Mets Fire Front Office Executive Who Accused League of Paid Patriotism

Mets

The New York Mets have fired assistant director of player development Nick Francona after he publicly denounced Major League Baseball for profiting “off the memory of dead soldiers.” The former U.S. Marine (and son of Indians Manager Terry Francona) criticized the league for failing to disclose who’s entitled to the proceeds of military-themed apparel sales (worn by players on Memorial Day); products that are marketed and sold as officially licensed merchandise. Francona reportedly repeatedly requested evidence from the league that the proceeds were being donated to charities connected with military families, but was rebuffed each time; leading him to take a public stand on social media. In email correspondence provided to the New York Post, Mets GM Sandy Alderson stated Francona’s actions were “beginning to ‘undermine’ the Mets military and veterans agenda”; ultimately, the reason for his firing. Francona has called the franchise “cowardly” for caving to the pressures of the league office as opposed to standing up for what is right; the Commissioner’s Office has denied the allegations.

Howie Long-Short: “Paid patriotism” isn’t a new concept or one originated by Major League Baseball. Back in 2016, Senators John McCain and Jeff Flake blasted the NFL (and other pro leagues) for taking government funding to honor military personnel (think flag displays, family reunions). An internal audit found that between ’12-’15, the NFL signed contracts worth $6.1 million that contained elements of “paid patriotism”. To the league’s credit, they did return $723,000+ to the Defense Department; “the first organization to perform due diligence, take responsibility and return funds to the taxpayers” (according to Flake). Wondering who the biggest pigs were? Atlanta ($879,000), New England ($700,000) and Buffalo ($650,000).

Fan Marino: On the surface, it seems as if Francona has been wronged; but this isn’t the first time he’s brought negative attention on his employer. Francona was previously fired by the Dodgers after accusing the team’s director of player development (Gabe Kapler) of discriminating against him for seeking help from an organization that supports veterans with “invisible wounds of war”. MLB investigated the complaint and decided not to take action.

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Anthony Joshua: Range Rover Sponsorship Aligns with Long-Term Goal

JWS: You mentioned that you’ve signed endorsement deals with brands that align with your long-term goals. How does the Jaguar/Range Rover relationship play into that?

You can read the transcript of the full interview at https://johnwallstreet.com/heavyweight-champ-anthony-joshua/

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Anthony Joshua Has a “Billionaire Mindset”

JWS: You’re open about pursuing your goal of becoming a billionaire. You have a successful line of gyms, what other businesses are generating income for you?

You can read the transcript of the full interview at https://johnwallstreet.com/heavyweight-champ-anthony-joshua/

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Anthony Joshua Implies Stake in DAZN

JWS: Mayweather made a fortune collecting on a portion of PPV receipts. Do you worry that DAZN’s subscription model will cost you money?

You can read the transcript of the full interview at https://johnwallstreet.com/heavyweight-champ-anthony-joshua/

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NFL Generated Record Revenue in ’17, Claims of League Demise Premature

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NFL teams split a league record $8.1 billion ($255.9 million/per) in national revenues (includes: TV deals, road-game rev-sharing etc.), representing a 4.9% YoY increase in 2017. The escalating value of television rights (+5% YoY) and the increased availability of Thursday Night Football (think: Amazon) drove the growth. The Green Bay Packers, the only publicly traded team, reported record revenue ($454.9 million) last season; an 8% YoY increase, that includes $34.1 million in operating profits. It’s been estimated that the league generated more than $14 billion in ’17 revenue, the most of any league worldwide.

Howie Long-Short: It’s time we put to rest the notion that the NFL is declining in popularity. Player protests. Brain injuries. Criminal Accusations (think: LeSean McCoy). None of it has had any impact on revenue generation (according to Packers President Mark Murphy). While we’re at it, let’s end the talk that the NBA is closing the gap on the NFL; it’s not. For all the overseas interest we hear about, NBA teams split just $7.4 billion in TOTAL revenue last year.

