A NY Times article headlined ‘Insuring Endorsements Against Athletesâ€™ Scandals Ken Belson and Richard Sandomir write-
In the wake of the Tiger Woods scandal, insurers are being inundated with inquiries from corporations seeking to protect their investments, their brands and even their sales when their celebrity endorsers suffer public embarrassment.
Dan Trueman, who runs the enterprise risk department at R J Kiln & Company, the managing agent for Lloydâ€™s, said his firm had seen an eightfold increase in inquiries into this type of insurance between September and December, the bulk from pharmaceutical and financial service companies. “Itâ€™s more than just the flavor of the week,” he said.
Is one source proof that companies are insuring their endorsements? Note the things in bold. The Tiger Woods scandal started on the last Friday in November.
But the article cites insurers as making more inquiries going as far back as last September. Or a full three months before the Woods scandal went into full gear.(The beginning of December) So if what Mr. Trueman is saying is true, then how much of it is really Tiger related?
Also note the word ‘enquiries’. Asking about possible insurance isn’t the same as actually taking out the insurance. The Times headline and article are therefore out of sync.
The article also says-
An increasingly common strategy for companies to better protect themselves is to change the language in their morals clauses to cover more contingencies. The more specific the language, the more expensive the insurance becomes, according to executives in the industry.
A change in the wording of contracts isn’t the same as actually taking out insurance.
One more thing.
Indeed, the stock prices of the seven publicly held companies that have or had sponsorship deals with Woods lost $12 billion in market value in the month after Woodsâ€™s statement in December that he was taking a leave from golf, according to a study by Chris Knittel, a professor of economics at the University of California at Davis.
The Study by Dr Knittel has been seriously called into question by both the Wall Street Journal and Ryan Ballangee at the golf blog waggleroom, and has seen its authors backtrack from their original figures. Let me quote from the WSJ article-
The Woods study appeared online, accompanied by a university press release, barely two weeks after Mr. Woods stepped away from the links. It isn’t unusual for universities to trumpet studies before they undergo peer review, but this one made some rushed shots into the rough, researchers said.
Prof. Stango acknowledges, in an interview and in the paper, that several challenges may have undermined his findings. Some of Mr. Woods’s sponsors are part of large conglomerates, and news of his infidelity trickled out slowly — both factors that made it tougher to interpret investors’ decisions to buy or sell. “It’s just a very difficult thing to disentangle,” Prof. Stango* says.
From today’s article I have to conclude NY Times editors and reporters don’t pay much attention to WSJ or Waggleroom. That’s just pitiful when it causes them to put out nonsense like the above.
It is not often that some aspect of Harness racing gets written up in the New York Times.
Meadowlands Racetrack has had some of the highest-quality harness racing in the country and dozens of the sportâ€™s most important races. But in recent years, the track has become a money-losing drain on the state of New Jersey, which now threatens its survival.
A report issued this month by a committee put together by Gov. Christopher J. Christie before his inauguration to come up with solutions to the financial problems of the New Jersey Sports and Exposition Authority made several suggestions that, if put in place, could all but gut the stateâ€™s racing industry. The suggestions included possibly closing Meadowlands Racetrack and drastically reducing the number of racing days at Monmouth Park.
The Sports and Exposition Authority is a state-run agency that owns the Meadowlands, Monmouth Park and portions of the stateâ€™s off-track betting system. The committee projected that the Meadowlands and Monmouth would lose a combined $22 million in 2010, a loss some lawmakers find difficult to justify given the stateâ€™s fiscal crisis.
In the report, the committee insisted that â€œthe status quo is not sustainableâ€ when it came to New Jersey racing.
â€œWe know that the frankness of that report will have raised fears with certain interested groups and constituencies,â€ said Michael Drewniak, a spokesman for Christie. â€œIn a sense, weâ€™re glad that happened because if it wasnâ€™t clear to everyone that these are the realities, it should be clear.â€
I’m well aware of the financial realities the horse racing industry is facing at present. In spite of infusions of public money, or more often than that the addition of some form of casino gambling to race tracks, the sport continues to struggle. There just aren’t as many people interested in the ‘Sport of Kings’ as there were when my father took me and my other siblings to the races in Pennsylvania, Ohio, New Jersey, Deleware, and Illinois when we were growing up.
Here are just a few of the posts I’ve written on horse racing’s financial woes.
