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Issue: The Sports Business

The Sports Business

By: Joe Lapointe

Pub. Date: September 4, 2017 Access Date: September 28, 2021 DOI: 10.1177/237455680326.n1 Source URL: http://businessresearcher.sagepub.com/sbr-1863-103855-2836922/20170904/the-sports-business ©2021 SAGE Publishing, Inc. All Rights Reserved. ©2021 SAGE Publishing, Inc. All Rights Reserved.

Is it a bubble about to burst? Executive Summary

If the U.S. sports business has two mainstays, they are the National Football League and ESPN, the dominant league and pre-eminent television network in a $60 billion industry. Yet both are facing serious challenges, with the NFL confronting a drop in television ratings and ESPN grappling with a decline in subscribers as fans find alternate ways to watch their favorite sports. Some observers view these trends as warning signs that the decades-long expansion of sports’ popularity – and profitability – is about to end. Others disagree, saying the industry can adapt to changing fan preferences and remain prosperous because of strong interest in its basic product. Here are some of the key takeaways: The advent of smartphones and streaming services has cost ESPN more than 12 million subscribers and $1 billion in lost revenue in the past six years. The NFL suffered an 8 percent decline in its television viewership last season and is cutting down on the number of in-game commercials in response. The fraught relationship between sports and gambling will enter a new phase when a pro hockey team moves into Las Vegas in 2017 and an NFL franchise follows suit by 2019. Overview

The prosperous partnership between the NFL and ESPN is being tested by new trends in sports viewership. (Scott Cunningham/Getty Images)

As a television executive for the sports network ESPN, Burke Magnus stays aware of changes in video technology. But a recent moment in the family car showed him the speed of the evolution. As Magnus drove, his teen son rode with him, watching a football game on his smartphone screen. If his son lost the signal for 30 seconds, Magnus says, he got frustrated and said, “What a pain in the neck!” Magnus – ESPN’s executive vice-president for programming and scheduling – chuckles at the memory. “I’d say to him, ‘You do realize you’re watching a live college football game in the car on your phone?’ ” Magnus says. “Can you imagine having that ability when you were a teenager? I can’t. Because it didn’t exist.” As the warning says on the side of the car, “Objects in mirror are closer than they appear.” The digital device in the hand of Magnus’s son – a technology barely a decade old – certainly will disrupt the way ESPN has done business for almost 40 years. And, at the very least, the digital revolution will rattle the business landscape that includes the National Football League (NFL) and other sports leagues enriched by television money. “The only question now is ‘How do you make the most money getting the signal to the eyeball?’” says Rodney Fort, a sports management professor at the University of Michigan. “This is causing heartburn, I’m sure, for people who are heavily invested in old-style capital.” It isn’t the only change in sports television or in the business of sports. The NFL, coming off a season of lower TV ratings, is tinkering with digital delivery and reducing commercial interruptions that try the patience of viewers. “I’m glad that the TV contracts aren’t up again for a few years because that will give everybody an opportunity to assess where we are,” says John Mara, co-owner of the New York Giants. “Things are changing rapidly. We want to be ahead of the curve as much as possible.” They have a money cushion that can buy some time. According to Forbes magazine, the sports market in North America was worth $60.5 billion in 2014 and will be worth $73.5 billion in 2019. 1 Citing data from a 2015 sports industry report by PricewaterhouseCoopers, Forbes concluded that the business in good shape. 2 The report took into consideration the new, digital technology for showing events. “Related initiatives involving a la carte and streaming media are allowing consumers to purchase specific content (i.e. media rights for a single game or season package for a specific team), watch games in a condensed format shortly after completion, and watch replays on league platforms before they are available through general media,” the PricewaterhouseCoopers report said. 3 Other currents in the stream of the sports business include: The entry into Las Vegas of pro football and hockey leagues and the possibility that the U.S. Supreme Court might legalize single-game betting. The growth of “fantasy sports” in which fans draft players and can bet on how their “team” fares for a season or a day, an activity that appeals to both the urge to gamble and the shorter attention span of the Millennial generation. The continued race to build elegant, gentrified stadiums and arenas that attract big spenders and doom many existing, functional buildings as “outmoded” after only two or three decades.

The chance that the soccer World Cup could return to the United States in 2026 to boost the domestic growth of that international sport. All this is transpiring amid doom-and-gloom predictions that followed the latest round of ESPN layoffs last spring and lower NFL ratings during the 2016 season. “At best, televised football is no longer a growth industry, but merely a strong business that has peaked,” wrote Derek Thompson, a senior editor at The Atlantic. “At worst, this is the beginning of a period of steady decline for the one thing on traditional television that was never supposed to waver.” 4 Breitbart News speculated that a TV disruption could cascade through the sports industry. “If this trend in sports TV broadcasting continues, the financial strain won’t just be relegated to sports broadcasters,” the website predicted. “This bubble could very well spread and burst across cities that spend – and some contend waste – tax dollars on stadiums. These costs could even cascade to the unseemly amount of money teams already charge at ballpark gates.… This will likely cause a downward spiral in professional sports. Eventually, the increasing ticket prices will keep fans at home and, with fewer people attending games.” 5 One skeptic of this bubble-bursting theory is Paul Anderson, director of the National Sports Law Institute at Marquette University. He says he hears that warning every five or 10 years. “There’s no bubble,” Anderson says. “The cable network paying for sports, that may change. But sports in general? No.… I think it’s going to keep growing. It’s going to change, yes. The way we consume sports is going to change.” He says consumption of sports online will reflect the model in the music industry, a business that many once feared would be ruined by the internet. “Well, the music industry went online and they have iTunes and things like that,” Anderson says. According to William Sutton, director of the sports and entertainment management program at the University of South Florida, the change is generational. People under 35, he says, consume sports differently than their elders. “The NFL has a three-hour broadcast with 12 to 15 minutes of action,” says Sutton. “That’s not lost on this generation. They’re not going to sit there. They’re either going to watch the RedZone channel [which shows in-game cuts when teams approach the goal line] or they’re going to follow it online. They still follow it. They’re still fans. They just consume it totally differently. It’s never going to swing back.” Growth and change have been consistent themes in an industry that began to boom almost a century ago, when World War I ended. But the growth was not evenly paced. In the summer of 1960, there were just 42 teams in the four major sports leagues – 16 in baseball, 12 in football, eight in basketball and six in hockey.

In autumn 2017, when an expansion team called the Vegas Golden Knights joins the National Hockey League (NHL), it will be the 31st team in its league and the 123rd in the four big leagues. At the start of the 1960s, hockey ended in April, pro football in December, baseball’s World Series was played entirely in the afternoon and pro basketball featured teams such as the Minneapolis Lakers, Cincinnati Royals and Syracuse Nationals. But the birth of the American Football League in 1960 led to a television gold rush that has not yet ended. ABC and, later, NBC, subsidized the new league. It was over the air and it was black and white, but it sold, and it eventually forced the merger of the NFL and the AFL. Media Rights To Be Top Sports Revenue Source

Projected to surpass ticket sales in 2018

Note: Figures for 2016 through 2019 are projections.

Source: David Broughton, “Media rights to trump ticket sales by 2018,” SportsBusiness Journal, Oct. 19, 2015, https://tinyurl.com/y9gjoqxh; “At the gate and beyond: Outlook for the sports market in North America through 2020,” PwC Sports Outlook, October 2016, https://tinyurl.com/yc4a2tbb.

Media rights will outpace ticket sales as the greatest source of revenue for the North American sports business by 2018, according to a projection.

