Monday, February 23, 2009

Barry Bonds Trial Gets Under Way

After more than five years and the expenditure of tens of millions of taxpayer dollars, it’s show time for the government. The case known as the United States of America vs. Barry Lamar Bonds is coming to San Francisco on March 2 for what is estimated to be a four week run.


The feds will attempt to prove that Bonds committed perjury when he testified before a federal grand jury in December 2003 that he did not knowingly use steroids. In layman’s terms, perjury is lying under oath about a material fact when you know your statement is false.


Under questioning by prosecutors, Bonds admitted using two substances – the Cream and the Clear – that he later determined to be steroids. But he said he didn’t know they were steroids at the time he used them. Bonds insisted he thought his former trainer, Greg Anderson, gave him flaxseed oil and an arthritis balm to alleviate the aches and pains that come with the daily grind of playing professional baseball.


Most Americans, save, hopefully, the members of the jury who will hear evidence in the case and determine Bonds’ guilt or innocence, have made up their minds about Bonds. And polls suggest that in the court of public opinion, Bonds is guilty as charged. But fortunately for him, not to mention the rest of us, our system of justice requires that the government prove its case beyond a reasonable doubt in a court of law. And by all accounts, the government will have its work cut out for it. The case is more porous than the Yankees 2008 defense.


Judge Susan Illston’s pre-trial rulings have generally favored Bonds. The most recent government setback came last week when Judge Illston refused to allow evidence of three positive steroid tests and documents alleged to be doping calendars. Prosecutors will be allowed to enter evidence of one positive test, taken on a sample from the infamous 2003 survey testing of MLB players, the same test that tripped up A-Rod.


Those test results were supposed to be confidential and the samples destroyed. But the union, for some inexplicable reason save incompetence, failed to dispose of the evidence before the government seized it in a raid on several testing facilities in conjunction with the BALCO investigation.


The key to the government’s case against Bonds is and always has been Anderson. The trainer was among the BALCO defendants who plead guilty to conspiracy to distribute steroids and spent three months in prison. Upon his release, he was paraded before a grand jury investigating Bonds and refused to testify. He was sent back to prison on two separate occasions and served an additional year behind bars.


The feds tried to procure Anderson’s testimony by putting pressure on his wife and mother-in-law, threatening each with tax charges and staging a raid on the mother-in-law’s house. Prosecutors are determined to call Anderson as a witness against Bonds. But Anderson’s attorneys say he will never rat on Bonds and Judge Illston is on record as being loath to find him in contempt a third time.

Prosecutors intend to call several witnesses who claim Bonds discussed his use of steroids with them and another witness who claims she watched Anderson inject Bonds, with what, no one knows. Most of the witnesses are a defense attorney’s dream, including a jilted mistress and individuals who themselves engaged in criminal activity.


Judge Illston will allow the government to enter expert testimony concerning the effects steroid use can have on the male body, including back acne and shrunken testicles. The government’s only witness on the condition of Bonds’ private parts is his former mistress, Kimberly Bell, who seems all too eager to confirm the expert’s testimony as it relates to Bonds. This won’t be a trial so much as a pilot for a reality show on Fox.


The government is unlikely to prevail against Bonds, in spite of their vast resources and huge expenditures in time and money. Even if Bonds is convicted, Judge Illston is likely to give him probation instead of jail time. Regardless of the trial’s outcome, we all lose.


In comparison, the government throwing hundreds of billions of dollars at banks and auto companies doesn’t seem like such a bad deal.


UPDATE


The federal government has publicly admitted what many of us have known for years: Without the testimony of Greg Anderson, Barry Bonds’ former trainer and childhood friend, the game is over. The feds don’t stand a chance of convicting baseball’s home run king of charges that he committed perjury when he testified before a grand jury that he didn’t knowingly take steroids.

The government’s admission came on Friday afternoon in Federal District Court in San Francisco. Prosecutors told presiding Judge Susan Illston they would appeal her earlier ruling that without Anderson’s testimony, evidence of three positive drug tests, along with doping calendars and ledgers that allegedly relate to Bonds’ use of steroids, was inadmissible in her courtroom.

