CHAPTER 4
PROFESSIONAL TEAM SPORTS

For decades baseball, football, basketball, and hockey have been considered the four major professional team sports in the United States. Even though other sports, such as auto racing and soccer, are gaining ground in terms of popularity and hockey is struggling to maintain its status, it most likely will be some time before major league sports in the United States means anything other than the four core sports.

Besides being popular spectator events, professional league sports are also major industries that generate huge amounts of money—for team owners and managers, companies that sponsor teams, equipment and athletic gear manufacturers, and the athletes themselves.

MAJOR LEAGUE BASEBALL

Major League Baseball (MLB) is no longer as popular as professional football and is losing ground to other sports (particularly auto racing), yet it remains firmly ingrained in the American imagination, retaining the title of "national pastime." In 2004, 2005, and 2007 two teams with long histories of futility, the Boston Red Sox and the Chicago White Sox, saw World Series victories. Their success evoked an emotional response in fans across the United States and seemed to spark renewed interest in a sport that has had more than its share of bad publicity since the 1990s, mostly because of steroid scandals. Baseball's steroid problem was magnified in 2007, as Barry Bonds (1964–), the player most closely associated with the scandal, approached the all-time home-run record held by Hank Aaron (1934–) since 1974. Bonds broke Aaron's record on August 7, 2007, eliciting an ambivalent response from fans and the national media. It remains to be seen if the renewed interest in baseball will translate into long-term gains in attendance and television viewership in the face of stiff competition from other sports, old and new.

MLB Structure and Administration

As of 2007 MLB consisted of thirty teams. (See Table 4.1.) These teams are divided into two leagues: sixteen in the National League and fourteen in the American League. Each of these leagues is further split into three divisions—East, Central, and West—that are loosely based on geography. The MLB season normally runs from early April through late September and consists of 162 games. This season length was established in 1961, before which teams played a 154-game schedule. Most games are played against teams within each league, though not necessarily within each own division.

Following the regular season, the champions of each division (three teams in each league) plus a wild-card team—the team with the best record among those not winning their division—from each league compete in the playoffs. The playoffs consist of three rounds: two best-of-five Division Series in each league; a best-of-seven Championship Series in each league; and finally the World Series, a best-of-seven game series between the champions of each league to determine the major league champion team.

According to Plunkett Research, in "Sports Industry Overview" (2007, http://www.plunkettresearch.com/Industries/Sports/SportsStatistics/tabid/273/Default.aspx), MLB took in $5.2 billion in revenue in 2006. The average player salary was $2.7 million. Table 4.2 shows the latest team values and revenue figures for each MLB team. The SportsBusiness Journal (2007, http://www.sportsbusinessjournal.com/index.cfm?fuseaction=page.feature&featureId=43) estimates that of the $10.5 billion worth of officially licensed sports merchandise sold annually, from banners to bobbleheads, $2.3 billion is spent on goods licensed by MLB and its member teams, second only to the NFL among the major sport leagues. Technically speaking, "Major League Baseball" refers to the entity that operates the National and American Leagues,

the two top professional baseball leagues in North America. MLB operates these two leagues under a joint organizational structure that was established in 1920 with the creation of the Major League Constitution. This constitution has been overhauled many times since then. MLB team owners appoint a commissioner, under whose direction MLB hires and maintains umpiring crews, negotiates marketing and television deals, and establishes labor agreements with the MLB Players Association.

MLB maintains a level of control over baseball that is somewhat unique among the major sports. This comes as a result of a 1922 U.S. Supreme Court decision in which baseball was deemed not to be "interstate commerce" and therefore not subject to federal antitrust law. Consequently, MLB is allowed to operate in monopolistic ways that would not be legal in most other industries. This privileged status allowed baseball to stave off player free agency (a professional athlete who is free to sign a contract with any team), and the high salaries that accompanied it, until the mid-1970s.

MLB History

The first professional baseball team was the Cincinnati Red Stockings, founded in 1869. That year the team—which still exists as the Cincinnati Reds—embarked on a fifty-seven-game national tour and went undefeated against local amateur teams. Their success led in 1871 to the creation of the first professional baseball league, the nine-team, eight-city National Association of Professional Baseball Players. Various other competing leagues were formed over the next decade, including a

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precursor to the modern National League. The American League was founded in 1901. The champions of the American and National Leagues faced off in what became the first World Series in 1903. The popularity of professional baseball continued to grow over the next several years. A crisis unfolded in 1919, when several members of the Chicago White Sox were paid by gamblers to throw the World Series, in the so-called Black Sox scandal. In the wake of the scandal, club owners hired baseball's first commissioner, Kenesaw Landis (1866–1944), to clean up the game. As of 2007 the commissioner was Allan H. Selig (1934–), a founder of the Milwaukee Brewers. Selig, the ninth commissioner in MLB history, was appointed to the post by the team owners in 1998.

Baseball's golden era took place between the two world wars, marked by the rise of such all-time greats as Babe Ruth (1895–1948), Ty Cobb (1886–1961), andLou Gehrig (1903–1941). The major leagues survived the Great Depression (1929–1939) by introducing night games, which soon became the norm for games played during the week; weekend games were still played during the day. From its beginnings through World War II (1939–1945), MLB was racially segregated. That changed in 1947, when the African-American player Jackie Robinson (1919–1972) joined the Brooklyn Dodgers. Such legends as Willie Mays (1931–) and Hank Aaron followed over the next decade, and by the middle of the 1950s black players were fairly common on major league rosters. More recently, the number of African-American players in baseball has plummeted, as young African-American athletes have flocked to other sports. The 2005 World Series roster of the Houston Astros did not include a single black player; it was the first team to compete for the MLB championship without an African-American player in half a century.

After fifty years of stability, the 1950s brought changes to MLB in response to demographic shifts in the United States. The Boston Braves moved to Milwaukee in 1953. Two New York teams moved to the West Coast in 1957: the Brooklyn Dodgers departing for Los Angeles and the New York Giants to San Francisco.

