Taylor Shippee

May 2nd, 2016

Current Issues Paper
Professor Liptrap
Sport Finance

Finance is one of the backbones of the sport industry today. Not many people realize
how much of a big business sports at any level have become. Even within leagues there are
teams and companies that operate individually as businesses. The one thing that all
businesses have in common is the pursuit and retention of money. In the sport world in

particular, there is a lot of money. Between player contracts, sponsorship, stadium revenues
expenses and so on, there is more money being exchanged than most people will see in their
lifetimes. While the professional sports leagues definitely rely on the most money to operate,
that doesn't mean that all the other leagues don't rely on it as well. Collegiate sports are
becoming a bigger and bigger attraction to fans and consumers these days, bringing in record
ticket sales and tv deals at the division one level. As much as many people don't like it, even
high school and recreational sports cost money to operate on a day to day basis. Sports as a
whole have come a long way over the years. They operate like legitimate corporations, with
financial statements and accounts that can be analyzed and compared to other teams and
leagues in their specific sector. There is so much more involved than just wealthy people
pumping money into schools and organizations or the government funding programs. Not only
are the people who work and participate in this industry involved, but the fans and consumers
are as well. They pay for the tickets, food and merchandise, therefore they have a right and in a
lot of cases a curiosity, as to know why things are priced as they are and where the money is
going.

Paid In Full

It is a very busy time for the city of Atlanta and their sport franchise right now. The city
and all of the owners are working hard to update their facilities and rosters to make sports more
enjoyable and competitive in Georgia. One of the problems that they have been running into is
the state of their arenas and parks. The Braves have spent the last eighteen years playing at
Turner Field in Atlanta, but recently the stadium has been experiencing some infrastructure
problems including water drainage and sewage. Since their lease expires at the end of the
upcoming 2016 season, they decided to cut their losses and build a brand new, state of the art
stadium and fan complex in Cobb County, a small suburb north of the city. The city of Atlanta

was not happy with losing the Braves, so now they are using it as motivation to update and keep
all of their other franchises in the city. Next up on their to do list is Philips Arena, home of the
Atlanta Hawks. The arena opened in 1999, but hasn't kept up with other NBA stadiums in terms
of box seating and other upgrades (p 101). Atlanta mayor Kasim Reed has said that a major
renovation is needed in order for the Hawks to be able to continue calling it home. Team
ownership and city officials have been working since June to come up with a plan that works for
everyone. The renovation costs are totaling up to three hundred million dollars and according to
Reed one hundred and fifty million of that may need to come from public funding (p 101). The
final numbers, set to come out sometime in March, aren't set in stone yet, but Reed has said
that they have looked into their finances and know what they are comfortable spending. The
Atlanta Fulton County Recreation Department owns the arena and they do have the option to
issue bonds. The one thing they know for sure is that a public tax raise is not an option they
were willing to explore. If a deal can not be reached then the Hawks will have to relocate out of
the downtown district.

Atlanta United Releases Structure for Season Tickets at Mercedes Benz Superdome

The other construction happening in Atlanta right now is a new multi use stadium named
the Mercedes Benz Superdome. This new building is going to house the NFLs Atlanta Falcons
and the newly established Atlanta United FC of the MLS. The stadium cost 1.4 billion dollars
and will be completed sometime during the summer of 2017 (p 104). Last week the Atlanta
United released their season ticket price structure. The price range for the tickets is anywhere
from $20-$225 a seat (p 104). The Suntrust suites, the nicest seats in the building, which are
located along the fifty yard line and the cheapest seats are located behind both goals. They
have also established a Founders Club. The club is $50 to join and as a member fans will
receive special access to the Suntrust Suites and first grabs at season tickets. As of right now

there is 10,000 members of the club and they have pledged to purchase about 30,000 tickets (p
104). Darren Eales, the president of the team says that he doesn't know exactly what the
conversion percentage of the season tickets will be, but he is optimistic that they are high.

Nationals-MASN Dispute Forcing Teams to Backload Free Agent Offers

There are many things that go into the structuring of a player contract. The team needs
to have funds available before they can write up anything legal, promising money to their
players. Some big market teams make enough money in ticket and sponsorship revenue to pay
their players that way. Smaller market teams on the other hand don't necessarily have that
luxury. They have to rely on other revenues like money they get from the league and individual
local television deals. This is something that the Baltimore Orioles and Washington Nationals
have heavily relied on. Both teams have contracts with the local television station MASN.
However, the Nationals are at a bit of a disadvantage in this situation. The television station is
owned by the Orioles Management team and they are less than willing to come up with fair
terms for the Nationals deal. In 2005 when the team moved from Montreal, the Oriole owners
agreed to give them a contract. However what they didn't agree on was what that contract
would look like. The management team has not been willing to give the Nationals what they
deserve. This has been an ongoing problem for four years now, and the end is getting closer in
sight due to the MLB and national court systems getting involved. Because MASN is being
difficult, the Nationals have been unable to offer free agents the contracts they deserve. They
have been able to offer big contracts, but they have had to defer the majority of the money to
later years, sometimes beyond the contract's expiration date. Just recently the Nationals
offered a contract to free agent Yoenis Cespedes that had a face value of 110 million dollars
over five years (p 102). However the money would not have been paid to him in full for over a
decade. The deal he ended up signing with the Mets, was only for three years, but he was going

