Countdown of 10 Top Sports & Entertainment Biz Issues January 14-20, 2008

1.  Mitchell Report and MLB Congressional Hearings Part I -- Impact on Viewing America While the Mitchell Report and the last couple of years' worth of steroid accusations have damaged the hero-worshipping psyche of the American fan, they've also had a profound impact on Corporate America.  On the eve of the January 15 baseball hearings on Capitol Hill, consider the following implications:

a.  Where do the Mitchell Report/congressional hearings on performance-enhancing drugs fall in terms of capturing the attention of the American worker during business hours, resulting in lost productivity – and costing taxpayers money?

1.       O.J. Simpson murder trial, 1995.  134 days of televised testimony on Court TV in this very public criminal trial held America’s attention beginning January 25, 1995.  On October 3, 1995, an estimated 150 million American viewers watched the jury return a verdict of not guilty.

2.       Watergate, 1973.  Television cameras covered the Watergate hearings gavel-to-gavel, from May 17 – August 7.  The hearings comprised 319 hours of television, a record covering a single event.

3.       Army-Joseph McCarthy Hearings, 1954.  Broadcast "gavel to gavel" on two networks from April 22 -June 17, 1954, the Army-McCarthy hearings were the first nationally televised congressional inquiry. 

4.       Clinton Impeachment Senate Trial, 1999.  Following the December 19, 1998 House of Representatives impeachment resolution, the Senate tried President Bill Clinton January 7 – February 12, 1999.  The Senate did not convict Clinton after charges arising from the Monica Lewinsky scandal and the Paula Jones lawsuit.

5.       Congressional steroids hearings, 2005.  On March 17, Former St. Louis Cardinals slugger Mark McGwire refused to answer questions about steroid use during his playing career.  Sammy Sosa and Rafael Palmeiro also denied using steroids during this hearing.

2.  Mitchell Report and MLB Congressional Hearings Part II -- Impact on Corporate America  

b.  What endorsement deals do Roger Clemens and others stand to lose if they are found to have used steroids and/or HGH?
Clemens has over $25 million in lifetime endorsement deals with such companies as Cingular, Coca-Cola, H-E-B, AutoNation, Modell’s Sporting Goods, Under Armor, and J&J Snacks.  He also owns the Rocket Sports Grill in Houston.  His 2006-2007 endorsement deals totaled about $3.5 million; Andy Pettite’s were in the neighborhood of $500,000, as were those of Jason Giambi.

c.  How have businesses involved with baseball and sports sponsorships in general reacted to the Mitchell Report and its fallout? Corporations continue to renew deals with Major League Baseball and its teams – no sponsors have pulled out specifically due to steroids in the game.  Now and in the future, however, corporations are deciding to align with leagues, teams, and other entities more often than with specific athlete pitchmen and women.  When they do execute deals with individuals, the contracts are trending toward being smaller, shorter, and easier to terminate.

d.  Have baseball fans turned on MLB via their wallets?

As of the end of December 2007, not a single fan had cancelled a season ticket package citing performance-enhancing drug use by players as the reason.  Despite widespread fan cynicism about the issue, baseball logged record attendance numbers last season, and anticipates the same in 2008.

An agreement signed last week will help – MLB and the NFL agreed to contribute $3 million each as they joined the U.S. Olympic Committee to fund anti-doping research.

3.  NFL Playoffs – Patriots Blow Out Ratings
Despite the unanticipated NFL Playoff exit by the Indianapolis Colts on Sunday – and a rematch of “Super Bowl 41.5” with the New England Patriots – the coming AFC and NFC Championship games are still on track to earn a record $1 million per 30-second ad in some spots, and the ad inventory is virtually sold out.  But then again, the Patriots have been setting tv records all season.

The NFL on CBS, anchored by four nationally-broadcast Patriots games, saw a 5.1 percent season-long leap in ratings, while viewership increased 8.6 percent from last playoff season.  And all four divisional playoff games saw big jumps in overnight Nielsen ratings.  The Giants-Cowboys match-up Sunday on Fox earned a 25.8/43, a 16.7 percent increase over CBS’ program last year.  The Jaguars-Patriots game on Saturday also posted better than a 16 percent increase in ratings, earning a 20.2/33. 

In the wild card round, NBC’s coverage of the Jaguars-Steelers game was the week’s most-watched telecast, averaging 25.74 million viewers and enabling NBC to have television’s “most watched” night since the May 23 finale of Fox’s “American Idol.

