Moag and Company Sports Notes (07 Feb 2020)

Date: Feb 2020

Trivia

Who was the first former Major League Baseball player to play in Japan?

Last Week’s Answer: The first AFL/AFC team to win the Super Bowl was the AFL’s New York Jets who defeated the Baltimore Colts in Super Bowl III 16 to 7. Jets quarterback Joe Namath was the MVP for that win in Super Bowl III.

Football:

The Jacksonville Jaguars will play consecutive home games at Wembley Stadium during the '20 season to make scheduling space for a $500M construction project adjacent to TIAA Bank Field, the first time an NFL team will play multiple foreign games in one year. Scheduling details are still to be determined, but the Jaguars said that the games in London would be on back-to-back Sundays, and it would not be against either the Pittsburgh Steelers or the Chicago Bears, both home games reserved for Jacksonville. The other six potential opponents therefore are the Houston Texans, Indianapolis Colts, Tennessee Titans, Cleveland Browns, Detroit Lions or Miami Dolphins. Season-ticket prices will drop by 5% on a per-game average. That cut, along with the loss of another game to London, will mean a 15% reduction in the total package cost compared to '19. By reducing the regular-season game load for TIAA Bank Field by 25%, the Jags hope to speed work on the massive “Lot J” mixed-use development project. The team has plans for an entertainment district, a 200-room hotel and 405 residential units. The move to playing back-to-back games in London is an attempt by the Jaguars to "increase their local revenue and escape the bottom quartile of the league in that category." The Los Angeles Rams, Los Angeles Chargers and Las Vegas Raiders all are moving into new stadiums this season, leaving the Jaguars the feeling that an additional home game in London -- which "generates twice the money of a home game at TIAA Bank Field -- was the best way to offset the boost those teams will be receiving from those relocations and stabilize the long-term future of the franchise." Jaguars President Mark Lamping: "We are entering an uncertain time. That uncertain time is related to three teams that in the past were teams that were with us in the bottom of the league in terms of revenue. They have taken steps, steps that we would not consider, but they've taken steps to fix their revenue by leaving Oakland, by leaving St. Louis, and by leaving San Diego. That has had an impact in terms of all the other teams that are where we are in terms of the league".

The Mecklenburg County (N.C.) Board of Commissioners voted to "slash the Bank of America Stadium's assessed value" from $472M to $215M, according to the Charlotte Observer. Last year, Mecklenburg County's valuation of the stadium "surged by 324%," from just under $135M to $572M, though the team "insisted the stadium was worth less than it was at the time of the last assessment" in '11. In September, the county "lowered the value of the stadium and related property the team owns" to $472M. The new vote is the "second big break" Carolina Panthers Owner David Tepper has received on the facility in the past few months, with the Charlotte City Council expected to approve funding for renovations to the stadium in order to host MLS games. Between the two changes, the Panthers are "now set to save" $3.55M on the stadium's tax bill under '19 tax rates. The Panthers' tax bill now comes to $2.15M, whereas under the "original valuation" of $572M, the team would have paid $5.7M. Panthers COO Mark Hart said that the team "appealed for a lower evaluation in part due to the building's age," having opened in '96.

Baseball:

Steve Cohen is "ending negotiations with the Wilpons" on his $2.6B purchase of an 80% stake in the New York Mets because he is "deeply unhappy with the Wilpons changing the terms of the deal at a very late stage and has decided to walk away," according to the N.Y. Post. Until recently, it appeared the deal was "progressing quite well." Under the deal with Cohen, Mets Control Person & CEO Fred Wilpon and COO Jeff Wilpon would remain in their roles for five years. After that period -- or during -- it was "expected that both Wilpons would be removed from the daily operations of the team." The deal also reportedly did "not include ownership of the Mets' regional sports network, SNY." Sources said that the Wilpons "pushed late to maintain some control of the franchise beyond the five-year window." There also appeared to be some "disagreement over the long-term status of SNY." Initial reports "might have overstated the simplicity of the Wilpons retaining ownership of the network as a separate entity". This would be the "second time the Wilpons' near-sale of the Mets has fallen through late in the process." Hedge fund manager David Einhorn, in '11, was "close to buying a minority share of the team," with a path to becoming the majority owner, for $200M. But Einhorn said that the Wilpons "changed the terms of that deal".