to make 17 million in the first year alone (p 102). Comparing the two deals, it was an easy
choice for him to make. This is not attractive to prospective players because to them it's like
they are playing the first years for almost no money which leads them to worry that they won't
ever get paid. It's not an ideal situation for the Nationals right now seeing as they have a lot of
talent on their roster and could really make a serious run at a championship if they could only
add a couple more power players to their payrolls. The case is expected to be tried in the New
York Court of Appeals sometime within the upcoming year.

Yankees Expand Credit Facility as They Look for NYFC Site

The New York Yankees are known for a lot of things, not only around Major League
Baseball but also the sport world as a whole. They are extremely successful, popular and
probably the most profoundly wealthy. They have always been in the top three teams when it
comes to the value of payrolls. In other words, money has never been a problem for them.
Recently, the Yankees have jumped on the train that a lot of other sport franchises have been
riding for years and is investing in an MLS team. The Yankees formed a bond with New York
FC prior to the 2015 season. They opened up their newly built stadium to use of the soccer
team, alternating with the Yankees home games. By doing this, the Yankees generated more
revenue than if the field sat empty on days that the team was playing away games. This was an
exciting time for those in the soccer world, however the baseball players were not overly thrilled
with the idea. They were worried that making the switch from soccer to baseball in very little
time was going to be an issue that would in turn affect their game. Due to the success of the
team this season and Major League Soccer as a whole, the Yankees front office is now looking
into building a soccer stadium for them. Yankee Global Enterprises is the holding company for
the Yankees. At the start of the year they increased the credit facility from which they can
borrow from 175 million up to 300 million (p 39). The first thing that came to fans minds when

they heard this news was that it was a plan for the Yankees to use the money to increase their
payroll. Yankees General Manager said with a very firm no that this was not the case. The
Yankees want to go younger with their roster and are focusing their efforts on establishing the
young talent they have accumulated. It is still unknown where the stadium will be built.
Manchester EPL who owns the other half of the NYFC, had looked into locations in Queens but
the community was very opposed. As of right now there are no definitive stadium plans in
place, but the money will be there when they are ready.

NHL Welcomes Canadian Teams to Loan Pool

With the recession in the late 2000s, many of the sport teams and leagues took major
hits in terms of revenues. They were not able to conduct business quite like they way they were
used to and therefore had to make some adjustments. Coming out of the recession, many of
the teams needed some help in order to get back to they way things had used to be. The
leagues did this by instituting credit pools. The NFL, NBA, and MLB all started using this form
of credit. The NHL was late to the party and just created theirs in 2014. The problem that the
NHL runs into a lot is that they have such a strong division of teams in Canada. They run into a
lot of issues with the differences in currency. Depending on the time in the economy, one
version of currency might be more weighted than the other and that can present issues
especially when it comes to loans. Citigroup is the major bank backing the debt however and
they have syndicated some of the debt to other banks including Bank of America and
JPMorgan Chase amongst others. What gave the NHL their final leverage to start a credit
facility was the major tv deal that they signed with Rogers Media back in November 2013 for 12
years and 5.2 billion Canadian dollars (p 39). Since the contract is in Canadian money and the
NHL did not buy a currency hedge, the value of the contract has dropped about thirty percent.
Thats about 3.5 billion down from 4.9 billion at the time of signing (p 39). Even though the

value has been fluctuating the league still considers this transaction a good risk and is
embracing it head on.

2024 Bids Lower But Are They Realistic?

Perhaps one of the most elaborate sporting events out there is the Olympic Games. The
Olympics take the best athletes from countries all over the world to compete for what truly is the
title of best in the world. Along with winning medals, hosting the games is a huge
accomplishment. Not only is it good exposure for the country as a whole on the global scale,
there is also theories that they will help boost the local economy and promote higher tourism
rates. This being said, when it comes time to select a host city for a future game, countries pull
out their checkbooks and get ready to play ball. Tokyo spent 75 million dollars in order to
secure their spot for the summer 2008 games while Rio spent 90 million in order to get the
games in 2016 (p 6). Now the time has come to start reviewing and receiving bids for the
summer 2024 Olympics. However whats different now is that the offers are not as high as they
have been in years past. Some of the front runners for the 2024 competition are Paris and
Budapest, who have offered 65 million dollars each. Los Angeles and Rome round out the
finalists with offers of 35 and 27 million dollars respectively (p 6). Los Angeles has since said
that they will potentially be increasing their offer barring any more private donations. The goal of
this process is to make the bidding process more affordable so that as many countries as
possible can be in contention rather than having just the same wealthy ones over and over.
Whether or not this is possible still remains to be seen. Between now and the final vote, the
Olympic committees must pay marketing and consulting fees, real estate developers,
government associations fees along with costs that come with travel and negotiating documents

with landowners and regulators. These costs add up quickly, making it hard for any country to
host the games on a budget.