The appeal means the trial against Bonds - set to begin on March 2 – could be delayed for months, if not longer. The government has already spent more than five years and tens of millions of dollars preparing their case against Bonds. But when Anderson was asked in open court on Friday morning whether he would testify against Bonds, he replied in the negative. Shortly thereafter, the government effectively conceded defeat.

But rather than fold their house of cards and move on to prosecuting real crimes against the citizens of this country – Was the Bernie Madoff Ponzi scheme just a hoax? Are there no current or former bank officers at Citibank or Bank of America who committed crimes against the American taxpayer? – the government elected to throw (our) good money after bad.

The sole issue on appeal is Judge Illston’s ruling concerning the admissibility of the drug evidence. Regardless of the decision of the appellate judges, the government has nothing to lose. A win in the Court of Appeals, and the additional evidence could persuade a jury to convict Bonds. If the government loses the appeal, which is likely, the trial could still go forward but the result will almost certainly be a not guilty verdict for Bonds. In either case, the appeal represents an abuse of prosecutorial discretion and power reminiscent of the McCarthy era.

The case against Bonds long ago passed the demarcation line between prosecution and persecution, with each successive move by the government confirming the latter. The government has conducted a witch hunt against Bonds since December 2003, when he testified before the grand jury investigating the BALCO case involving steroid distribution to athletes in a number of sports.

A reading of the grand jury transcript suggests that Bonds – and only Bonds – was targeted for prosecution even though he wasn’t the only baseball player who testified to illegally using performance enhancing drugs. Thus began a five-year crusade that included sending Anderson to prison on two separate occasions for failing to cooperate with government investigators, and intimidating his wife and mother-in-law in an effort to loosen the trainer’s tongue.

The government’s actions in the Bonds case have been unconscionable. Despite the fact that Bonds is an admitted steroid user, and his testimony before the grand jury was less than forthright, the campaign against him exceeds all manner of perspective. The crime(s) Bonds committed, and the likely punishment in the event he is ever convicted, do not merit the time and expense the government has expended in his pursuit.

There’s a new administration in Washington. But the action taken by the Department of Justice in the Bonds case – they almost certainly would have had to approve an appeal of this nature - confirms that the new administration is hardly distinguishable from the old one. While the bombastic Barry Frank, Representative from Massachusetts, rails against the sports related marketing expenses of bailout recipients Citibank and Bank of America, he and others of his ilk turn a blind eye to the wasteful spending associated with the Bonds persecution.

If prosecutors had to make the money necessary to pursue a conviction, as Bonds did in order to fund his defense, it’s unlikely this case would have ever seen the light of day. Instead, the government gets to wield its abusive powers using our hard earned dollars.

Here’s hoping Anderson’s lips remain sealed, regardless of the next move taken by the wayward prosecution. In spite of his shady past, the trainer is clearly the only honorable person in this drama.


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.









Tuesday, February 3, 2009

Super Bowl Advertising

The Super Bowl game is history and most viewers not having an Arizona or Pittsburgh zip code will be hard pressed to remember the final score.  But the ads that aired on NBC - and some that didn’t make the cut - will be the subject of endless conversation. 

NBC sold 69 advertising spots for the game to 32 different advertisers, grossing a Super Bowl record $206 million.  Each in-game ad sold for between $2.4 million and $3 million per 30-second spot.  Given the state of the economy, the figures were nothing short of astounding.  Jeff Zucker, president and CEO of NBC Universal, told the AP, “The Super Bowl has become one of our country’s biggest holidays, a uniquely American day, and advertisers recognized the value in being a part of it.”  Not all advertisers. 

General Motors, a major advertiser during prior Super Bowls, took a pass on Super Bowl XLIII after receiving a $13.4 billion bailout from Congress.  The company is drowning in red ink in the midst of a precipitous decline in automobile sales.  Ditto for FedEx, another Super Bowl regular that sat on the sidelines this year for the first time in over a decade.   

