Here’s a look at the intersection of the business of sports and business by Rick Horrow and Brian Finkel of Horrow Sports Ventures.
NBA Camps Open Amidst Trade Controversy
As if the entire NBA lockout hadn’t been controversial enough, players and fans were left reeling after NBA Commissioner David Stern nixed a three-team trade that would have sent Hornets guard Chris Paul to the Lakers and Lakers power forward Pau Gasol to Houston, among other roster changes.
Stern killed the deal after several owners complained, irate in their view that the new collective bargaining agreement was supposed to stop big-market teams from plundering small-market teams for star free agents, and yet that hadn’t happened. Players expressed their displeasure with Stern’s veto through Twitter and other channels – and the atmosphere was a little cold even for December at the practice courts in Houston, New Orleans, and L.A.
Bottom Line: The move is perceived as a power grab by Stern, who, after LeBron James and Chris Bosh’s migration to Miami last season, has made it clear that he doesn’t like players dictating where they want to go. Insiders maintain he wasn’t about to let Paul do the same.
Pujols Deal Is a Game Changer
It’s December, but the boys of summer have managed to push Santa and Newt Gingrich off the front page of the paper.
Thursday’s blockbuster signing of 3-time baseball MVP Albert Pujols by the Los Angeles Angels of Anaheim for $254 million over 10 years, as well as pitcher C.J. Wilson for $77.5 million over five years, immediately put the Angels in contention for the World Series and once again made Los Angeles relevant in the American League.
After disappointing fans with his inaction last winter, the time was right for Angels owner Arte Moreno to take control of the Southern California market. His baseball neighbors to the north, the Los Angeles Dodgers, are still mired in the uncertainty of bankruptcy and an upcoming change of ownership. The Padres to the south have collapsed.
Bottom Line: Are the Angels finally Southern California’s team? Baseball fans in the region are snapping up Angels tickets and Pujols jerseys by the thousands – look for the team’s spring training games in Tempe, Arizona to sell out as well.
Green Bay Takes Stock
The Green Bay Packers remain dominant on the field and on Wall Street. The NFL franchise, which conducted its first stock sale in 14 years last week, sold 1,600 shares in the first 11 minutes the stock was available on line Tuesday morning. By the end of the second day, the Pack had sold more than 185,000 shares, raising about $43 million out of the $143 million needed to renovate Lambeau Field.
Fans and investors love the idea of “owning” a stake in the Packers, even though this isn’t your typical stock investment. It has no financial value, can’t be resold, doesn’t pay a dividend, and can be transferred only to another family member. It also has no bearing on attaining seat licenses, for which there is a 93,000 person waiting list.
Bottom Line: For $250 a share, you could be a proud partial owner of one of the NFL’s most storied franchises. Or gift a share this holiday season to that NFL fan on your list.
NHL Realigns
Last week, the NHL Board of Governors approved a four-conference realignment in hockey that will create two 8-team conferences and two 7-team conferences starting next year. Under the new format, every team will play every other team outside its conference twice — once home, once away, and the top four teams in each conference will qualify for the NHL Playoffs. The four respective conference champions will meet in the third round of the playoffs, with the winners playing for the Stanley Cup.
A major factor in the league’s realignment decision was what to do with the new Winnipeg franchise, recently relocated from Atlanta and still playing in the Eastern Conference.
Bottom Line: The Board of Governors chose a long-discussed major conference shift in favor of a simple swap, and can look forward to simplified travel plans and higher TV ratings as a result. At least this realignment was much swifter and cleaner than the college football realignment process.
College Football Bowl Economics
College football’s bowl season begins Friday – spanning 24 days, 35 games, 70 teams, 16 states, over $281 million in pay outs to participating schools and conferences, and, regional economic impacts across the U.S. comprising over $1.7 billion.
Long gone are the eras of the regional Peach Bowl or the quaint “Blue Bonnet.’
In 2011, every single one of the 35 bowl games has a title or presenting sponsor attached – with 11 games, like the GoDaddy and Belk bowls, claiming only the name of their sponsor company as the event title.
Bottom Line: Despite cynics who say there’s too many bowl games, the 35 bowls allow 70 schools to participate in the post-season at a significant level. Overall, nearly half of Division I teams have the privilege of participating in post-season bowl games, far more than the roughly 20% selected in the NCAA championships of other sports.
Rick Horrow is the “Sports Professor,” and is the Sports Business Analyst for Fox Sports. He has been the Visiting Expert on Sports Law at the Harvard Law School, and has authored “When the Game Is on the Line” and “Beyond the Scoreboard: An Insider’s Guide to the $750 Billion Business of Sports.” His show “Beyond the Box Score” is posted on a weekly basis on FoxSports.com, and the latest emerging trends in sports business can be found at www.horrowsports.com.
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