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February 27, 2009
Yankees forced to take the field Opening Day with no corporate logos splashed all over everything
Bank of America won't become the Adidas of the new Yankee Stadium after all: Talks with the New York Yankees about slapping the government-bailed-out bank's name all over the place have been terminated. The Yanks aren't commenting on how this will affect their finances, but you know it's gotta hurt, so if you have $20 million a year to throw around and a burning desire to see your logo affixed to light fixtures and bullpen canopies, give Lonn Trost a call.
Also, expect this to be one of the last links to a Newsday story you see here, as Cablevision, the newspaper's owner, has announced plans to start charging for its online content, possibly as part of some kind of cable TV package. While I think that some kind of subscription (or membership) fees will ultimately be needed to help keep professional journalism alive in the digital age, still, good luck to them with that.
Once again we see the most important thing in business is timing. The Mets got the Citi Field naming rights completed, and they get $20m a year, and the Yankees will not. It is no different than the Stadium construction issue: Mets, Phillies & Nationals got their Stadiums completed, the Marlins did not. Simple as that.
One huge story under the radar is the NBA borrowing $175m to help teams due to the economy. I wonder how bad things are, and will things get worse?
BAC is providing the $200M (the NBA managed to increase the size of this!) loan to the teams... And so far, BAC has received $45B+ in TARP funds.
Absolutely sickening. BAC should be helping to end the foreclosure crisis, not lending money to an industry where the average salary is over $4M, and where the average owner is a mult-billionaire.
If NBA teams have to close up, too bad. How many foreclosures could BAC stop with $200M? Tens of thousands, perhaps?
If you're not mad, you should be.
Posted by MikeM on February 27, 2009 01:17 PM
To be fair, B of A is getting 8.27% on these loans, which foreclosed homeowners would have a tough time matching. If we're going to pretend that these banks are still for-profit entities, it's hard to complain about them trying to make a profit on their money.
I do really wonder what's going to happen to the NBA, though. They have a cap/floor system based on revenues, right? So in the next couple of years, they'd be looking at plummeting payrolls, a free agent market even worse than that for outfielders in baseball this winter, and anybody with a long-term deal signed under the old economy treated as a toxic asset.
What would you all say the over/under is for big-four sports league seasons lost to labor disputes in the next five years? Two? Three?
Posted by Neil on February 27, 2009 01:42 PM
BIG BOARD OF COLLECTIVE BARGAINING
NBA: Current deal expires following 2010-2011 Season. League option for 2011-2012 season. Deadline to extend Dec 15, 2010.
The NBA is hemmoraging red ink all over the place. Even with massive public subsidies in most markets they still cannot balance revenues and expenses.
Prediction: Owners decline to extend current CBA. Lockout begins in June 2011. Owners attempt to overhaul the entire structure of NBA by eliminating guaranteed contracts and severely decreasing the salary cap. At least one full season lost, probably two.
NFL: November 2009 deadline for owners to remain in current CBA. If the owners opt out 2010 could be the last salary capped season. The NFLPA is already instructing members to brace for a lockout of the 2011.
Prediction: The owners and the players are both making way to much money to lose games. No work stoppage.
MLB: Current CBA expires after 2011 season. There's been a lot of buzz about a salary cap however, the MLBPA is a very strong union.
Prediction: There will be no salary cap. But there will also be no work stoppage. There might be some tense moments and a Manny Ramirez like game of chicken, but in the end, they get a deal done and play on.
NHL: Current CBA - No clue. Apathetic.
Prediction: All 30 teams move the Sprint Center in Kansas City. Gary Bettman negotiates lucrative television contract to broadcast the NHLKC games before realizing the channel he secured was eliminated in the digital conversion. In a desperate move Bettman reunites with old boss David Stern who's league has been in lockout for 14 months. In a joint press conference they threaten to move both leagues to Luxembourg immediately unless all federal income taxes are funneled directly to team owners.
I believe the answer is UNDER two. There is two things that BOTH owners and players fear. 1: Fans not attending games, buying merchandise, or watching on TV, due to economics, anger or both. 2: Firms can no longer afford to sponsor or advertise sporting events. All a strike would do is to make matters worse (Which is why the Screen Actors Guild (SAG), decided NOT to go on strike (Could you imagine the anger if you see millionaires walking picket lines, and complaining about how "Unfair" management is, while California has a 9.3% unemployment rate?)).
