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The Biz of Baseball :: Business of Sports Network
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Maury Brown Article Archive
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Written by Maury Brown
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Tuesday, 14 May 2013 14:56 |
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Houston Astros owner Jim Crane is a smart man. One doesn’t get rich and build global business without being as such. But there’s some advice that he needs when it comes to owning and running an MLB club, and it’s this:
Slow down.
I get that you saw the need to fix aspects of the organization. You might even have wanted to put your own stamp on it, but since before you purchased the club actions—some not all of your doing—have transpired that when taken in total are scaring fans off now, and possibly in the future.
McLane Dumps Salary to Make the Sale
To make the sale happen, Crane worked with former owner Drayton McLane. For the better part of two seasons, McLane shed player payroll. This helped not only with the sale, but played into a strategy that Crane is deploying now: strip out most everyone but prospects and rebuild.
The Move to the American League
I said not everything is of Crane’s doing, and this is one of them. As part of the sale the league pushed the Astros into the American League. It is the first time in the history of MLB that a team has moved from the NL to the AL.
The Complete Gutting of the Front Office
When McLane left, pretty much everyone else in the front office went, as well. Be it Tal Smith, or Ed Wade as examples, “out with the old, in with the new” came with the sale. This isn’t uncommon. In fact, those that watch the comings and goings in sports business expect it. It’s change that comes with change.
Rebranding
This is actually a smart move, and makes sense, but it’s (again) just one more thing. With the move to the American League, the club rebranded itself based on the old Houston Astros logos. New colors… new logos… something else that is new for fans to try and absorb.
Pain for Gain
While there are some that see the method upon which the Astros are rebuilding as a bit radical (this author included), it’s always difficult to say to your fan base that you’re rebuilding. Given how drastic the plan is, it could be several seasons before the Astros are competitive, and that banks on decisions that are being made pan out. Fans don’t like it, but if the pains are short, they might live with it. Several seasons can rot a fan base. Don’t believe me? Ask the Pittsburgh Pirates.
The Launch of CSN Houston
As part of the grand design, getting into a regional sports network was in the works at the purchase. This was a smart move in the overall, but adds to the mountain of change. To date, the RSN isn’t being carried by any of the major carriers such as DirecTV or Time Warner Cable. That’s hurt the club as many fans simply can’t watch Astros games.
George Postolos Resigns as President and CEO
Maybe it was not being able to get CSN Houston those needed carriage deals. Maybe it was something else. But yesterday, George Postolos, the President and CEO of the Astros resigned. In speaking with sources close to the matter, the club currently has no one to replace him, nor are they done in searching for one. It’s been just over a year since Crane purchased the club, and the highest-placed exec below Crane has left the building. Yet more instability.
Astros Cancel Annual Fundraiser for Houston Area Women's Center
On the same day that Postolos resigned, the Astros made a move with a charitable foundation. This latest move is not only another change, it’s very bad PR. The Astros canceled The Black Ties and Baseball Caps gala that was an annual event at Minute Maid Park put on by the Astros Wives Organization. According to the club, the team’s charitable foundation is changing directions and will focus on at-risk youth and youth baseball programs and the Astros Wives Organization has been officially disbanded. Women’s center CEO Rebecca White said losing the money is a huge setback.
"I don’t know if we will cut anything because we can’t. We have to serve the people who come to our doors," White said. "The alternatives are too horrible to imagine."
Add it All Up, and You Need to Slow Down
To Mr. Crane, one needs to treat the ownership of sports clubs differently than other businesses. If you don’t think that applying business methods that work in other industry fails when it comes to sports ownership, take some time and sit down with Kansas City Royals owner David Glass. The herky-jerky, all-too-fast changes that you are making not only are doing damage to your short-term fan loss, you’re likely setting up losses far into your tenure. Remember, you’re only a steward of the Astros for a relatively short time. The Astros will be around a lot longer than you or I. What you’re doing now could have broad reaching effects on the Houston fan base. Before you do more, why don’t you let fans try to acclimate to everything that’s been thrust upon them. They’re probably woozy just reading this, let alone living through it.
