Business of Sports

In NBA Finals, Media Partners Are Winners


1. NBA Finals (Almost) Set. Are Broadcasters, League Officials Content?

With the favored Cleveland Cavaliers now down 3-1 to the Orlando Magic and the weary Los Angeles Lakers edging out the "upstart" Denver Nuggets 3-2, the marquee-lit prospect of a LeBron James/Kobe Bryant-led NBA Finals series have dimmed somewhat. At least now maybe people will stop making accusations that the entire NBA Playoffs is rigged, weighted heavily by league brass and referees alike toward the NBA's most bankable stars.

They're all bankable, says Commissioner David Stern. According to the Associated Press, Stern last week "downplayed the idea" that having James in the Finals "would be a windfall for the league." Stern was quoted as saying, "You mean as opposed to Dwight Howard, Carmelo Anthony, or Kobe Bryant? … We have nothing but stars." Added TNT analyst Ernie Johnson in the Orlando Sentinel, "The league is not trying to manufacture a final. If they were, then Boston would be playing Cleveland."

So far, the NBA's media partners have nothing to be unhappy about. TNT averaged a 3.1 cable rating (4 million viewers) for the 37 telecasts of the NBA Playoffs through the Conference Semifinals, up 10.7% from a 2.8 rating (3.5 million viewers/36 games) through the same point last year. ESPN also realized gains for Conference Semifinals coverage, averaging a 3.5 cable rating (4.6 million viewers) for six telecasts, up 9.4% from a 3.2 rating (four million viewers) for seven telecasts last season. NBA Playoffs games, according to the SportsBusiness Daily, accounted for the eight highest-rated programs on cable for the week of May 11-17.

TNT averaged 7.321 million viewers for last Wednesday's Magic-Cavaliers Eastern Conference Finals Game One, up 18.3% from 6.19 million viewers for the comparable Spurs-Lakers Western Conference Finals Game One in 2008. Moreover, ESPN earned a 5.8 cable rating and 8.085 million viewers for Tuesday's Nuggets-Lakers Western Conference Final Game One—producing ESPN's most-viewed basketball game ever.

While Nike (NKE) with its puppets and Coca-Cola (KO) with its frequent vitaminwater ads are still going to town on the whole LeBron-Kobe dynamic, vitaminwater has made it clear that it can slot in Magic star Dwight Howard, also an endorser of the product, should the Magic beat the Cavs. (No word on whether Nike has a Howard puppet in production, draped in a Superman cape.) According to a recent ESPN poll of fans' favorite NBA players, however, Howard is not quite yet playing in the Bryant-James stratosphere: Bryant got the "favorite player" nod from 8.2% of fans polled, followed by James at 6.1%, Suns' Shaquille O'Neal at 2.9%, Celtics' Kevin Garnett at 2.4%, and the Spurs' Tim Duncan at 2.3%. Howard was further down the page.

2. When Books Tackle Sports: Book Expo America 2009

While books about sports don't exactly dominate the racks at Barnes & Noble (BN) and Borders (BGP), the top-selling titles in the genre continue to make a splash, as they will this weekend at Book Expo America, the largest book industry event in North America and one of the biggest gatherings of English-language publishers in the world.

A-Rod: The Many Lives of Alex Rodriguez by New York Times sportswriter Selena Roberts and The Yankee Years by Joe Torre and Tom Verducci have dominated recent headlines. Born to Run: A Hidden Tribe, Superathletes, and the Greatest Race the World Has Never Seen by Christopher McDougall is currently the top-selling sports title on Amazon.com and No. 63 on the site's top 100 best-seller list. What's more, athletes continue to enjoy healthy advances. Last year, Grand Central Publishing won the rights to publish Serena Williams' upcoming memoir, tentatively titled Queen of the Court, for a reported $1.3 million.

BEA officials note that this year's convention will not only play host to exhibitors and publishers from 37 countries, it will also boast a wide cross-section of different types of publishers—small to large, specialized to general interest, and independent to big corporate. More than 1,500 exhibitors will participate in BEA this year, displaying many thousands of new books.

We're using the setting of Book Expo America to make a major announcement of our own. This fall, Morgan James Publishing will release the first title in The Sports Professor Series, a collection of books by top professionals in the sports industry. Boasting a list of authors comprising owners, athletes, architects, sponsors, and fans, the Sports Professor Series is the first-ever collection devoted to the dollars-and-cents side of sports.

The first title to be released in series is Return of the Gold: The Journey of Jerry Colangelo and the Redeem Team, written by Phoenix sportswriter Dan Bickley with Colangelo. Behind that is our own Beyond the Box Score: An Insider's Guide to the $750 Billion Business of Sports.

3. Double Dribble, or Double Book? Sports Scheduling Gaffes

What once flew under the radar has now led to threats of lawsuits and steel cage matches. Double bookings in sports facilities are not exactly common, but major gaffes have occurred in the last couple of months. With NBA and NHL playoff games set only a few days in advance, some slipups are expected. Others, however, are unacceptable. Here are five recent incidents:

5. Cleveland Cavaliers/Yanni: Instead of letting a Yanni concert clash with a possible Game 1 of the NBA Finals, officials at Quicken Loans Arena moved the show to nearby Wolstein Center. Unlike the other gaffes on the list, this one escaped criticism, and for that matter, attention.

