Rabil: The Fastest Growing Sport in North America, Preview of Final Four


The N.C.A.A. lacrosse Final Four is taking place this weekend in Boston, with Maryland, Duke, Albany and Yale playing for the championship. We thought it would be an opportune time to catch up with pro lacrosse player and entrepreneur Paul Rabil. In a wide-ranging two-part interview, we discuss everything from the growth of the sport to the differences between its two pro leagues. In part 1 (part 2 will follow on Tuesday) Paul talks about the double-edged sword that is club lacrosse, he how collegiate scholarships are allocated and previews this weekend’s games.

JWS: Lacrosse has grown from a niche sport played in two pockets of the U.S. (Long Island and Maryland) and Canada to a game played around the world. Can you briefly expound on the sport’s growth trajectory over the last 15 years?

Paul: Lacrosse has been the fastest growing team sport in America for the past 15 years. We’ve gone from a couple hundred thousand people playing to now 2 million. Moreover, we have 6 million fans; those are people that used to play, they’re parents of kids who play now, people who have touched a stick and watched a game. Ten years ago, we had nine participating countries in the World Games. Fast forward to this summer – the World Games are in July, in Israel – we have 58 countries participating. So, we’re seeing international growth and North American growth.

JWS: The privatization of the sport (see: club programs) has expedited its growth, but doesn’t that strategy hurt the game long-term? 

PaulThe double edge sword is that it (club lacrosse) makes our sport more exclusive of new entrants. What I’d love to see our sport get to, with the assumption that we have enough great coaches in all markets across the country, is a revival of rec lacrosse; so, league fees would sit at $100 versus in some cases $2,500 to $5,000 per season. Right now, 37% of families that have a child playing youth lacrosse are spending north of $1,000/year on fees and travel. That said, there are positives to privatization of youth lacrosse. You get good coaches, players who are competitive and improving quickly, and they’re building team camaraderie and community. 

Additionally, we’re seeing growth in non-profits that are working with and targeting urban market communities to offer playing opportunities for free. They’re usually funded by private ownership groups, or brands like Warrior are coming in and underwriting equipment.

JWS: Help the readers understand why families would be willing to spend upwards of $5,000 for their child to participate in a youth sport?

Paul: There was rampant early recruiting taking place over the past decade and privatized lacrosse or club lacrosse programs were building their stock based on being able to get a player a verbal commitment as early as 8th grade. So, what that was doing was causing this trickle-down effect on families to spend more to try and get their kid into college sooner. Late last year, the NCAA came in and said that recruits must wait until July 1 of their junior year of high school to commit to a school and that you can’t even have contact with a club coach, if you’re an NCAA head coach. That’s allowed us to kind of reset and focus on getting sticks in hands.  

JWS: Parents are spending a fortune on club lacrosse, but of the +/-200 players playing in Boston this weekend, few are on full scholarship. Can you explain how scholarship allocation differs between revenue generating sports and a non-revenue generating sport like lacrosse?

PaulFully funded lacrosse programs get 12.6 total scholarships, designated by the NCAA as equivalency scholarships, meaning they can parse them out however they want. In basketball and football, you’re not given that choice – if a player is on scholarship, it’s called an headcount scholarship, which means it’s a full ride. For equivalency scholarship sports, some players are on 10% scholarship, then there are other players that are #1 in their class, and get a full ride; so, they’re accounting for 1 full of those 12.6 scholarships.

JWS: You mentioned Warrior, but Nike and Under Armour are also subsidizing youth lacrosse. Unlike AAU basketball, where sneaker companies seek to establish an early relationship with future NBA stars, there is no big payday on the back-end if a lacrosse player turns out to be an all-time great. What do the equipment/apparel providers get out of the deal?

Paul: 57% of lacrosse participants are Gen-Z and they’re highly affluent. 63% of families with a child playing lacrosse spend $250/year or more on hard goods. So, if they (equipment/apparel providers) can reach that audience through sponsorship, they can create brand loyalty or brand affinity and it’s more likely the next stick purchase will be with that brand. The brands also know that if they are sponsoring the Baltimore Crabs (example of a local club team), that it’s more likely that the operators of that club will encourage the families (of the players) to purchase their goods from that sponsor. So, there are sales coming in two different ways, through affinity and encouragement of coaches.

