Cornell University’s ILR School Sports, Inc.

A Tension Between the NBA and the Olympics Pages 7 - 11

ILR Sports Business Society - Fall 2014 - Volume VII, Issue 1 Magazine Staff Executive Board Editor-in-Chief Jesse Sherman ‘15 Advisor Kevin Harris Layout Editor Lauren Mahaney ‘16 President Alex Smith ‘15 Content Editor Gabe Cassillo ‘15 VP of Magazine Jesse Sherman ‘15 Writer /Editor Andrew Distler ‘15 VP of Finance Kevin Cole ‘15 Writer/Editor Evan Lefkovitz ‘16 VP of Radio Matt Hakimian ‘16 Writer/Editor Jason Lefkovitz ‘16 VP of Blog Stephen Rosen ‘15 Writer Taylor Kosakoff ‘16 VP of Events Dan Cappetta ‘15 Writer Damian O’Sullivan ‘17 VP of Marketing Lauren Mahaney‘16 Writer Karthik Sekharan ‘17 VP of Alumni Affairs Sarah Gilman ‘16 Writer Magic Peng ‘18 Director of Career Services Taylor Kosakoff ‘16 Director of Operations Mike Wolkon ‘16

The ILR Sports Business Society, an independent student organization located at Cornell University, produced and is responsible for the content of this publication. This publication was not reviewed or approved by, nor does it necessarily express or reflect the policies or opinions of, Cornell University or its designated representatives.

2 Sports, Inc. The Inc.’s INK Volume VII, Issue 1: Fall 2014

A Changing Landscape: Today’s Sports Issues Also Featuring

Why They Call Him “Money” by Page 11 Karthik Sekharan Page 5

“Socialism” Defeats “Capitalism” on the Pitch The Olympics as a Legal by Magic Peng Steroid: How Participation Enhances NBA Player Performance by Jason Lefkovitz Page 7 Page 20

A New Dead Ball Era? How Surgery The Effects of Declining Affects Baseballby Damian Offense in Baseballby O’Sullivan Andrew Distler Page 13

A Case Study of Apparel Sponsorship in Sports by Evan Lefkovitz Page 23 Page17 Business Sponsors and the Public Press for Change by Taylor Kosakoff

Fall 2014 3 The President’s Greeting: Alex Smith ‘15

First, thank you for taking the time to read the ILR Cornell Sports Business Society Magazine. On behalf of our entire team of writers, editors, and E-Board, we thank you for your support. This magazine is a celebration of the outstanding research performed by our members throughout the Fall 2014 semester. Their work embodies the core values of our organization, the ILR School, and Cornell as a whole. A primary objective of our organization is to offer students opportunities to apply the knowledge learned in their academic coursework to the sports business world. Through practical applications, such as this magazine, we hope that our members will be in a better position to succeed in the competitive landscape that is the sports industry. As you sift through the following pages, please keep this in mind, and enjoy the detailed and hard work of each of our contributors.

Check out our new website at www.cornellsportsbusiness.org

4 Sports, Inc. Why They Call Him “Money” Karthik Sekharan ‘17

Most superstar athletes have a nickname of some sort. Lebron James is “The King,” Derek Jeter is “The Captain,” and Marshawn Lynch has been dubbed “Beast Mode.” The birthplace of most of these names are easy to explain. James is arguably one of the best athletes to have ever played the game of basketball, Jeter’s leadership abilities are unmatched by even the most veteran of players, and Lynch, a fierce running back, is known for an energetic and aggressive playing style. Photo courtesy of ESPN While these athletes have FLOYD “MONEY” MAYWEATHER has redefined the industry by combining his nicknames that speak to their unparalleled performance in the ring with his ability to recognize new opportunities on the business side of the sport. attributes on the playing field, Floyd Mayweather Jr. has a Hall of Fame Fighter of the this extreme accumulation of costs, and other costs right nickname that is a little different Year in 2002, and the ESPY wealth. This begs the question: down to the cups that the beer in nature. Floyd “Money” Award for Best Fighter in why is he so rich? The answer is served in. While the boxer Mayweather did not simply 2012. Throughout his career to this question requires a bit of pays the promoter a set fee, the happen into Mayweather an explanation. promoter assumes all financial becoming the has Boxing, while being a risk. That is, if the fight does richest athlete “What did accumulated lucrative industry, is a sport not bring in the expected profit, on the planet an extreme that has been rapidly declining then the promoter is the one by being good Mayweather amount of in popularity in America. In losing a significant amount of at boxing. wealth. Solely order to account for this, the money. However, with this His business do to avoid from fights, biggest matches that any risk comes a great reward if model, though Mayweather serious boxing fan needs to everything works out. If the incredibly losing all has netted watch are on Pay-Per-View for fight brings in a significant risky, is what more than upwards of $80 per match. On profit, the promoter rakes in a has propelled that potential $400 million top of that, tickets to watch a huge chunk of it. So the boxer him to the in his career. match at the MGM Grand or makes a small percentage of extreme wealth profit? He Pay-Per-View any other boxing venue range that profit while the promoter that he has. revenue from from $500 to $2,000. In other makes most of it. Floyd bypassed the his whole words, you need to have serious What did Mayweather Mayweather career has money to be a boxing fan. Of do to avoid losing all that Jr.’s official middleman.” earned him an the revenue that is made from potential profit? He bypassed boxing record estimated total Pay-Per-View and ticket sales, the middleman. He founded is 47-0 after of $1 billion. a significant percentage of it Mayweather Promotions, his his most recent match against In addition, endorsement deals goes to the promoter. own promotions company. Marcos Maidana. He has been provide him with a steady Most boxers hire a promoter Since all of his fights net internationally recognized stream of revenue. All in all, before every big fight. The enormous profits, he makes for his skill and has won estimates have him being worth promoter’s job is, as the name most, if not all, of that money. numerous awards including around $280 million. While implies, to promote the fight. In He doesn’t have to give the the International Boxing Award being an accredited boxer like addition, they pay for every cost majority of it to some outside Fighter of the Year in 1998 Mayweather is sure to have its associated with the fight. These promoter. However, up until and 2007, the World Boxing perks, it is no explanation for include venue costs, referee July 2014, Mayweather

Fall 2014 5 Promotions has had to partner and co- costs that go into promoting and hosting a general commanding a small army that promote with since, one fight, if profits were less than expected works furiously for 12 weeks to create up until that , they did not have their it could send some fighters into bankruptcy. his vision of fight night. And every time promoter’s license. Now that Mayweather Showtime Vice President Stephen Espinosa he steps into the ring, he meets and maybe Promotions has its has said that while even exceeds expectations by proving time license, Mayweather other boxers have tried and time again that he is undoubtedly the Jr. will be making large this business model, best fighter on the face of the earth. amounts of money even “relying on your own after he retires, since blood, sweat and tears the company intends to to maximize your event continue representing other boxers. doesn’t work if you haven’t built over time One may ask, “Why don’t all boxers the kind of appeal that Floyd has.” just bypass the middleman and start their Floyd “Money” Mayweather has taken Karthik Sekharan is a sophomore in the ILR own promotions company?” The answer control of the boxing industry. When he School. He can be reached at kns44@cornell. is that it is so incredibly risky. With the announces the date of his fight, he becomes edu.

Congratulations to Robert D. Manfred, ILR ’80 The Cornell ILR Sports Business Society would like to congratulate Robert Manfred ‘80, on being unanimously elected as the 10th Commissioner in history! Several ILR Sports Business Society members had the honor of attending a special event hosted by Cornell Alumni Affairs at MLB headquarters in December 2013. Rob Manfred and NHL Commissioner Gary Bettman were members of a panel that was moderated by Dean Harry Katz. The panel discussion was preceded by a networking opportunity for the students and many ILR alumni in attendance.

6 Sports, Inc. The Olympics As A Legal Steroid: How Participation Enhances NBA Player Performance Jason Lefkovitz ‘16 time I saw a compound leg fracture on NBA owners like the Dallas Mavericks’ television. I was watching live when Kevin Mark Cuban have vehemently opposed Ware of the Louisville Cardinals men’s the status quo. It is not difficult to Introduction basketball team suffered a very similar sympathize with their perspective, for injury during the 2013 NCAA Division such owners invest millions of dollars On August 1, 2014, the USA men’s I Men’s Basketball Tournament. So why in their players in order to generate basketball team held a televised, intra- did Paul George’s injury resonate with success and, in turn, revenue for their team scrimmage in as part of me to such a great degree? Unlike Kevin teams. Seeking to minimize the risks of the preparatory process for the 2014 FIBA Ware, Paul George was a professional playing basketball in any setting, these World Cup. The game was intended to whose livelihood depended on his ability owners want to prevent their players from serve as an innocuous way to evaluate the to play. If it weren’t for Paul George’s playing for any cause unrelated to their pool of selected players and finalize the contract extension, he could have lost own teams’ success. Specifically, the roster for the tournament. Unfortunately, millions of dollars in the event that he exploits of their players in international in the third quarter of the scrimmage, couldn’t fully recover from the injury. competition do not directly generate any everything went awry when Indiana In addition, the implications of the revenue for their teams. Pacers All-Star forward Paul George injury reach beyond the scope of the In reality, however, it is impossible snapped his lower right leg in half on a individual player. For instance, how would to completely prevent the incidence of backboard stanchion. Suffering compound the Pacers fare in the absence of their injury off the NBA hard-court. Even if top fractures of his right tibia and fibula most valuable and most expensive asset? NBA players chose to avoid international bones, George would inevitably miss In the wake of that fateful August 1st competitions during the offseason, they not only the tournament but also the night, such concerns echoed from media would still play in exhibition leagues 2014 NBA season. outlets across the country, prompting and pickup games like many of their The gruesomeness of such an injury an age-old debate: should NBA players peers do. In addition, despite the risk of can really haunt one’s thoughts. I still participate in international competitions injury, many NBA players have a desire remember where I was and what I was and how much control should NBA teams to represent their country in competitions eating when I witnessed the horrific have over these decisions? Currently, like the Olympics. Players are not only spectacle. I couldn’t stop thinking about NBA players have full autonomy in the patriotic but are also aware of the notoriety Paul George’s injury for days afterward. decision to play for their countries in that comes with international success. However, this was oddly not the first international competitions. Many of these players undoubtedly know

Photo courtesy of the New York Post PAUL GEORGE’S horrific leg injury illustrated the dangers that players can face by participating in international competition.