4. New York Jets/Jewish High Holidays: The NFL alienated Jewish Jets fans by scheduling games during the two holiest Jewish holidays. Acknowledging its mistake, the league rescheduled one of the games to be more accommodating.

3. Pittsburgh Penguins/Yanni: Apparently, teams wanting to go deep into the playoffs just need to book Yanni on the date they hope to play. When the NHL realized that Yanni would be stopping in Pittsburgh the night of a potential Penguins-Capitals Game 7, the league forced the teams to play back-to-back nights to avoid a conflict.

2. Arizona Cardinals/Fiesta Bowl: Despite a contractual obligation for University of Phoenix Stadium to be vacant 48 hours prior to the Fiesta Bowl, the Cardinals failed to ask the NFL office for an away game, and now are scheduled to play at home the day before. Fiesta Bowl officials are evaluating their options and are considering a lawsuit.

1. Denver Nuggets/WWE: The Nuggets did not expect to be in the Western Conference Finals when owner Stan Kroenke booked WWE Monday Night Raw. When the scheduling conflict was noticed, WWE Chairman Vince McMahon challenged Kroenke to a steel cage match, then picked up his show and moved it to Los Angeles.

4. When You Scratch This, It Doesn't Pass the Sniff Test

The week before last, Delaware become the only state east of the Mississippi to allow legal betting on sports after Governor Jack Markell signed legislation legalizing gambling, including sports betting. State officials, according to state media sources, claim they "expect to have sports betting running in three months and table games such as poker, blackjack, craps, and roulette in play in no more than six months."

A sports lottery is key to Delaware's plan to help ease a projected budget shortfall of more than $600 million for the coming fiscal year, and Delaware is one of only four states—along with Nevada, Oregon, and Montana—grandfathered under a 1992 federal law banning sports gambling. But sports betting there could face a legal challenge by professional sports leagues. As reported by The News Journal of Wilmington, the NFL immediately filed a legal brief with the state Supreme Court, arguing that games cannot be considered a situation of chance because skill "plays an impermissible" role.

The Court scheduled a hearing for May 21 to hear arguments on the matter, but since the NFL's legal move was announced, the league has already lost a lot of ground in the court of public opinion, or at least with sportswriters, who have been blasting the league for its hypocrisy. Why? Only days earlier, the Massachusetts State Lottery and the New England Patriots had announced that development of the first NFL team-licensed instant-win lottery ticket after NFL owners voted to allow their teams to partner with state lotteries on sponsorships and promotions. The new Massachusetts instant ticket is expected to go on sale before the start of the upcoming football season; in Pennsylvania, the Eagles and Steelers are rumored to be exploring lottery relationships of their own.

5. As the French Progresses, Aussie Dips and ATP Uncovers

While the French Open, now under way, is enjoying record purses and a definite sense of anticipation after Roger Federer beat Rafael Nadal on clay in Madrid, word has gotten out that the Australian Open's sponsorships have fallen like a well-placed drop shot.

According to tournament sources, the global economic downturn has cost the Australian Open nearly AU$10 million in sponsorships after highly visible sponsor Garnier abruptly exited its deal with the tourney. The announcement by Garnier, a division of the L'Oreal Group, yesterday followed on the heels of sponsor GE Money's decision not to extend its three-year sponsorship deal. Smaller deals with MasterCard (MA) and Optus are also broken or under review. The good news: Rolex and Lacoste are still behind the tournament for high-level multiyear contracts, and automaker Kia (KIMTY) "remains committed until at least 2013."

The ATP, meanwhile, is reportedly jumping on the reality television bandwagon via "ATP World Tour Uncovered," a behind-the-scenes series about the circuit. The show, hosted by former player Justin Gimelstob, an ATP board member, is being jointly produced by British Telecom (BT) and IMG. The plan as reported by Gimelstob is for 13 episodes to be produced this year and 43 in 2010.

6. More than 2,000 Participants to Attend 49th Annual Pop Warner Scholastic Banquet

Last Saturday night, youth football league Pop Warner hosted its 49th Annual Scholastic Banquet at Walt Disney's (DIS) Coronado Springs Resort in Lake Buena Vista, Fla. This year, more than 8,000 Pop Warner scholar-athletes were named to the First Team, Second Team or Honorable Mention All American Scholars, based on a score calculated from students' grade point average and addendum activities.

More than 2,000 participants from around the country attended this year's banquet, and Pop Warner awarded more than $105,000 in scholarships on behalf of its partners and sponsors. Pop Warner also presented awards to organizations and individuals who have had an impact on youth football and their communities and serve as positive role models for today's scholar-athletes. Pop Warner's 2009 Award Winners include:

NFL Team of the Year: Tampa Bay Buccaneers

The Warner Award: NCAA President Myles Brand

Inspiration to Youth Award: Earnest Graham, Tampa Bay Buccaneers

Humanitarian Award: Bob Sanders, Indianapolis Colts

Female Achievement Award: Summer Sanders, Olympic Gold Medal Swimmer, Broadcaster

7. EPL Crowns a Champ

$24.16 million. That's the amount, according to Sports Illustrated, Manchester United received for winning this year's English Premier League Championship. The number is up 1,867% from the $1.29 million the club received for winning the inaugural EPL title in 1993. (And you thought CEO salaries were inflated.) Too bad Man U lost to FC Barcelona 2-0 in the European Champions League final in Rome on May 27.