Baseball started losing fans, especially younger ones, in big numbers during the 1960s and 1970s as labor conflicts and other challenges plagued the sport. In 1966 the MLB Players Association was formed. The association's main goal was to end the reserve clause, a contractual provision that essentially gave teams ownership of players, meaning they were bound to a particular team until they were traded or released. The reserve clause was finally overturned in 1975, ushering in the era of free agency in baseball, wherein players were free to negotiate with any team they wanted once their existing contract had expired. Labor squabbles continued over the next twenty years, and parts of several seasons were lost to work stoppages. The worst of these took place in 1994, when the final third of the season, including the World Series, was canceled.

The sport survived in spite of these distractions, however, thanks partly to a handful of individual accomplishments. These included Cal Ripken Jr.'s (1960–) destruction of Gehrig's long-standing record for consecutive games played, and Mark McGwire's (1963–) and Sammy Sosa's (1968–) 1998 competition to break the record for home runs in a season—a record that was broken again by Bonds just three years later. Unfortunately, enthusiasm over these feats has since been muted by ongoing scandals involving performance-enhancing drugs, which call into question the validity of the exploits of Bonds, McGwire, Sosa, and others who just a few years earlier had been credited with reviving public interest in the sport.

The Labor History of MLB: Players versus Owners

MLB's first major strike took place in 1981, as owners sought to blunt the impact of free agency. Team owners wanted to receive compensation when one of their players was signed by another team. The players went on strike in protest, and more than seven hundred games were canceled before the two sides agreed on a limited form of compensation for free-agent signings.

In 1990 owners proposed a sort of salary cap and the elimination of the arbitration system in place for resolving salary disputes. A thirty-two-day lockout ensued, resulting in the cancellation of spring training that year. The owners finally dropped their demands, and the full regular season took place, though its start was postponed by one week.

In "The Baseball Strike of 1994–95" (Monthly Labor Review, March 1997), Paul D. Staudohar reports that in June 1994 the owners proposed a salary cap that would have limited the players to 50% of total industry revenues. This represented a pay cut of about 15% for the players; not surprisingly, they declined the offer and went on strike in August. This strike resulted in the cancellation of the 1994 postseason, including the World Series. A ruling by the federal judge Sonia Sotomayor (1954–) ended the strike in March 1995. The 1995 and 1996 seasons were played under the terms of the expired contract.

In 2002 MLB appeared to be on the brink of another strike, the causes of which were mainly rooted in imbalances between teams in large and small markets that resulted in some financial disparities. The team owners lobbied for salary caps, but the players were understandably opposed to this. Instead, the owners came up with the idea of a luxury tax, which would be imposed on any team that spent more than a predetermined amount on player salaries. A strike was thus averted. The impact of the luxury tax, however, has been questionable. The New York Yankees, for example, have continued to spend vast sums to lure top players; in 2005 the Yankees became the first team in the history of sports to spend more than $200 million on salaries in a season. According to Barry M. Bloom, in "Yanks, Red Sox Hit with Luxury Tax Bills" (December 21, 2005, http://mlb.mlb.com/content/printer_friendly/mlb/y2005/m12/d21/c1286225.jsp), this was about $80 million over the luxury tax threshold, triggering a $34 million tax bill for team owner George Steinbrenner. The article "Yankees Hit with $26 Million Luxury Tax" (December 22, 2006, http://www.sportingnews.com/yourturn/viewtopic.php?p=1477875) indicates that the Yankees were billed another $26 million in December 2006. By contrast, only one other team, the Boston Red Sox, had to pay the luxury tax in 2006, so the tax is generally believed to work as a deterrent to reckless spending for most teams. However, the fines do not seem to have deterred big spending on the part of the Yankees organization. Among the highest paid MLB players in 2007, only three were paid more than $20 million per year, and all three—Jason Giambi (1971–), Alex Rodriguez (1975–), and Derek Jeter (1974–)—played for the Yankees (USA Today Salaries Databases, 2007, http://asp.usatoday.com/sports/baseball/salaries/top25.aspx?year=2007).

The other part of the 2002 deal was increased revenue sharing, meaning a greater share of each team's revenue was put into a pot to be divided among the entire major leagues. The biggest difference between baseball's revenue sharing system and football's is that baseball teams earn significant revenue from local television broadcasts, whereas almost all football coverage is national. MLB's 2002 contract brought a sharp increase in the amount of local revenue that teams must share. The 2002 collective bargaining agreement ran through the 2006 season; a new agreement, signed in the fall of 2006 and running through the 2011 season, preserved the luxury tax and revenue sharing systems with only minor alterations.

Current Issues in Baseball

One of the most critical issues facing baseball is how to respond to recent revelations of the rampant use of performance-enhancing drugs among top players (see Chapter 9 for more detailed information). As news has come to light about the use of steroids and other substances by some of the players credited with reviving the sport during the 1990s, professional baseball's credibility has come under fire. Important questions inevitably arise, such as how to account for records broken by players who were probably using banned substances. Bonds's eclipse in 2007 of one of the sport's most venerable records has brought this question to the fore. The ability of the league to handle such questions in a way that satisfies disgruntled fans will have a huge impact on the future of professional baseball in the United States.

NATIONAL FOOTBALL LEAGUE

The National Football League (NFL) is the premier U.S. professional football league. The United States is the only place where the term football refers to the game played by NFL teams; in most other parts of the world, this term refers to soccer. In "Sports Industry Overview," Plunkett Research estimates that the NFL's total league-wide revenue was $5.9 billion in 2006, and the average player earned a salary of $1.4 million. According to SportsBusiness Journal, sales of merchandise licensed by the NFL or its teams total $2.5 billion per year, the highest among the major sports. Table 4.3 shows current team values and revenue.

Figure 4.1 shows the gradual growth between 1998 and 2005 in the percentage of Americans who identify themselves as fans of professional football. The NFL's

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success can be credited in part to breakthroughs in the 1960s and 1970s in packaging the sport for television. No other sport has managed to capture the kind of spectacle that NFL broadcasts generate. The league has also benefited from labor relations that have been relatively stable, compared to those of the other major sports (a state some commentators attribute to the fact that the NFL Players Association is weak and ineffectual when compared to the unions in other sports). The NFL's revenue-sharing system is also generally considered the best among the major sports in terms of keeping small-market teams competitive.

