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Volume 24 No. 112

Events and Attractions

The organizers of the Baltimore Grand Prix are "facing more than $12 million in debt and have less than $100,000 in cash on hand," according to internal documents cited by Luke Broadwater of the Baltimore SUN. The documents show that more than $5M of the debt -- including taxes "owed to Baltimore and payments to vendors -- is past due." The full extent of the company's "dire financial status is laid bare in confidential documents in which former Goldman Sachs and Constellation Energy executive Felix J. Dawson proposes assuming leadership of Baltimore Racing Development Inc." Dawson's investment firm, Wilkes Lane Capital, would "give Baltimore Racing Development $3.3 million and control 58 percent of the company under his proposal." The documents show that the company's total debt is "more than three times higher than amounts that had been gleaned from court records and other claims." Ryan O'Doherty, a spokesperson for Baltimore Mayor Stephanie Rawlings-Blake, said that the group has "until the end of the month to turn over an audit of its books to the city." If the company does "not pay its taxes to the city by Dec. 31, Rawlings-Blake has threatened to sever the company's five-year contract." According to the documents, BRD "owes $3.1 million to vendors, $2.5 million to the Maryland Stadium Authority, $1.9 million to Baltimore and $1.7 million in contractual payments to different firms." The race's assets are "valued at $600,000, which includes concrete barriers and hundreds of tires needed for race day" (Baltimore SUN, 12/8).

Conference realignment has become a buzzword in collegiate sports in the last two years as colleges look to align themselves based on economic and cultural factors, according to panel discussion of conference commissioners this morning at the IMG Intercollegiate Athletic Forum in N.Y. Conference USA Commissioner Britton Banowsky said realignment is not necessarily a bad thing, as collegiate board members have a fiduciary responsibility to their institutions to seek out the best possible situations. “I think it’s healthy for institutions to think about bettering themselves and putting themselves in a better association,” Banowsky said. “It’s not a sign of disloyalty.” Big Ten Jim Delany said he does not have a problem with institutions that are seeking change, but he does not believe that large conferences with 14 or 16 teams will work. He also said that rapid change and expansion puts serious pressure on a conference and can greatly alter its culture. “When people are playing Monopoly, you think about the boardwalk and the bank, but you don’t think about how it all hangs together,” Delany said. “You can’t underestimate the way people interact, and how that will change if you bring in four or six teams.” Mountain West Conference Craig Thompson conceded size and regionalism can hurt a conference with 16 teams because schools will not be given the chance to play each other. “Is it truly a confederation or a conference if not everybody gets to play one another?” Thompson said. “That’s a value judgment you have to make.” Meanwhile, Delany said a 16-team playoff is not universally supported and would not improve the current BCS model for college football. Teams already play 12 regular-season games, as well as two postseason games, and the addition of a playoff would put too much stress on collegiate athletes, he said. “With a full-blown playoff, there isn’t much left over for the other teams (other than the 16 that qualify),” Delany said. “Right now we accommodate 70 teams in the BCS. It’s a celebration of college football.”

Quick Hits:

On how TV agreements affect potential realignment plans:
* Banowsky: “We need to be able to provide assurances to TV partners that the inventory they are buying is what they are going to have. If you’re a TV partner you want some level of assurance that the institutions you thought you had done business with will be there for the long haul.”

On how a superconference of the biggest Division I schools could fix NCAA football:
* Delany: “The idea that these problems would go away after we collectivize implies that the problems are caused by smaller institutions, and that is fallacious thinking. I don’t think that having a more elite group would make us healthier. I think quite the opposite.”

On the challenges facing a 16-team playoff system:
* ACC Commissioner John Swofford: “College football is the only sport to have an alternate system to a playoff, and it’s very historical and successful. You would have to undo something that is a pretty special part of American sports culture that has been around for a long time.”

On the current consolidation of conferences:
* Delany: “I think some will work. I think others will fall apart like a poorly constructed erector set.”

