Forget Those Small-Market Dollars and Come to New York

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The New York Sun

Suppose Nassau County had offered New Orleans Hornets owner George Shinn the same financial package he received from Oklahoma City in order to move the franchise there this season. The Hornets owner is not paying rent at that city’s arena, the Ford Center, which was funded by taxpayers, and virtually all of his franchise’s expenses are being picked up by the city. Additionally, Oklahoma City elected officials and business leaders have guaranteed Shinn up to $10 million if the Hornets’ arena and local TV revenues are less than what Shinn generated in New Orleans last year.


Would the National Basketball Association have allowed the Hornets to relocate, at least temporarily, to the Nassau Coliseum on Long Island?


The answer is no, but in reality there is nothing that could have stopped Nassau County and Shinn from completing a deal. If Saints owner Tom Benson wanted to use the Meadowlands for New Orleans Saints games and cut a deal with New Jersey officials, the National Football League could not stop him.


New York won’t get a third Major League Baseball team unless the U.S. Supreme Court or Congress overturn the 1922 Supreme Court decision that gave MLB an anti-trust exemption. Major League owners have a different set of business rules and can act with monopoly powers. The Mets and Yankees can block any move. But neither the NBA nor the NHL nor the NFL has that exemption. Therefore, it is possible that the New York City/New Jersey/Connecticut market could add another NHL team, say in Brooklyn, two NBA teams, say in New Jersey and Long Island, and an NFL team.


The San Diego Clippers ended up in Los Angeles in 1984 despite the NBA’s best efforts to block the move. And Raiders owner Al Davis beat the NFL in court when the league attempted to stop his move from Oakland to L.A. in 1982.


The late John McMullen purchased the National Hockey League’s Colorado Rockies that same year with the intention of moving the team to New Jersey even though the league already had two New York-area teams. He simply paid off the Rangers, Islanders, and Philadelphia Flyers, and set up shop within their territories.


Right now, New York and New Jersey are in the midst of the biggest sports construction projects in local sports history. The Yankees and Mets are building new stadiums; the Nets are moving to Brooklyn, where owner Bruce Ratner is putting up an arena, and Devils owner Jeffrey Vanderbeek is taking his team to Newark in three years, just in time for Ratner and the Nets to vacate the Meadowlands.


With the Nets moving to Brooklyn, what’s stopping New Jersey officials from contacting NBA owners like Orlando’s Rich DeVos, Milwaukee’s Herb Kohl, the Maloof Brothers of Sacramento, or the Hornets’ Shinn to try to get them to move to the Garden State?


Nothing. In fact, New Jersey has the one thing available that Orlando, Milwaukee, Sacramento, New Orleans, Oklahoma City, Kansas City, Las Vegas, Louisville, and San Diego don’t have: a lucrative local cable TV contract.


Starting next spring, the Madison Square Garden Network, the YES Network, and the New York Mets-Comcast-Time Warner regional sports network will be competing. The Garden network has plenty of winter programming, but lacks a major summer presence as both the Yankees and Mets have entered the cable TV distribution and programming business. The Mets will not have a major winter programming presence. The YES Network has the Yankees and Nets.


Three networks and not enough programming to go around. That could give some financially struggling owner – say in Orlando, Sacramento, New Orleans, or Milwaukee in the NBA; Pittsburgh in the NHL,or Minnesota and Oakland in baseball – something to ponder.


There is plenty of money in New York. The Yankees walked away from some $55 million a year in cable TV money from Knicks and Rangers owner Charles Dolan and the Garden in 2000 to start a regional sports network. The Mets will say goodbye to Dolan and his big rights fee at season’s end to start a regional sports network.


Presumably, Dolan’s money would still be available if A’s owner Lewis Wolff or New York City art dealer and Florida Marlins owner Jeffrey Loria or Twins owner Carl Pohlad decide that they’re interested in moving to the New York City area.


Islanders owner Charles Wang, who thought he had a deal to renovate the Nassau Coliseum and the 72 acres that surround the building, has made no secret of his desire to own an NBA team. Wang, who may be playing Nassau County against Suffolk County in the “arena game,” needs an NBA team to fill dates in either a renovated Coliseum or a Suffolk arena. He would also need a TV deal, and the new Mets network has plenty of winter availability.


Ratner may want an NHL team in his building. The Mets network has plenty of availability. Newark may want an NBA team in its new building. Again, the Mets network has plenty of availability.


It all fits into the new paradigm of sports, which is simple: A franchise needs three components for success: 1) a partnership with city and state government to build an arena/stadium or provide land and tax breaks and incentives for a team owner to build one himself, 2) a large cable TV contract, and 3) corporate support. The Yankees and Mets have all three. Bruce Ratner has two of the three – government and cable TV – as he moves into Brooklyn. Dolan owns the Knicks and Rangers, owns the cable company, and has corporate support. Wang has the TV contract and might have government support in Nassau County if a deal can be struck.


Could the New York area support a third NBA team or a fourth NHL team? The answer is yes. Within three years, arena operators in Newark, Brooklyn, and perhaps Long Island are going to be looking for teams to fill dates and generate additional arena revenue. The NBA and NHL would probably try to dissuade owners from even thinking about moving to New York because there are already three NHL and two NBA teams along with two Big East basketball-playing schools going after the same corporate and TV dollars, but both leagues would be powerless to stop an owner if that owner really wanted to move his business to the city, Long Island, or New Jersey.


To everyone but the fans, sports is a business, a way to make lots of money. Team owners are businessmen first and foremost, and when push comes to shove, they’ll take their chances in the financially lucrative New York market over competing for whatever dollars are available in small cities any day.


The New York Sun

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