Business of Sports

The Tip-Off on the NBA's New Season


1. NBA Season Opens

Is the NBA's future as scary as National Basketball Players Assn.'s Billy Hunter predicts? Who's the real man in the cape—the Magic's Dwight Howard or new Cavalier Shaquille O'Neal? As the league prepares to open its regular season in the days leading up to Halloween, NBA Commissioner David Stern deploys his usual bag of tricks in answering these questions and facing the still-ghoulish economy.

Asked about the Dwight vs. Shaq issue, Stern's answer is LeBron. "He hasn't won anything yet, but he may be the best player ever to descend to this planet," Stern says on this Tuesday's episode of The $ports Take on Versus. Commenting on the recent purchase of the Nets by Russian billionaire Mikhail Prokhorov, Stern warns: "It hasn't been finalized. There's in effect a handshake, a term sheet. My understanding is that it will be reduced to a full-blown agreement in the next couple of weeks. The formal review process, background investigations, etc., will go into full swing, and if it's approved it will probably close in the first part of 2010." His impressions on heading to the new Cowboys Stadium for February's All-Star Game? "It's kind of neat. The one thing we know is that no shot from anyplace is going to hit the video board. We're feeling a sense of comfort about that."

Despite the economy, the NBA's rich appear to be getting richer. As Sports Illustrated notes, the five leading NBA title contenders this season beefed up their rosters with expensive acquisitions over the summer, moves that should lead to the most exciting title race in two decades.

The NBA staved off one crisis on Friday by reaching an agreement on a two-year contract with their referees' union, ending a month-long stint by replacement refs. But with a potential work stoppage looming a couple of seasons from now—mostly due to the haves vs. have-nots scenario—NBPA Executive Director Hunter last week stated that the NBA has told his union that owners "will lose 'hundreds of millions of dollars' over the course of the current" collective-bargaining agreement, based on the "last four years of the deal combined with projections of declines in revenue for the next two years." Another bargaining session has not yet been set.

In an innovative move to help fans get ready for the upcoming season, the NBA has launched a video rule book on www.nba.com that explains more than 100 rules—from charging to illegal screens to traveling, some of the game's most misunderstood calls—by using actual video clips from NBA games. The online rule book is expected to increase officiating transparency, a goal the league has tried to reach since it was entangled in the scandal surrounding former referee Tim Donaghy. NBA Executive Vice-President for Basketball Operations Stu Jackson says the feature "is just a great idea by some people here in basketball-referee operations."

Among individual franchises, the Los Angeles Clippers are hoping that top draft pick Blake Griffin will increase their appeal in a town where the Lakers dominate. The Clippers' average home attendance last season was 16,185; arena mate the Los Angeles Lakers sold out almost all of their games at the Staples Center's 19,079 capacity. And according to the Los Angeles Times, the Lakers have reached a 98% season-ticket renewal rate for this season, the NBA's highest. (The league average is 75%.) For the team and the league, that's a treat.

2. NBA Marketing Partners Soar

Despite the economy, corporate America still seems eager to hook its fortunes to the NBA. According to SportsBusiness Journal, the NBA begins the 2009-2010 season with "most of its pending renewals in the bag." Among returning sponsors are Nike (NKE), which extended its 17-year relationship with the league for five more years and lengthened its USA Basketball rights for seven years, through 2016. Sports-ubiquitous FedEx (FDX) also signed a one-year renewal. However, 19-year league partner McDonald's (MCD) will not be returning (it's being replaced by TacoBell). Also passing this season is Toyota (TM), yet another casualty of the auto-industry downturn.

Among the league's own marketing initiatives is the launch of a new TV campaign called"Words," which builds on the popular "When Amazing Happens" series—one of the few ad campaigns that don't send us immediately scrambling for the remote. This new collection of 30-second spots features voiceovers from current and past NBA stars. Accompanying this campaign in the NBA marketing strategy planner this fall is a new Hispanic-themed campaign called "enebea" (the Spanish pronunciation of NBA). Through this campaign the NBA hopes to boost its popularity among a demographic that already makes up 15% of its fan base. NBA stars such as Spaniard Pau Gasol are front and center in the ads.

Additionally, NBA TV increases its distribution to more than 45 million homes courtesy of solidified carriage deals with Cablevision (CVC), Dish Network (DISH), and Time Warner Cable (TWC)—that number is triple its distribution entering last year's season and puts the channel closer to the distribution of the MLB Network (53 million homes) and the NFL Network (50 million homes).

