Judge Nelson orders NFL season to begin

In a bit of breaking news, 30 minutes ago Judge Nelson ordered the NFL to begin its season, effectively ending the lockout.  The NFL will now try the Appeals Court as their last resort.  For more on the lockout and Judge Nelson’s rulings and its potential fallout you can read previous posts here and here.

NFL Doomsday Scenario, Part II

More movement in the NFL lockout.  NFL owners urged Judge Nelson to place a stay on her decision, the players fired back and said “NOT SO FAST” (in their best Lee Corso voices).  The NFL players are now urging Judge Nelson to not grant a stay, so they can move forward.

In the 23 page filing which is opposed to the NFL Owners attempting to get a stay on the previous ruling, the players have asked for four big things if the stay is not granted..

First, they want a billion dollar bond (yes, $1 billion).  I would suppose this would be to cover player costs, but at this point they are simply noting that it is to “protect players’ rights”.  The $1 billion would be a bout 25% of total compensation that players receive in a year, and would seem to help solidify the end of the lockout in some individuals opinions.

Second, and potentially more important, the NFL players have asked for a new system which does not violate any antitrust laws.  Now yesterday I posted talking about what I thought may have been Goodell’s irrational fears of the players gaining too much power.  I dismissed this as many players had said they wanted to head back to the status quo.  Yet, it is rather vague what the players’ association really is going for here, when they want an end to all antitrust activities.  Does the draft violate antitrust? Should all players be unrestricted free agents?  Certainly there are good arguments for giving these things to players under antitrust law.  This has major implications depending on how it is interpreted, I would be curious to see if the NFL players try to move away from their current status quo, towards a system which gives them even more power (and would likely hurt certain groups of players and owners alike, and help others).

The other two parts of the filing note that the NFL has little chance to win, and that a lockout is not in the best interest of the public.

The drama continues, and Judge Nelson’s decision here today could have major financial implications for all involved.

NFL Doomsday Scenario?

National Football League (NFL) Commissioner Roger Goodell has been given space in today’s Wall Street Journal to write his own opinion piece of what he believes will happen if the players win this lockout battle going on between owners and the players.  The picture which Goodell paints, is one of a true Doomsday scenario for the league and owners.  He believes that the recent ruling by Judge Nelson which will potentially end the lockout will cause a lot more problems for the NFL and potentially lead to the demise of the league.  While the ruling is still being considered by Judge Nelson, and even if she did rule in the players favor, the owners would still probably get time with the business friendly Eight District Court of Appeals.  In all of this, what Goodell see’s as the future is if the players manage to have rulings made in favor of them, it will give too much power to the players, and that the players would want to take more and more away from the owners.

Now this is quite funny in my opinion, as it was the owners who wanted to take away more money from the players, and the players refusing which lead to the owners locking out the players, not the players going on strike.  In fact, it seems many of the players would liked to maintain a status quo, with the league and players keeping their splits from the previous collective bargaining agreement (CBA) without the owners trying to pull over $1 billion from the pot before things were split.  Now to have Goodell, who is really acting in the best interests of the owners, not necessarily the league as a whole is writing what looks to me to be a piece that is focused more on scare tactics than reality.

Goodell tells of a league that has no draft, where all players are independent contractors, and everyone is an unrestricted free agent.  While the players would love such conditions in many cases, as it would allow players to try and demand higher salaries and really test their value on the market, this scenario seems more likely to be something Goodell has nightmares about, than necessarily becoming reality.  Goodell in his piece notes:

In an environment where they are essentially independent contractors, many players would likely lose significant benefits and other protections previously provided on a collective basis as part of the union-negotiated collective-bargaining agreement. And the prospect of improved benefits for retired players would be nil.

