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Volume 24 No. 178

Leagues and Governing Bodies

Since the NFL free agency period began on Tuesday, "spending has never been higher, teams are gambling like never before and those within the game say only one thing is certain: This is the week that everything changed," according to Kevin Clark of the WALL STREET JOURNAL. Former Jets GM Mike Tannenbaum, who is now an agent, said, "This is the new collective bargaining agreement kicking in. There are unintended consequences." Clark writes those "unintended consequences stem from a confluence of factors." They include a "quickly rising salary cap ... and a little-discussed clause" in the '11 CBA, which said that teams "must spend 89% of the salary cap in cash over a four-year period." Through roughly the first day and a half of free agency, teams spent $324M "in guaranteed dollars to players," compared to $107M last year at this time, and by Thursday afternoon, over $1B in contracts had been given out over the three-day period. In the last few years, teams during free agency "have preferred to sit on the sidelines, either out of fear of making high-price mistakes or because they just don't want to spend." But now, "not spending creates problems." If teams "don't spend enough on players to meet the 89% rule, they have to write a check for the difference" (WALL STREET JOURNAL, 3/14). In Cincinnati, Paul Daugherty notes the spending spree "proves that the NFL has more money than it could ever possibly need" and that "many of its owners are clinically insane." Free agency is a "whole lot better deal for the players than the teams who sign them." It is "essentially a massive redistribution of wealth, backed by a keen sense of public relations" (CINCINNATI ENQUIRER, 3/14).

Many indicators for NASCAR this season to date reflect "an accompanying bounce in buzz" following Dale Earnhardt Jr.'s strong start, "except the most important indicator" -- TV ratings, according to Nate Ryan of USA TODAY. Taking into account that the Daytona 500 suffered a rain delay of more than six hours, ratings "have been down for the first three races," prompting talk about whether Earnhardt's success "can spur nationwide interest." NASCAR CMO Steve Phelps said, "He has a massive following, and his fan base is energized. But trying to measure an impact is difficult, and we look at a number of things. Ratings are one indicator, but we're not overly concerned about that." Phelps said that the metrics "most important to NASCAR sponsors are TV ratings and attendance." He added that while there have been no sellouts in any of the first three Sprint Cup races, NASCAR has been "encouraged by this season's crowds, particularly an estimated 25,000 for qualifying at Vegas." Texas Motor Speedway President Eddie Gossage: "Whenever Junior does well, we all do well. At the same time, no one person determines the sport's success or failure." Ryan reports Earnhardt's early success "seems to be driving growth in digital and social channels." web traffic "mushroomed in February for unique visitors (up 55%), page views (68%) and videos (122%) from last year." also reported that Earnhardt merchandise "is up nearly 1,000% over the first races of 2013, and Lionel Racing is predicting Earnhardt's die-cast will become the best seller of the company's four years in NASCAR, doubling the sales of the previous mark" (USA TODAY, 3/14).

TOY STORY: In Tennessee, Kevin Castle writes Lionel Racing's future "really started looking up" after this year's Daytona 500. Lionel "began taking orders for a raced, die-cast version of the National Guard number 88 just hours after" Earnhardt won. Lionel Senior VP & GM Howard Hitchcock said, "We began selling 100 cars an hour." He said that the current rate of Earnhardt’s sales of that particular car "have already beaten sales of the two previous Daytona 500 winners, Jimmie Johnson and Trevor Bayne, by a 2-1 margin in just three weeks." The win "could possibly signal a new uptick in die-cast sales, which Hitchcock admitted took a hit with the economic downturn." He also admits that as Earnhardt goes, "so goes the industry." Hitchcock: "As his momentum grows, it sort of carries the entire sport. It carries ticket sales. It carries merchandise sales. It brings more people to the track, sells more hotel rooms and meals at restaurants and it sells us more cars" (BRISTOL HERALD COURIER, 3/14).