 Maury Brown is the Founder and President of the Business of Sports Network, which includes The Biz of Baseball, The Biz of Football, The Biz of Basketball and The Biz of Hockey. He writes for Baseball Prospectus and is a contributor to Forbes. He is available as a freelance writer. Brown's full bio is here. He looks forward to your comments via email and can be contacted here.
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Facility News
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Written by Maury Brown
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Wednesday, 15 May 2013 15:15 |
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The allure of the NHL outdoors in ballparks continues. The NHL and New York Yankees announced today that two outdoor regular-season NHL games will be played at Yankee Stadium during the 2013-14 season as part of the 2014 Coors Light NHL Stadium Series.
The two games scheduled for Yankee Stadium are:
- New York Rangers at New Jersey Devils - Sunday, Jan. 26, 2014 - 12:30 p.m. ET
- New York Rangers at New York Islanders - Wednesday, Jan. 29, 2014 - 7:30 p.m. ET
The two games at Yankee Stadium complete the four-game 2014 Coors Light NHL Stadium Series scheduled for next season. On Jan. 25, the Anaheim Ducks will play the Los Angeles Kings at Dodger Stadium. On March 1, the Chicago Blackhawks will host the Pittsburgh Penguins at Soldier Field.
"The innovative nature of the Stadium Series affords the opportunity to have all three NHL teams in the New York-New Jersey metropolitan area play, outdoors, at one of the most-celebrated stadiums in the world," NHL Commissioner Gary Bettman said. "We'll be able to create a multi-faceted, multi-day experience for our fans, and we thank the teams, Coors Light, the New York Yankees and Yankee Stadium for their support of this memorable NHL event."
The 2014 Coors Light NHL Stadium Series will be the first time Yankee Stadium has been used for hockey.
"We have long thought that Yankee Stadium would be a great venue for outdoor hockey," said Lonn Trost, New York Yankees Chief Operating Officer. "In addition to being a first-class baseball facility, Yankee Stadium was designed to house unique and memorable events, such as the NHL Stadium Series™. Hosting two of the NHL's classic rivalries at Yankee Stadium will be a great kickoff for the worldwide sporting events in the New York/New Jersey metropolitan area scheduled in early 2014."
"The New Jersey Devils are proud to have been selected to host the first of two games at Yankee Stadium," said Devils President/CEO/General Manager Lou Lamoriello. "The NHL Stadium Series will be a memorable experience for our organization, our players and, most importantly, our fans. We are thrilled to play our divisional rival, while adding to the legacy of one of the nation's most recognized sports facilities."
"The New York Islanders are honored to take part in the National Hockey League's outdoor stadium series," Islanders General Manager Garth Snow said. "Our fan-base is one of the most passionate in the NHL. The support we consistently receive from our fans was on display during the 2013 Stanley Cup Playoffs and I expect it to be on an even greater scale when we take on the Rangers. This is what makes the games against the Rangers one of the best rivalries in the league. I look forward to seeing a strong contingent of the orange and blue in the stands at Yankee Stadium."
"The New York Rangers are honored to participate in these two historic games at Yankee Stadium, bringing hockey into the home of another one of New York's iconic sports franchises," said Rangers President & General Manager Glen Sather. "Playing hockey outdoors takes the game back to its roots and reminds us all why we laced up our skates as youngsters. We are excited to be able to bring that experience and thrill to our fans and the city of New York."
"The teams playing in these two games - the Rangers, Islanders and Devils - have tremendously loyal fans and the rivalries are intense because of their proximity and playoff history," said Mathieu Schneider, NHLPA special assistant to the Executive Director. "Yankee Stadium is a landmark venue in New York City and to see hockey played in such a celebrated setting will be extremely memorable to the players and everyone involved."
According to the NHL, further details on this special NHL event, including national broadcast information and specifics on ticket opportunities for the season-ticket holders of each team, will be released shortly. Fans interested in receiving more information on ticketing, news and special offers around the event should register at www.NHL.com/2014NewYork.
NHL Network and NHL.com will provide extensive coverage live from New York leading up to and after the games. NHL Social will have exclusive coverage on all social platforms, including the use of the hashtag #StadiumSeries.
