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Bust, Boom, and Hope: College Sports, Baseball, Soccer, Football, Basketball


By Rick Horrow and Karla Swatek

April 5, 2013

College Sports

Winner: Wichita State University will reap a financial windfall from the school’s first Final Four appearance since 1965. School officials expect sizable increases from at least three revenue streams: tournament-related earnings, increased merchandise sales, and increased contributions from donors.

Loser: For-profit prison operator GEO Group has withdrawn its $6 million gift for the naming rights to Florida Atlantic University’s football stadium. The agreement had received widespread criticism, and became too much of a distraction for the company and the school.

What it means: As the public pressure mounted, it became more and more clear that FAU’s naming rights deal wouldn’t last. Rather than spend the money on naming rights, GEO Group’s CEO is pledging $500,000 to academic scholarships this year. It won’t take long for everyone to forget that this deal existed in the first place.

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Baseball

Winner: The average MLB team payroll topped $100 million on Opening Day, as a record 14 teams began the season with a nine-figure payroll. The New York Yankees lead the league for the 15th consecutive season with $228 million in salaries. The average MLB salary is $3.6 million, a 5.9% increase over 2012.

Loser: Despite slashing payroll by more than $50 million, the Miami Marlins expect to post an operating loss this season. The team’s season ticket-base has fallen 60% from last year, and the Marlins are the only MLB team that used Groupon to sell Opening Day tickets. The Marlins lost $47 million last season.

What it means: The Marlins notwithstanding, teams have been able to spend more money on players thanks to lucrative local TV rights deals. In the first week of the season, three players – Buster Posey, Justin Verlander, and Elvis Andrus – all signed contract extension worth more than $100 million.

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Soccer

Winner: Visa signed an eight-year extension of its FIFA World Cup sponsorship in a deal worth $170 million through 2022. Visa is also an IOC TOP sponsor, meaning the company has marketing rights to the two premier global sports properties for the rest of the decade.

Loser: One of the stadiums Brazil had hoped to use for the 2014 World Cup is closed indefinitely after authorities said there were structural problems with the building’s roof. Estádio Olímpico João Havelange won’t be used during next year’s World Cup, may not be ready for the 2016 Summer Olympics in Rio.

What it means: No South American country has ever hosted an Olympics, and none have hosted a World Cup since Argentine in 1978. With Brazil on the international stage in both 2014 and 2016, they need to make sure all their facilities are ready and safe or they risk an international embarrassment.

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Football

Winner: Atlanta’s economic development authority has approved issuing more than $200 million in bonds to partly finance a new Falcons stadium. The vote was the last political hurdle the Falcons had to overcome in their plans to build a $1 billion retractable-roof stadium in downtown Atlanta.

Loser: The Arizona Cardinals have lost Northern Arizona University as an option for its training camp location as negotiations to permanently move to Glendale progress slowly. The Cardinals had held camp at NAU for the past 25 years. If a deal with Glendale isn’t reached soon, the team will need to find an interim site for this summer’s workouts.

What it means: The economic development authority’s approval capped two years of negotiations. The new stadium will open in 2017, and will guarantee the Falcons stay in Atlanta for at least 30 more years. The Georgia Dome will be demolished once the new building opens.

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Basketball

Winner: The WNBA signed a six-year extension of its TV rights deal with ESPN worth $12 million annually. The deal runs through 2022, and pays each WNBA team about $1 million per season. ESPN has broadcast WNBA games since the league’s inaugural 1997 season.

Loser: The NBA’s strategic resting rules are being called into question after the Miami Heat weren’t fined for resting three starters, including Lebron James and Dwyane Wade, in a game against the San Antonio Spurs. The Spurs were fined $250,000 earlier this season for sitting their stars against the Heat.

What it means: ESPN has always made a commitment to women’s sports, even if the deals don’t provide the best return on investment. Their new rights agreement with the
WNBA is an example of one of those deals. Of course, having WNBA rights could give ESPN an upper hand when they renegotiate NBA rights within the next couple years.




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Beyond the Scoreboard
Rick Horrow, America’s leading expert in sport business, and coauthor Karla Swatek give fans an inside look at the multibillion-dollar world of professional sport.
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Beyond the Scoreboard eBook
Rick Horrow, America’s leading expert in sport business, and coauthor Karla Swatek give fans an inside look at the multibillion-dollar world of professional sport.
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Beyond the Scoreboard: Chapter 1. The Mega-Master Super Series XLXL eBook chapter
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