Name of New Mets Ballpark

Bailout Ballpark. Taxpayer Field. Subsidized Park.

All the names are catchy, and perhaps appropriate. Nevertheless, the new ballpark under construction for the New York Mets will continue to be called Citi Field. But that name may be subject to change, based on the shifting tide of the financial landscape and the equally uncertain future of Citigroup.

At a time when Citigroup could still pretend that all was right with its balance sheet, the financial giant entered into the largest sports facility naming rights deal in history, a 20-year, $400 million contract with the Mets.

Now that the toxicity of Citigroup’s assets has been confirmed, and the government has agreed to a $345 billion bailout - $45 billion in direct investments and another $300 billion in guarantees – critics of the naming rights deal are having a field day, no pun intended. But their criticism is misplaced. Neither the naming rights deal nor its amount should be the issue.

When times are tough, marketing budgets should be among the last areas businesses seek to cut. Companies need to market their products, and to do that they need name recognition and exposure. The question that should be asked is whether a company receives value for its investment in marketing.

The visibility of the naming rights deal with the Mets makes it an easy target for those who are rightfully upset with the callous and reckless way Citigroup operated, which resulted in the need for a government handout. But that visibility merely suggests that the naming rights deal may in fact be an appropriate and effective use of marketing dollars.

If critics of Citigroup’s government subsidy want to get worked up over the company’s actions, a more appropriate target would be the compensation package afforded the bank’s executives. Those responsible for leading the financial giant down the road to ruin earned as much as $30 million per year. When he was finally asked to leave last year, Citigroup’s chief executive, Charles O. Prince III, was “rewarded” with an additional cash bonus of $12.5 million and stock valued at $68 million according to The New York Times.

Citigroup isn’t the only recipient of taxpayer funds to have naming rights sponsorships with sports entities. The list is long and includes a number of other financial institutions. Among the largest: PNC Bank ($7.7 billion) holds naming rights to the Pittsburgh Pirates’ ballpark, “PNC Park;” J.P. Morgan Chase ($25 billion) calls the Arizona Diamondbacks stadium “Chase Field;” Comerica ($2.3 billion) has its name on the Detroit Tigers’ stadium, “Comerica Park;” and Capital One ($2.3 billion) is the title sponsor of the “Capital One Bowl”.

AIG, the insurance giant that is being propped up by a $150 billion subsidy from Uncle Sam, has a $125 million sponsorship agreement with Manchester United, the British soccer club. At least with the Citi Field sponsorship, the argument can be made that bailout funds are being spent on American soil.

Not every company seeking a handout from the American taxpayers is continuing or expanding its sports sponsorships. General Motors, which along with the other Detroit automakers is on life support and seeking $25 billion in aid from Congress, has announced cutbacks on advertising in NASCAR and will eliminate all Super Bowl ads next year. The company has also cancelled a sponsorship agreement with Tiger Woods to endorse its Buick line. The original 10-year deal would have expired next year, but the parties mutually agreed to an early termination, saving the beleaguered company $7 million.

The sponsorship deal between GM and Woods was a one-way street - beneficial to Woods, but unproductive to the company and its shareholders. GM hoped to reduce the age of Buick buyers by aligning the brand with the youthful golfer. But the average age of Buick purchasers in 2008 was 68, the same as in 1997, according to a study by the auto research division of Strategic Vision, Inc. Sales of Buicks plunged 58% from 1999 to 2007, and fell an additional 24% this year.

Which brings us back to Citi Field. The issue shouldn’t be the amount of the sponsorship, but whether the deal will benefit Citigroup and its stockholders, a group which now includes the U.S. taxpayers. Based on early returns, the answer to that question is still unknown.

Jordan Kobritz is a former attorney, CPA, and Minor League Baseball team owner. He is an Assistant Professor of Sport Management at Eastern New Mexico University, teaches the Business of Sports at the University of Wyoming, and is a contributing author to the Business of Sports Network. Jordan can be reached at jkobritz@mindspring.com.

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Athlete Clustering at NCAA Institutions

If you think student-athletes are more the former and less the latter, you also believe the Bowl Championship Series (BCS) crowns a true football champion. A recent USA Today report suggests that NCAA schools are more concerned with eligibility than education.

The paper compiled data on juniors and seniors in five sports – football, men’s and women’s basketball, baseball and softball – at 142 colleges across the country and found that athletes “cluster” in certain majors at many of those institutions. Which begs the question: Are athletes encouraged to enroll in easy majors and easy courses in order to maintain eligibility?

Coaches and administrators who defend the practice of clustering say no, and suggest that athletes are merely enrolling in popular majors. That position would be more defensible if the percentage of athletes mirrored the percentage of the student population enrolled in such majors. But that isn’t the case at most institutions.