Rams Owner to Borrow 1 Billion for Stadium

Earlier this year the NFL approved the relocation of the Rams from St.Louis back to Los
Angeles. The move is effective immediately, meaning that the Rams will play all of their games
in Los Angeles starting in September 2016. Along with playing in a new city, the Rams are
going to get a brand new stadium to call home as well. Construction on the new stadium, which
is to be located in Inglewood California, is set to begin in 2016. The estimated cost of the project
is 2.66 billion, making it the most expensive sports arena ever built. Rams owner Stan Kroenke
is set to borrow about 1 billion dollars from JPMorgan Chase (p 38). The amount is arguably
the largest ever borrowed to finance a stadium. In addition to the borrowed funds Kroenke is
investing 800 million dollars of his own equity (p 38). League rules generally limit borrowing that
large of an amount of money but the rule is often waived when it comes to construction of new
stadiums. Since Kroenke is borrowing directly from the private bank, it suggests that he is a
client of the financial institution even though the loan is through the stadium operating company
and not Kroenke himself. The number 1 billion sounds daunting, but if the projections pan out
then, Kroenke will be making all of his money back. One financial expert said that Kroenke
could expect nearly 700 million dollars in seat revenues and about the same in naming rights (p
38). Last year Kroenke developed a relationship with a real estate investment firm who is
expected to contribute an unspecified amount of money to his project as well. There is also the
potential for a second team to relocate to Inglewood with the Rams and if that was to happen
then he would receive money from the incoming team. All of these partners would seriously
decrease Kroenkes equity burden substantially.

Rams Home Short on Premium

Since the new stadium in Inglewood is not slated to be finished until the 2019 season,
the Rams are going to need to play somewhere else for the next three years. Their temporary
home is going to be the Los Angeles Memorial Coliseum. They are going to share the facility
with the University of Southern California football team. The Coliseum is a good temporary
home for the Rams to get readjusted to the Southern California lifestyle. However the only
problem that they are going to face is a substantial drop in premium seat revenues. This is not
a huge concern for Rams management because they still have an expected seat revenue of
over a million dollars a season once they move to Inglewood. They are also coming from a
market in St Louis where they finished at the bottom of the NFL in terms of seat revenues, so
they are used to not making a ton of money in that area. The Coliseum is an old building, that
has not been updated with the times. The amount of available premium seating available is
scarce. The team has set up a meeting with Joe Furin, the general manager of the building to
come up with an agreement for the next three years and to see what potential upgrades could
be made to improve the seating for the next three years. Any improvements that the Rams
decide to make will have to be paid for by Roenke and his team. USC had made some minor
improvements for their game day operations and the the team is planning on expanding on
those for use by both teams. It is unclear how much the Rams will be able to do with the little
resources available or how much they will be able to charge for the seats.

NBA to Help Clubs Upgrade Arena Operations Profit

One of the biggest trends in the sport industry today is the use of stadiums and arenas
for other activities outside of the teams that play there. These can be anything from concerts to
wrestling matches to other sporting events from different leagues. This a great way for

teams/stadium owners to make more money especially while the teams that play there are out
of season. Newer stadiums are equipped to host these types of events easily, without many
changes and work that needs to be done. It's the older venues that are having a more difficult
time with the process. This is the case in the NBA especially. There are a lot stadiums in the
NBA/NHL that need some upgrades in order to make extra revenue events a serious possibility.
Therefore the league is developing an initiative that is designed to help improve facility
operations and arena profitability. Right now the main aim is to improve arena operations
including the scheduling of events, ticket sales, staffing and usage of new technologies. All
thirty clubs will have access to the resources. While a lot of the arenas may need physical
improvements, many of them are already able to hold these events, they just don't know how to
facilitate them and that is what this initiative is going to help iron out. Some teams had taken it
upon themselves to bring in a third party to help them organize these activities. The NBA isn't
looking to eliminate these parties, they are just providing the teams with a cheaper option. After
looking at a surplus of data from years past the league decided that there was a need for these
resources in order to persuade the teams to take advantage of the opportunities that they might
not have known were there.

