SBS Sports Business News

This section is updated on a weekly basis. If you have a story that you think other students should see, please send the link to SBS at sportsnews@sportsbusinesssims.com

These series of articles highlight the NFL's attempt to insert a team into the Los Angeles Metropolitan Area. Currently, there has not been an NFL football organization there since the Raiders returned to Oakland in 1995. Having a team in the LA area is a key part of the kind of sports rights fee platform the NFL wants to have by the time its television contract comes up for renegotiation. More teams in all of the major metropolitan areas in America gives the NFL a large bargaining chip as it attempts to establish a contract larger than the $18 billion deal formed in 1998.

This is an issue of such importance to the NFL, it has established a special committee headed by Carmen Policy, President of The Cleveland Browns.

For sports economics and management students, following these events as they unfold provides a rich environment of information on various subjects in the sports industry: sports rights fees, expansion team costs, the process of league expansion, stadium economics and design, sponsorship and naming rights costs, and the politics between sports teams, sports leagues, and municipal and state governments.

For SBS, the "NFL to LA" matter provides a great basis for the development of simulations not seen before. Stay tuned. Until then, here are some articles to give you an update on the current news on the NFL's initiative.

Balita: L.A., Pasadena both hope to lure NFL teams, April 21st, 2003

The race to bring an NFL team to LA is paced by two competing groups. One headed by the City of Pasadena and Moag & Company a sports investment banking firm, the other formed by former Hollywood studio exec and agent, Michael Ovitz. As you will learn in two weeks, this was not the first time Mr. Ovitz made a pitch to the NFL.

Sign On San Diego: Rose Bowl to unveil new design with eye on NFL and history, May 16, 2003

The Rose Bowl, facing the potential loss of key events as it ages, is the focus of a proposed renovation to attract an NFL team.

In the next two weeks, SBS will provide more information on the "NFL-to-LA" initiative, including a history of this effort.

ESPN: NY Yankees vs. Chicago Cubs Translates to High Ticket Prices, June 6, 2003

The demand for tickets for this baseball matchup -- the first since 1938 -- is one example of the rationale behind "variable ticket pricing." But in this case, the demand for tickets is so high, some passes to the contest are being sold on the secondary market commanded by ticket brokers.

ESPN: NBC Bids $2 Billion for Rights to Olympics, June 6, 2003

Here is another example of the costs of sports rights fees. NBC paid over $2 billion for the telecast rights to the Olympics for the next nine years. This is less than the previous bid of $3.5 billion.

ESPN: Baseball's Political Group Gives to Political Groups, May 13th, 2003

This article is timely for two reasons: first, in that it points to the importance of political expenditures in the business of baseball. Second, it follows on an extensive discussion of the importance of poltics in building a new stadium in the Oakland Baseball Simworld and in the real world.

ESPN: Minnesota Vikings Quarterback Dante Culpepper signs 10-year, $102 million contract. May 13, 2003

This is one example of the kinds of deals organizations structure to keep star players. This example, if Culpepper reaches all of the contract incentives, is just over $10 million annually.

ESPN: Washington D.C presents $338 million plan to cause relocation of the Montreal Expos. May, 13, 2003

For several years, Washington D.C. has worked to increase the number of sports organizations in its region, and its overall sports business profile. Bidding to host the Olympics, and this proposal to lure the Expos, are part of its ambitious plan. The process behind the D.C. plan to draw the Expos is replicated in the Oakland Baseball Simworld. The article also reveals Oregon's plan to pay for a stadium by taxing baseball players; another stadium financing option in the Oakland Baseball Simworld.

ESPN: Kobe Bryant's Jersey Top's In Sales of NBA Players. May 13, 2003

This article clearly shows how a star player can drive the sales of team merchandise, especially if the player's on a winning organization like the Defending NBA Champion L.A. Lakers.

ESPN: Anaheim Angels Reportedly Sold For $180 Million. May 13, 2003

Ending The Walt Disney Company's attempt to sell the World Champion Anaheim Angels when the media company thought it would command a premium price, the club is in the middle of the final stages of a sale to Phoenix businessperson Arturo Moreno for $180 million. Not reported in this account is the fact that Disney originally believed it could part with the franchise for $250 million, even in a terrible economy and with an organization that lost $11 million as it was winning the World Series.

CNN-SI: Sports Team Buyers Think They Can Run Organizations Better than Previous Owners. May 12, 2003

This article provides a summary of the current sports franchises for sale and who's in line to purchase them. It also claims that sports teams are money losing investments, forgetting information that shows most owners purchase teams only to resell them at a profit years later.

WWW.JANG.COM: Pakistani Team May Carry Sponsor's Logo on Bats. May 5, 2003

Pepsi is considering a radical new sponsorship strategy: placing its logo on baseball bats for a fee paid to the team franchise. While this is not yet permitted in American professional baseball, this deal is worth paying attention to. If it's successful, it may be only a matter of time before it is common practice in America.

The Boston Globe: Yao Languishes on Nike's Advertising Bench. April 27, 2003

News article critical of Nike Corporation's "handling" of one of the athletes it sponsors, Houston Rockets Rookie Center Yao Ming. The article is interesting in that it reveals Nike's fear of causing its client to become "overvalued."

Sports Business News: SARS Restricts Blue Jays Autograph Sessions, May 10, 2003

The SARS epidemic is slowly impacting various actvities within our culture. In this example, it impacts the after batting practice autograph sessions between the Toronto Bluw Jays and their fans. While this may appear to be an unimportant story, its a large problem for the team's marketing department, which considers this part of the organization's relationship with its ticket-buying fans.

AZ Central.Com: Glendale Drives Bid to Lure Super Bowl: February 26, 2003

The efforts that cities employ to draw "finals" games, like the Super Bowl are reflected in this article. The Super Bowl is the NFL's game to determine the champion team for a season, but it has evolved into a symbol of the television and patron drawing power of sports in America, claiming the 100 top ratings in television history, and an host city economic impact of between $150 and $300 million.

ESPN: Plan For Redesigned Rose Bowl Hopes To Lure NFL Team: April 27, 2003

Currently, the LA region is without an NFL team. There have been several attempts to solve this problem; all have failed for different reasons. This proposal by John Moag of Moag and Company is to be presented at the May 21st NFL Owners Meeting in Phoenix, Arizona.