As you may already know, President Elect Barack Obama has proposed to increase the federal income tax rate for the top bracket from 35% to 39.6%. The AP (via ESPN) points out that if a free agent signs after January 1st, his signing bonus would likely be taxed at the new rate, costing them an additional 4.6%. So if Mark Teixeira is looking to match Jason Giambi’s $17M signing bonus, he’d would stand to save himself nearly $800,000 by agreeing to a deal before New Year’s. I thought this was pretty interesting, and if we see a mad dash of guys signing just before the calender turns to 2009, this might be why.
Newark Bears fold
This isn’t exactly Yankees’ related, but it’s local and I’m sure people are interested. The Newark Bears of the independent Atlantic League have ceased operations and no longer exist, effective yesterday. Former Yankee Rick Cerone founded the team in 1998, and the Bears have had some notable alumni over the years including Rickey Henderson, Jose Lima and Jose Canseco. I don’t know the circumstances of the team’s folding, but I’m sure the recent economic crisis played a part. (h/t Robert Pimpsner)
Is the baseball TV coverage backlash reaching a tipping point?
In less than 48 hours, Joe Buck and Tim McCarver will grace millions of homes across the country — OK, just in Philadelphia and the Tampa Bay area — with the dulcet tones of FOX’s annual World Series coverage. I can hardly wait.
For anyone who watches baseball week in and week out during the season, Buck and mcCarver are a familiar pair. The two provide the commentary on FOX’s weekly Saturday broadcast and during the All Star Game. Even after baseball season, it’s impossible to escape Joe Buck as the robotic announcer covers football for Rupert Murdoch’s media empire as well.
Over the years, Buck and McCarver have done little to impress the crowd. Buck often sounds like he’d rather be somewhere else, and McCarver speaks a lot while saying a little. He’s also shown as tenuous a grasp on baseball player names as John Kerry did in 2004. It may even have come as a shock to McCarver than Manny Ortez wasn’t actually a player on the Red Sox.
As time wore on, though, it seemed like the only people complaining were those of us with our own online platforms. Fire Joe Morgan, a site clearly dedicated to the ESPN broadcaster, and Awful Announcing are popular online, but no one is listening. Maybe, just maybe, a Phillies-Rays World Series will spur on some changes.
Last week, Slate columnist Ben Mathis-Lilley started the annual baseball announcer bemoaning, and his cry has been picked up with increasing frequency over the last few days. A Huffington Post writer — not quite a position with high barriers to entry — warns of the impending Buck/McCarver tandem, but more important is Maury Brown’s diatribe about the national media. Brown writes emotionally:
So why, oh why, will the ratings be low? Blame broadcasters, for one.
Low ratings show, in part, that when you spend week after week, year after year showing the Red Sox and the Yankees during the regular season, you brainwash the average fan. If you want to make October something special, no matter who is playing, you better get America to follow all 30 teams.
This requires doing a bit of detox on FOX, ESPN, and TBS’ part. Understandably, you have America hooked on the Red Sox and Yankees, and with that you get your precious regular season ratings. The problem is, if one or the other team isn’t in the World Series and ratings are low, there’s a mountain of articles talking about how it’s a matter of being a “poor Series.”
That’s a load of manure…So, I say, the low ratings do mean something. It means that broadcasters will decide that, in the end, they will get on bended knee and pray for the Red Sox, Yankees, Mets, Dodgers, Angels or Cubs to make the World Series, and hope that they drew high ratings during the regular season.
Brown is 100 percent correct, no ifs, ands or buts about it. The national TV landscaped for baseball has become so attuned to the weekly ratings that they sacrifice the popularity of the game. Constant attention on the Yankees or Mets, on the Cubs and White Sox, on the Angels, Red Sox and Dodgers isn’t something promoting the best interests of the game.
Rather, the national TV coverage promotes the best interests of ESPN, FOX and TBS. These stations need money; they get money from advertising; they get more advertising from higher ratings. Since there are more fans in New York and Los Angeles and New England, games featuring teams from those areas will attract more eyeballs.
When Major League Baseball has a chance to renegotiate its next media contract — and that date won’t arrive until well into the next decade — it would behoove the game if the Powers That Be urge the networks to show a more distributive sampling of teams and games. After all, these telecasts should be about promoting baseball, and clearly something has gone wrong when a World Series match-up that promises to be as compelling this one is decried as a ratings bust before the games even begin.
Yanks, Cowboys form concessions partnership
Two of the most storied — and most hated — franchises in sports are teaming up for a concessions business venture.
The Dallas Cowboys and New York Yankees have teamed up to form Legends Hospitality Management that will, according to Sports Business Journal, “manage regular concessions, suite catering and team stores at the new Yankees and Cowboys stadiums.” The company will also bid on concessions contracts at stadiums across the country.
The first-of-its-kind initiative between two of pro sports’ star teams is the idea of Gerry Cardinale, the Goldman managing director who helped create the Yankees’ regional sports channel, the YES Network, and brokered the return of Alex Rodriguez to the team last year.