Cable TV became a force in the 1970s and ESPN started in 1979 and grew into a behemoth. It threw elbows at over-the-air networks such as NBC, CBS and ABC in the way a rebounder fights for position under the basketball hoop. In addition to dual revenue streams of commercials and subscribers, ESPN added more money muscle in 1996 when The Walt Disney Co. acquired it and ABC. By 2011, ESPN had topped out with more than 100 million cable subscribers, who now pay close to $8 per month for the network’s channels whether they watch them or not. ESPN also committed that year to rights contracts that will cost it more than $8 billion in 2017. 6 But “cord-cutting” since then, especially by younger viewers, has trimmed more than 12 million subscribers from its channels, ESPN says. It is costing ESPN more than $1 billion per year with no sign of the slump bottoming out. 7 “A lot of people have been paying for ESPN who don’t want to watch it,” said Andy Serwer, the editor-in-chief of Yahoo Finance. “That’s not a great business model, people paying for something they don’t want.” 8 Bloomberg journalist Joe Nocera wrote about ESPN’s layoff of 100 employees last spring after dropping 300 more two years before. He said digital video delivery systems available on the internet and “skinny bundles” sold by some cable companies allow customers to either avoid ESPN totally or buy it without the traditional cable “bundle.” 9 “As the cable bundle disintegrates, it matters a lot,” Nocera wrote. “ … The ability to get cable television without ESPN or to stream sports without cable means that the subscriber losses are going to continue … As other industries have learned, gravitating your business to the internet usually means lower profits, often drastically lower. ESPN’s problems are only going to get worse.” 10 An ESPN employee who survived the layoffs, Ed Cunningham, is leaving for a different reason – one that has marred football’s image and could affect its popularity. He said he is giving up his job as a college football color analyst because of concern about the physical trauma on players, especially head blows that have been implicated in long-term brain damage. 11 One of the few assets ESPN lost in recent years is the right to televise World Cup soccer from Russia in 2018. The rights were won by Fox. “It’s to our great regret, believe me,” Magnus of ESPN says. “That’s one we wanted to keep doing. Slowly, but surely, soccer is taking hold. We actually look at soccer as a great growth property.” Soccer’s world governing board, FIFA, will decide in June 2018 if the United States, in partnership with Mexico and Canada, will host the World Cup in 2026. (The quadrennial event is in Qatar in 2022). Such a coup would please Major League Soccer, the North American league that says it plans to add four expansion teams by 2020 to bring its total to 28. Dan Courtemanche, MLS’s executive vice-president for communications, says “we are on a growth trajectory” and that the biggest expansion is among Millennials. “Everybody always says, ‘I see kids all playing soccer out there, when’s it going to catch on?’ ” Courtemanche says. “Well, among that generation, it has caught on.” As evidence for this, Courtemanche cited a survey by SportsBusiness Journal that showed the average age of MLS viewers in 2016 to be 40 years old, younger than those of the NBA (42), NHL (49) and NFL (50). 12 Also catching on with younger fans are fantasy sports websites, which involve betting not on individual teams and games but on players drafted to form imaginary, personal “teams.” The New York Times reported in 2013 that single-day fantasy sports “is now responsible for $492 million in annual spending out of an overall fantasy industry of $1.6 billion spent, according to a study commissioned by the Fantasy Sports Trade Association.” 13 The Times reported that people who know the industry are troubled that many sites are run by people with backgrounds in online poker or sports betting, activities that sometimes run afoul of government regulators. 14 “On the spectrum of legality to illegality, they’re getting pretty close to the line,” said Ryan Rodenberg, an assistant professor of sports law at Florida State University. 15 That line could soon be further blurred if the Supreme Court rules in its 2017–18 term in favor of New Jersey in the state’s effort to legalize sports betting at its racetracks and casinos. “It’s certainly a slippery slope,” says Mara, the co-owner of the Giants. Mara’s team moved into a luxurious new stadium in New Jersey in 2010, just as an older one next door was demolished. It is part of a trend that will continue with the $1.6 billion Mercedes-Benz Stadium in Atlanta. It is next to the Georgia Dome, which will be torn down after just 25 years of existence. Fort, the University of Michigan economist, scoffs at the notion that a recession or disruption for ESPN and traditional broadcast outlets will mean less money overall in the sports business. “It’s not a bubble,” he says. “Remember, a bubble is an irrational increase in price because the price is going up.” And Fort does not see such irrationality in sports. For television, he says, “People are still willing to pay for it. It’s just that they have lots of options to buy it.” Fort says that while rising ticket prices force cutbacks in spending for middle-income families, those fans are being replaced by “people willing to pay more, rather than less” for luxury boxes, private clubs and suite seating as economic gains of recent years have flowed upward to the wealthiest. “Sports owners figure out ways to collect that money,” he says. “That’s what we’ve seen happening.” As executives, athletes and fans alike think through how the sports business is changing, here are some of the issues they are considering: Weighing the Issues Are TV and the NFL still a good marriage?

As the 2016 season brought a surprising 8 percent decline in television ratings for pro football viewership, according to the NFL, the headlines on the websites were gloomy. “NFL ratings plunge could spell doom for traditional TV,” said The Washington Post. 16 “The NFL Was a Sure Thing for TV Networks,” said Bloomberg. “Until Now.” 17 “NFL ratings were down all season, and there’s no reason to think they’ll get better next year,” the technology news website recode.net wrote. 18 But as the 2017 season approached, the league and its team owners were more sanguine about the survival of the most watched and most expensive sports television programming in the United States. While ratings were down, most of those losses were in the first half of the season. Sure, more fans – particularly young ones – were eschewing cable TV in favor of internet streaming services and mobile devices. Still, traditional TV was reaching somebody. “For six years in a row, NBC’s Sunday Night Football has been the No. 1 show in prime time in all of TV,” says Brian McCarthy, an NFL spokesman. “The past year was an unusual year after years of skyrocketing ratings. The NFL is the crown jewel of television.” Younger Fans Stream Super Bowl on Smartphones

Different devices used to view last year’s game

Source: Heike Young, “New Research Reveals How People Will Spend Time Multi-Screening During Super Bowl 50,” Salesforce, Feb. 4, 2016, https://tinyurl.com/ydeqlhwk.

As fans watch and stream sports events on multiple devices, more 18-to-24-year-olds planned to watch last year’s Super Bowl on their smartphones than on televisions, according to a survey. (Numbers total more than 100 percent because fans watch on more than one device during the game.)

But for how long? Skeptics include Patrick Keane, a media executive who is president of Sharethrough, an online advertising company. He told Bloomberg.com that he used to think the NFL was unstoppable. 19 “It’s live,” he said. “It’s compelling. It’s historical. It’s only 16 games.… It just felt untouchable. The NFL’s sudden vulnerability is one of the more shocking media phenomena that I’ve seen in my career.” 20 And a Washington Post article suggested that the vulnerability comes from cultural trends bigger than even professional football or television. 21 “Though it still dominates the country’s leisure time, traditional TV viewership has rapidly dwindled,” the Post wrote. 22 “Since 2010, the time Americans spend watching TV has dropped 11 percent, Nielsen data shows. For people younger than 24, their TV time has plunged more than 40 percent, with many of those minutes spent instead on social media and their phones.” To reach those Millennials, the NFL will experiment for a second year with streaming some games – 10 of them on Thursday nights in addition to airing them on NBC, CBS and the NFL network. Last season, Twitter paid $10 million for the streaming package. This year, Amazon will pay $50 million for the same one-year deal. The strategy seems both measured and forward-looking for a game that sparked the sports television explosion in the 1960s. Vishal Shah, the league’s senior vice president for digital media, said this is a “learning phase” and the digital games are “all additive at this point and not cannibalistic” to their other delivery platforms. 23 “Television will continue to be the mass market where we’re aggregating audiences,” he said.” 24 Nevertheless, he added that partners such as Amazon and Twitter might bid for packages when the NFL’s current deals expire in 2022. 25 “I do think they will be a meaningful option, even in the short term,” he added. 26 The value and length of current TV contracts allows the NFL to study and experiment with the market and the technology in real time without making hasty decisions. Giants co-owner Mara says the league is fortunate to have long and lucrative TV agreements with NBC, CBS, ABC and ESPN. According to Forbes, the NFL will get about $7 billion per year in media revenue through 2022, or “more than $200 million per team every year before one ticket, beer or jersey is sold.” 27 Mara said the fact that the contracts run for another five years will allow the league to study the evolving technology and stay ahead of the curve. Overall, he says, it is a time of change in the business but not one of panic. “It’s an exaggeration to say that the bubble has burst,” Mara says. “People still love NFL football. Look at the ratings we get for the draft and for events like the combine [a scouting showcase for college players] and everything. They’re still pretty remarkable.” Are the NHL and NFL taking big gambles by putting teams in Las Vegas?

When Tim Mara founded the New York Giants football team in 1925, he worked as a legitimate bookmaker for gamblers at horse racing tracks. Now, his grandson, John, is the co-owner, president and chief executive officer of this bedrock NFL franchise. With professional sports creeping closer to legalized gambling and to Las Vegas, Mara is concerned. “I don’t want to be in a position where I’m in a stadium and most of the fans are more worried about the point spread than they are about who wins the game,” Mara says. He may soon find out if that comes true, given the Supreme Court’s decision to take the New Jersey case on legalizing sports betting at racetracks and casinos. 28 The justices are expected to rule in their 2017–18 term on the Professional and Amateur Sports Protection Act of 1992, a federal prohibition against sports betting. 29 At present, the only state allowed to offer single-game wagering is Nevada, which handled more than $4.5 billion in sports betting in 2016. 30 Its famous gambling mecca, Las Vegas, will soon join the NHL, and an established NFL team, the Oakland Raiders, plans to move there as soon as 2019. These developments reflect a changing philosophy in professional sports. Until recently, the leagues avoided Las Vegas and connections to gambling. A major sign of this shift came three years ago when National Basketball Association (NBA) Commissioner Adam Silver published an opinion essay in The New York Times headlined “Legalize and Regulate Sports Betting.” 31 Silver wrote that an estimated $400 billion in illegal sports gambling is wagered each year in the United States and that the laws should change. 32 “Sports betting should be brought out of the underground and into the sunlight where it can be appropriately monitored and regulated,” Silver wrote. He added that gambling has become “a popular and accepted form of entertainment in the United States” through state lotteries and legalized casinos, and that British gamblers can place sports bets on smartphones, stadium kiosks and even a TV remote. Silver said state governments should offer mandatory monitoring of point spreads and betting lines to report unusual movements. 33 More recently, Major League Baseball Commissioner Rob Manfred seemed to agree. “Are we better off in a world where we have a nice, strong, uniform, federal regulation of gambling that protects the integrity of sports,” or “closing our eyes to that and letting it go on as illegal gambling?” Manfred said. 34

