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SBJ Unpacks: Coronavirus -- Salary Cuts, Furloughs To Hit NFL


Many of today’s headlines regarding Dr. Anthony Fauci’s interview with the N.Y. Times focused on the negative, highlighting the quote that some leagues are “going to have to bite the bullet” this year and cancel their seasons. The interview, though, did offer some glimmers of hope. It will be a hard road. But it is possible for leagues to start playing, Fauci said. “You’ve got to be really creative.”

Fauci noted leagues and organizations are going to have to “test all the players and make sure they’re negative and keep them in a place where they don’t have contact with anybody on the outside who you don’t know whether they’re positive or negative.”

Speaking of MLB, specifically, he said, “Get a couple of cities and a couple of hotels, get them tested and keep them segregated. I know it’s going to be difficult for them not to be out in society, but that may be the price you pay if you want to play ball.”

Stay safe, everybody.

--- John Ourand

 

SALARY CUTS, FURLOUGHS TO IMPACT NFL STAFF

  • The NFL announced broad salary cuts and furloughs across league staff today, citing the economic damage of the pandemic, reports SBJ's Ben Fischer. Commissioner Roger Goodell isn’t currently taking a salary after the owners’ compensation committee approved that action at his request last month, according to a letter from committee chair and Steelers President Art Rooney II.

  • Effective with May 22 paychecks, anyone earning more than $100,000 a year at the NFL will see tiered cuts: 15% for exec VPs, 12% for senior VPs, 10% for VPs, 7% for directors and 5% for managers. No one’s salary will be reduced below $100,000 by these measures, reads the Goodell memo, which went to staff at the Manhattan HQ, NFL Films and NFL Network offices. The league also will implement a furlough program starting May 8 for anyone “unable to substantially perform their duties from home and/or whose current workload has been significantly reduced,” Goodell wrote. The commish did not say how long the furloughs or the salary reductions would last, but noted, “We are hopeful that we will be able to return furloughed employees back to work within a few months.”

  • The league will also permanently reduce its contribution to pension funds from 15% to 10% of eligible compensation effective July 1. It’s not known exactly how many people are affected.  “The economic consequences for our country have been substantial,” Goodell wrote, adding later: “It is clear that the economic effects will be deeper and longer lasting than anyone anticipated and that their duration remains uncertain.”

  • Goodell also mentioned the league has limited new hiring, frozen salaries for many employees and undertaken a company-wide review for cost reductions. Goodell’s base salary is around $4 million, but his annual income could be up to $40 million if he meets all incentives under his 2017 contract, which was the source of substantial disagreements among the owners. Goodell said in the memo that the league continues to plan for a full 2020 season.

 

BUSINESS OF THE NFL STAYS STRONG DURING PANDEMIC

  • In the six weeks before the NFL announced salary cuts and furloughs, the shield had been the most active sports league, taking a business-as-usual approach that has stood out among the sports community, writes SBJ's John Ourand. The amount of activity made today’s cutbacks all the more surprising. It started with the NFL’s decision to allow its free agency period to run as scheduled, starting March 18. Just two days later, Tom Brady announced that he was signing with the Buccaneers, providing a topic that has dominated sports media for the ensuing month-and-a-half.

  • On March 31, the NFL sold the rights to a pair of Wild Card playoff games to CBS and NBC -- bringing in more than $140 million combined for the matchups. Three weeks later, the NFL Draftwas held remotely, shattering TV viewership records for the event across ABCESPN and NFL Network. In the days leading up to the draft, Roger Goodell faced some criticism for his decision to continue with the event as planned. But he earned nearly universal praise afterwards due to the record audience, combined with fewer than expected glitches for the remote production.

  • Then today, the NFL renewed its streaming deal with Amazon for 11 “Thursday Night Football” games, plus one late season game on a Saturday. Sources said Amazon paid a healthy rights fee increase to keep those rights. 