The Packers are publicly traded but stockholders hold no equity interest, shares do not pay dividends and they cannot be sold; except for back to the team at a discounted price. Great deal (rolling eyes). For those wondering, the balance of the team’s revenue ($199 million, +.8% YoY) came from sponsorships, game-day revenue, local broadcast fees, sales at the team’s pro shop and tickets to their Hall of Fame exhibit.

Fan Marino: One argument I will buy regarding the NFL is that the controversies, particularly as it relates to CTE, have negatively impacted the value of franchises. Even with newly signed TNF and streaming deals, Trump related tax breaks and legalized gambling on the horizon, the Carolina Panthers sold for 5.9x ’16 revenue; just a slight increase over in 5.6x multiple Buffalo sold for in ‘14. By comparison, the Rockets sold for 7.4x in ‘17. I continue to maintain David Tepper got a great deal.

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Nats Park Has Revitalized Southwest Washington D.C.

Nats Park

The site of tonight’s All-Star game, Nationals Park, has been an “engine of economic growth” for Southwest Washington, D.C.; the fastest growing area of the District. Michael Stevens, President of the Capital Riverfront business improvement district, said the development of the stadium “helped people understand that a place they knew as unsafe was now a safe neighborhood.” Since the stadium went up in 2008, the number of families living around the park has quadrupled (to 3809), household income has risen 127% (to $78,265) and value of real estate in the neighborhood has increased 130% (to $2.65 billion); as new residential towers, a waterfront boardwalk and dozens of restaurants have replaced low-income housing projects, fenced off gravel pits and empty lots. The ballpark is also now generating so much stadium related tax revenue, that the city made an additional $17 million payment on the building’s construction loan in 2017; as D.C. CFO Jeffrey Dewitt pointed out, “that’s a third of a new middle school right there.”

Howie Long-Short: As cities come to the realization that using public funding to build stadiums in isolated locations, surrounded by parking lots, is a losing proposition (and started tightening purse strings); team owners have begun building downtown. They’ve surrounded their new venues with mixed-use real-estate projects (like in D.C.) capable of servicing the public debt. Retail, office and high-end residential properties now surround urban venues in at least 10 cities, stimulating the local economy and rejuvenating downtrodden parts of cities, as no stand-alone facility ever did. The trend mirrors a greater American urban renaissance (started in ’10), where for the first time in 60 years more people are moving to the city than the suburbs, driving the country’s economic growth.

It’s not just Southwest D.C. that has benefited from the construction of Nationals Park, though. The District has added 130,000 new residents over the last 15 years and now claims a population exceeding 700,000 for the first time since the 1970s. The rise in population has actually managed to create concerns surrounding traffic, parking and an under-funded Metro (closes at 11:30p); unfathomable just a decade ago.

Dennis Coates, an economist at UMBC, doesn’t buy into the notion that Nationals Park has positively impacted the area’s economy. Coates said, “it is very common for people to say, ‘just stand here and look at all the cranes,’ and attribute that to the stadium” but, “it is one big shell game. This is not income growth; it’s redistribution. It’s money that was being spent in Northern Virginia or Georgetown, and now it’s being spent near the ballpark.”

The substitution effect (as Dennis explained) is in play here, though certainly not at levels we see in other cities. 45% of fans attending Nationals games are from Virginia, another 35% are from Maryland and 65% of those moving into the neighborhood of the stadium are from outside the District (i.e. substitution effect not applicable). Of course, rising property values and an expansion of the city’s tax base are also undeniably positive developments for the city that can be tied directly to the construction of the venue.

Fan Marino: Nationals star Bryce Harper won Home Run Derby on Monday night, defeating Kyle Schwarber in the final round (19-18). Harper hit 44 home runs in all, the longest sailing 473 feet. With the win, Harper becomes the first player to win Home Run Derby in their home park since Todd Frazier (Cincinnati) did it in ’15.