Other sports commissioners are more reluctant. After the NFL voted in 2015 to allow the Raiders to move to Las Vegas, league Commissioner Roger Goodell told reporters, “We are not changing our position as it relates to legalized sports gambling. We still don’t think it is a positive thing.” 35

A Las Vegas sportsbook on Super Bowl Sunday last year. (Ethan Miller/Getty Images)

People who study the economics of sports offer different predictions about the impact of legalized gambling. One warning came from the University of South Florida’s Sutton. “It will definitely put a spike in the number of people with gambling problems,” he says, adding that people will use their credit cards to bet while they watch. A different take on sports betting comes from Kenneth Shropshire, CEO of the Global Sport Institute at Arizona State University. “I cast it to some extent like recreational marijuana,” Shropshire says. “If you legalize it, commercialize it, as a government entity, you’re able to tax it and it’s another revenue source.” He says Silver’s argument amounts to, “This is happening anyway, so we might as well be a part of it. Rather than trying to fight it, if we’re a part of it, we can make it part of our revenue stream.” As for fixed games, Fort of the University of Michigan says such worries are misguided because point-shavers would be easier to catch if betting were legal. “The chance you catch the cheaters is even higher because you have a bigger sample,” he says. The skittishness about franchises moving into the Nevada desert and what some call Sin City is “dramatically overblown,” Fort says. “There may be some symbolism,” he says, “but that’s about it.” However, some skeptics question whether Las Vegas is a viable sports market. They include Richard Peddie, a semi-retired consultant who used to be the president and CEO of the Rogers Centre in Toronto, home of the baseball Blue Jays, and of Maple Leaf Sports and Entertainment, which controls the Raptors of the NBA and the Maple Leafs of the NHL. “Las Vegas is a horrible decision for the NHL,” Peddie says. “Not because they’re sending a bunch of young men to an area that has legalized prostitution and gambling. I just think it’s a bad economic market.” He cites Las Vegas residents’ relatively modest incomes and the high price of tickets. “Those people are in the service industry,” Peddie says. “They work at night. And they don’t get paid a lot of money. And there’s no corporations.” This quintessential winter sport may or may not flourish in the desert, but sports betting is probably there for good, taxed and regulated. According to a story on the ESPN website, the $4.5 billion wagered in Nevada on sports is only a hint of what is bet illegally elsewhere. 36 “The American Gaming Association puts that estimate at more than $150 billion annually in the U.S.,” ESPN wrote. Others, including Silver, “estimate the amount is much higher.” 37 Also in the sunbelt, the home stadium of the Cardinals’ football team in Glendale, Ariz., is about to be renamed – and one of the bidders is a company that runs gambling casinos. 38 Mara, the Giants’ owner, was asked whether American professional team sports and legalized gambling are approaching a mutual accommodation. “I don’t think they’ve found an accommodation yet,” he says. “Is it possible that we could find it at some point in the future? Yes, I think it is. But I think it’s certainly a slippery slope.” Are ticket and concession prices squeezing families out of the market?

Fort of the University of Michigan says he sympathizes with families who want to go to five or six baseball games over a summer but now can afford only one. “You feel priced out,” he says. “It’s more like a trip to Disneyland.” But rising prices for baseball and other sports have had little effect on U.S. pro sports attendance. According to the online statistics portal Statista, baseball’s average per-game attendance has varied between 30,324 in 2009 and 30,163, in 2016 with a high of 30,504 in 2013 and a low of 30,138 in 2010. 39 And in pro football, according to Statista, NFL per-game attendance in 2016 was 69,487, up from 68,245 in 2008. 40 “Some kinds of people are still going to the ball park, and it appears to be the kind of people who are willing to spend more rather than spend less because revenue increases,” says Fort. Part of this could be due to the gentrification of stadiums and arenas to court big spenders who crave luxury suites and other perks. It is occurring at a time when wealth gains are being concentrated among the elite. Figures supplied by the Economic Policy Institute, a Washington think tank, showed that 74.2 percent of the growth of household wealth between 1983 and 2010 went to the top 5 percent of the households. 41 A chart produced by economists Thomas Piketty, Emmanuel Saez and Gabriel Zucman displays the uneven distribution of income growth between 1980 and 2014. It shows average annual income growth falling from 2.0 percent in 1980 to 1.4 percent in 2014. But for the very wealthy, income growth rose to 6 percent in 2014. 42 In that those years roughly match the upward trend in luxury sports accommodations, it stands to reason that some of that flush money at the top might be spent by the private suite crowd at sports events, says Elise Gould, senior economist at the Economic Policy Institute.

“People want more amenities,” says Marquette University’s Anderson. “There’s more boxes, more fancy seats, more clubs … People want to walk around. They want to eat fancy meals. People are more than willing to part with their extra dollars and sports is one of those outlets.” According to Statista, which publishes a yearly fan cost index, a family of four paid, on average, $502.84 to attend an NFL game in 2016. The highest price was in Chicago, at $685.10; the lowest was Jacksonville, at $367.42. 43 In baseball, that family paid an average of $219.53 at a game in 2016, with Boston the most expensive at $360.66 and Arizona the cheapest at $132.10. 44 Sports venue gentrification is happening in a big way in San Francisco, where the NBA champion Golden State Warriors are building a new $1 billion arena in Mission Bay for when they move out of Oakland for the 2019–2020 season. Like NFL teams, the Warriors will sell personal seat licenses (PSLs) to fans before the fans can buy season tickets. 45 But they are not calling them PSLs because, unlike those in the NFL, they can’t be resold on the open market for a higher price. Economist Thomas Piketty Plus, this Warriors’ “membership” money will be refunded to the PSL buyer after 30 years. In effect, the San Francisco Chronicle reported, it is an interest-free loan that helps pay for the new arena without public funds. 46 Half the Golden State “membership” fees will sell for under $15,000, the Warriors say. The other half will cost more, perhaps much more. 47 Asked why the term of the loan will be 30 years, Warriors’ President Rick Welts said: “Right or wrong, that’s about the life cycle of an arena.” 48 Once a fan pays for the right to buy the seats, the top suite price will be $2.25 million per year. 49 According to Sports Business Daily/Journal, that will get the buyer “16 tickets to all Warriors’ games, including potential playoffs, all other concerts and other events at the arena, plus food and beverage for all Warriors games, parking and a common wine vault where suite holders can store their own bottles of cabernet in private lockers.” 50 The quest for luxury seating accelerated in 1988 when the Detroit Pistons of the NBA opened the Palace of Auburn Hills, which had 180 suites spread out over three levels, a new concept at the time. Tom Wilson was then a Pistons executive and now works for Olympia Entertainment, which is building Detroit’s new Little Caesars Arena for the Pistons and the NHL’s Red Wings. “The number of suites allowed us to be profitable before we even had an event in the building,” Wilson says of the Palace. “So that sort of redefined the business. In four, five, six years you could pay the building off. You get every concert. It really became a great place to make good money and good returns.” But the concept of exclusive seating reached a “goose-that-laid-the-golden-egg” level in 2009 when the New York Yankees built a new Yankee Stadium and charged $2,500 per ticket per game for padded chairs behind home plate that were visible on TV for almost every pitch of a telecast. 51 Perhaps because those customers also had access to a nearby private club, the seats were often empty, creating an optical embarrassment that forced the team to slash their prices in half. 52 “We saw the prices at an unrealistic level,” says Vince Gennaro, director of Columbia University’s graduate program in sports management. “The market will sort of figure out the right price.” A game in May 2017 against Toronto drew 25,556, The New York Times reported, the smallest for a Yankees’ home game in 13 years. 53 According to Statista, it costs a family of four $337.20 to attend a Yankees game in 2016. The same article reported that “a certain haughtiness” came from Lonn Trost, the Yankees’ chief operating officer, who said in a 2016 radio interview that “our existing fan base” is frustrated when luxury seats are bought on the secondary market by “someone who has never sat in a premium location.” 54 Background The Babe Makes a Bang

Almost a century ago, a Big Bang moment jolted American professional sports onto a path that led to the pervasive and profitable entertainment industry seen today. The explosion came on Jan. 5, 1920, when the Boston Red Sox sold Babe Ruth to the Yankees for $125,000. 55 Ruth soon evolved from a star pitcher and promising home run hitter into a full-time slugger and a national sensation. Nothing in sports would ever be quite the same. The purchase price for Ruth would equal about $1.5 million in 2017 dollars. 56 It can be seen as a savvy down payment on an industry that will be worth $73.5 billion in 2019, according to Forbes magazine. 57 The Yankees are the second-most valuable franchise in U.S. sports at $3.7 billion, according to Forbes. 58 The most valuable team is the NFL’s Dallas Cowboys, appraised at $4.2 billion. 59 In 1960, the cusp of an era in pro sports, they began life as a $1 million expansion team. In the mid-1920s, shortly after the NFL was founded, Tim Mara paid a $500 franchise fee to start the Giants. 60 Owner Jerry Jones bought the Dallas franchise in 1989 for $150 million. 61 Last season, NFL franchises were worth an average of $2.34 billion apiece. 62