For the next several years, what I think you will see will be an economic system that is very similiar to the Entertainment Industry: You will see stars and elite talents well compensated, but the guy who is 15th on the credit listing, or on the depth chart will struggling to maintain their standard of living.
This fear, has become a reality on the PGA Tour, where non Tiger Woods events lose half of their ratings, and where companies such as GM can no longer afford to sponsor events such as the Buick Invitational at Grand Blanc, Michigan.
I believe the answer is UNDER two. There is two things that BOTH owners and players fear. 1: Fans not attending games, buying merchandise, or watching on TV, due to economics, anger or both. 2: Firms can no longer afford to sponsor or advertise sporting events. All a strike would do is to make matters worse (Which is why the Screen Actors Guild (SAG), decided NOT to go on strike (Could you imagine the anger if you see millionaires walking picket lines, and complaining about how "Unfair" management is, while California has a 9.3% unemployment rate?)).
For the next several years, what I think you will see will be an economic system that is very similiar to the Entertainment Industry: You will see stars and elite talents well compensated, but the guy who is 15th on the credit listing, or on the depth chart will struggling to maintain their standard of living.
This fear, has become a reality on the PGA Tour, where non Tiger Woods events lose half of their ratings, and where companies such as GM can no longer afford to sponsor events such as the Buick Invitational at Grand Blanc, Michigan.
I believe the answer is that with the recession, the NBA will be forced to change in fundamental ways. Lower salaries; fewer players; fewer teams; fewer games. In other words, approximately what GM, Chrysler, Ford, HP, and other large companies, are doing.
It may just be temporary, but it's just inevitable. Markets like Sacramento, Memphis and Indianapolis are really in the public's view right now.
Sacramento Bee will live-blog (sort of) the Cal Expo Board meeting.
http://www.sacbee.com/live/
Posted by MikeM on February 27, 2009 03:26 PM
I am not of the opinion that you will see fewer games, teams, and players. There are areas where you can move an NBA franchise to (Such as the new facility in Pittsburgh or Kansas City). In addition, there is NO way, they will cut the number of games (That is taking money out of the owners pockets).The problems are: 1: Far too many players are paid like stars when they are not (Stephon Marbury and Eddie Curry are examples of this ). 2: There is a term in economics called the "Substitution Effect", where if one good becomes too expensive, you can substitute another in its place. In most markets, you can substitute an NBA game for college, and the attendance prices are cheaper. That effect is not applicable to baseball or hockey.
Posted by Januz on February 27, 2009 04:02 PM
Here's the NBA's proposal:
http://www.sacbee.com/topstories/story/1659178.html
My question: Who are they gonna squeeze for the $5B or so this will cost?
Posted by MikeM on February 27, 2009 04:18 PM
It's amusing that the headline is "NBA Releases Details".
Of course there is no mention of funding or any actual details for the plan. Just some renderings . Perhaps they could use the old standby headline: "NBA Lets Sacto Look at the Pretty Pictures!"
Posted by Thomas on February 27, 2009 04:58 PM
The plan is such a huge, massive overreach that I really have no clue what they were thinking. It boggles the mind.
They say 2013. As in the YEAR 2013.
It's really ridiculous. Sacramento seems to glom on to the stupidest plans it can, then when they ask the voters, they yell NO!
First concrete criticism: This is such a huge makeover of State-owned real-estate that the Legislature will be required to get involved. They'll see the plan, and if there's no law to give them more oversight, they'll write one.
This is way over the Cal Expo Board's heads. A complete waste of time. Take those pretty pictures out and construct a lean-to with 'em, because that's how much they're worth.
People paid for this study??
PEOPLE PAID FOR THIS STUDY!!
Egad, epic fail. First Oprah and Lisa, now this.
Amazing.
"Back to the drawing board, boys."
Posted by MikeM on February 27, 2009 05:12 PM
The pdf of the presentation is now out, for those who want to see it.
Cal Expo's servers are slammed. Don't bother with them.
http://www.news10.net/news/pdf/CalExpo-Presentation.pdf
Posted by MikeM on February 27, 2009 06:10 PM
Thomas,
That was hilarious what you said about the NHL moving all teams here to KC since almost have been linked here but I couldn't stand one NHL team let alone thirty! Btw, where does the NBA come up with these plans? Unbelievable! Must be looking for stimulus money.
