WNBA Franchise Forfeits Game Following Commercial Air Delays, Cancellations

WNBA

The Las Vegas Aces became the 1st team in WNBA history to forfeit a game after electing not to play in their August 3rdcontest against the Washington Mystics; the club cited player health and safety concerns following 25 hours of travel (see: flight delays x3, cancellations). League rules prevent teams chartering private planes to ensure an even playing field. With the season ending on August 19th, and no common availability, the league was unable to re-schedule the game.

Howie Long-Short: WNBA teams travel commercial because their finances simply don’t support anything better. Indiana Fever SVP Kelly Krauskopf explained to the Indy Star that a club could travel all season (commercially) for the same price as 2 charter flights (estimated $150,000-$200,000/trip).

Aces coach Bill Laimbeer acknowledges that “it’s not feasible” for league franchises to travel private, which makes the club’s decision to forfeit the game that much more peculiar. Why damage your playoff changes for a couple minor changes in travel guidelines (think: limiting number of time zones a team can travel following game)?

Fan Marino: Aces fans should be upset their team didn’t take the floor amid a playoff run. Sure, 25-hours of travel is a nightmare and I’m certain the players were tired, but to claim anyone was at risk of being injured because they had a broken night of sleep is absurd. Aces players willingly took a loss to make a statement to the league, it’s time to treat WNBA players like professionals. They’re right, but if the club fails to make the playoffs (and they’re currently just one game out), it’s going to be hard to argue their approach was; the debate over if the team should have played the game will overshadow why they chose not to.

While the league’s travel accommodations may not be 1st class just yet, if the league continues its recent growth trajectory they’ll get there. Viewership (during 1st half of season) rose +35% YoY across ESPN2 & NBATV and +38% YoY (to 247,000) on ESPN, merchandise sales on the league’s website increased +50% YoY and Puma recently announced a league-wide footwear partnership with the WNBA.

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Why Does Pay-For-Play Work for Basketball, But Not Soccer?

US Soccer Federation

A study by the Sports & Fitness Industry Association (SFIA) indicated that participation in youth soccer is rapidly declining in the United States. According to SFIA, which has been analyzing trends in youth sports for the last 4 decades, the percentage of 6 to 12-year-olds playing regularly has declined -14% (to 2.3 million) over the last 3 years; with the sport losing 600,000 child participants during that time. U.S. Soccer Federation participation (i.e. number of registered players, coaches, referees) figures do not mirror the regression found by SFIA, but the organization does acknowledge participation has plateaued after rapid growth in the late 90s, early 00s.

Howie Long-Short: Hope Solo recently attributed the waning participation figures to the proliferation of pay-for-play clubs/leagues. There’s no doubt that club/travel teams discourage participation, but youth basketball thrives under the AAU system and the sport has seen a recent uptick in involvement; so, there must be other factors at hand.

One issue would seem to stem from the size of the commitments made by the corporate sponsors. While footwear/apparel brands (see: Nike, Adidas, Under Armour) heavily subsidize the costs of AAU basketball, there are no shoe sponsored leagues (think: Nike EYBL) or tournaments (think: Nike’s Peach Jam Classic) for youth soccer players. While I can’t speak to Adidas or Under Armour’s participation, Nike’s involvement in youth soccer is focused on annual investments in the U.S. Soccer Federation scholarship fund and sponsorships at the club level. The shortfall leaves the U.S. Soccer Federation heavily reliant on donations to grow youth participation.

The way the U.S. Soccer Federation is structured, as a collection of members as opposed to a top-down single entity, also hampers the organization’s ability to reduce the cost of participation wholesale. As Chief Soccer Officer Ryan Mooney told us, “the organization is so far removed from the business model that dictates the actual endpoint of participation and the price point, it’s hard to say with a million dollars, $5 million or $10 million about how you would effectively utilize it.” So, even if a sponsor wanted to reduce the cost of participation of every kid, U.S. Soccer lacks the authority to ensure consistent fees across clubs/leagues.