 

 

STRINGENT SAFETY PROTOCOLS TO BE PART OF NASCAR RETURN

  • With NASCAR set to be one of the first major sports to return to action, the sanctioning body’s soon-to-be-implemented safety protocols are leaking out -- and they include plenty of masks and temperature taking, reports SBJ's Adam Stern. NASCAR will release a revised schedule as soon as tomorrow, and the first race back is expected to be Darlington on May 17. The schedule will be incomplete and only show a month or two worth of races, as NASCAR is not yet prepared to roll out the entire campaign given the fluid nature of the pandemic.

  • NASCAR has been consulting with a public health expert on at-venue guidelines. Track personnel are going to be significantly limited, with essentially only people participating in the race itself on site. Tracks will not be open to fans, media and industry personnel who are not essential to pulling off a race. The ban on these categories of attendees could be for an initial period of around four or five weeks. NASCAR’s protocol for what it will do if anyone at a track tests positive for coronavirus is not yet clear.

  • Sources say that NASCAR is going to require every person at the track to wear a mask at all times and to have their temperature checked every time they enter and exit the facility. The private plane companies who work with teams have also been developing protocols. It’s not yet clear to what extent NASCAR is trying to obtain rapid tests and how those could eventually factor into the equation. NASCAR President Steve Phelps told SBJ last week that he has been in touch with fellow commissioner Jay Monahan to share best practices, as the PGA Tour will be another league seeking to make an early return.

  • Several NASCAR teams are known to be in the process of purchasing personal protective equipment (PPE), including hundreds of masks. The Race Team Alliance has helped identify PPE makers with surplus equipment who are ready and willing to sell to private companies. NASCAR is essentially blowing up its prior schedule and aiming to run as many races as possible in the Southeast over the next couple months, as that region is among the earliest opening up for business. After Darlington, the sport will travel to Charlotte for the Coca-Cola 600 on May 24.

 

LPGA COMMISH TALKS RETURN TO PLAY, FINANCIAL IMPACT OF SHUTDOWN

  • Commissioner Mike Whan shed new light on plans for the LPGA's return, set for July 15-18 at the Dow Great Lakes Bay Invitational, notes SBJ's John Lombardo. During a video conference call, Whan spoke about the challenges planning a restart and plans for a season that will now end in December. “I'm not naïve enough not to think that we still need to see progress as it not only relates to the virus and the curve, but as it relates to testing and our ability to make sure we can create a safe environment everywhere we play," he said. "But I think we've now bought ourselves enough time between now and then to deliver what we believe is a realistic schedule and a realistic operation plan to deliver a schedule that our athletes and our sponsors will be excited about being a part of."

  • Whan would not put a dollar amount to the financial impact due to the shutdown. “It's a staggering financial impact year. It doesn't take us to our knees. It doesn't put us on a death watch, but I've been very proud and I've said in many interviews, we've saved more money in the last 10 years than in the 60 years before, but it's possible in 2020 we could eat up most of the savings we saved in the last 10 years in 10 months."

  • The commissioner added that there will be no clear-cut policy regarding spectators when play resumes. “I don't think there will be a one-size-fits-all answer,” he said. “I will tell you that most of our tournaments would prefer, for obvious reasons, to have a hometown experience, to have fans out there, to have their customers out there. ... What we've essentially said with each tournament is let's make a final assessment of what we can build and if you will build 45 days before we go.”

  • Testing will be a major component of the LPGA’s return, which is set to start in MidlandMich. "We obviously realize when we show up we're a pretty global group and we're coming from all over the world. I want to make sure that town feels as comfortable as I do about us coming and about us staying healthy along the way. How often we'll be virus testing is still to be determined, but I've told the players and the caddies, expect it to be regular at our events."

 

 

TIMELINE COMING INTO FOCUS FOR POTENTIAL MLB RETURN

  • The final two weeks of May loom as an important window for MLB, writes SBJ's Eric Prisbell. If the league hopes to start its season between late June and the first week of July in order to play anywhere from 80-100 regular-season games -- followed by a presumed expanded playoff structure -- it likely will need to make a formal announcement of a resume-to-play plan during that window. That would give players somewhere between 7-10 days to report to either Arizona or Florida or a select hub location such as the Dallas area or elsewhere.