Howie Long-ShortWarrior Sports was founded in 1992 by Dave Morrow, a two-time collegiate All-American and a co-founder of MLL. Back in 2004, New Balance was seeking a growth opportunity (lacrosse was first gaining popularity amongst high-school kids) and acquired the company for an undisclosed amount. At the time, New Balance was competing with Reebok (NOT Adidas, Puma or Under Armour) to become 2nd (behind Nike) in U.S. footwear sales. New Balance is a privately held entity, there are no ways to invest in the company.

Fan MarinoThe NCAA lacrosse Final 4 will take place this weekend in Boston. I asked Paul for a to give us a preview and for his prediction.

Paul: This weekend we have Maryland, who has been there traditionally over the past eight years and has one of the more storied programs in college lacrosse in terms of success and legacy. You have Duke, who is one of the more prominent ACC schools and has been on the rise over the last decade. You have Albany, who is new to the Final Four; the exciting team led by the best freshman in the country – he’s Native American – his name is Tahoka Nanticote. Then you have Yale, an Ivy League school that has been knocking on the door (of the Final Four) for a long time; and they have one of the best seniors (Ben Reeves) in the country. My prediction is a Maryland/Albany final and hopefully an Albany winner – and the reason I say that is because Scott Marr, their head coach, is a Hopkins grad (Editor Note: Paul played at Johns Hopkins).

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SOLD: Carolina Panthers for $2.3 Billion


Hedge Fund Manager and Steelers minority owner (5%) David Tepper has bought the Carolina Panthers for an NFL record $2.3 billion, subject to vote at the owners meeting in Atlanta next week, with the intention of keeping the franchise in the Charlotte area. The vote should be a formality as Tepper was vetted and approved when he acquired his stake in the Steelers; per league rules, he will have to sell his interest in the Pittsburgh NFL franchise. Franchise founder Jerry Richardson put the team up for sale in December after facing “me too” and racial misconduct accusations. Coincidentally, the announcement comes just one day after the SCOTUS struck down PASPA, the federal ban preventing individual states (save Nevada) from offering betting on the outcome of a single sporting event; likely already increasing the value of Tepper’s investment.

Howie Long-Short: $2.3 billion is the most ever paid for an NFL franchise but, below the $2.5 billion Richardson had hoped to get. Richardson’s desire for a quick sale, Tepper’s ability to pay in cash and the lack of a 2nd viable buyer all contributed to the depressed sale price. Prospective bidders Joe Tsai (Nets) and Michael Rubin (Fanatics) each bowed out of the bidding when told it would take an offer “substantially more than $2.5 billion” to buy the team and Ben Navarro’s $2.5 billion bid was made with the intention of moving the franchise to South Carolina; a term the league and Richardson opposed.

At $2.3 billion, the Panthers sold for less than 6x revenue ($385 million); a figure that’s only going to grow with legalized gambling and increased competition for media rights. While the deal was consummated prior to the SCOTUS decision, the outcome had been expected for months. Add any newfound betting revenues to the additional income expected from newly signed streaming rights deals (Amazon – worth $65 million/year, Verizon – worth $500 million/year) and there is no way the team generates less than $400 million in 2018. At 6x, the team is worth a minimum of $2.4 billion. Forbes, which is notably conservative with their franchise valuations pegged the franchise at $2.3 billion. It appears that Tepper got a good deal or at least one in line with the market, as opposed the deals signed by Joe Tsai (Nets, $2.3 billion valuation) and Tilman Fertitta (Rockets, $2.2 billion valuation) that defy logic.

Fan Marino: Panthers fans concerned Tepper would look to rebuild the team’s front office and coaching staff can rest easy. Both Head Coach Ron Rivera and General Manager Marty Hurney received positive reviews from Tepper’s colleagues in Pittsburgh. As a result, there are no plans to make any changes to football operations prior to the 2018 season.

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2018 NBA Free Agent Class to Face Soft Market, Reckless Spending Decimated Salary Caps


Reckless spending by NBA teams during the summers of 2016 and 2017 has turned nearly half the league into “sellers”, franchises looking to offload player contracts to remain under the luxury tax threshold next season. Just 5 teams are slated to pay the luxury tax this season (the average since ’12), but that number is expected to jump to 12+ in 2018-2019 (depending on how many teams re-sign their own free-agent players). While there are plenty of sellers, the league lacks buyers capable of taking on these bad contracts; just 7 teams are expected to have $10 million+ to spend this summer, down from 25 in the summer of 2016. The salary cap grew from $63 million in 2014-2015 to $99 million this year, but with it only projected to rise by $2 million in 2018-2019 and so much money already committed to player contracts ($3.02 billion or 99.6% of next season’s cap), this summer’s free-agent class can expect a particularly soft market.

