EPL TV Rev Sharing Idea Could Work

Last week English Premier League (EPL) TV revenue figures showed how the league distributed the record $1.6B it brought in this season. The way I understand the system, each team receives a flat fee as part of the negotiated television contract. Then teams receive additional funds based on incentives, such as national television appearances and related success factors. Sports leagues don’t want to take lessons from the EPL to promote competitive balance or salary structure, given the top four teams annually dominate the league and buy the best players. However, if applied in a different manner the revenue sharing idea has merit.

Recently the NBA announced it would increase the amount of money in the revenue sharing pool next season. The league uses a complicated formula produced by McKinsey consulting to distribute money to teams that qualify. In other words, a team cannot simply cut costs, not try, then pocket the money. As revenue sharing becomes a more prominent part of almost every sport, these checks and balances are crucial.

Applying the NBA model to TV revenue is interesting. League’s could start by setting aside a percent of the annual broadcast revenue to be equally divided among teams. The remaining money would then be allocated based on an incentive program, in one of two ways.

The league could use an outside consultant, such as McKinsey, to create a complex formula that rates teams on a number of various metrics that take into account financial need, business model implementation, marketing success, and competitiveness, to name a few. The premise is to determine how much a team is doing with what it has to work with, and how well it’s executed. Based on this formula, teams are ranked, and receive a percentage of the remaining money.

A second way is to take the remaining league TV revenue, and split it into different categories. Put a certain percentage towards the financial need teams, another portion to marketing efforts, and so on. Then rank the teams based on each metric, and award a percent of the revenue for that metric to each team accordingly.

The goal is to reward teams that do well and punish teams that don’t. Obviously, it needs to go beyond a simple win-loss analysis. If both the Twins and Yankees earn playoff berths with 90 wins, the Twins should rank higher in earning the shared revenue because they will likely have done more with what they have to earn those wins than the Yankees. Likewise, if a team rolls out a new marketing campaign and sees a 10% increase at the gate as a result, they should be rewarded for the grassroots efforts. While a team in the NBA like Memphis that gave away its only superstar should not simply receive extra revenue because it divulged its greatest asset in a cost saving move.

Clearly, more analysis and research is required to develop the right system, but performance based incentives for shared revenue is one way to reward teams that need additional revenue and work hard for it, while avoiding hand outs.


Piazza Rides Into the Sunset

Twenty years after signing as a 62nd Round LA Dodgers draft pick, a favor by family friend Tommy Lasorda, Mike Piazza quietly retired yesterday as a sure fire first-ballot hall of famer. His final two seasons spent in relative anonymity in Oakland and San Diego, arguably the greatest hitting catcher ever finishes with a .308 career average, 427 homeruns, and 1335 RBI’s.

For full disclosure, I’m a Yankee fan – always have been, always will be. Still, Piazza captivated me from the day he arrived in NY in May 1998. With the Yankees beginning what became a record-setting season, the Mets stole the spotlight, pulling the trigger on the blockbuster trade with Florida on a Thursday afternoon. Piazza’s first game still stands out, a glistening Saturday afternoon at Shea against Milwaukee. Stepping in to a king’s welcome, the savior scorched a line drive to the right center field gap with his vintage swing featuring the long follow through. The ball jumped off his bat, hit so hard it took a bounce and bolted toward the wall, splitting the outfielders. An RBI double, Piazza stood on third after the throw home. Not a run of the mill double though, a prodigious gapper – thus began the Piazza era.

Signature home runs, start with the three-run blast in Houston later that year as the Mets made a stretch run for the playoffs. Then there’s the blast he basically hit out of Shea Stadium against the Yankees, of course the dramatic slam against the Braves in the first game following 9/11 to cap a miraculous eighth inning comeback. The one that got away of course, was the long fly out to center that ended the 2000 World Series, a few feet from adding to the legend.