In Milwaukee, the Bucks signed an agreement with Wendy's that "offers kids 14 years and younger free tickets to most Bucks home games during the first month of the season," according to the Milwaukee Journal Sentinel. The partnership includes retired NBA player Junior Bridgeman, whose company "oversees the operation of 163 Wendy's restaurants in five states."

And happy anniversary to the Staples Center! This month the downtown Los Angeles facility turns 10—grossing $43 million on 70 performances last year, it's the No. 3 concert venue of its size in the world, behind Madison Square Garden and London's O2. As a gift that keeps on giving, Staples (SPLS), the company, just agreed to a lifetime naming rights deal for the venue.

3. Colangelo Chronicles Return of the Gold

Nike may have just extended its USA Basketball rights, but times weren't always so good for this basketball governing group. By 2004, USA Basketball was faltering. A sixth-place finish in the 2002 World Championships and a bronze at the 2004 Olympics made clear that there were problems within the organization and that the rest of the world had caught up to the U.S. in talent.

Faced with the possibility of further embarrassment in 2008 at the Beijing Olympics, USA Basketball turned to Jerry Colangelo to solve the organization's problems and rebuild its global reputation. Colangelo was already a legend in American sports—he was a former owner of the NBA's Phoenix Suns, one of the founding owners of the Arizona Diamondbacks MLB franchise, and one of the main influences in bringing the NHL to Phoenix. Now he was tasked with returning Team USA to its glory atop world basketball.

Return of the Gold: The Journey of Jerry Colangelo and the Redeem Team is a behind-the-scenes, in-depth look at how Colangelo rebuilt Team USA for the 2008 Olympics. From naming Duke University coach Mike Krzyzewski as the squad's head coach to hand-picking the stars who would make up the team's roster, Colangelo guided it all.

Return of the Gold isn't simply a recap of the 2008 gold medal run. As the NBA season prepares to tip off, it's also a look at the sport in general over the last 20 years. Why are we so enthusiastic about this book? It's the first title out in our Sports Professor Series with publisher Morgan James, and it's now available at bookstores and online booksellers near you!

4. World Series Set to Begin

Even though many baseball fans consider a start date three days before Halloween to be a cruel All Hallows-type prank by MLB Commissioner Bud Selig (especially those getting ready to freeze their masks off in New York and Philadelphia), it's set.

Ticket prices for the World Series are set by Major League Baseball, not by the teams. In New York the "cheap" bleacher seats, $5 during the regular season, will go for $50—even though people sitting in them will not be able to see a third of the field. Field-level seats that are $100 during the regular season double, to $200. Overall Yankees ticket sales are averaging $488.

In Philadelphia a prominent ticket broker reports that standing-room-only tickets at Citizens Bank Park for the World Series are "going for about $750, and some outfield seats are available for about $1,000." TicketNetwork.com spokesman Mike Garvie adds that as of Thursday, $830 was the "average sales price for Philadelphia Series tickets." He also said that the "most actually paid so far for a Series game was $4,700 for each of two seats right behind home plate in Philadelphia—and each of two seats in a special section at Yankee Stadium."

Once considered the National League's laughingstock, the Phillies are looking to repeat the World Series Championship they earned last October. This will be Philadelphia's seventh trip to the World Series in 127 years. (The team lost in 1915, 1950, 1983, and 1993, and beat the Kansas City Royals in 1980.) The Yankees swept the Phillies in 1950. As of this writing, the Phillies lead the Series 1-0, having beaten the Yanks 6-1 in Game 1.

5. Say "Cheese!" Favre Returns to Green Bay

Last week the mayor of Green Bay, Wisc., threw down a challenge to Packers fans: find "tasteful" ways to welcome Brett Favre back to the city when Favre's Minnesota Vikings come to town to play the Pack on Nov. 1. Mayor Jim Schmitt asked fans to submit the ideas to the city Web site, and he'll select the top four.

Among the "tasteful" suggestions submitted so far:

• Inviting Italian performer Luca Lionello to sing the pregame national anthem. (Lionello played Judas Iscariot in the film Passion of the Christ.)

• Preparing the world's largest waffle in the shape of the number 4.

• Flying in the Norwich (Conn.) Free Academy marching band to perform during halftime. (Norwich is the birthplace of Benedict Arnold.)

• Encouraging fans to wear flip-flops despite the fall chill.
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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