Fall 2014 7 1992 Dream Team PER Before ('91-'92) PER After ('92-'93) Difference Average Difference Robinson, David 27.5 24.2 3.3 Ewing, Patrick 22.8 20.8 2 Pippen, Scottie 21.5 19.2 2.3 Jordan, Michael 27.7 29.7 -2 Drexler, Clyde 23.6 20.7 2.9 Malone, Karl 25.4 26.2 -0.8 Stockton, John 22.8 21.3 1.5 Mullin, Chris 19.9 19 0.9 Barkley, Charles 24.5 25.9 -1.4 Johnson, Magic NI Bird, Larry NI Laettner, Christian NI 0.97

1996 Olympic Team PER Before ('95-'96) PER After ('96-'97) Difference Average Difference Charles Barkley 24.8 23 1.8 Penny Hardaway 24.6 21.4 3.2 Grant Hill 20.9 25.5 -4.6 Karl Malone 26 28.9 -2.9 Reggie Miller 20.1 20.2 -0.1 Shaquille O'Neal 26.4 27.1 -0.7 Hakeem Olajuwon 25.5 22.7 2.8 Gary Payton 19.6 21.8 -2.2 Scottie Pippen 21 21.3 -0.3 Mitch Richmond 19.2 21.6 -2.4 David Robinson NI John Stockton 21.9 22.1 -0.2 -0.51

2000 Olympic Team PER Before ('99-'00) PER After ('00-'01) Difference Average Difference Shareef Abdur-Rahim 20.2 19.1 1.1 Ray Allen 20.6 22.9 -2.3 Vin Baker 14 13 1 Vince Carter 23.4 25 -1.6 Kevin Garnett 23.6 23.9 -0.3 Tim Hardaway 16.4 16.7 -0.3 Allan Houston 16.5 16.1 0.4 Jason Kidd 18.4 19.4 -1 Antonio McDyess 19.6 22 -2.4 Alonzo Mourning NI Gary Payton 23.6 22.1 1.5 Steve Smith 17.3 15.9 1.4 -0.23

8 Sports, Inc. 2004 Olympic Team PER Before ('03-'04) PER After ('04-'05) Difference Average Difference Carmelo Anthony 17.6 16.7 0.9 Carlos Boozer 20.8 19.2 1.6 Tim Duncan 27.1 27 0.1 Allen Iverson 19.3 23.2 -3.9 LeBron James 18.3 25.7 -7.4 Richard Jefferson NI Stephon Marbury 20.4 21.9 -1.5 Shawn Marion 19.9 21.7 -1.8 Lamar Odom 18.5 17.3 1.2 Emeka Okafor NI Amar'e Stoudemire 19.8 26.6 -6.8 Dwyane Wade 17.6 23.1 -5.5 -2.31

2008 Olympic Team PER Before ('07-'08) PER After ('08-'09) Difference Average Difference Carlos Boozer NI Jason Kidd 16.7 16.9 -0.2 LeBron James 29.1 31.7 -2.6 Deron Williams 20.8 21.1 -0.3 Michael Redd NI Dwyane Wade 21.5 30.4 -8.9 Kobe Bryant 24.2 24.4 -0.2 Dwight Howard 22.9 25.4 -2.5 Chris Bosh 23.8 22.1 1.7 Chris Paul 28.3 30 -1.7 Tayshaun Prince 15.6 15 0.6 Carmelo Anthony 21.1 19 2.1 -1.2

2012 Olympic Team PER Before ('11-'12) PER After ('12-'13) Difference Average Difference Anthony Davis NI 21.1 23 -1.9 26.2 28.3 -2.1 22.9 23.9 -1 LeBron James 30.7 31.6 -0.9 Carmelo Anthony 21.1 24.8 -3.7 Chris Paul 27 26.4 0.6 Tyson Chandler 18.7 18.9 -0.2 Kevin Love NI Deron Williams 20.3 20.3 0 Andre Iguodala 17.6 15.2 2.4 Kobe Bryant 21.9 23 -1.1 -0.79

Fall 2014 9 To establish objectivity, I PER from one season to the concretely defined “sufficient” next (i.e. PER After > PER to mean playing 50% or more Before), and 37 out of the 61 of the games during the season PER differences (approximately (in the lockout-shortened 2011- 61%) included in the data set 2012 season, any player who were negative. played 33 games or more was To investigate this deemed eligible for analysis). phenomenon even further, I This rule resulted in the decided to test if there was elimination of 11 players from a statistically significant the analysis. improvement in PER among the I utilized the statistic players in the season after they Player Efficiency Rating (PER) participated in the Olympics. because it is a comprehensive I decided to employ a more statistic that evaluates player advanced statistical analysis performance while controlling of the data: hypothesis testing. for differences in players’ Let me spend a few moments positions, team roles, and providing a general overview playing time. According to of this statistical process. Basketball Reference.com, PER Scientists and other is “a measure of per-minute researchers seek to learn about production standardized such population parameters, which that the league average is 15.” are real-world values (such as To calculate the Olympics’ a mean or a standard deviation) effect on player performance, that we can’t possibly know I computed for each player without collecting every piece Graphic by Jason Lefkovitz the difference between his of relevant data in the world. PER in the season leading Since obtaining every piece of up to the Olympics and the data is impossible, scientists about the aura of the famous Research/Analysis PER in the season right after use statistics to make inferences 1992 Dream Team. the Olympics. Then, for each about these population Thus, I do not believe Let me take a moment to Olympic team, I calculated parameters. For example, if that the possibility of injury outline the parameters of my the average difference in PER scientists wanted to compute is sufficient justification for data and research. To avoid among that team’s players. the actual average height of giving NBA owners control complexity, I focused on the My findings are displayed Americans, they would have over a player’s decision to play Olympics, which is by far the on Page 8 and Page 9. Note that to measure the height of all in international competition. most prominent international 1) the average 300+ million Instead, perhaps there should basketball competition differences for Americans. be concern over the effect of and which unquestionably each Olympic Since this is international play on player attracts the best NBA players. team (i.e. PER impossible, performance for their NBA Moreover, I decided to focus before – PER scientists teams. Specifically, in contrast on Team USA because that After) are would resort to any friendly offseason Olympic team features the highlighted to taking a pickup game, international play most prestigious NBA players. in yellow representative requires players to endure an Thus, I amalgamated into and, 2) for the sample of the extra month of physically taxing one data set all 6 USA Olympic players that I population practices and competition akin men’s basketball rosters since omitted from and using the to those during the actual the 1992 Dream Team, which the analysis, average height NBA season. With this in have prominently featured I put the acronym NI next to from this sample to make mind, perhaps participation active NBA players. For each their names, which stands for inferences about the real in international competition can player, I investigated player “not included.” average height. yield fatigue that compromises performance in the season Interestingly, the data Hypothesis testing is a player performance in the leading up to the summer in produce a trend that is type of statistical inference. following NBA season. If there which he competed in the almost antithetical to what I To paraphrase my Introductory is a statistically significant Olympics and then player hypothesized: the data suggest Statistics professor, the effect, perhaps owners have a performance in the season that NBA players (at least mechanics of hypothesis testing legitimate argument for more immediately following that those on Team USA) generally mirror those of an American control over their players’ summer. I omitted from the improve performance in the courtroom. Specifically, in offseason decisions. Therefore, analysis any player that did season after they participate court, we assume a defendant is I decided to conduct in depth not play a sufficient number of in the Olympics. Specifically, innocent until there is sufficient research and analyze the games in the season before or 5 out of 6 teams exhibited a evidence to prove guilt (i.e. possibility of such an effect. after his Olympic participation. negative average difference in beyond a reasonable doubt).