NBC was able to offset those losses with revenue from new advertisers as well as additional commitments from advertising regulars such as PepsiCo. and Anheuser-Busch InBev.  But the final figure wasn’t achieved easily.  In past years, Super Bowl ads were sold out months in advance of the game.  Not this year.  NBC had to lower its original asking price of $3 million per 30-second spot - up 11% from what Fox charged for last year’s game - to sell its entire inventory.  The final two spots were sold literally hours prior to kickoff.   

But NBC didn’t have to wait that long.  While the network accepted sexually suggestive ads from a number of advertisers, including GoDaddy.com which featured Indy racing’s pin-up girl, Danica Patrick, it rejected an ad from PETA on grounds that it depicted “a level of sexuality” which exceeded the company’s standards.   

All potential ads must be submitted for review to Victoria Morgan, NBC’s Vice President for Advertising Standards.  The PETA ad, titled “Veggie Love,” showed scantily clad women, uh, cozying up to vegetables, and proclaimed that “Studies Show Vegetarians Have Better Sex.”  True or false, NBC declared the ad too risque for an audience that included children. 

The irony, if not the hypocrisy, of that position was brought home by an organization calling itself Common Sense Media.  During the week leading up to the Super Bowl, the group released a report titled “Broadcast Dysfunction:  Sex, Violence, Alcohol and the NFL.”   

The report looked at ads in more than 50 NFL games this season, and every game included ads depicting sex, violence or erectile dysfunction drugs, in addition to the omnipresent ads promoting alcohol consumption.  Common Sense Media founder and CEO James Steyer said the study determined that, “one in six of the ads shown during the broadcasts features content that’s wildly inappropriate for kids.”

 

According to the group’s website, 40 per cent of the games included ads for Viagra or Cialis; nearly 500 of the ads involved gun fights, explosions and murders; 80 of the ads featured significant levels of sexuality, including scenes featuring prostitution and strippers; and 300 of the ads were for alcohol.  Almost half of the violent or sexual ads were promos by the networks for their own programming.  And a sexy woman cavorting with a stick of broccoli is inappropriate?   

Professional sports and TV networks don’t have an exclusive on hypocrisy.  Last year, the NCAA turned down a full-page ad from Hooters which the restaurant chain sought to include in the Final Four program.  At the same time, the NCAA allows member institutions to accept advertising from gambling interests and permits networks to air alcohol ads during the broadcast of college sports.  No sport or network, it seems, can resist the temptation to accept ad revenue from gambling interests.   

Maybe NBC can rationalize its rejection of the PETA ad while allowing other ads depicting sex, alcohol consumption and violence during the Super Bowl.  But if using scantily clad women to market products is ever appropriate – a debate beyond the scope of this column – I prefer to have them promote veggies.


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.






Capitalism, Yes; Salary Cap, No!

The old adage, “Be careful what you wish for,” should be a siren call to Major League Baseball owners and executives calling for a salary cap in the wake of the Yankees’ off-season spending spree. 

Oakland A’s owner Lew Wolff, Milwaukee Brewers owner Mark Attanasio, Houston Astros owner Drayton McLane, and Pittsburgh Pirates President Frank Coonelly took turns lamenting baseball’s status as the only Major League team sport without a salary cap. All four suggested that a salary cap would be a panacea for both parity in MLB and preventing the Yankees from acquiring the best – and most expensive - free agent talent.  As my father used to say every time I made a suggestion he was loath to embrace, “It sounds good.”  

Indeed it does.  After all, in leagues with a salary cap, there is no equivalent of the Yankees, a team that can purchase any free agent it chooses regardless of the price.  And, so the theory goes, there is more parity in leagues with a salary cap, particularly the NFL which is the poster child for sharing revenues equitably.  Except it’s just not true.   

The NFL shares a higher percentage of revenue (approximately 70%) than the NBA, NHL and MLB.  But the revenue discrepancy between the richest and poorest teams in the NFL exceeds $100 million.  Because a salary cap in sports also includes a floor - a minimum amount each club must spend on payroll – the lower revenue clubs make significantly less money (they spend a higher percentage of their revenue on payroll) than the higher revenue clubs.  

