Cornell University’s ILR School
Sports, Inc.
Can the PGA Tour Succeed Without Tiger Woods At the Peak of His Abilities? Pages 10-12
ILR Sports Business Society - Spring 2015 - Volume VII, Issue 2
The President’s Greeting Taylor Kosakoff ’16
The Cornell ILR Sports Business Society presents you with our semiannual magazine, Sports, Inc. I would like to thank the Editor-in-Chief of the magazine, Jason Lefkovitz, for making this publication possible. This magazine embodies the efforts of our writers, editors, and E-Board to explore the intersections between their academics and today’s key sports business issues. Sports, Inc. is one of many exciting aspects of the Cornell ILR Sports Business Society. Dedicated to “Advancing the World of Sports,” the club strives to expose its members to several aspects of the sports industry and to enable these students to inject their voices into the sports business forum. Our organization attracts alumni and professionals in the sports industry, who share with our members their professional experiences and their views on the current state of sports business. Additionally, the club features a blog, which creates several weekly postings, and a radio show. You can find out more about the Cornell ILR Sports Business Society on our website: cornellsportsbusiness.org. Our organization appreciates your interest in reading our magazine. We hope you enjoy the hard work from our contributors!
Executive Board Magazine Staff Editor-in-Chief Layout Editor Writer Writer Writer Writer Writer Writer Writer
Jason Lefkovitz ‘16 Sabrina Smith ‘18 Andrew Distler ‘15 Evan Lefkovitz ‘16 Josh Klein ‘18 Amanyi Richardson ‘17 Karthik Sekharan ‘17 Damian O’Sullivan ‘17 Brittany Biggs ‘18
The ILR Sports Business Society, an independent student organization located at Cornell University, produced and is responsible for the content of this publication. This publication was not reviewed or approved by, nor does it necessarily express or reflect the policies or opinions of, Cornell University 2 or its designated representatives.
Advisor Kevin Harris President Taylor Kosakoff ’16 Vice Presidents: Magazine Jason Lefkovitz ’16 Radio Ben Denson ’16 Blog Adam Malz ’16 Events Dan Cappetta ‘15 Marketing Zoe Forster ’17 Alumni Affairs & Career Services Sarah Gilman ‘16 Operations & Finance Ethan Cramer Gibbs ’17
Sports, Inc.
The Inc.’s INK Volume VII, Issue 2: Spring 2015
Can the NHL Become a “National Sport?”
By Andrew Distler
StubHub, Ticketmaster, and the Future of the Sports Ticket Marketplace By Evan Lefkovitz Without its Tiger, the PGA is Losing its Roar
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By Josh Klein
Pushing Forward: MLS, The New CBA, and the Future of American Soccer By Amanyi Richardson Signed, Sealed, Delivered: the Historic Television Contract with the NBA By Karthik Sekharan The Connor McGregor Effect: the Impact of the UFC’s Rising Star
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13 16 18
By Damian O’Sullivan
Equal Pay for Equal Work: the Rise of Women’s Tennis and Its Effects By Brittany Biggs
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Can the NHL Become a “National Sport?” Andrew Distler ‘15 Introduction In February 2015, Super Bowl XLIX became the most watched television event in American history, with almost 120 million people tuning in to view the matchup between the Patriots and Seahawks.1 Thanks to aggressive marketing, a powerful television strategy, and fan participation that includes fantasy football and betting on spreads, the National Football League has morphed from a regional into a national franchise. Fans will often watch any game, regardless of which teams are playing. The National Basketball Association enjoys a similar kind of popularity. Superstar players such as LeBron James and Kobe Bryant are not only huge draws in terms of TV ratings, but they also have become cultural icons that transcend sports. However, despite the national popularly of the NBA and NFL (and to some extent Major League Baseball), the National Hockey League still remains a “regional sport.” It enjoys widespread popularity in only a few areas in the
United States, mostly in cold-weather regions such as New England and the upper Midwest (particularly Minnesota). By many measures, including revenue and television ratings, the NHL lags behind the NFL, NBA, and MLB in large part because it isn’t as well known on a national scale. For the NHL to become a “national sport,” or one in which fans are willing to watch any game regardless of which teams are playing, the league must make the game more accessible. In this article, I will discuss and analyze several potential solutions, including making the game more accessible and cheaper for kids to play, and ways in which the NHL can better market its players and big games. Is Hockey Not Accessible Enough? For any sport to gain more popularity, it is crucial to appeal to younger fans. Not only can young fans introduce the sport to their friends and parents, but they are also future consumers, who can pass down their passion for the sport to their own children. In many ways, the NHL already does a great job of reaching
Photo courtesy of the Washington Post
The NHL, led by Commissioner Gary Bettman, must consider an array of strategies to increase the sport’s popularity.
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Sports, Inc.
out to younger fans. Most teams are highly involved in their cities’ youth hockey scenes, with many, such as the Detroit Red Wings and Chicago Blackhawks, organizing and sponsoring youth hockey teams. The league also has an official youth development program, Hockey is for Everyone (HIFE), which aims to give as many kids access to hockey as possible, especially those in underserved communities. However, even with these league and team initiatives, hockey is a very difficult sport to get children to play. One major hurdle for potential youth hockey players is cost. According to a 2012 Forbes article, spending on rink time and new equipment can reach thousands of dollars per season. The cost is especially steep in warmer parts of the country, such as the West Coast, where playing in indoor rinks is the only option. These kinds of obstacles aren’t as prevalent in other sports. Basketball and football are relatively inexpensive, primarily requiring space in either a park or a gym. Also, middle and high schools are usually more than willing to cover the costs of equipment and space rental for basketball, football, and baseball teams. According to the National Federation of State High School Associations (NFSHSA), over 18,000 high schools have basketball teams, while over 14,000 have football teams. However, high school hockey does not enjoy nearly the same benefits, due mainly to the cost of equipment and space to play, as many state high school athletic associations don’t even sponsor hockey. Unless a child’s family is able to handle the financial necessities of youth hockey, or the child lives in an area that has an abundance of frozen surfaces on which to skate, it is very difficult for a child to play hockey. And without widespread opportunities to play the sport, it may be difficult for the NHL to become more popular on a national level, for playing a sport can help to foster a child’s interest in that sport at a professional level. Do Kids Need to Play Hockey to Become Hockey Fans? However, even though playing
Photo courtesy of nhl.com
hockey can be a financial and The marketing of NHL stars like Sidney Crosby can’t be the only method to increase the NHL’s logistical burden for a lot of popularity, for such stars have a relatively limited impact on the game as individuals. kids, that doesn’t necessigeneration that, for a variety though it might be difficult for selves in this manner, it would tate that they won’t watch it. of reasons, demands constant younger kids to learn to play make more people aware of the The NFL is by far the most stimulation. The flow of a hockey, the nature of the game sport. Some hockey players are watched sports league in hockey game is much differcan still allow it to become a already starting to do this. For the U.S., yet football is not popular spectator sport. example, many players have available everywhere. In urban ent from that of a sport such as baseball that has lots of started attaching GoPro camerareas such as New York City, stops in play. And, given that Is the NHL Reaching Enough as to their helmets during pracfinding space to play football pundits and sports writers often People? tices, to give fans a first-peris very difficult, yet the NFL complain that baseball has If the NHL wishes son view of playing hockey. remains extremely popular. become “too boring” for kids to become a more popular However, the inherent problem Therefore, it should also be to become fans, a fast-paced spectator sport, it must make with this is that hockey is very possible for the NHL to besure that as many people much a team sport, to the point come a more popular spectator sport with few stoppages such are exposed to the game as where a top player (other than sport throughout the U.S., even as hockey should be becoming more popular. possible, particularly in areas the goalie) may not have a in areas where “Without having Also, given the with limited opportunities huge impact on every game. there is little popularity of new to play hockey. A lot of this For example, 2013-14 Hart opportunity to a significant viewing platforms comes back to marketing. As Trophy winner Sidney Crosby play hockey. television that feature main- previously mentioned, hockey averaged less than 22 minutes The ly highlight plays is a sport that can fit in well of playing time per game (out one advantage presence, (such as NFL with current trends of sports of a possible 60 minutes). This the NHL has it will be RedZone), the consumption, but this is not is in stark contrast to NBA here is that NHL has another known by everyone. There are stars who play upwards of the nature of extremely hard built-in advanmany ways the NHL can better 40 minutes per game (out of the sport lends for the NHL tage. By featuring market itself. One way is to a possible 48 minutes), often itself well to highlight goals market its own players more with the ball in their hands, current trends to attract and spectacular aggressively. Almost every star and NFL quarterbacks who in sports and new fans.” saves, the league NBA and NFL player has com- control every offensive snap. entertainment. could increase fan mercial endorsement deals, and Another way the NHL Hockey, engagement with hockey in the some, such as Peyton Mancould improve its visibility sometimes nicknamed “The same way that the NFL did for ning, are known as much for is by better publicizing the Fastest Game on Earth,” has football by making it easier for their endorsements as for their white-knuckle excitement of its non-stop action. There’s very fans to watch and follow sevplay on the field. If more NHL playoff games. With many onerarely a lull during play. This eral games at once. Thus, even players were to market themgoal games, frequent upsets style is preferred by a younger
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(such as the Los Angeles Kings winning the 2012 Stanley Cup as a No. 8 seed), and of course sudden-death overtime (in which teams that are tied play overtime until someone scores), the Stanley Cup Playoffs can be among the most exciting events in sports. Similarly, the NCAA Basketball Tournament, often referred to as “March Madness,” has gained mass popularity in recent years not only due to bracket pools but also due to the major upsets and exciting finishes that happen every year. The NCAA has done a great job of building up the tournament and portraying it as a “must-watch” event. The NHL should follow suit and do a better job of hyping up its playoffs. However, probably the most important way to increase exposure to hockey is by increasing the number of televised games throughout the season. Starting with NFL Commissioner Pete Rozelle’s push to get all NFL games televised in the 1960s, TV has become the most crucial way for sports to gain new fans. And because sports have become one of the last “DVR-proof” TV events, networks are more than willing to pay for them. This is evidenced by the latest NBA contract, in which ESPN and Turner Sports will pay $24 billion over nine years (starting with the 2016-17 season) to broadcast NBA games, including 164 nationally televised games per year.2 The current NHL TV contract (in the U.S.), started in 2011, has NBC Universal airing only 100 games per