The 12-time All-Star put the Mets back on the map during a time when the Yankees were dominating baseball, and he did it with class. Piazza carried New York’s second-team to the playoffs in 1999, and the World Series in 2000. He brought the fans back, which certainly helped get Citi Field approved and built. Unlike today’s Met stars, Piazza had a good relationship with the media, stood up to constant criticism of his defense, answered the questions after tough losses and big wins, hard to find anyone with a bad word to say.

The numbers speak for themselves. By far the most home runs for a catcher (396), he redefined the position. Only eight catchers have posted a .300 average with 30 homers and 100 RBI in a single season, Piazza did it six times. Of the others, only Roy Campanella did it more than once (3). Constantly chastised for his below average throwing arm, Piazza worked hard on his defense to become a solid catcher. Former pitchers praise his game-management and pitch selection skills, likely to be overlooked by his offensive prowess.

The 1993 NL Rookie of the Year wanted to continue playing, but remained unsigned this season. Not exactly a storybook ending to a historic career, yet more realistic and appropriate than suddenly hitting over 40 home runs as he approached age 40, like many of his contemporaries. When a player like Piazza rides into the sunset, its a good time to reflect and appreciate the fact that we watched one of the great baseball players ever, both on and off the field.

Cooperstown in five years – book it!

Joba Fist Pump

David Delucci doesn’t like it. Frank Thomas could care less. Yankee fans say its pure emotion, Yankee haters claim its bush league. One thing seems clear, the Joba Fist Up is here to stay.

After a key strikeout of Dellucci in Thursday’s game to end the eighth inning, Chamberlain gave an emphatic fist up, yell, and half pirouette. Two nights earlier Dellucci deposited a Chamberlain fastball into the right field seats to beat the Yanks. He felt the mound histrionics on Thursday were retaliatory, and blatant showmanship.

Many agree, arguing, a mid-May Thursday afternoon game, with a 3-run lead does not warrant that type of emotion. Those same people that lit up talk radio and print media after the game, were talking about how important this game was for the Yankees, following two straight losses, with the up and down Mussina on the mound, before heading to a weekend series where the legendary Kei Igawa would take the mound. Somehow the game went from important to a ho-hum when someone showed emotion, and played like it was important.

The fact I’m even writing about this is almost comical. How many pitchers, especially often eccentric relief pitchers, put on a mound display after clutch strikeouts. Papelbon and Franky Rodriguez to name a few of the more prominent. Tom Gordon points to the sky after he completes an inning, does that get under anyone’s skin? Ugueth Urbina used to put on a complete show, worthy of judges and a Dancing With The Stars appearance. Is Manny Ramirez still watching the last home run he hit, or is it finally time to break into his walk around the bases – calling it a trot is a slap in the face to leisurely runners across the world.

Why pick on Chamberlain? Because he’s a Yankee – markedly, easy targets – or because he’s not Mariano Rivera, the stoic, emotionless robot on the field that he’s most compared to. Joba’s not calling out people in the media, he’s not pointing directly at other players, or staring them down, his antics are not directed at other players. Fact is, the media and fans have built up the phenomenon that is Joba Chamberlain and the 21-year-old is feeding the hysteria.

Maybe ten or twenty years ago dancing off the mound is unacceptable, not anymore. I prefer old-fashioned baseball, but if you want to start cleaning up showmanship, Joba is at the end of a long line of culprits still awaiting criticism.  By the way, did Manny start running yet?

Rays Spending Wisely

When Tampa Bay sent uber-prospect Evan Longoria down to AAA to start the season, eyes rolled. Here we go again, Tampa acting cheap by holding back players in the minors to delay arbitration eligible years, and eventual free agent years. They did the same with Delmon Young a few years back. A tactic that only creates animosity with the player, and creates an image for the entire league about what type of franchise the Rays are.

Surprisingly, by April 12th Longoria found himself starting at 3B, batting third, against the Baltimore Orioles. By the end of the week he had a six-year contract in hand. Talk about turning over a new leaf. The same team scoffed for preventing players from coming to the majors so they can avoid doling out the cash gives an unproven prospect a six year contract in under a week.