NFL Structure and Administration

As of 2007 there were thirty-two teams in the NFL, sixteen each in the National and American Football Conferences. (See Table 4.4.) Each conference is divided into four divisions: East, North, South, and West, and each division has four teams. NFL teams play a sixteen-game regular season, which begins the weekend of Labor Day. Each team also has a bye weekend (no games are played)

during the season; therefore, the full regular season lasts seventeen weeks. Sunday afternoons have long been the traditional time for professional football games. The exceptions have been one game per week on Sunday night and one on Monday night, although in recent years the league has begun scheduling occasional games on Thursday nights as well.

At the end of the regular season, six teams from each conference qualify for the playoffs: the four division champions and two wild-card teams (those with the best record that did not win their division). The champions of the two conferences square off in the Super Bowl. For much of its history, the Super Bowl has taken place in January; however, since 2002 it has been played in early February.

In the NFL revenue from television contracts and product licensing is shared equally among the teams. The idea behind this approach is to create parity, in contrast to MLB, where teams located in larger markets generally have a lot more money to spend than their rivals in smaller markets. Football teams also split money from ticket sales. Generally, the home team gets 60% of the money from the gate and the visiting team gets 40%. The exception is luxury boxes; the home team gets to keep all the money from selling its luxury box seating to corporations and other wealthy customers. This is one of the main reasons so many teams have been campaigning for new stadiums containing fewer regular seats and more premium boxes. Owners of teams that generate more money find the NFL's revenue-sharing system unfair, arguing that teams that draw more fans and sell more merchandise should benefit the most. Others contend that if revenue sharing is abolished, the NFL as a whole will suffer as team records begin to reflect the disparity between wealthier teams and those that generate less money.

The NFL is administered by the Office of the Commissioner. The first commissioner of the NFL was Elmer Layden (1903–1973), who had been a star player and later a coach at the University of Notre Dame. Layden held the post from 1941 until 1946, guiding the league through the difficult years of World War II, when most able-bodied American men had either joined or were drafted into the armed services. Layden was succeeded by Bert Bell (1895–1959), the cofounder of the Philadelphia Eagles. Under Bell, whose term as commissioner lasted until his death in 1959, NFL attendance grew every year. Bell is famous for his oft-quoted statement, "On any given Sunday, any team can beat any other team."

However, it was Bell's successor, Pete Rozelle (1926–1996), who led the league through its period of dramatic growth in the 1960s and 1970s. Rozelle introduced the concept of long-term network broadcast contracts and applied sophisticated marketing techniques to sell the NFL brand to the American public. Rozelle over-saw the merger between the American Football League (AFL) and the NFL and guided the league to what is generally considered a victory over the players' union during the 1987 labor strike. Rozelle retired in 1989 and was replaced by Paul Tagliabue (1940–). Under Tagliabue the NFL was marked by a great deal of team movement between cities, as owners sought to maximize the revenue they could generate from the sale of stadium naming rights and luxury skybox seating. Under Tagliabue the NFL largely avoided the labor disputes that have plagued the other major sports. Tagliabue retired after the 2005 season and was replaced by Roger Goodell (1959–). One of the key issues the commissioner must deal with before 2010 is the future of the NFL's revenue-sharing system, a debate that may pit owners of big-market teams against owners of teams who play in less populous cities.

NFL History

The NFL came to life in 1920 as the American Professional Football Association (APFA). The league adopted its current name two years later, but professional football actually dates back to 1892, when a Pittsburgh club paid Pudge Heffelfinger (1867–1954) $500 to play in a game.

The APFA—which was based in a Canton, Ohio, automobile dealership—consisted of eleven teams, all but one of them located in the Midwest. In its original form, the APFA was not really a league in the modern sense; it was essentially an agreement among member teams not to steal players from each other. Even though professional football remained secondary to the college version in its early years, it gradually gained in popularity when former college stars such as Red Grange (1903–1991) and Benny Friedman (1906–1982) turned professional. An annual championship game was established in 1933. By this time, most of the league's teams, with the notable exception of the Green Bay Packers, had left the small towns of their birth for bigger cities.

Professional football began to challenge college football's dominance in the years following World War II, as a faster-paced, higher-scoring style drew new fans. The NFL expanded to the West Coast in 1945, when the Cleveland Rams relocated to Los Angeles. By the 1950s professional football was firmly entrenched as a major sport in the United States, as television effectively captured the heroics of such glamorous stars as Bobby Layne (1926–1986), Paul Hornung (1935–), and Johnny Unitas (1933–2002). The explosive growth of professional football led to the creation of a rival league, the AFL, in 1960, resulting in a costly bidding war for the services of top players. By the mid-1960s professional football had eclipsed baseball as the nation's favorite sport. In 1970 the two football leagues merged. The AFL's ten teams plus three NFL teams became the American Football Conference; the remaining thirteen NFL teams became the National Football Conference. The champions of the two conferences would meet in the newly created Super Bowl to determine the world champion of professional football.

The NFL was the biggest spectator sport in the United States during the 1970s and 1980s. In most years the Super Bowl was the most watched television show of any kind, and Monday Night Football set a new standard for sports broadcasting with its innovative mixture of sports and entertainment. Since the 1990s the popularity of football has spread internationally. In 1993 the NFL launched the World League of American Football, whose name was changed to NFL Europe in 1997. NFL Europe, with teams in Germany and the Netherlands, served as a sort of development league in which a player's skills can be honed to reach NFL standards. In June 2007 the NFL abruptly announced that it was shutting down NFL Europe, but interest in the sport continues to grow in Europe.

Labor Disputes in the NFL

The NFL Players Union was formed in 1956, when players on the Green Bay Packers and Cleveland Browns utilized a collective approach to demand minimum salaries, team-paid uniforms and equipment, and other benefits from owners. The owners refused to respond to any of these demands. The union threatened to sue, a threat strengthened by Radovich v. National Football League (352 U.S. 445, 1957), in which the Supreme Court ruled that the NFL did not enjoy the same special status as MLB did with regard to antitrust laws. The owners eventually gave in to most of the players' demands but did not formally recognize the union for collective bargaining purposes. The NFL Players Association (NFLPA), as it was by then named, did not become the official bargaining agent for players until 1968, following a brief lockout and strike.

After the merger of the NFL and AFL, the NFLPA focused on antitrust litigation that challenged the so-called Rozelle Rule, which required a team signing a free agent to compensate the team losing the player, thereby severely limiting players' ability to benefit from free agency. The union succeeded in getting the Rozelle Rule eliminated in 1977.