Did you know? At least 35% of those currently participating in youth soccer are coming from households where the average income exceeds $100,000/year. Just 11% come from households earning less than $25,000/annually.

Fan Marino: While U.S. Soccer won’t be able to do much to reduce costs wholesale, the organization is making a concerted effort to grow the game. One key initiative is to increase the number of licensed coaches to over 300,000 by end of 2022. The organization “believes very strongly that if we can improve the quality of coaching for kids 12 and under, we can naturally retain and grow participation.” To that end, U.S. Soccer has revamped its coaching licenses at the grassroots level and has built a digital platform to push new educational programming.

It should be noted that the rapid rise of eSports and the early specialization of sport (which leads to high burnout rates) are also contributing to a decline in youth sports participation.

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Stan Kroenke To Complete Takeover, Acquire Remaining 33% Stake in Arsenal Football Club

Arsenal (1)

Alisher Usmanov has accepted Stan Kroenke’s offer of +/- $700 million (at $2.3 billion valuation) for his 30% stake in Arsenal, effectively giving Kroenke Sports & Entertainment (KSE) full ownership of the Premier League club. Upon closing, Kroenke who already controlled 67% of the franchise will surpass a key threshold under UK takeover law; anyone owning more than 90% of a company’s shares can force the remaining shareholders to sell their stake. Kroenke intends on purchasing the remaining 3% of the franchise from Arsenal Holdings shareholders at a price of +/-$38,000 per share. It must be noted that KSE’s acquisition is being funded by a loan, a fact that has Arsenal Holdings shareholders particularly upset.

Howie Long-Short: Arsenal Supporters Trust (AST), the club’s largest fan group, claims that by Kroenke taking AFC private AST fans are being forced to give up their role as “custodians who care for the future of the club.” Sure, they’ll lose their access to annual general meetings and there will be a delay in financial reporting, but to suggest their participation is crucial to the club’s success is laughable; even Usmanov, who controlled 30%, hasn’t had any voting power or influence since Kroenke took majority ownership back in ’11.

Forgive me if I’m underestimating the impact of this deal. As an American sports fan, I’m used to blindly rooting for my favorite teams without ever having the opportunity to hold them accountable.

Fan Marino: Kroenke’s decision to take the club private is unlikely to make much of an impact on the pitch, but Arsenal fans are going to notice plenty of changes when their Premier League season gets started this weekend (Sunday against Man City). Unai Emery has replaced Arsene Wenger following a 22-year run as the club’s manager.

Arsenal becomes the 5th professional sports franchise under the KSE (Kroenke Sports & Entertainment) umbrella. They also own the Los Angeles Rams, Denver Nuggets, Colorado Avalanche and Colorado Rapids (MLS).

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President Eric Winston Discusses OneTeam Collective, NFLPA’s Athlete Driven Accelerator

NFLPA

The NFLPA, via OneTeam Collective (its athlete driven accelerator), recently acquired a minority stake in SportsCastr Powered by FanChain; a live-streaming platform that gives anyone the opportunity to become a color commentator. The collaboration enables active and former NFL players to provide fans with unfiltered commentary on a wide range of sports. JohnWallStreet had a chance to sit down with NFLPA President Eric Winston (in his 3rd term) to find out who’s vetting the ideas on behalf of OneTeam Collective, to ask if the NFLPA plans to profit off legalized sports betting and to find out how the players can work towards a CBA that includes fully guaranteed contracts. 

JWS: Who is vetting the ideas on behalf of One Team Collective?

Eric: We have a board of guys. Obviously, Ahmad Nassar, the President of Players Inc. is involved. Modrona Venture Group and Intel sit on some of the investment committees that evaluate these deals. We also have an athlete advisory board that contributes, Kelvin Beachum, Dhani Jones, Isaiah Kacyvenski, Russell Okung; these guys are big into tech and are closely following what is occurring in the wearable-tech world. Ahmad and De(Maurice Smith) ultimately make the final decisions.