10 Sports, Inc. Analogously, in hypothesis testing, we that the true mean difference in PER from LeBron, who are notorious gym rats. assume a certain status quo until there is one season to the next is equal to 0 (i.e. Nevertheless, one may still have sufficient, statistically significant evidence that there is no statistically significant some concerns with these findings. First, to prove otherwise. In difference in PER some of the players that I omitted from statistics, the status on average between the dataset missed significant time in quo is called the null the two seasons for the season following the Olympics due hypothesis. Just like NBA players), and the to significant injuries. For instance, a ruling of guilty in alternative hypothesis David Robinson was omitted from the a courtroom, when “Players are not was that the mean 1996 Team’s data because he missed 76 there is statistically difference was less games with a back injury and a broken significant evidence only patriotic but than 0 (i.e. that the foot. Perhaps one might attribute these to disprove the null PER in the season injuries to the extra wear and tear on his hypothesis, we reject it. are also aware after the Olympics body during the Olympics the previous The “guilty ruling” in was greater on average summer. In response to such concerns, statistics is called the of the notoriety than the season before it is impossible to isolate the effects of alternative hypothesis. the Olympics). I the Olympics from those of the 1995- A key way to that comes with utilized a significance 1996 NBA season or those of the 1996- measure “statistical level of 5%, for, as 1997 Preseason. Let’s not forget that significance” is international aforementioned, that such injuries could have also been freak with a p-value, is probably the most accidents in the same way that many people which measures the common level used in get injured on a daily basis. Since it is probability that a success.” statistical analyses. impossible to know whether competing sample will yield the The results, as can in the Olympics actually increased the data obtained given be seen in the charts probability of injury, it is pointless to that the null hypothesis on Page 8 and 9, show include such concerns in the conversation. is true. If the probability of seeing the data an extremely low p-vaule of 0.0178 or Second, one may point out that I only from our sample is really low assuming a mere 1.78% probability that our data analyzed players from Team USA. Perhaps that the null is true, then statisticians would be obtained if the mean difference other countries’ basketball programs, assume that the null is not true and reject in PER was equal to zero. Since, this which surely lack the quality coaches it. Similarly, in the courtroom, if there is p-value is less than the 5% significance and players that make up Team USA, enough incriminating evidence, the jury level, there is sufficient, statistically can’t offer the same kind of enriching will deem the defendant’s innocence (i.e. significant evidence to reject the null Olympic experience for their players. the null hypothesis) to be very improbable hypothesis and accept the alternative that Although I concede that this fact may and rule the defendant guilty. the mean difference in PER is less than pose limitations on the power of my Researchers use threshold p-values, 0. In other words, there is statistically findings, I still assert that these findings called significance levels, to establish significant evidence to suggest that, on can provide very useful perspective for when data are statistically significant average, the PER’s of NBA players on NBA owners. Since most NBA players enough to reject the null hypothesis. If Team USA increase in the season after (and, for the most part, the best ones) the p-value is lower than the established competing in the Olympics. are American and would thus play for significance level, then the null hypothesis Team USA, the effects of a Team USA is rejected. Significance levels vary with Conclusion experience on NBA player performance are the nature of the research, but perhaps important for NBA owners to understand. the most common significance level is These findings are not necessarily As articulated above, my findings 5% (a p-value of 0.05). counter-intuitive, for there are various illustrate that playing for Team USA I conducted my analysis with a reasons why an NBA athlete playing for in the Olympics yields, on average, a paired t-test, which is the ideal kind of Team USA might improve during his statistically significant improvement in hypothesis testing for the PER differences. Olympic experience. Team USA usually player performance the following season. A paired t-test takes two groups of data consists of the best players in the world, Therefore, I would strongly recommend for different individuals in a study (such so the best are competing against the best to NBA owners to not only allow but as “before-and-after” data) and finds in practices. Therefore, these players also actively encourage their players the difference in the two groups of data can improve from the sheer challenge to play for Team USA in the Olympics. for each individual. Then, the paired of competing against the best, perhaps t-test takes this group of differences learning from their equally capable peers and makes inferences about the mean new skills that can complement their of these differences. So, for the NBA current basketball repertoires. data, the paired t-test would take the 61 In addition, a player may develop a PER differences computed in the analysis better work ethic during the experience. above and make inferences about the true By their competitive nature and their average change in PER of NBA players egos, players may be motivated to work from the season before they play in the harder so they could outperform the elite Jason Lefkovitz is a junior in the Olympics to the season after they play. players around them, or they may want ILR School. He can be reached at In my analysis, the null hypothesis was to emulate all-time greats like Kobe or [email protected].

Fall 2014 11 “Socialism” Defeats “Capitalism” on the Pitch Minggao (Magic) Magic ‘18

During the 2014 summer transfer window, Luis Suarez and James Rodriguez, two of the biggest names in the soccer world, landed in Spain as tons of rumors had predicted. To a certain extent, this situation epitomizes the soccer transfer market in 21st century, with the two Spanish giants, Real Madrid and Barcelona, signing almost all superstars at the peak of their careers, while other top European clubs struggle to accept negotiation defeats. According to the statistics of the Daily Telegraph, a newspaper in the United Kingdom, Real Madrid and Barcelona are responsible for seven of the ten most expensive transfer fees of all time. As a result of great management, they have been the two most successful clubs Photo courtesy of Barca Blog around the globe in this century. Since the THE FANATICS pictured above actually own both of the Spanish giants. 1999-2000 season, these two formidable clubs jointly lifted 6 out of 15 titles in So what factors result in the fact that Real cultivated the best players of each decade. the UEFA Champions League, the most Madrid and Barcelona are much more For example, arguably the four most prestigious club competition in European attractive to stars? The most three critical distinguished soccer players in history, football. explanations can be boiled down to: 1) Spain Pelé, Maradona, Di Stéfano, and Messi, In contrast, it seems that Manchester is inherently attractive to Latino players, 2) all come from either Argentina or Brazil. United, another top club in Europe, also full support of the Spanish government, 3) As a result, Real Madrid and Barcelona are operates well and expands its influence the vital reason, which is that in the Real easily able to land the superstars of each in a global context. However, when it Madrid and Barcelona fan-owned system, generation. The two cases of Luis Suarez comes to the attractiveness to superstars a “socialist” ownership equips them with and James Rodriguez during the summer and the number of winning cups, it still superior spending power compared to of 2014 illustrate this point, as they cannot compete small ownership each dreamed of playing in Spain since against the two groups that childhood. Spanish giants. dominate Under his mother’s influence, James Some people “The team that has “capitalistic” Rodriguez has been a lifelong die-hard speculated that clubs. fan of Real Madrid. On April 28th, 2014, the English more money and more First of all, when the Spanish franchise went to Premier League historically challenge Bayern Munich, Rodriguez is not as rich freedom to spend speaking, drove himself 584 kilometers all the way as La Liga, but Spanish clubs down to Germany from Monaco with the the data shows will probably reign are innately purpose of supporting his side and meeting that the Premier appealing to his idol, , in person. League is the players from Similarly, while Suarez was still paying most lucrative supreme.” Latin America, for Ajax soccer club in 2008, he revealed soccer league. soccer’s biggest to the media that he would play in Spain More specifically, Wayne Rooney, the talent pool. During the hundreds of years in the future, without mincing his words captain of Manchester United, is earning of colonization, Spain left a number of its at all. That was his dream. Thus, even if an £15.6m annual salary, which eclipses unique elements in Latin America: culture, Liverpool fans were excessively lenient the reported salaries of Cristiano Ronaldo foods, and most importantly, its language. and tolerant towards him when he fell into and Lionel Messi. Because of this bond between Latin controversies regarding racism and on-field Other fans assume that the style of America and Spain, most of the soccer biting, they were unable to keep him. It is English matches is rougher and more players there target Spain as their dream because of these players’ passion to play physically challenging. Nevertheless, after destination, a familiar environment where for their dream teams that Real Madrid and the establishment of the English Premier people speak the same language and share Barcelona could almost effortlessly sign League in 1990s, the style of the English many similar customs to them. these desirable stars. games has become increasingly exquisite Moreover, because of the unmatched Furthermore, the fact that the and focused on beautiful short passes, soccer atmosphere and advanced youth governments spare no effort in supporting ball movement, and precise penetration. training system, Latin America has always these two clubs provides them with a much

