Should Sports Change Revenue Sharing to TARP-like Program?

Last week’s SBJ cover story on the state of Detroit’s sports teams battling through the recession further illuminates how hard the recession has hit that part of the country. Sports teams are the least of Detroit’s problems, yet they remain one of the few refuges for an area fraught with unemployment and failing businesses.

Three key points I took away from the story: 1) Detroit has phenomenal sports fans, it’s aggregate per-cap attendance across all four major sports as a testament; 2) for the most part, the city is blessed with top ownership (we know about the Lions), Davidson and Ilitch have put wining teams on the field, done right by the fans, and tried to do right by local business; 3) the recession is stronger than both #1 and #2, which will make it difficult to sustain these teams over the next decade.

Ticket sales and sponsorship revenue are the most critical and most volatile revenue streams for teams. The economy has put both under significant pressure in the Detroit market. Teams face a steeper trade-off in ticket sales vs. price reductions than most markets and its key sponsors lost significant marketing budget. Lions aside, since the NFL shares revenue in a more equitable manner across the league, each team expects a significant revenue drop this year, which immediately makes it more difficult to field a championship-caliber team.

Looking further down the line, the auto industry will never look the same, and the future of these key sponsors and a critical regional source of employment is in jeopardy for the long-term. That said, will Detroit teams require, and should they receive a boost from the league’s central pool, similar to the government backing its local companies.

From a pure market size perspective it’s a border line top 10 DMA (11 to be exact), but the unemployment numbers, per capita income, and discretionary income numbers make it a candidate for help. Should leagues focus more on helping these owners, who have proven they invest in the team, have loyal fan bases, and can be a key market for leagues than the low-income owners that reap the benefits of revenue-sharing, yet do not add much value to the league.

Putting absolute numbers aside, using forward-looking marginal revenue metrics, leagues should consider if adding each dollar they subsidize Detroit with adds more value to the league and other teams than each dollar MLB subsidizes Pittsburgh or Florida, for example. Market size, ownership wealth, and absolute revenue numbers don’t encapsulate who most needs revenue sharing. Leagues should visit which teams need it at the margin, and how much value the investment (and it is investment by the other teams) can add to the league at large. Detroit – along with other traditional sports cities in struggling regions, are good candidates to consider in the short-term.

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Celtics Become Road Warriors

Venues change, series change, but the recipe to win does not. It’s very basic, the team who’s role players and bench make the biggest contribution, that has a decided three point advantage or rebounding edge, and can hit big shots to stop a run wins the game. Home, away, higher seed, lower seed, MVP, Coach of the Year, no matter what. Boston did all of the above Saturday night in a dominant 94-80 win in Detroit, that elusive first playoff road win.

Boston’s second unit won this game in the first quarter. The Celts started with 11 straight points out of the gate, and led 15-4 at the 5:34 mark of the first. A minute prior to that Kevin Garnett exited with two early fouls, followed to the bench by Ray Allen a minute later, also with two quick ones. Led by Rodney Stuckey, Detroit reeled off 13 consecutive points in a four minute span. Already up against the wall after losing at home in Game Two, facing the pressure of not having won a road game all postseason, with two of its three stars on the bench in foul trouble, having handed away an 11 point lead, Boston easily could have wilted right here. Likewise, Detroit had a chance to stomp them.

Instead, the Boston reserves – James Posey, Sam Cassell, and Glen Davis – led a 10-0 run to close the quarter. Boston led 25-17 and never looked back. Detroit made runs the rest of the game, but right there the game had a chance to either way. Boston not only responded, its role players, who failed to show up in Game Two , responded.

Detroit’s offense played abysmal. Out of sync consistently, the Pistons had chances to cut into Boston’s lead, which bloated to 18 at halftime and stayed in double digits most of the second half, but could not string together good offensive possessions at any point in the game. Billups and Prince killed the Pistons in different ways. Billups, perhaps still hampered by the hamstring injury that forced him to miss a game in Orlando last series, sat for long stretches of the game as Stuckey stepped up and played a great game in his stead. However, when Billups played he hurt the team. Saunders inserted Billups with 5:30 left for a last desperation run. After the Pistons trimmed the lead to 9 and made a defensive stop, Billups immediately turned the ball over. He then missed a 3-pointer and another jumper on two of the next three possessions. That turnover and missed three killed Detroit’s chances. Either possession would have Boston under pressure, something they have not responded to well on the road late in games. Blame Saunders for looking to Billups late in the game after sitting most of the way, blame Billups for not hitting the big shot, and perhaps not looking for teammates that had better nights than he.

Prince flat out stunk. No injuries, no excuses. Detroit’s equivalent to Manu Ginobili, Prince is a spark plug that can create matchup nightmares for opponents, and cause disruptions on defense. He only caused nightmares for his own team. 2-11 shooting and four rebounds. While role player performance separates teams, its assumed that the stars will play well. Neither Billups nor Prince stepped up.

Credit Boston for hitting a few big shots, and more importantly grabbing six offensive boards in the fourth quarter. Each time Detroit made them sweat, someone stepped up with a big shot – even Ray Allen found the net late in the game. The offensive rebounds though, broke Detroit’s back. When you are trying to come back from a double-digit deficit against a quality team, nothing is more deflating than making a defensive stop and not grabbing the rebound. Getting two consecutive stops is extremely difficult. More importantly, Boston ran more precious seconds off the clock each time.

And how can Piston fans boo throughout this game. The crowd marred a potentially historic night with the city hosting the Stanley Cup Finals, NBA playoffs, and a baseball game simultaneously. Detroit’s performance warranted the boo birds after the game, or late in the fourth, but booing the team in the first half and third quarter, the game still within reach, is unacceptable. A day ago they controlled the series thanks to a big road win. Talk about fickle.

Monday night Detroit is back up against the wall, a familiar position. They trailed Philadelphia 2-1 in the first round before three straight wins. If Billups is hurt he needs to sit, if not he needs to come to play like a star. It wouldn’t hurt if Rasheed Wallace stepped up and called for the ball in a big spot either. He plays good, but not up to his potential. Wallace is capable of taking over a game offensively, what better time than now.