Morgan Stanley Adds to Athlete Loan Program

The cost of a college education is one of the biggest controversies in the country right
now. Every year, students graduate in thousands of dollars of debt and have trouble paying
them back because they can't find jobs right away. The same goes for athletes that graduate
and try to enter their respective professional fields. Many people tend to forget that even though
a lot of these athletes go to school on some type of scholarships, but very few of them are a full
ride. So while some of the bill is paid, not all of it is. Even if these players get drafted, they
aren't making significant amount of money right away, therefore they are not able to pay off their

loans. Morgan Stanley saw this trend and decided it was an area that they could help improve.
They started a loan program that was designed for student athletes. These loans are designed
to help the athletes transition from college to the pros, and are not to be used on any luxury
items, as the company monitors their spending to make sure they stay on the right path. Before
the NFL draft, players can apply for loans ranging from 60,000-75,000 dollars. If they are taken
in the top four rounds, they can increase their loan amount to 125,000 (p 34). Morgan Stanley
has reiterated that these loans are not a money maker for the company. Managing director
Steve Hawkins said that the payoff will come if the players sign on and become lifelong clients
with the organization. They present the program to over 25 college and professional programs,
as they try to raise awareness of the options that they offer.

NFL Halfway to Billion Dollar Goal

It is no secret that the NFL has been one of the most successful professional leagues in
the last decade. They have been growing in popularity which turns into more revenue. Six
months ago commissioner Roger Goodell announced that he expected the annual league
revenue to exceed 25 million dollars by 2027. That would essentially mean tripling the current
annual revenue of about 8 billion dollars or increasing the annual revenue every year by 1 billion
dollars (p 34). Many felt that this was a tall task. Executive Vice President of Business
Operations Eric Grubman has said that like all other business in America, the NFL is affected by
the dips and rises in the economy. In order for the NFL to reach Goodells goal they would have
to be almost recession proof, and that is just not realistic. He called the approach aggressive,
and said that instead of putting monetary value on a goal, they are focusing on growing their
brand globally, trying to become as big as the English Premier League or even consumer
product companies like Disney. Traditional areas of the game are difficult to grow, so instead
the NFL is focusing on adding value to those parts like adding experience to the premiere seat

pricing. There is nothing wrong with setting lofty goals but sometimes they can be too big and
can cause you to lose focus of what is really important.

Naming Rights Selling Fast

Another trend that has been heating up recently is naming rights. In the past a lot of
teams had just named their stadium after their team name (Yankee Stadium, Cowboy Stadium
etc). Lately however the movement has been turning towards companies making major
investments in the stadiums in exchange for having their names on the front of the buildings.
This has become quite the expensive endeavor, as some companies are paying upwards of 500
million dollars to have stadiums named after them (p 43). Some companies are even investing
in multiple buildings across different sports. Mercedes Benz just invested in the new Atlanta
Falcons new stadium, their second of the kind. Suntrust signed on to the naming rights of the
new Atlanta Braves stadium, in less than a week they had the contract signed and ready to go.
They also just agreed to the naming rights of the luxury boxes in the new Mercedes Benz
Superdome. Its hard to quantify marketing tactics, but the name is going to be seen, heard and
spoken so much that it makes it almost worth it. It also involves a 360 degree incorporation of
the brand in and around the stadium as well. Michael Newman, the manager at Scout Sports
and Entertainment says that there is an excess of research that shows that the connection
between naming rights and customer recognition has never been stronger. Naming rights
purchases are considered expensive but generally worth the investment. Unless the economy
takes another serious turn for the worse, the naming rights trend should be here to stay.

Sports Authority Bankruptcy Raises Questions About Mile High Naming Rights

Investing into naming rights is not only a huge undertaking for the teams, it is also a lot
for the companies that are fronting the funds. They pledge a lot of money into this one venture,
with the hopes that it at least produces as much of a payout that they invested into it. However
when this doesn't happen it becomes a problem. That is what is happening right now in Denver.
Sports Authority has held the rights to the name of the home of the Denver Broncos, the current
super bowl champions. However they have been having some major financial troubles and
have been forced into bankruptcy. This leaves the fate of the stadium at Mile High in jeopardy.
Sports Authority is actively trying to solve this problem by trying to reorganize their financials or
sell off before April. Should they choose to sell, the naming rights contract would most likely go
with the company to the new owners. Sports Authority and the city of Denver agreed to a
naming rights contract back in August 2011. Even among the chaos surrounding the
bankruptcy, the sporting goods giant has been making their payments to the city of Denver. The
next payment which is valued at roughly 3.6 million dollars isn't due until August, where they will
have until the 30th to make their payment (p 126). If they fail to do so, then the contract can be
terminated and the Broncos will be forced to move on to another sponsor.