JWS: Does the NFLPA intend to profit from legalized sports betting?

Eric: We’ll see, our priority is to protect the players. I’m worried about the guy who misses a FG at the end of the game coming under investigation, or the player who drops a pass in the end zone, or falls down; the things that happen in every ballgame, now have everyone under a cloud of suspicion. That’s not a world any player should have to live in. I do think there will be some commercialization opportunities down the road (re: sports betting), but who knows what that landscape is going to look like.

JWS: Teaching “financial literacy” has been among your priorities as NFLPA President. What is the difference between your program and the financial training NFL players had been receiving?

Eric: I noticed coming up that topics being talked about were way too advanced or they weren’t applicable, talking about yield rates when we should be talking about burn rate. We should be talking about what taxes are, what a deductible is. I call them the start-up costs of life.

JWS: There’s been a lot of talk about a potential lockout following the 2020 season. Are guaranteed contracts the single biggest issue from the players’ side?

Eric: There’s nothing in the CBA right now that prevents a fully guaranteed contract, look at Kirk Cousins’ contract. Now, from an NFLPA/CBA standpoint we need to continue to break down the barriers to get guys to free agency, to give them maximum leverage to demand more player friendly terms.

Similarly, there’s nothing in the CBA language that says MLB and NBA players must have guaranteed contracts; a bunch of players just decided they’re not playing unless they get it and now that they’ve gotten it, it’s become the norm. I think that’s the approach we’re going to need to take. At the end of the day, guys like Kirk are going to have to demand guaranteed contracts or somewhat guaranteed (60%, 70%, 80%) and I think that’s how you keep inching towards it.

JWS: Chris Paul and LeBron James are the President and Vice President of the NBPA. If Tom Brady or Aaron Rodgers were at the forefront of the NFLPA’s push for guaranteed deals, do you think the issue would garner more serious consideration from owners?

Eric: Are you trying to say that I wasn’t a very good player? (laughing) I don’t know, Thomas Davis just came off our executive committee and he’s been an all-pro. Kevin Mawae is probably going to be a Hall of Famer and he was the President at one point. Drew Brees has been an Executive Committee member, so we’ve had big names. I don’t necessarily think you have to be a star player to galvanize the players and to move the needle. Our guys know who the guys in the locker room are that care and they want those guys to lead. In ’11 you saw Peyton Manning and Tom Brady put their names on that lawsuit, they’ll be there; just because they’re not a rep doesn’t mean they’re not supportive or that they’re not willing to go to war with the rest of us.  

Howie Long-Short: OneTeam Collective can offer start-ups a lot of things (access to the NFLPA’s brightest stars via licensing, marketing and content rights, research and development and mentorship for product development and marketing support), but capital is not one of them; the accelerator does not make cash investments on behalf of the players as a group.

SportsCastr Powered by FanChain is a privately held company. I’m not aware of any ways to play the start-up.

Fan Marino: Wondering what FanChain is? If SportsCastr is successful, it’ll become the cryptocurrency of choice in the global sports market; they’re currently working with various teams/leagues/media publishers to add FanChain support. In the meantime, SportsCastr users can earn tokens for participating on the platform; tokens redeemable for premium NFL player content (think: back-stage access), to purchase sports tickets or merchandise, or to send virtual gifts to NFL players.

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Lawsuit Could Result in NCAA Adopting “Olympic Model”, Josh Rosen’s Radical Solution

U.S. District Judge Claudia Wilken will hear the case of Martin Jenkins (former Clemson football player) v. NCAA in December and determine if the NCAA’s system of capping the value of athletic scholarships promotes competition between schools or stymies the market for student-athlete services (i.e. would the value of a scholarship increase if it could be used as a recruiting tool?). Student-athletes on a whole would benefit most from an “open market” (i.e. schools can offer whatever it takes to land a recruit), but a decision that the NCAA has been in violation of anti-trust laws is far more likely to result in a “less restricted market.” One proposed solution would be for college athletics to adopt the “Olympic model”, a resolution that would allow for student-athletes to be compensated for the use of their name, image and likeness while maintaining their eligibility. Regardless of the decision Wilken makes, it’s expected that the losing side will appeal the case to the Supreme Court.

