Happy Sunday…
Hope everyone had a great first week of December, and happy Chanukah to those who celebrate. It’s been a busy week indeed in the sports business landscape; insights and perspectives below on college football, golf, basketball, and NFL (officiating). As always, please consider joining the Sports Business League for the Daily Dose—such as this one on Jon Rahm joining LIV Golf (video below 👇) — and our weekly group meetings. Thanks for considering: JOIN SBL
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On to the Sunday Seven…(Actually Eight, but who’s counting?)
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1. What I’m thinking of Shohei Ohtani’s massive free agent contract with the Dodgers…
The news broke yesterday afternoon: The biggest free agent in Major League Baseball history has selected the crosstown Los Angeles Dodgers – he has been in Anaheim for the last six seasons – as his new home. The Dodgers won the sweepstakes over several other teams in a secretive process conducted by Ohtani’s agents at CAA.
The contract is staggering: $700 million over 10 years, worlds ahead of the most lucrative contract ever in baseball to date, the 12-year contract worth $426 million for Ohtani’s former teammate Mike Trout. And the $70 million average also zooms past previously record averages of $43 million for Max Scherzer and Justin Verlander.
Brandt’s Stance: We knew this deal would be off the charts, but a late-season injury to Ohtani – that will prevent him from being a two-way player at least until 2025 – made us wonder if he would only receive up to $500 million. But free agency is the Wild West, and with multiple teams upping the bidding, this is where things landed.
There is no opt-out in the deal; Ohtani is committed to the Dodgers for 10 years. And there are reported deferrals in the deal that (somewhat) help the Dodgers’ luxury tax issues. These clauses are helpful to the Dodgers. But for $700 million, CAA and Ohtani could be very helpful.
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2. What I’m thinking of Florida State being left out of the College Football Playoff…
While most have moved on from this snub, it will take some time for fans of Florida State to do so. FSU did everything a college football team can do to be included in the four-team playoff: won every game, won the ACC, won the ACC championship game, etc. Their sin? Having their starting quarterback get injured.
This was the final year of the four-team CFP; it moves to a 12-team playoff next year. The CFP committee chose to include one-loss teams Texas and Alabama instead, noting the loss of FSU quarterback Jordan Travis as a reason.
Brandt’s Stance: Yes, there was some loose language in their criteria about injuries to key performers, but a Power 5 undefeated champion had never not been included. The problem I had with the selection rationale was that it seemed like this ‘esteemed’ committee was just doing what a couple of guys at the end of a bar would do.
For FSU it was not just about bragging rights. A CFP game would have brought in $6 million, much more than the $4 million they will now get from the Orange Bowl. And there are recruiting and development impacts as well. And it sounds like they are not letting this go, with potential legislation and lawsuits ahead. Speaking of which…
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3. What I’m thinking about the NCAA proposal on compensating student-athletes…
New NCAA president Charlie Baker has a tough job, perhaps tougher than his former gig as governor of Massachusetts. Baker is trying to allow some player empowerment while, at the same time, making the NCAA viable and necessary.
This week, the NCAA issued a proposal to compensate certain Division I student-athletes with $30,000 annual payments as part of an educational “trust fund,” tying the money to the educational benefits that the Supreme Court ruled could not be restricted in the NCAA v. Alston case in 2021.
Brandt’s Stance: With lawsuits circling and collectives paying some student-athletes millions of dollars, the NCAA had to do something. It is an attempted preemptive strike to head off three problems plaguing NIL and the rise of athlete rights: (1) antitrust lawsuits, (2) the influence of collectives, and (3) the application of Title IX.
As for the lawsuits, they are already in motion and, it seems, can only be stopped by settlement. This proposal could, however, be codified into whatever congressional bill advances out of Congress with a limited antitrust exemption attached to it.
Bringing player compensation in-house and away from collectives — who have ignored women athletes — is important to the schools. Baker is essentially taking the payment processing out of the collectives’ control and into the control of the schools themselves.