12 Sports, Inc. better environment to grow. premium of £138. According to After more than a hundred a report by Deloitte, in addition years development, as the to the astronomical income Spanish duo has consistently generated by broadcasts and scored brilliant achievements advertising, Real Madrid and and gradually become the Barcelona generate £444.7 spotlight of the soccer world, million and £413.6 million they have reflected their respectively, remaining the two respective governments. Real most lucrative soccer clubs in Madrid, to a great extent, the world. More importantly, represents the Spanish central the regulations of the Spanish government, as President constitution enable them to Florentino Perez always completely spend their income emphasizes that the club brings based on their ownership glory to the whole country. For feature. As the regulations Barcelona, the club, stands for stated, fan-owned clubs cannot the government of Catalonia make profits. In other words, because of the geography. As they have to use up all of their Photo courtesy of Global Economic Intersection an ethnic group with extremely incomes from membership fees strong Catalan nationalism, the government. But as the soccer industry and other revenues to maintain local government stresses the More crucially, Real professionalized, a large their day-to-day operations. development of the club as an Madrid and Barcelona number of clubs could not bear These reasons explain the embodiment of its ethnic group, implement the membership the burden of skyrocketing unparalleled financial strength especially in comparison to model of ownership, affording expenditures. These teams had of the two Spanish giants. Real Madrid, which is believed them much stronger financial to pay professional players Even though there are to the symbol of central aid and spending freedom in wages and went abroad to still potential problems of government. comparison to other clubs. This attend the games, a series of the system of membership For different reasons, the type of ownership is similar to pressing problems that could ownership, such as the severe two governments pull out socialism in the sense that fans not be solved by membership corruption of the club’s all the stops to support their own the club. As a nonprofit fees. For instance, around the president who wields huge franchises, particularly in terms social organization, the club is 1990s, most Spanish clubs power, the “socialist” clubs of taxes and loans. not supposed to make profits were operated with a have generally defeated Even though Spain is in for its members; rather, its main huge amount of debt, the “capitalist” ones the midst of a severe financial is to pursue trophies and and more than half throughout the 21st crisis, with unemployment at glory to please its members. of them were on the century. In short, as 26% and youth unemployment Therefore, as long as there is no brink of bankruptcy. spending power plays at 50%, the spending power deficit, the club can spend all of In order to reverse an increasingly of Madrid and Barcelona was its money on the enhancement this deteriorating crucial role in the unaffected due to the policies of its squad without worrying situation, modern sports of the government. According about creating profits. the Spanish industry, the team to a report published in The On the contrary, nearly government that has more Independent in July of 2013, all franchises in the United required clubs to money and more the government disclosed the Kingdom and many in Europe, transform into limited freedom to spend will amount of unpaid taxes owed such as Manchester United, liability companies by probably reign supreme. by professional soccer clubs in are registered as limited a June 30th 1992 deadline. the country’s top liability companies. During the course of this two divisions. This is similar reform, four clubs, Real The sum was to a “capitalistic” Madrid, Barcelona, Athletic a staggering system. They have Bilbao, and CA Osasuna, were £575 million, to put a huge exempt from the transformation and the two emphasis on because their financial powerhouses making money for conditions were quite healthy, account for most its shareholders, and and they had a steady income of this figure. their financial ability and cash flow hat enabled them The government is limited to a great to continuously operate and pay also treats the two extent. their debts. These four Spanish clubs generously in terms In Europe, at the beginning, franchises have maintained this of loans. As shown by an most soccer clubs adopted the system to this day. official statement in 2014, ownership of its membership. In 2013, as stated by the Real Madrid’s debt has grown In historical context, clubs official statistics, Barcelona to £ 471 million, with a large were simply groups that was number one in terms of Magic Peng is a freshman in the percentage coming from banks organized soccer lovers to play members with 222,980, with ILR School. He can be reached at and creditors of the Spanish games together after work. each of them paying an annual [email protected].

Fall 2014 13 How Tommy John Surgery Affects Baseball

Photo courtesy of the Washington Post PITCHERS LIKE have such a big impact on the performance of their teams, both on and off the field. Tommy John surgery could prove costly not just to a player’s career, but to the direction of an entire organization. Damian O’Sullivan ‘17 competitive balance in Major his career, and 164 of these available to players. League Baseball, star pitchers came after this career-extending This high rate of full are also sizeable financial assets surgery that enabled him to recovery from surgery was The increasingly prevalent to teams. assume the seventh slot on unprecedented prior to 1974, decision by professional As a result, this surgery the all-time wins list for left- and UCL damage shortened the baseball players to undergo has a substantial economic handed pitchers in the MLB. careers of an indeterminable Tommy John surgery has given impact on baseball that affects This revolutionary number of great pitchers, rise to the question of whether practices such as scouting, surgery has vastly increased speculatively including the or not the frequency of these which demonstrates the the likelihood of return for 3-time Cy Young winner Sandy elbow injuries has reached broad impact that Tommy individuals with UCL damage, Koufax. Tommy John surgery epidemic proportions. Sports John surgery has on Major which became increasingly could have benefited many past medicine professionals often League Baseball. common after this era. pitchers, but the increasing cite the competitive nature of Tommy John surgery is According to modern studies, prevalence of UCL injuries youth baseball, as the root cause a relatively new medical the success rate of Tommy in recent years has made its of these injuries and thus, Major procedure in which the ulnar John surgery hovers around importance especially clear in League Baseball is limited collateral ligament (UCL) in 90%. Needing the today’s in the extent to which it can the elbow is reconstructed. In the surgery is MLB. reverse this alarming trend. order to do so, the damaged still highly The With approximately one- ligament is replaced with a problematic greater third of MLB pitchers having tendon from another part of the for both frequency undergone this surgery in lieu body. Dr. Frank Jobe was the players and o f Tommy of prematurely ending, or never first to perform this surgery on franchises John surgeries can be beginning, their professional a baseball player, and did so because it attributed to numerous careers, this surgery has had a in 1974 on Dodgers’ pitcher can translate factors, pervasive effect on the game. Tommy John, after whom to the end many of Had this many talented pitchers the surgical procedure was of a career which been replaced by their long- informally named. at any level of baseball. For stem from the competitive relief or Triple-A counterparts, The initial prognosis for the majority of pitchers, nature of youth baseball. This the balance between hitters John’s surgery was grim, however, the surgery results element also more specifically and pitchers would have but after a roughly one-year in approximately a 9 month to addresses the younger ages been altered, resulting in a rehabilitation period, he 1 year recovery period, down at which pitchers require very different Major League returned to baseball. John from a 12 to 16 month process the surgery. A study by the Baseball. Beyond affecting the won 288 games throughout when the surgery first became American Orthopedic Society

14 Sports, Inc. for Sports Medicine demonstrated a John surgeries that are performed on or younger accounted for 18% of the five-fold increase in serious elbow and professional baseball players. surgeries that he performed, whereas shoulder injuries since 2000. Modern According to the American Sports in 2010 that figure rose to 31%. Thus, youth baseball players are throwing too Medicine Institute, young players are higher competition at lower levels causes frequently in order to keep pace with the more frequently joining multiple leagues athletes to need the surgery at earlier ages intense competition necessary to reach simultaneously, which can obscure pitch or it develops issues that cause damage the professional level. counts and stress the athletes’ arms. The requiring surgery later on in careers. One reason for this excessive throwing ASMI also posits that pitchers throw Effective prevention of UCL damage, is that sport specialization is becoming curveballs very early on, which can best achieved by decreasing the volume of far more common in reaction to the high prove detrimental in the event of poor pitching and spending less time throwing level of competition at lower levels. Dr. pitching mechanics that at maximum velocity, Robert Malina, Professor of Kinesiology predictably characterize is seldom contested at the University of Texas at Austin, much of youth baseball. by professionals in suggests that although the rise in sport Finally, the emphasis “Of the 360 the sports medicine specialization is difficult to quantify, an on throwing with a high community. The ASMI increasing number of coaches, parents, velocity in order to pitchers that and the MLB itself even and athletes believe that in order to be attract attention from maintain positions to competitive, one should focus on one scouts and competitive started the 2013 this effect. However, sport from an early age. Instead of a leagues leads to the because this phenomenon young athlete with a strong arm playing straining of UCLs. season, 124 occurs among very baseball in the spring and football in Constantly clocking young athletes who the fall, a prospective pitcher is more young pitchers results are encouraged by their likely to choose one sport, maintaining in their constant effort had undergone coaches and parents to the same throwing motion and inducing at maximum velocity, emphasize winning, unrelenting elbow stress. Young pitchers which is compounded at least one these entities can’t tend to play year-round, which leaves by playing year-round. induce change. Thus, inadequate time for the ligament to recover. Dr. James Andrews, a Tommy John if parents and coaches Annual periodization requires sufficient renowned physician continue to ignore the rest from full effort pitching in order to who has performed this surgery.” importance of mechanics effectively reduce ligament strain and surgery on many notable and pitch count limits, ultimately avoid UCL reconstructive pitchers, supports and fail to denounce the surgeries. these theories by indicating that in his use of performance enhancing substances, Several other aspects of competitive experience, operating on younger people the damage done in these formative years youth baseball significantly contribute is becoming more common. will likely continue. to the rise in the number of Tommy In 2000, players in high school Tommy John surgery has reached proportions large enough to warrant the American Sports Medicine Institute to deem it an “epidemic.” The precipitous rise, especially in recent years, is captured well in the following graph constructed by Bill Petti based on MLB disabled list statistics. In spite of this alarming trend, efforts at the professional level to combat the issue are seemingly ineffective. As teams tried to reduce pitch counts for starters in the mid 2000’s to mitigate the Tommy John epidemic, the frequency of surgeries continued to rise. In 2000, there were 160 games in which an individual’s pitch count was greater than 125. Throughout the next 10 years that number declined to an average of 39.9 games and never exceeded 70 in a given season. Nevertheless, throughout this period, the number of surgeries rose markedly. Of the 360 pitchers that started the 2013 season, 124 had undergone at least one Tommy John surgery. These pitchers, who would have likely been forced to conclude their careers early prior to this 1974 revolution in sports medicine, Infographic courtesy of SweetSpot Network have by and large returned to the game