The 6-year, $17.5 million pact gives Longoria guaranteed money right through his arbitration eligible seasons, while Tampa locks in a potential star at what may look like bargain basement annual salaries by the time Longoria reaches years five and six, each valued at $11.5 million. Ryan Howard recently garnered $10 million in arbitration, and he’s not even close to year 5 and 6 yet. Not to put that expectation on Longoria, widely considered the top prospect in baseball, but if he evolves into the player most expect the Rays will surely be paying below market value on this contract.

After years of bad free agent signings – remember Vinny Castillo and Greg Vaughn – new owner Stuart Sternberg and General Manager Andrew Friedman finally have the Rays headed in the right direction. In addition to Longoria, Carlos Pena is signed for three seasons, up and coming pitcher James Sheilds is locked up for four years, the club holds options on Carl Crawford and Rocco Baldelli, Japanese import Akinori Iwamura is signed through 2009 with a 2010 club option, and last years top draft pick David Price has a six year deal. Next on the list CF BJ Upton and lefty starter Scott Kazmir, both approaching free agency. With a solid, young nucleus in place, combined with an influx of young pitching on the way from the minors, the Rays are ready to compete.

At slightly over $43 million, Tampa’s 2008 payroll ranks next to last in baseball, only above the Marlins – not much of an accomplishment – but moves like the Longoria signing prove Tampa is committed to winning and heading the right direction. Following the model Cleveland used in the mid-1990’s, buying out the arbitration years on young players to control costs while keeping a young team together, Tampa has taken a calculated risk with a high reward. They are well-positioned to improve each year, possibly compete for a playoff as soon as next season.

Stadiums Not the Answer To Save A Franchise

As Tampa Bay and Florida petition for new Major League stadiums, claiming it’s the only way for their respective franchises to generate the revenue to compete, both teams need to reevaluate the misconception that a new stadium alone will lead to increased attendance.

Of the 9 teams that opened new stadiums since 2000, each team benefited from an initial attendance increase, however only the San Francisco Giants – thanks to a World Series appearance and big box office draw in Barry Bonds – and the 2005 champion St. Louis Cardinals, have avoided at least one season of significant attendance decline. Stadiums are only new for so long, fans attention quickly shifts back to the product on the field to make buying decisions.

To underscore that point, every World Series participant since 2001 enjoyed at least a 15% attendance surge the following season, unless that team was already over 90% capacity. The 2003 Yankees, with only a 6.57% increase and still strong 83% capacity in 2004, are the only outlier. But New York had played in six World Series over eight years at the time, so fans expected success.

Similarly, teams that increased their win total by a double-digit percent during that period witnessed a similar uptick at the gate in either that same year, or the subsequent season. Though most people no longer consider US Cellular Field in Chicago or Toronto’s Rogers Centre destination stadiums, each club saw an uptick in attendance thanks to winning seasons, while PNC Park in Pittsburgh, arguably the class of the recent retro stadiums, struggles to beat the attendance numbers from the final seasons at antiquated Three Rivers Stadium.

Teams relying on new stadiums as the primary means to compete with big market teams should use Milwaukee and Detroit as case studies. After opening Comerica Park in 2000 with a 19.5% attendance increase over the final season at Tiger Stadium, and over 70% higher then the penultimate season, the Tigers lost those ticket gains in three seasons by averaging 107 losses, and making a run at the single-season record for losses. Only after restoring its on-field product to respectability did Detroit regain enough fans to draw over 2 million. An American League pennant in 2006 led to eclipsing 3 million at the gate last season, a franchise record. The Brewers have a followed a similar curve since opening Miller Park, initial hype increasing ticket sales, a retreat back to previous stadium attendance levels due to poorly performing teams, before a steady increase correlating with more wins.