Howie Long-Short: Of course limiting scholarships to “tuition, fees, room, board, course-related books and other expenses up to the value of the full cost of attendance” stymies the market for student athlete services; college athletic departments (and the boosters who support them) value winning above all else. They spend on coaches and facilities (which were recently shown to have little to no impact on recruiting decisions), so why wouldn’t they spend on the players too if permitted by NCAA guidelines?

The Olympic model (think: endorsements, commercials for star players) makes a lot of sense, if you believe that academic scholarships are fair compensation for most student-athletes; as I do. Student-athletes in revenue generating sports are awarded scholarships worth +/-$200,000 and can graduate debt free, as their classmates finish their studies with +/-$40,000 in debt. You don’t think a college scholarship is valuable? Tell that to someone making $30,000 and paying +/- 20% (average of $351) of their monthly post-tax income towards repaying student loans.

Fan Marino: Josh Rosen, who studied economics at UCLA, has developed a solution (with 2 partners, here’s the formal presentation) that would allow for student-athletes to pursue revenue generating opportunities while in college and still maintain their amateur status. The concept is built around the use of a “Clearinghouse” that would serve as an intermediary between the players and potential endorsers (eliminating need for agents). The “Clearinghouse” would negotiate all deals and hold player funds pending graduation; players that fail to graduate, are ineligible to compete or commit felonies forfeit any money earned. It’s a radical idea, but I’m for one that incentives student-athletes to graduate. As the saying goes, most of these guys will go pro in something other than sports; the degree will come in handy.

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Minor League Baseball Players Living Far Below Poverty Line

MILB

Major League Baseball players are making more money than ever, with the average salary topping $4 million for the 1st time last year, but most of their minor-league counterparts are living well below the poverty line. Aware of the vast pay gap and plight of MiLB players, MLB chose not to revamp the pay scale, but to pursue legislation that would preserve the status quo (technically they agreed to raise the min. by $60); and it passed as a last-minute addition to the 2,200-page federal spending bill that was rushed through Congress in March. Tonight (July 24th) at 10p EST, HBO’s Real Sports with Bryant Gumbel examines why MiLB players are “Playing for Peanuts”.

Howie Long-Short: While major league salaries have multiplied 5x over since 1984 and team valuations have grown 20-fold, MiLB player salaries have decreased over the last 25 years (accounting for inflation); Real Sports is reporting that “the majority of” minor league players are earning just $7,500 annually. $7,500 isn’t just below the poverty line ($12,140), it’s less than half of what a full-time minimum wage worker collects ($15,080).

Major League Baseball revenues eclipsed $10 billion for the 1st time in 2017, but Commissioner Manfred argues that the league could not operate if it had to pay MiLB players more money; a joke considering the biggest companies in the world manage to comply with federal minimum wage laws. Here’s a fun fact: MLB could pay every one of the 6,500 minor league baseball players an additional $22,500/year (raising min. comp. to $30,000) for less ($146 million) than what the Astros will pay Jose Altuve ($151 million) to play through ’25.

For those wondering, the “Save America’s Pastime Act” (yes, they’re serious with that name) simply requires MLB to compensate MiLB players for 40-hour work weeks during the season; spring training, off-season conditioning and any “overtime” in season can remain unpaid.

Fan Marino: While MiLB player compensation (and the league’s handling of it) is disturbing, the NBA’s G-League has quietly become a viable alternative to NCAA basketball. In addition to the round-the-clock, world-class coaching, at least two-thirds of the league’s players now make $70,000 (+ housing & medical); more than a respectable living for 5 months of work. That’s not the ceiling either. The NBA added roster spots for 2-way players last year – those designated to split time between their G-League team and NBA affiliate. 2-way players can earn up to $385,000/season. The G-League’s min. player salary is $35,000.

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