guncurug

This quarter's baseball meetings will be memorable for Bud Selig upsetting the natural order of things as he caught the realignment bug from the NCAA.  In order to create more inventory for baseball's television partners, Selig forced the Houston Astros to move to the American League West,  more on that in a moment, added a new wild card team and fundamentally altered inter-league play. What additional inventory did the TV networks gain? One playoff game in each league between the two wild card teams.

The Houston Astros were the designated franchise for realignment because Selig had the power to force the Astros to move.  The sale of the Astros has been pending since early Spring and has been held up until the additional playoff game could be worked out with the players' union.  Once the owners got the green light, the sale was ready to be approved but only on the condition that the franchise move to the American League, a prospect which doesn't particularly thrill the fans.  That move cost Drayton McClane, the selling owner $70 million, as the price was reduced to entice Jim Crane to go through with the sale and the league switch.  I don't know if that is a reflection on the American League or, more likely, the  long history of the Astros in the National League. 

Interleague play will now take place every day during the season.  Since each league will now have 15 teams, in order for all teams to be playing everyday, one interleague game must be played.  So, rather than the three or four windows that fans could anticipate and teams could design marketing plans around, interleague games are likely to become just another game.  That's a prospect that I don't think is particularly beneficial to baseball, especially when it's done in return for a single playoff game in both leagues. 

As I was running errands this afternoon, I was listening to Bob Valvano's talk show.  He has an afternoon talk show on the local ESPN affiliate and does an overnight show for ESPN radio on the weekends.  If you don't know Bob, he also does color commentary for ESPN during basketball season, and the occassional football game, as well as the local (Big East Network, for now) broadcast of Louisville games.  He's Jimmy V's brother and a former college head coach.


All that is by way of introduction since I want to Bob the credit for this idea.  He proposed today that, assuming the NBA ever solves its labor problem, and more about that at a later time, it should seize this opportunity to change its calendar and start games in December and run through July, instead of the normal October through June.  Why, because on the front end there is too much competition (NFL, college football, NASCAR Chase, World Series)  and no one pays attention to the relative meaningless early season and when the playoff start, there is still competition: March Madness, the Stanley Cup, the opening of baseball season, the Triple Crown, the Masters and some others. 

However, once the middle of June hits, there's nothing.  Baseball is in the middle of the season and it doesn't demand the interest of the casual fan and what else is there?  From roughly mid-June to the beginning or middle of August, there is a relative sports desert.  All we have is baseball, regular season MLS, golf, tennis and regular season NASCAR, if you will. Even horse racing takes most of July and early August off without more than a couple of major races.  The NBA would have the field to itself.  I think the networks would love it as it would give them some high demand television in traditionally slow months.  It all makes a great deal of sense to me, which of course is why they won't do it.

The NCAA Board of Directors approved a proposal to allow schools to distribute up to $2,000 a year or the full cost of attendance, whichever is less, to student-athletes in "head count" sports, i.e. men's and women's basketball, football, and those in " equivalency sports" who reach the full value of a scholarship. Amazingly, the NCAA Board, which is composed of member university presidents actually followed through on a pledge to reform its policies in student-athlete friendly ways,

While the full cost of attendance change is likely to garner most of the headlines, the Board passed what potentially could be a more impactfull change, finally authorizing multiyear scholarships up to the full term of eligibility. This should help stop the oversigning problem which plague the SEC., and the disgraceful practice of wholesale running off of players that seem to accompany every coaching change. Additionally, the presidents voted to allow institutions to provide aid to any athletes who came back to school to complete their degrees following exhaustion of of their eligibility. They also raised the Academic Progress Rate required for postseason eligibility. Taken as a whole, this was probably the single most student athlete friendly day ever at NCAA headquarters. The presidents made good on a number of commitments they had made over the years and NCAA President Mark Emmert made a significant down payment on his credibility as a student athlete friendly reformer. Much is left to do, but we must always stop and recognize progress when it occurs. I've bashed the NCAA on many occasions for ignoring the welfare of the students in favor of the sports administration complex (similar to the military industrial complex.). These steps don't end the arms race, don't begin to reign the outrageous salaries being paid to coaches, or the sale of the programs to corporate sponsors, but they took significant steps toward making the student athletes lives better, both while at school and, importantly, after they have left without a degree. For that, they deserve our praise.