How did it all grow so big since the Roaring ‘20s? Good timing helped. In a historic population shift, Americans in the early 20th century were moving from farms to cities for jobs. After work, they sought mass entertainment, and promoters provided it. It wasn’t just baseball that boomed. In that same decade that followed World War I, boxing and college football thrived at the ticket windows. In a bout touted as the first “million-dollar gate,” heavyweight champion Jack Dempsey knocked out challenger Georges Carpentier in the fourth round on July 2, 1921, in Jersey City, N.J. A crowd announced as 80,123 paid $1.6 million, promoters said. 63 It was the first major title fight broadcast on radio, the new communications and entertainment medium. 64 In college football, Notre Dame rose to national fame from the midlands of northern Indiana by winning games in off-campus, big-city venues, including Chicago’s Soldier Field and New York’s Polo Grounds. 65 Athletes’ exploits were covered not only by newspapers but also in newsreels, shown before feature films in movie theaters. Professional football got its first big boost in 1925 when George Halas’s Chicago Bears signed star running back Red Grange – the “Galloping Ghost” – after his final game at Illinois. 66 The Bears barnstormed from coast to coast with Grange through the end of that year and the beginning of the next. 67 They played the New York Giants before a crowd of at least 60,000 at the Polo Grounds and an estimated 73,000 at the Los Angeles Memorial Coliseum. Many purists expressed horror at the Grange example, but it proved prophetic. Although he finished his senior season at Illinois, Babe Ruth’s home-run swing. His sale to the New York Yankees Grange left school without completing his studies. In later decades, four-year attendance became optional for college “student-athletes” in 1920 initiated a new era in sports. (Mark as professionalism lost its taint. Rucker/Transcendental Graphics/Getty Images) Along with his elusive style of running, Grange also brought something new: a business agent, C.C. (“Cash and Carry”) Pyle. It took another 50 years for pro sports to fully accept the validity of agents in the bargaining process.

That coincided with the growing strength of the union movement in sports, which launched at midcentury. It has made sports one of the few industries in which organized labor has made significant strides in recent decades. But a superstar could always earn a good wage. After the stock market crashed in 1929 and the clouds gathered for the Great Depression, Ruth landed a 1930 salary of $80,000, which was more than the $75,000 annually paid to President Herbert Hoover. Asked to justify that paycheck, Ruth responded: “I had a better year.” 68 “We Need Muscles Like Yours”

But, sometimes, it was about more than money. Some sports stars transcended sports to become social icons. Perhaps the most significant was Joe Louis, a black boxer nicknamed “The Brown Bomber” who won the heavyweight championship in 1937, the first of his race allowed to even challenge for that title since Jack Johnson lost the crown in 1915. 69 Louis’ best-remembered fight was his first-round knockout of German boxer Max Schmeling in 1938, the year before World War II began. 70 “Joe,” President Franklin D. Roosevelt told Louis, “we need muscles like yours to beat Germany.” 71 Another African-American in similar circumstances was Jesse Owens, an Ohio State track star who won four gold medals in the 1936 Summer Olympic Games in Berlin. 72 The Berlin competition saw the first-time use of television cameras at a live sports event. 73 These “Nazi Olympics” occurred during the career of a Jewish baseball star, Hank Greenberg of the Detroit Tigers. Greenberg worked in a city whose prominent residents included Henry Ford, an anti-Semitic automobile manufacturer, and Father Charles Coughlin, an anti-Semitic radio preacher. 74 A similar cultural resonance reached Italian-American fans with Joe DiMaggio, a Yankees rookie in 1936 who quickly became an idol. Louis, Greenberg and DiMaggio lost what may have been the best years of their careers during the following decade when they served in the military until the war ended in 1945. Emerging from the Army then was Jackie Robinson, one of history’s most significant American athletes, a former college football player at UCLA who joined baseball’s Brooklyn Dodgers in 1947 as a 28-year-old rookie to break the sport’s “color line” that had excluded blacks since the 19th century. 75 Around the same time, pro basketball emerged with the formation in 1946 of the Basketball Association of America – the forerunner of the NBA, eventually dominated by African-Americans. 76 In the 1950s, black stars such as Hank Aaron in baseball and Jim Brown in football lifted the profiles of their sports. Jet airplane travel allowed franchises to transcend their traditional geographic limits of the East Coast and Midwest. The Dodgers moved from Brooklyn to Los Angeles and the baseball Giants from New York to San Francisco. The Boston Braves moved to Milwaukee, the Philadelphia Athletics to Kansas City and the St. Louis Browns to Baltimore. The Philadelphia Warriors of the NBA signed Wilt Chamberlain, a 7-foot-1 center. Like Ruth, Chamberlain – Wilt the Stilt, he was called – changed the way his game was played, adding the dimension of “above the rim” to what was, until then, a floor-oriented approach. 77 In one game, in 1962, he scored a record 100 points. Television – a black-and-white novelty in the late 1940s – was airing games in color by the 1960s. The decade also saw the invention, in 1963, of the videotaped instant replay, which changed the perception of the game for viewers at home. 78 For the first time, in some ways, those watching on TV could comprehend some plays more fully than fans in the stands. Gradually, game officials began to issue some decisions based on video review. Network television – first ABC, then NBC – financially supported the American Football League against the NFL on CBS. A critical moment of acceleration came in January 1964 when CBS outbid the other two networks to sign the NFL for two years at $28.2 million, more than triple the previous price. 79 NFL is Highest-Valued Pro Sports League

Source: Cork Gaines, “Total value of all 32 NFL franchises is now $63 billion,” Business Insider, Forbes, Sep. 16, 2015, https://tinyurl.com/yattrgr5.

The total value of National Football League franchises in 2015 – just under $63 billion – far exceeded the value of any other major U.S. sport. Major league baseball was a distant second, followed by the National Basketball Association and the National Hockey League.

The fight between the two leagues led to a 1966 merger agreement and the first Super Bowl, in 1967. In this era, the stadiums got bigger and more detached from the natural world. And there was a change in the culture of common people sitting side by side with wealthier sorts to cheer the local teams. A stark example of these trends was the Houston Astrodome, which opened in 1965 for baseball and football. 80 This first covered stadium also introduced artificial turf because real grass would not grow under its diffused light. 81 In addition to a scoreboard video screen and climate control, the “Eighth Wonder of the World” introduced “skyboxes,” private suites for select fans. 82 One athlete who performed there was Muhammad Ali, who roiled the decade – and several after that. 83 Ali was a heavyweight boxer originally named Cassius Clay and nicknamed the “Louisville Lip.” 84 He evolved from brash contender and surprise champion in 1964, to despised and suspended draft resister in 1967, to champion twice again in the 1970s – and then to grand old man of world sports for the rest of his life. 85 In the 1996 Summer Olympics in Atlanta, Ali – old before his time and with trembling hands from Parkinson’s disease – lit the torch to begin the Summer Games. 86 He died in 2016 after altering the boundaries of what star athletes could say and do on the public stage.