  • A sampling of MLB execs in recent weeks by SBJ revealed that most believe that 2-3 weeks of ramp-up time -- definitely less than a full month -- would then be necessary to ready players, and especially pitchers, for the start of the season.

  • The Metroplex area of Dallas-Ft. Worth continues to look like an attractive option as one of the handful of markets where baseball could resume. Gov. Greg Abbott is letting Texas' stay-at-home order expire tomorrow and allowing businesses to reopen in phases Friday, when retail stores, restaurants, movie theaters and malls will be permitted to operate at 25% capacity. If all goes well -- and there is no "flare-up" of COVID-19 -- then the second phase would allow businesses to expand their occupancy to 50% on May 18.

  • Several MLB players balked at the idea of having to be quarantined in a city away from home for perhaps several months at a time. But the Dallas timeline for reopening -- if it doesn't re-ignite the spread of the virus -- could in a couple months allow for players to not have to be quarantined for that long of a period. They'd have more freedom than in other markets, with or without family accompanying them, while adhering to necessarily social distancing protocols.

  • Potential markets where re-openings are successfully underway could be a significant selling point for players. MLB sources are hopeful that a handful of other markets could be in the re-opening stages at various points during the season, which would create more opportunities for playing venues.

  

TOP U.S. OLYMPIC DOCTOR DISCUSSES TRAINING FACILITY MEASURES

  • Dr. Jonathan Finnoff, chief medical officer for the USOPC, told media today that four members of Team USA have tested positive for COVID-19, reports SBJ’s Chris Smith. Finnoff said that three of the individuals are residing at USOPC training facilities and the fourth was living offsite, but with facility access. There are currently 185 people, including 90 athletes, residing at Olympic training facilities in Colorado Springs, Lake Placid and Chula Vista.

  • Finnoff, who assumed his role at the beginning of March, said that the low number of positive tests is the result of strict countermeasures. “We implemented a pretty rigorous workplace infection protection program immediately upon my arrival here,” said Finnoff. “We have high-density housing with our athletes on site … and despite that and the potential for a significant outbreak because of exposure, the measures we took resulted in three isolated cases on our site.” Finnoff added that the USOPC quarantined people who had been in close contact with infected individuals and that none developed symptoms.

  • Though living quarters have remained open, the USOPC shut down training facilities in Colorado Springs and Lake Placid on March 18. The city-owned training center in Chula Vista closed its track venue at a later date, though Finnoff said the facility in SoCal has otherwise “worked in close collaboration” with the USOPC. Training facility populations fell significantly after athletes returned home following the USOPC lockdowns. The Colorado Springs facility currently houses around 70 individuals, less than one-third of the pre-shutdown population of 220, and the number of individuals residing at the Lake Placid facility is down from 60 to 25.

  • Yesterday, the USOPC published new official guidelines for athlete training and event planning. The guidelines detail the steps through which athletes and event organizers can minimize the risks of transmission, though they are also clear that risk-free training and events won’t be possible until COVID-19 is either "eradicated, a vaccine is developed, or a cure is found.”

  • Finnoff also said that mental health has been a focus. At the beginning of April, the USOPC announced a 13-member mental health task force, and Finnoff said that access to resources has been expanded; previously, mental health resources were only available to athletes with Elite Athlete Health Insurance, but access has been “significantly expanded” to include a larger number of both athletes and USOPC staff.

 

WORKING FROM HOME WITH BILL SIMMONS

  • Bill Simmons has been spending most of his work hours in his backyard pool house that he describes as an office/man cave combo. From there, he does podcasts, take calls and, of course, has TVs on showing old games. “It’s like my little work bunker,” he said. One big challenge has been communicating with execs from Spotify, which shifted to remote work four days after closing on its deal to acquire The Ringer. “Everything’s been remote -- so we have been interacting with our new co-workers through phone calls and Zoom,” Simmons said. “People we barely know that we’re trying to get to know. So, a lot of it almost doesn’t feel real.”