Howie Long-Short: NBA players earn +/- 50% of all basketball-related revenue and are splitting the dollars between just 15 guys, so this isn’t a case of there not being enough money to go around; it’s a case of poor cap management. Money is going to be tight the next 2 summers, so it would be wise for players in those free agent classes to sign one or two year deals. By the time the summer of 2020 rolls around, expect the market to become bullish again; the cap is expected to rise to $113.4 million and most of the bad contracts Fan lists below, come off the books.

Fan Marino: NBA GMs had money burning holes in their pockets during the summers of 2016 and 2017. It’s the only reasonable explanation for the following contracts:

  • Joahkim Noah (4 years, $72 million)
  • Bismack Biyombo (4 years, $72 million)
  • Chandler Parsons (4 years, $94 million)
  • Luol Deng (4 years, $72 million)
  • Kent Bazemore (4 years, $70 million)
  • Nic Batum (5 years, $120 million)
  • Mike Conley (5 years, $153 million)
  • Hassan Whiteside (4 years, $98 million)
  • Evan Turner (4 years, $70 million)
  • Evan Fournier (5 years, $85 million)
  • Otto Porter (4 years, $104 million)
  • Tim Hardaway Jr. (4 years, $71 million)
  • Harrison Barnes (4 years, $94 million)
  • Allen Crabbe (4 years, $75 million)

Every player on that list is making $70 million+ and not one of them made an all-star appearance in the 3 seasons prior to signing the deal or during the 2 seasons since. It’s not a coincidence that of those 14 players, not one plays on a team that remains in the playoffs.

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NBA Teams Spent More Than $125 Million on Injured Players During ’17-18 Season


NBA stars Kawhi Leonard (Spurs), Kyrie Irving (Celtics) and DeMarcus Cousins (Pelicans) won’t suit up for their respective teams during the 2018 post-season, due to various injuries; but, all 3 will collect paychecks as they rehabilitate. NBA contracts, which are guaranteed in full, resulted in injured players taking home more than $125 million this past season. No team spent more on inactive players, than the Boston Celtics; paying over $34 million to Gordon Hayward and Irving, as they missed a combined 103 games. Despite their absences, the Celtics managed to finish the regular season with the Eastern Conference’s 2nd best record (55-27). Coincidentally, the Western Conference’s #2 seed (58-24), the Golden State Warriors, spent the 2nd most money on injured players; spending more than $22 million on Steph Curry, Kevin Durant, Andre Iguodala and Draymond Green, as they sat out a combined 72 games.

Howie Long-Short: If $125 million sounds like a lot of money sitting on the bench, consider analysis of the 2016-2017 season; OnlineGAMBLING.ca found NBA teams paid out $305 million to injured players last season. The 76ers, who finished the ’16-17 season with the league’s 4th worst record (28-54), led the way; spending $22 million on 7 players (including $6 million on Ben Simmons) that were unavailable to take the floor. It must be noted that despite finishing with the league’s 4th worst record, the 76ers won the 2017 NBA draft lottery; earning the right to select first overall in the 2017 NBA draft. The team selected Markelle Fultz, who ironically sat out the first 68 games (taking home $5.8 million while rehabbing) of his career with a shoulder injury.

Fan Marino: Injuries to the league’s biggest stars had minimal impact on their respective franchises this season, and even less on popular merchandise lists. Steph Curry (31 games), Kevin Durant (14 games), Kyrie Irving (22 games), Joel Embiid (14 games), Kawhi Leonard (70 games) and Jimmy Butler (23 games) all missed extended time and still managed to finish 1st, 3rd, 5th, 8th, 11th and 15th, respectively, in jersey sales.

Correction: We wrote that the 76ers had earned the right to select first in the 2017 NBA Draft. While the team ended up with the #1 overall selection, they acquired it in a trade with Boston (via Brooklyn); giving up the #3 pick and a 2018 (or 2019) first round selection to move up 2 spots.

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Top MLB Prospect Took $360K for 10% of Career Earnings, Now Calls Deal “Unconscionable”


Francisco Mejia, ranked by MLB.com as the 11th best prospect in baseball, has filed a lawsuit against Big League Advance Fund I, LP (BLA) seeking to void a series of signed contracts, on grounds that the deal’s terms were “unconscionable”. In 2016, the Indians prospect was approached by “runners” (often former players) of BLA in the Dominican Republic; young and vulnerable (his mother was ill, medical bills were piling up), the player agreed to forfeit 10% of his future earnings (now projected to exceed $100 million) in exchange for a $360,000 payment. The 3rd baseman/outfielder now claims that the deal was “so one-sided, that no reasonable person would have entered into it.” While a court will decide the case’s merit, a deeper dive would appear to support Mejia’s argument; counsel advising Mejia on contract terms had been hired/paid for by BLA and BLA has since filed a counterclaim accusing Mejia of violating the contract by disclosing its existence (not the terms, the actual agreement).