Before I dive into the topic of the post, let me first say a word or two about the absence of recent posting.  I realize it's been a while and I want to apologize for that.  A combination of health issues, all now since resolved, thank you, and family matters have consumed my time for the last couple of months and I just haven't been able to devote any time to the blog.  However, with most of that behind me, I hope to resume posting on a much more regular basis.


In my absence, it seems that college athletics is engaged in another round of conference roulette, touched off, in part, by another ACC raid on the Big East, grabbing Pitt and Syracuse.  Has there ever been a more insecure conference commissioner than John Swofford?  This time, of course, the SEC joined in the fun early with Texas A&M longing to get out from under the huge shadow cast by its Austin rival, jumping from the Big XII.  The final shoe has yet to drop as Missouri is readying itself for a move to the SEC, with the Big XII then having to decide whether to just replace Missouri and stay at ten members or invite three schools and go back to 12.  By all reports, there is no consensus yet, although the Big XII presidents meet this week.

The Big XII decision has ramifications for the Big East, which is trying to salvage itself with a plan to expand to 12 football members by adding Boise State, Air Force and Navy for football and Houston, SMU and UCF for all sports.  Since Louisville and West Virginia are widely thought to be two of the three leading candidate to join the Big XII, all the Big East can do now is wait it out.

Aside from your favorite school may be playing next year or in 2013, there are two interesting undercurrents to all of this "ring around the rosey".  One is the unseen hand of ESPN; the other is the potential effect this maneuvering may have on the NCAA's and its members' tax exemption.  Let's take ESPN first.  To accept what I'm about to discuss takes a little bit of belief in conspiracy theories.  While I'm no usually prone to believing in them, this story has too many coincidences not to give at least a little credence.  First, a little history.  Within the past year or two,  three major conferences have signed new television agreements for football and men's basketball: the ACC, SEC and Big XII.  Both the ACC and SEC signed very lucrative long-term deals with ESPN, which created branded "ACC on ESPN", and "SEC on ESPN" networks among other enticements, like hundreds of millions of dollars.  The Big XII spurned ESPN and signed with Fox, its previous media partner.  Earlier this year, the Big East, in the final year of its existing ESPN contract, rejected an almost $1 billion contract in favor of negotiating next year, when all the other conference deals will have been completed.  Leading the charge to reject the contract was Pitt Chancellor Mark Nordenberg.  The two conferences most adversely affected by all of the school movement so far:  Big XII and Big East.  One further bit of evidence is the comment by the ever lovable athletic director at Boston College, who, in discussing the admission of Pitt and Syracuse, said "It�s 85 percent football money. TV - ESPN - is the one who told us what to do."He later apologized and said he misspoke but what would you expect him to do?

The tax implications of the realignment game are potentially far more impactful than any monetary gain a new conference and new TV contract may provide.  For more than five years, Congress has been "interested" in the tax exempt status of the NCAA and the athletic programs of its member institutions.  For any number of reasons, members of Congress have thought that athletic programs sporting budgets  in the tens, and even hundreds in the case of Texas and Ohio State, of millions and making decisions based on business necessity not the welfare of the student athlete were being operated as businesses and should be taxed accordingly.  In 2006, the House Ways and Means Committee sent a letter to the NCAA asking it to respond to various questions and justify its tax exemption.  While the issue has been on the back burner since, comments like these from our voluble friend at Boston College certainly don't help the NCAA cause.  When schools are jumping to leagues with questionable geographic and academic ties (see ACC or Boise State to the Big East) it becomes increasingly easy for the opponents of the NCAA to question its right to a tax exemption.