year (in a season that is the same length as the NBA’s).3 Even though that contract will allow all playoff games to be nationally televised, it is still showing significantly fewer games on national TV. And at $2 billion over 10 years,3 it is substantially less than the TV contract in the NBA, as well as those in MLB and the NFL. Without having a significant television presence, it will be extremely hard for the NHL to attract new fans. What Will the Future Hold? As we’ve discussed, the NHL’s potential to increase its audience and appeal is tremendous. Because of the game’s fast pace and teams’ involvement in their local communities, more and more kids could be exposed and drawn to hockey. But to stand out in a crowded field, the NHL will need to beef up its marketing and television presence and to focus more efforts on making the sport accessible to kids from all parts of the country and in all socio-economic brackets. The league has a very steep climb ahead of it, as it still lags behind other sports in popularity. Even though average attendance rates in the NHL and NBA are virtually identical with both leagues averaging almost 18,000 fans per game,4 television ratings tell a different story. The 2014 NBA Finals attracted approximately three times as many viewers as the 2014 Stanley Cup Finals,5 even though both series lasted 5 games and even though
the Stanley Cup featured the two largest market teams in the league (the New York Rangers and Los Angeles Kings) and three overtime finishes. Though it is possible for the NHL to become extremely popular on a national level, a lot of work must be done to achieve that goal. It will take a lot of time and a lot of money, but those are the necessary measures the NHL must take if it wishes to go from “regional sport” to “national sport Works Cited 1. Catherine Taibi. “Super Bowl XLIX Was Most-Watched Show In U.S. Television History. Huffington Post. February 2, 2015. 2. Mike Prada. “NBA to announce 9-year, $24 billion TV deal with ESPN, Turner.” SB Nation. October 5, 2015. 3. Bon Condor. “NHL, NBC sign record-setting 10-year TV deal.” NHL.com. April 19, 2011. 4. Statista.com. “Average per game attendance of the five major sports leagues in North America 2014/15.” 5. John Rowady. “A Hot Summer For The NBA And NHL.” Mediapost.com. July 1, 2014.
Andrew Distler is a senior in the College of Arts and Sciences. He can be reached at abd76@cornell.edu.
Photo courtesy of nhl.com
Youth hockey is mostly popular in only a select few regions of the US, a reality that makes it more difficult for the NHL to appeal to young, budding sports fans on a national scale.
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Sports, Inc.
StubHub, Ticketmaster, and the Future of the Sports Ticket Marketplace Evan Lefkovitz ‘16 Introduction On March 31st, 2015, online ticket distributor StubHub filed an antitrust lawsuit against Ticketmaster and the Golden State Warriors. The EBay-owned StubHub claims that Ticketmaster and the Warriors conspired to cut StubHub and other ticket providers out of the Golden State Warriors ticket marketplace. StubHub alleges that the Warriors and Ticketmaster coerced season ticket holders into only reselling their tickets on Warriors. com or the Ticketmaster-operated NBATickets.com with an arsenal of threats. The Warriors purportedly told season ticket holders that if they re-sold their tickets on any platform other than Warriors.com or a Ticketmaster website, the Warriors would retract their tickets for the upcoming playoffs and revoke their rights to season tickets for next season.1 According to the lawsuit, this constraint on the ticket holders constitutes an unlawful monopoly and thus a violation of the Sherman Anti-Trust Act. The Rise of Primary and Secondary Ticket Marketplaces StubHub’s lawsuit marks a potentially landscape-altering climax in the long and heated clash for ticket-selling supremacy. Long before StubHub and Ticketmaster ever existed, control of the sports-ticket marketplace rested solely in the hands of the franchises and individual consumers. Teams offered tickets at a flat rate, and fans would line up at the ticket box office for their chance to see the likes of Babe Ruth, Wilt
Chamberlain, or Gordie Howe. started to comprehend the limHowever, opportunistic fans itations of the primary ticket realized that consumers would market. Since teams set prices, pay a premium to attend a fans often were stuck overpayplayoff game or see a star play- ing for meaningless contests er in action. These individuals or fell victim to sellouts for would purchase tickets at face high-demand games. More imvalue and proceeded to attempt portantly, if fans who already to resell the tickets at a higher purchased price. To do this, they would tickets loiter outside the stadium or (usually arena in the hours before game season ticket time and “scalp” their tickets holders) at seemingly attractive prices. chose not to attend games, This practice, though decidedthey had no legitimate way to ly illegal in many U.S. States, re-sell their tickets. To address carried on for decades and still these issues, two Stanford exists even today. Business School graduates Nevertheless, with founded StubHub, a platform the advent of the Internet came that allowed fans to re-sell along an entirely innovative their tickets in a safe and legal platform to distribute tickets to environment. StubHub became eager fans. The primary ticket a pioneer in the rise of the onmarketplace, defined as tickets line secondary marketplace, a sold directly by teams to condeparture from shady scalping sumers, expanded to include practices that often involved not only the box office but also unfair prices and fake tickets. team websites and authorized The secondary ticket market ticket providers. Ticketmaster operates as an arena in which stands as the leading auindividuals have the opportuthorized to buy and sell “StubHub’s nity primary tickets at whatever ticket seller lawsuit marks price they see fit. This in the Unitalso ensures that a potentially setup ed States. tickets will always be Ticketmaslandscape-al- available, as fans own ter possessright to sell their tering climax the es direct tickets to games that partnerships in the long and have been sold out in with teams primary marketheated clash for the that provide place.2 them excluTo distinticket-selling sive rights to guish between the prisupremacy.” mary and secondary sell tickets on their bemarketplace, one need half. This domination of “first not look further than the simple time sales” leads experts to rules of supply and demand. In believe that Ticketmaster holds stark contrast to the fixed pricmore than 50% of the primary es in the primary ticket market, marketplace.2 secondary ticket marketplaces As Ticketmaster like StubHub empower sellers expanded its command of the to change the price of the ticket marketplace, some fans tickets to reflect the true value
Spring 2015
of the ticket. If a fan wants to attend a game between the wretched Knicks and Sixers at Madison Square Garden, he or she should not have to pay the exorbitant prices offered by the Knicks and Ticketmaster. Rather, said fan can hop onto StubHub and purchase tickets from a disgruntled Knicks season ticket holder who will surely offer tickets at a price low enough to mirror the sheer ineptitude of his favorite team. By the same supply and demand logic, a fan looking to score tickets to a Warriors-Spurs game in the Bay Area will be willing to pay a premium for a sold-out contest between two of the best teams in the NBA. A Warriors season ticket holder has the right to post his tickets for this game if he cannot attend, and the fan will most likely pay a price above face value for the chance to watch Steph Curry battle the defending champions. This flexibility explains why the New York Times suggested in 2011 that the secondary ticket marketplace stands somewhere between $3 and $4.5 billion.3 The rise of secondary ticket marketplaces like StubHub as formidable competitors to primary ticket providers serves as a compelling backstory to the aforementioned legal proceedings between StubHub and Ticketmaster. With over 50% share of the secondary market and an estimated $500 million in revenue in 2014 according to Bloomberg, StubHub is the largest ticket reseller in the United States. But many companies in the secondary marketplace, such as SeatGeek, the “Kayak.com of ticket
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Photo courtesy of galleryhip.com
sales,” have gained ground on StubHub in recent years. More importantly, Ticketmaster itself has entered the secondary market game with TM+, which currently holds 11% market share, second to only StubHub per Bloomberg.4 In fact, Yahoo cites John Tinker, an analyst with research firm Maxim Group, who suggests that Ticketmaster could potentially boost its share of the secondary market up to 30% with TM+.5 Lawsuit Motivations: Protecting the Fans? The outcome of this lawsuit could once and for all decide whether teams have the legal right to cut secondary ticket providers out of the marketplace entirely, which would put a significant dent into the likes of StubHub, SeatGeek, and others. But what’s driving this legal dispute? Is there a genuine concern for fans as both StubHub and the Warriors suggest, or are there other factors at play? To answer these questions, we
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StubHub’s lawsuit against Ticketmaster and the Golden State Warriors could have a huge impact on how fans buy tickets to see the Warriors play at Oracle Arena. first need to take a look at the concerns addressed by both the Warriors and StubHub. In their defense against StubHub, the Warriors have pointed to common secondary market issues as justification for their actions. The Warriors stipulate that Ticketmaster represents the only online marketplace that can guarantee the authenticity of tickets, as the tickets come directly from the team itself. The Bay Area franchise notes that third-party sites in the secondary marketplace cannot offer this same authenticity assurance. Moreover, as Warriors spokesman Raymond Ritter indicated, ticket brokers in the secondary marketplace bought up 2015-16 season tickets in bulk “with the sole intent to resell them at a markup.” Ritter highlighted the fact that the Warriors rescinded season ticket rights from these brokers “so that [the Warriors] can instead sell those tickets
directly to fans on our wait list.”6 While the Warriors may have noble intentions, StubHub believes that the Warriors actions restrict the right to free competition in the marketplace. By controlling the secondary marketplace as well as the primary marketplace, the Warriors have sole control of ticket prices. Without a secondary marketplace in which fans can sell and buy tickets at their own discretion, StubHub argues that the Warriors can set prices at whatever level they choose and drive up rates to reflect increased demand and team performance. In this scenario, the Warriors and Ticketmaster, not the fans, receive all the benefits, while fans are left susceptible to exorbitant prices and sellouts. Lawsuit Motivations: Profit Maximization However, despite these “fan-centric” arguments promulgated to the media, ulterior motives are at play in this legal dispute. Specifically,
Sports, Inc.