  • Staff at The Ringer have learned they can effectively record podcasts remotely, something they didn’t think they could do three months ago. Simmons: “We figured it out -- sent our hosts high quality podcast equipment (it’s not as expensive as you’d think), have them do the podcast on Zoom (so they can see each other) but record their audio on their end. Then they send the files to the podcast’s engineer and it sounds like a real podcast.”

  • Creating content without live sports is not ideal for a sports-centric site, but Simmons feels The Ringer is in good shape. “We’ve always tried to be creative during dead spots of the calendar with nostalgia content, nerd culture stuff and theme weeks -- it’s something we learned to do at Grantland, how to cover ‘dead’ content weeks in February, August or whenever with pre-planned gimmicks that we can throw our people into and just get creative.” Now, Simmons is just hoping his staff gets the challenge of going from no sports to a ton of sports, quickly.

  • How is Simmons filling the hours that would have been spent watching sports? “I’ve watched an exceptional amount of television, even for me,” Simmons said. That’s included “Ozark,” “Mrs. America,” “Melrose Place” and dozens of old NBA games. “I’m in basketball withdrawal,” he admitted. On the family front, Simmons speculates he’ll never get to spend this much time with his teenage daughter ever again. His advice for others? “Get outside. Don’t stay in one place for too long. Don’t do serious work with your family in the same room because they never know if you’re seriously working or not.” All of that with one caveat: “I broke all of these rules in the last 8 hours so don’t listen to me.”

 

Simmons says his staff has learned they can effectively record podcasts remotely, something they didn’t think they could do three months ago

 

SPEED READS

  • TV episode recap programs have been a media mainstay for years now, whether it be “Talking Dead” or “West Wing Weekly” or “Decoding Westworld.” Chicago-based TeamWorks Media is now applying the format to “The Last Dance” documentary with a weekly program called “Backstage At The Last Dance,” notes SBJ's Austin Karp. On Monday afternoons on Twitter during the documentary’s five-week run, the TeamWorks feed recaps the two episodes from the night before. The talking heads on the video series: Tom Smithburg, director of media relations for the Bulls during that 1997-98 season; Mike Sear, producer of Bulls pre-game, halftime and post-game shows for the team’s RSN during the 1997-98 season; and Chris Weber, a producer at NBA Entertainment staffed on the secret Bulls project during that final championship season.

  • Despite the impact from the coronavirus pandemic, Fitch Ratings gave the senior secured fixed rate bonds for the USTA National Tennis Center an A- rating and all of its other bonds a stable outlook, according to SBJ's Karn Dhingra. Among the reasons cited for the tennis facility's positive outlook:

    • The tennis facility's strong financial covenants and contractual protections, which protect against revenue losses in case the U.S. Open is canceled.
    • The USTA’s long-term broadcasting agreements, which provide 50% of its pledged revenue.
    • The New York metro area’s solid demographics and large corporate base
    • Securities issued to fund the USTA's strategic transformation plan, which will enhance the fan experience and rehabilitate the facility’s essential infrastructure.

  • What are the voices of college sports doing right now? That's been the focus of an interesting video series titled "Vocal Distancing" from College Sports Now, hosted by Appalachian State's Adam Witten. The most-recent roundup of play-by-play announcers features Don Fischer (Indiana), Neil Price (Mississippi State) and Andy Demetra (Georgia Tech). Among the topics: what they're doing during the shutdown; what Price is in for with Mike Leach taking over the Bulldogs' football program; establishing a presence in a college community; first experiences on the air; and top moments they've called on the air.