Cable Changes the Landscape

The 1970s brought challenges to the NBA and the NHL as the American Basketball Association and World Hockey Association eventually forced mergers. Two major evolutions took place in media and in one sport that were both quantum leaps. In TV, ESPN capitalized on the new delivery system of cable transmission to create in 1979 the first all-sports network, something that seemed preposterous to skeptics at the time. 87 In less than 40 years, ESPN would become the little fish that swallowed the big fish, a dominant buyer of sports rights and a profit-maker with two streams of revenue – paid commercials and paid subscription fees. 88 That same year, the NCAA national championship basketball game raised the profile of the college game when Earvin (Magic) Johnson and Michigan State defeated Larry Bird and Indiana State. Their meeting launched a decade-long rivalry that boosted both the college and professional versions of the sport. The 1980s began with what might have been the most important American sports moment in history – and one of the most egregious examples of how commercial television could distort it. In the Winter Olympics at Lake Placid, N.Y., in 1980, the underdog United States hockey team defeated the favored Soviet Union and went on to beat Finland two days later to win the gold medal. 89 Although viewers in nations such as Canada saw the Soviet-U.S. game as it took place in the early evening, the ABC network in the United States declined to carry this major news event live because it had booked it for delayed videotape in prime time, when sponsors paid top dollar for exposure of commercials. So some Americans tried to avoid the result and watch it on tape as if it was live. Canada also gave sports something new: the first covered stadium with a retractable roof, SkyDome – now called the Rogers Centre – in Toronto in 1989. The building was unveiled on a rainy night – and the roof was opened to let the rain in, just to show it worked. Canada also provided the one hockey star most American fans actually recognized – Wayne Gretzky, who was dealt for money and players in 1988 from the Edmonton Oilers to the Los Angeles Kings. 90 Gretzky was the Babe Ruth of his sport, breaking records and achieving a celebrity status that transcended the boundaries of hockey. He played through the 1990s as hockey became a global sport. The fall of the Soviet Union in 1991 brought athletes from that nation and its allies to the NHL to join the players from Sweden, Finland and other European countries who were creating a more open, flowing style of play. A Detroit Red Wings team powered by a group called “The Russian Five” won the Stanley Cup in 1997 and 1998. 91 In baseball, the decade brought labor unrest and the cancelation of the 1994 World Series because of a players’ strike. By the turn of the current century, baseball stars were denying use of performance-enhancing drugs to elevate their statistics and marketability. Baseball’s Barry Bonds retired from the San Francisco Giants with 762 home runs, the most ever for a career, including a single-season record of 73 in 2001. His numbers surpassed Ruth’s and Aaron’s. But Bonds’ totals increased along with his size and muscle mass. Despite his statistics and denial of drug use, Bonds was not elected to the Baseball Hall of Fame in the first five years of his eligibility. 92 But sports have survived scandals before, including the revelation that members of the 1919 Chicago White Sox (also known as the Black Sox) fixed the World Series so Cincinnati would win. Pete Rose, the all-time hits leader at 4,256, was banned from baseball in 1989 for gambling on games as manager of the Reds and, thus, denied admission to the Hall of Fame. 93 Starting in the 1980s, baseball rosters showed a decline in African-American players and an increase in athletes from Latin America and Asia, just as hockey grew from its Canadian base to include athletes from the United States and Europe. Fantasy sports and gambling stoked more fan interest. Teams sold ever-changing “naming rights” for glittering new stadiums to corporations. Telecasters improved their productions with high- definition screens and their distribution with digital signals on the internet. Fans could watch the games on large home screens, smaller laptop computers or tiny hand-held telephone screens. Or they could gape at something much bigger, as they did in suburban Dallas in 2009, where the Cowboys opened a stadium with a retractable roof over a giant screen that showed play-by-play as it occurred below. Fans paying high prices for good seats would have a hard time concentrating on the field when the TV picture drew their eyes upward. It was as if Jones, the Cowboys’ owner, had built the world’s largest television set and put 80,000 chairs around it. What would Ruth, Dempsey and Grange have made of this, with the very images of pro athletes so much larger than life? On with the show, perhaps. Current Situation World Cup Fever?

On the eve of the 2018 World Cup tournament in Russia, the rulers of global soccer will decide where to stage their 2026 championship. Should the FIFA Congress vote to make North America the winning bid, 60 matches in 2026 would be played in the United States and 10 more each in Mexico and Canada as the final phase of the tournament expands that year from 32 nations to 48. 94 If the United States wins the right to host the world’s most prestigious sports event for the first time since 1994, it could boost soccer’s U.S. profile and edge the game closer to baseball, football, basketball and hockey among top American team sports. In recent years, U.S. television networks have begun broadcasting soccer from England and other foreign lands. Major League Soccer, based in New York, is about to choose four expansion markets from 12 applicants to raise its membership to 28. 95

Germany battles Argentina in the 2014 World Cup final. The United States hopes to co-host the 2026 tournament. (sampics/Corbis via Getty Images)

Courtemanche, the MLS executive, says a winning World Cup bid would “ramp up” American interest in soccer as a spectator sport and as a participatory sport for men, women and children. While Courtemanche’s view may be colored by his interest in a business that will sell its next franchises for $150 million each, Sutton of the University of South Florida agrees that there would be great U.S. fan interest in the World Cup. “It will sell out in a half an hour,” Sutton says. He says when ESPN shows highlights of a day in sports, it always includes two or three soccer clips in its top 10 plays. “It’s very purposeful,” Sutton says. ESPN executive Magnus says of soccer, “Slowly but surely, it is taking hold. We actually look at soccer as a great growth property. And we look globally, not just as a United States proposition.” There are caveats to soccer optimism. Soccer’s international image took a hit when U.S. and Swiss authorities charged 30 current and former FIFA officials with corruption. FIFA suffered a financial loss of $369 million in 2016, largely because of legal costs and lost sponsorships as a result of the scandal. 96 At a meeting in March, FIFA President Gianni Infantino warned that the North American 2026 bid could be jeopardized by President Trump’s travel ban against six Muslim-majority nations. 97 “Teams who qualify for a World Cup have to have access to the country,” he said. “Otherwise, there is no World Cup. That is obvious.” 98 And “soccer-is-the-future” boosterism in the United States has ebbed and flowed since the 1960s. “We’ve heard the same story all these years,” says Shropshire of Arizona State University. “OK, this is going to happen. But we have a long way to go. We’ve had the World Cup here before.” NFL TV Commercial Format Changes

The number of commercial breaks on NFL telecasts may not be the reason viewership declined in 2016. Nevertheless, thanks to viewer complaints, NFL games in 2017 will have fewer commercial interruptions than in previous years – but there is a catch. “The length of the [ad breaks] will be a little longer,” says McCarthy, the NFL spokesman, who adds that the total number of commercial minutes will remain the same. The span of the breaks will expand from 1 minute, 50 seconds to 2 minutes, 20 seconds, he says. He also says the networks will take out some of the in-game promotional messages that interrupt the flow of the competition. This is fine with Magnus of ESPN, which carries Monday Night Football and pays $1.9 billion each year to the NFL. 99 “We worked hand-in-hand with them on that as their other partners did as well,” he says. “They came to us with a really smart and prudent plan to try and make a difference. Their research showed – which we agreed with – the fans’ primary complaint about the commercials was the number of interruptions, not the length.” Fantasy Sports Keep Growing

Fantasy sports has blurred the boundary of hard-core sports betting. The latter usually involves a wager on a single team over a single game. A recent report on ESPN.com previewed a new iGaming lounge opening at Resorts Casino in Las Vegas with how bets might go down. “Feeling a little riskier?” the story asked. “Plop down $200 on a 500-1, 10-leg parlay across multiple sports, if you want, and go for the $100,000 jackpot.” 100 But Mara, the Giants co-owner, is more comfortable with fantasy sports than what he calls traditional gambling. “You’re not betting on the outcome of the game and who’s going to win or lose,” Mara says of fantasy sports. “You’re looking at individual performances.… I guess reasonable people can differ on what the definition [of gambling] is.” Peter Schoenke, chairman of the Fantasy Sports Trade Association (FSTA), says his industry had 59.3 million participants in 2016, up from 15.3 million in 2003. He says the fantasy sports business generated $7.22 billion in 2016. According to the FSTA, 66 percent of fantasy players are male and there are 59.3 million participants in the United States and Canada. Their favorite sport? Football. 101 Looking Ahead From Over the Air to Over the Top

In early summer 2017, ESPN executive Magnus discussed his network’s approaching experiment with BamTech. It is a technology company, rooted in major league baseball, that could take the “cable” out of cable television sports by selling programming “over-the-top” and directly to consumers through a digital application. “Our company has always run towards change and not away from it,” says Magnus, “not to fear change but to embrace change.” Weeks later, Robert A. Iger – chief executive of ESPN’s parent company, Disney – announced the newest embrace. ESPN would launch one of Disney’s two new streaming services in early 2018 for sports, he said. The other would come later, for feature films. 102 No subscriber price was announced. The ESPN app will start cautiously by not duplicating ESPN’s linear programming on its regular cable or satellite channels. Instead, it will add about 10,000 events previously not televised. 103 In a conference call to discuss earnings, Iger cited “a dramatic increase in app-based media consumption” as the impetus for the new service. 104 “I would characterize this as an extremely important, very, very significant strategic shift for us,” Iger said. 105 Having lost 12 million of its 100 million cable subscribers since 2011, ESPN will try to reach sports fans who might pay to watch sports on their laptop computers or their telephone screens, Magnus says. The Disrupter Becomes the Disrupted

It is ironic to see ESPN threatened by new technology that disrupts the prevailing business model. When ESPN began in 1979 as the scrappy upstart, it used the once disruptive technology of hard-wired cable. Before cable, most TV viewers got their programming with over-the-air antennas and did not have to pay for it. Abe Madkour, executive editor of SportsBusiness Journal, was asked if ESPN could evolve into a production company that buys rights as it does now but sells its products directly to customers without the cable company middleman. “ESPN could certainly be a purely over-the-top system,” he says, “but then that changes the business model substantially because they won’t be getting the seven or eight-dollar subscriber fees they get now.” Madkour says the sudden pivot toward innovation at ESPN was prompted by Wall Street investors concerned about an earnings decline. “So, is this the end for ESPN?” Madkour asks. “No. Let’s realize, they’re still pumping out. It’s still making billions of dollars. But their revenue is not growing and that’s the issue.” U.S. News and World Report noted that traditional ESPN cable and Dish subscribers will be able to stream what is on their TV. 106 But those who buy only the new system might get a vague, nebulous experiment. 107 “You’ll watch a highlight and if you want to buy maybe part of a game that’s going on live … you’ll be able to buy it directly through the app or subscribe to the service,” Iger said. 108 About the Author