When the NFLPA went on strike for a month in 1987, the owners responded by carrying on with the schedule using replacement players and a handful of veterans who chose to cross the picket line. With support weakening, the union ended its strike in October 1987. Free agency finally came to the NFL in 1992, and this was balanced by the introduction of salary caps during the mid-1990s. The NFL has experienced relatively smooth labor relations since then. The current collective bargaining agreement, which was renewed in March 2006, is active through the 2011 season.

Unlike MLB and the National Basketball Association (NBA), the NFL has a hard salary cap, meaning teams cannot spend more than a specified amount on salaries under any circumstances. For players and their union, free agency is considered an acceptable trade-off for the introduction of salary caps. With each new contract, the size of the salary cap is a subject of intense negotiation, but to date there have not been any work stoppages over it. Salary caps are considered an important way to ensure competition across the league: they stop the large-market teams from buying their way to the Super Bowl, and they give smaller-market teams such as Kansas City, Cincinnati, and Green Bay the ability to afford high-performing players.

Studies in sports economics show a strong correlation between total team salary and winning percentage. In "Buying Success: Relationships between Team Performance and Wage Bills in the U.S. and European Sports Leagues" (Rodney Fort and John Fizel, eds., International Sports Economics Comparisons, 2004), Robert Simmons and David Forrest analyze salary and percentages of wins of seven professional sports leagues in the 1980s and 1990s—three European soccer leagues, MLB, the National Hockey League (NHL), NBA, and the NFL. The results showed that, in general, a higher overall team salary was associated with a greater likelihood of higher point scoring (in the European leagues) and of entering playoffs (in the North American leagues). Salary caps were invented precisely to mitigate this effect, and by and large they have been effective at balancing the wealth within leagues. The NFL's cap is the "hardest" (it has the fewest loopholes), and as such has had the biggest balancing effect. Of course, wealth parity does not always translate into winning percentage parity, because there are so many other variables involved, such as whether management makes good decisions about how to distribute its limited payroll.

In recent years greater attention has been on the well-being of former players suffering from physical problems resulting from the pounding their bodies took during their active playing careers. Many players with disabilities severe enough to prevent them from working have faced financial hardships besides physical pain. One story that received a great deal of media attention is the case of Mike Webster (1952–2002), a Hall of Fame–caliber player for the Pittsburgh Steelers. Webster died homeless and destitute at the age of fifty after years of drug addiction and dementia that he believed was caused by the many concussions he suffered during his seventeen-year career. The NFL denied that Webster's injuries were football-related and withheld assistance. A court later ordered the league to pay Webster's estate more than $1 million.

In June 2007 congressional hearings revealed an NFL disability compensation system that had performed poorly, providing assistance to a shockingly low number of former players who had suffered debilitating injuries, ranging from multiple concussions to severe arthritis necessitating joint replacement. In 2007, in response to this problem, a number of former players—led by Jerry Kramer (1936–) and Mike Ditka (1939–)—formed the Gridiron Greats Assistance Fund (http://gridirongreats.org/), a nonprofit foundation that provides financial assistance to indigent former players who need help with medical or domestic issues.

NATIONAL BASKETBALL ASSOCIATION

Professional basketball has changed drastically since its early days; in fact, its evolution has perhaps been more pronounced than that of any other major sport—in dress, style of play, and, most noticeably, the racial composition of teams. Once a sport that featured white men in close-fitting uniforms hoisting up set shots from chest level, by the late twentieth century basketball was largely an African-American phenomenon, featuring loose-fitting fashions, a hip-hop sensibility, and an emphasis on the shortest-range shot of all: the slam dunk. Even though a sport such as hockey, for example, has always been dominated by white fans and players, basketball's racial shift has

led to an identity crisis of sorts, with the issue of race becoming a major feature of discussion about the game.

NBA Structure and Administration

The thirty-team NBA is divided into two conferences: the Eastern Conference, which consists of the Atlantic, Central, and Southeast Divisions; and the Western Conference, which consists of the Northwest, Pacific, and Southwest Divisions. (See Table 4.5.) Each division contains five teams.

The NBA regular season begins in early November. A season consists of eighty-two games for each team, divided evenly between home and away games. Teams play each of the other teams in their own division four times per season; they play teams in the other divisions of their own conference three or four times, and they play teams in the other conference twice each. The NBA is currently the only one of the major sports leagues in which all teams play each other over the course of the regular season.

The NBA Playoffs begin in late April. Eight teams from each conference qualify: the winners of each of the three divisions plus the five teams with the next best records. Each round of the playoffs is a best-of-seven series. The third round of the playoffs is for the Conference Championship, and the winners of these two series compete against each other in the NBA Finals, the winner receiving the Larry O'Brien Trophy.

Plunkett Research reports in "Sports Industry Overview" that the NBA generated a total of $3.1 billion in revenue during the 2006–07 season. SportsBusiness Journal estimates that sales of NBA-licensed merchandise

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brings in approximately $1 billion per year. With such revenue teams can afford to pay high salaries. The average player salary was $5.2 million during the 2006–07 season, the highest among the major sports in the United States. In addition, as of 2006, twenty-one NBA players, the most in any professional sport, earned salaries greater than $15 million per year, according to the USA Today Salaries Databases (http://asp.usatoday.com/sports/football/nfl/salaries/top25.aspx?year=2006). Table 4.6 shows the current values of NBA teams and their most recent revenue figures.

NBA History

Basketball was invented in 1891 by James Naismith (1861–1939), a Canadian physical education instructor and physician. Working at a Young Men's Christian Association (YMCA) in Springfield, Massachusetts, Naismith was directed by the head of the physical education department to create an indoor athletic game that would keep a class of young men occupied during the winter months. In two weeks Naismith had developed the game, including the original thirteen rules of basketball. Among them: "A player cannot run with the ball" and "The referee shall be judge of the ball and shall decide when the ball is in play, in bounds, to which side it belongs, and shall keep the time." Even though he never sought recognition for his invention, Naismith was present at the 1936 Olympic Games in Berlin, Germany, basketball's first appearance as an Olympic event.