Critics suggest that clustering is one method of complying with the NCAA’s Academic Progress Rate (APR) system. The APR, instituted in 2003, was designed to encourage higher graduation rates for athletes by imposing penalties such as forfeiture of TV revenue, exclusion from bowl and tournament appearances, and loss of scholarships for universities that did not meet the NCAA’s retention and eligibility guidelines.

When the NCAA instituted the APR, it also adopted more stringent rules regarding the progress athletes make towards their degree. But the governing body simultaneously lowered admission standards, allowing schools to accept less academically qualified students.

Talk about your perfect storm. Universities across the land were faced with pushing “academically challenged” students through school more quickly. All while making sure said athlete fulfilled the primary purpose for which he/she was enrolled: To bring glory to State U. on game day. And the latter activity was always more important than the former, at least in the eyes of coaches and many members of the administration.

The existence of athlete clustering is undeniable. At the University of Michigan, for example, 31 of 41 junior and senior football players majored in “general studies” in 2007. General studies, referred to as “university studies” at schools such as the University of Nevada at Las Vegas and the University of New Mexico, is best described as a major that really isn’t a major.

At many institutions, students enrolled in general studies are allowed to cherry pick the easiest courses from all the majors offered on campus. The result might be a degree plan that includes, say, an activities class such as basketball or golf from Health and Physical Education, basket weaving from Early American Studies, and sports public speaking from Communications.

None of those courses in and of themselves are irrelevant. But cobbled together in a degree plan, they prepare a graduate for exactly what kind of career? But I digress. A scholarship athlete’s career goal at many institutions is to remain eligible. Which, given the time commitments required of athletes at Division 1 institutions, is difficult to do by taking chemistry, engineering and physics.

Athletes face enormous pressure - from coaches, administrators, parents, peers - to maintain eligibility. An additional source of pressure exists in the form of academic advisors who are employed and paid by the institution. C. Keith Harrison, an associate professor at the University of Central Florida, told USA Today academic advisors help student-athletes “major in eligibility with a minor in beating the system.”

There are athletes who compete at the highest level and still obtain a quality education. One example is Florida State safety Myron Rolle, who missed part of the November 22 game against Maryland while interviewing, successfully, for one of the 32 Rhodes Scholarships awarded annually. But he’s the exception, not the rule. And even Rolle experienced pressure from a coach, Seminoles’ defensive coordinator, Mickey Andrews, who publicly criticized him for studying too much last year, saying it affected Rolle’s preparation to play football.

The NCAA’s position is that if clustering exists, it’s a problem individual institutions should address, since curriculum and course quality issues aren’t the concern of the national governing body. But if the NCAA created the problem initially - which can’t be definitively determined without further research – shouldn’t they be the ones to initiate changes to benefit student-athletes?

Jordan Kobritz is a former attorney, CPA, and Minor League Baseball team owner. He is an Assistant Professor of Sport Management at Eastern New Mexico University, teaches the Business of Sports at the University of Wyoming, and is a contributing author to the Business of Sports Network. Jordan can be reached at jkobritz@mindspring.com.

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The Economy Hits NASCAR Hard

How quickly the mighty have fallen. After a meteoric rise over the past 10-15 years, NASCAR was on the verge of challenging the NFL, America’s number one sport, for the top spot in television ratings. No more. NASCAR has taken a hit. Make that multiple hits.

Where to begin? Hopefully, it can’t be as bad as the recent headline in The Boston Herald which screamed, “Will NASCAR Survive?” But the reality is many of the teams that form the backbone of the sport are hurting. And the worst is apparently yet to come.

Attendance at Sprint Cup races around the country took a nosedive this year. The drop in attendance was evident prior to the meltdown in the economy, but coincided with the run-up in the price of a barrel of oil and a gallon of gas. Fans, apparently concerned with paying their mortgages and fearful of the floundering stock market, were staying close to home.

Merger talks aimed at strengthening teams struggling for sponsorship dominated the garage throughout the season. Some of those talks have been successful, including the recent announcement that Dale Earnhardt, Inc. and Ganassi Racing will merge, with the latter assuming control. In effect, DEI ceases to exist, barely one year after CEO Theresa Earnhardt rejected a bid from Dale Earnhardt, Jr. to purchase controlling interest in the company founded by his father. Theresa’s stubbornness personifies the old adage that a smaller percentage of something is better than 100% of nothing.

With the Cup season ending last Sunday, expect a blizzard of pink slips in the garage, reflecting a number of teams’ uncertain future in an unstable economy. Some teams are fortunate to have long-term sponsorship agreements with stable companies. But teams with expiring sponsorship deals are justifiably concerned about qualifying a car in next year’s Daytona 500.