all parties involved, in one way or another, are interested in maximizing the revenue associated with the increases in ticket prices. StubHub fears that Ticketmaster will attempt to negotiate deals similar to the Warriors agreement with other teams across the country, thereby cutting into revenue produced from re-sales by season ticket holders. By the same token, the Warriors want to eradicate companies like StubHub that do not provide them with a portion of the revenues earned on Warriors tickets. Instead, the Warriors choose to partner with Ticketmaster because they earn a share of the revenue of all ticket purchases on Ticketmaster’s website, regardless if the sales occur in Ticketmaster’s primary or secondary marketplace. In fact, Ticketmaster secured partnerships with the NBA, NHL, and NFL to serve as the exclusive ticket distributor in both the primary and secondary marketplaces while providing each team with a cut of the profits. In contrast,
StubHub does not provide any share of the consumers. As these entities quibble revenue to NBA, NFL, and NHL franchis- over their respective legal rights, they fail es barring an individual agreement with a to realize that, regardless of the outcome given team. Instead, StubHub has a similar of the case, the customer will be left out revenue-sharing deal to dry in the battlefield. If with MLB teams as the Warriors prevail, fans “Though these the league’s “preferred lose their right to purchase entities may not tickets at the prices they re-sale market.”7 A more deem appropriate due to the like it, a simple revealing indicator of presence of price floors and solution to this the Warriors intentions the lack of a free market lies in the advantage dilemma exists: the structure. On the other hand, Ticketmaster offers the a StubHub victory would Warriors agree to leave fans susceptible to Warriors and countless other franchises that authenticate Stub- purchasing fake tickets and StubHub cannot recipthe exploits of greedy ticket Hub tickets, Tick- brokers. rocate: the opportunity to control prices. As etmaster eliminates Ultimately, the WarBloomberg writer Ira riors, Ticketmaster, and price floors, and StubHub need to understand Boudway illustrates, the Warriors and other StubHub in turn that, if they disregard the teams know they canbest interests of their fans, returns a share of these individuals may be not boost ticket prices to a level that alienates Warriors-related turned off by the prospect of the middle class fan. engaging in an unnecessarily At the same time, these revenue to the team hostile ticket environment. teams want to capture Fans may choose to avoid itself.” the additional monethe ticket marketplace tary value generated by altogether and watch games a successful stretch of play. The franchisfrom the comfort of their own homes. To es see the premiums for tickets paid by avoid this sort of impact, the three parties consumers on secondary websites like involved must realize that they need to StubHub as lost revenue. It would therework together to ensure the best interest of fore seem that teams are stuck between the fans. If the Warriors and StubHub want a rock and a hard place: they don’t want to maintain customer loyalty, they have to to raise prices, but at the same time they demonstrate a genuine concern for their want rake in the extra cash that fans are customers. Though these entities may not willing to pay. Thus, teams will call upon like it, a simple solution to this dilemma Ticketmaster to set price floors in both exists: the Warriors agree to authenticate the primary and secondary Ticketmaster StubHub tickets, Ticketmaster eliminates marketplace. Hence, when teams perform price floors, and StubHub in turn returns poorly and ticket prices would naturally a share of Warriors-related revenue to the decline in a free market environment, a team itself. This may be a tough pill to minimum price level ensures that teams swallow, but this represents the best and will not lose money as a result of ticket fairest outcome for the consumers. As all prices sold below face value on StubHub. marketing teachers repeat in one form or In the opposite scenario, successful teams another, the customer always comes first. like the Warriors can inflate prices to a With a little Marketing 101, a happy and certain degree to obtain the additional loyal customer will satisfy everyone in the value generated by the increase in demand long run. in the marketplace.7 Conclusion: Impact on Fans It seems clear based on the evidence in front of us that the Warriors, Ticketmaster, and StubHub have been consumed by profit-seeking impulses. Behind this cloud of the legal warfare lurks the most important party in this case:
Works Cited 1. Darren Rovell. “StubHub filessuit against Warriors.” ESPN.com. March 31, 2015. 2. Seatgeak.com. “Expert Series: Guide to the Secondary Ticketing Market.” 3. Ken Belson. “As Economy Sagged Online Sports Ticket Market Soared.” New York Times. January 14, 2011. 4. Adam Satariano. “The Case of the Stubbed Hub.” Bloomberg.com. February 19, 2015. 5. Ryan Nakashima. “Ticketmaster puts resale, unsold tickets in 1 spot.” Yahoo! News. September 6, 2013. 6. Aoife White. “EBay’s StubHub Sues Ticketmaster over Ticket Resales.” Bloomberg.com. March 30, 2015. 7. Ira Boudway. “StubHub vs. Ticketmaster: Can a Scalper Really Be a Fan’s Best Friend?” Bloomberg.com. April 2, 2015.
Evan Lefkovitz is a junior in the ILR School. He can be reached at edl52@cornell.edu
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Without its Tiger, the PGA is Losing its Roar
Photo courtesy of golfdigest.com
Widely regarded as one of the greatest golfers of all time, Tiger Woods has not won a Major since 2008.
Josh Klein ‘18 It was early on a cool, gray Thursday morning in San Diego. Heavy fog had almost completely hidden the Torrey Pines coastline. The moisture in the air had soaked into the grass, rendering the golf course unplayable. For those waiting behind the tee on the 10th hole, sight beyond the backs of the people circling the tape was virtually impossible. Perhaps if they squinted, they could just barely make out the rather imposing silhouette of a six-foot, well-built man. Yet it didn’t matter that the gallery couldn’t see the golfer through the dense clouds. Every spectator at the Pines knew exactly who was about to tee off. Some had camped out for hours; others
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had made the long trek to San Diego purely to see one man swing a club. Frankly, the gloomy California weather had no impact on the fans at the 10th. Surely, they were not going to be deterred by a few one-hour delays. Many of them would wait all day. Time was a small price to pay to see Tiger Woods. Woods, however, did not share the fans’ apathy for the weather. At 39 years old, the 14-time major champion understood that his body was not what it used to be. When Woods was notified on the morning of the opening round of the Farmers Insurance Open at Torrey Pines that play would be delayed one hour, he was worried. With his warm-up
schedule meticulously planned to the minute, any unanticipated setback, even just an hour of lost time, could result in cramps or soreness for Woods once play began. When the PGA’s most popular golfer was told that he would have to wait one more hour to tee off, Woods felt that an injury was inevitable. “I was ready to go, I had a good warm-up session the first time around,” Woods reflected. “Then we stood out here and I got cold and everything started deactivating again. It’s frustrating that I just can’t stay activated. My back just never loosened up…and got progressively worse.”1 A missed green to start the 10th was a troubling sign. The 25-foot overshot chip
Sports, Inc.