Basketball was first played professionally in 1896, when members of a YMCA team in Trenton, New Jersey, left to form a squad that would play for money. Two years later a group of New Jersey sports journalists founded the National Basketball League (NBL), which consisted of six teams based in Pennsylvania and New Jersey. The NBL petered out after several years, but in the mid-1930s a new league with the same name was founded. A second professional league, the Basketball Association of America (BAA), was formed by a group of New York entrepreneurs. The BAA, which was in direct competition against the NBL, had teams in New York, Boston, Philadelphia, Chicago, and Detroit. Right before the start of the 1948–49 season, four NBL teams—Minneapolis, Rochester, Fort Wayne, and Indianapolis—joined the BAA, and the following year the NBL's six surviving teams followed suit. The BAA was then divided into three divisions and renamed the National Basketball Association. One division was eliminated the following year, leaving the two that became the forerunners of the modern Eastern and Western Conferences of the NBA.

The NBA had no competition for the next two decades. That changed in 1967 with the formation of the American Basketball Association (ABA). The ABA lured fans, and quite a few players, away from the NBA with a flashier style of play that featured a red, white, and blue ball. The ABA disbanded in 1976, and several of its teams became part of the NBA. However, by the late 1970s professional basketball's popularity was sagging. Revenue and television ratings were down, and the game had become dull. The league received a huge boost with the emergence of two new stars: Magic Johnson (1959–) of the Los Angeles Lakers and Larry Bird (1956–) of the Boston Celtics, who together are credited with ushering in a new era of popularity and prosperity to the NBA. Behind Johnson and Bird, the Lakers and Celtics completely dominated the NBA through the 1980s. During the 1990s the game was dominated by Michael Jordan (1963–) and the Chicago Bulls. With the charismatic Jordan leading the way, the NBA continued to thrive through most of the decade.

After the 1997–98 season, tensions between players and owners began to heighten, as the salary cap and other issues came to a head. The owners instituted a player lockout, and the two sides did not reach an agreement until January 1999, by which time more than a third of the regular season had been canceled.

At the turn of the twenty-first century there was a dramatic increase in the number of foreign-born players in the NBA. The U.S. Olympic basketball team's mediocre performance in 2004 demonstrated that the rest of the world was starting to catch up with the United States in terms of basketball talent. Players from Europe appeared to have a better grounding in basketball fundamentals such as passing and long-range shooting. In "Solving USA Basketball's Long List of Problems" (September 6, 2002, http://espn.go.com/nba/columns/aldridge_david/1427992.html), David Aldridge notes that the top NBA coaches George Karl (1951–) and Larry Brown (1940–) (who coached the U.S. team to a bronze medal in the 2002 World Championships) have complained for years that there is less emphasis on skill development and fundamentals on U.S. teams than on teams in other countries. Bringing foreign-born players into the NBA is believed to be one possible solution to the problem. Tim Receveur notes in "Foreign Players Help San Antonio Win Basketball Championship" (June 19, 2007, http://usinfo.state.gov/xarchives/display.html?p=washfile-english&y=2007&m=June&x=20070619155528btrueveceR0.3644831&t=livefeeds/wf-latest.html) that in 2007 NBA rosters included eighty-five foreign-born players (about 20% of all league players) from thirty-seven different countries and territories. Some of them, including German-born Dirk Nowitzki (1978–) of the Dallas Mavericks, French-born Tony Parker (1982–) of the San Antonio Spurs, and Chinese-born Yao Ming (1980–) of the Houston Rockets, are among the best players in the league. In fact, the league's Most Valuable Player award was won by an individual born outside the United States for three straight years from 2005 to 2007—one by Nowitzki and two by the Canadian Steve Nash (1974–) of the Phoenix Suns.

Current Issues in the NBA

SALARY CAPS.

Basketball has a soft salary cap, meaning the amount a team can spend on salaries is limited, but there are loopholes and complications. As a result, there are still great disparities in how much the teams spend. For example, the article "NBA Salary Report" (Sports Illustrated, December 14, 2006) reports that the New York Knicks started the 2006–07 season with a payroll totaling $117 million, whereas the Charlotte Bobcats paid their players a total of $38 million. Table 4.7 shows the history of the NBA salary cap since 1984.

Beginning in the late 1980s it became increasingly common for top college players to leave school before graduating and enter the NBA draft. By the mid-1990s the best high school players were foregoing college altogether and moving straight into the professional ranks. The NBA has long sought to discourage players from making the jump from high school to the pros. Toward that end, in 1995 the league enacted a salary limit for rookies, in the hopes of making the move less enticing.

In June 2005, as another labor dispute seemed possible, the league and the players union reached a new collective bargaining agreement. In "The NBA's New Labor Deal: What It Means, Who It Impacts" (Sports-Business Journal, June 27, 2005), Liz Mullen and John Lombardo explain that the agreement's key provisions included a new rule preventing players from entering the NBA straight out of high school, increased drug testing, a 3% increase in the salary cap, and a reduction in the maximum length of free-agent contracts from seven to six years. This agreement remains in effect through the 2010–11 season.

MINIMUM AGE.

Among the issues addressed in the NBA's contract, the minimum age requirement generated the most public attention. This provision requires that a player be at least nineteen years old and be out of high school for at least one year. Proponents of age restrictions argue that allowing teens in the NBA does them a disservice and that they are much better off playing college basketball—even if it is just for a year—or playing in the NBA Developmental League than they are sitting on the end of an NBA team's bench rarely seeing significant playing time. They also say the NBA's skill level can become diluted with players who have not yet mastered the fundamentals of the game. According to the article "David Stern Media Conference" (April 12, 2004, http://www.insidehoops.com/stern-interview-041104.shtml), the NBA commissioner David Stern (1942–) has been the most vocal advocate of age limits, arguing that the presence of NBA recruiters in high school gyms has an overall negative influence on young players, that teens lack the maturity to handle the rigors of NBA life without getting into trouble, and that too many young urban Americans are unrealistically looking to basketball as a pathway out of poverty.

Opponents of the minimum age requirement point out that practicing every day against the best players in the world is not such a bad way to learn the game and wonder what young men can gain from waiting just one extra year before entering the professional league. In "Hunter Still Opposed to Raising NBA Age Limit" (USA Today, May 12, 2005), Chris Sheridan notes that Billy Hunter (1943–), the director of the NBA players' union, also questions the possible racial motivations behind the move toward age limits: "I'm still strongly philosophically opposed to it, and I can't understand why people think one is needed except for the fact that the NBA is viewed as a predominantly black sport. You don't see that outcry in other sports, and the arguments that have been in support of an age limit have been defeated."

