10 TO WATCH 11/07/16
PUBLIC SECTOR SPORTS ENTERTAINMENT ISSUES OF THE WEEK
- What a game! The Cubs-Indians Game 7 World Series matchup may go down as the best baseball game in history, and the numbers reflect just that. According to Sports Business Journal, the deciding game drew an astounding 25.2 overnight rating, “marking the best figure for a Fall Classic matchup since Game 7 of the Diamondbacks-Yankees series drew a 27.0 overnight in ’01 on a Sunday night.” Despite a 17-minute rain delay toward the end of the game and a late finish, the drama kept fans around the country with their eyes glued to the TV. The peak of the ratings cycle came at 11:15pm ET, where the cast turned out a 31.1 rating. With the win, Theo Epstein can now be credited for snapping two of baseball’s largest title droughts – in Chicago and Boston. “Give all the credit where it’s deserved,” said Cubs Chair Tom Ricketts. “The guys who put together this organization. The guys who played on the field, the manager (Joe Maddon). They all did a great job. All I did was do everything I could to support them and keep the ball moving forward.” Over 40 million television sets; many, many, many more mobile devices (watched by millennials); over 200 countries with over 20 languages; economic impact in Chicago well over $200 million for the eight games at home and nine away games attracting thousands of folks standing around Wrigleyville. The net impact: great for baseball, great for the Cubs, and perfect symmetry as Chicago back from 3-1 down on the road against Cleveland after another Cleveland team does the same thing against Golden State four months earlier.
- The Portland Timbers have consistently drawn some of the best home crowds in the MLS over the past few seasons, and are now in the process of trying to expand their stadium’s capacity. According to the Portland Oregonian, the Timbers have a strong desire to stay put in Providence Park, but want to add up to 4,000 additional seats in the stadium. Team Owner Merritt Paulson is “cautiously optimistic” about the $50 million, privately-funded plan, which would bring total capacity up to 25,000. Paulson said that the club is “looking to add all the new seats to the east side of Providence Park.” The club has been working with Allied Works Architecture on the project design; the team “would aim to complete the new construction in two phases in back-to-back off-seasons.” “There’s a plan that looks to work there and work well for a site that’s pretty compact,” said Paulson. The Pacific Northwest in the prime “soccer rivalry” market in North America. A new stadium renovation for the Timbers will continue to add to stability, fuel the rivalry, and increase the broad value of the MLS.
- It’s not every day that a college can cash in on a professional team’s home games, but Georgia Tech is set to benefit from MLS expansion club Atlanta United FC’s entrance to the league. According to the Atlanta Journal-Constitution, Atlanta United FC “likely will pay” the Georgia Tech Athletic Association $1 million in rent to play its 2017 home games at Bobby Dodd Stadium on campus. AUFC will eventually play all of its home contests at Mercedes-Benz Stadium, but the facility is not set to open until June. Atlanta United will “pay rent of $45,000 per match, $275,000 for locker-room accommodations and $350,000 to make changes to the field once the final soccer game is played.” Going forward, GTAA and Atlanta United will split 35% of the “net revenues on food and beverage sold during games,” with GTAA receiving 60%. Bobby Dodd was originally built in 1913 and plays host to Georgia Tech’s football team. The stadium has a maximum capacity of 55,000. Downtown Atlanta will be vibrant for years to come, even though the Braves opened their new stadium in the suburbs. Soccer, college football, and the NFL add to the excitement of Super Bowl, Final Fours, and other mega-events at Mercedes-Benz Stadium in the next few years.
- The NFL may be some serious trouble with the law in the near future. According to the N.Y. Times, New York state judge Jeffrey Oing is “forcing the NFL to reveal something it has desperately tried to keep secret: how the league’s medical officials handled the issue of brain injuries over the last two decades.” Insurance companies will now determine if the league knew about the dangers of concussions and intentionally kept that information from players. More than 5,000 retired NFL players have accused the league of not disclosing pertinent concussion-related information, so this case is “central to whether the insurers will pay for a class-action settlement” brought up by these former players. The NFL has tried to get insurance companies to cover past claims made by players, but those some insurance companies sued the league in response. The NFL is “likely to appeal Justice Oing’s ruling.” Another example of science and law jousting. As concussion knowledge advances – and as preventative techniques evolve – insurers, plaintiffs, lawyers, and the industry attempt to be at the “front of the line.” Hopefully, all parties will put this issue at the forefront of their concern, as it will never really be over as long as science continues to evolve.
- The 2016 Summer Olympics in Rio de Janeiro came and went with its fair share of problems, but residual effects still linger, according to the AP. Over two months since the Games finished, “hundreds of workers still haven’t been paid and are planning to sue the local organizing committee to get their money.” Most of the worker that have yet to be paid served as stadium announcers, show producers and DJs, as well as individuals that worked for the Olympic News Service. A majority of the stadium announcers are freelance contractors, and multiple have noted that this is the first time they have experienced such a problem at the Olympics. Rocky Bester, who represents the 100 contractors, commented, “We’ve had robust conversations at other Olympics about payments, but it’s always been an open conversation. What is happening here is that no one is talking back. We’re sitting in the dark. We’re mushrooms at the moment.” As we all thought, Olympic “legacy issues” will drive how the real Olympics will be perceived by historians. Atlanta, Los Angeles, London, Sydney all had positive impacts over time. Sochi, Athens, Beijing – not so much. The next year or so will be critical for Rio in this regard.