Rebirth Of Daytona

NASCAR has been growing in major popularity over the last decade. Gone are the days
of associating auto racing with lower class individuals and a cheap alternative to spectator
sports and here are the days of corporate events and on track access from anywhere.
NASCAR has invested a lot of time and energy into making their tracks and experiences more
appealing to the general public. One of the biggest changes has come in the form of Daytona
Rising. This is an initiative that has set out to upgrade Daytona International Speedway into a
state of the art facility, capable of competing with those of the NFL. The project has spanned

three years and cost roughly 400 million dollars (p 42). Track president Joie Chitwood talked
about developing this plan and how when he brought it up to media outlets and investors and
they looked at him like he was crazy. People didn't think that spending that much money on
something that was not overly popular at the time was a good idea. Over time the investors
caught on to Chitwoods vision and the project grew from there. Chevrolet, Toyota and Sunoco
among others were on board with their checkbooks in hand. There were talks of tearing the old
track down and starting from scratch, but they decided that the building was too historic and well
known to get rid of. They instead decided to attach a 350 foot long sign to the exterior of the
track so that people can see it from long distances away. They have taken over the land across
the street and are planning on building a strip mall full of popular retail chains like Bass Pro
Shops and PF Changs, slated for a 2017 grand opening. They are trying to create the ultimate
destination spot, giving spectators as many things to do as possible within the area of the track.
They sold naming rights to different entrances and staircases all around the building. There are
now multiple levels to the track full of things to see including replicas of the most popular drivers
cars. Perhaps one of the biggest things that Daytona Rising accomplished was creating
desirable premium seating options at different levels above the track. They now meet the needs
of corporate events and individual ticket buyers. They completely updated everything about the
boxes from supplying more appealing food options, leather swivel chairs for race viewing, wifi
connections, plugs for mobile devices and so much more. Not all of the boxes are the same;
some of them can accommodate 12 people while some can hold 50. Lounge style boxes were
incorporated along with the traditional seats. Depending on the price point depends on what
types of amenities are available. It was a huge undertaking for Chitwood and his team, a risk
that sometimes felt like they had bitten off more than they could chew, but in the end they have
all said that it was more than worth it.

Who Is Next? Richmond, Phoenix Tracks Eyed for Upgrades

Now that Daytona has been updated, the management group has decided to turn their
attention to the other speedways in their portfolio. First on the list are Phoenix Motor Speedway
and Richmond International Speedway. Lesa Kennedy, Chairwoman of the ISC has said that
the plans for both of these tracks haven't been finalized yet. Both speedways are of interest to
the league though. Richmond is a unique area as it does not have any major professional
teams anywhere else near them, it gives the ISC a lot of options with what they can do to try
and get the fans to come out to the races there. There have been talks with the Richmond
Flying Squirrels the local triple A baseball team on potentially building a stadium on the same
property as the track. Phoenix on the other hand is actually part of a great sports market. A lot
of people tend to sleep on Phoenix as a sports city, but it is actually right up there with some of
the best and the track itself already harbors some unique characteristics, that could make it a
real jewel in the middle of the desert. It is still unclear as to how much money will be spent on
both of these projects, but one thing for sure is that it will not cost as much as the Daytona
project. The ISCs five year capital expenditure plan for 2013-2017 does not allow for more than
600 million dollars in spending during that time period, so they may have to defer some of the
major renovations until after 2017 (p 42). Even though the projects have to be delayed a couple
of years, just the prospect of improvements in the sport is enough to hold the fans over.

Colleges Cash in on New LED Inventory

Teams and leagues are constantly on the lookout for new ways to increase their revenue
streams. Usually trends start on the professional level, eventually making their way to the lower
levels. The latest movement to breach the collegiate surface is LED displays on basketball
stanchions. More than 40 schools have installed the digital boards, next to the infamous red
padding of the State Farm signs that sit behind all of the back boards (p 1). It may sound like

these boards are just another sign in a stadium full of advertisements but the key that makes
them so desirable is the visibility that they will have on tv. Television cameras will be able to pick
up on the colors better than normal signage with no backlighting. The arenas will also have the
ability to change the signs at any point throughout the given contest, maximizing brand visibility.
In the past the NCAA has restricted the use of LED displays because they considered them to
be a distraction to the shooters on the court. After careful consideration, the board members
decided to allow the signs barring the teams follow the list of guidelines that were created. In
order to install a sign the arena must ensure that the signs are only lit at 50 percent of their
brightness and must be at least 6 feet away from the baseline, among other rules (p 44). While
the boards were in use for all of the 2015-2016 season, they still are not allowed to be lit up at
any time during the NCAA tournament. Some schools purchase the boards directly and then
offer them to their prospective sponsors, while some companies are buying them and taking
them to the arenas and asking to have them put up with their brands on them. Creighton is one
of the most recent schools to invest in the technology and they have yet to release exact
numbers but representatives are saying that the school has already sold enough advertising on
it to make back their original investment and then some. No one knows exactly what the future
holds, but it looks like the entire stanchion itself could end up being digital, keeping in mind
NCAA regulations of course.

