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Tuesday, November 30, 2021

gimme a break
Asking for a $1-million property tax break in the midst of a labor dispute takes balls, even when you’ve got a Stanley Cup in tow. But that’s what the Tampa Bay Lightning are doing.

What’s the motivation? Keeping up with the rest of the Tampa Bay area’s sports Joneses:

The hockey team says it simply wants the same deal as Tampa’s other professional sports teams, the Buccaneers and [Single-A minor league] Yankees, which pay little or no property taxes on their stadiums.

“We’re just looking for consistent treatment,” said Sean Henry, the Lightning’s chief operating officer.

So let’s see if I have this clear: When players seek their fair share of the pie, they’re selfish, spoiled and overpaid. When the owners do it, they’re exercising good business judgement. Just checking.

- Costa Tsiokos, Tue 11/30/2004 09:54:14 PM
Category: Hockey, SportsBiz | Permalink | Feedback

Saturday, November 13, 2021

In the midst of this locked-out season, Forbes Magazine has released its package of reports on the financial state of the National Hockey League and its franchise teams.

The verdict? NHL teams are worth an average of $163 million, the bottom rung among the four major pro leagues but still respectable. That’s also another increase in team valuation, following a decade-long trend.

What’s more, the magazine estimates that the league collectively lost less than half the amount it claimed last year: $96 million versus $224 million — a claim the league, predictably, forcefully disputes.

Why the discrepency? Boiled down, the owners simply aren’t disclosing all the money they’re making as a result of their hockey operations. Overall, section editor Michael Ozanian finds the benefits of owning an NHL team to outweigh the much-publicized downside. Considering the enviable control position the ownership of a major league team brings with it, in terms of various supplemental ventures (real estate, events, etc.), it’s not hard to believe.

I haven’t been shy about placing the blame for this deadlock squarely upon the owners. This news from Forbes isn’t surprising, because they find the same sort of numbers every year, and every year the NHL cries long and hard about how there’s little truth behind them. Even if you accept the Forbes findings, you could argue that a $96 million loss is still a loss, and thus still worthy of a cost-certainty solution.

I’d have an easier time believing the owners even a little bit their actions matched their words. Fact is, plenty of these franchises have been claiming losses year after year for decades, sometimes through different ownership groups. Despite all this red ink, the money appears every time contracts come up. Despite allegedly bleak economic models, potential owners line up every time an existing team or expansion franchise comes up for bid. If we’re talking about facts, looking at the owners’ arguments doesn’t give you an equation that adds up.

Not that any of this will change the lockout prospects. But it’s hockey news, and I’ll take anything I can get right now.

- Costa Tsiokos, Sat 11/13/2004 02:05:20 PM
Category: Hockey, SportsBiz | Permalink | Feedback

Tuesday, September 28, 2021

Naming-rights deals don’t get much more fun than this: Candlestick Park (once, briefly, 3Com Park), home of the San Francisco 49ers, will now be known as Monster Park, to the tune of $6 million.

Why Monster Park?

The name comes from its new sponsor, Monster Cable Products, a San Francisco-area company which sells audio cables such as those connecting guitars to amplifiers.

“Monster has always been an unusual name. But at least within the consumer electronics industry it’s a famous name,” Monster Vice President David Tognotti said in an interview.

I got news for you, Dave: I seriously doubt the park’s name will raise much recognition for your company, in northern California or anywhere else. The first company that came to mind when I read the stadium’s new name was Monster (formerly Monster.com), which already has far better brand recognition. And I bet I’m not going to be the only one.

In my opinion, Monster Cable just threw away their money. Online job network Monster is going to end up with a lot of unintentional exposure out of this, and it won’t have spent a penny. Meanwhile, even people in San Francisco will remain in the dark about the park’s true naming-rights sponsor.

What is it about San Francisco? This sounds like just another 404 error in the city’s ballparks.

- Costa Tsiokos, Tue 09/28/2004 07:44:55 PM
Category: Advert./Mktg., SportsBiz | Permalink | Feedback

Friday, September 24, 2021

Someone’s gotta be Number One — to the chagrin of Cleveland, which topped out the list of the U.S. most poverty-stricken large cities.

What I found interesting was the reason why most observers were so surprised:

The unwanted distinction is the latest in a litany of struggles for Cleveland, which appeared to be on the rebound over the past decade, with the Rock and Roll Hall of Fame, Cleveland Browns Stadium, Jacobs Field and Gund Arena.

The much-publicized and promoted addition of these (nominally) publicly-owned venues had the desired effect: It gave a veneer of robustness to the city, when there really wasn’t one. Unfortunately, their construction was more flash than anything else. It shows how much noise big-ticket projects like this make, while the nitty-gritty of hard socio-economic data tends to get ignored. It’s not jjust the layman that gets blinded, either:

“I guess I am a little surprised, because my sense was that Cleveland was a city on the rebound,” said Tom Kaplan, the associate director of the Institute for Research on Poverty at the University of Wisconsin-Madison.

If Kaplan, who’s job it is to have a better idea of these things, was fooled by what Cleveland’s civic boosters were selling, it’s a testament to the marketing effectiveness of these high-profile works.

On another level, Cleveland’s high poverty rate, despite all that investment into that concrete and glass, seems to debunk the chief arguments for indulging in these types of projects. Every metro area gets pitched a program of boosted revenue streams by virtue of having the newest and shiniest arena/concert hall/whatever. They’re supposed to attract or retain major league sports, headlining concerts, tourism events and the like. Along with that, the halo effect would be the creation of grass-roots economic activity: Jobs at the venue, restaurants and other businesses around it, etc. These predictions are key to securing public funds for facilities that are used by private enterprises.