Fun Fact: The Nationals return to Washington came 33 years after the Senators abandoned the District for Texas (became Rangers) in 1971. That team replaced the original Senators franchise that left D.C. for the Twin Cities (became Twins) in 1960.

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Wimbledon Chooses Tradition Over Profits

Wimbledon

Wimbledon’s conscious decision to honor tradition at the expense of profitability is estimated to cost the All England Lawn Tennis and Croquet Club (AELTC) upwards of $60 million annually. Official records indicate that Wimbledon generated $289 million in ’17 (-6.5% YoY); by comparison, Forbes estimates that the U.S. Open brought in $350 million last year (+15% YoY) – ticketing ($120 million v. $47 million) and sponsorships ($65 million v. $47 million) accounted for much of the difference. Commercial and Media Director of the AELTC Mick Desmond explained that the objective “is not to maximize revenue in the short term, but to build relationships for the long term that will future-proof The Championships and our partners for years to come.” The decision ultimately costs the players competing. The winners of last year’s U.S. Open took home $3.7 million in prize money; Wimbledon winners this year will earn just $3.08 million  (after +7.5% YoY increase).

Howie Long-Short: It’s Wimbledon’s “brand” that drives the “clean court philosophy” (as opposed to Arthur Ashe Stadium which has highly visible advertising on court and nets), its decision to limit the number of sponsors and the ability to resist the urge to increase ticket prices and the size of the venue (15,000 v. 23,771). Haagen-Dazs, Rolex, Slazenger and Robinsons Barley Water are among the few associated with the 2018 tournament. It should be noted that sponsors are not permitted to advertise on AELTC grounds.

Fan Marino: Pinnacle Sports (and another unnamed bookmaker) reported a Wimbledon men’s doubles match, involving 4 Top-55 players, for suspicious betting patterns. A series of “out of the ordinary” late bets from “accounts with a history of wagering on suspicious matches” moved the odds, tipping off the bookkeeper. Fernando Verdasco (ranked 34th), David Marrero (ranked 54), Joao Sousa (ranked 45th) and Leonardo Mayer (ranked 36th) are the players who participated in the match under investigation. It’s not the first time that Wimbledon has had a potential match fixing scandal on their hands; 3 matches at last year’s tournament were flagged for potential corruption.

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opendorse Expands Platform to Build Personal Brands for Student Athletes

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opendorse has announced the launch of a content distribution platform for collegiate athletes. Designed to help student-athletes build their personal brands, the software empowers these individuals to share content (think: highlights, images from games, team graphics) from their school, to their personal social media channels, with a single tap of the application. UCF, Auburn and TCU were among the schools that participated in a fall 2017 beta program that produced “overwhelmingly positive results”; the more than 400 participants experienced an average increase of 22.9% in total followers during the 6-month trial. More than 20 programs, including schools from all P5 conferences, have committed to (or are already) using opendorse to helping student-athletes tell their story on social media.

Howie Long-Short:  opendorse was founded by former Nebraska Cornhusker football players Blake Lawrence and Adi Kunalic. The Lincoln (NE) based company has maintained its ties to the program, closing on a $3.5 million series A round in November 17, with more than 1/3 of the capital coming from former Huskers; including Bears CB Prince Amukamara. The company has raised $6.3 million to date, but it’s all private money.

Fan Marino: Alex Rios, University of Southern California Football Director of Recruiting, was at the Hashtag Sports conference on Tuesday. I had a chance to connect with him to discuss why college athletes should be focused on building their personal brands and how a platform like opendorse could assist in the recruiting process.

Fan: Why should a college athlete worry about developing their personal brand if they aren’t permitted to be compensated for their name/likeness?

Alex: 3.3 years is the life expectancy of the NFL player. If a player can start developing his brand in college, the opportunities at the NFL level are huge. It is about giving them that jump start to make sure that they are ahead of the pack. The player also has the chance throughout his collegiate career to show that his values and messaging are genuine and authentic; and that’s what all brands want to see.