that followed was even more alarming. After an ugly drive on the 11th, Woods was already walking gingerly by the 12th. Something was up. Although the winner of 79 PGA Tour tournaments was too proud to quit after a mere three holes, it became increasingly obvious as Woods powered through to the back nine that he was physically not himself. Sometimes even needing help to pick up his tee, Tiger finally called it quits on the 3rd after struggling with his approach. Woods quickly shook hands with his competitors, graciously murmured a few words to the media swarm that had engulfed his golf cart, and headed to the players’ parking lot. And, just like that, he was gone. The
man widely considered to be the greatest golfer of his generation, Tiger Woods could barely complete a round of golf. Oh how the mighty had fallen. Upon Woods’s exit, rumors swirled among fans about the golfer’s future. For the PGA brass, however, the question became not when Woods would return but how the Tour would survive until he did. In the opening round of the Farmers Insurance Open, Woods had been playing with Rickie Fowler and Billy Horschel. For the first nine holes, the threesome had enjoyed a packed gallery; the crowd following the group was constantly five-deep and stuffed between the course’s ropes. After Tiger exited, the pair’s audience almost immediately thinned to just friends and family. And no, there was no mid-afternoon rush to grab a cold iced tea from the concessions stand. This was no coincidence; the fans had come to see Tiger. Even Woods’s partners held a crystal-clear understanding of the situation. “We became chopped liver,” Horschel chuckled after the round. “We went from 600 or 700 people watching us to about 50. We realized where we stand in this game of golf and we had a good joke about it.” 2 For PGA executives and television bigwigs, however, this was no joke. Billy Horschel had confirmed the grim reality of their situation: the Tour was just not the same without its Tiger. Think back to the PGA’s most memorable moments over the past 20 years. Almost all of them involve Tiger Woods. In 2000, Woods crushed the field at the U.S. Open, beating his closest competitor by fifteen strokes. To this day, Woods’s epic performance at the ’00 Open is still the largest margin of victory in a Major.3 Remember the 2005 Masters? A pitch-perfect chip on the 16th resulted in a white, Nike golf ball slowly rolling towards the cup. For a split second, it seemed as if the shot would come up just
short. But, with one final rotation, the ball found its mark. Who was celebrating at the back of the green? Tiger Woods. Then, in 2006, just months after the passing of his father, Woods, in an emotionally gripping performance, edged out the competition at the British Open. And, finally, who can forget how, in 2008, with a torn ACL in his left knee and a double stress fracture in his leg, Woods miraculously came back to force a playoff at the U.S. Open? 4 In the sudden-death hole, greatness prevailed again. The constant presence of Woods in the PGA’s most recent unforgettable moments is perhaps best explained by Fahd Ismail, a golf fan who likely speaks for the majority of the sport’s avid followers. He noted, “Our generation can’t let it go, because we are too attached to him. We grew up with him. For so long, we had Michael Jordan and Tiger.”5 It is crucial to remember that Ismail’s words are not merely a criticism of the PGA, if a critique at all. With Jordan, the NBA enjoyed some of its best seasons in history, not only financially but also in terms of talent on the court. Yes, there was Michael Jordan. And in his prime, he was indisputably the best player on the planet. But there was also his righthand man Scottie Pippen. The famous 1992 “Dream Team” included an aging Larry Bird and a veteran Magic Johnson. In many of Jordan’s All-Star Game appearances, he was joined by Charles Barkley, Karl Malone, and David Robinson. By no means was Michael Jordan alone. And neither is Tiger Woods. Yet, despite featuring a budding superstar in Rory McIlroy, two talented, charismatic lefties in Phil Mickelson and Bubba Watson, and a strong Australian presence in Adam Scott, the PGA will never truly find a replacement
“The man widely considered to be the greatest golfer of his generation, Tiger Woods could barely complete a round of golf. Oh how the mighty had fallen.”
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for Tiger Woods. Think of it like this: however good Magic and Bird may have been, however close they may have come to rivaling Jordan’s popularity, the sneakers that today’s basketball players lace up have the iconic image of one man in flight: Michael Jordan. In many ways, Tiger Woods is the Michael Jordan of golf. For a while, no one in the sport was better. Even as Woods’s level of play declined with age, he remained the face of the Tour. He inspired kids to pick up clubs and old men to give their pastime another chance. While the golf buff tuned in weekly for his love of the game, the casual sports fan turned on golf to watch Tiger Woods. Whether he was struggling or dominating, when Woods entered a tournament, golf, for at least a few days, became must-see TV. Consider the remarks made by PGA Tour commissioner Tim Finchem in anticipation of Tiger’s return: “Candidly, I think when [Woods] tees it up, everybody in the world is going to want to see how he’s going to play, because here you have a guy who was so incredibly good for such a long time and he’s struggling out there. [Even] if he’s not winning golf tournaments, people still want to see Tiger Woods play golf. As long as he’s playing, he’s still going to have the same impact.”2 Finchem’s words reveal the sobering truth of golf without Tiger Woods: no Tiger means no occasional fan. Interestingly, in the initial few weeks after Tiger’s withdrawal, the PGA seemed to miraculously overcome this inevitability. Although overnight ratings – the percentage of the market’s TV households tuned in on average – for the Farmers Insurance Open were nowhere close to matching the tournament’s 2013 numbers (when Woods clinched the Championship in the final round), they were up 9% from last year.6 Despite Woods’s absence, CBS’s audience still showed marked improvement from 2014 for Sunday’s final round. This was followed by strong showings at the Pebble Beach Pro-Am and the Northern Trust. However, despite these encouraging results at the outset, media executives knew it was too good to be true. While a hole in a ship’s deck can be quickly patched up, a makeshift fix will only keep the vessel afloat
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for so long. Inevitably, despite the most valiant of efforts, the ship will sink. For several weeks after Woods’s departure, the PGA scraped by, generating just enough coverage to keep the Tour above water. Two weeks after the Northern Trust, however, the tides turned at the WGC-Cadillac Championship: pro golf’s annual stop at Doral rudely interrupted any momentum the PGA had carried into the event. Its ship had sunk. The WGC-Cadillac Championship, one of the four annual World Golf Championships, is a highly competitive tournament where the prize money is official money on both the PGA Tour and the European Tour. Consequently, the event showcases the world’s best golfers and thus usually commands a sizable television audience. Yet, with Tiger Woods still absent almost a month after his exit from the Farmers Open, overnight ratings hit a four-year low for the World Golf Championships at Doral.7 Final round coverage of the WGC drew a measly 2.6 overnight rating on NBC Sunday afternoon, the lowest figure for final round coverage of the tournament since 2011.7 Unsurprisingly, in the weeks that followed the WGC, the PGA continued to struggle engaging the public. Weak overnights at Bay Hill were followed by another four-year low, this time for the Texas Open’s final round.8 The numbers don’t lie: TV golf needs Tiger Woods. For the past few months, Woods just wasn’t there. And, as a result, neither were the ratings. Although it is rarely asked, Tiger’s notable absence and recent struggles prompt a rather worrisome question: has Woods’s popularity masked a declining interest in golf? For now, Tour executive vice president Ty Votaw maintains that lower TV ratings and dwindling participation rates aren’t necessarily signs of weakness. “You look at what’s happened to ratings for prime time and virtually every other sport during the same time period and I think we’ve done pretty
good,” Votaw noted.9 Yet, despite the VP’s optimistic perspective, this downward trend is certainly one to keep tabs on. Clearly, golf is a sport that caters to an older market. While the PGA will do its best to keep the younger generations engrossed in the Tour, it could still use some help. And, of course, a Tiger Woods comeback certainly wouldn’t hurt. Sure enough, the PGA got what it wanted when Tiger announced his return to the Tour just in time for this year’s Masters Championship. In turn, the enthusiasm that accompanied Tiger’s return to competitive golf after a nine-week hiatus was remarkable. The dream weekend for the PGA began when The Masters Par 3 Contest on ESPN drew the largest audience of the event since it was first televised in 2008. Never had there been more excitement for such a meaningless competition. Unsurprisingly, the Par 3 Contest’s impressive showing was a sign of good things to come. On Day One of The Masters, coverage hit a five-year high. Earning a 2.4 overnight rating on ESPN Thursday afternoon, The Masters went up an astonishing 60% from last year.10 As Tiger’s play improved toward the end of the week, Day Two also displayed significant television growth from prior years. With Woods making the cut and advancing to the weekend’s final thirty-six holes, Saturday overnights shot up 48%, The Masters’ best mark since 2011.11 Despite shooting a remarkable 4-under, 68 on Saturday, Woods found himself ten shots back of the lead going into Sunday’s final round. Tiger Woods shot a 73 on that Sunday, finishing the 2015 Masters at 5-under-par, good enough to knot him in a tie for 17th place. After seventy-two holes, Woods would say that, although he was pleased with his overall performance, he was disappointed in his final round effort. Nevertheless, it didn’t matter that Woods didn’t win the Masters. Even if Tiger had fizzled
“While a hole in a ship’s deck can be quickly patched up, a makeshift fix will only keep the vessel afloat for so long.”