Joe Lapointe is a veteran journalist who spent 20 years in the sports department of The New York Times. He is a graduate of Detroit’s Wayne State University and now teaches journalism at the University of Michigan, Dearborn campus. Chronology

1920–1953 Booming popularity creates a thriving business. 1920 The Boston Red Sox sell Babe Ruth to the New York Yankees for $125,000 in what may be the most important deal in U.S. sports history. 1921 Jack Dempsey knocks out Georges Carpentier to retain boxing’s heavyweight championship in what is touted as the first “million-dollar gate” in sports. 1925 Football running back Red Grange leaves the University of Illinois to tour with the Chicago Bears, giving the National Football League (NFL) its first widespread exposure. 1936 U.S. track-and-field athlete Jesse Owens wins four gold medals at the Summer Olympics in Berlin. 1937 Joe Louis becomes the first African-American world heavyweight boxing champion since Jack Johnson in 1915. 1941 With World War II looming for the United States, Joe DiMaggio of the Yankees and Ted Williams of the Red Sox enjoy epic seasons. DiMaggio has a 56-game hitting streak and Williams bats .406. Within two years, both are wearing different uniforms – those of military service. 1946 The Basketball Association of America, forerunner to the National Basketball Association (NBA), is formed. 1947 Jackie Robinson, a 28-year-old rookie, breaks professional baseball’s “color bar” that has excluded blacks since the 19th century by playing for the Brooklyn Dodgers.

1953–1980 Expansion, television widen the sports market. 1953 The Boston Braves move to Milwaukee, setting off an era of franchise transfers and expansion as passenger jet travel and television enable changes in the location of major sports franchises and fans’ ability to witness the games. 1959 Wilt Chamberlain, 7-foot-1, turns professional with the NBA’s Philadelphia Warriors and changes the way basketball is played. 1960 The American Football League (AFL), helped by television revenue, begins operations to compete with NFL. 1963 Videotaped instant replay on television changes how fans watch sports and eventually how games are officiated. 1964 Muhammad Ali, then known as Cassius Clay, defeats Sonny Liston for the world heavyweight boxing title and alters the norms for how athletes behave, speak and are perceived by the public. 1965 The Astrodome opens in Houston, beginning an era of domed stadiums and artificial turf. 1967 The first Super Bowl is played as the NFL and AFL agree to merge. 1970 ABC Sports debuts “Monday Night Football,” giving the sport prime-time exposure on what used to be an off day and expanding its television penetration. 1979 Larry Bird and his Indiana State Sycamores lose to Magic Johnson and his Michigan State Spartans in the championship basketball game of the National Collegiate Athletic Association (NCAA). The game, and the two stars’ subsequent rivalry in the NBA, elevates both the college and professional games…. Cable sports channel ESPN begins operations.

1980–present From miracle on ice to hockey in Vegas. 1980 The U.S. men’s Olympic hockey team upsets the Soviet Union and defeats Finland two days later to clinch the gold medal. The American victory over the Soviets is televised in the United States only later on tape by ABC, demonstrating television’s power to delay – and, some would argue, distort – an event in pursuit of prime-time ratings. 1982 A federal court decision eliminates the NCAA’s ability to regulate the televising of college football, leading to a major expansion of exposure and TV contracts across the sport. 1988 Superstar center Wayne Gretzky of the Edmonton Oilers is traded to the Los Angeles Kings, elevating hockey’s profile in the United States. 1994 A players’ strike cancels baseball’s World Series…. The United States hosts soccer’s World Cup for the first time. 2007 Barry Bonds retires from the San Francisco Giants with 762 home runs, topping Babe Ruth’s 714 and Hank Aaron’s 755. Bonds denies using performance-enhancing drugs. He becomes eligible for the Hall of Fame in 2012, but as of 2017 he has not been inducted into it. 2016 NFL television viewership declines 8 percent, raising questions about whether pro football’s popularity has peaked. 2017 The expansion Vegas Golden Knights of the National Hockey League becomes the first major-league pro sports franchise to locate in the gambling mecca of Las Vegas.

Resources for Further Study Bibliography

Books

Miller, James Andrew, and Tom Shales, “Those Guys Have All the Fun: Inside the World of ESPN,” Little, Brown, 2011. Two veteran journalists trace the growth of the cable television sports network ESPN from its founding in 1979 through its rise to riches and influence. Sperber, Murray, “Shake Down the Thunder: The Creation of Notre Dame Football,” Henry Holt and Company, 1993. A college professor with access to legendary coach Knute Rockne’s papers traces the formation of an amateur sports dynasty of prestige, profit and power. Steinberg, Leigh, with Michael Arkush, “The Agent: My 40-Year Career Making Deals and Changing the Game,” Thomas Dunne Books, 2014. The one-time superagent of sports – and the model for the movie “Jerry Maguire” – recounts his path-breaking career as the negotiator for first-round draft choices in the National Football League. Zimbalist, Andrew, “Circus Maximus: The Economic Gamble Behind Hosting the Olympics and the World Cup,” Brookings Institution Press, 2016. In an updated paperback version of one of his many books, a longtime sports industry contrarian explores the risks and broken promises involved when cities or nations host major global sports events.

Articles

Bonesteel, Matt, “In surprise move, Supreme Court says it will take on New Jersey sports-betting case,” The Washington Post, June 27, 2017, http://tinyurl.com/ybplvmt4. The high court accepts a case that could change how the United States treats sports gambling, especially bets on individual games at casinos and racetracks. Gillette, Felix, “The NFL Was a Sure Thing for TV Networks. Until Now,” Bloomberg.com, Nov. 3, 2016, http://tinyurl.com/y9blr7qa. A prominent business news organization examines the many reasons for the National Football League’s surprising TV ratings slump in the 2016 season. Gonzalez, Roger, “Report: USA, CONCACAF want 2026 World Cup bid confirmed by FIFA soon,” CBSSports.com, April 11, 2017, http://tinyurl.com/yahur4nw. The United States, Canada and Mexico ask for an early decision on their joint bid to host the 2026 World Cup Soccer finals. Ourand, John, “Taking the pulse of ESPN,” Sports Business Journal, June 26, 2017, http://tinyurl.com/yafapbrt. A publication that covers the business of sports looks closely at the challenges facing the top cable sports network as “cord-cutters” turn away from cable and toward digital delivery. Saracevic, Al, “Warriors reveal long-term Chase Center season-ticket plan,” San Francisco Chronicle, July 19, 2017, http://tinyurl.com/y6vnzooh. The NBA champions will finance their new arena in part with 30-year “loans” from season-ticket holders. White, Gordon S. Jr., “N.C.A.A. Telecast Rights on Football Struck Down,” The New York Times, Sept. 16, 1982, http://tinyurl.com/y8dm4ce6. In a pivotal court case, a federal judge declared the NCAA “a classic cartel” for restricting the television rights of its member schools.

Reports and Studies

Bushnell, Henry, “Ranking the potential 2026 World Cup host cities and stadiums, from 1 to 49,” Yahoo News, Aug. 18, 2017, http://tinyurl.com/yb83vz44. A journalist offers a wide-ranging look at possible venues for the 2026 World Cup if it is played in North America. Good, Andrew, “When it comes to women in sports, TV news tunes out,” USC News, June 5, 2015, http://tinyurl.com/hcl7llw. A study of TV coverage shows little change in reporting of women’s sports over the previous 25 years. Parker, Clifton B., “Sports stadiums do not generate significant local economic growth, Stanford expert says,” Stanford News, July 30, 2015, http://tinyurl.com/y9tz3lo7. An economist offers a skeptical look at the theory that new stadiums bring economic benefits to the surrounding area. Yanity, Molly, “Sports Journalism Programs Rise, But Can They Take the High Road?” MediaShift, Sept. 2, 2014, http://tinyurl.com/yc3j6232. A think tank reports on how journalism schools teach sports coverage in a changing media environment. The Next Step

Daily Fantasy and Betting

Conway, Tyler, “Ex-MLB Commissioner Fay Vincent Says Sports Gambling Likely to Be Legalized Soon,” Bleacher Report, Aug. 4, 2017, https://tinyurl.com/y8bhrgze. Major League Baseball’s former commissioner says sports franchises are becoming more expensive because owners know that the inevitable legalization of sports gambling will lead to an influx of cash into their leagues. Kirkham, Chris, and Ezequiel Minaya, “DraftKings, FanDuel Call Off Merger,” The Wall Street Journal, July 13, 2017, https://tinyurl.com/ycnd2g67. Daily fantasy sports companies DraftKings and FanDuel called off their proposed merger after the Federal Trade Commission filed an antitrust lawsuit to block it. Purdum, David, and Ryan Rodenberg, “Future of sports betting: the marketplace,” ESPN, May 4, 2017, https://tinyurl.com/jfznvzv. Whether or not sports betting is widely legalized in the United States, emerging technologies will revolutionize how bets are placed – meaning Google, Microsoft, Sony and other tech companies may become major players.