The NHL recently announced that the 2014 Bridgestone NHL Winter Classic is scheduled for Wednesday, Jan. 1, when the Detroit Red Wings will host the Toronto Maple Leafs at Michigan Stadium on the University of Michigan campus. The NHL anticipates that the 2014 Bridgestone NHL Winter Classic could set a world record for attendance at a hockey game.
The first-ever NHL regular-season game contested outdoors was played in 2003 when the Edmonton Oilers hosted the Montreal Canadiens at Commonwealth Stadium. Since then, the NHL has played six additional regular-season games outdoors with 2009 (Wrigley Field between the Red Wings and Blackhawks), 2010 (Fenway Park between the Flyers and Bruins), and 2012 (at Citizens Bank Park between the Rangers and Flyers) all occurring at MLB ballparks.
Maury Brown is the Founder and President of the Business of Sports Network, which includes The Biz of Baseball, The Biz of Football, The Biz of Basketball and The Biz of Hockey. He writes for Baseball Prospectus and is a contributor to Forbes. He is available as a freelance writer. Brown's full bio is here. He looks forward to your comments via email and can be contacted here.
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Television
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Written by Maury Brown
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Tuesday, 21 May 2013 14:13 |
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In advance of the overall strategy for the sale of the Houston Astros to Jim Crane, former President and CEO George Postolos, and the Houston Rockets approached NBC Sports Group about the creation of a new regional sports network that would become Comcast SportsNet Houston. The deal which sees the Astros own 46.384 percent, the Rockets owning 30.923 percent, and NBC Sports Group owning the balance at 22.693 percent was smart given the rapidly changing landscape of media deals. With the move to the American League West, the Astros would be competing with the Rangers and Angels, both of whom had landed media rights deals at a reported total of $3 billion. While the Astros wouldn’t be garnering that much, they at least would be able to potentially top out in excess of $1.5 billion over the life of the agreement.
But, a couple of things happened along the way that has CSN Houston not reaching the revenues anticipated. In fact, the Astros and Rockets could potentially have the new RSN a loss leader, as opposed to a key revenue stream.
While the Houston Rockets made the playoffs this season, the Astros are years from the postseason. As part of the sale to Crane, then owner Drayton McLane began unloading player payroll. By the time the sale was approved in November of 2011, the team had finished the season with 106 losses and attendance ranked 19th at 2,067,016. In 2012, the Astros again finished with over 100 losses (107, to be exact), and attendance had dropped to 28th with a total of 1,607,733, a whopping decline of 459,283 in paid attendance or -22% from 2011. And, it appears that the team will surpass the 100 loss season mark this year.
All of this has played into the hands of carriage negotiations for CSN Houston. According to a report in the Houston Chronicle, the “Astros/Rockets/NBC Sports Group partnership is low on funds and faces ‘tough decisions’ about its future,” according to Astros owner, Jim Crane. Currently CSN Houston is not being carried by DirecTV, Dish Network and AT&T U-verse or regional carriers such as Suddenlink and Time Warner Cable. Currently, the new RSN is only being carried on approx. 40 percent of available 2.2 million televisions in the Houston area due to the impasse. Due to limited carriage, Houston Rockets ratings were down one-third for the season that recently ended.
Imagine that.
The issue is one of conflicting interests. The owners of CSN Houston, knowing that carriage deals of up to 20 years carries with it the need to get the most while they can, are sticking to their guns on getting the best rate possible. According to reports, that could be as high as $3.40 per subscriber—a lofty sum, especially in light of the dismal performance by the Astros, and the possibility that it could be several years before the rebuilding gets the club into competitiveness. The owners of CSN Houston are looking at the market that has not only provided those $3 billion deals for the Rangers and Astros, but $2 billion for the Mariners as part of the majority purchase of ROOTS Sports NW, the Dodgers waiting for approval on a $6-$8 billion media rights deal with TWC, and the outcome of a potential bidding war between FOX Sports and Comcast for a new Phillies deal. It is actually the cumulative weight of all these media rights deals, coupled with the self-inflicted wounds that the Astros have taken on with the fan base as part of the rebuilding that place the Astros/Rockets and NBC Sports Group at a considerable disadvantage.