The Big Three American automakers, bleeding cash and lobbying Congress for a bailout, are reassessing all marketing expenses and sponsorship relationships. It’s hard to imagine what NASCAR would look like without direct subsidies from Detroit. But for now, none of the three auto manufacturers, Ford, Chevy or Chrysler (Dodge), have announced plans to pull out of NASCAR entirely. Their position acknowledges the obvious: They need to move inventory, and one of the best ways to draw buyers into the showroom on Monday is to have a presence at the track on Sunday.

In an effort to reduce team costs, NASCAR last week announced a ban on all testing at tracks that host NASCAR events. The move was controversial, with some arguing it will give multi-car teams who share information an advantage over smaller, less successful teams. Although NASCAR admitted it didn’t know how much the move would save teams, some estimates put the cost of testing at $100,000 per day, meaning industry-wide savings could total as much as $30 million per year.

The falling popularity of NASCAR was made painfully obvious during the penultimate Sprint Cup event of the season, the November 9 race at Phoenix International Raceway. With 34 laps remaining, and Jimmie Johnson, who was leading the race, on the verge of becoming only the second driver in NASCAR history to win three Championships in a row, ABC switched the telecast to another Disney network, ESPN2, in the Eastern and Central time zones. Seems ABC was committed to showing America’s Funniest Home Videos in its entirety.

The move was reminiscent of the infamous “Heidi Game” of 40 years ago. With the New York Jets leading the Oakland Raiders 32-29 and 1:05 left in an American Football League game, NBC elected to begin showing the movie “Heidi.” The Raiders proceeded to score two touchdowns in those final 65 seconds and won the game, 43-32, creating a firestorm of complaints from viewers and provoking criticism from the media. ABC was spared similar scorn, as Johnson won the race and increased his points lead over runner-up Carl Edwards.

But the message to NASCAR was clear: You aren’t relevant, at least, not as relevant as America’s Funniest Home Videos. Who would have thunk it just two short years ago?

The economic times are tough for many Americans, and destined to get tougher. And the sports world won’t be spared. NASCAR is just the first of the big-five sports to feel the pinch.

Jordan Kobritz is a former attorney, CPA, and Minor League Baseball team owner. He is an Assistant Professor of Sport Management at Eastern New Mexico University, teaches the Business of Sports at the University of Wyoming, and is a contributing author to the Business of Sports Network. Jordan can be reached at jkobritz@mindspring.com.

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MLB Free Agency

As the Major League Baseball free agent signing period begins in earnest – the first day teams can talk money with other teams’ free agents is November 14 – the question on everyone’s mind is, given the current state of the economy, will the big money be out there? The prediction here is...yes.

The economy may be in the doldrums, but most professional sports - although not recession proof - are recession “delayed.” Thanks to long-term contracts with TV networks, naming rights holders, sponsors, suite and season ticket holders, most professional leagues and teams can count on at least the same - if not increased - levels of revenue for the foreseeable future.

There are exceptions, for sure. As previously mentioned in this space, NASCAR has seen race attendance plunge and some teams are closing up shop in the absence of sponsorships. With the season ending this week, rumors are running rampant in the garage that hundreds of employees will be dismissed.

Major League Baseball, on the other hand, is swimming in an estimated $6.5 billion in revenue this year, a figure that will almost certainly be eclipsed next year regardless of the state of the economy. The sport is set to launch the MLB Network in January to the largest audience in the history of sports networks.

Not all MLB teams are flush with cash. The Arizona Diamondbacks recently announced the layoff of 31 front office employees. But the Red Sox aren’t likely to see a diminution of passion for their team. And the Yankees and Mets are moving into new stadiums that will generate obscene amounts of revenue. In the case of the Yankees, the 300 seats in the new Yankee Stadium priced at $2,500 per game – already sold out – will generate $60 million next year. That figure exceeds the ticket revenue generated by over half of MLB clubs in the 2008 season.

The uncertain economic climate led Commissioner Bud Selig to urge all clubs to exercise caution in their financial dealings, which is code for avoiding exorbitant free agent contracts. Super-agent Scott Boras pooh-poohed Selig’s cautionary tone, opining that baseball won’t be affected by the economy. “Baseball didn’t invest in derivatives and sub-primes,” he told NBCSports.com. “Baseball has long-term contracts with national and local TV networks…As I’ve said all along, the hay is in the barn.”

As someone who is given to hyperbole, it’s usually best to take anything Boras says with a barrel of salt. But in this instance, the hyperbolic agent is right on. His clients, including the top two position players on the market, Manny Ramirez and Mark Teixeira, are guaranteed to be well compensated. The only thing the economy may do is reduce the length of their free agent contracts. But teams will be willing to pay more up front to obtain increased flexibility down the road, which means the overall dollars are likely to be the same.

Case in point: When the Dodgers opened the bidding on Manny last week, speculation put the offer at $45 million for two years, with an option for a third year. While not publicly announcing the terms of the offer, Dodger GM Ned Coletti did say the offer would give the enigmatic slugger the second-highest average salary in the sport, behind only Yankee third baseman Alex Rodriguez. Whether the Dodgers are intent on signing Ramirez or merely trying to appease their fans, is another story.