Fall 2014 15 pitching at the professional level. While the solutions to the Season vs. Number of Tommy John Surgeries frequency with which damage to the UCL remain difficult to implement, Tommy John surgery serves as a reactive solution for a tremendous number of professionals each year. The amount of money saved by teams due to the return of players after undergoing surgery is illustrated clearly by the economic impact of the Nationals’ young pitcher Stephen Strasburg. From the very start of his professional career, he drew national attention to the franchise at a scale unprecedented in the team’s history, as demonstrated by his quick rise to top the list Graph by Damian O’Sullivan in all-time best selling jerseys THE NUMBER of Tommy John surgeries in baseball has risen exponentially since the 1970s. for the Nationals. His first start aired on the MLB Network and attendance rates, merchandise, The league seeks to prevent By expanding this drew enough viewers to become and his role in helping the team exorbitant bonuses for young opportunity, the quality of the most watched program reach the playoffs. Strasburg players on the basis of fear pitching and thus the game itself in the network’s history. underwent Tommy John of injury, and that concern is would be considerably altered Strasburg’s first two starts surgery and returned to pitch exacerbated by hard-throwing and likely diminished. Teams were sellouts at at a high level pitchers. Strasburg is a prime are also afforded financial Nationals Park, for the team, example of why a hard-slotting benefits as a result of the return which can be “A study by indicating system should be implemented; of prominent starting pitchers, contrasted the economic however, in the absence of some of whom bring in tens of to the 53% the American impact that this surgery, bonuses would millions of dollars annually decline in Tommy John be even further suppressed. to their respective franchises. attendance the surgery has on This suppression would be The nature of scouting and day after his Orthopedic the business of necessitated by the constant investing in young talent debut. Just this baseball. expense of replacing pitchers would also be significantly first start alone Society The that had their careers shortened altered in the absence of this accounted for implications by tearing their UCL’s. Thus, procedure. Thus, Tommy John approximately for Sports of this surgery the paradigm of scouting and surgery, the most famous $1.5 million extend far investing in young talent would surgery in sports, has proved in additional Medicine beyond teams be significantly different revolutionary in protecting revenue for simply saving without the efficacy of Tommy pitchers, substantially shaping the franchise. demonstrated money by John surgery. the game both in business and Perhaps offering a Other names such as Chris on the field today. more likely return for Carpenter, , Adam importantly, a five-fold many talented Wainwright, Ben Sheets, A.J. Nationals’ pitchers after Burnett, and most notably ratings for his increase in tearing their Tommy John would have been starts remained UCL’s. The absent from their prominent substantially serious elbow contemporary places in baseball history prior higher than issue of to Dr. Jobe’s innovation in other games, and shoulder the slotting UCL surgery. Without these demonstrating system for individuals as well as the his long- injuries since amateur draft approximate one-third of term impact. bonuses that current pitchers who have Financial 2000.” consistently been affected by the surgery, experts emerges during less effective pitchers would valuated his collective have filled their places, many contribution at approximately bargaining would be a of whom in turn would get Damian O’Sullivan is a sophomore $25 million per year based considerably greater issue injured after assuming more in the ILR School. He can be on higher television ratings, without this surgery. innings in starting roles. reached at [email protected].

16 Sports, Inc. Special thank you to Bloomberg, Inc. for providing printing of this issue

Fall 2014 17 A Case Study of Apparel Sponsorship in Sports Evan Lefkovitz ‘16

Earlier this year, Nike and Under Armour engaged in a heated bidding war for the sponsorship rights to Kevin Durant, with Nike winning his services by offering him a contract for 10 years and $275 million. Given this ostensibly exorbitant cost, one has to ask whether the exposure and revenues earned from these types of ventures are sufficient enough to justify them in the long . We can attempt to provide an answer to this question by evaluating current and past sponsorship deals between apparel companies and colleges, leagues, and individual players. To narrow the scope of this Photo courtesy of East Bay Blog study, we will focus on the most SPONSORSHIP has become such an important aspect of the sports industry. Fans no longer prominent apparel companies just support teams and players; they support brands. in the : Nike, Under Armour, and Adidas. By and alumni as well. a business gain by paying a right to place their logos on analyzing these partnerships This deal laid the foundation university for the right to the facilities, equipment, and with athletic entities through a for modern-day relationships provide uniforms to its athletes? apparel of both the players cost-benefit paradigm, we can between universities and First, signing contracts with and staff. Stipulations are even determine whether large-scale apparel providers. Instead universities enables them to drawn up that prevent players sponsorship deals are viable of searching for uniform and secure exclusive merchandising from covering logos with tape. and justifiable for major firms. sneaker vendors, a university rights. The Collegiate Licensing During broadcasts of is offered equipment, cash, Company (CLC) reported that college sports, the national College Sports and other perks from apparel “the retail marketplace for platform serves as a showcase companies, which in turn are college-licensed merchandise of their products to current The prevalence of mega- given the sole sponsorship in 2013 was estimated at $4.59 and prospective customers. deals between universities and rights for the university. billion.” These merchandising Portland Business Journal apparel providers is only a Nike, Adidas, and Under contracts permit large apparel writer Matthew Kish made an recent trend. In fact, until the Armour do not report revenues companies be the sole provider astute observation by noting 1980’s, college teams would earned from university of gear to all of a university’s that the game itself is a cheaper simply purchase contracts, so I sports teams. alternative to traditional apparel from will evaluate The amount of capital advertisements, which can different their merit and manufacturing capacity cost as much as $1 million vendors. That based on necessary for securing these for 30 seconds of air time. all changed in additional pieces exclusive contracts allows Rather, companies invest a few 1988, when the of evidence. major firms like Nike to million dollars in these schools, University of The Portland dominate this lucrative market. and in return will have their Miami asked Business Journal Thus, the profits earned from logos broadcast on national Nike to estimated merchandise sales could television for two or three hours be the that Nike, potentially outweigh the cost of during games and on nightly official Adidas, paying for the rights to supply shows like SportsCenter. In sneaker provider to its entire and Under Armour combined the apparel. return, companies hope to win athletic program. No company to pay over $250 million to Second, obtaining the hearts of loyal fans that had ever been granted this type college athletic programs in sponsorship rights means could potentially purchase not of monopolistic platform, in 2013. On its face, this would pervasive exposure that can be only college-related products, which it could not only be the seem inherently illogical from used as a marketing tool to drive but additional items that the sole distributor of shoes to the the perspective of an athletic consumer demand. Typical businesses sell as well. players, but to fans, students, apparel company. What does contracts give companies the

