The Star of David Beckham

When the Los Angeles Galaxy signed David Beckham to a contract reportedly worth $250 million, they did so with the ultimate goal of increasing revenue and establishing a worldwide brand. In a matter of months, the Galaxy are on their way to achieving that goal.

To establish a worldwide brand, the first order of business was to create a new logo that would be instantly recognizable throughout the world, much like the interlocking NY of the New York Yankees. Done.

To increase revenue, the Galaxy has done everything from the obvious (increasing ticket prices) to the creative (signing new sponsors to a series of exhibition games). A big piece of the financial puzzle was selling sponsorship on the front of the team's jersey. Herbalife outbid other potential sponsors, including Citibank, with a $20 five year deal -- better than some MLS stadium-naming-rights. The deal also gave the Galaxy a chance to sell more than 75,000 jerseys to Herbalife product distributors and included a commitment to back other AEG Sports.

It will be very interesting to see if the Galaxy can recoup their investment. The Beckham publicity machine is in full motion, but hype can only get you so far. In two years, when the hype has died down, the Galaxy and MLS may find themselves back in the obscurity from which they started.

from Tripp Mickle of Street & Smith's Sports Business Journal

Alexi Lalas’ family vacation disintegrated last January. What was supposed to be a quiet week away from work in Palm Beach, Fla., turned into a week of nonstop, international phone calls and e-mails

Is it done? Lalas, president of the Los Angeles Galaxy, would ask every few hours.

We’re close, AEG Sports President Shawn Hunter would say. Still no signature.

But late on the night of Jan. 10 that all changed when Lalas got word that David Beckham had signed to play for the Galaxy. He immediately got on his computer to e-mail his staff the good news. After labeling the subject, “The Star of David,” Lalas wrote:

It’s a go. Let’s have some fun.

He hit send and felt a mix of pride and excitement as he thought about the historic significance of the signing. But those feelings quickly faded under the weight of his new responsibility.

The team had just signed the world’s most iconic soccer player to an unprecedented contract reportedly worth $250 million. It was a deal he would have to help make work not just for the Galaxy but also for all of Major League Soccer.

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Spike to Pay $100 Million to Keep UFC

Multiple sources are reporting that Spike TV will renew their rights deal to continue carrying the UFC for over $100 million. According to Multichannel News, the pact will give Spike more live UFC events than the previous agreement. The deal will also allow Spike to continue running it's Ultimate Fighter reality series. Executives from Spike would not comment, and UFC executives could not be reached for comment at press time.

For those of you keeping track, that is $100 million more than Gary Bettman and the NHL received from NBC in their last rights deal.

Falcons' Vick Indicted by Grand Jury in Dogfighting Probe

Atlanta Falcons quarterback Michael Vick and three others were indicted on charges of operating a dogfighting operation on property owned by Vick in southeastern Virginia. If convicted, Vick could face up to six years in prison and $350,000 in fines. Purses for the fights ranged from hundreds of dollars to thousands. According to the indictment, Vick was highly involved in the operation, attended the fights, and paid off bets when his dogs lost. The indictment also alleges Vick was involved in the executions of dogs that did not perform well.

NFL star Michael Vick was indicted by a federal grand jury Tuesday on charges of sponsoring a dogfighting operation so grisly the losers either died in the pit or sometimes were electrocuted, drowned, hanged or shot.

If convicted, many are calling for the same punishment for Vick.

The First Rule of NHL Fight Club...

How proud the NHL must be to know one of its players has been hosting a camp that instructs kids as young as 12 how to physically decimate their opponents with their fists. This story was written by Adam Proteau of The Hockey News.

In addition to providing that oh-so-valuable life lesson in common assault, the second “Derek Boogaard Fighting Camp”, held last week in the Minnesota Wild enforcer’s home province of Saskatchewan, also gives the kiddies T-shirts “splotched with blood-red dye,” according to the St. Paul Pioneer Press.