An ideal Super Bowl XLII foe for the likely Patriots, in the NFL’s eyes?  You gotta go with the Green Bay Packers national fan base and overwhelming fan sentiment for quarterback Brett Favre over the New York Giants – despite the Giants’ playing in the nation’s number one media market.

4.  Tennis Down Under:  Déjà Blue at the Australian Open
Television viewers of the 2008 Australian Open, myself included, are still getting over the sense of déjà vu the newly resurfaced, $4.45 million Plexicushion courts produce – are we watching the first Slam of the year in Melbourne, or the U.S. Open?

While the jury is still out on whether the new surface is better than the green Rebound Ace the tournament has featured since it switched from grass over two decades ago, what’s not being questioned is the health of the sport, especially during its Slams.  More than 75 million viewers in more than 180 countries watched all or some of the U.S. Open on CBS and USA, including 17 million who tuned into the men’s final.  Sponsor support also set records, and the tournament’s official website saw more than 30 million visitors for the first time – with over 50 percent of the visitors coming from outside of the U.S.  All these numbers bode well for the Australian and for the 2008 pro tennis season.

On the athlete side, with Monday’s win, American Lindsay Davenport passed Steffi Graf on the all-time career prize-winning list for women's sports, at $21,897,501.  (Golfer Annika Sorenstam is still chasing the record.)  While her $10,231,402 prize earnings are now only about half of Davenport’s total, Maria Sharapova is still at the top of the heap in terms of endorsement dollars.  Sharapova just signed a four-year sponsorship deal with Sony Ericsson Mobile Communications, sponsor of the WTA Tour.  Last year, she was the second most-popular sports entity to be searched on Yahoo!, behind only NASCAR and ahead of David Beckham, Serena Williams, and the Boston Red Sox.

Justine Henin won $5,367,086 in 2007, the first woman to break the $5 million mark in a single season.  On the men’s side, Roger Federer earned $10,130,620 in 2007, the first player to break the $10 million mark. 

Another major change in Melbourne besides the court hue – in light of 2007’s tennis gambling woes, beginning this year there will no longer be an on-site betting agency at the Australian Open.

5.  End of an Air-A?  Nike Rolls Out 23rd Air Jordan Model Jan – Feb
This month, Nike releases the 23rd edition of the Air Jordan, a shoe that has solely changed the landscape of sports marketing.  The Air Jordan XX3 will be released in three rounds throughout January and February, beginning with a limited edition shoe that will be sold by only 23 retailers, for $230.  The nationally-launched edition will cost $185. Nike signed Jordan and released the first edition of the shoe in 1985. 

Since then, it became the footprint for sneaker manufacturers to sign athletes for their own exclusive shoe designs.  Each year, the release of the highly-coveted new Air Jordan was set for a weekend, in order to keep kids from skipping school just to be the first in line to get a pair. 

An Upper Deck Authenticated signed Air Jordan I is currently available on eBay for $1,499.99 – though most pairs on the site are listed at less than $100.  The wholesale value of athletic shoes for the U.S. market alone is close to $10 billion.

6.  Jerry Jones to Catch NCAA College Football Hall of Fame?
Now that Dallas Cowboys owner Jerry Jones doesn’t have the NFC Championship Game and the Super Bowl to worry about, he has more time to focus on such issues surrounding his new $1 billion dollar stadium as luring the College Football Hall of Fame there.  Officials in Atlanta are hoping to stand in his way.

Now based in South Bend, Indiana, the College Football Hall of Fame is exactly the kind of attraction Jones would like to add to his new stadium complex, likely in the $600 million mixed-use Glory Park development nearby.  Glory Park is slated to have “two hotels, 1.2 million square feet of retail space and an entertainment district with restaurants and a movie theater,” according to the Dallas Business Journal.  A Hall of Fame addition would help to make the development a year-round destination.

However, the Atlanta Sports Council confirmed its interest in landing the Hall in December.  Its proposed site for the Hall is Centennial Olympic Park, a previous target for the NASCAR Hall of Fame (which went to Charlotte instead) and adjacent to the Georgia Dome, Philips Arena, and the Georgia World Congress Center. The current Hall of Fame in South Bend is funded by a bond issue at $1 million annually and a statewide hotel-motel tax, which provides $500,000-$600,000 toward operating costs.  While it attracts 65,000 visitors each year, that number is far from the 200,000 annual visitors first predicted when it opened in the early 1990s.