Hockey:

Escalating costs of KeyArena's renovation have caused Oak View Group to "shift priorities away from naming rights in order to first secure premium amounts for smaller founding partner sponsorships," which is part of the reason why "talks aren't further along" on securing a naming-rights partner, according to the Seattle Times. OVG is "said to want" $4-6M annually for founding partnerships, such as those already struck with Symetra, Virginia Mason and Alaska Airlines. Sources said that OVG is in "final negotiations with Verizon on a coveted technology founding partnership that's taken longer because of the volume of competing bidders." Theories "abound" on why OVG's strategy has shifted. One is that OVG "securing higher founding partnership amounts will drive up the bigger-ticket naming rights." Another reason is that when "initial naming rights discussions happened" in early '18, the arena's "projected cost" was still $700M. Once the founding partnerships "are done, including the technology deal and one for wireless and beverage partners, the focus reverts to naming rights." Amazon has been "widely viewed as a contender" for the naming rights. However, sources said that Microsoft also is "interested in naming rights and could make more sense from an integration perspective." Microsoft's Xbox had a "decadelong jersey and pitch sponsorship with the Seattle Sounders," which was signed in '09 when now-NHL Seattle CEO Tod Leiweke was the club's president. Another "potential bidder is said to be Expedia".

Soccer:

MLS and the MLSPA reached an "agreement in principle" on a new, five-year CBA that runs through the '24 season, according to SI.com. The deal still will "need to be formally approved by the league and union, but progress was sufficient to prompt" comment from Commissioner Don Garber. He said the deal "addresses key strategic priorities for the league and our players," and will "serve as the foundation for a new era of partnership." The key points of the deal include "increased player salary spending, expanded free agency and more charter travel, all of which were priorities for the players." Some "new wrinkles include the players being given a share of media rights starting with the new deal" in '23, and an "emphasis on signing younger players at a reduced salary budget charge, which is a component that is still being fleshed out." Other details include expanding the free agency program, for which the union "seemed to sacrifice substantial dollars last time," and clubs once again being able to "sign up to three Designated Players". The new agreement was reached "almost a full month" before this season, offering an "earlier resolution than the past two CBA negotiations." Conversations between the two sides "began two years before the deadline." Sources said that those conversations "allowed better collaboration and an improved relationship between the two parties." The new CBA raises the "total spending power of every club" from $8.49M in '19 to $11.64M in '24. Under the deal, clubs will be "required to use charter flights for eight legs of travel" in '20, a number that will "increase to 16 legs" by the '24 season. Clubs also will be "required to charter flights for the MLS Cup playoffs and for any Concacaf Champions League matches that require international travel." Starting in '23, a portion of MLS' new media agreements "will be funneled into clubs' player spending." In the '23 and '24 seasons, MLS will "increase league-wide player spending" by $100M.

Atlanta United Owner Arthur Blank said that most MLS clubs are "profitable, which stands in contrast to what many league executives contend" amid ongoing CBA negotiations, according to The Athletic. Blank said MLS has "grown and yet maintained ... financial integrity and stability." He said, "The league continues to attract a higher level of investor that is willing to invest not only more money, but bring their business expertise, their sense of marketing and management to the league and to their own clubs. ... I couldn't be more excited about the direction of the league." Blank also said the league's expansion process has been "well thought out" and clubs/ownership groups are "highly vetted." Blank: "The quality of owners that are coming into the league is outstanding. And they're looking at it in a much broader sense." Blank added MLS is "well positioned for competitive growth." He said the league's current model "encourages" ambitious owners. However, he cautioned, "You don't want to turn the league over without any salary cap. Without any efforts to create a sense of competitive balance, where owners that are more well off than other owners -- let's say the owners of late, of the last four or five or six years -- where you put other teams that are owned by more traditional ownership, you don't want to put them at a competitive disadvantage. Their fans will lose interest. They won't attend games".

Sources: SportsBusiness Daily; ESPN; NFL Network; Charlotte Observer; N.Y. Post; Seattle Times; SI.com; TheAthletic.com;  PROSOCCERUSA.com

 
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