But despite playing the arena game as deftly as any other metro area, Cleveland has an anemic local economy to show for it. So why should any city or region sink public dollars into these things? Status is nice, but if it doesn’t pay off for the local economy, the justification disappears.

These findings should be a nice bit of ammunition for future public initiatives. I’ll keep an eye out for it the next time one rolls through Tampa Bay.

- Costa Tsiokos, Fri 09/24/2004 08:00:27 PM
Category: Advert./Mktg., SportsBiz, Society | Permalink | Feedback (2)

Wednesday, September 15, 2021

on ice
Today’s the day. Barring a last-minute miracle, the National Hockey League will lock out its players, cutting into training camp and eventually slicing away chunks of the 2004-05 season. The worst-case scenario has the entire season being cancelled.

Some scattered thoughts on the impasse:

- The way things look now — and this is with the caveat that the external view doesn’t necessarily match what’s happening behind the scenes — the players will have to be the ones to blink first. And to avoid being totally fleeced, they can’t do that without at least a month being lost. If I had to guess, in order to get the owners to sign, the Players Association would have to accept one of the league’s don’t-call-it-a-cap “cost-certainty” proposals, most likely this one:

A player partnership payroll plan (P-4), which would involve individual player compensation being individually negotiated on the basis of “units” allocated for regular-season payrolls, supplemented by lucrative bonuses for team playoff performance.

The only gain the NHLPA could squeeze out of accepting this would be an elimination of the “groups” qualification levels for free agency, and lowering the age for unrestricted free agency to 28 for all players, regardless of experience or other factors. It would be a mostly hollow victory, given the built-in restrictions of the P-4 system, but it would be a longer-term gain to build upon some eight years from now, when the CBA after this coming one is up for discussion.

- Fans should keep in mind that the lockout is not a required action. The owners could allow the indefinite continuation of the the current CBA terms while they hammer out a new deal with the players. That means the owners are in the driver’s seat as far as training camps and the season starting on time. Naturally, from the owners’ perspective, this would rob them of leverage in negotiation, so there’s little incentive to do so. The only advantage is to foster goodwill with the players and, more importantly, the fans; but again, that won’t expedite a new Collective Bargaining Agreement, so there’s little point to it.

- As much as the owners think a cap will help them, it really won’t, because any system that locks in salaries will create an opportunity for a rival league to start poaching players. Aside from filling a geographic market need (think football’s old American Football League and it’s base in the unserved Western U.S.), competing sports leagues find short-term success by offering the players an expanded free market for their services.

Naturally, in order to appeal to players, an alternate league has to offer better salaries and on-ice opportunities than the NHL, and with the “cost-certainty” models the owners are pushing, that won’t be hard to do. What’s more, once the poaching begins, it’ll only drive up salaries in both leagues. That’s exactly what happened during the WHA era in the ’70s, when the formerly monopolistic NHL had to suddenly compete for players with the upstart league.

Right now, the relatively free market for player salaries in the NHL ensure that it’s the world’s premier hockey league. The sheer size of the North American sports entertainment market means there’s plenty of money to attract the best players. Leagues in other countries don’t have those resources; the only advantage they might have is the appeal of playing in a native country (thus avoiding culture shock for a player and his family). If the owners choose to limit how much of those resources are available to attracting and retaining players, the NHL loses that edge, and opens the door for a challenger.

What are the prospects for a challenge league? That’s where the NHL has an advantage. The league, along with the NFL and NBA, learned their lessons from past rival league experiences, and have maneuvered their franchises into positions where almost all of them own and/or control their arenas. With most metro regions having the infrastructure for only one hockey-friendly major-league venue (including all the revenue streams such a venue brings), that makes it extremely difficult for a start-up league to set up shop. Add to that the geographic saturation the NHL has achieved: There aren’t that many major-market cities that lack a team these days (efforts in Kansas City and Oklahoma City notwithstanding).

Still, there are possibilities (and I’m not talking about the phantom menace that is the resurrected WHA). The Russian league, in particular, has ownership that’s demonstrated a willingness to pay NHL-level salaries to attract talent. I imagine that Russian/European players would be the main ones siphoned away initially, and for provincial North American fans, there would be few tears shed. But if leagues in Russia and other European countries really start a talent rush for hockey players, it won’t be long before even Canadian and American players are lured overseas. At that point, NHL owners will have to open the pursestrings, cost-certainty be damned.

- In the midst of owners’ claims that you can’t make money in the current NHL, consider that two teams look to be in play: The Vancouver Canucks and their arena could change owners for $250 million (that might be in Canadian currency; if so, it would be something like $175 million U.S.), and the Mighty Ducks of Anaheim have three suitors, including Howard Baldwin, former owner of the Pittsburgh Penguins and Hartford Whalers.

There are other clubs on the market, either actively or passively. But why would anyone want to buy into a league that’s about to shut down, and whose business model is allegedly so bad? Why would Baldwin, in particular, a former owner, want back in? He went through bankruptcy with the Penguins, which you’d presume would be the ultimate disincentive for owning a hockey team again. Why would the Vancouver group want to buy a team that, thanks to the currency exchange as it relates to player salaries, operates in a perpetual small-market environment?

Anticipation of a CBA that fixes player costs obviously creates a window of unique opportunity for potential team owners. But with that being far from a sure thing, these offers indicate that owning a club, even within the current business structure, ain’t a bad way to make a few bucks.

- Costa Tsiokos, Wed 09/15/2004 10:52:47 AM
Category: Hockey, SportsBiz | Permalink | Feedback (1)

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