7.  Bush Book Released

On Tuesday, Pocket Books release Don Yaeger and Jim Henry’s Tarnished Heisman, which provides new details regarding allegations that sports marketer Lloyd Lake gave Reggie Bush nearly $300,000 in cash while Bush was still a student athlete at USC.  According to publishing industry reports, the book also contains "transcripts of secretly recorded conversations that Lake claimed to have had separately with Bush and his stepfather, LaMar Griffin."

Bush and his parents are already under investigation by the NCAA over charges that he took improper benefits while playing college football in 2004 and 2005.  Tarnished Heisman shifts much of the focus of the investigation from Bush’s parents to the running back himself.  And while it hints that USC coaches may have known about some of the Bush-Lake financial arrangements, it stops short of providing evidence fingering school officials.

Tarnished Heisman is based largely on interviews with Lake (who was compensated by the authors), who claims in the book that Bush was “provided with hotel stays, cash for shopping sprees and money to buy and customize” a 1996 Chevy Impala, according to the Los Angeles Times.  If the NCAA determines that USC violated rules, the football program could forfeit victories from those seasons – including when the Trojans won a national championship and lost in a title game against Texas – and face additional penalties. If Bush is found retroactively ineligible, he could lose his Heisman Trophy.

8.  Golf’s Green Pastures

How much does a tour card cost?  Just ask Todd Demsey, the 35-year old journeyman golfer who finished tied for 88th at this weekend’s Sony Open, the first PGA tournament Demsey had played in since losing his card at the close of the 1997 season.  Demsey failed to make the cut at the Sony and has only $56,697 in total career earnings, a far cry from the $954,000 pocketed by Sony winner KJ Choi.  Demsey regained his tour card at Q School last fall – much less of a victory, however, than his removal of a benign brain tumor in 2003.

According to Sports Illustrated, the price of remaining at least partially exempt on the PGA TOUR has increased more than tenfold in the last 20 years.  To finish in the Top 30, which makes you exempt for the Players Championship and all four majors, a PGA TOUR pro needs to earn at least $2,184,379.00.  Finishing in the Top 70 equals $1,313,353 in annual tournament earnings, while a Top 125 finish equals $785,180.  A player would still need to earn close to half a million dollars, or $499,197, to guarantee a Top 150 finish.

Meanwhile Tiger Woods is on course to reach $1 billion in career tournament winnings and endorsements, according to Golf Digest.  Woods earned $122 million, $99.8 million off the course, in 2007 alone.

It also pays to be Commissioner of the PGA TOUR.  Commissioner Tim Finchem’s salary increased to $5.4 million in 2006, according to the Sports Business Journal, up $1 million from the prior year.

9.   NHL’s International Exchange Rate Soars  

On Wednesday, fresh off Sunday’s European Club Championship, National Hockey League executives and representatives of the International Ice Hockey Federation will meet in New York to hammer out a new agreement governing international player transfers.  The two organizations have agreed to renegotiate their current agreement after acknowledging European club’s concerns over NHL franchises that “warehouse” European players in the minor leagues – and compensate teams a mere $200,000 per player to do so. 

The negotiators are trying to avert a potential crisis at the end of the season when the current deal expires.  For the NHL, Europe is an increasingly-important market for television rights and other revenue.  The weak dollar isn’t helping their case there, either. Perfectly happy with hockey financials, however, is Russian Alex Ovechkin – otherwise known as Alexander the Great.  Ovechkin just signed the fist $100 million deal in NHL history, guaranteeing a 13-year, $124 million extension of his playing time with the NHL Washington Capitals.  The Number One overall pick in the 2004 NHL draft, Ovechkin was in the final year of a three-year initial deal.  This season, he’s playing under a $3.83 million salary cap, taking into account bonuses.  Capitals’ owner Ted Leonsis is hoping to restore the franchise as a perennial playoff team.

10.  Fantasy…Fishing?
This is no fish tale.  This week, FLW Outdoors debuts a fantasy league to run with its televised fishing tour, which begins January 15.  Fantasy league participants will “form teams of 10 anglers from the FLW Tour,” according to the Los Angeles Times, and will earn the same points as the real fishermen do in each tournament. And if you win the league?  First prize is a cool $1 million – currently the top prize money in any fantasy sport.