RACE AND THE NBA.

The debate over teens in the NBA and its possible relation to race is related to the broader issue of public image. Because it is dominated by young African-American males, the NBA struggles with the image the league projects to a predominantly white American public. Some basketball executives, particularly Stern, express concern about the message sent by the appearance and behavior of certain players. The arrests of high-profile players on sexual assault, drugs, and weapons charges have not helped matters. According to Jeff Benedict, in Out of Bounds: Inside the NBA's Culture of Rape, Violence, and Crime (2004), a startling 40% of NBA players have police records, although, not surprisingly, the NBA disputes this claim. Interestingly, it is not the younger players who are getting in trouble the most. In "Illegal Defense: The Irrational Economics of Banning High School Players from the NBA Draft" (Virginia Sports and Entertainment Law Journal, vol. 3,2004), Michael A. McCann of the Mississippi College School of Law analyzes arrests of NBA players from 1995 to 2004 and finds that 57.1% of the NBA players arrested actually went to college for four years. Another17.9% of the arrested players went to college for three years. Only 4.8% of those arrested did not go to college at all.

Nonetheless, the question of public image persists. As one way of addressing the image problem, Stern announced in October 2005 a new dress code that would apply to all players when they are participating in NBA-related activities, including arriving at and leaving games, participating in interviews, and making promotional appearances. The new rules banned sleeveless shirts, shorts, T-shirts, chains or medallions worn over the clothes, sunglasses while indoors, and headphones (except on a team bus or plane or in the locker room). The code also required players to wear a sport coat when on the bench but not in uniform. Reactions to the code among players were at best mixed. Some players applauded the league's effort to clean up the game's image. Others were outraged. According to the article "Spurs Superstar Tim Duncan Is Known to Be Understated and Shy, But Not about the NBA's New Dress Code" (FoxSports.com, October 20, 2005), Tim Duncan (1976–) of the San Antonio Spurs, a player often touted by the league as a model citizen, described the dress code as "basically retarded." The article "Pacers' Jackson: Dress Code Is 'Racist': Forward Wears Jewelry to Protest Rules, Which He Says Attacks Culture" (October 20, 2005, http://www.msnbc.msn.com/id/9730334/) reports that Stephen Jackson (1978–) of the Indiana Pacers openly accused the league of targeting black players. Jackson was particularly critical of the ban on wearing chains, noting that chains are associated with hip-hop culture and are a common fashion choice among young black men.

A new image problem for the NBA emerged in July 2007, when it was revealed that the veteran referee Tim Donaghy (1967–) was under investigation for allegedly betting on the outcome of NBA games, including games in which he had officiated. The following month he pleaded guilty to two felony charges, admitting that he personally bet on NBA games and that he provided inside information to associates about likely game outcomes.

WOMEN'S NATIONAL
BASKETBALL ASSOCIATION

The Women's National Basketball Association (WNBA) started play in June 1997 following the celebrated gold medal run of the U.S. women's basketball team in the 1996 Olympics. There had been other professional women's basketball leagues before, but the WNBA was launched with the full support of the NBA, making it much more viable than other upstart leagues. At its inception, the WNBA already had television deals in place with the National Broadcasting Corporation, the Entertainment and Sports Programming Network (ESPN), and Lifetime network.

In its first season, the WNBA had eight teams. By 1999 four more teams had joined the league. That year, players and the league signed the first collective bargaining agreement in the history of women's professional sports. Four more teams were added in 2000. Following the 2002 season, the league's ownership structure was changed. Before that, the NBA owned all the teams in the WNBA. In 2002, however, the NBA sold the women's teams either to their NBA counterparts in the same city or to outside parties. As a result of this restructuring, two teams moved to other cities and two teams folded. Another team dropped out after the 2003 season.

As of 2007, there were thirteen teams in the WNBA: six in the Eastern Conference and seven in the Western Conference. (See Table 4.8.) Each team plays a thirty-four-game regular-season schedule, with the top four teams in each conference competing in the playoffs. The first and second rounds of the playoffs are best-of-three series. The WNBA Finals are best of five. The WNBA season starts in the summer, when the NBA season ends.

Even though the WNBA has gained in popularity, it has not been a big financial success. Through 2006, the league had not yet turned a profit in any year, although league officials expressed optimism that 2007 would be the season in which the league finished in the black. Average attendance at WNBA games is only about half that of NBA games. Player salaries are much lower as well. In "Free Agency 101" (September 27, 2007, http://www.wnba.com/shock/news/freeagency101.html), the WNBA indicates that the maximum salary for a WNBA player was $93,000 in 2007; this figure was less than one-fourth the minimum salary for an NBA rookie.

NATIONAL HOCKEY LEAGUE

Even though professional hockey has a long and storied history in the United States, it is currently at a

This text has been suppressed due to author restrictions.

crossroads. Its popularity in the United States is declining, whereas other sports such as soccer and auto racing are eagerly courting disenchanted hockey fans. The cancellation of the 2004–05 NHL season because of a bitter labor dispute certainly did not help matters. Regardless, hockey is still big business. Plunkett Research notes in "Sports Industry Overview" that league-wide revenue in the NHL was about $2.2 billion during the 2006–07 season, less than half that of the NFL or MLB, and nearly a billion dollars less than the NBA, which has the same number of teams and games in a season. NHL players earn an average annual salary of $1.5 million. The SportsBusiness Journal estimates that sales of merchandise licensed by the NHL and member teams generate about $900 million annually, the lowest among the major sports. The values and recent revenue figures for NHL teams are shown in Table 4.9.

NHL Structure and Administration

The NHL is divided into the Eastern and Western Conferences. (See Table 4.10.) Each conference consists of three divisions, and each division has five teams. The Eastern Conference is split into the Northeast, Atlantic, and Southeast Divisions. The divisions that make up the Western Conference are the Northwest, Central, and Pacific. NHL teams play an eighty-two-game regular season, split evenly between home and away games. Before the 2004–05 lockout each team played all the others at least once during the season, but this is no longer the case. Teams now play ten games against opponents outside of their own conference, and forty games against teams in a different division within their own conference.