Fan: How often are prospects asking you about USC’s ability to build their personal brand?

Alex: I doesn’t come up, until I bring it up to them. They’re looking to see what schools offer the best academics, where they can play for a national championship, who has the best alumni network; they don’t understand that what they’re doing right now on social media could impact them for the rest of their lives. I tell them, you’re in the 2nd biggest media market and you have the opportunity to tell the entire world your story; and with the help of a big brand like USC, it could potentially boost their draft stock.

Fan: If you could promise a prospect that they would increase their social following by at least 20%, would that help you in the recruiting process?

Alex: 100%. This is branding athletes. To be able to tell a kid how we’re going to develop them, both on the field and off the field and that their brand is going to be bigger and nationally known (because they came to USC), is extremely helpful.

Editor note: USC is not under contract and has not participated in any trials with opendorse. The parties are currently in discussion.

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United Bid Wins ’26 World Cup but Revenue Projections Overstated

United 2026

The U.S., Canada and Mexico have won the rights to host the 2026 World Cup, the first with an expanded field of 48 teams, following a vote of more than 200 FIFA member nations; Morocco was the other finalist. Sixty of the 80 games will be played on U.S. soil, including all matches from the quarterfinal round onward; Canada and Mexico will each host 10 matches. The 17 U.S. cities under consideration to host games are: Boston, NY/NJ, Baltimore, Washington D.C., Cincinnati, Nashville, Atlanta, Orlando, Miami, Kansas City, Dallas, Houston, Denver, Los Angeles, SF and Seattle; 10 will be selected. The final is scheduled to be played at MetLife Stadium in East Rutherford, NJ.

Howie Long-Short: The United bid was selected because of the potential revenue (double that of the Morocco bid, $7.2 billion) and the stadium infrastructure that already exists. While all 23 venues submitted for consideration within the United bid already exist or are in the process of being built, Morocco’s bid required 14 venues to be built or renovated at an estimated cost of $15.8 billion. $14.3 billion in revenue would equate to an estimated $11 billion in FIFA profits or a +/- $50 million distribution per member country; 3x the revenue that the international soccer organization generated in Brazil in ’14.

While the tournament is going to be wildly profitable, $14.3 billion in revenue appears to be a pie in the sky figure. The United bid projected it would generate $5.5 billion in revenue from media rights, but FIFA pegs the number closer to $3.6 billion; wisely noting that the time difference prevents matches from being broadcast live (and therefore from maximizing revenue) in parts of Europe and Asia.

Attendance and ticket sale records set in ’94 (last time U.S. hosted) still remain, so perhaps U.S. Soccer Federation President Carlos Cordeiro’s prediction that six games (three opening games, both semi-finals, final) will generate ticket sales and hospitality revenue on par with the Super Bowl is accurate; but the United bid projects $1.5 billion in hospitality revenue, 10x more than FIFA anticipates. For comparison purposes, the last Super Bowl did $150 million in hospitality revenue. The bid also accounts for $1.4 billion in other activities (i.e. not games) that have yet to be announced. Even if the United bid ends up bringing in just $10 billion, it would still represent a 66% increase on the $6 billion FIFA will generate this summer in Russia.

Fan Marino: The current voting system, which makes member choices public, was implemented following the 2015 arrests of nine soccer officials (and five marketing execs) on charges of wire fraud, racketeering and money laundering. The old system, rife with corruption, called for just 22 FIFA executive committee members to cast secret ballots, explaining how Russia and Qatar managed to win the ’18 and ’22 World Cups, respectively.

For those wondering, with an unprecedented three host countries, it’s not certain that all three national teams will be guaranteed automatic entry to the tournament; however, it’s likely that COCACAF will amend its rules to ensure all three teams qualify.

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