On the one hand, it is monumental to see the NCAA proposing any kind of payment directly from the schools to student-athletes. On the other hand, it may be too late for them to deal with what has already happened while they were sleeping.
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4. What I’m thinking of Jon Rahm taking Saudi money and signing with LIV Golf…
When we last discussed the ongoing saga in golf between the established PGA Tour and LIV Golf, there was an “agreement to agree” on a merger by December 31, a few short weeks from now. As I remarked, LIV had “bought golf” as the new entity would be completely funded by them.
That merger, we assumed, would put an end to LIV’s poaching of the top PGA Tour golfers. Rahm, a top-five golfer in the world, had been tempted by massive money to switch tours but had pledged fealty to the PGA Tour. That was then, this is now.
Brandt’s Stance: Merger talks seem to be moving at a snail’s pace, with the best hope for the December 31 deadline being an extension of that deadline. Both tours already have separate schedules through at least 2024, and there seems no momentum to act. Rahm was not going to wait; he took the money and will see whether it was for LIV only or eventually for some merged entity.
Rahm reportedly signed a three-year contract worth anywhere from $300-400 million, putting him at or above the highest-paid LIV golfers including Phil Mickelson, Brooks Koepka, and Dustin Johnson. And, as I noted when learning more about LIV in attending their event in West Virginia in August, team captains — which Rahm will be —own roughly 20-25% of their teams in addition to their contract compensation. That ownership share could end up being more lucrative than the contract if and when these teams are sold as assets similar to other team sports.
The phenomenon of Saudi money poaching PGA Tour golfers is still alive and well.
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5. What I’m thinking of the NBA In-Season Tournament…
The first iteration of this new European cup-style NBA In-Season Tournament ended last night with a $500,000 per-player share for the winning team (either the Pacers or Lakers, as of this writing). The semifinals and finals were played in Las Vegas, where there has been much discussion of an NBA franchise to come.
Brandt’s Stance: The NBA is not on the average sports fan’s mind in November and early December, and for many fans, that has not changed. But for a significant number — as proved by the metrics below — that was changed by the tournament. It is a genius stroke by the league to have relevance before the Christmas Day games when many start paying attention to the NBA.
November attendance for NBA games was way up, averaging 18,208 fans per game, and tournament games on ESPN and TNT saw a 26% increase compared to last season. And with media deals coming up, it is easy to see the tournament as a standalone piece of inventory for Apple or Amazon to take over.
Yes, the courts were gaudy and the rules seemed hard to understand. But the NBA tried something new and different: to make November and early December matter more, even if it was incremental.
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6. What I’m thinking of the problems with NFL officiating…
Sunday night’s game, which had an uplifting result for this Packers fan and former employee, featured some truly questionable referee calls that negatively affected both teams. Although those calls stood out in that nationally televised game, it was just one of many NFL games this season where the officials were, unfortunately, part of the game story.
With so many eyeballs and media on the NFL, this storyline has become a constant and negative one for the league yet, of course, no one is turning off the games because of it.
Brandt’s Stance: Some continue to suggest a way to improve is to make the officials full-time. That is not going to happen. The officials don’t want to give up their full-time jobs, and the NFL does not want to pay them to do so. And, of course, what exactly are the referees supposed to do for seven months of the year?
The other issue is technology, and I still don’t understand why there is not more of this. In 2023, the NFL is still measuring first downs the way they did in 1973, with two guys holding two sticks and a chain (and sometimes a notecard).
As a tennis fan, I have often remarked how most tournaments now don’t even have linesmen, as all calls are electronic. I do not know how much of that could be implemented in the NFL, but smarter people in this space certainly do. There have to be improvements with chips, lines, satellites, etc. that would take some of the “human” out of human error. And maybe, like tennis, the day will come with only one or two officials out there with the players, instead of the current 10 or 12.
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8. What quote I wish I said: (I am proudly number 3):
“The three stages of career development are:
1. I want to be in the meeting.
2. I want to run the meeting.
3. I want to avoid meetings.”
– Jay Ferro
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