18 Sports, Inc. Professional Leagues Journal writer Erik Siemers points out, identity and ultimately sales revenue. Nike, the undoubted leader in the sports Nowhere is this more visible and prevalent In 2006, Adidas signed an 11-year apparel business, has a partnership with than in the NBA, where companies vie deal worth more than $400 million to the NFL that is strategically sound. To a for the rights to supply sneakers to the become the official supplier of NBA company that pulls in roughly $25 billion game’s most marketable stars. This trend uniforms and apparel. The Business in sales, the estimated $500 million it was set by Nike and Michael Jordan in Journal estimates that Adidas brings will earn in yearly revenue from the deal the 1980’s, who turned a $500,000 a year in about $300 million in revenue from doesn’t seem all that significant. But by sneaker deal into an entire subdivision NBA merchandising rights. Employing securing the NFL rights, Nike prevents of Nike that generated $2.5 billion in the same twofold reasoning used above up-and-coming competitors like Under sales revenue and held 54% of the U.S. for college sponsorships, one can see the Armour from gaining the business that basketball sneaker market in 2013. significant benefits enjoyed by Adidas. could significantly enhance its brand Jordan’s rise to prominence fostered The company has exclusive selling rights and turn it into a viable international the development of a sneaker-crazed on the official online NBA competitor. Thus, Nike has market, one in which every NBA star Store, giving it a significant utilized its deal with the NFL needs a requisite sneaker deal and leg up on its competitors in as an instrument to maintain its subsequent marketing campaigns. This jersey and other apparel profound control over strategy has paid significant dividends sales. The Adidas logo the sports apparel for Nike, which brought in $525 million is visible on warm- market. in combined sales revenue in 2013 from up gear, practice its 3 biggest stars: LeBron James, Kevin uniforms, and Individual Athletes Durant, and Kobe Bryant. Adidas earned even on D-League $50 million from Derrick Rose, John jerseys. Signing an individual athlete to a Wall, and Dwight Howard, and recently However, sponsorship deal is inherently the most signed a megadeal with young Portland Adidas still faces some disadvantages risky investment for sports apparel Trail Blazers superstar Damian Lillard in the marketplace. While Adidas is the companies. While teams and leagues that calls for the release of a personalized only brand allowed to sell official NBA will have a steady stream of loyal and shoe line in the spring of 2015. merchandise, Nike and Under Armour have new fans for years to come, athletes only For all the glitz and glamor of a brand the right to use NBA jerseys to market play for a short window of time. Often, new LeBron sneaker or a Kobe commercial, their own stars and sneaker products. these athletes are signed right out of there are business forces at play that put Furthermore, Adidas’ exposure is limited college, before they ever suit up for a the value of these individual contracts by the fact that its logo is not placed professional game. During their careers, into question. The sneaker industry is in on game-worn official NBA jerseys. athletes are not guaranteed sustained the midst of a significant boon, with sales Nevertheless, a provision in the most success, a clean bill of reaching $4.5 billion in recent collective bargaining agreement health, or a sustained 2013. But as of 2014, has opened the door to sponsor logos positive public image. Nike and its Jordan being placed on NBA jerseys, potentially As a result, the return “Obtaining brand occupy 92 percent giving Adidas the opportunity to feature on investment for some of the U.S. basketball its logo on the jersey in the near future. of these contracts could sponsorship sneaker market. In October 2010, Nike signed a 5-year potentially be mitigated In contrast, Adidas deal valued at approximately $1.1 billion by external factors. rights means only owns 5.5% of the with the NFL. The deal is similar in Companies thus market, and Under structure to Adidas’ deal with the NBA, must make calculated pervasive Armour a measly in that Nike supplies all jerseys, pants, moves in their effort 0.7%. In the long run, gloves, and other accessories to NFL to find the “right star.” exposure that is it really worth it teams and has merchandising rights to sell These deals often turn for Adidas and Under goods through the NFL Shop. However, into substantial sales can be used as Armour to dole out Nike shares the rights to sell apparel generators, but, in some millions of dollars to to fans with other firms such as G-III instances, companies the likes of Rose and Apparel and VF Corporation (Majestic may not earn enough a marketing Lillard if Nike will Athletic), which limit their control over revenue to cover the continue to dominate the NFL marketplace. Yet, Nike’s deal costs of contracts, or tool to drive and control the market? could be deemed superior to Adidas in can even face public Nike has perfected the two ways. relations nightmares consumer art of choosing the right First off, Nike is allowed to display that can damage their “stars.” They have its logo on game day jersey, an added reputations. demand.” the NBA’s two most level of exposure on national broadcasts Individual marketable players that Adidas does not have. Furthermore, sponsorship is different under contract in James players are not allowed to display the than leagues and teams. When signing a and Durant, with the latter recently signed Adidas’ logo during games, forcing deal with a superstar, companies devote to a huge deal in an effort to keep him Adidas-sponsored stars like Robert resources and entire product lines to a away from Under Armour. Griffin III to put tape over their cleats single individual, whose popularity and Forbes notes that the gap between each week. Second, as Portland Business talent are looked upon to boost brand these two players and everyone else is

Fall 2014 19 significant, as Durant’s shoe Its two most marketable sales are three times greater stars, Robert Griffin III than the third highest earner, and Derrick Rose, have Kobe Bryant. On the flip side, each suffered serious knee Nike lets less marketable stars injuries while wearing Adidas like Stephen Curry and Dwayne products, perpetuating a bad Wade, who’s arguably well past reputation among both fans his prime, sign with smaller and consumers. Even worse, competitors. Moreover, the athletes may commit morally revenue earned from many and legally reprehensible of these deals doesn’t even crimes while under contract cover the costs. According to that can damage the image of estimates by Forbes sneaker the company. In the case of expert Matt Powell, even Kevin Michael Vick, Ray Rice, and Durant and pre-2012 LeBron Oscar Pistorius, Nike had no did not generate enough shoe choice but to sever ties with Photo courtesy of R & H Construction revenue to match the 12-13% of these clients after they were APPAREL COMPANIES acquire the right to feature their gear sales Nike spends on marketing convicted of crimes. prominently at official university stores, like Nike does at The each product. Two of Nike’s most Duck Store in Clackamas, Oregon. Therefore, if the league’s reputable and important stars, biggest superstars have trouble and Adrian forum for presenting their future. On the other side of the propelling Nike into the green, Peterson, were let go after their brands to the public. spectrum, it will be interesting does it really make sense for own scandals. These cases shed The biggest wild card to see if the contracts with these companies to pursue light upon the tenuous nature of for big apparel companies is individual athletes will continue deals worth $20-$30 million athlete-company relationships, the athlete sponsorship deal. to decline in value. The best per year? Apparently companies illustrating the fact that even the While fans like to emulate their indicator for the future of have caught on to this trend, brightest stars do not represent favorite players by purchasing individual contracts will come as the incoming rookie class a risk-free investment. their customized sneakers and when a transcendent athlete did not receive large contracts other gear, the suboptimal in the mold of the LeBron akin to the $70 million deal Conclusion revenue streams, injury threat, rises through the ranks and that Kevin Durant got from and public relations disasters dominates at the college level. Nike in 2007, or even the $25 Although we can’t make are ever-present possibilities If this hypothetical superstar million John Wall received definitive determinations about that can cause contracts to fails to receive significant from Reebok in 2010. Rather, athletic sponsorships as a whole, become burdens rather than amounts of money, it could be a Andrew Wiggins and Adidas we can draw some meaningful boosters. The recent decline sign of a permanent downward signed the largest contract conclusions. It would seem in the value of rookie sneaker trend in the value of contracts for a reported guarantee of that the safest investment for deals in the NBA is a reflection between individual athletes $2 million per year, indicating athletic apparel companies is of the understanding that and apparel firms. that companies now understand college apparel. The companies sponsoring individual athletes that the benefits may not get exclusive rights to outfit a may not be worth the risk. outweigh the costs for these given university, meaning that So what does this all mean? types of deals. it does not have to compete With the big 4 sports leagues Aside from the monetary with the other big companies locked into contracts with risks, athletes are subject once it signs the contract. apparel providers through to other factors that make These contracts virtually at least 2017, the evidence these sponsorship deals give big companies a monopoly suggests that Nike, Adidas, and inherently precarious. The at large institutions with loyal Under Armour should pursue chance of athletes getting fan bases and thousands of universities with strong athletic injured is always a concern students and alumni, departments, large and loyal outside of the company’s representing a significant fan bases, and championship control. As Paul George’s growth opportunity. pedigrees. Understanding the injury showed in the League sponsorships lucrative potential of university summer of 2014, for Nike and Adidas partnerships, Under Armour freak accidents are also sound signed a deal with iconic Notre can plague business Dame for an undisclosed sum even the moves. They that is reported to be the most most give these valuable contract in college durable companies sports history. of stars. the ability to It would seem likely that In the case of Adidas, the crowd out their competitors in the value of these contracts company faces an unfair stigma the sale of official NFL and will continue to rise as Evan Lefkovitz is a junior in the that its shoes are the “cause” NBA merchandise respectively, prominent universities seek ILR School. He can be reached at of injuries. as well a national television new sponsorship deals in the [email protected].

20 Sports, Inc. A New Dead Ball Era? The Effects of Declining Offense in Baseball

Andrew Distler ‘15

In its famous 1998 commercial, Nike claimed, “Chicks dig the long ball.” This slogan was appropriate at the time, as Mark McGwire and Sammy Sosa were chasing Roger Maris’s 37-year-old single season home run record. The two mashers headed a surge in offense in Major League Baseball that thrust the sport to the center of attention after the 1994 strike threatened the league’s popularity. But that era of incredible offensive numbers is long gone, as baseball is witnessing some of the lowest offensive production in years. In 2014, MLB teams Photo courtesy of the LA Times averaged just 4.07 runs per TEAMS MIGHT start to prioritize developing or signing the best bats available over signing game, the lowest total for a the big-name pitchers to mega-deals. non-strike-shortened season since 1976 (and down more and trained to advances in rule changes that benefit four runs fewer than what they than a full run since 2000). analytics that help pitchers defensive play. Teams in the scored in the early 1890s. A Meanwhile, players are hitting much more than they do hitters. NBA and NFL are now scoring new baseball featuring a cork just .251, the lowest average Declining offensive production at extremely high rates thanks center, made standard in 1910, since 1972, the year before the has also been brought up as in large part to rule changes caused teams to score almost instituted a potential reason for why that limit defenses; the NHL one whole run more per game, the designated hitter. Home baseball’s popularity is did not change any rules when but once again the pitchers run rates, , declining, particularly among scoring exploded in the 1980s; adjusted and run production and on-base percentage are Millennials and succeeding and Major League Baseball returned to below four runs all at their generations. almost never institutes rules per game. lowest However, that greatly benefit pitchers. The next change was totals in one thing is However, every time there arguably one of the most over 20 for certain: have been rule changes to significant rule changes in years. this decline help hitters, pitchers have baseball history: in 1920, Hitters in scoring been able to adjust. doctoring the baseball (such are now does not One of the first significant as throwing spitballs) was striking appear to be changes was in 1893, when banned, which yielded a huge out more stopping any the pitching mound was surge in offense. With Babe than ever, time soon, moved back from 50 feet Ruth popularizing the home whiffing 7.70 times per game and it will take many changes to its current distance of 60 run, run production increased during the 2014 season, the and adjustments for hitters feet and 6 inches. Offensive dramatically, culminating in highest in MLB history. And to gain ground on pitchers. production immediately went 1930 when teams averaged 5.55 2014 is not an outlier, as the This article will discuss how up, as, just two years after the runs per game, still the highest rate record has been offensive levels became so change, teams were averaging total since 1900, and hit for broken in seven consecutive low, and how this trend can over two runs more per game an astonishing .296 average. seasons, including the 2014 potentially affect the future than they were beforehand. However, offensive campaign. of baseball. However, offense soon went production started declining This decline in offense has back down again; by 1908, the right after that, as pitchers been attributed to a variety of Will Hitters Ever Evolve? “Dead Ball Era” had begun, once again adjusted to the new factors, ranging from changes and teams averaged just over landscape, which eventually in how pitchers are developed In sports, there are rarely three runs per game, more than led to the “Year of the Pitcher”