The NFL does have parity - how else to explain the Arizona Cardinals in the Super Bowl?  Most teams, with the exception of Detroit and Cincinnati, begin each season with a reasonable chance of making the playoffs.  But that’s as much a function of the nature of the sport and the limited number of games in a season as it is a salary cap. 

The NBA’s salary cap would be laughable, except it’s no joke.  The intricacies of the salary cap are known to only a handful of humans, living or dead.  And the bottom line in constructing a team has nothing to do with talent and everything to do with the bottom line:  Making sure each team stays within the parameters of the salary cap/floor.   

As for parity, unless the Celtics decide to guard anyone other than LeBron James in their expected playoff matchup with the Cleveland Cavaliers, does anyone believe the two teams in the NBA finals will not be named the Lakers and the Celtics – again?   

In the NHL, clubs such as Nashville and Columbus are hemorrhaging millions thanks to the minimum salary requirements, while Phoenix will reportedly lose $30 million this year and teeters on the brink of bankruptcy.  The strongest teams in the salary cap era – Detroit, San Jose, New Jersey – were also dominant prior to the advent of a salary cap.  Can you say good management? 

A salary floor in MLB would require teams such as the Florida Marlins to increase payroll by as much as $50 million over last year’s figure. 

The only realistic source for that money would be increased revenue sharing -  taking more money from the Yankees to distribute to other clubs.  Which is what all the crying and grandstanding is about.  Clubs want to reduce the Yankees’ spending power; but owners can’t increase revenue sharing or implement a salary cap without the consent of the union.  Peace will come to the Middle East before MLB negotiators convince the union to agree to a salary cap.    

What the whiners fail to acknowledge is that parity in MLB doesn’t take a backseat to any league, including the NFL.  In the last eight years, 13 different MLB teams have played in the World Series – the Yankees only twice and they lost both times - compared to 12 different NFL teams that played in the Super Bowl.       

A salary cap in MLB is merely a pipe dream.  It’s also a convenient crutch for incompetence on the part of team management.  If the Pirates had drafted as well as Tampa Bay over the past 12 years, they - not the Phillies - would have played the Rays in last year’s World Series.  Now that’s something for Coonelly to focus on.



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.






Boston College AD Gene DeFilippo Drops Ball

Boston College athletic director Gene DeFilippo gets no sympathy in this corner.

DeFilippo is the type of person who believes a commitment is a commitment – at least, when he’s on the receiving end. But if he’s the one making the commitment, well, that’s a different story.

DeFilippo fired his football coach, Jeff Jagodzinski last week for interviewing with the New York Jets. There was nothing in his contract, which had three years remaining at an annual salary of $1 million, which prevented Jags from exploring coaching options with the Jets or anyone else. It’s also standard practice for successful coaches like Jags, who lead BC to a 20-8 record and successive bowl appearances in two years at the helm, to cast about for better opportunities, something DeFilippo, as AD at BC for the past 11 years, should have known better than anyone.
But DeFilippo maintains that Jags verbally assured him at the time he was hired that he would remain at BC for the length of his contract. Never mind that oral commitments at the time a contract is signed are rarely enforceable in a court of law. And never mind that BC isn’t exactly the most desirable coaching position in college football. DeFilippo was furious nonetheless.
To be fair, DeFilippo issued a public warning to his coach that he would be terminated if he interviewed with the Jets. But Jags was so determined to return to the NFL – where he had been an assistant coach for several teams prior to taking his first head coaching position with BC – he went ahead with the interview in spite of DeFilippo’s threat.
There’s no doubt Jags could have handled the situation better. DeFilippo first heard about the interview with the Jets from the media. When DeFilippo sought confirmation from Jags, the coach failed to return his call until after the interview took place. That’s no way to treat a superior, even if you don’t value your job. The fact that BC would still be on the hook for the $3 million remaining on his contract if he was fired may have influenced Jags’ course of action.
Jags’ repudiation of his verbal commitment to DeFilippo is unlikely to affect his ability to obtain another coaching position. In the coaching profession, contracts are meaningless and your word takes a back seat to your record. Win and you get to stay, unless a better offer comes along, in which case you leave. Lose and you get fired. If only the financial markets were that simple to understand.

