Public vs. Private Financed Arenas November 6, 2009
Posted by Michael McCarthy in : Uncategorized , 6commentsDesigning your product for monetization first, and people second will probably leave you with neither.
-Tara Hunt
Last week, I talked about the documentary Sonicsgate and how the public battle over the Sonics would likely cause a team trouble if it relocated to Seattle. This week, I will examine the issue at the heart of the Sonics move, the public financing of NBA arenas. In Seattle, both Howard Schultz and Clay Bennett’s ownership groups called KeyArena obsolete and asked the city to finance a new arena for the Sonics. When the city refused, Clay Bennett took the team to Oklahoma City.
Over the last decade, the NBA, led by David Stern, has been pushing cities to publicly finance new arenas for NBA teams, with the threat of relocation if they do not. Of the last 8 arenas built (including the new Amway Center for the Orlando Magic, set to open next season), 7 arenas have had at least 50% public financing. The question is, with legislatures throughout the country tightening their budgets, can the NBA keep pursuing this line of strategy?
The main benefit to the NBA for public financing is the bonds used for financing are usually tax-exempt, saving the NBA a lot of money. However, in the wake of the Sonics ordeal, the NBA needs to reevaluate its strategy since the battle for public financing may produce more drawbacks than advantages. Tax payers in the cities are now organizing to prevent their tax dollars from being spent on NBA arenas. For example, in Seattle, the “Citizens for More Important Things” led an effective campaign against the NBA. These citizens would rather spend tax dollars on things like healthcare, especially as the budgets get tighter and tighter. The NBA’s only legitimate argument against these groups was that an NBA team would provide an economic benefit to a city. However, in the trial in Seattle, the NBA undermined its own claim. Clay Bennett’s group (which had the support of the NBA) had expert witness Brad Humphreys, an associate professor of economics at the University of Alberta, testify that the Sonics leaving “won’t have an impact on Seattle’s economy,” that the money not spent on an NBA team would just be spent elsewhere.
So, going forward, the NBA needs to be careful about its overt push for public financing. Since statistically, there is no difference between public and privately financed arenas, in terms of revenue, income or franchise value, the NBA does not need public financing. By pushing the issue, the NBA risks tarnishing its image, making it seem a greedy enterprise that does not have the fans interests in mind. This will turn off casual fans, a key demographic for the future viability of the NBA, which may cause more losses than they would save through tax-exempt bonds.
Next week, I plan to take a look at the early part of the season, highlighting important stories and trends.
Teams Making A Difference November 4, 2009
Posted by cssr in : Alumni Posts , 11commentsBy, Scott Mittleman
Co Founder SF FunRaisers aisers
My first two articles I’ve touched on Athletes involvement in working with and creating a non-profit. Sticking to the same non-profit theme, I would like to delve into how teams are also making a difference.
The Sports Philanthropy Project has teamed up with The Robert Wood Johnson Foundation in creating The Steve Patterson Award for Excellence in Sports Philanthropy.
About the Steve Patterson Award for Excellence in Sports Philanthropy
The Steve Patterson Award for Excellence in Sports Philanthropy is presented annually by The Sports Philanthropy Project (SPP) and The Robert Wood Johnson Foundation. The award acknowledges sports organizations and individual philanthropies that have demonstrated excellence, leadership, and a sustained commitment toward a mission that serves and improves the lives of others. www.sportsphilanthropy.com/patterson.
To keep all of New England reading my blog posts, I am happy to report that the Red Sox Foundation received the award for 2009. Principal owner John Henry made the following statement about the team’s priorities following the purchase of the Red Sox in 2002. “Immediately after we purchased the Red Sox in 2002, one of our biggest priorities was to create a foundation that will have a meaningful impact on the lives of people throughout New England who are facing some of the greatest challenges,”
When a teams ownership makes being a difference in the community a priority, this commitment trickles down to the players, the fans and the community in general. It shows that the hometown team believes in where they are from and wants to help preserve valuable non-profit work.
The Red Sox Foundation has not only donated time and money but is truly pioneering ways to fundraise, manage donor relationships, keeping volunteers, and generating in-kind opportunities.
With the World Series nearing an end, most baseball fans are moving onto football season while The Red Sox Foundation continues to make Boston a better city each day.
Check me out next week to read about who won the individual honors for The Steve Patterson Award for Excellence in Sports Philanthropy
Related Links: Press Release for Award
Featured on The Boston Business Journal Website
Listen to Red Sox Chairman Tom Werner’s interview during “Inside Pitch” with Casey Stern and Kevin Kennedy on the MLB Home Plate channel on SIRIUS XM Radio
Is the NCAA Too Strict? November 3, 2009
Posted by jghager in : Uncategorized , 7commentsNCAA Too Strict?