And that reasoning would indicate that this is exactly why the players would most likely come back to the table even without the lockout ended by a judge and negotiate a new CBA.  In fact, many players came out and discussed this topic today, including Jeff Saturday, the Players Union Rep for the Indianapolis Colts.  On both the radio and television he noted all the players want is things to basically go back to the system they had before, the one where owners weren’t pulling out an extra billion dollars.  As noted before, if the owners opened their financial statements and showed hardship, then they might have a case, but they continue to refuse to do so, and really make things tough on themselves.  Goodell does end by trying to pander to the fans.

Is this the NFL that fans want? A league where carefully constructed rules proven to generate competitive balance—close and exciting games every Sunday and close and exciting divisional and championship contests—are cast aside? Do the players and their lawyers have so little regard for the fans that they think this really serves their interests?

As Gene Wojciechowski of ESPN notes, the Wall Street Journal isn’t probably the best venue to reach football fans.  He also notes:

Goodell said in the WSJ piece that the current system provides “incentives” that resulted in “two dozen new and renovated stadiums.” Interesting, since Goodell has argued in the past that the current system isn’t conducive to new infrastructure expenditures such as stadiums. So which is it, Commish?

Really, Goodell seems to be losing his war against the players union, and it could be costly for the owners if they come to some agreement soon.  Will it “endanger” the league as Goodell claims it will?  In the short-run I doubt it, in the long-run, it will probably be in the owners and players best interest to get a CBA back in place.

Financial Punishment and Delay Tactics in La Liga

Over the past few weeks, an emerging tactical theme has been coming up in the top flight of Spanish Football (soccer).  In La Liga matches, the new tactic isn’t innovative formations and tactics, or even the traditional tactics of diving or grassrolling that some players have used.  Rather teams are now using their ball boys to help slow down opposing teams in matches.

Sevilla beat Villarreal 3-2 over the weekend.  Sevilla finished fourth in the table last season, and participated in Champions League this year, but has been in 7th place and is chasing Athletico Madrid and Athletic for the 5th and 6th place spots to qualify to play in the UEFA Europa League competition.  Their opponent Villarreal was sitting comfortably in 4th place and looking to pretty much seal a Champions League spot this weekend.  What transpired in the match, was Sevilla taking a 3-2 lead, and Villarreal pushing at the end of the match, attacking in hopes of getting a 3rd goal and grabbing a draw.  ESPN noted on their front page today, that video replay shows that while Villarreal was trying to attack, a ball boy threw an extra ball on the field to stop the game.  Later, another ball is thrown from the stands onto the field in front of the Villarreal goal, causing another delay in the game.  Essentially, it boiled down to various individuals trying to stop and slow down the game, giving Sevilla time to get back and set up their defense, as well as waste time that Villarreal needed to try and grab that third goal.

The above ESPN article noted that this was not the first time this had happened during games, and that there had been several matches were this occurred, with one team fighting to avoid relegation having this ball-on-the-field type incident in one of the games they managed to win.

What really sticks out is the punishment for these balls getting thrown on the field offenses.  Clubs who have been found guilty of tossing extra balls onto the field are fined a simple $877.  Now if a team was fighting for a spot in Europe, $877 is a small chunk of change to pay if it helps keep you in the hunt for big name competitions which will bring in probably a thousand times (or potentially much more) more revenue than the fine.  In other words, considering the financial incentives, why wouldn’t a team use this tactic to help them try to win games?  From an ethical and sportmanship perspective this is clearly not the right thing to do, but as Football Clubs are businesses, most of them are probably motivated more on a financial level than a sportmanship level.

So really, this all falls down to the governing body.  Is a $877 fine enough for a ball thrown on the field?  Sometimes it is an accident, but when these accidents start happening more often late in games, it clearly becomes a problem.  How long is it before every team takes a league and starts having ball boys toss balls onto field at convenient times?  I think the solution is simple, stricter punishment.  La Liga could fine teams with steeper fines for any game delaying tactics late in the game.  James Reade mentioned in an earlier post of Real Madrid’s use of tactics to get two players sent off during a game, so that they would have their slate of yellow cards wiped clean.  Another potential solution could be to dock points from teams who use such tactics during games, and thus make the punishment heavy enough that teams would not participate in these activities.

