My Sports Ideas

Lamar Odom must have the best agent ever because somehow he keeps getting these awesome commercials.  How does the 6th man (at best the 2nd or 3rd option if he played for a team besides the Lakers) get national play?  Today I saw the Samsung commercial and realized that probably 80% of people who see that ad don’t know who he is.  If no one can recognize him then why would Samsung bother going after him?

Also, tell me why a dude nicknamed “the candy man” hasn’t been in one of those new snickers commercials?  Talk about endorsing products you believe in…

Watching the Packers this afternoon reminded me that they have a very interesting ownership structure.  The packers are the only major US sports team which is owned by a large collection of share holders.  According to wikipedia (of course the most reputable source on these matters) these shareholders have very limited rights

Shares of stock include voting rights, but the redemption price is minimal, no dividends are ever paid, the stock cannot appreciate in value – though private sales often exceed the face value of the stock, and stock ownership brings no season ticket privileges. No shareholder may own over 200,000 shares, a safeguard to ensure that no individual can assume control of the club. To run the corporation, a board of directors is elected by the stockholders. The board of directors in turn elect a seven-member Executive Committee (officers) of the corporation, consisting of a president, vice president, treasurer, secretary and three members-at-large. The president is the only officer to draw compensation; the rest of the committee is sitting “gratis.”

This means that there are over 100k people who paid at least $200 each to own a part of the packers.   Yet unlike a normal investment which is made for financial gain, the packers shares really have no financial value.  Shares have been sold 4 times in the ~80 year history of the Packers, but shares can not be resold and no dividends are paid.  It seems to me that it’s really similar to  taxpayers financing stadium upgrades in other cities.  In both cases it’s a composition of outsiders (rather than a single for profit group) raising money.

From an individual investors perspective it’s strange to me that people would want to make this kind of investment.  Sure its pretty cool to say you own part of an NFL team and you might get a vote for some executive committee, but beyond that the investor doesn’t get much.

Yet if we think about this from a microeconomics perspective, the plan seems like a pretty efficient use of funds.  Rather than tax payers funding the profits of a single owner, it’s really the people who will be benefiting from the services that are funding the new investment.  It’s almost like some sort of prepaid usage tax.  Think of it like the government paying for roads.  If the government pays for roads using income tax revenue then everyone who makes money is paying for a portion road improvements.  Compare this with improving roads through tolls or gas taxes where only people using the roads are funding their maintenance.  If we assume that only people who are interested in the packers are he ones buying the shares, then it seems like a good/ efficient way to raise funds for the team.

I’m not sure if this would work in larger cities like LA or New York, where there are multiple sports teams, but it seems to work well in Green Bay.

Its been two months since my last post, so I think its time to start this up again.

There hasn’t been a lot of coverage of this story, but it was recently announced that Latavious Williams will become the first high school player to go directly from high school to the NBA D-League rather than going to college.  Brandon Jennings did this last year by opting for a big pay day in Italy, but no one had yet decided to use the D-league as a springboard.  I agree with this article’s analysis that this new trend could be good for all parties involved, but my question is why does the NBA still call its developmental league “The D-League?”

For everything the NBA does well, I think it has screwed up this name pretty badly.  Sure the name makes it very clear that the league is intended to develope talent for NBA teams, but shortening the name to “D-Leauge” has the connotation that these players are near failures.  I would be pretty pissed off if I got a D in school, so when I hear the term D league, I automatically think that the quality of play must be pretty bad.  Why not try another name?  MLB as a AAA league which has connotations of “A” being good (e.g. grade a beef, A+ in school, AAA bonds…).  Even the worst MLB league is still called single A, which sounds way better than D league ball.  I’m pretty sure that I would automatically be suspicious of anywhere that promoted itself as “D.”

How about some of these names:

• NBADL (NBA Developmental League)
• P-Leage (Pre-NBA, Prospect League)
• NBA 1 (another version of the NBA)

There are a lot of things that have better connotations then D-Leage.

I actually had to stop and think about the math to believe the recent Walmart commercials about savings from bringing lunch everyday.  Sure it makes sense that saving $5 dollars a day adds up, but unless you think of it over a period of time then it doesn’t seem like much money.

The basic premise of the commercials is that by bringing your lunch 2 times a week rather than buying for an entire year, you can save over $500 dollars.  At first this seems like a huge number but then remember that it’s really just saving $5 dollars x 2 times a week = $10 a week x 50 weeks a year = $500 dollars.  Proving that the little things really do add up.  So, since this is my sports blog, it got me thinking about applying this to sports.

Want an additional $1M in revenue?  If you run a MLB team just find a way to charge people $0.50 more per game either through concessions, ticket prices, parking or some other avenue.  It’s that simple.  81 game season x avg of 25k attendance per game x 50 cents per person >$1M.  You run an NBA team?  Just find a way to generate an additional $1.25 per person per game.  NFL?  Just $1.75 extra gets you to $1M.

This is one of the reasons it’s so amazing that the NBA refs might be locked out over a $700k difference in pay.

Now how do you generate this extra revenue without angering fans?  One idea:

• Raise ticket prices by $5 on expensive tickets.  It won’t seem like much more to a consumer paying $100 vs $105 for a ticket, but it will allow the team to generate enough revenue to not have to raise prices on the cheaper tickets.  This is the same concept that applies when buying a car.  Most people would not even bother haggling over paying $20,010 vs $20,000 for a car. But if instead they had to pay $20 vs. $10 for a shirt, it would be a much tougher decision.  In either case its the same $10 one-time payment, but since in the car case its such a small percentage of the total price.  This also keeps ticket prices low for the people who need it most.

The NFL’s decision to ban players from twitter and other social networking sites near game time was not shocking to anyone familiar with the situation.  With a commissioner who is constantly suspending players because of off the field actions, it’s not surprising that twittering during games will not be allowed.  I don’t see the big deal, but I guess this is a less drastic step than the NFL has taken, banning referees from all social media use.

Referees are not full time employees of the NFL and therefore probably encounter “social media” in everyday aspects of their lives.  What if a ref looses his job and tries to find a new one on linked on?  What if a ref reads an article on google reader that is shared by one of his email contacts?  I’m sure the intention of this rule is to remove outside influences on referees and ensure their safety, but “social media” is such a nebulous term that I have a hard time agreeing that all social media should be banned from referee usage.  Google allows users to promote, remove, or comment on search results in an effort to make search more relevant.  Once google begins to use this data to influence searches by others does that mean it has become social media and that NFL referees can no longer use google?