTES: In L.A., Bill Plascke notes that Murdoch was not present at the announcement, as he was in London on business, and adds, "Nothing to do now but get used to it." Plascke: "One of our last remaining treasures wasn't simply sold Thursday, it was swallowed whole" (L.A. TIMES, 3/20)...In Chicago, Jim O'Donnell writes that White Sox Chair Jerry Reinsdorf's vote against Murdoch "comes off as a recalcitrant, stubborn move made with little apparent upside." O'Donnell: "For Jerry Reinsdorf, is the end of his reign as an influential sports power man now clearly -- and voluntarily -- in sight?" (CHICAGO SUN-TIMES, 3/20).
After two seasons of "battling poor attendance and losing money," the ABL Glory will not return to Atlanta next season, according to Celeste Whittaker of the ATLANTA CONSTITUTION. The team will move to Nashville, Tampa or St. Louis, with a decision by April 1. ABL CEO Gary Cavalli: "The bottom line was just so bad. We have lost a tremendous amount of money down there." The team averaged 2,780 its first season at Morehouse Arena and 3,898 in its second year, but "much of its wasn't paid." The league "will not retain anybody from the team's front office." Whittaker: "The Glory suffered from a lack of overall marketing. Despite the big local names, the players didn't make many local appearances" (ATLANTA CONSTITUTION, 3/20).