The Sports Professor Rick Horrow, in conjunction with promotional partner Northern Trust, ranks the top business stories of 2005.
As the holiday season begins and the business year comes to a close, the $357 billion sports industry made more headlines than ever. Look at the numbers. Corporate commitments for naming rights: $4 billion; NFL television contract: substantial increase over $17 billion; universe of 400 wealthiest Americans (according to Forbes): $1.13 trillion (64 of these are involved in sports some way, confirming the notion that teams and leagues can be good investments in addition to the challenge and “heartache” of ownership). In any event, my top five business issues of the year:
NUMBER 5: LANCE ARMSTRONG. The cyclist turned icon wins a seventh Tour de France after overcoming testicular cancer. Obviously, a pinnacle of achievement that will not be witnessed again in our lifetime. Along the way, he established his Lance Armstrong Foundation to help kids afflicted with cancer overcome the disease. This last year, in addition to winning his seventh straight title, he also rose above international accusations of steroid use, proposed to rock star Sheryl Crow, and gave over half a million dollars to help the displaced victims of Hurricane Katrina.
Armstrong is obviously a true American hero. A study by marketing company Genius Insight reports that Lance Armstrong is by far the most “liked” athlete of 2005, almost doubling the “likeability” index of Tiger Woods, Shaquille O’Neal, Brett Favre, and others.
Number to remember: $17.5 million; Armstrong’s projected endorsement income from 2005, placing him in the top five of all active athletes.
NUMBER 4: NCAA ATHLETICS. The NCAA fails to resolve the annual BCS controversy, but this time No. 1 and No. 2 make sense to all of America. The 28 holiday bowls ensure maximum corporate sponsorship, a record payout of $193 million, and exposure for nearly 48 percent of the 119 Division I college football teams.
The NCAA also purchased the rights to the NIT basketball tournament, bringing the total number of teams they control in the basketball post-season to nearly 100. Purists decry mediocrity, but participants point out that the $5 billion college football and $3 billion college basketball businesses will perpetuate as long as Corporate America continues to sponsor the events, networks continue to televise the events, and regions see the $50-$60 million of economic impact in hosting major college sports events.
Number to remember: $930 million; the amount contributed by television to the Bowl Championship Series over the past five years, with 94 percent of it shared by the “Big Six” major conferences – the reason the current BCS system will not become a playoff system.
NUMBER 3: IMAGE AND SPORTS. Led by Terrell Owens (this year’s Kobe Bryant), the controversial new NBA dress code, and the anniversary of 2004’s “basket-brawl,” pro sports leagues continue to confront major image problems with racial undertones.
This last month, NASCAR points champion Kurt Busch was suspended after a police altercation in Phoenix, the same week that Kurt’s brother Kyle won the Checker Auto Parts 500 race in Phoenix. The fallout from the November 19, 2004 Indiana-Detroit basket-brawl is still being felt – Pacers players Ron Artest, Jermaine O’Neal, and Steven Jackson pleaded no contest to assault charges and were sentenced to one year of probation. Within two weeks, Commissioner David Stern revealed his new “dress code” policy, with Dockers quickly offering to outfit all 450 NBA players from head to toe – potentially spending an estimated $432,000 for pants, shirts, shoes, and the like. Pity poor player Brevin Knight, claiming that he needs vouchers from his team to buy clothes – as his salary could not pay for new suits.
Number to remember: $30-$35 million; the amount Terrell Owens might lose on the remainder of his seven-year, $49 million contract plus untold potential endorsement losses.
NUMBER 2: BALCO AND STEROIDS. The “Balco” stain grows – impacting baseball, U.S. Olympians, and even Lance Armstrong. The agreement between Major League Baseball and its Players Association was conducted at the point of a legislative gun. That being said, the new 50-game, 100-game, and lifetime suspensions from the first, second, and third offenses may be a step in the right direction. More important may be the treatment of amphetamines, with a third offense creating an 80-game “holiday.” The numerous hearings led to the final “leverage point” by Senators John McCain and Kentucky Senator (former Philadelphia Phillies pitcher Jim Bunning), causing baseball to agree to its formal deal at the steps of the U.S. Capitol.
Now the scene shifts to hockey and basketball, with more hearings expected. The key issue: the growing negative impact on the next generations, with steroids becoming more commonplace in high schools, and the negative impact on an entire generation of kids forced to see their sports heroes called before Congressional hearings.
Number to remember: 18 percent; number of athletes a recent high school survey admitting that they “knew of” or “were involved in” some type of steroid use.
NUMBER 1: HURRICANE KATRINA. The killer hurricane and its domino effect on teams and communities nationwide clearly takes the top spot. The Superdome, host of six Super Bowls and four Final Fours, may be repaired by next November at a cost of $150 million. The Saints will now emerge in the headlines once again as San Antonio Mayor Hardberger ratchets up the stakes; and rumors abound concerning potential litigation by Saints owner Tom Benson over next year’s relocation. The Charlotte Hornets moved to New Orleans, and then cut a deal in less than 20 days to play their games in Oklahoma City. Buoyed by the 1993 passage of a $500 million arena and infrastructure package called MAPS, Oklahoma City has showcased its capability as an NBA town, probably allowing the Hornets to substantially exceed their $40 million revenue goal.
Not lost in this tug-of-war between regions is the cancellation of over 400 high school games, relocation of two college bowls, and the damage or destruction of nearly 30 sports facilities.
Number to remember: $3-$4 billion; possible Katrina long-term economic impact in the sports sector alone, not to mention the unquantifiable and untold human suffering.