And, it’s not like having Jim Crane say that CSN Houston is going to have to make “tough decisions” doesn’t add more leverage to those carriers that the RSN is trying to get top-dollar for. Ask yourself: if you know that an RSN is wounded, that ratings are down, and public perception of the club is low, why would you give in and offer a high rate that you are stuck with for 20 years?
And then there’s the “perception” matter. The carriers on the sideline see the Astros, Rockets, and MLS Dynamo that are carried on CSN Houston as “a small market” and therefore, not worth the amount being sought as a regional channel offering. New Astros president Reid Ryan said of the negotiations, There’s a real desire from Jim to get it right because (Crane) knows if he doesn’t get it right, it could affect this club for a very, very long time,” Ryan said. “There’s a perception out there nationally that Houston is a small market, and what we’re hearing is that people want to treat us as a small market. This is the fourth-largest city in America. It’s kind of a slap in the face to call Houston a small market.”
There is possible movement on the matter, but it’s hard saying when that movement may come, if at all. On Monday, representatives from the Astros, Rockets, NBC Sports Group and Suddenlink Communications met with Houston Mayor Annise Parker. The meetings were described as “positive” but that no resolution was reached, and none were expected soon.
The Astros may be part of bad timing as well as negotiating from a position of weakness. As we’ve been saying, it’s possible that the media rights bubble may be close to bursting. When you couple that with the Astros poor showing in the standings and other matters such as bad PR with the sudden, unexpected resignation of George Postolos, the Astros may get broader carriage, but not at the rate they feel they deserve, or want. It's just one more thing on top of many others that have the Astros needing to slow down with all the change.
Maury Brown is the Founder and President of the Business of Sports Network, which includes The Biz of Baseball, The Biz of Football, The Biz of Basketball and The Biz of Hockey. He writes for Baseball Prospectus and is a contributor to Forbes. He is available as a freelance writer. Brown's full bio is here. He looks forward to your comments via email and can be contacted here.
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MLB News
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Written by Administrator
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Thursday, 16 May 2013 12:53 |
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 On second and final day of the meetings with Major League Baseball’s 30 owners in New York, the topic of the pension plan for those working for clubs was discussed. The matter, first reported by Adam Rubin of ESPN New York, has been brewing for several years. According to the report, a small market club raised the issue of eliminating some pension plans, despite the league seeing record gross revenues in excess of $8 billion.
But the matter was not brought to a vote today, and no action has been taken. Sources reiterated what was said when the story first broke that the matter is not about eliminating pension for personnel, rather giving clubs more flexibility in what they offer. It was not said whether that could possibly mean the downgrading of pensions for some clubs.
At the time of the report in March, the Professional Baseball Scouts Foundation had an emergency conference call to discuss the matter. Those that have been scouts for some time were reassured that they would not be impacted by any change, but it was unknown whether new scouts would see adverse impacts, if or when, the league’s owners vote on changes to the pension plan.
Maury Brown is the Founder and President of the Business of Sports Network, which includes The Biz of Baseball, The Biz of Football, The Biz of Basketball and The Biz of Hockey. He writes for Baseball Prospectus and is a contributor to Forbes. He is available as a freelance writer. Brown's full bio is here. He looks forward to your comments via email and can be contacted here.
Follow Maury Brown on Twitter
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Sports Business Radio
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Written by Maury Brown
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Monday, 06 August 2007 11:11 |
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 In our continuing work with Sports Business Radio, we wish to highlight an outstanding interview with Dodgers owner, Frank McCourt.
McCourt, the fourth owner of the Dodgers, is seeing incredible attendance this year, with the Dodgers surpassing the 3.5 million mark already (they've also drawn 175 million fans - all time best for an American sports franchise). Also, in what must remind many of the now famous Jimmy Fund with the Red Sox, the McCourts have launched ThinkCure, a non-profit charitable organization dedicated to raising funds for critical cancer research at City of Hope and Childrens Hospital Los Angeles. Brian Berger of Sports Business Radio talks with McCourt about these topics, as well as McCourt's overall business philosophies, and who McCourt's favorite baseball player is.
Select the following link to access the interview in Podcast, via Sports Business Radio: The Frank McCourt Interview |
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