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in his return, perhaps missing the cut by several strokes, the ratings would have been more or less the same. It meant little that arguably the world’s greatest golfer played well. The appeal of the 2015 Masters seemed to stem solely from the almost universal desire to watch Tiger Woods play golf once again. However, even in the wake of this fairy-tale-like return for Tiger on Masters weekend, we all must come to terms with the inevitable: eventually, Tiger Woods, one of the greatest golfers of all time, will have to hang up his Nike cap, clean off his muddy shoes, and, for a final time, place his clubs back in his bag. And, with Tiger rapidly approaching the age of 40, perhaps this day will come sooner rather than later. But, until then, people will watch. Until then, the PGA will roar. Works Cited 1. Gary Van Sickle. “Tiger Woods Withdraws From the Farmers Insurance Open with Bad Back.” Golf. February 9, 2015. 2. Mark Cannizzaro. “The Sobering Truth About Golf After Tiger Woods.” New York Post. February 6, 2015. 3.Clifton Brown. “A Dominating Tiger Woods Wins Open by 15 Strokes.” New York Times. June 19, 2000. 4. Bob Harig. “A Year Later, it’s Time to Reminisce.” ESPN. June 15, 2009. 5. Bill Dwyre. “Time to Break Addiction to Tiger Woods’ Show.” Los Angeles Times. February 6, 2015. 6. Sports Business Daily. “Ratings Off Slightly for PGA at Torrey Pines.” 7. Sports Media Watch. “Overnights for WGC at Doral Hit Four-Year Low.” 8. Sports Business Daily. “Overnights Hit Four-Year Low for Final Round of PGA Texas Open.” 9. Matthew Futterman and Douglas A. Blackmon. “PGA Tour Begins to Pay a Price for Tiger Woods’s Transgressions.” Wall Street Journal. January 25, 2010. 10. Sports Business Daily. “Day One of Masters Hits Five-Year High in Overnights.” 11. CBS Sports. “Saturday’s Masters Overnights Up 48%, Best Since 2011.”
Josh Klein is a freshman in the College of Arts and Sciences. He can be reached at jwk87@cornell.edu
Pushing Forward:
MLS, The New CBA, and the Future of American Soccer
Photo courtesy of wikipedia
Amanyi Richardson ‘17 Introduction MLS kicked off its 20th season of play on March 6th amid much fanfare and excitement. But there was another strong sentiment among the players and league management: relief. The few weeks leading up to kick off were marred by the possibility of a player strike, as the MLS Players Union and the league struggled to come to an agreement on a new collective bargaining deal. Points of Contention The negotiations focused first and foremost on free agency1. The ultimate goal of the MLS Players Union was to secure an agreement with the league that would give the players a bit more say in the direction of their own playing careers. The previous CBA placed massive restrictions on player freedom, and the MLSPU would not walk away from the table without changing that. Since its inception, MLS has not had any form of free agency put in place, unlike pretty much every other professional sports league in the world1. According to the league, this is partially attributed to its business structure, in which the league acts as a “single entity” that owns and negotiates every contract for its players. Due to this “single
A delay to the start of the MLS season seemed imminent during the contentious negotiations over a new collective bargaining deal. entity” model, it would not help the league The Settlement On Wednesday, March 4th at if its owners had to place increasing salary around 6 AM, the two sides had finally bids against one another for a free agent come to an agreement. After hours of player, as that yields more money lost for intense negotiation that lasted until the the league that could otherwise be used to early hours of the morning, the MLSPU, improve the league in other ways. For exaccepting what they decided was the ample, that money could be used to bring league’s best offer, finally ratified in a 12-7 in more big names from Europe.2 In convote the framework of a CBA that would trast, the MLSPU argued that free agency last through the 2019 season. was vital to the well-being of its players. On the issue of player salaries, Free agency would allow players greater the two sides agreed that the minimum freedom of movement within the league and allow players to decide for themselves wage for senior roster players would increase from $36,500 to $60,000, a where to ply their trade. 64% increase. In addition, under the new Another priority on the table for the MLSPU was increasing player salaries. agreement, roster sizes will drop from a maximum of 30 players to a maximum According to the Daily Mail, MLS placed of 28 players. Furthermore, the $3.1 22nd on a list ranking the average salaries million salary cap allocated to each team in different leagues worldwide3, falling well behind its European and South Amer- will increase by about 20% in 2015 and will increase by an additional 7% annuican counterparts. The average league salally through the 2019 season, putting the ary prior to the agreement was $135,000, league minimum wage at $ 70,000 by a number undoubtedly inflated by the 2019.2 mega-contracts given to the league’s As for the elephant in the room, big-name stars but still only a little more free agency, the sides went back and forth, than half of the average league salary in with the league initially refusing to budge the Mexican domestic league, Liga MX. on the issue before placing a paltry initial In addition, the league minimum wage sat offer that would have affected exactly at a lowly $36,500 in 2014. Thus, it is not one player in the league (Brad Davis of surprising that there had been a large push by the Players Union to see these numbers the Houston Dynamo). With the very real threat of a strike looming over what was increase.2
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to be a possibly monumental season for MLS, league officials finally placed an offer stating that players who are 28 years of age and have played in the league for at least 8 years would be eligible for free agency. In an attempt to combat rising salaries that are inevitable with free agency, the offer also placed restrictions on wage increases, with players earning less than $100,000 per year limited to a 25% raise, players earning $100,000-200,000 limited to a 20% raise, and players earning more than $200,000 limited to a 15% raise2. The two parties also agreed to a provision that players deemed to be “vastly outperforming their contract” (a criterion to be determined by a neutral or third party that has not yet been named) will not be restricted by the cap on raises. However, the re-entry draft (a 2010 compromise that allowed players to renew their contracts if they have expired contracts or if their clubs decline the option) shall remain as an MLSPU concession to the league4.
tioned, the deal stipulates that players above 28 years of age who have played in the league for 8 years, a mere 13% of players, are allowed free agency. Second, eight years is a long time in professional soccer, long enough for a player to suffer an injury or some other unfortunate event that can jeopardize, or even end, a player’s career. Also, a lot of rookies even end up leaving the league after their first few years because they simply are not good enough. Nevertheless, while it can be argued that the Players Union should have strived for a better deal, it is important that we, as spectators, realize what the MLSPU achieved at the bargaining table with respect to free agency. This is the first time in sports history that players were able to secure free agency without litigation,6 and free agency as an issue had never been Which side won these negotiations? implemented at the bargaining table before Now that the dust has settled, these negotiations. In addition, we must we can sit back and take a look at who understand that these free agency concestruly got the better end of sions were earned in an this deal. There were winners “...this collec- especially hostile environand losers on both sides, and ment characterized by a tive bargaining league initially refusing to each side had to make some concessions and compromisagreement in- budge at all on the issue. es. However, at the end of the MLS’ business model cluded unprece- has always been about day, I believe we can confidently say that the players dented gains for slow steady growth while ended up marginally better cutting costs, and the very the MLSPU and concept of free agency off than the league in these negotiations. Why? Because, can now serve completely goes against while the terms that they were this business model. Furas a launching thermore, while the players able to secure might not have been completely ideal, this point for future may not have gotten the collective bargaining agreeexact deal that they wanted agreements.” this time around, they ment included unprecedented gains for the MLSPU and can surely have put themselves now serve as a launching point for future in a very good position for their next go at agreements. the bargaining table in 2020. Free Agency Before discussing its merits, we must acknowledge that the final agreement regarding free agency is surely not the one that most players truly desired. First, detractors of the deal point out that it will affect too few players in the league, and only a select few will therefore be able to experience the freedom of choice that the MLSPU was supposed to secure for all players.5 Specifically, as aforemen-
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Player Salaries The overall increase in the player salary cap is a big win for the players in MLS, particularly those at the bottom of the pay structure (players signed right out of college). This new deal sees a substantial pay increase for the rank and file players at the bottom of the spectrum, while the players who make more than the minimum wage will also see nice incremental increases in their pay.