Cardinale met Cowboys owner Jerry Jones, and his son Stephen, the team’s chief operating officer, through a mutual friend who hosted them and their wives on a boat off of St. Barts in the Caribbean in February 2007.
On the boat, a source said, Jones spoke of his new stadium, and Cardinale brought the idea of pairing the two teams together back to the Yankees. Hal Steinbrenner, the team’s co-owner, team President Randy Levine, and Chief Operating Officer Lonn Trost handled the discussions.
The teams are known for their entrepreneurial bent, and the concessions business is now the latest iteration. The Yankees’ YES Network is a highly successful regional sports channel in which Goldman is an investor, and the Cowboys are the only NFL team to manage the distribution of its branded merchandise.
In charge of this new business venture will be former Pizza Hut President Michael Rawlings and Dan Smith and Marty Greenspun, two Yankee employees.
While some many think back on the non-descript YankeeNet venture, this partnership has the potential to reap massive benefits for the Yanks and Cowboys. The Yanks did about $70 million in concession sales at their old ballpark, and this figure stands to jump tremendously when the new stadium opens in April. If this venture is successful — and there’s no reason it won’t be — it could mark a new approach to sports business deals across all major sports.
Stadium items fail to sell at auction
The Yanks have learned that a bad economy is no time to auction off baseball memorabilia. As the AP reported, yesterday’s stadium memorabilia auction was not very successful.
The last ball hit out of Yankee Stadium didn’t leave the auction block Saturday in a memorabilia auction celebrating Bronx Bombers history…It was expected to fetch up to $400,000, but was pulled after offers fell short of the suggested opening bid of $100,000…
A collection of 15 World Series and American League championship rings that once belonged to former Yankees owner Del Webb was also pulled by the Guernsey’s auction house after the high bid of $325,000 fell short of expectations…
About 100 people came to the Garden and bid several hundreds of dollars for baseball card vending machines, pictures of Yankee Stadium under construction and posters signed by Mantle and Joe DiMaggio.
This is hardly a surprising result. People aren’t too keen on spending their disposable incomes on baseball merchandise right now. I’m sure they’ll try again in a few months.
The Yankees and the economy, redux
Sports and the economy get along uneasily at best. Over the next few weeks, as the nation looks for some economic stability, CC Sabathia and Mark Teixeira are going to sign two of baseball’s most valuable contracts. Meanwhile, teams are raising ticket prices and hoping to sell luxury boxes.
Historically, sports haven’t always suffered when the economy dips. In periods of prolonged slumps, attendance does decline, but in periods of shorter economic downturns, sports have, by and large, not witnessed decreases in attendance. Concession sales may slag, but ticket sales remain relatively robust.
This doesn’t stop, however, writers from wondering if the financial crisis will impact the Yanks who are opening some expensive new digs in six months. Fortune’s Jon Birger ponders this exact question:
Take the New York Yankees, for instance. The Yankees move into their new stadium next year, and over the past year they’ve been trying to sell New York’s corporate titans on the virtues of the new stadium’s 47 available luxury suites. Asking price: $600,000 to $850,000 a year – several times what other major league teams charge for their luxury boxes.
A year ago, selling Yankees skyboxes was considered a slam dunk. Today, not so much, not with the stock market tanking and most financial companies gushing red ink. “I would hate to be in their position,” a top executive with another Major League team says of the Yankees. “$850,000 for a luxury suite?” says Phil Matalucci, president of sports-suite broker Luxury Suite Alternative. “There could not be a worse time for teams to be selling luxury suites.”
A Yankees spokeswoman insists that the economic crisis has not had any impact on the commitments the team has already received from prospective suite-holders. Still, as one Yankees’ limited partner tells Fortune, it’s a little too soon to judge since the contracts for the suites were only recently sent out.
While we last looked at this issue less than a week ago when the Yanks seemed like they would ride out the storm, Birger introduces an interesting phenomenon. First, high-rolling clients — such as New York’s banks — find value in investing in luxury suits. Bank of America says that its return “is multiples more than the initial investment.”
At the same time, though, can a bank that just had to accept billions of dollars of governmental bailout money really turn around and spend more than three quarters of a million dollars on baseball tickets? I doubt it.
This could get interesting over the next few weeks. The Yanks and Mets both claim that luxury suite sales are robust, but are the contracts signed? Have the tickets been delivered? There would be some irony in the Yanks’ not selling out their luxury suites considering that those suites were one of the prime purposes behind the new stadium. Perhaps, for now, the baseball gods will have the last ironic laugh over the destruction of Yankee Stadium after all.
A Doomsday scenario
This isn’t about the stock market collapse or a terrorist attack. It’s not about the next World War or an earthquake in New York. This is far, far worse. Or at least it is according to FOX. If the Tampa Bay Rays and Philadelphia Phillies meet in the World Series, FOX might be better off showing new episodes of House and Prison Break, Maury Brown reports. Ouch.
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