Both teams needed new parks and benefit from the advantages, but neither team improved its record, or attendance, solely based on a new stadium infusing revenue. In fact, attendance increased because improved management and player development delivered young, inexpensive stars to the major league team – neither team doling out excessive contracts until Detroit signed Miguel Cabrera this past off-season. Similarly, the Cleveland Indians laid the groundwork for their playoff teams of the mid-1990’s prior to Jacobs Field opening in 1994. Cleveland opened the park with a World Series contender.

In the NBA, where arenas are less of a differentiating factor for consumers, the same fact holds true. Boston and Portland experienced the biggest increase at the gate this season compared to last. Both also made substantial leaps in the standings, the Celtics setting a record for the biggest increase in wins from the previous season.

New Stadiums Still Worth It

Despite new stadiums not guaranteeing sustained attendance increases, they will still benefit a franchises bottom line. Almost all new facilities sacrifice capacity in exchange for more luxury boxes and suites equipped with various amenities that older venues did not have. More amenities lead to higher prices and more sales of suites, which both increase team revenue, one of the most compelling arguments owner give for wanting a new stadium.

The regular stadium seats also benefit from various amenities at modern ballparks, particularly improved views closer to the field, new scoreboards, and various attractions within the concourse. These factors justify ownership raising ticket prices when the team moves, therefore even if attendance falls back to previous levels the team still rakes in more profit because it’s selling the same amount of tickets at higher prices.

Throw in the additional sponsorship opportunities at new facilities, including naming rights, and franchises certainly benefit from new stadiums. However, ownership frequently takes on substantial debt, even with publicly subsidized projects, therefore they need to sustain that additional revenue to cover expenses and raise capital to invest in improving the team.

Where Teams Can Improve

Teams that effectively build strong brands, not tied to a particular player or performance, can withstand a down year without impact at the gate. To no surprise, the Chicago Cubs and Boston Red Sox maintain close to 100% capacity irrespective of fielding a playoff team. The Dodgers perennially fill over 70% of capacity without a playoff win since 1988, although they often field playoff caliber teams.

It’s hard for younger franchises to duplicate the history behind the Cubs and Red Sox, but teams need to use that first season at the new ballpark to make a strong impression on fans while they have their attention.

A new stadium is an opportunity to redefine the brand, create a unique experience, give fans a reason to come back to the stadium, regardless of the outcome of the games. That’s why it’s perplexing that the Washington Nationals rushed to open their new stadium, with a major parking problem, an unsettled concessions situation, and kinks in the overall stadium operations, witnessed by scoreboard malfunctions during the second game. Teams, especially those with recent attendance problems, must be customer service oriented and pay detailed attention to creating a positive fan experience in year one of a new stadium or fans will not return until the team improves.

This season provides a few key stories for teams either opening new ballparks, or proposing to – Minnesota, Oakland, Tampa Bay, Florida. We will find out how strong of a brand San Francisco built in its first season without its big drawing ticket, Barry Bonds, or a competitive team. Same in Houston, who lost future hall-of-famer Craig Biggio, and no longer have a team expected to contend. How will the Nationals, lacking any star power, draw in their inaugural season at Nationals Park, and will fans keep coming despite the problems?

Wins Drive Baseball Attendance, Not Ballparks

Keep an eye on the attendance situation in Washington, the only Major League Baseball team to open a new ballpark this season. They opened the stadium to a packed house on National Television – after begging ESPN to air the game – with the President on hand. Due to a scheduling quirk the Nats did not play home game #2 until Monday night, in front of only 20,487 fans, roughly half of capacity. New stadium hysteria eventually wears off, but after one game – that’s bad news.

Grant it, an early April Monday night against the minor-league Florida Marlins, who really wants to watch that game. Washington made a mistake rushing construction to meet the Opening Day Deadline, leaving a parking nightmare, along with numerous ballpark malfunctions, according to many first hand accounts. Not a good way to win over fans for a team yet to be competitive since moving to Washington. Though better weather and better visiting teams will bring more fans, don’t expect sellouts at Nationals Park this season. Fans want to see good teams. Teams usually get at least one year of attendance paradise with new stadiums (see Pittsburgh) before returning to form. Will Washington fans even provide that?