Korn Ferry, MLBAM to Shop Nats Naming Rights

One of the sport markets that took the biggest hits during the recession was the naming
rights market. Naming deals were selling for top dollar and following stock market crash,
companies were no longer willing to throw their money at something that may or may not stay

successful throughout such troubling times. Now however almost eight years later, the market
seems to have stabilized itself for the time being and companies are looking to get back into the
name game. That is why the Washington Nationals feel that the time is right to finally get a
name on the place that they call home. The Nationals moved from Montreal to Washington DC
in 2005 and in 2008 moved into their new stadium. Unfortunately the market fell right around
the same time and the team was never able to get a deal down. For almost a decade now they
have left the name as Nationals Park, a place filler until a name deal can be reached. Deciding
that now is the time, the Nationals have brought on Korn Ferry, an executive search and
advisory firm along with MLB Advanced Media to help them make a decision. Entering the
market comes at a good time for the Nationals as they have been playing excellent baseball the
last few seasons and currently have National League MVP and fan favorite Bryce Harper
patrolling their outfield. It is still early in the process, so the Nationals aren't really sure as to
who they are looking for in a partner. They do know that they don't want it to be just any
company, they want to ensure that whoever they make the deal with is willing to contribute and
grow in the same direction that the team is heading. Back when they were first shopping
around, the team was looking to get anywhere from 8-12 million dollars a year for the naming
rights and today it's looking like the market is about the same (p 4). While the Nationals have
exciting seasons ahead including hosting the All Star game in 201, they aren't in a huge rush to
wheel and deal. They are taking it day by day until they find exactly what they are looking for.

Temple Hires AECOM, Moody Nolan for New Stadium

As the growth of college football continues to trend upwards, more and more colleges
are looking to build their own stadiums rather than having to share with other teams. Temple
University in Northern Philadelphia is the next school up to take the stadium building plunge.
Up to now the Temple football team has been playing all of their games at Lincoln Financial field

home of the NFLs Eagles. Temple has a student population of around 15,000 and averages
around 44,000 per home game depending on the opponent (p 4). Administration is looking to
base their new stadium based loosely off of Florida Atlantic Universitys stadium in Boca Raton.
Temples obsession with FAU came when they played Toledo in the Marmot Boca Raton Bowl in
December and they received a tour of the facility. It has been open for five years and was
overseen by Craig Angelos, Temples current deputy athletic director. Moody Nolan was the first
design firm to be brought on to the job, they are currently working on plans for the indoor
practice facility. AECOMs Steve Terrill and Brian Pounds were hired soon after as they same
pair that designed FAUs stadium when they worked for a different firm. The FAU project cost
around 70,000 dollars and the budget for the Temple has a budget of 130,000 dollars coming
from mostly private funds with the sale of a bond (p 4). Much of the design plans haven't been
released yet, but what we do know is that the stadium is going to seat about 30,000 with 2,500
of them being club seats distributed between two premium levels will try to blend in with the
urban feel that the campus has going. Because part of the stadium will border one of the citys
busiest streets, the campus is also planning some retail space as part of the construction.

Raleigh Builds Sports Rep With Top Venues and Partners

When it comes to popular sport cities, it's always the same old culprits whose names
come up: Boston, New York, LA etc. However as the sport industry grows, more and more cities
are rising in the ranks, trying to establish their place in the sport city rankings. One of the cities
currently making the climb is Raleigh North Carolina. While Raleigh doesn't have a surplus of
professional sport franchises of it's own, it has been doing plenty of other things to make its
claim. What makes Raleigh stand out is the surplus of colleges and universities, venues,

municipalities and clubs that have hosted many successful events. We continue to establish
our brand regionally and nationally through our marketing efforts and by continually hosting
successful events. Thats the best way to spread the word-by proving it. says Scott Dupree the
executive director of the Greater Raleigh Sports Alliance (GRSA)(p 19). Some of the state of
the art venues include PNC Arena, Cary Tennis Park, USA Baseball National Training Complex
and more. One of the other positive qualities about the city is that it is already such a tourist
attraction. They have an abundance of hotels among many other activities that people like to
do. Not to mention the climate is ideal almost year round making possible for any sport to
thrive. Just recently Raleigh and North Carolina State University welcomed rounds one and two
of the NCAA mens basketball tournament for the fourth time in the last 12 years but the third in
the last four. The tournament was expected to bring in 10,000 hotel rooms and nearly 4.2
million in direct visitor spending (p 19). Then immediately following the tournament Raleigh will
welcome runners from all over the country for the Rock and Roll Raleigh Marathon and Half
Marathon. Both races have had great success in the past, with more than 8,000 runners from all
fifty states and ten different nations come out to participate accounting for more than 2.5 million
in economic impact on the weekend (p 19). The GRSA has events planned out through the rest
of the year looking to maintain and improve upon the success that they have had in the past,
furthering the climb up the sport city ladder.