When the primary justification for a conference switch is to access a greater pot of TV money, or even to gain access to the BCS, without regard for the welfare of the student athletes who must do the far flung travel while also keeping up with classwork, can it honestly be said that such a move is furthering the academic mission of the university. Before you say football is only once a week and they generally charter planes at this level anyway, remember that most of these moves are all sports moves requiring the Olympic sports, which do not have the budgets enjoyed by basketball and football, to make the same trips.  Olympic sports generally travel commercial if they must fly and those are all day trips in both directions.  We all know how pleasant the commercial flying experience has become.  Athletic department actions which are so blatantly commercial, as jumping conferences for a share of TV money, may go a long way towards solidifying the argument that the NCAA and its member institutions are not engaged in activities that further the academic mission of the school, but are commercial enterprises that deserve to be taxed like ones.  Should that happen, not only would there be tax to pay, but donations to the athletic department would likely lose their charitable deduction, significantly decreasing the attractiveness of many season ticket packages.  As has been the case so often in the past, when it comes to college athletics, decisions are often made for all the wrong reasons or are not carefully thought through.  Athletics seems to attract emotional decision-making more than any other aspect of university life and, as a result, the entire enterprise of college athletics as we know it may be placed in peril.

I feel compelled to say something about "The Vest's" departure from tOSU since it has dominated the discussion in American sports this week.  It has even overshadowed to a significant degree the opening of both the NBA Finals and the Stanley Cup Finals (the opener proving just how exciting a 0-0 game can be  the only goal was scored with 16 seconds left in regulation), So, where to begin?

I was not terribly surprised at what was his likely forced resignation, something which I believe should have happened months ago. This was far from Tressel's first brush with the NCAA.  He had problems at Youngstown State, for scholarship and recruiting violations.  After his arrival in Columbus, there was Maurice Clarett, followed by a steady stream of players, with the most prominent and public being the suspension of  Troy Smith for the Fiesta Bowl following the 2004 season, for accepting $500 in cash from a booster. President Gee and Athletic Director Gene Smith were much too lenient when it first beacame known that Tressel had lied to the NCAA and to his bosses.  With his compliance track record and for the lies, he should have been immediately terminated.  It would have been in the best interests of the institution and set a better example of how a school should react when something like this happens, and rest assured it will happen again, somewhere.  It wasn't until the Columbus Dispatch was about to go public with stories concerning additional violations that Gee finally decided to act, assuming as I do, that the resignation was not voluntary.  I'm also convinced that Leslie Wexner, founder of The Limited and Chair of the Board of Trustees, saw the continuing controversy as adversely affecting the school's major capital campaign that President Gee was forced to act.  This did nothing for his reputation either, but solidified the feel who went to B1G Ten that tOSU is really a SEC in witness protection.

Zach Price  in a piece for Sports Illustrated, links the Terrell Pryor portion age limit, which, in this case, would be the stricter NFL limit once the players and owners sign a new collective bargaining agreement. While I don't really buy the connection, I do believe that the age limit is a bad idea from the colleges standpoint, particularly in basketball.  The NBA and NCAA should adopt the baseball limit at all.  Baseball allows a player to be signed right out of high school, but if he doesn't sign a pro contract before he enrolls, then it's three years before the MLB can get him.  The advantages of this rule are: (1) it gives the student an option not to go to college if that's really what he wants, (2)the colleges know that they have a player for three years and can better build a team, (3) the athlete knows he must be a diligent student since he will want to stay eligible for three year, thereby significantly raising the change that college will actually be meaningful for him.