 

The longtime play-by-play announcers dished on a host of topics, including their top moments behind the mic

 

  • ESPN’s Dave McMenamin had some good insight into the Lakers' attempt to open their practice facility. "The Lakers are a bit of a civic trust in the city of Los Angeles," he said on "SportsCenter" yesterday. "And so the mayor's office has been involved with other things that have happened with the team in the past, as recently as February with the memorial for Kobe Bryant and how to deal with the foot traffic, the people descending upon L.A. Live. But they also recognize what’s at play here. You’re talking about close to 500,000 positive cases of the coronavirus in L.A. County, close to 2,000 people have perished, and so they don't want to put their needs above the needs of the general public.”

  • SBJ's David Broughton notes that new research from the National Restaurant Association indicates the industry expects to lose more than $50 billion in sales in April as the "result of the coronavirus-imposed stay-at-home policies and forced closures of restaurant dining rooms.” The industry lost an estimated $30 billion in March. The research was gleaned via a survey of more than 6,500 restaurant operators between April 10-16. Restaurants have experienced the most significant job losses since the outbreak began, per the Bureau of Labor Statistics. More than 8 million restaurant employees -- representing two-thirds of the industry -- have been laid off or furloughed since the beginning of the coronavirus outbreak. Dave & Buster's stock has fallen 29% since March 10, the day before the NBA postponed their season. 
     
  • Spotify in its recent quarterly earnings report said that while the COVID-19 quarantine has depressed podcast listenership (fewer commuters), it remains bullish on podcasts in the long term. Spotify noted that around 19% of monthly active users listen to podcast content, up from 16% in the prior quarter. Consumption is also growing at triple-digit rates.

  • Kudos to Tennessee AD Phillip Fulmer for taking on a new role last night -- bedtime story reader. Knox County Schools posted a video last night of the national championship-winning football coach reading of "Smokey's Journey Through the Volunteer State." Naturally, Fulmer was joined in the video by the Vols' mascot.

 

Knox County Schools arranged for Phillip Fulmer to read "Smokey's Journey Through the Volunteer State"

 

   NEWS YOU NEED FROM SPORTS BUSINESS DAILY

  • During this crisis impacting the sports business, we want everyone to be up-to-date on the latest news and information. SBD's "Coronavirus & Sports" section is free, outside the paywall, for the foreseeable future. Below are today's headlines:
    • Fauci: Could Be "Very Difficult" For Major U.S. Sports To Return In '20
    • Optimism Growing In MLB Circles For New Three-Division Plan
    • MLB Clubs To Soon Unveil Ticket Refund Policies For Fans
    • New Scenario Sees NHL Pushing Start Of Next Season To December
    • NASCAR's New Schedule Has Races Mid-Week, Primarily In Southeast
    • LPGA Plans For Restart In July, Pushes Women's PGA To October
    • CFL Asks Federal Government For Up To C$150M To Bolster League
    • MLS Allowing Teams To Make Own Calls On Ticket Refund Policies
    • Rays Furlough Some Staff, Cut Pay For Most Amid Shutdown
    • SBJ Unpacks: Veteran Marketer Ed Horne On Brands Navigating Pandemic
    • Mavericks Continue To Support Front-Line Workers

 

SBJ UNPACKS -- WEATHERING COVID-19

  • Check out the most recent editions of our "SBJ Unpacks" podcasts around COVID-19:

    • SBJ's Bill King & Mark Burns talk about a path back from this pandemic with a new normal for the sports industry and the potential for fanless games.
    • How are brands navigating the pandemic? What awaits on the other side? Ed Horne, president of creative firm 160over90, shares his thoughts.
    • Kathy Lupia, a leading security and emergency preparedness consultant, discusses ways venues will have to change their procedures after the pandemic.
    • Ben Fischer and John Ourand recap the first round of the 2020 NFL Draft.
    • 1984 Gold Medal-winning hurdler Benita Fitzgerald Mosley, now U.S. CEO of non-profit group Laureus, and Jeremy Goldberg, president of youth sports platform League Apps talk about the peril facing youth sports programs without federal aid during the pandemic.

 

 

 

Something related to coronavirus and sports business catch your eye? Tell us about it. Reach out to Austin Karp (akarp@sportsbusinessjournal.com) and we'll share the best of it.