Basketball gives technical fans when fans disrupt games in progress, such as when the Louisville cheerleader ran onto the court earlier this year when he thought the game was over and threw the ball into the air.  Louisville was charged with a technical foul and it almost cost them the game.  In basketball such interference is easy to stop with technical fouls for such incidents, but such in-game punishment could be difficult to enforce in a game like soccer.

Either way, it’s another case of bad rules and policies potentially causing major issues in the top-level of professional sport.  The Spanish Federation has come out and said they will look at the current policies to try to put a stop to this new tactic.

Trouble in Los Angeles

Bud Selig, Commissioner of Major League Baseball (MLB) is not a well liked man among baseball fans, even fans of the Brewers, the team he once owned.  Now, Selig may have made even more enemies in the city of Los Angeles after he announced that the MLB would be taking over operations of the Los Angeles Dodgers.  In a story which seems more like one for the daytime Soap Opera’s filmed not too far away, the Dodgers found themselves in a financial stranglehold as Jamie and Frank McCourt (the owners of the team) have been embattled in a bitter divorce, with rumors of affairs with bodyguards and poor financial decisions.  Reports note that not only have the two caused the team to be in a bad financial position, with Jamie being quite poor at doing the duties as CEO of the Dodgers.

Things got so bad, that the team is reported by the Los Angeles Times to have gone to Fox television to get a $30 million loan in order for them to be able to make payroll for the next month.  After hearing this, Bud Selig decided that he needed to step in, and that MLB would take over the team for the time being.  Frank McCourt isn’t taken this sitting down, and has retained legal council and is said to be planning a lawsuit against Major League Baseball.  In the LA Times article it is noted that this is not the first time that the Dodgers had to go out and take a loan from Fox to cover their monthly expenses.  Selig himself has previously rejected a loan the Dodgers tried to take out for $200 million from Fox, using their television rights money as collateral for the loan.  Clearly Selig is unhappy with the financial situation of the team, it’ll be interesting to see what happens while the Dodgers are under MLB control.

Being under control of the league is not a death sentence by any means, as the Texas Rangers were under MLB control for part of 2009 and 2010 as they went through bankruptcy proceedings.  The Rangers still managed to do quite well during this time period in terms of on-field performance.

After taking over the Dodgers, many were already turning their eyes to the New York Mets who have been in trouble because of financial trouble related to the Bernie Madoff Ponzi scheme.  The Mets are currently being sued $1 billion (about how much they are worth) for money they gained from others in the Madoff Ponzi scheme.  Despite the fact that the Mets had to take a $25 million loan out, Bud Selig has said that for the time being the Mets are safe and in a better position than the Dodgers.

Makes me wonder how much trouble the Dodgers really are in financially.

New Big 12 media deal, may not be big enough.

I will admit it, I am not the biggest fan of Dan Beebe, the Commissioner on the Big 12 conference.  With the conference losing two schools this year (Nebraska to the Big Ten and Colorado to the Pac-10), I feel it may only be a matter of time till the conference has to go through some more changes.  This could potentially be realignment, adding new teams, or even breaking, and maybe forming part of a “super-conference” with another school.

Mr. Beebe, has been the toast of the Big 12 these past two weeks as the Big 12 signed a new media deal, worth $90 million a year for second-tier rights.  It is a big deal, as it means more revenue for the conference and its member schools who could all use some extra money.  However, the money, as with all shared revenue in the Big 12 is not split equally.  Most schools will get $7 million on average, with the big schools like Texas (who I mentioned in a previous post as having their own new TV deal) getting a large share (Texas is reported to get about $12.5 million a year from the new deal).  So with this influx of revenue, why might it not be big enough?

The Big 12 is essentially in competition with the Big Ten, Southeast Conference (SEC) and the Pac-10 (or is it Pac-12 now?) for media rights dollars, and the real big winners have been the Big Ten and SEC.  The Big Ten, the only conference with their own channel brings in about $220 million in media revenue each year.  That is about $20 million in media revenue per school in the Big Ten which splits its revenue evenly.  The SEC was not far behind, with the power of their football television deal with CBS driving them up to around $210 million last year.

