Column: Big-dollar, big-impact sports stories loom in 2013
Last year at this time I made five sports business predictions. Some I aced, others I whiffed on. This year, instead of engaging in the fool's game of prediction, I'll list the top sports business stories I'll be watching in 2013 and state my reasons why you should as well.
The NFL concussion lawsuits are a must follow. In addition to the billions-of-dollars at stake, the ultimate resolution of the consolidated cases involving thousands of former players and their families could change the game as we know it. The NFL failed to reveal - lied would be a more accurate characterization - much of what it knew about the effects of concussions, making liability a distinct possibility, despite the daunting burden of proof faced by the plaintiffs.
For different reasons, the O'Bannon case is another game changer. Former college players, going back as far as Bill Russell and Oscar Robertson, are intent on reclaiming control of their publicity rights from the NCAA. In addition, the plaintiffs are attempting to recoup a piece of the billions-of-dollars the governing body and its member institutions have accumulated over the decades they have used former players in their marketing endeavors. While a resolution of the litigation is a long way off, the revelations in the discovery stage will continue to be fascinating.
The NHL lockout will eventually end, but whether it comes in time to salvage the 2012-13 season is anyone's guess. During the past 20 years and three CBA's, the owners' negotiating tactics with the players have been predictable: Cry poverty, lock out the players, demand givebacks, and wait for the players to cave. This time will be different. With former MLBPA executive director Don Fehr leading the union, the players are unlikely to succumb to pressure from the owners. Hockey owners should learn from their MLB counterparts. After suffering eight work stoppages between 1972 and 1994, management realized it behooves everyone to form a partnership with the players. In baseball, the result has been two decades of labor peace accompanied by unprecedented financial growth.
Two soccer stories worth following are the effect David Beckham's retirement will have on MLS and the success, or lack thereof, of the third reiteration of women's professional soccer. Beckham's six seasons with the L.A. Galaxy were punctuated with back-to-back championships, but his major accomplishment was making professional soccer relevant in the U.S. His signing in 2007 had more to do with star power and marketing than it did with talent. And Beckham delivered, filling arenas around the country. Will the league continue to prosper in his absence?
And whither the new women's professional soccer league? Previous incarnations have failed, abysmally. But the new league will have something its predecessors did not have: The backing of soccer federations in three countries, the U.S., Canada and Mexico.
The Dodgers are on the cusp of a television deal with Fox Sports that will likely net the team a minimum of $280 million per year. If you're counting, only five MLB teams gross more than that figure in total revenue. The team is attempting to structure the deal in a manner that would shield approximately $200 million per year from revenue sharing.
Generally speaking, 34 percent of local media rights are subject to revenue sharing. However, teams with their own Regional Sports Networks can avoid paying their fair share by having the RSN purchase TV rights from the team for a fixed sum. Any revenue from advertising and subscription fees above that amount isn't part of the revenue sharing formula. In effect, teams are paying revenue from one pocket to the other. The Dodgers are trying to convince MLB that their agreement with Fox isn't a guarantee, but a revenue sharing arrangement subject to risk. A final decision will not only impact the revenue sharing pie but may set a precedent for other clubs to follow.
Dale Earnhardt Jr. is the most popular driver in NASCAR and a significant cog in the sport's marketing efforts. In 2012, he became as relevant on the track as he has been off it. However, a late season concussion prevented him from competing for the championship. Will this be the year he wins his first title?
Those are some of the key sports business stories I'll be following in 2013.
Jordan Kobritz is a former attorney, CPA, and Minor League Baseball team owner. He is a Professor and Chair of the Sport Management Department at SUNY Cortland and is a contributing author to the Business of Sports Network. Jordan can be reached at firstname.lastname@example.org