Growth of Major League Soccer

Belson, Ken, “As Appetite for Soccer in U.S. Grows, So Does M.L.S.,” The New York Times, Aug. 8, 2017, https://tinyurl.com/y8u6rxm2. Major League Soccer is booming, with plans to add six teams by 2020 at an expansion fee of $150 million per team. But critics say the dizzying pace of expansion has compromised the quality of play.

Page 12 of 16 The Sports Business SAGE Business Researcher ©2021 SAGE Publishing, Inc. All Rights Reserved. deMause, Neil, “Is MLS A Ponzi Scheme?” Deadspin, Aug. 4, 2017, https://tinyurl.com/ydej2g7o. Major League Soccer is expanding rapidly, but its TV ratings and business model suggest it cannot earn enough to be profitable, cannot compete internationally and may be a bubble that eventually will burst. Smith, Chris, “How Heineken Is Taking Over North American Soccer,” Forbes, Aug. 16, 2017, https://tinyurl.com/yccjx7tx. Since becoming Major League Soccer’s official beer in 2014, Heineken has invested heavily in the league based on its conviction that the U.S. soccer market has huge growth potential.

Sports Journalism

“Boston Sports Journal Launches With Subscription-Based Platform,” CBS Boston, July 24, 2017, https://tinyurl.com/yassufdj. Inspired by a venture created in Pittsburgh three years ago, a former sportswriter started a subscription-based website for Boston sports fans that aims to appeal to those outside the city. Brustein, Joshua, “As ESPN Falters, Sports Startup Chases Fans Tired of ‘Old Fluff’,” Bloomberg Businessweek, July 24, 2017, https://tinyurl.com/yc96kqrr. New online sports venture The Athletic, which targets fans displeased with local coverage of their favorite teams and is seeking to expand to new cities, recently raised almost $6 million to hire laid-off writers from companies such as ESPN, Fox Sports and Sports Illustrated. Thompson, Derek, “ESPN Is Not Doomed,” The Atlantic, May 1, 2017, https://tinyurl.com/ycsb9qn2. ESPN remains profitable and has increased its global workforce, but the ever-increasing cost of the rights to air live sporting events and the decline of cable TV bundles mean it can no longer rely on its old business model.

Streaming Services

Abbruzzese, Jason, “Sports fans finally have a streaming TV bundle, but you’d better love soccer,” Mashable, July 20, 2017, https://tinyurl.com/y98uu5vu. Internet streaming service FuboTV, which found success by offering sports fans soccer content and its own livestreaming technology, is looking to expand its reach abroad. Perez, Sarah, “What we know about CBS’s upcoming streaming service for sports,” TechCrunch, Aug. 8, 2017, https://tinyurl.com/ybgugyu7. CBS announced it will launch a live 24/7 streaming site for sports by the end of the year, similar to its live streaming news site CBSN. But it gave no details on pricing or content. Snider, Mike, “Turner shoots for soccer success with Champions League on new streaming service,” USA Today, Aug. 17, 2017, https://tinyurl.com/y7rkuvxs. Turner Sports will start its own subscription streaming service for Champions League and Europa League soccer games after signing a three-year deal to broadcast those matches in English in 2018. Organizations

Big East Conference 655 Third Ave., New York, NY 10017 1-646-663-3444 FAX: 1-646-838-8304 http://www.bigeast.com/staff.aspx Headquartered in New York, the Big East Conference includes 10 schools and has a basketball-focused heritage. Columbia University School of Professional Studies 203 Lewishon Hall, 2970 Broadway, MC 4119, New York, NY 10027 1-212-854-9666 http://sps.columbia.edu/sports-management Columbia says its masters degree program in sports management “trains professionals in all sectors of the sports industry by teaching management skills with a global, analytics and digital focus.” ESPN ESPN Plaza, 935 Middle Street, Bristol, CT 06010 1-860-766-2000 http://www.corporateofficeheadquarters.com/2012/10/espn-corporate-office-headquarters.html A multinational, multimedia sports entertainment company with a portfolio of sports assets that includes more than 50 business entities. The company is 80 percent owned by ABC, an indirect subsidiary of the Walt Disney Company. Fantasy Sports Trade Association 22 N. Carroll Street, Madison, WI 53703 1-608-310-7540 https://fsta.site-ym.com/ [email protected] The organization calls itself “the most comprehensive resource for and the official association of the fantasy sports industry.” National Football League 280 Park Ave., 15th Floor, New York, NY 10017 1-212-450-2000 http://www.corporateofficeheadquarters.com/2012/09/nfl-corporate-office-headquarters.html The U.S. professional football league, with 32 teams. Sports Business Daily/Global/Journal 120 W. Morehead St., Suite 120, Charlotte, NC 28202 1-704-973-1400 FAX: 704-973-1401 http://www.sportsbusinessdaily.com/Daily/About/Editorial-Mission.aspx Sports Business Daily has provided real-time industry news since 1994, concentrating on sports in the United States. Sports Business Global, also a daily, focuses on the world. Sports Business Journal, in addition to appearing online, is a weekly printed publication. University of Michigan Center for Sport Management 1402 Washington Heights, Ann Arbor, MI 48109-2013 1-734-615-1710 www.kines.umich.edu/research/mcsm [email protected] The program says it “strives to be the preeminent center for researching sport industry organizations and disseminating knowledge concerning the practice of sport management.” Notes

[1] Darren Heitner, “Sports Industry to Reach $73.5 Billion By 2019,” Forbes, Oct. 19, 2015, http://tinyurl.com/y73wucj8. [2] Ibid; “At the gate and beyond,” PwC Sports Outlook, October 2015, http://tinyurl.com/y96q2gos. [3] Ibid. [4] Derek Thompson, “How Superstar Economics is Killing the NFL’s Ratings,” The Atlantic, Jan. 10, 2017, https://tinyurl.com/y8xeopog.

[5] Warner Todd Huston, “ESPN Layoffs at Leading Edge of the Coming ‘Sports Bubble’,” April 28, 2017, Breitbart.com, https://tinyurl.com/ybyz2ean. [6] Ira Boudway and Max Chafkin, “ESPN Has Seen the Future of TV and They’re Not Really Into It,” Bloomberg.com, March 30, 2017, https://tinyurl.com/lf89r4r. [7] Ibid. [8] Daniel Roberts, “ESPN will look dramatically different in 1 year,” Yahoo.com, April 29, 2017, https://tinyurl.com/lohnd6n. [9] Joe Nocera, “ESPN Just Can’t Afford to Go On Like This,” Bloomberg View, April 28, 2017, http://tinyurl.com/kmpe6v9; Brian Stelter, “ESPN laying off several hundred people,” CNN media, Oct. 21, 2015, http://tinyurl.com/pnoammb. [10] Ibid. [11] John Branch, “ESPN Football Analyst Walks Away, Disturbed by Brain Trauma on Field” The New York Times, Aug. 30, 2017, http://tinyurl.com/yavkmh74. [12] John Lombardo & David Broughton, “Going gray: Sports TV viewers skew older,” SportsBusiness Journal, June 5, 2017, https://tinyurl.com/y7b3b627. [13] Joshua Brustein, “Fantasy Sports and Gambling: Line is Blurred,” The New York Times, March 11, 2013, https://tinyurl.com/yajnd6go. [14] Ibid. [15] Ibid. [16] Drew Harwell, “NFL ratings plunge could spell doom for traditional TV,” The Washington Post, Oct. 14, 2016, https://tinyurl.com/ycllnyej. [17] Felix Gillette, “The NFL Was a Sure Thing for TV Networks. Until Now,” Bloomberg, Nov. 3, 2016, https://tinyurl.com/y9blr7qa. [18] Peter Kafka, “NFL ratings were down all season and there’s no reason to think they’ll get better next year,” recode.net, Feb. 4, 2017, https://tinyurl.com/ycp6uhsp. [19] Gillette, op cit. [20] Ibid. [21] Harwell, op. cit. [22] Ibid. [23] Kurt Wagner, “How the NFL juggles the future of streaming, the decline of TV, and billions of dollars,” Recode.net, May 1, 2017, https://tinyurl.com/m48mgmy. [24] Ibid. [25] Ibid. [26] Ibid. [27] Kurt Badenhausen, “The NFL Signs TV Deals Worth $27 Billion,” Forbes, Dec. 14, 2011, https://tinyurl.com/y8kqtlsb. [28] Matt Bonesteel, “In surprise move, Supreme Court says it will take on New Jersey sports-betting case,” The Washington Post, June 27, 2017, https://tinyurl.com/y83zfuar. [29] Ibid. [30] Shelly Hagan, “Sports Betting is Starting to Look a Lot More Like Wall Street,” Bloomberg, March 14, 2017, https://tinyurl.com/y9bumxjk. [31] Adam Silver, “Legalize and Regulate Sports Betting,” The New York Times, Nov. 13, 2014, https://tinyurl.com/ybnlmtkh. [32] Ibid. [33] Ibid. [34] Ryan Fagan, “MLB’s seeming evolution on sports betting shouldn’t get Pete Rose off the hook,” Sporting News, Feb. 8, 2017, https://tinyurl.com/ydeyxph9. [35] Ryan Kartje, “With the NFL now in Vegas, Roger Goodell foolishly doubles down against sports betting,” April 7, 2017, https://tinyurl.com/yadmf3zu. [36] David Purdum, “Future of sports betting: Fantasy Sports,” ESPN.com, May 6, 2017, https://tinyurl.com/y8wpmnlc. [37] Ibid. [38] Brett Schrotenboer, “NFL’s Gambling Policy Appears Consistently Inconsistent,” USA Today, June 11, 2017, https://tinyurl.com/y8u38tmb. [39] “Average per game attendance (regular season) in Major League Baseball from 2009 to 2016,” Statista, http://tinyurl.com/ycduqjcv. [40] “National Football League average per game attendance from 2008 to 2016,” Statista, https://tinyurl.com/y8ftlfe9. [41] “The State of Working America,” Economic Policy Institute, https://tinyurl.com/y9dwa4te. [42] David Leonhardt, “Our Broken Economy, in One Simple Chart,” The New York Times, Aug. 7, 2017, https://tinyurl.com/y8sxaxyw. [43] “Fan Cost Index of Major League Baseball teams in 2016 (in U.S. dollars),” Statista, https://tinyurl.com/yd2z4uzq. [44] Ibid. [45] Al Saracevic, “Warriors reveal long-term Chase Center season-ticket plan,” San Francisco Chronicle, July 19, 2017, https://tinyurl.com/y6vnzooh. [46] Ibid. [47] Ibid. [48] Ibid. [49] John Lombardo and Don Muret, “Warriors’ new gold standard,” SportsBusiness Journal, June 12, 2017, https://tinyurl.com/y872osxa. [50] Ibid. [51] Billy Witz, “Winning Yankees Aren’t Faring Nearly as well at the Ticket Office,” The New York Times, May 25, 2017, https://tinyurl.com/ybxesecg. [52] Ibid. Page 14 of 16 The Sports Business SAGE Business Researcher ©2021 SAGE Publishing, Inc. All Rights Reserved.