Looking at the numbers the Big 12 does seem to be doing better than the Pac-10/12 but is really chasing the Big Ten and SEC.  With the conference having gone through a scare with teams leaving, and having the power of Texas pretty much holding the league together during all the realignment talks, this new revenue may not be enough to keep the Big 12 together.  Furthermore, some have thought that this new Big 12 deal got done partly because the Big Ten has been in talks with ABC and ESPN about furthering their media deal between the Big Ten Network, that could lead to even more revenue for the Big Ten member institutions (including former Big 12 member Nebraska).

While, the new deal is great for the Big 12, it is probably an important move in trying to keep the conference together.  With Texas’ pulling power, I’m sure many conferences would be happy to try and make deals to bring them in, and the Big 12 providing extra revenue for Texas (and all other schools as well) may just help keep the conference together.

For now.  College sports is in an arms race in regards to revenue, and the schools with popularity and large revenue streams are sure to be continuously targeted to join other conferences.  Maybe someday we will really see the Super Conferences, the question is, will the Big 12 be one of them?

Return of the New York Cosmos?

Back in the 1970′s, the New York Cosmos took America by storm, boosting the popularity of soccer in the country.  The team brought in Pele, Beckenbauer, and Chinaglia to play for them, and soon saw attendance as high as 70,000 in New York to watch professional soccer.  Just a few decades earlier, the U.S. managed to beat England in the World Cup in 1950, yet no America’s really knew that this happened or even really cared.  In fact many thought the score was a misprint, and some newspapers reported the score differently.

So what made soccer popular all of the sudden in the 1970′s?  The professional league then, the North American Soccer League (NASL) started with a small number of teams but quickly expanded with hopes of becoming the next major professional sport league in North America.  The crown jewel of the league became the New York Cosmos in 1975, when Pele joined the team, and with Beckenbauer and Chinaglia, the trio of extremely well paid stars the team was the toast of the town, as mentioned in this New York Times article.  The team was so popular that rock stars like Mick Jagger would show up to meet the team and hang out with them in New York nightclubs.  But the New York Cosmos, while being the most popular and famous team in the history of the NASL, also would be the team that lead to its downfall.  After the Cosmos started to pay high salaries for stars, other teams in the NASL followed suit, and with rapid expansion, the league was soon too big to be sustainable, and was paying salaries that were much more than any team could afford.  And within less than a decade of Pele’s appearance in North America, the league folded, going broke as teams just could not control their spending.

And yet, still people remember the wonderful days of the New York Cosmos.  In fact one man named Paul Kemsley loved the Cosmos so much he bought up a bunch of their stuff, put them in boxes and locked them away in storage, guarding them as he grew older, much like the guardian of the Holy Grail in the one Indiana Jones movie.  In order to keep the Cosmos name and logo, Kemsley ran soccer camps each year using the teams name and logo which he had bought the rights to, and spend almost a million dollars in legal fees suing those who tried to use the Cosmos.

Now, the Cosmos seem to be on their way back.  Recently Don Garber, the commissioner of Major League Soccer (MLS) said that the final spot in the league (the 20th franchise) would be sold to a franchise that would be based in New York.  Speculation began to fly as to who this team would be, and who would buy them.  No real news has come of this yet, but the Cosmos have seem to have risen from the ashes and are making a push towards being that 20th team to enter the MLS.  Quite ironic, as the Cosmos and NASL’s failure were the model for the single-entity league structure which the MLS has employed to keep down player costs.  In the New York Times articles this issue is discussed, especially with Mr. Kemsley’s goal of being number one soccer franchise in the world.  And already the words have begun flying between Garber and Kemsley in regards to the Cosmos’ future.