Awwwww. Cute. But I think Boogaard hasn’t gone far enough. He should be demonstrating what ambulance rides to a hospital’s intensive care unit feel like. The tykes ought to know how it feels to have reconstructive surgery on their orbital bones. And there’s got to be enough room in the curriculum for showing campers how to push aside their consciences, as well as how to live with the long-term, physical effects that follow when you pummel other human beings for a living.

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Was Rick DiPeitro's Contract Genius or Madness?

Sabermetric Research cites a July 16 Sports Illustrated article by Michael Farbe, in which he discusses a loophole in the NHL salary cap. At issue is that when a player is given a multi-year contract, the hit against the cap is the average salary for the length of the contract, and the not actual salary for that particular year.

For instance, Daniel Brière signed with the Flyers for $52 million over eight years. That's an average of $6.5MM, which will be charged each season against the Flyers' cap. But for the eight years, Brière is actually being paid $10, $8, $8, $7, $7, $7, $3, and $2 million, respectively.

To illustrate the loophole, Sabremetric Research offers the following extreme example,

Now, suppose the Flyers are so rolling in money that they're willing to pay Brière something completely unreasonable, like $50 million a year for 20 years. Technically, they can sign him to a billion year contract, at $1 per year, and front load all the money into the first twenty years. The cap gets charged $1 per year, for a billion years – and the Flyers barely notice. Brière gets rich, and the cap (in spirit, if not in letter) is blown away.

Which brings us to Rick DiPietro's much-criticized 15-year, $67.5 million contract. On the surface, this deal seems irresponsible. Why offer such a young goaltender, or any player for that matter, such a long expensive contract?

Well, let's assume the Islanders only expect to get 10 good years from DiPietro. Roberto Luongo recently signed a three year contract with the Canucks at $6.75 million per season. Using that as a base, one option for the Islanders would be to sign DiPietro to a 10 year $67.5 million contract. This deal would represent a $6.75 million dollar annual hit on the salary cap.

Here is where the genius comes into play. By extending the deal to 15 years at the same $67.5 million, the Islanders reduced their cap hit to only $4.5 million per year.

You might think that one risk to this deal is that even though the Islanders are taking a smaller cap hit, they are taking the hit for 5 additional years. What if DiPietro does not play all 15 years, and retires after the 10th season? Again, the Islander's are protected.

Under the collective bargaining agreement, if a player signs a multi-year deal before the age of 35, and retires before it finishes, there is no salary-cap charge for the unplayed seasons.

So the Islanders would not take any salary cap hit if DiPietro retires before the 15 year deal is complete. If DiPietro retires after year 10, he effectively gets a 10 year, $67.5 million contact. However, the Islanders cap hit was only $4.5 million per year. Suddenly, Garth Snow's first contract as Islanders GM seems much more like genius than lunacy.

A Deeper Look at the NHL Schedule

On The Forecheck, a terrific NHL blog, has created a very interesting spreadsheet of the 2007-08 NHL schedule. The spreadsheet, of course, includes columns containing the names of the teams that are playing. But added in are columns for distance from the previous game, opponent's winning percentage, opponent's power play %, and more.

So how can you use this? Checking out who has the furthest to travel for games on consecutive nights is a start. That honor goes to the Vancouver Canucks, who play at Edmonton on November 20, then have to fly 1,090 miles to play the Wild in Minnesota the next evening. You can summarize and sort the teams based on greatest and least travel. Who's going to face the toughest defensive teams on the road this year? Whose goalie is going to see the most rubber flying his way? How do the divisions compare?

Overnight Sports Nielsen TV Ratings: 07/09/2007 - 07/15/2007

Overnight Nielsen ratings for selected sporting events. One rating point equals 1% of the USA's 77 million overnight TV homes in Nielsen Media Research's 56 selected major markets. Cable rating converted to broadcast equivalent.