Howie Long-Short: Sure, a return of 2,677% ($10 million on $360,000) seems predatory, but the courts may not see it that way. In 1989, a Delaware (where this case will be tried) court ruled (Graham vs. State Farm) that the “mere disparity between the bargaining power of parties to a contract will not support the finding of unconscionability. A court must find that the part with superior bargaining power used to take unfair advantage of his weaker counterpart.” That may not be the case here. BLA agreements are not loans. If a player fails to make the major leagues, the money is not repaid (i.e. no personal guarantee). Furthermore, Mejia’s claims aren’t without retort; while BLA acknowledges that no translator was present during the contract signing, they argue none was needed as the discussions were conducted in Spanish (the contact is also written in Spanish).

With that said, the reasoning for the counterclaim is particularly curious. BLA publicly markets itself as an “investment fund that provides minor league baseball players with the resources they need to help make their dream a reality”; one would reason that their association with one of baseball’s top prospects would be beneficial from a marketing standpoint, if their business practices were honorable. Mejia’s lawyers will also argue that by 2016, the player was all but assured to have a big-league career; leaving BLA with minimal, if any risk. Mejia was called up to the majors before the end of the 2017 season.

Fan Marino: For those wondering, the 10 prospects listed ahead of Mejia are; Shohei Ohtani (Angles, RHP/OF), Ronald Acuna (Braves, OF), Vladimir Guerrero, Jr. (Blue Jays, 3B), Eloy Jimenez (CWS, OF), Gleyber Torres (NYY, INF), Victor Robles (Nationals, OF), Nick Senzel (Reds, 3B), Fernando Tatis, Jr. (Padres, SS), Forrest Whitley (Astros, RHP) and Michael Kopech (CWS, RHP).

Fun Fact: On April 23, 1999, Fernando Tatis, Sr. hit 2 grand slams in a single inning. Here’s the video.

Editor Note: Apologies for the abbreviated newsletter. Game 4 of the Devils/Lightning Series called for an early deadline. We’ll be back to our regularly scheduled program tomorrow.

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Lamar Jackson to Lean on Rookie Wage Scale, Will Not Sign with an Agent Prior to the Draft

Lamar Mom.jpg

During 2011 NFL CBA negotiations, the NFLPA agreed to implement a rookie wage scale as a means of transferring wealth (at least 47% of all revenue) from unproven prospects to deserving veterans. To prevent training-camp holdouts (then an annual right of summer for 1st round selections), rookie contracts were simplified and deal terms and compensation became largely fixed (note: guaranteed money is negotiable). Lamar Jackson, the 2016 Heisman trophy winner and a projected 1st round pick, has decided that with little room for negotiation in his rookie contract, he’ll forego signing with an agent prior to the April 26th (runs through 28th) draft; hiring just a contract attorney to review the deal’s language. Should Jackson be selected in the 1st round, as expected, he’ll save a minimum of $267,000 in agent fees (standard is 3%); a figure that could push $400,000, if he’s selected by Arizona at #15 (see Fan Marino below).

Howie Long-Short: Wondering why the league’s veterans pushed for a rookie wage scale? In 2010 (the year prior to CBA change) Sam Bradford received $50 million guaranteed as the top overall selection in the draft, becoming the 1st player in league history to reach that mark, before taking his first professional snap. In 2011, Cam Newton signed a fully guaranteed deal worth $22 million as the number one selection. It’s logical that in a league where the average career is just 3.3 years, the biggest deals are awarded to those that have proven their worth. Top 10 picks aren’t guaranteed to be stars. Of the top 10 players picked in the 2011, 2012 and 2013 NFL drafts (30 total players), 13 (43%) didn’t have their 5th year options picked up.

Fan Marino: NFL draft “experts” talk ad nauseum about Wonderlic scores (Jackson’s was reportedly the lowest among the Top 5 QBs) and off-field transgressions (see: Mayfield), but this is a decision JWS considers worthy of a 1st round grade. First round QBs don’t need to be “sold” to teams and the money/years is all but set. At a minimum, top-end rookie talent should be capping agent fees at 1%. As for where Jackson can expect to land, Arizona (15), Buffalo (12, 22) and Jacksonville (29) should be considered the most likely destinations.