At the conclusion of the regular season, the champion of each division plus the five teams in each conference with the next best records compete in the Stanley Cup Playoffs. The structure is similar to that of the NBA: a single-elimination tournament consisting of four rounds of best-of-seven series, culminating in the Stanley Cup Finals, usually played in the late spring.

NHL History

Even though hockey in North America started in Canada, the first professional version of the game was launched in the United States. In 1904 the International Pro Hockey League was founded in the iron mining areas of Michigan's Upper Peninsula. That league lasted only a few years, but in 1910 a new league, the National Hockey Association (NHA), arose. The Pacific Coast League (PCL) was founded soon after the NHA. It was arranged that the champions of the two leagues would play a championship series, the winner gaining possession of the coveted Stanley Cup, a trophy named for Frederick A. Stanley (1841–1908), a former British governor-general of Canada.

World War I (1914–1918) put a temporary halt to the fledgling sport, but when the war ended professional hockey reorganized itself as the National Hockey League. At first the NHL was strictly a Canadian affair. The league initially consisted of five teams: Montreal Canadiens, Montreal Wanderers, Ottawa Senators, Quebec Bulldogs, and Toronto Arenas (later renamed the Maple Leafs). The first game took place in December 1917. The NHL expanded into the United States in the 1920s, adding the Boston Bruins in 1924; the New York Americans and Pittsburgh Pirates in 1925; and the New York Rangers, Chicago Blackhawks, and Detroit Cougars (which later became the Red Wings) in 1926. By the end of the 1930–31 season, there were ten teams in the NHL. The Depression and World War II took their toll on the league, however, and by its twenty-fifth birthday the NHL was reduced to six teams. Those six teams—the Canadiens, Maple Leafs, Red Wings, Bruins, Rangers, and Blackhawks—are commonly referred to, though not very accurately, as the "Original Six" of the NHL.

The NHL did not expand again until 1967, when six new teams were added, forming their own division. Two other franchises came on board three years later. In 1972 a new rival league, the World Hockey Association (WHA), was formed. In response, the NHL accelerated its own plans for expansion, adding four new teams over the next three years. This double-barreled expansion of professional hockey in North America diluted the pool of available players, however, and the quality of play suffered as a result. The WHA folded in 1979, and four of its teams joined the NHL. The league continued to expand over the next two decades, as league officials sought to follow demographic trends in the United States. The NHL reached its current total of thirty teams in 2000. Unfortunately, the league's southward and westward expansion has not been entirely successful, as interest is weak in warm-weather regions. Even though many Canadian towns have lost their teams to U.S. cities, and suffered economically as a result, a large percentage of Canadians remain diehard hockey fans. In "'Hockey Night' Features Flicks Instead of Sticks" (November 1, 2004, http://sports.espn.go.com/nhl/columns/story?id=1913770), Damien Cox notes that the television show Hockey Night in Canada is consistently the highest-rated Canadian-produced television program on Canadian television. In the United States, though, hockey is in danger of losing its major sport status.

Labor Issues in the NHL: A Season on Ice

In its long history the NHL has been interrupted only three times by labor strife. The first, a 1992 strike by the NHL Players Association (NHLPA), lasted only ten days, short enough for all missed games to be made up. A lockout at the start of the 1994–95 season was more disruptive. It lasted three months and resulted in the cancellation of thirty-six games, nearly half of the regular season.

With the 1995 deal moving toward its 2004 expiration date, negotiations between players and owners turned bitter. Unlike the 1994 lockout, which came at a time when the NHL was enjoying strong fan support and rising popularity, interest in the league had been waning for several years by 2004. As in other major sports, one of the biggest points of contention was proposed limits on the amount teams could spend on player salaries. The league proposed what it called cost certainty, which the players' union argued was just a fancy term for a salary cap. The union rejected the idea and instead proposed a luxury tax. Not surprisingly, the owners were opposed. The two sides failed to reach an agreement, and the entire 2004–05 season, from preseason training through the Stanley Cup Finals, was canceled—the first time a major sport had lost a whole season to labor unrest.

In July 2005 the NHLPA and the league finally agreed to the terms of a new collective bargaining agreement, which was published as the Collective Bargaining Agreement, 2005 (http://www.nhlpa.com/CBA/2005CBA.asp). The deal, which runs through the 2010–11 season, gives players 54% to 57% of league-wide revenues, depending on the total. The agreement includes a salary cap that tops out at about $39 million and enhances revenue sharing to help the smaller market teams remain competitive. It does not include a luxury tax.

Naturally, hockey fans across North America were greatly disappointed by the loss of an entire season. In response, the NHL took measures to try to lure fans—both those who had wandered away from the sport before the lockout and those who lost interest directly because of it—back. These measures included a handful of rule changes designed to speed up the pace of the game and increase scoring.

A bigger challenge to the NHL remains: making hockey popular in parts of the United States that do not have long-standing hockey traditions. The expansion that the league undertook in the last two decades of the twentieth century was focused primarily in the southern and southwestern regions of the United States, the very parts of the country experiencing rapid population growth. Even though this expansion strategy made sense at the time, to date it has not produced the expected new generation of hockey fans in these regions.

MAJOR LEAGUE SOCCER

Major League Soccer (MLS), the premier professional soccer league in the United States, was launched in

April 1996. MLS has a unique ownership and operating structure that is unlike those of other major U.S. sports leagues. Even though the other leagues are confederations of independent franchise owners, MLS has a single-entity structure, which allows investors to own a share of the league as well as individual teams.

As of the 2007 season, MLS consisted of thirteen teams that were divided into two conferences: Eastern and Western. (See Table 4.11.) Teams compete through a season that runs from April through the MLS Cup championship in November. Each team plays thirty regular-season games, four games against each opponent within their division, and two against nonconference opponents. With the addition of the San Jose Earthquake in 2008, this structure will likely be adjusted. The MLS Cup Playoffs begin in mid-October and culminate in the crowning of a new MLS Cup champion.

Plans to start up MLS were first announced in December 1993. Twenty-two cities submitted bids to secure teams, of which ten were selected. A player draft was conducted in February 1996. The league's first game took place a few months later. According to MLS (2007, http://ww2.mlsnet.com/about/), a full stadium of 31,683 spectators and a national ESPN viewing audience watched the San Jose Clash defeat the D.C. United.

