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Volume 24 No. 133

Leagues and Governing Bodies

NASCAR "continues to grapple with perhaps its most troubling ongoing challenge: declining ticket sales," according to a front-page piece by Scott & Dunn of the CHARLOTTE OBSERVER. Securities filings show that NASCAR ticket sales revenue fell by 38% "over the past five years at its three publicly traded companies, which host 35 of the 38 race weekends." NASCAR Chair & CEO Brian France said, "Things aren’t perfect and easy, no. But a lot of people would like to have our problems.” SMI has “lost more than a quarter of its admission revenue," falling to $130M. Meanwhile, ISC has "lost nearly" 40% of its ticket revenue, falling to $144M. Dover Motorsports Inc. “has been hit the hardest," with admission revenue dropping nearly 60% to $13.6M last year. France said that the “main culprit for declining ticket revenue ... continues to be the economy, because attending a NASCAR race often requires more travel and a longer stay than attending other sporting events.” NASCAR’s racetrack companies “largely blame the slowdown in consumer spending for the lack of sales.” Admission revenues “peaked between 2006 and 2008 and have fallen every year since.” The companies say that ticket sales “will continue to struggle as long as the economy does.” SMI President Marcus Smith in May said, “We think the pricing this year will stay consistent with last year” (CHARLOTTE OBSERVER, 7/8).

CREATING URGENCY: France said that NASCAR "is looking at shortening more events." USA TODAY's Nate Ryan noted Pocono Raceway cut its first Sprint Cup Series race this season by 100 miles, and the "first 400-mile event last month was well received." France: "We'll be working on that. ... You can make the argument there's more urgency in the middle of the races that are a lot shorter, so you tend to have more urgency along the way. I think you can make that argument, though not everywhere." France "wasn't sure if there'll be a reduction in the Sprint Cup manufacturer lineup next season." Dodge is losing Penske Racing after '12 and has "announced no replacements yet" for '13. France "was hopeful the company will return but hadn't been given confirmation." France in a Q&A with the USA TODAY further addressed the potential of shortening the NASCAR schedule, along with other issues. Below is an excerpt from the Q&A.

Q: There's been talk of cutting the 36-race schedule. Any chance of considering that?
France: Well, I've heard that for 25 years. We don't have anybody who would like to give up one. When I find someone who would like to give up one, we'll have that conversation, but right now, we don't.

Q: Are there any tracks, though, that should give up a race given their declining attendance?
France: You can always point fingers at given moments, but we tend to look at things in a much longer horizon than in a couple of years in a choppy economy. We're long-term players here trying to figure out what works in the future. If we have to pull events and change them around, we've done a lot of that. We have built this sport by not unilaterally doing that because it felt right at the moment. Our competitors do that all the time. It's a bigger sanction fee, or a street course pops up or whatever. They are happy to move in and out of historically important events. We think that is the wrong recipe.

Q: Are you expecting there'll be no decrease in the [new TV] deal's overall revenue?
France: I certainly wouldn't preview a negotiation, but I would say there are very few high-quality sports properties that are looking to take less with the way it is out there. We'll have those negotiations, and they'll be whatever they are.

Q: Will you be close to wrapping up the contract by this time next year?
France: I don't know exactly when we'll get to the finish line with each group, but this is about that time the discussions will get more serious. We'll see how fast they go (, 7/6).

FAIR & BALANCED: France said that he "favors shortening some races, like has been done this season at Dover, Pocono and California." France: "It generally worked well." France "acknowledged that long commercial breaks can sometimes detract from" NASCAR TV broadcasts. France said, "That's a fair point. There is a commercial balance there. There aren't timeouts, per se, in our sport. So it's understandable that our fans might miss something" (CHARLOTTE OBSERVER, 7/7). 

JUNIOR NATION: In Orlando, Mike Bianchi wrote it is "no secret that NASCAR ratings and attendance have dipped in recent years," in large part because Dale Earnhardt Jr. "has been irrelevant." Even though Jimmie Johnson "has become one of the greatest champions NASCAR has ever known, he simply doesn't resonate with fans like Earnhardt does." Earnhardt last month won his first Sprint Cup Series race in nearly four years, and he "is clearly the crown prince of the infield." At Saturday's Coke Zero 400 at Daytona Int'l Speedway, an "endless array of Junior flags flapped proudly in the breeze and the thousands of Junior fans clapped loudly from their perches" (ORLANDO SENTINEL, 7/8).