Garber notes:

“They need to believe in the M.L.S. system, which is not about one team dominating everybody else, like the Cosmos did 30 years ago, and if they don’t believe in our system, we won’t sell them the team.”

Kemsley counters:

“We intend to meet the requirements of the M.L.S. We intend to play nicely.”

I’ll be curious to how the MLS responds to the Cosmos’ interest in joining the league.  The tradition is something that the MLS likes, but it surely brings back bad memories of the NASL’s death, and the U.S. losing out the 1986 World Cup bid to Mexico because of the NASL’s demise.  If the Cosmos do come back, I’m sure the league will make sure their pocketbooks are kept under tight control.

On a final note for everyone’s amusement, the Portland Timbers, one of the MLS’ newest franchises began play this past week, and their “mascot” Timber Joey has stepped in to take the place of Timber Jim at games.  Timber Jim supposedly brought a chainsaw to games for decades, and now Timber Joey fires up the chainsaw each time the Timbers score a goal (Timber Joey was busy the first night with a 4-2 victory over the Chicago Fire).  That said, the Timbers have been a real success this year in regards to attendance and fan support.  The Pacific Northwest is really looking to be the hotbed of soccer in the United States.

Video link to the chainsaw celebration here.

Are NFL Players the target of predatory lending?

With the National Football League (NFL) owners current locking out the players, many players have little or no source of income or any type of benefits.  More than a year ago, I discussed how the NFL Player’s Association (NFLPA) was warning players on how to prepare for the lockout.  This including things such as: not purchasing houses, not buying boats or expensive cars, and trying to save money and leave within one’s means.

Pro Football Talk reported last month that many players were seeking high interest loans to help them through the lockout period.  Now ProFootball Talk and Yahoo Sports are both reporting that a number of players from at least 16 teams have had to set up these high risk loans.  It is noted that these loans have interest rates in the range of 18 to 24 percent, with a 36 percent rate in the case of default for some of the loans.

NFLPA representative and Arizona Cardinal kicker Jay Feely noted:

“I think it’s predatory and unjust.  I don’t think they should be charging those interest rates and I would encourage every player [considering high-risk loans] to look elsewhere.  I think if you went to your bank, or outside lending agencies, you’re not going to pay that kind of interest.  That’s absurd.”

However, as noted in the Pro Football Talk article, many players do not have the credit history or collateral needed to back the large loans that many of them are needing to get through the lockout period.

Yesterday, I noted that the NFL owners had made a new offer to the players.  Considering the fact that players are already going out to get risky loans, I’d think that the owners may be in a good negotiating position now.  They have made concessions which will give more money to players who are more likely to be NFLPA representatives, and with the number of players potentially needing a paycheck growing everyday, it may be that some players will start putting pressure for the rest of the players to negotiate a new collective bargaining agreement sooner rather than later.

On a final note, I imagine these lenders who are making these loans must be smiling in joy at the lockout, and probably hope it extends longer so that they can hook more players with these high interest rates.

H/T to Shawn for sending me these articles.

“I think it’s predatory and unjust.  I don’t think they should be charging those interest rates and I would encourage every player [considering high-risk loans] to look elsewhere.  I think if you went to your bank, or outside lending agencies, you’re not going to pay that kind of interest.  That’s absurd

New NFL offer to players would change rookie compensation

The National Football League (NFL) owners and players have been engaged in contract talks over a new collective bargaining agreement for quite some time, and has been discussed several times in previous posts here on the blog.  While things have been somewhat quiet for the last week, ESPN is reporting that the league has made a new offer, which would essentially put a rookie compensation structure into place, and that some of the revenue being taken away from rookies would go to compensate veteran players.

Specifically, the new deal would take about $300 million a year away from first-round draft picks and move that money to veteran player salaries and benefits for all players.  This new offer is said to free up around $1.2 billion in the next five season, and would help to reduce payments to rookies which have been quite high over the last several seasons.  In 2010 alone, over half a billion dollars was paid by NFL owners as guaranteed money to the 32 players who were selected in the first round of the draft.