Down the Beltway, Oriole fans have finally turned a cold shoulder to Peter Angelos. Experts pick Baltimore to finish last in the East, behind Tampa, and compete for the worst record in the league. Since Opening Day attendance has failed to eclipse 20,000, marking record lows at Camden Yards, one of the best pure baseball parks around even 17 years after opening. San Francisco, another team undergoing a major rebuilding process, and Baltimore, provide two interesting case studies for attendance. Two premier stadiums that historically sold out, though Baltimore’s attendance is in a multi-year decline, home to two teams projected to eclipse 100 losses. Will the stadium alone draw fans, or will team performance lead to half empty state of the art stadiums? If the latter holds true, will new parks in Florida or Tampa really make the teams more competitive, or will new ownership?

An unscientific look predicts team performance drives attendance. Jacobs Field emptied out when the Indians emptied the roster, same with Safeco in the post-116 win era, while plenty of tickets remain available in Pittsburgh, the class of the new stadium wave, and Cincinnati.

When team’s falter the value of service, innovative ticket packages, good marketing, and overall ballpark enjoyment and convenience become paramount. Washington may have missed the boat on that. This season we’ll find out how well San Francisco did in those areas, or if Barry Bonds steroids persona will have an impact.

[Note: A more detailed analysis of attendance trends and W-L record will follow. ]

Mets Worst Nightmares Coming True

Blinded by the Johan Santana deal, everyone in New York thinks its a foregone conclusion the Mets will at least win the division, if not the NL pennant, without much competition. After a historic collapse, Omar Minaya patiently waited to pull off a heist, grabbing Santana for an array of mid-level prospects. However, that bold move, without question a great decision given the circumstances and need, hides a handful of risky contracts and weaknesses on a flawed Mets squad.

57 pitches into his comeback season, Pedro Martinez walked off the mound, about to expose one of those Met weaknesses, starting pitching depth. Prognosis – out until June, which may really mean July in Martinez rehab terms. Pedro was the big question mark, if he returned to a semblance of his former dominating self, behind Santana in the rotation, the Mets had four solid starters. Without Pedro, the pressure mounts on Maine and Perez, and an iffy 5th starter situation becomes a serious problem as that role moves into the fourth slot. El Duque is already on his first of multiple hiatus’ this season. Running Mike Pelfrey out every fifth day, or Nelson Figueroa, does not lend itself to long losing streaks. While you watch Pelfrey struggle, take a look at how effective Brian Bannister is in KC, a pitcher Minaya basically gave away last off season.

Martinez brought pitching concerns to the forefront, lineup problems started in Spring Training. Reyes, Wright, and Beltran are elite offensive players, take them as given for MVP type production – if not, Willie can start looking for a new job now. Behind them, Carlos Delgado is the offensive equivalent to Pedro Martinez. An aging star who struggled to produce and battled injuries last season that the Mets are counting on.  Already battling a bad hip in the spring, about to turn 36, Delgado is a high risk proposition from both a health and production stand point. After Delgado, the lineup reads Ryan Chruch, Brian Schneider, and Angel Pagan or Endy Chavez, in front of the pitcher, perhaps one of the weakest bottom four in baseball. Can you say rally killer?

Moises Alou you say. Already on the shelf. Yes, he will be back, he’ll hit .350 for a month because he is a great hitter, lull everyone to thinking the Mets lineup problems are resolved, and just when you start to feel confident, he’ll pull up lame again and disappear for two months.

Signing Luis Castillo for 4 years will haunt the Mets. Never more than a glorified slap hitter with some speed and above average defense, the Mets made a mistake committing to him long term. Resting a season of hope on Pedro, Delgado, and Alou is not smart management. The Mets left themselves vulnerable to risk in too many areas, and may end up paying for it. Philadelphia and Atlanta are not without problems, but unless an unsung starter emerges or Delgado and Alou manage to both stay healthy and put up numbers reminiscent of their primes, the Mets should gear up for a battle.