Also in the U.K., the Football League, the second-through-fourth tier of English soccer, recently unveiled a proposal seeking "increased financial support" from the Premier League, asking EPL clubs to "pass on a percentage of their total spending on players' wages" and to bundle together TV rights to the Football League and EPL, according to London's Daily Telegraph. The proposed plan comes as portion of a response to the seven questions U.K. Secretary of State for Culture, Media & Sport Andy Burnham sent to football's top executives last fall about the game's future.

Football Association Chair Lord David Triesman last week also unveiled plans for "wholesale reforms to the way English football is governed…in an attempt to bring players, ethnic minorities, and women into the heart of the game's decision-making structure." Triesman allegedly vowed at a recent FA board meeting "to definitively rid English football of its blazer-clad image," the Telegraph reported.

8. Does Super Bowl Hosting Equal Playoff Success?

At the recent NFL spring owners meetings, the New Orleans Saints were awarded the 2013 Super Bowl. That might not bode well for the Saints, as 77% of teams that host the Super Bowl fail to make the playoffs that season. Here is a breakdown of how Super Bowl hosting teams have fared over the last 43 years. New Orleans did not make the playoffs in any of the nine seasons the city hosted the Super Bowl.

• No Playoffs: 33 teams

• Wild Card Round Exit: 3 teams

• Divisional Round Exit: 4 teams

• Conference Championship Exit: 1 team

• Super Bowl Loser: 1 team

• Super Bowl Winner: 1 team (1984 San Francisco 49ers)

9. Despite Labor Pains, U.S. Pro Sports Not Facing Contraction

The country's in a recession, the stock market is in the gutter, and the Phoenix Coyotes are in bankruptcy court—seems a likely time for one of the four major sports to contract. However, despite all of the apocalyptic signs surrounding the sports industry—things like Texas Rangers owner Tom Hicks defaulting on a major loan and the New Jersey Nets announcing a $28 million operating loss—contraction will not happen.

As bad as steroids in baseball, gambling in basketball, and lockouts in hockey have all been, nothing would be more devastating to a league's image than contraction. No major professional franchise in the modern era has been contracted, and as bad as the economy is, there is no reason to think that the downsizing starts now. For most owners, holding a franchise is more of a status symbol than an investment. If a team becomes available, there will be no shortage of prospective buyers.

Rather than eliminating a team altogether, a much more likely scenario is relocation. In the last 20 years, nine different franchises have moved cities. Los Angeles wants the NFL, Kansas City and southern Ontario are craving the NHL, and Las Vegas will take whatever it can get. Three ownership groups vied for the Chicago Cubs, two have submitted bids for the Coyotes, and no fewer than 10 are looking at the Montreal Canadiens. As a positive sign that the credit market may be thawing, the "mid-tier" Orlando Magic just secured a $100 million loan to complete their stadium.

Things may look bad now, but like the U.S. economy, the sports industry has no place to go but up. While a team or two might move, you can rest assured that they won't disappear.

10. Get Your Ocho Cinco Gear—But Never Mind the Gap

Just in time to get those orders in before NFL training camp starts in earnest: the Ochocinco #85 jersey of the Cincinnati Bengal formerly known as Chad Johnson. The orange and black official replica jersey is selling on www.nflshop.com for $79.99.

While Johnson is admittedly spacey, his new jersey is not: Just to remind the all-Pro wide receiver who's boss, the NFL refused to separate "Ocho" and "Cinco" on the jersey since Florida court documents registering the name change condensed his legal last name into one word. Chad still references his last name as Ocho Cinco, but no matter how you spell it, isn't having #85 and Ochocinco together on the back of the jersey redundant?

Rick Horrow is a leading expert in the business of sports. As CEO of Horrow Sports Ventures, he has been the architect of 103 deals worth more than $13 billion in sports and other urban infrastructure projects. He is also the sports business analyst for CNN, Fox Sports, and the Fox Business Channel.

Karla Swatek is vice-president of Horrow Sports Ventures and co-author of Beyond the Box Score: An Insider's Guide to the $750 Billion Business of Sports.
Rick_horrow
Rick Horrow is a leading expert in the business of sports. As chief executive officer of Horrow Sports Ventures, he has been the architect of 103 deals worth more than $13 billion in sports and urban infrastructure projects. He is also the sports business analyst for CNN, Fox Sports, and the Fox Business Channel. Karla Swatek is vice-president of Horrow Sports Ventures and co-author of Beyond the Box Score: An Insider's Guide to the $750 Billion Business of Sports (2010). Horrow is also the host of Sportfolio, a new program on Bloomberg TV that airs Wednesday nights at 9 pm ET.

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