1. 2.3/6 FOX SAT MLB Baseball
2. 1.7/4 ABC SAT NASCAR Busch USG Durock 300
3. 1.3/3 CBS SUN PGA Tour John Deere Classic
4. 1.0/3 CBS SAT PGA Tour John Deere Classic
5. 1.0/2 NBC SUN Golf American Century
6. 0.9/2 NBC SUN Hy Vee ITU World Cup
7. 0.8/2 ABC SAT NASCAR Countdown
8. 0.8/2 ABC SUN WNBA All Star Game
9. 0.7/2 CBS SUN Tour de France Highlights
10. 0.7/2 CBS SUN Grand Prix of Germany
11. 0.7/2 NBC SAT Golf American Century
12. 0.6/2 CBS SAT SPT SP
13. 0.6/1 ABC SUN British Open Preview
14. 0.5/1 NBC SAT SPT SP 7/14

ESPN and the WNBA Team Up

The Sports Business News is reporting that the WNBA has agreed to an eight-year rights extension through the 2016 season with ABC, ESPN, and ESPN2.

The new contract includes a minimum of 18 regular-season games to be telecast on ESPN2 (approximately one per week) and two games on ABC. The postseason on ESPN2 will include a minimum of 11 games, including the entire best-of-five WNBA Finals. All ABC and ESPN2 telecasts will continue to have time-period exclusivity. In addition, the deal includes coverage of the first round of the WNBA Draft on ESPN2 and rights to coverage on ESPN Deportes, including: live simulcast rights for all ESPN2 regular-season and post-season games, as well as all studio and specials programming; SAP rights for all ABC games; and enhanced digital media rights for ESPNDeportes.com.

Although financial terms are not discussed in this article, it has been reported that the deal did include a rights-fee, and not a revenue sharing percentage. What does it say about the state of the NHL that the WNBA received more guaranteed money than they did? Of course, it is probably not a coincidence that the NBA recently also agreed to terms with ESPN and ABC. It would not be surprising to learn that David Stern made it clear that if you take the WNBA, you will get treated better by the NBA.

Chris Benoit Tragedy Splotlights Strain on WWE Wrestlers

In the aftermath of the Chris Benoit tragedy, the stresses put on WWE wrestlers are coming more and more into the spotlight. According to insiders, wrestlers are placed under near-constant stress, face hazardous conditions, have no insursance, no off-season, and often perform hurt. A major factor leading to these conditions is that the WWE is basically a monopoly. According to Alfonso A. Castillo of Newsday,

Even when they are hurt, many pro wrestlers, who are classified as independent contractors and don't get insurance, choose to work through agonizing pain out of fear of losing their place in the cards or their jobs altogether.

With no unions or pensions and no viable competitor to WWE, losing your job can mean losing your career, wrestlers say.

The problem for the wrestlers is that the WWE has bought out most rival wrestling leagues. That leaves the performers with little options. They must keep performing up to brutal expectations -- the WWE puts on shows more than 250 nights a year -- or risk losing their jobs. If they lose their jobs, they do not have another league to turn to.

This is similar to the problem faced by UFC performers as previously discussed on Everything But The Game. When performers have few options, they are taken advantage of. Of course, the MLB and NFL are monopolies as well. But in those leagues, there are 30 odd teams competing for the services of each player. If a player leaves one team, he has 29 more opportunities to find another job. WWE wrestlers and UFC fighters do not have that same opportunity.

Odds & Ends: Beckham's Debut

David Beckham's home MLS debut for the Los Angeles Galaxy has generated some interesting betting odds. Intertops.com is currently offering the following odds on Beckham's home opener:

Option: Odds
Tom Cruise to be in the audience: 1.10
To score: 2.20
To be substituted: 2.75
To be booked: 3.50
To score by freekick: 4.00
To score by penalty: 6.00
To be sent off: 15.00
To score a hattrick: 31.00

What are the odds that by January, anyone in the U.S. is going to care?