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The players are not the only winners in the agreement. The increased wages are the result of an increased salary cap for the clubs. This can be beneficial to the clubs, as the increased amount of funds can create more room for intelligent maneuvering of their salary caps and provide greater flexibility in dealing with player salaries4. This is also a win for the league, for the increased minimum wage reduces the incentive for its less paid players to leave the league and pursue their careers in second or third-tier European or South American leagues where they would be guaranteed more pay. Thus, increasing the minimum salary sustains MLS’ status as an attractive option for younger players (who are the ones usually kept on these minimum wage deals) and ensures that newer players can ply their trade without worrying about making ends meet1. Conclusion: Where does MLS go from here? Still, even after this breakthrough for the players, broader questions remain: How does our domestic league compare to our European counterparts? How can we catch up to the rest of the world? It is no secret that the ultimate goal is for MLS and the quality of American soccer to reach, and maybe even eclipse, that of Europe and South America. This may be feasible, but it cannot be done as long as the quality of play in MLS is so drastically inferior to that of the top leagues in the world. At the heart of this disparity in talent is MLS’s “single entity” business model. As I mentioned briefly earlier, MLS operates within the paradigm of a “single entity” business model in which the league acts as a “single entity” that owns and negotiates every contract for its players. Under the SE model, MLS tries to allocate players to teams through a draft. While this allows for players to be placed on teams and makes it easier for expansion teams to fill a roster (e.g. NYCFC and Orlando City SC), it does not do much to improve the quality of play. In contrast, throughout the rest of the soccer world, the best ready-made talent is acquired
from other teams, and the structure of these transfers makes it much easier for other teams to acquire said talent. In every other part of the world, transfers are generally conducted in the following manner: a club expresses interest in another player, and the club contacts the player’s current club about the possibility of a deal. Then, if the player’s current club is interested in a deal, the two clubs negotiate a transfer fee while the player undergoes personal contract terms and a medical examination, and the deal is done. Thus, for the most part, the players are the property of the clubs themselves, and, if another club wants to acquire a player, it is as simple as buying “property” from someone else. Due to the SE model, MLS, not the clubs, owns the rights to its players, which makes it difficult for clubs to acquire talent in the international market. In addition, allocation money awarded by MLS to individual teams, which may be used to reduce player costs against the team’s salary cap, is often still not enough to cover the cost of bringing in foreign talent. The league attempts to circumvent this situation with its designated player rules, which allow teams to only
count a portion of a “designated” player’s salary against the cap. The designated player rules have definitely helped to bring some big names to MLS (David Beckham and Frank Lampard, I’m looking at you guys!), but it ultimately has not been enough to consistently bring top talent to the league either. The SE model has surely yielded some benefits for the league, as it has been helping to grow MLS since it first began play in 1996 and has ushered in a huge joint broadcast deal with ESPN, Fox, and Univision. However, in order for MLS and American soccer to make the final jump into the big time, I believe the “single entity” model has to go.
Works Cited 1. Brian Strauss. “MLS season start threatened as free agency remains in CBA crosshairs.” SI.com. March 3, 2015. 2. Brian Strauss. “Bob Foose, Todd Dunivant reveal new details on ‘best deal’ for MLS CBA.” SI.com. March 6, 2015. 3. Nick Harris. “Premier League wages dwarf those around Europe with top-flight players in England earning an average of £2.3million a year... almost 60 per cent more than in Germany.” Dailymail.co.uk. November 15, 2014. 4. Brian Lewis. “MLS, union reach new CBA, avoiding league’s first strike.” New York Post. March 4, 2015. 5. Paul Kennedy. “MLS CBA deal: Who got what? Who gave up what?” Soccer America Daily. March 5, 2015. 6. Mike Bianchi. “With new CBA, MLS truly is becoming Major League Soccer.” Orlando Sentinel. March 4, 2015.
Amanyi Richardson is a sophomore in the ILR School. He can be reached at awr59@cornell.edu.
Photo courtesy of mlssoccer.com
MLS Commissioner Don Garber should strongly consider abandoning the SE model to compete with the greatest soccer leagues in the world.
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Signed, Sealed, Delivered:
the Historic Television Contract with the NBA Karthik Sekharan ‘17 Introduction While most fans of the NBA take it for granted that the games will be on television, this privilege comes to fruition as a result of a long, drawn out process with astronomical sums of money often at stake. Specifically, deals between the NBA and both local and national television stations can be worth millions, and sometimes even billions, of dollars. In fact, the most recent deal between the NBA and the networks of ESPN and Turner Sports will go down as one of the most lucrative deals in history. The deal, which will not take effect until the beginning of the 2016-2017 season, will require ESPN and Turner Sports to pay the NBA around $2.6 billion annually over a nine-year span. In contrast, the current deal, which was signed in 2007, has ESPN and Turner paying $930 million annually. Thus, the newly signed deal yields an unprecedented 180% increase in the amount of money going to the league. As a frame of reference, the deal signed in 2007 only represented a 21% increase from the previous deal.1 The new deal features other interesting terms, too. For instance, there will be more nationally televised games. Under the current deal, ESPN and ABC get 90 games per year, and TNT (a Turner sports network) gets 52. Under the terms of the new contract, ESPN/ ABC will get an additional 10 games, and
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Photo courtesy of grantland.com
The NBA’s enormous new television deal is one of the more recognizable business-oriented events during the tenure of Commissioner Adam Silver. TNT will get another 12. In addition, the new deal has established a framework for setting up an online streaming site for fans without a cable subscription. Rationale Behind the Deal Why was such a deal signed? Answering this question requires analyzing the current state of the television market. With the sudden surge in online streaming sites like Netflix and Hulu, the television market is experiencing an unprecedented amount of cord cutters: people who decide that they do not need to purchase a cable subscription. A report released by the Leichtman Research Group says that the 13 largest cable providers lost around 150,000 cable subscribers last quarter, compared to just 25,000 in the same quarter last year.2 Ratings across television have declined drastically due to this cord cutting, as “overall primetime broadcast network ratings were off 12% last month compared to a year ago, while cable networks dropped 11%.” 3 However, ratings for live sports have remained about the same and in some cases have actually increased. A perfect example is the World Cup last summer. Approximately 25 million Americans
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tuned in to watch the USA vs. Portugal match while, in comparison, 5.8 million watched TNT’s “Rizzoli and Isles”, that particular week’s top non-soccer cable show.4 This makes sense when we consider that cable is necessary in most cases to legally watch live sports. Therefore, it is a known fact that television networks actively seek deals with sports leagues, for these networks believe that live sports boost their ratings. As a result, it is no wonder that such networks are willing to pay generously in order to obtain the right to show sports on their channels. Implications of the Deal on Various Stakeholders How does this deal affect the interested parties? When I say “interested parties,” I am referring to four entities: a) the fans, b) the players, c) the league in general, and d) consumers of cable television. Fans First, let’s start with the fans. Currently, Turner Sports offers NBA League Pass, which allows NBA fans to stream certain games without a cable subscription. However, an NBA fan would only value this as a supplement to
a regular cable subscription, for NBA fans figure. The current collective bargainmust have a cable subscription in order to ing agreement, which states that players watch nationally televised games and any receive around half of the BRI, runs until playoff game. As aforethe 2020-2021 season. How“Carriage fees ever, either side may opt out mentioned, the deal accounts for this issue in the 2016-2017 season. The for sports by creating a tentative NBA will most likely opt out networks already of this deal in order to try and framework for providing a streaming site for negotiate a smaller portion make up the these games without of the BRI for the players. I largest chunk a paid cable subscripbelieve that this could lead tion. Unfortunately, to a lockout by the players in of a cable bill, the jury is still out on the 2016-2017 season because and that chunk the players had been looking how this streaming site will affect fans because get a larger portion of the will only grow to the details of this BRI even without this new due to this deal.” TV deal in place. The new TV streaming site have yet to be released. If the deal could further enhance the site provides access to a majority of the hostility of this aspect of the negotiations, nationally televised games, then this might for the NBA players will surely want a be a great alternative to purchasing a cable larger chunk of this new TV money. And, subscription. However, if it is subpar, then considering the evident undesirability of a NBA fans are still in a bind. lockout, any trend that could increase its likelihood could be deemed undesirable, Players too. Under the current collective bargaining agreement, the players are Consumers of Cable Television guaranteed between 50 and 51 percent In addition, it is worth noting that of the league’s basketball related income this deal even affects people who have (BRI), and the salary cap is set at 44.71% no interest in the NBA. Specifically, the of the projected BRI. This deal will deal is certain to increase everyone’s cable obviously increase the BRI immensely, bills, even if he or she doesn’t watch the therefore increasing the salary cap and NBA. Carriage fees for sports networks driving up players’ salaries. The salary cap already make up the largest chunk of a for the 2014-2015 season is set at $63.065 cable bill, and that chunk will only grow million, and, with the new contract, the due to this deal. Since ESPN and TNT cap will in theory rise to a ridiculous $88 paid a ridiculous amount to the league in million.1 I believe this is the reason why order to get the rights to show games, that LeBron James only signed a two-year cost is going to be transferred onto the deal with the Cavaliers. With the onset of people paying for cable. Deadspin staff this new deal, he stands to make so much writer Kevin Draper has articulated this more money when and if he re-signs with notion well: “Cable providers currently the Cavaliers in 2017 (whether he needs pay $5.75 a month to carry ESPN, $1.28 it or not is an argument for another time). to carry TNT, and $0.27 to carry NBA TV. However, while this deal will have an With ESPN shelling out an extra $915 impact on star players like LeBron James, million annually and TNT an extra $755 the question remains if the wealth will million under the new deal, you can be be spread evenly or if star players will certain that they will charge cable providjust increase their salaries by ridiculous ers more, who will in turn pass those costs amounts while role players remain at the on to you. Your cable bill will increase a same salary level. couple dollars a month solely because of the NBA.”1 The League The TV deal could also impact Conclusion the league simultaneously. Specifically, it To conclude, this deal can clearly is highly unlikely that new commissioner have a huge impact, even on people not Adam Silver will allow the salary cap interested in the NBA. As for those who to reach the aforementioned $88 million do have a stake in the NBA, the nature of
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this impact remains unclear; a couple of important contingency variables in this regard are the specific stipulations of the proposed streaming site and the distribution of increased income amongst NBA players. Also, it will be very interesting to see how the TV deal contributes to the imminent negotiations over a new collective bargaining agreement. Stay tuned. Works Cited 1. Kevin Draper. “What the NBA’s Insane New TV Deal Means for the League and for You.” Deadspin.com. October 6, 2014. 2. Damon Bares. “150,000 Cable Subscribers Cut the Cord Last Quarter.” Huffington Post. November 14, 2014. 3. Claire Atkinson. “TV ratings see double digit declines for fifth straight month.” New York Post. March 13, 2015. 4. Richard Morgan. “Live sports winning kick for TV ratings.” New York Post. June 26, 2014.