In the real world, contracts set forth the obligations of the parties, and all parties expect those obligations to be fulfilled. In the event of a breach, parties often become litigants on opposite sides of a courtroom.
Coaching contracts, on the other hand, aren’t really contracts in the literal sense. They merely serve as a reference during the inevitable termination. Litigation between schools and coaches is rare – West Virginia vs. Rich Rodriquez is the exception - if for no other reason than a litigious coach may find himself with a paucity of offers and a litigious school with few applicants. So the “system” is self-regulating. A coach is free to leave with no impediments and a school can fire a coach, as long as they pay him the balance of his contract.
DeFilippo’s holier than thou stance with Jags rings hollow. Sure, he’ll get a few slaps on the back from his compatriots at the next AD convention. But those backslappers will be secretly pleased that DeFilippo has effectively prevented most of the better coaches in the country from ever applying at the Chestnut Hill school. Who wants to take a position where the AD expects you to stay the length of your contract?  

And then there’s the matter of DeFilippo’s word. On DeFilippo’s watch, BC abandoned its long term affiliation with the Big East Conference for the supposedly greener pastures of the Atlantic Coast Conference. During private negotiations with the ACC, while rumors circulated in the media, DeFilippo repeatedly denied any interest in moving to a new conference. When the move became public, DeFilippo was forced to retract his earlier denials. In short, he did what he accuses Jags of doing: Going back on his word.

At least Jags never lied about his interest in the Jets



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.






Monday, January 5, 2009

Piling on Clemens

For Roger Clemens, the fallout seemingly has no end.

Last November, Clemens was asked to end his involvement with a charity golf tournament he had co-hosted for the past four years in his hometown of Houston. With Clemens’ help, the tournament has raised millions of dollars for local charities that benefited kids.

A month later, a Houston hospital announced it was removing Clemens’ name from a sports medicine institute created in 2006. The Roger Clemens Institute for Sports Medicine at Memorial Hermann became known as the Memorial Hermann Sports Medicine Institute, effective January 1. Clemens had given liberally of his time and money in support of the clinic. He was also a major contributor to other needs of the hospital, having donated a reported $3 million towards a new pediatric wing at the time the sports medicine clinic was founded.

Why now? Why, after a year of denying the allegations in the Mitchell Report that he used performance enhancing drugs, was Clemens suddenly discarded like yesterday’s newspaper? Was his name suddenly more of a liability than an asset? Was the association with Clemens costing more in contributions than he could offset? Did the hospital return any of Clemens’ contributions? No one representing the hospital was willing to answer any of those questions.

This isn’t an attempt to defend Clemens, either for using PED’s or lying about using them. I know; Clemens hasn’t been convicted of anything. But my Cornell Law education to the contrary notwithstanding, anyone who still believes Clemens’ denials is in serious denial themselves. Common sense says Clemens used drugs illegally, cheated on his wife, and lied about both.

Come to think of it, that profile fits a number of current and former politicians, and if you believe the research, a majority of the people in this country. Should Roger Clemens be held to a higher standard than the rest of us, just because his physical talent is superior to ours?

Have John Kennedy’s, Richard Nixon’s or Bill Clinton’s names been deleted from the many buildings and roads named after them? Is there any reason to think George W. won’t have his name emblazoned on buildings and road signs around the state of Texas, if not other parts of this country? Why should athletes be held to higher standards than presidents?

Clemens is no different than the hundreds - perhaps thousands - of current and former Major Leaguers who used PED’s. No different than former teammates Jason Giambi and Andy Pettitte, both of whom played in the Major Leagues post the Mitchell Report. Except Pettitte and Giambi admitted using (sort of, in the case of Giambi) and apologized for it; while Clemens, due to a combination of hubris and bad advice, responded to the accusations by attacking his accusers, which is the same way he approached the opposing team.