The UFC will expand the health insurance it extended to its fighters last year to include pre-existing injuries and conditions, a decision that the company says will increase premiums it pays for the  approximately 400 fighters it employs globally by about 60%. UFC Chair & CEO Lorenzo Fertitta and President Dana White will inform employees of the change today when the promotion kicks off its two-day Fighter Summit in Las Vegas. White did not reveal how much the sanctioning body pays for insurance, other than to say it was upward of $1M. The UFC always has covered injuries incurred during bouts, White said. But beginning last year it bought coverage to pay for treatment when fighters got hurt in training, as well as for basic health needs. The UFC looked into adding pre-existing conditions when it found many fighters who needed surgery had their claims rejected. “Guys would come in and say ‘I need knee surgery,’ and if your knee was hurt before they weren’t covering it,” White said. “Well, of course they’re going to have had injuries before. They’re fighters. They get hurt. Insuring guys in this sport isn’t easy. But it’s something we felt we needed to do.”

THE SUMMIT: This year marks the fourth annual Fighter Summit for the UFC, which uses the event predominately to educate its athletes on the sort of matters other sporting bodies address with their annual rookie symposiums. The two-day event also will include presentations on financial planning, drug use and social media use. Among the speakers is Pro Football HOFer Michael Irvin, who will speak to fighters about mistakes he made during his playing career. The discussion regarding performance enhancing drugs will include an overview of the UFC’s drug policy. While not instituting its own random mandatory testing -- other than the full workups already required of fighters signing their first UFC contracts -- the UFC says in the policy that it will “encourage fighters to submit to voluntary testing” and take disciplinary measures, including termination, against fighters found to have used prohibited substances.

TONING DOWN TWEETS: While previous social media sessions have encouraged UFC fighters to tweet often to increase their visibility, this one will attempt to tug on the reigns. Several UFC fighters, as well as White and TV analyst Joe Rogan, have been taken to task for inappropriate, insensitive tweets. In April, sponsor Anheuser-Busch came down on the UFC over the matter, issuing a statement that said it had expressed its “displeasure” about some fighters' “inappropriate comments.” “We’re reminding them to use common sense,” White said. “First of all, you’re not comedians. What you think is funny, the rest of the world may not. So keep your jokes to yourself. We’ve had a couple of things happen in social media. Nothing huge. But enough to be annoying.”

While NBA teams must wait until Wednesday to begin signing free agents, many teams already are “throwing around money as if salary-cap space has an expiration date,” according to Gary Washburn of the BOSTON GLOBE. The numbers “are staggering” and in the first year of a new CBA it has left “many to wonder why the sides fought to keep the system essentially the same.” Washburn: “This excessive spending will be blamed on the players when the CBA expires. It’s apparent that general managers can’t control themselves when it comes to signing players.” The only thing that has “remained consistent from the previous CBA is that smaller-market teams aren’t making moves.” The new CBA was “supposed to allow them to pull some of those desirable free agents away from the larger-market teams.” But what the league “is now realizing is that regardless of how inviting the free agent market may become to certain owners, they are not going to invest their money.” They are “instead willing to take the cheaper route and compete for lower-level playoff spots with draft picks and moderately priced free agents.” Washburn: “This is why the same teams win every season. It’s not the model that is broken, it’s the owners who are willing to be mediocre that makes the NBA predictable” (BOSTON GLOBE, 7/8). In DC, Jason Reid wrote NBA owners proved “yet again that the people who run the league are also the biggest impediment to its long-term financial health.” Despite all the “lockout-inspired talk about the need for change because of their massive losses, owners displayed a business-as-usual approach in making questionable eight-figure offers to non-superstars.” The league “handed out bad contracts as if it were the federal government.” The “hard-line owners in the recent labor negotiations were among the worst offenders” (WASHINGTON POST, 7/8).

STRAIGHT TO THE POINT: In N.Y., Mike Lupica wrote people "keep hearing about the boatloads of money that Jeremy Lin will make for the Knicks,” but the team’s decision to match the four-year, $28.8M offer sheet Lin has signed with the Rockets “shouldn’t be about that kind of business.” It can “only be about the basketball business.” If it is not, then the Knicks "make it for all the wrong reasons, and waste valuable money, especially down the road, against the salary cap.” This “isn’t to say that the Knicks shouldn’t match the back-loaded offer." But if they do, they “have to believe that in a point guard league, that Lin can be one of the better point guards by the third year of this contract, when he starts making more money.” Lupica: “If they don’t -- and if he’s not -- Knicks fans aren’t going to want to hear about how Lin helped them grow their brand in Taiwan” (N.Y. DAILY NEWS, 7/8). SportsNet N.Y.’s Chris Carlin said, "This is a money decision, not a basketball decision. I don't think ‘Linsanity’ is going to be what it was during that brief stretch earlier this year, but you can't knock the fact that all of a sudden it brought attention to this guy. You walk around the city, you see people wearing Jeremy Lin jerseys. And you can't work against the idea that he has also opened up a new market to the Knicks in the Asian community. ... We’re talking about a whole new revenue stream for the Knicks. They were always bringing him back. Didn't matter what other teams were paying because they’re going to make their money back and more” (“Loud Mouths,” SportsNet N.Y., 7/6).