Karthik Sekharan is a sophomore in the ILR School. He can be reached at kns44@cornell.edu
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The Conor McGregor Effect: The Impact of the UFC’s Rising Star
Damian O’Sullivan ‘17 Introduction In the less than two-year period since Conor McGregor’s first UFC bout, “The Notorious” has undergone a tremendous rise to prominence, culminating in a chance to fight for the featherweight championship in July. The 26-year-old has five UFC fights under his belt that have resulted in five consecutive victories. Although he has yet to fight an opponent ranked among the top five featherweights, the tenacious Irish fighter competes like a seasoned veteran, and his demeanor inside and out of the octagon has been critical to his immediate UFC success and fame. McGregor’s most recent fight against powerful German striker Dennis Siver concluded with an emphatic TKO for McGregor and resulted in unprecedentedly high ratings for the UFC on Fox Sports 1. This card currently ranks as the most highly viewed telecast in the history of the network among male viewers aged 18 to 34 and 18 to 49.1 In this instance, the heavy promotion of the fight proved successful for McGregor and the UFC and suggests a similar strategy for McGregor’s upcoming title fight. In fact, in regard to this upcoming bout, UFC President Dana White has publicly stated: “we probably spent more money promoting this fight than we have ever spent on any fight in UFC history.”2 Enabled by McGregor’s brash personality, strategic promotion by the UFC and McGregor himself perpetuated his meteoric rise to popularity and has implications for rising fighters to come. McGregor’s Background and Emergence Dana White first heard of Conor McGregor in April of 2013 while in Dublin receiving an award from the esteemed Trinity College for his contribution to the sport of MMA. During that trip, White encountered fans buzzing about Conor McGregor and his UFC potential. Aware of McGregor’s ability to excite and invigorate the Irish market, White returned to the United States determined to learn more about this fighter. The then 24-year-
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Photo courtesy of bleacherreport.com
With his brazen persona and success in the octagon, Conor McGregor (right) has become an increasingly prominent face in the UFC. old McGregor was a former plumber’s apprentice who was born and raised in Dublin. A former amateur National Boxing Champion, McGregor became determined to establish a career in the UFC after attending UFC 93 in 2009. White made this dream a reality, as he flew the fighter to Las Vegas for dinner and was immediately encapsulated by McGregor’s persona, later calling UFC CEO Lorenzo Fertitta to say: “if this kid can fight this much – if he can even just throw a punch – he can be bigger than anything I’ve ever seen before.”3 This meeting resulted in the company making McGregor only the second fighter under contract from the Republic of Ireland. Fertitta was also extremely impressed, deeming McGregor to be like the Irish Mohammad Ali.4 The unfaltering confidence that initially won over passionate Irish fans and the corporate ranks of the UFC would eventually elevate him to fame among American and international sports fans. Early Octagon Success McGregor’s UFC career has been brief but very impressive. The dominance of “The Notorious” in the octagon is
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perhaps best illustrated by the fact that his UFC career has thus far been only 27 minutes and 52 seconds long.5 Four of his five bouts comprised 13 minutes and 52 seconds of that total, with the other fight lasting the full fifteen minutes and culminating in his win by unanimous decision. This fight could have been finished even sooner if McGregor had not been fighting on a torn anterior cruciate ligament that was injured during the contest. Gaining the respect of fellow fighters and fans alike, McGregor is riding the wave of brilliance into UFC 189 in July, when he will face current featherweight champion José Aldo. However, one could qualify such dominance by noting that the highest ranked fighter McGregor has faced has been the sixth-ranked Dustin Poirier6. Since McGregor has not faced a top-five opponent or any top fighter with a wrestling background, it is still unclear how good McGregor really is. McGregor’s Persona Nevertheless, McGregor sufficiently makes up for this lack of experience against the sport’s elite with his larger-than-life persona. Specifically,
McGregor’s highly promotable personality has manifested itself time and time again in press interviews and fights. For instance, McGregor made sports headlines when he stormed out of the octagon after emphatically beating Dennis Siver in order to get in the face of José Aldo, his next opponent. When subsequently asked why he did this, McGregor simply responded: “I just seen [sic] his skinny Brazilian head…I was going to kill that little Brazilian.”7 In addition, when asked about the heavily one-sided promotion of his fight against Siver, he said: “The promos are 99 percent me because the fight is going to be 99 percent me. The only one percent he gets is making his walk. The rest is me.”8 Many fighters share this same type of self-promotion and hubris; however, with Conor McGregor, it is different. According to Dana White, McGregor’s brazen claims should not be deemed as simple trash talk because McGregor genuinely believes everything he says. McGregor’s Promotion and Popularity This tremendous degree of confidence has surely been a chief contributor to McGregor’s recent fame. Thus, it is not surprising that the UFC leverages this persona to boost ratings for McGregor’s
fights. For example, as aforetitle fight this soon. Specifimentioned, the advertising for cally, McGregor’s ability to his fifth fight against Dennis contend with a fighter boasting Siver was a strong wrestling widespread background remains “McGregor and heavuntested in the sufficiently ily slanted UFC. Matchmakers toward have not sought to makes up for McGregor.9 test this ability, perthis lack of The ad haps strategically in campaigns order to maximize experience primarily the immense draw against the featured of excitement and outlandish viewership for sport’s elite lines from his contests. The with his McGregor’s seemingly strategic interviews, larger-than-life protection of Mcincluding “I Gregor could be a persona.” don’t just significant contribuknock them tor to his perceived out, I pick the round,”10 and dominance in the octagon. highlights from his previous fights. Such promotion was Promotion of McGregor’s deemed a resounding success: Upcoming Fight at UFC the Boston Garden was effec189 tively sold out for the fight, and The success of Mcthe fight garnered phenomenal Gregor’s fifth fight brought television ratings (e.g. UFC about by an effective advertisFight Night was the number 1 ing campaign has yielded an show on ad-supported cable, even larger promotional camFOX Sports 1 was the number paign for the title fight at UFC one network in ad-supported 189. As mentioned earlier, cable during the fight, and it Dana White has stated that the was the most-watched MMA UFC has spent “the most monevent on ad-supported cable ey” in the organization’s histotelevision since 20091). ry on promoting his title fight In addition, the UFC’s against Aldo.11 The company promotion strategy for McGre- refers to the campaign as the gor may have also accounted “UFC 189 World Championfor his lack of experience ship Tour”, and it includes an against elite competition and unprecedented number of legs, the resulting questions about including stops in Dublin, Rio whether or not he deserves a de Janeiro, London, Las Vegas, Los Angeles, and Boston.
Photo courtesy of mmaweekly.com
UFC President Dana White understands the potential of McGregor’s promotion to augment the UFC’s popularity.