Posted by Chris on February 27, 2009 07:14 PM
I was reading about this plan, and it sounds like a pie in the sky concept. Note the following: "A NBA consultant said Friday that the proposed Sacramento Kings arena complex at Cal Expo would take 25 years to take shape and won't start anytime soon.
John Moag, a consultant on the project, said the plan would create thousands of new jobs.
This proposal far exceeds our wildest dreams," Cal Expo director Rex Hime said.
He describes the would-be venue as a utopian, sustainable state fairground where people will live and walk to work and to entertainment.
"This is not a project that will not begin this year," Moag said. "Let's be honest about this. This is a project that will begin when the economy turns"..........
Note that quote about the project beginning when the economy turns. Does anyone really think the Kings ownership will stay there and continue to take a financial bath, on the HOPE they can get a new arena, when Kansas City is available now, and Louisville, and Pittsburgh will become available in 2010? PS: Keep in find the Indiana Pacers are not happy with their lease either. I guarantee, they will not allow that to happen.
When did a blog post about the Yankees become a NBA related post?
Regardless, the market for MLB outfielders wasn't that good to begin with this past offseason. Manny Ramirez is a middle of the road ballplayer at best but he doesn't deserve most of the money he requested from the Dodgers. He made a key error in game one of the 2004 World Series, and had Boston lost that series, he would be more hated than Bill Buckner.
As for the NBA, they have problems simply because the teams are allowed to go over the salary cap in order to resign their own players. In addition, one poster is right when stated that some players get more than what they are worth.
Prediction: There will be a new CBA that will allow contraction, but I think that there will be a lockout or strike beforehand which will come after owners and players vote to dissolve the current CBA.
NFL Prediction: I think there will be a new deal sometime within the next 6 or 7 months and it will include a meaningful rookie salary cap.
MLB Prediction: Players will agree to a salary cap with the new deal with a salary floor at about $80 million with that floor rising at the rate of inflation.
NHL Prediction: No real deal to talk about, but the NHL will pull out of some US Markets. We might even see pro sports in North Dakota as a result.
Posted by Jessy S. on February 27, 2009 11:53 PM
When did a blog post about the Yankees become a NBA related post?
Regardless, the market for MLB outfielders wasn't that good to begin with this past offseason. Manny Ramirez is a middle of the road ballplayer at best but he doesn't deserve most of the money he requested from the Dodgers. He made a key error in game one of the 2004 World Series, and had Boston lost that series, he would be more hated than Bill Buckner.
As for the NBA, they have problems simply because the teams are allowed to go over the salary cap in order to resign their own players. In addition, one poster is right when stated that some players get more than what they are worth.
Prediction: There will be a new CBA that will allow contraction, but I think that there will be a lockout or strike beforehand which will come after owners and players vote to dissolve the current CBA.
NFL Prediction: I think there will be a new deal sometime within the next 6 or 7 months and it will include a meaningful rookie salary cap.
MLB Prediction: Players will agree to a salary cap with the new deal with a salary floor at about $80 million with that floor rising at the rate of inflation.
NHL Prediction: No real deal to talk about, but the NHL will pull out of some US Markets. We might even see pro sports in North Dakota as a result.
Posted by Jessy S. on February 27, 2009 11:54 PM
I can't speak for the rest of the league, but the Grizzlies are locked into the FedExForum through 2015, or else pay the city of Memphis $100 Million just for starters. Who's got that kind of $$$ now?
Posted by sjs1959 on February 28, 2009 01:11 AM
I am a hard-core Yankee fan (And I can't stand Manny), but Ramirez is NOT a middle-of-the-road outfielder.
One projection that is very reasonable, is salaries are going to be going down in 2010. With the execptions of Matt Holliday, and John Lackey (And MAYBE Vlad Guerrero (He may be on the decline)), the free agent class is awful. Combine that with the Yankees/Bank Of America deal falling apart (Costing them around $20m per year), means there may be NO big spenders next offseason. If anyone is looking for a continued major downward trend, see how spending on the MLB Draft and International Free Agents goes? This will be the first indicator of things to come.
Pro sports are going to have to learn these two words: Open system
Constant relocation threats and actual relocation just aren't sustainable. If people stop investing so much emotional input into these sports teams and start treating them as just another entertainment option then look out!
The British and Europeans do it better! Promotion/relegation. Clubs that are in the given communities for 100+ years. Clubs that are actually...clubs and not franchises, like we have here.
Posted by Transic on March 3, 2009 11:30 PM