Bust, Boom, and Hope: February 25, 2013

By Rick Horrow and Karla Swatek

February 26, 2013

“Bust”: Top Five Reasons the Armageddon is Near

1. A North Carolina judge has denied the University of Maryland’s motion to dismiss a $52 million exit fee payment to the ACC. The school, which will move to the Big Ten in 2014, had argued that because it’s state-funded, it has sovereign immunity from lawsuits like the ACC’s.

2. Nike announced it would no longer run ads featuring disgraced South African Paralympian Oscar Pistorius. The company last year spent an estimated $800 million on athlete endorsements, but recently has had to deal with high profile scandals involving endorsers Lance Armstrong and Tiger Woods.

3. Boston Red Sox CEO Larry Lucchino said the team’s 793-game sellout streak at Fenway Park likely would come to an end this April. The team defines a sellout based on the number of tickets distributed, but scores of empty seats have been visible at games in recent years.

4. Despite a labor deal that runs through 2021, NFLPA President Domonique Foxworth says players don’t trust Commissioner Roger Goodell, primarily because of he handled the Bountygate scandal. Foxworth says players want checks and balances such as a neutral arbitrator to improve league relations.

5. The American owners of Italian soccer club AS Roma are facing a revolt from fans disenchanted with the team’s recent losses. Since buying the club in 2011, the American ownership group has sought and struggled to build Roma into an international brand similar to the EPL’s Manchester United.

“Boom”: Top Five Reasons that Prosperity is Right Around the Corner

1. The University of Texas football program during the 2011-12 fiscal year became the first college sports team to make over $100 million revenue in a single season. All told, UT’s athletic department generated an NCAA-record $163.3 million in revenue, and it’s $25 million operating surplus was more than what 135 of 220 D-1 schools spent on their entire athletics program.

2. Brazilian entrepreneur Flávio Augusto da Silva has invested $70-80 million in USL Pro soccer club Orlando City, believing it could be the next MLS expansion franchise. The club has been working with the city and Orange County on plans for a $110 million soccer-specific stadium.

3. Roger Goodell earned nearly $30 million in 2011, according to the league’s latest tax returns filing. While Goodell’s salary was only $3.1 million, owners gave him a $22 million bonus for negotiating a new CBA and new TV deals. By comparison, NBA Commissioner David Stern and MLB Commissioner Bud Selig are believed to make in the mid-$20 million range.

4. Under Armour debuted a new flagship store in Baltimore, marking the company’s first stand-alone, full-price store in the U.S. since 2008. CEO Kevin Plank said “Brand House,” which is located near the company’s HQs, would be used as a template for international growth.

5. Ticketmaster CEO Nathan Hubbard said the company’s new venture with the New York Yankees would be profitable despite cutting commissions from 15% to 5% on sales by season-ticket holders. The Yankees opted out of MLB’s new partnership with StubHub to create their own ticket exchange with Ticketmaster.


“Hope”: Top Five Reasons That Creativity is the Key to Economic Survival

1. The Chicago Cubs could leave their long-time TV partner WGN when their contract expires after the 2014 season, possibly opting to launch their own regional sports network. WGN has held rights to Cubs games since 1948, but the number of games broadcasted on the network has declined over the years.

2. The group of schools known as the “Catholic 7,” which broke away from the Big East to form their own conference, hope to eventually expand to 12 teams. The Catholic schools severed their relationship with the Big East believing they could get a more lucrative TV contract on their own.

3. Reebok launched its latest ad campaign promoting the benefits of exercise without using any of its star athlete endorsers. The decision to use “real people” in the campaign partly makes the brand more appealing to women, but also indicates Reebok’s shift toward lifestyle marketing.

4. D.C. United officials are optimistic about negotiating a stadium deal after a decade-long search for a new facility. The team is targeting an undeveloped area near National Park for the 20,000-seat stadium. DC United has played at RFK Stadium since its inaugural 1996 season.

5. The Minnesota Vikings will play two seasons outdoors at TCF Bank Stadium while their new $975 million stadium is under construction. Initial plans call for the Metrodome to be torn down in February 2014, with the new building opening up by July 2016.

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