Six college ADs took to the stage to discuss the state of intercollegiate athletics yesterday, with the panel touching on the future of the major conferences, athletics being integrated into universities and working with big-name coaches. All of the panelists pointed to the reforms of the last year as major progress, with Univ. of Washington AD Scott Woodward saying, “Besides churches, we are the oldest institutions in America. We move slowly. Change will be incremental and will take time, but the progress over the last year is a big step from where I thought we would be.” The crises at Penn State and Syracuse were a major theme during the discussion, and each of the panelists stressed the need for preparation and learning. Syracuse AD Daryl Gross said, “I have learned a lot. Our university and our coaches have learned a lot and our community has learned a lot. All of what we’ve learned can help going forward. If there is any positive coming out of this, it’s lessons that we learn coming out of it.” UCLA AD Dan Guerrero noted that as soon as the Penn State incidents became public, “Our staff met for at least an hour. ... We need to reinforce our guidelines. You need to make sure your people are willing to speak about what they see, that there is vigilance in what they see and do.” Georgia State AD Cheryl Levick added, “It really does help when you have plans written down. Here’s Plan A, Plan B and Plan C. It really helps and it calms people down.” Woodward: “You need to be transparent, but you can’t back yourself into a corner. You have to know all the information, on top of what is happening. …. You have to be careful about process, you have to have good process in there, but you have to be careful about how you use it. You can’t get paralyzed.”

Guerrero said you need to make sure your
people are willing to speak about what they see

HEALING PENN STATE: Asked what advice they would give to a future AD to restore the image of Penn State, Woodward said that bringing in outside voices would help. He said, “You always need outside new blood. If I were doing that, you have to take a fresh look at what happened there, take a fresh look from a macro standpoint.” Levick said, “Proactive management. Identify the issue and face it head on. Get out there and move forward and involve the community, come up with a plan and push it back out. Penn State is hurting right now. They need something that can heal their wounds.” Kansas State AD John Currie suggested going “over the top” on transparency, and added, “Getting out and getting face-to-face with people, being communicative, listening and being transparent.” Guerrero: “You have to clearly identify the problems. And very often we have blind spots and we don’t see them. You need to take a real close look at the whole organization to figure out where you need to heal the situation.” Currie said the athletic organizations “are probably more integrated into the academic environment than most people in the public think we are.” Currie: “But one of the most critical aspects for people around a university to understand [is that you must empower the] people you have in charge to do their job. When things go wrong, in many cases you see a breakdown in the chain of command. And when a coach feels he can go to a board member, even with the best of intentions, that circumvents a chain of command, that is when you have a breakdown.”

Bowlsby claims new Pac-12 media rights deal
already has been a "game changer" for schools

PAC-12 NETWORK MEANS OPPORTUNITY: Woodward, Guerrero and Stanford AD Bob Bowlsby all touted the Pac-12 merging media rights to create a Pac-12 Network next year. Bowlsby: “It’s already been a game changer for us. We own 100% of our network, we will manage our own return on investment. It’s possible we could sell some of it off at some point, but it’s incredibly valuable to us. And we retain a digital tier that we think could be even more valuable going forward and allows us to capitalize on forward-thinking technologies. So this network is terrific from a college sports standpoint and from an institutional standpoint.” Guerrero said, “We really see this as a global opportunity and see real chances to get into the Far East, for example.” Bowlsby said the process of pooling and sharing media rights among all Pac-12 schools was collegial and statesman-like. Bowlsby: “When we have disagreements, we just think about the money and we feel better.” Woodward: “After doing these deals and seeing the result, we were all high-fiving each other. We were in the right place at the right time. It wasn’t easy, but it was very collegial.”

Quick Hits on whether the BCS system should evolve into a football playoff:
* Woodward: “I think it will eventually get there, but right now, I like the Plus One. I think this will be an incremental step -- that's where my mind is.”
* Guerrero: “I was vehemently against a playoff, but I am more open to the discussion when it comes to a Plus One model.”
* Currie: “I like the bowl experience for our student athletes. College football doesn’t need the bowls to help build the brand of college football, but bowls help build the brand of college football. If we are going to use our formula or tweak our formula, that’s fine, and maybe we want to do that to have a national championship game. But we don’t need ‘labels’ to establish ‘this group of games’ as better than ‘other groups of games,’ unless we’re going to objectively place those teams in those games. If we’re going to ‘promote a label’ around these games and define success, then we should control whether we are ethical about following some explainable formula or format.”
* Bowlsby: “What gets lost in all the playoff discussion -- and I think a Plus One is inevitable at this point -- is that the strength of college football has never been healthier. The regular season is important and it’s important because there is something to play for in the postseason.”