Conclusion: Implications of the “McGregor Model” for the Future McGregor’s rapid ascent to prominence has been explicitly leveraged by the UFC, yielding promising results so far. If the UFC’s campaigning efforts for UFC 189 result in similar success, then the company’s promotion of McGregor offers a promising model for it to follow in the future in order to sustain and
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augment the sport’s popularity: heavily promote the sport’s most vocal, divisive characters while concealing their flaws as fighters with strategic matchmaking. Works Cited 1. Kevin Iole. “UFC Fight Night a smash ratings hit thanks to Conor McGregor (and NFL).” Yahoo! Sports. January 21, 2015. 2. Matt Boone. “Dana White: ‘We Have Spent More Money on Aldo-McGregor Than Any Fight In UFC History.’” MMA News. March 26, 2015. 3. Gareth A. Davies. “Conor McGregor: UFC’s route to title fights in Europe and trialing Pay-Per-View events in USA on Fight Pass.” The Telegraph. October 4, 2014. 4. Jesse Holland. “UFC Quick Quote: Conor McGregor is the Irish Muhammad Ali.” SB Nation. January 13, 2015. 5. ESPN.com. Conor McGregor’s Statistics. 6. UFC.com. UFC Fighter Rankings. 7. “Conor McGregor Shifts Focus To Jose Aldo, Featherweight Title.” UFC.com. January 19, 2015. 8. UFC News. “Conor McGregor: ‘Promos are 99 percent me because the fight will be 99 percent me.’” Pro-wrestling. com. January 13, 2015. 9. Kevin Iole. “Those whining about UFC’ s promotion of Conor McGregor are missing the point.” Yahoo! Sports. January 14, 2015. 10. Damon Martin. “Conor McGregor calls his shot, puts away Dustin Poirier in first round.” Foxsports.com. September 27, 2014. 11. Nat Black-Heaven. “Conor McGregor: UFC fighter ready for world title showdown.” BBC Sport. April 5, 2015. Damian O’Sullivan is a sophomore in the ILR School. He can be reached at djo64@cornell.edu
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Equal Pay for Equal Work:
The Rise of Women’s Tennis and Its Effects
Brittany Biggs ‘18 Introduction In her meeting with the 2005 Grand Slam committee, 7-time women’s singles Grand Slam champion Venus Williams posed the following thought experiment: “Imagine you’re a little girl. You’re growing up. You practice as hard as you can, with girls, with boys. You have a dream. You fight, you work, you sacrifice to get to this stage. You work as hard as anyone you know. And then you get to this stage, and you’re told you’re not the same as a boy. Almost as good, but not quite the same.”1 There was a time when this was a harsh reality for female tennis players. Such players were given less prize money than men and their matches were televised less frequently than men’s. However, through the efforts of some remarkably persistent women, women’s tennis has been propelled into a different stratosphere. Key Developments Along The Road To
Photo courtesy of the Huffington Post
Although an accomplished tennis player, Billie Jean King may be best known for her work to advance female tennis.
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Equality money. In addition, women are making Billie Jean King was perhaps the more in tournament revenue than ever most influential harbinger of change in before. Now, women have the ability to women’s tennis. In her famous Battle of win 2.34 million dollars at the Australian the Sexes against Bobby Riggs in 1973, Open, 2.65 at Wimbledon, 2.03 at the she was able to cement the status of womFrench Open, and 2.60 at the US Open3. en’s tennis. Disproving sexist stereotypes, Prize money has also increased for those King ended up defeating Riggs 6-4, 6-3, who are unable to make it past the early 6-3 in front of a crowd of 30,000+ at days in the tournament. This is important the Houston Astrodome, then the largest for lower ranked women’s players who are crowd to watch a tennis match in history. losing early in tournaments and are forced In that same year, King went on to found to settle for an even lower payoff than the groundbreaking Women’s Tennis men. Association (WTA). With the creation of the WTA, women’s tennis finally had a The New Marketability of Women’s governing body to ensure tournaments and Tennis the proper treatment of The recent financial success of “However, its players.2 female tennis players has extended But the battle through the beyond the court. Specifically, the for equality was still biggest stars of women’s tennis now efforts of some often sign to enormous endorsement far from over. For instance, women’s remarkably deals. For instance, raking in 22 tennis players were million dollars from endorsements persistent for a long time given with Nike and Avon, Maria Sharaless prize money at the pova even makes more in enwomen, Majors. In response, dorsements than top men’s players women’s tennis Rafael Nadal, Novak Djokovic, and female tennis legends like Chris Evert and has been pro- Andy Murray.4 In addition, Serena Martina Navratilova Williams has also been able to make pelled into a millions of dollars through major for years lobbied for change. However, endorsement deals with Nike, Beats different despite such efforts, Audio, and Gatorade. stratosphere.” The augmented popularity and the French Open and Wimbledon, consisting exposure of these stars has paved of 50% of the Grand Slam tournaments, the way for more television coverage for still did not offer equal prize money for female tennis than ever before. All of the men and women as recently as 2006. Grand Slams now put women’s finals in That’s where Venus Williams’s the same prime-time slots as those occuefforts came in. From the aforementioned pied by the men’s finals. This allows for speech before the Grand Slam committee the true talent of the sport to be showcased in 2005 to her famous 2006 article for while bringing in huge numbers of viewThe Times, Venus was integral in securing ers. This year, the women’s Australian equal prize money at all the Grand Slam Open final was even able to eclipse the tournaments. In 2007, Wimbledon bemen’s final with a .7 viewer rating comcame the last major tournament to award pared to the .5 rating for the men’s!5 equal prize money for men and women. Even past female tennis stars are still making major profits. For example, The State of Women’s Tennis in 2015 18-time Grand Slam winner Chris Evert The positive developments for started Chris Evert Tennis Academy in women’s tennis did not stop there. Today, Boca Raton in the 1990s and owns a share the WTA also has many tournaments outin TENNIS magazine. Evert, along with side of the Majors, such as Indian Wells other tennis greats like Monica Seles and and the Miami Open, that offer equal prize Martina Navratilova, also lend their exper-
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Photo courtesy of the IB Times
Anna Kournikova has surely been one of the most marketed female tennis players but has not been able to justify these endorsements on the court. tise and voices to televised tennis events on ESPN and CBS. They sit side-by-side with male tennis greats and are living testaments to the growth that women’s tennis has experienced. Navratilova and Seles also had brief stints on Dancing with the Stars, which can attest to the new realms of commercial success that these women have been able to reach. Conclusion: Sexist Elements In the Status Quo? But, even with this rise in wom-
en’s tennis, some may skeptically assert that the fight may not be over, as certain sexist stereotypes perhaps still linger in the female tennis realm. For instance, in the midst of large endorsement deals signed by female tennis players, one may be compelled to ask an age-old question: does sex sell? Specifically, although women are earning more endorsement deals, is it primarily because of their talents or is it primarily because of their beauty? The case of Anna Kournikova is a key catalyst for such questions. Kournikova, a professional tennis player with the looks of a model, was able to secure 10 million dollars in endorsement deals from Adidas, Omega watches, Yonex watches, and Berlei Lingerie.6 However, there was one major problem: she wasn’t winning matches. Prone to early round exits at all of the majors, Kournikova was receiving as much coverage as much more accomplished top-seeded players. Such concerns even manifest themselves around highly accomplished top-ranked players like Maria Sharapova. Specifically, “commentators rarely seem to report on Sharapova without also commenting (often jokingly) on her appearance”7. These problems need to be resolved to ensure absolute equality for women’s tennis, for female tennis players could never earn the same respect as the male tennis players unless the former’s accomplishments on the court are taken as seriously as the latter’s. Nevertheless, despite this draw-
back, we cannot deny that the gains earned by female tennis players so far are truly remarkable. From huge endorsement deals to larger payouts at tournaments, women’s tennis has evolved into a sport that can lead to major financial success for its athletes. Hopefully, female tennis players could ride this wave of change to remove sexist attitudes from the sport, too. Works Cited 1. Bonnie D. Ford. “Venus Was ‘At The Forefront.’” ESPNW.com. October 15, 2014. 2. Sameer Arshad. “2014 US Open Tennis Prize Money Increased to $38.3 million.” Tsmplug.com. July 31, 2014. 3. Cork Gaines. “Chart: How Much Tennis Players Make Playing In Grand Slam Tournaments.” Businees Insider. January 22, 2014. 4. Forbes. “Top Earning Players In Tennis.” 5. Sports Media Watch. “Serena/Sharapova Lifts Aussie Open Women’s Final.” February 2, 2015. 6. Chris Isidore. “Anna can keep winning off the court.” CNN Money. July 8, 2002. 7. Usha Sutliff. “Coverage of Women’s Sports at Standstill.” USC News. July 20, 2005.
Brittany Biggs is a freshman in the ILR School. She can be reached at bb572@cornell.edu
Photo courtesy of Fox Sports
Venus Williams (left) was perhaps the most influential figure in the fight for equal prize money at the Majors, a feat that is surely appreciated by her sister, 19-time women’s singles Grand Slam champion Serena Williams (right).
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ILR Sports Business Society 2014-2015
For more information on Sports, Inc. or the ILR Sports Business Society, please contact Advisor Kevin Harris at kfh4@cornell.edu. Spring 2015
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