Fall 2014 21 in 1968. That year, teams averaged make adjustments themselves, rather than complete overhaul of the way hitters are an anemic 3.42 runs per game, which wait for rule changes to help them. developed and trained. This could mean was the lowest since 1908, and offensive In order to do this, MLB teams are focusing on different fundamentals from production was so low that Bob Gibson going to have to not only start developing a young age or looking at new analytics. managed to lose nine games despite their prospects differently, but also start boasting a 1.12 ERA. scouting and drafting players differently. Developing Pitchers The next season, the mound was One of the reasons that pitchers have lowered five inches, the strike zone recently been able to gain the upper hand The remarkable ability of pitchers to was made smaller, and offense slowly is that they are throwing the ball with improve over time, especially in terms improved until the late 1980s, which was more velocity than ever before, with of velocity, is due in part to dramatic the start of the “steroid era.” Spurred more pitchers throwing in the upper 90s changes in the way they are developed and on by a combination of performance- and sometimes trained. In an era enhancing drugs, smaller ballparks, better even topping of specialization, bat technology, and juiced out at 100 mph “One thing is for where kids are (according to some theories), offense (especially often encouraged and particularly home run production relievers). certain: this decline to train in just grew at incredible rates. Because more one sport (and Several home run records were either and more often only one broken or set in the 1990s and early 2000s, pitchers are in scoring does not position in that as it seemed that power hitting had taken able to throw sport), players over baseball. But once again, pitchers with so much appear to be stopping are now starting were able to adjust, and run production velocity, hitters specialized is now almost as low as it was during the are going to have any time soon, and it pitching training “Dead Ball Era” (this recent decline is to start training at much younger almost always credited to stronger drug specifically will take many changes ages. Kids are testing, but many view this as a weak for those high now pitching argument, as several pitchers were also speeds. and adjustments for more often than taking performance-enhancing drugs). It is likely ever before, Before we can delve into any one reason that teams hitters to gain ground as many elite for the most recent decline in offense, will start younger pitchers it is very important to realize that there emphasizing will sometimes have been countless adjustments made bat control and on pitchers.” pitch for by baseball to help increase offense. But hitting the ball multiple teams even if they were initially successful, to all fields, and will start discouraging at once and work with a private coach. pitchers have always seemed to adjust “dead pull” hitters, as it is much harder Even though this kind of training is often through improved training, development, to pull a pitch at high velocities (this blamed for the rise in arm injuries among and strategy. In order to reverse the current is a tactic that can also be used to beat MLB pitchers, it is a reason why pitchers trend of declining offense, hitters must shifts). There may even have to be a have been able to gain such a significant advantage over hitters. Another reason pitchers have been able improve their performance is that they are now doing more weight and aerobics training than ever before. Bo Jackson is often credited with popularizing weight training in baseball, but that trend took longer to affect pitchers. Now that it has, it has helped them not only to throw harder, but to throw off-speed and breaking pitches with more movement and consistency. The increased ability to better throw off-speed pitches is seen in the numbers. According to FanGraphs, even though strikeout rates are the highest they have ever been (while walk rates have been relatively constant in recent years), fastballs as a percentage of total pitches thrown have dropped roughly 7% in the past decade. This decrease has been coupled with an increase in the use of Chart by Andrew Distler the cutter and other secondary pitches. RUNS PER GAME in 2014 were at a historic low, a trend that has developed since The data show that pitchers are now the steroid-era in MLB. able to throw off-speed and secondary

22 Sports, Inc. pitches more frequently without compromising accuracy, which Implications for the will of course make hitting Future even more difficult. Unless there are more rule It is no secret to anyone or equipment changes on the who follows baseball closely horizon, hitters must find new that offense is declining to ways to train and develop as rates last seen in the “Dead well. The offensive decline Ball Era” of the early 1900s. is happening so quickly that Many articles have been written it may even take an entire about it, and many theories overhaul of the youth baseball have been hatched. But the system to ensure that hitters major question that needs are ready once they reach the to be asked is: how will the big leagues. This could mean offensive decline affect the starting to emphasize more future of baseball? specialization among young Since pitchers are not hitters (similar to what has getting any weaker or throwing been done with pitchers) and any slower, hitters must be even introducing new training Photo courtesy of Not in Hall of Fame able to adjust to the increase regimens to improve bat speed THE DAYS of Roger Maris (pictured above) and 60 homerun in pitch velocity and pitcher and hand-eye coordination. seasons may very well be a thing of the past. skill. This is much easier said While improvements in than done, as hitters only have pitching can be attributed put into action in MLB farm one of the many strategies that a fraction of a second to react largely to better training and systems. An example is the have recently contributed to to any pitch. Another key issue development, another factor , who have decreased run production. is how baseball’s decline in is the development of more focused much of their recent Because analytics have scoring will affect fan interest. pitchers. In response to the rebuilding on stockpiling and allowed us to measure fielding The NFL and NBA are now high- scoring 1990s, teams developing hitting prospects, in new ways, teams are able very high scoring, and the TV started to realize that pitching, as the market is seemingly to more easily identify good ratings and interest in both of particularly in the postseason, oversaturated with pitchers fielders, making it harder for those leagues have never been was the most important aspect who can either consistently the offense to get hits. Also, higher. With baseball’s low of the game. Because offensive give quality starts or can be statistics such as defensive scoring rates, one must wonder numbers were so high, good shut-down relievers. runs saved have shown how if our “national pastime” hitters were viewed as “a dime many runs are allowed due (which is already a slower, a dozen” type players that could The Impact of Analytics to poor defense, which has more drawn-out game) will be found anywhere, therefore compelled teams to increase become even less appealing making pitchers much more Another recent advancement their emphasis on fielding. to the next generation of fans. desirable. that has curbed offense is the Statistics such as defensive An argument can be made An example is the Colorado continued growth of analytics WAR and Ultimate Zone Rating that this is just cyclical, and Rockies, who signed pitcher in baseball. This may seem like (UZR) have helped strengthen in a few years we will start Mike Hampton in 2001 to what an odd reason, as analytics have fielding all across Major League seeing higher offensive at the time was the largest affected every aspect of the Baseball, making it tougher numbers, whether it be due contract in sports history, game, but the most prominent on hitters. to improved technology, new after he was 15-10 with a analytical techniques favor Pitching analytics have rules, or different development 3.12 ERA the previous year pitching and defense. An also become more prominent. strategies. It is entirely possible for the Mets. Teams were so example is defensive shifts. Even though pitcher domination that flame-throwing relievers desperate for pitching that Once only done by a few, this is related more to better and and starters who can give a team they were willing to give out is now a tactic used often by harder-throwing pitchers, quality starts will eventually large contracts to pitchers with almost every team. recent developments have become “dime a dozen” type somewhat pedestrian numbers. Now that advanced given pitchers extremely in- players, and teams will start Stockpiling pitchers became statistical tracking can depth information about hitters. investing more money and more such a priority that it can even accurately keep track of every An example is PITCHF/x, a draft picks on hitters. But it be argued that teams have over- batter’s hitting tendencies, it is pitch tracking system installed is undeniable that the decline drafted pitchers and have not easier than ever for a defense in every MLB stadium. This in run scoring in baseball is focused enough on developing to align itself to take away system is able to track the significant enough that major hitters. a hitter’s strengths. In fact, velocity, movement, and changes are needed to reverse It is very possible that this shifts have been credited so location of every pitch and the trend. trend will be reversed, and much with the recent decline even provides pitchers with we could see more emphasis in offense that there have been information about hitters’ Andrew Distler is a senior in the on hitters being drafted and discussions among baseball weaknesses. This is yet another College of Arts and Sciences. He developed. We are already fans and writers about banning recent innovation that has given can be reached at abd76@cornell. seeing this kind of strategy them. However, shifts are only pitchers more of an advantage. edu.