Two additional teams were added in 1998. The following year the Columbus Crew built the first major league stadium ever constructed specifically for soccer in the United States. The Crew ended up leading the league in attendance for the year. In 2002 the league was forced to cut two teams for financial reasons, returning MLS to its original ten-team size. Two new teams were added in 2005, bringing the league to twelve teams once again. The addition of Toronto FC before the 2007 season made the league thirteen strong.

MLS is far more ethnically diverse than any of the traditional four major sports in the United States. MLS rosters during the 2006 season included ninety-two players born outside the United States, representing forty-four different countries. MLS has also played a huge role in preparing American players for greater impact on the international soccer scene.

Attempts to establish a women's professional soccer league in the United States have not met with great success. The Women's United Soccer Association, the first women's professional outdoor league to be sanctioned by U.S. Soccer, was launched in 2001. It featured stars from the popular 2000 U.S. Olympic team, including Mia Hamm (1972–), Brandi Chastain (1968–), and Julie Foudy (1971–). Faced with financial struggles, the association suspended operations in September 2003. In 2004 a new nonprofit organization, the Women's Soccer Initiative, was established with the goal of reviving women's professional soccer in the United States. In September 2007, with seven confirmed teams already in place, the Women's Soccer Initiative (http://wsii.typepad.com/) announced plans to relaunch a professional women's league in 2009.

DIVERSITY IN THE MAJOR SPORTS

Diversity has long been an issue in major league sports in the United States. MLB was all white until Jackie Robinson crossed the color line in 1947. Over the next few decades the number of prominent black ballplayers grew, and baseball took on the appearance of an inclusive sport (at least on the field; managerial jobs for African-Americans have always been scarce). However, the trend has reversed itself. Once again, MLB teams have few African-Americans on their rosters, although the number of Hispanic players has increased dramatically. Enrique Rojas reports in "Robinson Opened Door for Black Hispanics" (April 14, 2007, http://sports.espn.go.com/mlb/jackie/columns/story?id=2836488) that 210 players born in Latin American countries were on the 2007 opening-day rosters of MLB teams, more than a quarter of the league's total number of players. The percentage of foreign-born players was only 19% on opening day in 1997, according to the Associated Press, in "More Foreigners in Majors for Sixth Straight Year" (April 2, 2003, http://espn.go.com/mlb/news/2003/0402/1532956.html).

Concerns about diversity in professional sports extend beyond the playing field. Coaching and management opportunities have traditionally been limited for minorities, though this trend may be shifting. The University of Central Florida's Institute for Diversity and Ethics in Sport issues annual racial and gender report cards that examine the front office, support staff, playing, and coaching opportunities for women and minorities in football, basketball, baseball, and soccer at the professional and college levels. The most recent report, The 2006–07 Season Racial and Gender Report Card: National Basketball Association (May 9, 2007, http://www.bus.ucf.edu/sport/public/downloads/2006_NBA_RGRC_PR.pdf), by Richard Lapchick, gives top marks for racial diversity to the NBA, noting that during the 2006–07 season the league had twelve African-American head coaches, people of color in 15% of team vice president positions, and the only African-American team majority owner in professional sports (Robert Johnson [1946–], owner of the Charlotte Bobcats). For gender diversity, Richard Lap-chick reports in The 2006 Racial and Gender Report Card: Women's National Basketball Association (July 31, 2007, http://www.bus.ucf.edu/sport/public/downloads/2006_Racial_Gender_Report_Card_WNBA.pdf) that the WNBA outperformed all other sports, which is not surprising because it was the only professional sport analyzed that has female players.

THE STADIUM SCRAMBLE

Since the early 1990s there has been an unprecedented boom in the construction of new stadiums for U.S. sports teams. The main reason is that team owners believe that they can make more money selling skyboxes to wealthy corporate customers than they can by selling cheaper seats to the masses, and many older stadiums lack luxury accommodations. A skybox can sell for upward of $200,000 a season. Table 4.12 shows the typical cost of a luxury skybox at venues that host each of the major sports. An additional incentive is that the revenue from sales of these luxury skyboxes is exempt from the revenue-sharing formulas of both MLB and the NFL, meaning that teams get to keep all the money generated by skybox sales.

Owners have been further encouraged by the success of their peers in obtaining public funding for the construction of their new stadiums. A number of team owners have succeeded in securing public dollars for their new stadiums by threatening to move to a different city if the taxpayers did not foot the bill. Owners usually argue that a new stadium will generate additional tax revenue, as fans flock to the new facility and, so they claim, spend vast sums of money at nearby businesses. In "Stadium Subsidies Scalp the Public" (Boston Globe, March 27, 2000), Ralph Nader (1934–), a consumer advocate and former presidential candidate, claims that the economic benefits of taxpayer-subsidized stadium construction are

negligible, citing research that indicates no positive economic impact over the course of thirty years from twenty-seven out of thirty existing taxpayer-funded stadiums. Nevertheless, team owners have met with great success in selling their proposed public-financed stadium plans to lawmakers.

Another source of revenue from stadiums comes from the sale of naming rights. Where in the past most stadiums had straightforward names such as Tiger Stadium or the Houston Astrodome, in the twenty-first century an increasing number of facilities bear the name of a corporate sponsor that has paid millions of dollars for the privilege. The following are only three out of several examples that Revenues from Sports Venues cites in Free Venue Information (August 27, 2007, http://www.sportsvenues.com/pdf/names.pdf):

• Comerica Park in Detroit, home of MLB's Detroit Tigers ($66 million for thirty years)
• San Francisco's 3Com Park, where the San Francisco Giants play baseball ($4 million for five years)
• American Airlines Center in Dallas, home of both basketball's Mavericks and hockey's Stars ($195 million for thirty years)

Sometimes these deals backfire. Darren Rovell reports in "Astros Stuck with Enron Name—For Now" (January 25, 2002, http://espn.go.com/sportsbusiness/s/2002/0124/1316712.html) that in 1999 Enron, a U.S. energy company, signed a thirty-year, $100 million deal with the Houston Astros. In 2001 Enron filed for bankruptcy following an accounting scandal. The collapse of the company forced the Astros to buy their way out of the deal to get Enron's name off their stadium.