[53] Ibid. [54] Ibid. [55] “A Staggering (Then) Sum,” The New York Times, Jan. 5, 1920, https://tinyurl.com/mjy4f8l. [56] USInflationcalculator.com, https://tinyurl.com/nbjyja. [57] Darren Heitner, “Sports Industry to Reach $73.5 billion by 2019,” Forbes, Oct. 19, 2015, https://tinyurl.com/ybyjzm62. [58] Kurt Badenhausen, “Full List: The World’s 50 Most Valuable Sports Teams 2017,” Forbes, July 12, 2017, https://tinyurl.com/ycoe6wg7. [59] Ibid. [60] Gerald Eskanazi, “Timothy J. Mara, 59, Dies; Former Co-owner of Giants,” The New York Times, June 2, 1995, http://tinyurl.com/y93b7lj9. [61] “Forbes/Profile/Jerry Jones,” Forbes, updated Aug. 28, 2017, http://tinyurl.com/ycm3tkyo. [62] Eskanazi, op. cit.; “NFL Expansion Fees,” Pro Football Hall of Fame, https://tinyurl.com/ycxsq2gr. [63] Elmer Davis, “The Million-Dollar Gate,” The New York Times, July 2, 1921, https://tinyurl.com/y8z2upsx; “Dempsey-Carpentier Fight,” Jersey City Past and Present, http://tinyurl.com/yaaawntt. [64] “Dempsey-Carpentier Fight,” Ibid. [65] Murray Sperber, “Shake Down the Thunder: The Creation of Notre Dame Football,” Henry Holt and Company, 1993. [66] Gerald Eskenazi, “Red Grange, Football Hero of 1920s, Dead at 87,” The New York Times Jan. 29, 1991, https://tinyurl.com/yc2frp9l. [67] Ibid. [68] “President Herbert Hoover Baseball Related Quotations,” Baseball Almanac, http://tinyurl.com/kehyklt. [69] Deane McGowen, “Joe Louis, 66, Heavyweight King Who Reigned 12 years, Is Dead,” The New York Times, April 13, 1981, https://tinyurl.com/2awprk. [70] Ibid. [71] Larry Schwartz, “More Info on Joe Louis,” ESPN.com, Nov. 19, 2003, https://tinyurl.com/ybcjokxp. [72] “The 1936 Berlin Summer Olympics – The So-Called ‘Nazi Games’,” War History Online, https://tinyurl.com/y7n22dma. [73] Ibid. [74] Michael Beschloss, “Hank Greenberg’s Triumph Over Hate Speech,” The New York Times, July 25, 2014, https://tinyurl.com/y9mo73rj. [75] Filip Bondy, “At Jackie Robinson Museum, a Timeless Mission Will Live On,” The New York Times, April 27, 2017, http://tinyurl.com/ydxnn8ft. [76] Leonard Koppett, “The NBA – 1946, A New League,” NBA.com, Dec. 7, 2007, https://tinyurl.com/y967zbuu. [77] Donald Hunt, “Fifty Years Later: Wilt’s 100-point Game,” ESPN.com, March 2, 2012, https://tinyurl.com/hscfg5q. [78] Jacob Pinter and Samantha Raphelson, “He Invented Instant Replay, The Trick We Now Take for Granted,” NPR, Jan. 20, 2015, https://tinyurl.com/jkprqsu. [79] Val Adams, “C.B.S.-TV to Pay $28.2 Million For 2-Year Pro Football Rights,” The New York Times, Jan. 25, 1964. https://tinyurl.com/yam52n98. [80] “Astrodome,” ballparksofbaseball.com, https://tinyurl.com/ycan9fbv. [81] Ibid. [82] Benjamin Wermund, “The Astrodome was a symbol of Houston’s ‘can-do’ attitude,” Houston Chronicle, July 28, 2016, https://tinyurl.com/yblxr4mq.

[83] Robert Lipsyte, “Muhammad Ali Dies at 74: Titan of Boxing and the 20th Century,” The New York Times, June 4, 2016, https://tinyurl.com/ya2q8fms. [84] Ibid. [85] Ibid. [86] “Ali Lights torch at 1996 Olympics,” NBC Sports, (video), https://tinyurl.com/yb2ny8w2. [87] Paul Brownfield, “Book Review, ‘ESPN: Those guys Have All the Fun’,” Los Angeles Times, May 27, 2011, https://tinyurl.com/y75enp8t. [88] Ibid. [89] Leonard Shapiro, “U.S. Shocks Soviets in Ice Hockey, 4–3,” The Washington Post, Feb. 23, 1980, https://tinyurl.com/252lw. [90] Frank Brown, “Wayne Gretzky is traded from the Edmonton Oilers to the Los Angeles Kings in 1988,” New York Daily News, Aug. 10, 1988, https://tinyurl.com/ya6jqpk5. [91] Joe Lapointe, “Wings’ Victory March has a Russian Flavor,” The New York Times, April 7, 1996, https://tinyurl.com/ycmbfcjk. [92] Barry Bloom, “Bonds’ wait for Hall of Fame continues,” MLB.com, Jan. 6, 2015, https://tinyurl.com/ybgwa7s7. [93] Ryan Fagan, “MLB’s seeming evolution on sports betting shouldn’t get Pete Rose off hook,” Sporting News, Feb. 9, 2017, https://tinyurl.com/ydeyxph9. [94] Roger Gonzalez, “Report: USA, CONCACAF want 2026 World Cup bid confirmed by FIFA Soon,” CBSSports.com, April 11, 2017, https://tinyurl.com/yahur4nw; “Fifa votes overwhelmingly to fast-track 2026 World Cup bid process,” The Guardian.com, May 11, 2017, https://tinyurl.com/ya5eq3ps. [95] “MLS expansion tour rambles on after Nashville makes its case,” Associated Press/USA Today, July 19, 2017, https://tinyurl.com/y9jyl3su. [96] “Fifa corruption crisis: Key questions answered,” BBC, Dec. 21, 2015, https://tinyurl.com/hnof3o3; “FIFA losses hit $369 million in 2016 after corruption investigations,” The Associated Press/Sports Illustrated, April 7, 2017, https://tinyurl.com/ycbc98wr. [97] Tim Hill, “Trump travel ban could prevent United States hosting World Cup,” The Guardian, March 9, 2017, https://tinyurl.com/z8ygmht. [98] Ibid. [99] John Ourand, “Taking the pulse of ESPN,” SportsBusiness Journal, June 26, 2017, https://tinyurl.com/yafapbrt.

[100] Purdum, op.cit. [101] FSTA News and Events, July 20, 2017, https://tinyurl.com/yc5vm99n. [102] Brooks Barnes, “Disney Bets on Streaming, Joining With Major League Baseball,” The New York Times, Aug. 9, 2017, https://tinyurl.com/y93eg62t. [103] Ibid. [104] Ibid. [105] Ibid. [106] John Divine, “Can Streaming ESPN Solve Disney (DIS) Stock’s Problems?” U.S. News & World Report, Aug. 14, 2017, https://tinyurl.com/yberxomd. [107] Ibid. [108] Ibid.

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