Fall 2014 23 Business Sponsors and the Public Press for Change

Taylor Kosakoff ‘16 sponsors, who compete to have the best players represent their products in marketing In our society, professional campaigns. A player like Derek athletes serve as important Jeter, who did everything the role models. They exhibit right way on and off the field, qualities such as teamwork, is an example of an athlete that sportsmanship, and heroism business sponsors eagerly want that influence young children. to support and associate with Athletes also provide their products. Jeter embarked entertainment for a large on his farewell tour in 2014 and portion of the country and was hailed as the paragon of a even internationally. They even role model. Jeter signed a 10 have the power to revive a city year, $100 million contract with economically. Time Magazine Nike, and, according to the New reported that LeBron James York Post, also has lucrative Photo courtesy of Better Body Expert is worth almost $500 million deals with Gatorade, Gillette, THE ACTIONS of athletes like Adrian Peterson (pictured to the city of Cleveland in Ford, and other businesses. above) have long-lasting consequences on the NFL, the team, his return to the Cavaliers. Jeter’s character as a captain, and their sponsors. However, the entertainment philanthropist, and citizen of and economic value of athletes New York was valued as much opinion has intensified, and transgressions negatively should never put them above as his exceptional talent on sponsors have reacted by impact not only these athletes’ the law. Recent criminal and the baseball field. putting pressure on professional reputations, but also the brands morally reprehensible behavior Unfortunately, while many sports teams and leagues to and companies that rely on by star athletes has significantly athletes exhibit extraordinary reevaluate their domestic these athletes to market their affected how society perceives talent on the field to excite violence policies. products. Major companies like athletes and professional spectators, there are Adrian Peterson and Ray Nike and Castrol canceled their sports leagues. increasingly Rice are ‘star’ players whose sponsorship of Peterson right Public more players talents are exceptional at the after his arrest. Nike released a outcry has who exhibit running back position. Adrian statement in response to Adrian caused the type of Peterson has a career total of Peterson’s actions saying, sponsors behavior 10,190 rushing yards and 86 “Nike in no way condones to be more that rushing touchdowns, while Ray child abuse or domestic socially destroys Rice has 6,180 rushing yards violence of any kind.” After conscious the trust and 37 rushing touchdowns Adrian Peterson’s actions and apply and during a six-year NFL career. were revealed, the Minnesota pressure respect Adrian Peterson was arrested Vikings deactivated him, but to athletes, of their for hitting his four-year-old then reactivated him after just teams, and followers. son with a wooden switch, one game. Minnesota Vikings leagues in Recently, and Ray Rice was videotaped sponsors and even Minnesota order to the viciously punching his fiancée. Governor Mark Dayton came enact change reputations Peterson and Rice’s careers out saying they disagreed and impose of players, were effectively halted by with the team’s handling of severe consequences teams, and even their actions, which left their the situation and pressured on prominent players who leagues have been tainted respective teams to cope the team into suspending the commit heinous crimes. by the criminal actions without their contributions running back for his actions. Businesses are increasingly of several ‘star’ athletes on the field. The Minnesota Vikings sponsor, impacting professional sports who committed criminal or Inappropriate behavior Radisson Hotels, even withdrew by imposing their financial morally reprehensible acts. by professional athletes not its sponsorship of the team leverage to stimulate social In the past, domestic violence only affects their teams, but because it felt Peterson’s change. issues involving athletes were also influences sponsors situation was not handled the Star athletes are swept under the rug. Recently, that back the athletes and right way. Radisson came out commodities for business however, the power of public their organizations. Such with the statement,

24 Sports, Inc. “Radisson takes this matter very 2013. Bogdanich explained that Winston’s to O’Driscoll, Bryant lost 4 to 6 million seriously particularly in the light of case was delayed while his team was dollars in endorsement contracts after our long-standing commitment to the pushing for a college football national his arrest. protection of children.” In response, the championship and that the university Statistics show disparities in arrest Vikings immediately suspended Peterson even disregarded rates between after pressure from sponsors and the possible evidence National Football public, acknowledging that they were connecting League players wrong in how they handled the situation. Winston to the “Recent criminal and and the rest of Sponsors were also displeased sexual assault. society. According with how the Even outside morally reprehensible to Reuben handled Ray Rice’s situation. Originally, of football, Fischer-Baum the league suspended Rice for two games. there are many behavior by from Deadspin, Many critics believed that if the NFL examples of professional imposed a yearlong suspension on star athletes football players Cleveland Browns’ wide receiver Josh who avoided the star athletes has had higher arrest Gordon for smoking marijuana, then the consequences of rates for assault/ punishment given to Ray Rice should criminal actions. significantly affected battery/domestic have been far more severe. The release In 2003, future charges, DUI of the video depicting him striking Hall of Famer how society perceives charges, and his fiancée in an elevator resulted in Kobe Bryant weapons charges increased sponsor and public pressure of the Los athletes and than the U.S. on the Baltimore Ravens and the NFL to Angeles Lakers average. However, increase the duration of Rice’s suspension was accused of professional sports Fischer-Baum The problem here is that many athletes sexual assault. noted that these have received less severe punishments According to same players were for criminal actions for many years in Patrick O’Driscoll leagues.” “11 percent less both college and professional sports. Walt of USA Today, likely to get a Bogdanich of the New York Times shared Bryant admitted DUI, 23 percent his research and opinions on how Florida to having sex with the accuser even less likely to get an assault charge, State University and Tallahassee Police though he was married and had a child and 59 percent less likely to get a drug reacted to the claims that star quarterback and said the woman consented. Bryant charge.” If known, sponsors and the public Jameis Winston raped another college was able to settle the case, which many would frown upon these statistics, as student. Winston, who is arguably the critics believed was only because the athletes in the past have been treated like best player in all of college football, was woman could not refuse the amount of untouchable superheroes who can avoid accused of sexual assault on December 7th, money Bryant was giving her. According consequences because of their elevated status in society. After the National Football League’s response to Adrian Peterson and Ray Rice, many sponsors spoke out and shared their opinions about how these players were handled and what such companies stand for. For example, according to Ben Popken, Anheuser-Busch InBev NV was notably critical of the NFL’s response. Other sponsors of the National Football League, such as Budweiser, PepsiCo, Nike, Castrol, Campbell Soup Co., and McDonald’s, came out saying they look to improve the NFL’s domestic violence policy. Although both the Peterson and Rice cases were not originally handled with sensitivity, the National Football League and other leagues have been swayed by public outcry and are now working in the right direction to educate, punish, and reduce domestic violence and other crimes in sports. According to Adam Howard of MSNBC, after running back Photo courtesy of Fansided Jonathan Dwyer of the Arizona Cardinals ROGER GOODELL has been entrenched in controversy concerning his evaluation was arrested for domestic assault, the and handling of off-field conduct of NFL players. CEO of PepsiCo, Indra Nooyi, said, “I am a mother, a wife and a

Fall 2014 25 Photo courtesy of USA Today RAY RICE (pictured above with his wife, Janay Palmer) tried to save face during a press conference, but only seemed to make things worse for his relationship with the Ravens and its sponsors. passionate football fan. I professional sports leagues Attorney’s Office; NO MORE changes in domestic violence am deeply disturbed that the may experience a significant co-founder Jane Randel; and and other policies are coming new repugnant behavior of decline in female fans very Rita Smith, the former director to fruition. Although there are a few players and the NFL’s quickly. However, Nooyi is of the National Coalition now higher standards for player acknowledged mishandling right. Professional sports Against Domestic Violence. conduct, there is still much to of these issues is casting a leagues, teams, and even law According to USA TODAY, improve. Even in recent years, cloud over the integrity of the enforcement have mishandled Major League Baseball athletes were able to get away league and the reputations of important issues in the past, but Commissioner with similar crimes without the majority of the players times have changed. Athletes hired former federal prosecutor team or league suspensions. who’ve dedicated their lives can no longer receive special Bryan Seeley to take charge Continuing pressure from to a career they love…I know privileges not afforded to others of the league’s investigations both the public and business [NFL commissioner Roger when it comes to breaking the department. Seeley now sponsors for new league and Goodell] to be a man of law. deals with the problems of team policies will hold athletes integrity, and I am confident Current actions by performance-enhancing drugs, accountable for their actions. that he will do the right thing professional sports leagues policy violations, and law Given the revered status of for the league in the light of have led to optimism and a enforcement. According to high-profile sports stars, the serious issues it is facing.” better policy system when it SB Nation’s Mark Prada, changes in professional sports The essence of Nooyi’s comes to athletes and the law. the National Basketball could also impact behavior in message is important because According to Tom Pelissero Association’s Commissioner our society. women are crucial to the of USA TODAY Sports, the Adam Silver vowed to take success of the National Football NFL appointed four women to a fresh look at the NBA’s League. According to Drew handle the task of shaping the domestic violence policies. Harwell of the Washington league’s policies going forward: With considerable Post, females comprise nearly Anna Isaacson, who is now VP pressure from sponsors in all 45 percent of the NFL fan base. of Social Responsibility; Lisa professional sports leagues If players continue to get away Friel, who was the former leader and heightened sensitivity Taylor Kosakoff is a junior in the with serious crimes like child of the Sex Crimes Prosecution due to high profile cases of ILR School. He can be reached at abuse and domestic violence, Unit in the NY County District lawlessness, badly needed [email protected].

26 Sports, Inc. ILR Sports Business Society 2014 -2015

For more information on Sports, Inc. or the ILR Sports Business Society, please contact Advisor Kevin Harris at [email protected].

Fall 2014 27