MLB drug users’ biggest offense was against their fellow players. The fact remains that their teammates and the union treated replacement players – those who agreed to play during the 1994 strike - with more disdain and acrimony than the players who used PED’s. Should we treat the druggies worse than their teammates did?

Failing to admit guilt and say he was sorry has already cost Clemens dearly, with more likely to come. His reputation is in tatters, his lock on the Hall of Fame has evaporated, and criminal charges appear likely. And now, his hometown is turning against him. After so many years of supporting his neighbors, friends and people in need, those who should stand up and say “Thanks, you did wrong, but we appreciate all the good you’ve done for us and others,” can’t seem to find the will to do so.

The person Roger Clemens hurt the most was himself, followed closely by his family. So far, it appears as if his family is standing behind him. Good for them. If Hilary and the country can stand behind Bill, then Debbie and his Houston neighbors can do the same for Roger.

As Willie Nelson croons, “Forgiving you is easy forgetting seems to take the longest time.” There’s no need to forget all the wrong Clemens has done. But a little forgiveness from those who accepted his help along the way would seem appropriate.




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.






Tuesday, December 30, 2008

Yankees Do What Yankees Do

Enough already.

After the Yankees swooped in and signed Mark Teixeira for eight years and $180 million, most of the civilized and nearly bankrupt world predicted an end to the baseball firmament as we know it. Spare me.

What did their critics expect them to do? These are the Yankees. They were only doing what they normally do, what only they can do, and what we all should have expected them to do after missing the playoffs last year for the first time in 14 seasons.

After their latest indulgence, the Yankees now feature a lineup with the four highest paid players in MLB, not to mention the highest paid players in all of baseball at six different positions. They’ve spent $423 million on free agents this off season and they’re not done yet. Add that to the more than $400 million they spent on their own free agents last year and you can be excused for thinking Wall Street and the auto industry should have hit up the Steinbrenner family for a bailout instead of the U.S. taxpayer.

But the vitriol aimed at the Bronx Bombers is misplaced. If you’re looking for a scapegoat, blame the system. The Yankees play in the biggest and best market, are moving into a new stadium that will generate obscene amounts of money, and own a one-third interest in the YES Network. In short, they’re the sports equivalent of Fort Knox.

Even with revenue sharing, to which the Yankees will contribute in excess of $80 million this year on top of a luxury tax bill of $27 million, the imbalance in the ability to generate revenue among MLB clubs continues to grow. As pointed out in an earlier column, the 300 seats that go for $2,500 per game in the new Yankee Stadium will yield more in ticket revenue than the amount that at least half of MLB clubs generated last year from their entire ballpark.

And lest we forget, MLB doesn’t have a salary cap and no amount of wishful thinking will result in one. The union will never agree to a salary cap and MLB isn’t in a position to pull an NHL and close up shop for an entire year in an effort to implement one.

If you want to criticize the Yankees, there are ample grounds on which to do so. They bullied and intimidated the City of New York for $940 million in tax exempt bonds to subsidize their new ballpark. Not satisfied with that handout, they have the chutzpah to request an additional $259 million of tax exempt bonds while lavishing exorbitant contracts on free agent players.

Acres of parkland in the Bronx that were appropriated to build the new ballpark will likely never be replaced, in spite of a commitment by the team to do so. That’s unconscionable, and yet the Yankees can get away with flaunting the agreement because…well, because they’re the Yankees, which means they operate with an arrogance that is unrivaled in professional sports.

Yankee haters, of which there are legions, should take solace in the fact the team has spent almost $2 billion in salaries, revenue sharing, and luxury taxes since their last World Series title. And this year’s shopping binge won’t guarantee a playoff berth in 2009, let alone the team’s 27th title. The Yankees’ annual payroll has exceeded the second highest total in the game by approximately 50% for the past several years, and they haven’t won the World Series since 2000 or a playoff series since 2004.

Last year at this time, the experts were predicting a World Series title for the Detroit Tigers after they acquired Miguel Cabrera and Dontrelle Willis in a trade with the Florida Marlins. But a check of the final standings for the 2008 season shows the Tigers looking up at every other team in the AL Central Division.