- The Atlanta Hawks are one step closer to refurbishing their home venue after agreeing on a deal with the city to renovate Philips Arena. According to the Atlanta Journal-Constitution, the deal between the Hawks and the city of Atlanta includes tax payers contributing $142.5 million with the team chipping in an additional $50 million. The deal in total will come out to $192.5 million and will keep the Hawks downtown through at least 2046. Of the public money set to be used in the renovation, $12.5 million will come from the sale of Turner Field, $110 million will come from a car rental tax, and the final $20 million will “come from a series of expected future sales of smaller tracts of city land.” Hawks officials said that other upgrades include “more connectivity so fans can better navigate around the arena.” Hawks Owner Tony Ressler has said that a Philips makeover is “essential for the team.” Atlanta continues to lead the way in infrastructure development. While some communities decide to deal with their facility retooling over many generations, Atlanta is looking at combining all of these processes in a compressed time frame. While much political conversation has continued, Atlanta should look forward to positive economics, civic pride, and downtown development in a comprehensive process over the next few years.
- With the financial statements just getting released, Manchester City has come out atop the table as last season’s top earner in the UEFA Champions League. According to Reuters, semi-finalist Man City racked in $92.96 million, slightly ahead of winner Real Madrid, who earned $88.8 million, of the record pot of nearly $1.5 billion. Despite only advancing to the round of 16, Italian champion Juventus came in third on the list at $80.1 million because of UEFA’s regional market share rules. The UEFA report states that every club earned $13.3 million for “taking part in the group stage, plus bonuses for each win and draw,” with an additional bonus every time a team progressed through the knockout rounds. In terms of media share from the market pool, the money is divided “according to proportional value on the national TV market allocated to each individual club, among other factors.” Because of that, as the last-standing Italian side, Juventus was able to earn more than most of the teams that finished ahead of them. While good for Manchester City, the numbers reflect the stark economic differences between international soccer and American leagues. With the NFL, MLB, NHL, and NBA, the bedrock foundation rests with shared national television revenue. Not the case with international soccer. While mid-level and relegated teams attempt to evolve the system, look for “the top teams” to continue to remain “the top teams.”
- The Oakland Athletics are in “danger of losing some or even all” of its annual portion from MLB’s revenue sharing agreement amidst talks of a new CBA, according to the S.F. Chronicle. Some team owners have expressed their unhappiness with the lack of spending by the A’s and team Owner Lew Wolff. The team’s ongoing business plan has involved “keeping a low financial profile and bathing in the annual revenue check from their corporate overlords.” Last season alone the team received more than $34 million in revenue sharing, and the league believes “the A’s aren’t doing an adequate job of spending that hefty sum on team improvement” like the rest of the league is. The franchise has finished in last place in its division for two consecutive years now and is currently struggling to find a site to build a new ballpark on. Any loss in revenue-sharing proceeds could further reduce the team’s “already frugal spending – and also could trigger at least a partial ownership change.” The annual revenue sharing allocation is usually not available as leverage to force teams to make significant economic changes. As the Oakland A’s continue to reduce spending and have difficulty finding a viable long-term Bay Area stadium plan, look for this leverage to be employed in the Oakland situation over the next couple of years.
- Now more than ever sporting events are breaking all sorts of records for giving away the most prize money. The Players Championship just broke an even more impressive record though, as the tournament announced that it will donate $8.5 million to area charities, according to the Florida Sun-Union. That marker is about $400,000 more than last season, setting a “record for the largest donation to charity” in the history of The Players. Much of the $8.5M “will be donated to children’s charities” as a part of the PGA Tour’s ’11 goal of earmarking $50M to organizations “involved in health and education within 10 years.” Many of the additional donations can be attributed to a 78% spike in attendance and a 116% increase in concession sales over the past eight years, all stemming from “a series of enhancements to the course” at TPC Sawgrass in Ponte Vedra Beach. As always, the PGA Tour and golf in general remains the “industry standard” in charitable donations. Golf is a unique vehicle to intensify social change. The Guggenheim Women in Tech Championship that begins next Labor Day Weekend in Indianapolis combines the LPGA and Guggenheim’s effort to intensify workforce training, urban development, and female workforce training, robotics, urban development, and other positive community goals through a golf tournament through an international golf tournament. Look for this trend to continue.
- The Russian doping scandal has been tracked all the way to New York City for the New York City Marathon. According to the New York Times, Russian sports agent Andrey Baranov, who represents female runners from all around the world, went under federal surveillance just a few days prior to the race being run in Manhattan’s Upper West Side. The ongoing investigation involves investigators “looking into whether Mr. Baranov conspired with American marathon organizers — including New York City Marathon officials — to allow athletes using banned substances to compete in their events.” Mr. Baranov has not been charged with any wrongdoings as of yet, and he has repeatedly denied any criminal activity. Another group being that will potentially undergo investigation is New York Road Runners, which organizes the NYC Marathon. “If contacted, we will cooperate fully with the authorities,” commented a spokesperson for the organization. “We recruit athletes that create the best competitive atmosphere and align with our values of fair play and commitment to community.”