Fun Fact: While certainly rare, Jackson won’t be the first 1st round selection to negotiate his own rookie deal; Matt Elam (’13 draft) and Erick Flowers (’15 draft) saved themselves $203,000 and $432,000, respectively, by bucking the norm.

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Soil Science has MLB Teams Nationally Sourcing Dirt


Historically speaking, MLB teams relied on “local suppliers lacking baseball expertise” to provide their infield dirt; resulting in a dry, chunky mix prone to bad hops. That’s no longer the case, as highly specialized groundskeepers studying “soil science” are sourcing dirt from around the country in search of “just the right mixture of sand, clay and silt to provide a smooth, predictable surface.” It’s not just “engineered soil mixes” that MLB teams are bringing in though, “black gumbo” clay (helps with footing) and crushed brick or lava rock (durable material) are also being nationally sourced for use on pitchers’ mounds and warning tracks.

Howie Long-Short: MLB quality dirt mixes range between $80-$100/ton (+ freight), roughly 4x the cost of “ordinary” dirt. Teams replacing the entire non-grass portion of a MLB infield could be looking at a bill upwards of $50,000.

Fan Marino: The biggest difference between the dirt on a MLB baseball field and on your local little league baseball or softball field is the amount of clay contained within the blend; “a binder that helps with consistency and resilience.” The dirt your little tyke plays on is going to be “sandier”, as it’s cheaper and easier to maintain.

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Bucks President on Downtown Arena Project, Metric for NBA “Health” & “Giannis Effect”


The Milwaukee Bucks are currently holding on to the 8th playoff spot in the East, are building a new arena in downtown Milwaukee and have one of the league’s biggest stars (Giannis Antetokounmpo). JohnWallStreet spoke at length with team President Peter Feigin about the arena project, the metric for “health” in the NBA and the “Giannis Effect”.

JWS: There’s a trend within the sports world of teams building new stadiums and arenas downtown and surrounding these new venues with mixed-use real-estate projects capable of servicing the public debt. The Bucks are following that trend. How is your arena project going to benefit downtown Milwaukee?

Peter: The trend is not by mistake. The Bucks are a great example. We lived at the Bradley Center, on an island, for 30 years; I mean, nothing around it. It was not part of a real economic development plan. We build a building literally 50 feet north and it’s the centerpiece of a 30-acre development that encompasses retail, entertainment, parking, our training facility, a medical office building and clinic. So, what we’re creating is the infrastructure for a neighborhood.

JWS: Harley Davidson, a Milwaukee-based company, is your jersey patch sponsor. When looking to put a corporate name on the new building, are you simply looking for the biggest dollars, for the most number of years, or does having synergy between the businesses matter?

Peter: In a perfect world, we’d want a growth company, somebody that understands our culture and somebody that could really expand not only our local footprint, but our national and international footprint. Obviously, somebody that wants to make a long-term commitment and dedicate significant dollars.

JWS: There’s a lot of excitement surrounding the Bucks franchise. Can you discuss the impact all the positive developments (i.e. playoff run, Giannis’ emergence, arena development) have had on ticket sales?

Peter: The metric for health in the NBA is having a base of 10,000 (season ticket holders) or more, depending on the size of the arena. When we acquired the team a little over 3 seasons ago, we probably were somewhere between 2,000-3,000 full-season ticket holders. We’re going to enter a 17,500-person arena with somewhere between 10,000-11,000 season ticket holders.

Howie Long-Short: The new facility (and adjoining parking structure) is estimated to cost $524 million with roughly half ($250 million) coming from public funding. The state will own the building with the Bucks agreeing to operate the facility as tenants, for a 30-year period. The Bucks development arm is funding the costs associated with construction of the entertainment district.

Fan Marino: Prior to Giannis Antetokounmpo’s appearance in the 2017 NBA all-star game, no Milwaukee Bucks player had made an all-star team since Michael Redd was selected during the 2003-2004 season and the team hasn’t won a playoff series since 2001. Giannis made it back-to-back all-star appearances in 2018 and has become recognizable enough to have been featured on 60 Minutes (last Sunday evening). I asked Peter, how does having a superstar like Giannis alter the perception of Milwaukee and the Bucks’ franchise?

Peter: We call it the Giannis Effect. It redefines that there are no small markets. If you have a superstar and you can win, and you position your brand, you have the opportunity to compete.

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