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The Top Stories of 2013: Sports News/Marketing/Business/Deal-Making Issues


By Rick Horrow and Karla Swatek

 

The NFL’s Concussion Settlement

The NFL reached a settlement in the class-action concussion lawsuit brought by 4,500 retired players. Rather than be subject to a lengthy and costly trial, the league agreed to a $765 million deal that will compensate victims, pay for medical exams, and fund brain trauma research. Per the settlement, players diagnosed with Alzheimer’s will receive $5 million, while those with dementia will receive $3 million. It’s eligible to all 18,000 former NFL players, though only 10 NFL Hall of Famers were plaintiffs in the actual lawsuit. The settlement doesn’t represent an admission by the NFL that the plaintiff’s injuries were caused by playing football.

 

The Dodgers’ New TV Deal

The Los Angeles Dodgers and Time Warner Cable officially agreed to a 25-year deal worth nearly $8 billion for local TV rights to the team’s games. Of the total, the Dodgers will keep $6 billion, with the balance going to the league’s revenue-sharing pool. The deal includes plans to launch a SportsNet LA, the region’s sixth regional sports network, in 2014. The team will own the channel, with Time Warner providing significant production and ad sales support. The deal with the Dodgers is the richest local TV sports rights deal in history, and helps justify the $2.15 billion purchase price paid for the team by a group led by Guggenheim Partners Chairman Mark Walter.

 

The Fox Sports 1 Launch

Arguably nothing shook up the sports business landscape more this year than the launch of Fox Sports 1. Fox’s effort to have its own 24-7 cable sports network, Fox Sports 1 represents the biggest threat to ESPN’s market share. Fox Sports 1 launched in 90 million homes, with a subscriber fee of $0.80 per month. Fox Sports 2 launched in 37 million homes at a cost close to $0.30 per month. Since 2010, Fox Sports has spent $9 billion on sports rights, which will provide critical programming for the new networks. Among the properties it holds rights to are the NFL, MLB, NASCAR, the FIFA World Cup, and various college sports.

 

The NHL Lockout

At the risk of losing an entire season due to a lockout, the National Hockey League in January ended its labor dispute with the players after four months, 113 days, and millions of dollars of lost revenue. After striking a ten-year labor deal in January, and following a lockout-shortened 2012-2013 season, the NHL is on its best financial footing in recent memory. Hockey now has its first-ever billion-dollar franchise, the Toronto Maple Leafs, and the average NHL franchise is worth $282 million. Most promising of all, the NHL and Rogers Communications reached a 12-year deal worth a total of $4.9 billion to go along with the 10-year, $2 billion contract the league signed with NBC.

 

The Best of the Rest

 

February 3: Critics are questioning New Orleans’ future in the Super Bowl rotation after the Superdome power outage cast an embarrassing light on the NFL and the city. Including the 2011 seating debacle at Cowboys Stadium, this is the second time in three years the league has had a significant technical gaffe at the Super Bowl.

 

April 2: Rapper Jay-Z launched his own sports agency, helping his first client, baseball player Robinson Cano, land a 10-year, $240 million contract with the Seattle Mariners. Roc Nation Sports teams with CAA Sports on contract negotiations. The agency’s other clients include Oklahoma City Thunder star Kevin Durant and New York Giants receiver Victor Cruz.

 

May 17: The Sacramento-based group bidding on the Kings reached a deal with the Maloof family to buy a controlling interest in the team for a NBA-record $535 million. New Kings owner Vivek Ranadive is the first majority owner of Indian descent in NBA history. Shortly after the deal closed, Ranadive brought on Shaquille O’Neal as a minority partner.

 

May 21: The New York Yankees are partnering with EPL club Manchester City to buy a MLS expansion franchise for $100 million. The new club, which will be MLS’ 20th, will be called New York City FC and plans to start play in 2015. The club is still considering stadium locations throughout greater-New York. MLS this year also awarded a franchise to Orlando.

 

July 24: The city of Chicago and the Cubs reached a deal for a $500 million renovation to Wrigley Field. Per the agreement, Cubs owner the Ricketts family will contribute $300 million for Wrigley and $200 million for a new hotel next to the ballpark. In exchange for the investment, the Cubs get more night games and are allowed to install new advertising signs at the historic landmark.

September 19: Michael Waltrip Racing is downsizing from three NASCAR Sprint Cup Series teams to two after losing sponsor NAPA Auto Parts. NAPA decided to end its sponsorship deal with the team after MWR was implicated in a race manipulation scandal.

October 17: Fantex Brokerage Services has developed a new marketplace that allows fans to buy and sell stock linked to the future on- and off-field compensation of athletes. The first athlete to sign up for the service is Houston Texans running back Arian Foster, who will receive a $10 million upfront payment in exchange for 20% of his future football contract and endorsement income.

 

November 11: The Atlanta Braves announced plans to build a new $672 million stadium in Cobb County, Georgia, for when their Turner Field lease expires in 2016. The cornerstone of the plan is a mixed-use development project located next to the proposed stadium. The Braves’ development project will include 1 million square feet of residential, office space, retail, restaurants, and a hotel.

 

November 22: Adidas might need to find a new signature basketball endorser after Chicago Bulls star Derrick Rose was lost for the rest of the season to injury. Since receiving a 13-year, $185 million endorsement deal in February 2012, Rose has missed the better part of two full seasons due to knee surgeries.

 

November 18: Turner Sports and CBS will produce three different telecasts for each of the two Final Four games this season. The traditional national telecast will air on TBS, with TNT and truTV airing the game with camera angles and announcers customized for the participating teams.




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