According to the Los Angeles Times, Boras quickly rejected the offer as too short, having previously hinted that his client was seeking a six-year deal at $25 million per year. But that’s where the uncertainty of the economy may come into play.

Once the big names are off the board, there will likely be a feeding frenzy for the second tier of free agents. Clubs who never got in on the Manny or Teixeira sweepstakes will feel compelled to do something – anything – to convince their fan base that they want to win. To avoid the wrath of the press, and to prevent erosion in their ticket base, those clubs will likely overpay for mediocrity.

Welcome to MLB’s 2008 off-season. Less money for free agents as a result of the

economy? Don’t count on it.


Jordan Kobritz is a former attorney, CPA, and Minor League Baseball team owner. He is an Assistant Professor of Sport Management at Eastern New Mexico University, teaches the Business of Sports at the University of Wyoming, and is a contributing author to the Business of Sports Network. Jordan can be reached at jkobritz@mindspring.com.

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Pity Bud Selig

Pity Bud Selig. The MLB Commissioner can’t win, even when he tries to do the right thing.

During the World Series, Selig was criticized on a number of fronts, from allowing FOX to start broadcasts at 8:37 PM in the east, to the shoddy umpiring, to allowing Game 5 to start in the rain in Philly. But the biggest beef concerned Selig’s decision to play Game 5 in full, regardless of baseball’s rule book, which provides for rain shortened games if the home team is leading after a minimum of 4 ½ innings.

The Phillies were leading, 2-1, after five innings. Fortunately for Selig, Tampa Bay scored the tying run in the top of the sixth. At that point, the umpires finally came to their senses and immediately stopped the game, which was being contested under conditions that were more akin to an aquarium than a baseball field. Under baseball rules, the game was “officially” suspended. When the skies in Philly finally cleared two days later, the game resumed in the bottom of the sixth inning.

But even if the Rays hadn’t tied the score, Selig insisted he would have suspended the game and resumed play when weather permitted, even if the teams had to wait until Thanksgiving. The commissioner said he made his decision prior to the start of Game 5, in spite of the clear language in the rule book.

Unfortunately, no one from MLB had bothered to tell the folks at FOX, who were as surprised as anyone by Selig’s announcement. While the Rays players were relieved, and the Phillies players - not wishing to win the World Series on a game that wasn’t played a full nine innings - were generally supportive, the fact remains that Selig was willing to play fast and loose with the game’s rule book.

The commissioner’s decision, while admirable, was reminiscent of a NASCAR race, where no one knows from week to week when the race will really end – after a caution, one more lap, or a green-white-checkered flag finish – until NASCAR makes an official announcement.

But the controversy surrounding the World Series wasn’t limited to Game 5. As part of the settlement of the last labor dispute with the umpires, MLB agreed to make post-season assignments on a “rotation” basis, regardless of competency. The men in blue get to share in the post season spoils, but the best umpires aren’t always the ones officiating the biggest games. The result was a number of bad and blown calls, in addition to a strike zone with more moves than are normally seen on Dancing With The Stars.

Shame on baseball for agreeing to such an arrangement. What’s next? A similar arrangement with the players’ association that would require every player to play a certain number of innings? That’s how it works in Little League.

This was the lowest rated World Series in the history of the event. MLB received a number of unsolicited suggestions designed to “improve” the ratings for baseball’s showcase event. Included among them are starting games earlier, shortening the season to avoid playing games in late fall, and reducing the break between half-innings.

None of the suggestions are new. And none of them has a snowball’s chance in Tampa Bay of being enacted at the present time. Baseball is too immersed in the goal of maximizing profits to do what’s best for the game. That’s true of the owners, the players, the umpires and the sport’s media “partners.”

Baseball isn’t alone in this regard. The same can be said of virtually all professional sports, including NASCAR. On the eve of last week’s Sprint Cup race in Texas, Dale Earnhardt, Jr. lamented the monetization of his sport. In an interview with Yahoo! Sports, Earnhardt said, “We have saturated the market with race after race…We’re driven by the ability to go make another dollar and make more money and there’s no way we would ever trim it down.”

The current state of the economy isn’t helpful to sports in general. But there are decisions within the control of every sport that would enhance its financial footing, not to mention its credibility. Just don’t expect anyone in baseball, from Bud Selig on down, to make them.


Jordan Kobritz is a former attorney, CPA, and Minor League Baseball team owner. He is an Assistant Professor of Sport Management at Eastern New Mexico University, teaches the Business of Sports at the University of Wyoming, and is a contributing author to the Business of Sports Network. Jordan can be reached at jkobritz@mindspring.com.

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