After gorging themselves in the free agent market, the Yankees will certainly enter the 2009 season as one of the favorites to win it all, and on paper, they should be. But games – and pennants – are won on the field, not with a checkbook.

Criticize the Yankees if you will. But remember, they’re only operating within the system.



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.






Sunday, December 28, 2008

BCS Should Listen To Critics

Everybody’s talking at me

I don’t hear a word they’re saying

Only the echoes of my mind.

Everybody’s Talkin’, by Harry Nilsson

The song and words made popular by Harry Nilsson in the 1969 movie, Midnight Cowboy, accurately describe the Bowl Championship Series (BCS) conference commissioners. Everyone is talkin’ at them and they don’t hear a word they’re saying.

The controversial manner in which the BCS conferences anoint a football champion – through a myriad of complex polls that would make a derivatives expert blush – is the basis for frequent and vocal criticism. Even President-elect Barack Obama got in on the act, threatening to “throw my weight around,” as he put it, in a post election interview on CBS’ 60 Minutes. Like so many other college football fans, Obama believes a national football champion should be determined by a playoff.

Such a concept isn’t unique. A playoff is held in every other football division and every other NCAA sport. But the BCS isn’t affiliated with the NCAA. The six conferences that comprise the BCS broke away from the governing body in the aftermath of a 1981 lawsuit brought by the Universities of Oklahoma and Georgia.

The major football schools wanted to divvy up the TV and bowl money among themselves, without contributing to the NCAA’s revenue sharing arrangement. Any reversal of course that includes a playoff system would most likely require the participation of the NCAA. Which makes the idea of a playoff a non-starter for BCS schools.

Now, I’m no fan of the NCAA. Their pious blatting about the welfare of student-athletes rings hollow when their actions over the years clearly prove otherwise. But in this case, there is no rational reason why the NCAA administers all national collegiate championships – 88 annually - save one.

BCS commissioners are quick to defend the status quo, arguing it protects the tradition and sanctity of the bowls. They even admit to leaving millions of dollars on the table by eschewing a playoff system. But if the extra money is distributed by the NCAA to non-BCS schools, the thinking goes, why bother?

Even worse than their unwillingness to share the wealth with their less fortunate brethren, BCS conferences don’t even maximize their own revenue potential under the current system. A survey of tax documents by Yahoo!.com uncovered what can only be described as gross overspending and mismanagement on the part of bowl committees, at the expense of BCS schools.

The Sugar Bowl, for example, took in revenue of $12.9 million in 2006 and paid only $6 million into the BCS pool (participating teams will receive $17 million for a BCS bowl appearance this season, but much of that amount is derived from TV contracts). The majority of the remaining revenue was spent on such “necessities” as entertainment, media relations, decorations, committee meetings, gifts, bonuses and employee compensation, including $453,399 to Sugar Bowl CEO Paul Hoolahan.

The Sugar Bowl isn’t alone. The Orange Bowl took in over $17.9 million in revenue in 2007, and after their contribution to the BCS pool, spent most of the remainder. The Arizona Sports Foundation, which staged two BCS games in 2007, did the Sugar and Orange Bowls one better. They took in $19.7 million and still managed to “lose” a million dollars.

The reality is BCS conferences don’t need the bowls, whether they use the present system to determine a “national champion” or conduct a playoff. They proved as much when they began staging conference championship games - in effect creating their own “bowls” - which have turned out to be extremely profitable. To wit: The 2007 SEC championship game grossed $13.7 million in revenue and distributed almost $12 million to conference schools, according to Yahoo!com.

So why allow yourself to be ripped off by the existing bowls? The answer has nothing to do with tradition or the sanctity of the bowls. The current system suits the BCS conferences just fine. They get to decide who gets how much money and they don’t have to deal with the NCAA. In this case, power is more important than money.

Those who argue for a playoff, including the President-elect, be damned. Despite all the talkin’, the BCS commissioners don’t hear a word they’re saying.


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.