A recent case involving an Oklahoma State pitcher and the NCAA has once again demonstrated the problems with NCAA rules and how they hurt more than help student athletes. The case involves Any Oliver, who was the second round pick of the Detroit Tigers in the most recent Major League Baseball amateur draft. Oliver was a highly touted prospect coming out of high school, and was actually selected by the Minnesota Twins in the 2006 draft. Oliver hired Tim Baretta of Icon Sports Group to help with contract negotiations at the time he was selected by the Twins. Baretta was present during the negotiation with the team, which turned out to be in violation of NCAA Bylaw 12.3.2.1 that states “ a lawyer may not be present during discussions between a student-athlete and a professional team or have any direct contact (in person, by telephone or by mail) with a professional sports organization on behalf of a student-athlete.”
Oliver decided not to sign with the Twins and decided to pitch for Oklahoma State instead. During his time there, Oliver decided to change agents and sign with the Boras Corporation. Subsequently, angered by the change in agency, Icon disclosed their relationship with Oliver to the NCAA. As a result, Oliver was suspended for a year (usual suspension is to take away all eligibility), which was eventually reduced to 70% of one season. Oliver then went on to challenge the decision in the state court of Ohio where he was granted injunctive relief and the suspension was nullified. The state court of Ohio determined that the NCAA bylaw was arbitrary and capricious and that it limits the players’ ability to effectively negotiate a contract. This was a big ruling against the NCAA, however they said that they would stand by the bylaw and that it still applied to student-athletes in the other 49 states. Oliver continued with a case that sued the NCAA for damages, but the NCAA settled out of court for $750,000. As part of the settlement, the NCAA bylaw would continue to be upheld in all 50 states. Oliver agreed to the settlement because the NCAA said that they would just keep appealing the case and tie it up in courts for years.
To me, this is just another case of the NCAA bullying student-athletes and using rules that do more harm than good. There is no way for the NCAA to police all student-athletes who may be negotiating contracts as to whether they have had a lawyer present or not. The only way the NCAA finds out is if someone turns the player in, as Icon Sports Group did. Eighteen-year-old kids and their parents cannot be expected to negotiate contracts with professional teams. Also, it is foreseeable that more athletes will change their mind like Oliver did and decide to attend school as opposed to turning pro. Again, someone who is only eighteen does not necessarily know exactly what they want to do with their lives. Having a lawyer present to protect a student-athlete should not mean that the athlete loses his or her amateur status. The NCAA needs to take a step-back and look at how they can better help the athlete instead of sticking to rules that are outdated. The bylaw is ridiculous and cannot be policed. Amateur status should only be taken away once an athlete actually turns professional. The NCAA has to consider the student-athlete.
Luke Bonner: “Center” of the World November 2, 2009
Posted by pknox in : Alumni Posts, NBA , 1,044comments
The “real world” beckons. My days of browsing the stacks at Mystery Train Records, snacking late night on a slice from Antonio’s, and taking the Mullins Center court are long gone. At the same time, I can kiss goodbye 8:00AM classes, research papers, strenuous exams, 6:00AM conditioning, and countless hours spent in Boyden/the cage/the Mullins Center. Those days are over (for the time being at least).
“Reality” has officially set in. I spent four great years in Amherst, MA, but this past May marked the end of that era. My eligibility expired, and I finished up my final course load. I packed up my belongings and made my way back home to New Hampshire with my degrees in tow. I am no longer a Umass student. Like many others, I have successfully achieved alumni status (a Umass alum entering into the workforce).
Specifically, I have entered into the industry of professional basketball. I am sure you all remember how shocked the world was this past June when my name was NOT called during the NBA Draft. Despite this unpleasant surprise, I refused to allow those pesky NBA General Managers thwart my desire to play basketball at the professional level. The NBA is not the only professional basketball league in the world. In fact, there are many leagues across the pond. With the help of my agent, the industry of my desire has welcomed me with a passport, working visa, and a plane ticket. I have since embarked on a quest to earn a living through basketball. First stop: Székesfehérvár, Hungary.
Lucky for you, I am a selfless man. Through the collaboration of some higher-ups at Umass, you will be able to accompany me along the way. I have recently been asked if I would be willing to write a biweekly blog/column for the Umass website while I am overseas, and my answer without hesitation is an emphatic “yes” (Congratulations! You are currently reading the first installment!).
Frequently players finish their college careers and head overseas to continue with their craft. Meanwhile, back in the states fans might be wondering, “whatever happened to that guy?” In fact, the guy in question may be leading a very successful career playing basketball overseas. Or, that guy’s playing career may have been quite hectic and short lived. Entering into this industry, I have a complete understanding that there will be plenty of highs and lows throughout the experience. It is not uncommon for American players to play for multiple teams in multiple countries throughout the course of a single season. There are many unknowns associated with what I am entering into. This is a reality I have accepted. The pure opportunity to experience a foreign culture, play basketball, and earn some money in the process is too much for me to turn down.
I have a lot of friends still in college who are interested in pursuing a basketball career overseas. Other people seem to be curious as to what being an overseas basketball player is all about. Nobody seems to really know anything about playing ball overseas until they experience it first hand. I am willing to share all of my experiences, the good and the bad, throughout my rookie season via this new blog. I hope that by being candid about my everything, I can help provide some perspective and shed some light on this interesting subject in an engaging/entertaining manner.