Quick Hits on the future of conference expansion:
* Bowlsby, on the Pac-12 Conference: “I think we will be at 12 for a while and I don’t see many obvious additions. I see the Pac-12 remaining with the group of institutions we have now and having a nationwide and worldwide footprint due to our media deals.”
* Guerrero: “I see no reason for us to look at a 16-team or a 14-team conference.”
* Gross, on leaving the Big East for the ACC: “We did everything we could to try and keep the conference together, in the perception of what we thought the conference should be. We don’t see this as ‘jumping off a sinking ship.’ Instead, we see this more as seeing the opportunity for our program. This was a better fit for us. It wasn’t so much that ‘this is falling apart, so let’s leave.’ It was more about the opportunity.”

Digital platforms are earning revenue for license holders and broadcasters, and five specialists from this world took the stage to discuss how the digital industry has matured around college sports. Big Ten Network VP/Digital & Interactive Media Michael Calderon talked about how the net produces web broadcasts for non-revenue-generating sports such as volleyball, lacrosse, field hockey and wrestling using student labor and inexpensive high definition cameras. Subscribers pay $9.99 a month to watch all of these sports for a specific school. “The decreased production cost and the additional platforms makes the distribution more available,” Calderon said. “This industry has taken off for us.” Thought Equity Motion CEO Kevin Schaff, whose company streams archived NCAA games online, said viewers watch regular archived content for 90 seconds on average. But with added statistical features and a function that lets viewers search for specific highlights, viewing time is up to 14 minutes on average. When asked about the prospect of cord-cutting, College Network Senior VP & GM Patty Hirsch said she is not worried about live sports being affected, even at the collegiate level. Hirsch said she believes future Apple TV products could change the model. “For people who only care about on-demand content, cut away,” she said.

Quick Hits:
* Calderon, on whether the Big Ten Network will shift additional programming online: "We have a handful of non-conference basketball games we will move to digital. But we don’t have any plans to take revenue generating programming off of the linear network."
* Schaff, on the future of digital content contracts: "People are trying to make the digital contract match the broadcast contract, and if you tie those up for 10-15 years you are making a huge mistake. You should make two-three term agreements that allow them to mature and revisit it.”

Taking an old building and making it appear young is the preferred means for stadium upgrades at the collegiate level, as colleges hope to maintain a visual aesthetic with surrounding buildings. Cisco Sports & Entertainment Dir of Business Development Gene Arantowicz said, “We’ve been seeing more colleges opting to renovate instead of build new. They want to maintain the history and mystique.” Heery Int'l VP & Dir of Sports Facilities Mike Holleman said college venues are also experimenting with revenue-generating infrastructure outside of the stadium, which also has a positive affect on the game structure. The Univ. of South Carolina built an area designated for tailgating as a way to charge premium prices to fans and cordon off tailgaters into a safe area. Rose Bowl Operating Company CEO & GM Darryl Dunn, whose venue is undergoing a $150M renovation, said the project is needed to maintain the stadium’s relevance in the market, as an NFL stadium will likely be built in L.A. eventually. Dunn said the Rose Bowl currently survives off of about 140 small events that generate $10,000 to $20,000 each. “The nickels and dimes pay off,” Dunn said. He added that getting a major renovation project approved for the publicly owned Rose Bowl required eight years of meetings and approvals, and he had advice for anyone attempting a similar project: “You have to have champions for each segment. You need to have people who are willing to walk uphill and take bullets.”

Rapid changes in ticketing technology have helped universities dig deeper into both existing and untapped markets, panelists said. Univ. of Tennessee Senior Associate AD of External Operations Chris Fuller talked about how the school has handled recent changes. He said, "We moved forward with an integration with StubHub, so we got into the secondary market in a measured way. It was really designed to make things more convenient for our customers, with the ability to move and exchange tickets on their own.” StubHub Dir of Business Development & Partnerships Danielle Maged said of the company getting more involved in college athletics, “Where there is a school that is willing in the NCAA space to participate in that revenue stream, get sponsorship dollars, get data ... people are out there transacting. It’s happening, so you can either choose to participate in it or it’s just going to happen without you. So we like to include everyone.” Univ. of Michigan CMO Hunter Lochmann talked about using social media for selling tickets for non-revenue sports: “It’s been a great channel for us. We’ve sold about 120,000 through social media. The smartest thing I did was hire a director of digital marketing.” Ticketmaster North America COO Jared Smith added, “From a sales channel standpoint ... we saw a 400% increase year on year in the percentage of our online sales that came from a mobile device.” As for how realignment could affect ticket sales, IMG College Senior VP & Chief Innovation Officer Mark Dyer said, “It could be troublesome to lose regional rivalries. As a matter of fact you almost can’t use regional and conferences in the same sentence now, with some of the moves.”