MLBPA Assets Grow Ahead of CBA Talks

The MLBPA is the most recent entity to release their annual reports for the year 2015.
This year the document showed that the association's assets increased 21 percent from the
prior year up to 141 million which was the highest total since 2011 (p 3). The 2015 annual
report also showed that revenue from other receipts was at 44.2 million, which was down 10
percent from the previous year (p 3). In the past union disbursements to the players have

totaled around 5.3 million, averaging about 5,567 dollars a player, based on their service time.
This is down a significant amount, with players receiving nearly 8,000 dollars less than the year
before (p 3). Union reports are studied in intervals that coincide with the signing of the CBA.
Historically the union withholds dispersing licenses to members near the end of the collective
bargaining agreement. The current CBA expires in December. This is a process that has been
practiced under executive director Tony Clark. They use the money that they retain to prepare
for litigation or any other costs that could potentially arise from a work stoppage should another
CBA not be agreed upon. Labor talks between the union and the league have already started
and are expected to continue throughout the summer and into the fall. Should a new agreement
be signed, the players will receive their payments. Some of the leading licensees include Topps
trading cards, MLB Advanced Media and Sony Interactive Entertainment.

The Will to Make the Personal Investment

Many times in sport, the owners of franchises don't receive enough credit for what they
do in order to put their teams in a position to achieve success. Some leagues are easier than
others to get involved with in terms of financing due in large part to the amount of sponsors
available. One of the leagues that has been a little late to the sponsorship party is the the
Indycar circuit of the racing industry. In the past, owners have had to front a lot of money in
order to get their cars out on the track. This was the case for Bobby Rahal, part owner of Rahal
Letterman Lanigan racing. Following his 25 year racing career, he bought stake in this racing
team and paid a lot of his own money in order to keep the team afloat. He has always felt that
whatever you invest has the opportunity to pay off immediately or down the line, you will never
know for sure, it's just the nature of ownership in the sports world. Rahal says
It's a passion for me and others, that is why we are in racing. But you wouldn't want to
do that if you thought the series wasn't progressing and there wasn't opportunity to bring in

outside money at such a level that you wouldn't have to use any personal money to support it
(p 22).
The racing series is in fact progressing, in fact for the first time, Rahal will not have to front any
cash this upcoming season. This has a lot to do with the addition of sponsors that are putting
up the money for him. Steak n Shake is the primary sponsor for his racing team and this
season Hyatt and Fifth Third Bank will join them, keeping the team fully funded. Having this kind
of corporate popularity has the potential to open doors for others with less accessible funding to
dabble at the game that is team ownership.

MLS Seeks to Buy Back Stake From Providence

Back in 2002, when the MLS first came back into operation they were looking into any
way to make money and bring awareness to soccer in the United States. This is why the league
and its owners/investors decided to create Soccer United Marketing (SUM). They came up with
the idea soon after acquiring the broadcast rights for the FIFA World Cup. Once they had those
rights, they then used them to leverage ABC/ESPN into airing MLS games in addition to the cup
games. SUM is fully operated by MLS, and quickly became a profitable venture acquiring deals
with soccer parties both nationally and internationally. In 2011, SUM was looking to sell stake in
their business in order to help bolster the league's growth plans, reinvesting the majority of the
investments at the national level. Providence bought 25 percent stake for around 125 million,
valuing the entity somewhere around 500 million (p 9). In more recent years they have started
securing more high profile deals for their clients including a 720 million dollar, eight year deal
with ESPN, Fox and Univision for MLS and USSFs media rights and seven figure deals with
major sponsors like Coke, Audi and Heineken (p 9). Following those high value deals, SUM and
MLS feel that they no longer need the money from Providence and are looking to buy back all
25 percent of their stake. This is considered an early buyout by sports pioneers in the equity

business. Normally these types of deals occur more than five years out of the original signing.
However some are looking at the potential buyout as a positive sign for MLS and their
confidence that they can continue to be successful without the additional funding. It also speaks
a lot to the growth of soccer as a whole in the United States.