This new proposal would not be setting a rookie wage scale, but rather would be capping the maximum salary allowed to be paid to a new player entering the league.  Of course several agents for potential first round draft picks in this years draft are already coming out public with how unfair this new system is, as it may cost them and their clients millions of dollars in guaranteed salary.

Agent Peter Schaffer might be the brightest of the group with his comments, he notes that bringing in a new system would be “scouting insurance” in case a team made a bad choice on a first round draft pick.  He also notes:

“It also makes the rookies more valuable when you reduce the amount you are paying to the young guy, This will eliminate the veteran middle class because teams can have younger players who are making less and are under fixed contracts.”

Personally, I think its about time the NFL tried to make this concession in the labor talks.  I figured that they would try to take a bigger piece of the pie, but try to compensate the veterans (who are a big group of those representing the players in the negotiations) by pulling money from rookies.  Though it would be interesting to see how such a change in the rookie wage scale, might cause teams to try and get rid of veterans earlier if a rookie with comparable skills and ability can replace them for a much cheaper price than before.

Trouble Brewing in the Arsenal Takeover Bid?

Greetings IJSF blog readers.  Just a bit of background before I start this post.  I am a big supporters of Arsenal, and have been for many years now (maybe it has something to do with Arsene Wenger have a degree in Economics).  Additionally, I also live in Columbia, Missouri which just happens to be the home of Stanley Kroenke, the most recent foreign investor attempting a takeover bid of another top Premier League club in England.

Yesterday news began to sprout around the sport websites that Stanley Kroenke was moving forward in an attempt to takeover Arsenal Football Club.  In moving to buy more shares, Kroenke hit the 62.89% ownership of the club mark, meaning that he now has the controlling stake of the club, and must make a cash offer to all the remaining share holders.  Kroenke’s takeover bid has hit a bit of a snag, as Russian oligarch Alisher Usmanov has refused to sell Kroenke his 27% stake of the club.  Rather, on the SkySports blog they are reporting that Mr. Usmanov tried to make a counter against Kroenke’s takeover, supposedly offering Lady Nina Bracewell-Smith a £13,000 pound per share offer, more than what she had agreed to with Kroenke for her shares.  All of that said, Lady Bracewell-Smith refused the offer, as she already had a full agreement with Mr. Kroenke.

With news of Usmanov’s defiance, the Arsenal Supporters Trust, a group of about 1,800 supporters announced that they would also not be selling the few shares of Arsenal which they held.

What does this all really mean?

In order from Kroenke to fully takeover the club, he needs to hold 90% of the clubs shares, and at that point it would force all the remaining shareholders to sell their stake to Kroenke.  However, with Usmanov sitting on 27% and trying to fight back, it seems that this is not likely to happen.  Usmanov’s hopes of countering Kroenke, and having himself takeover seem an even more unlikely happening, so Arsenal may now be facing a battle of two owners causing headaches for each other.  Kroenke’s offer for the remaining shares would have made Usmanov a nice profit, but from the look of things, it looks like Usmanov may be digging in for the long-run.

This whole episode does bring up two other interesting points.

First, many seem worried about club debts, and the use of Premier League clubs as debt servicing for rich foreign owners, as has been done by Malcolm Glazer and Manchester United.  Kroenke in his bid made sure to note that this takeover was not going to be done by taking out loans, but that he would be making cash offers for the remaining stakes, and that Arsenal would not be saddled with any of the debt.  Still, it seems that many really reject the idea of Kroenke fully taking over Arsenal, and that leads into my second point.  Currently 10 of 20 Premier League clubs are fully owned or have a majority of their stake owned by foreign investors.  Notably all of the “big” clubs have been taken over by foreign investment, with the top 4 teams in the table (Man U, Arsenal, Chelsea & Man City) all being owned by foreigners.  While many will probably not care as long as their team is doing well, there are some who are probably most likely worried about non-UK owners slowly taking over more and more of the most popular league in the world.