That said, my real answer is to eliminate athletic scholarships altogether.  But wait, then all of the disadvantaged kids who had trouble getting through high school would not be able to go to college. That would only be true for those kids who are marginal students.  For everyone else, there would be adequate financial aid available on the same basis as it is to the rest of the student body.  It has worked in the Ivy League and Patriot League (although the Patriot League has recently crossed over to the Darkside) and works in Division III.  Now, I know that Ivy League and D-III schools don't have stadia that seat 1000,000 and aren't on TV all the time, but that is what college athletics should be.  Instead, we all have gifted the top five major professional leagues, free of charge, a minor league system that would cost billions to replicate.  It is a system that has been designed to enrich its administrators and coaches at the expense of the colleges and universities and on the backs of the student-athletes.  Real and lasting reform of the NCAA won't take place until system and the role of the big five major leagues is addressed.

The Wilpon brothers, who are majority owners of the New York Mets are in final negotiations with billionaire hedge fund manager David Einhorn to sell a 30-33% interest in the team to him for a reported $200 million.  The deal supposedly includes a provision allowing Einhorn to purchase an additional 27-30% in three years, so that he would then own 60% at the same valuation. The Wilpons can avoid the latter sale and retain majority ownership of the club by repaying the initial $200 million to Einhorn, in which case Einhorn retains his 30% interest for essentially nothing while receiving a $200 million cash return on his $200 million investment.  So, the question presents itself is how should Mets fans react to this sale?

It's no secret that the Wilpons, and their business and team ownership partner Saul Katz, have been distracted lately.  It's also no secret that they and the franchise are in desperate need of cash.  Both issues stem in part from the fallout of the Bernie Madoof saga, as the trustee for the victims in the Madoff affair are suing them for a $1 billion.  As if that were not enough, the club is said to be hemorrhaging cash and is on pace to lose $70 million this season.  Anything that can ease both situations, as this sale will do, has to be a positive for the team's performance.  The idea that the Wilpons may be gone in three years probably brings new joy to the clubhouse - especially following principal owner Fred Wilpon's interviews in the New Yorker and Sports Illustrated last week.

There is another reason Mets fan should have reason to hope.  The track record of hedge fund owners in professional sports is generally a good one.  Whether it's the application of lessons learned in the hedge fund business, the ability and willingness to spend the necessary time to lead the organization - since most of them are billionaires and have the luxury of time, or it's the knack for picking the right personnel, the track record holds up across sports.  In baseball, there is John Henry, whose Red Sox broke an 86 year drought two years after he bought the team.  In basketball, there is James Pallotta, a member of the ownership group of the Boston Celtics.  In hockey, you have Philip Falcone, who owns part of the Minnesota Wild.

Which brings up a somewhat unrelated topic, but interesting nonetheless.  I'm sure many of you are aware of the Stadium Effect; the negative effect on stock price and financial performance of companies that enter into naming rights agreements for stadiums and arenas.  There may be a corollary to that rule emerging and it would indicate that investors in Greenlight Capital, the hedge fund managed by David Einhorn,  should be wary.  This curse applies to investors in hedge funds whose managers acquire sports franchises.  There appears to be a negative correlation between fund performance and franchise ownership.  Whether due to distraction or market luck is hard to say, just that the correlation is apparent.

Vancouver Canucks fans celebrated long into the night when the Canucks reached the Stanley Cup finals for the first time in 17 years. Fans in Canada also got their first Canadian finalist since 2007, although there are many Maple Leafs and Canadiens fans who just can't bring themselves to root for the west coast upstart.

However the Canadian fans sort out their loyalties, one thing is now clear:the suits at Comcast and NBC are strongly rooting for the Boston Bruins to close out the Lightning in their Eastern Conference finals. A Vancouver-Tampa Bay match-up would likely be a ratings disaster, given one Canadian team and one Sunbelt team with no real fan attraction outside Tampa Bay. After all, half the country hasn't been awake for the Canucks' games, not to mention that several of them have been on Versus which the casual fan is still struggling to locate. Add to that the fact that no Canadian numbers go into the ratings and the boys at Comcast could, with a Lightning win in game 7, be looking at the lowest rated Stanley Cup final perhaps ever. So, Flyers' fans, forgive Comcast I'd just this once, they root for the Bruins.

UPDATE: With the Bruins win, NBC/Comcast can breathe a little easier.