Early Money Keys NCAA New TV Deal

The college athletics market has increased exponentially in the last decade. This is a
trend that has not gone unnoticed and everyone is looking to get a piece of the action including
major cable providers. The NCAA mens basketball tournament is one of the most popular
events of the year and that is where the tv companies are focusing a lot of their energy. The
original deal that the NCAA had with Turner and CBS was set to go through the 2024 mens
basketball tournament with increases in payouts from 2017-2021 but flattening out to zero from
21-24 (p 6). Ultimately they wanted the ability to be able to decide whether or not to take the
increases as they came every year or to wait and spread the money out through the 2024
season. Nearly 90 percent of revenue from Turner and CBS goes straight to member schools,
not only in division I but II and III as well. Annual increases are important to NCAA schools
because many of them use the money to help grow their own budgets. Back in October Turner
and CBS came to the NCAA with a proposal that would extend the contract to 2032. The three
sides agreed to the basic terms in December, but still needed to make sure that the CBS/Turner
would own the rights no matter what distribution platform was popular at the time, how early the
NCAA could ask for their money and how that process would be structured. Other rights in the
deal remained the same; tv, digital and marketing/sponsorship for the mens tournament and
Turner and CBS will still maintain the same shared financial structure. Turner president David
Levy says

The NCAA tournament has exceeded our expectations on every metric. We are way
ahead of where we thought we would be six years ago and that's why we wanted to get this
done (p 6).
In the end the final deal was agreed upon in April during the Final Four in Houston with the help
of the dramatic championship game between Villanova and North Carolina. Final terms include
nearly 400 million dollars in additional revenue for the NCAA and CBS and Turner alternating
who gets to air the final four every year. Overall the ultimate goal was to make the deal
profitable for all and both sides are satisfied with what was agreed upon.

Chinas Growing Interest Translates Into More Spending

No matter how much growth it sees, soccer in the United States will always be at a slight
disadvantage. US soccer was late to the international party as the sport was popular every else
before it really made a splash in the states. This being said not only does US soccer have to
compete with other American sport leagues that have been around for many years, they also
have to worry about leagues across the world stealing their thunder. They seem to be doing
alright in keeping up with one of the biggest leagues in the world, EPL but now all of a sudden
they have another large market to turn their attention to: China. The Chinese market has
always been seen as a place to go and get talent for your own leagues, but now following rapid
development, they have created a national league of their own. The Chinese president has
even gone as far as securing the country a world cup bid further securing the idea that soccer is
there to stay. The teams in the newly developed league have paid over 350 million dollars in
transfer fees in just the last two months alone (p38). They have already started luring players
away from their current leagues with the offering of contracts that are roughly triple what they
are used to including the Seattle Sounders second best player Obafemi Martins. Beyond the
addition of personnel, Chinese sports properties are also quickly learning some of the business

practices that the European and American leagues have perfected, further securing them as a
serious international competitor. Market analysts don't believe it will stop at sports either. They
are predicting that the fashion, leisure and entertainment industries will grow just as fast making
China an international force to be reckoned with.

For Florida Company, A Story of Net Gains

One of the biggest controversies that plagued Major League Baseball last year was the amount
of protective netting that was laced behind home plate to protect fans from foul balls. There
were multiple cases where serious injuries occurred just beyond the reaches of the netting, and
that is why coming into this season the MLB made it mandatory for all teams to extend the
protection. While this rule change is making the game safer for fans, it is also particularly
beneficial for a baseball supply company. Every team in major league baseball had to extend
their protection, therefore they all had to order more netting. C&H Baseball was the company
that they looked to to help them out. Rob and Danielle Huff are a husband and wife team who
run C&H Baseball out of Bradenton Florida. They have worked with both major and minor
league baseball and college facilities for 25 years now.
We have been bombarded with calls, not only from major league clubs but minor leagues and
colleges all looking to do the same thing in expanding their nets says Danielle Huff It's not
unusual for us to have a rush this type of year and we are honored to do the work (p 4).
There has been no elaboration as to how much of a revenue increase the company has seen. It
has been stated that every project is different and can range anywhere from $15,000-130,000 (p
4). It is unfortunate that so many accidents occurred, but it is a good move on the MLBs part to
not waste any time in mandating safer conditions for fans.

As much as many people would not like to admit it, money does seem to be at the center
of any business. The same holds true for the sport industry. Many would like to go back to the
old ways of thinking when sports were something we partook in for fun, with no strings attached.
It has now turned into one of the biggest businesses in the world, with exchanges of more
money and people than many of us will ever see in our lifetimes. Money not only comes from
fans, it comes from professionals who are willing to invest their time and money and from
corporations who want to take advantage of the visibility of sports to get their product out. There
are a multitude of options for where money can come from and where it can go. Almost
anything can be attached to a sponsor, and the fans have more options than ever in terms of
memorabilia. Another financial issue that sport professionals face is the use of public money in
the construction of a new stadium, how much to rely on it and how to find a balance that work
for everyone. While some may not like the direction that the sport industry has headed, having
money be at the core is not necessarily a bad thing. More money means more experiences,
more options available to the consumer as a whole. It's no secret that your favorite team isn't
always going to win and that is why having the overall experience to back up the result of the
game is a huge advantage for everyone in the industry.

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