Kentucky horse racing â€˜in serious jeopardyâ€™
Florida horsemen say 2009 racing meet will end 3 months early
New York Racing Association files for bankruptcy
Owner of Pimlico racecourse defaults on loan*
Rosecroft Raceway ceases operations
Freehold Raceway cuts purses, Meadowlands could be next**
*- Like the Meadowlands which hosts ‘The Hambletonian, Pimlico hosts another one of the sports grandest events- ‘The Preakness. When tracks like these can’t make money, it should be a clear sign just how troubled the sport is.
**- This post which was about New Jersey horse racing difficulties, was posted on 1-22-08.
I’ve got many more posts like the six listed above. Since I began contributing at OTB Sports in May 2006, there have been 74 horse racing posts written. Over 30% of which we re on the sports’ dire financial condition.
Should the state of New Jersey bail out the industry? Absolutely not. I love horse racing but the industry if it can’t survive on its own should cease operations. The government shouldn’t be in the business of trying to prop up any business. Public resources should be used for something more fruitful, not be wasted on something that will fail eventually even with the assistance.
On a side note. Why did the NY Times use a thoroughbred racing photo to accompany an article that specifically states harness racing in the very first paragraph? Harness racing is to horse racing, what the LPGA is to professional golf, a Rodney Dangerfield. Harness racing, even when its greatest events are taking place, barely get noticed by the media. No one need look further than both sports 3-year-old Triple Crowns. Has The Messenger Stakes, always raced in the New York City area, ever been on network television. I know it hasn’t from 1970 on.
Part of The Four Seasons Resort and Club Dallas at Las Colinas, is the TPC at Las Colinas golf course, which has hosted the Byron Nelson since 1983*. From the Dallas Morning News-
One of the Dallas area’s most exclusive hotel properties is facing a possible foreclosure.
Lenders have filed to foreclose on the Four Seasons Resort and Club Dallas at Las Colinas, a 400-acre hotel, spa and golf club in Irving.
The Four Seasons Resort and Club Dallas at Las Colinas has almost 400 rooms and hosts the annual HP Byron Nelson Championship golf tournament. The tournament isn’t expecting any impact from the resort’s financial problems.
The more than 400-room hotel is one of the state’s top-rated accommodations and hosts the annual HP Byron Nelson Championship golf tournament.
U.S. Bank NA is seeking repayment of a $183 million loan on the property and has scheduled a forced sale on Feb. 2, according to legal filings.
The foreclosure posting is the largest in North Texas in more than 20 years.
Golf is taking economic hits just like the rest of the U.S. economy. The annual San Diego Tour stop is without a sponsor and faces an uncertain future.
The 2010 Byron Nelson won’t be affected by the foreclosure sale.
George Conant, tournament chairman for the 2010 HP Byron Nelson Championship, said the golf tournament will not be affected.
“We are pleased with the improvements that have been made to the property in recent years to enhance the golf and fan experience at the tournament, and we look forward to another fantastic championship this May,” he said.
Even if Tiger Woods, the 1997 Byron Nelson Champion, is back playing the PGA Tour he probably won’t be in the field. Tiger last played the Nelson in 2005.
*- After the 1985 edition of the Nelson, which is infamous for Payne Stewart double bogeying both the 72nd hole and the first hole of Sudden Death, the Las Colinas Sports Club was transformed into the TPC at Los Colinas. I don’t know about anyone else, but I consider the changes to the course not to constitute a site change. Some golf journalists will probably write otherwise.
A site change- When a golf tournament moves from Course A to Course B. Not when Course A is rebuilt and renamed Course B.
Hat tip- Ryan at Waggleroom
A complaint by the Players union was what caused the change. From the Miami Herald-
The perennially frugal Florida Marlins have reached an agreement with the players’ union to increase spending in the wake of complaints the team payroll has been so small as to violate baseball’s revenue sharing provisions.
The deal was announced Tuesday in a joint statement by the Marlins, the union and Major League Baseball. The parties did not comment beyond the statement, and it was unclear how much the Marlins’ payroll might increase.
The agreement runs through 2012, when the Marlins’ new ballpark is scheduled to open.
“In response to our concerns that revenue sharing proceeds have not been used as required, the Marlins have assured the union and the commissioner’s office that they plan to use such proceeds to increase player payroll annually as they move toward the opening of their new ballpark,” said Michael Weiner, executive director of the players’ association.
Mediation will be used in case there is any future disagreements.
The Marlins current payroll is 37 million. How much is team owner Jeffrey Loira willing to increase it? I’d really be surprised at any figure more than ten percent. The Marlins have been run on a shoestring since 1998, and the only way I see any real change occurring is if and when the team gets a new owner. The Marlins are supposed to move into a new stadium in 2012, but I would bet the Loira remains thrifty after it opens.
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Should we start taking up a collection for team owner Jeffrey Vanderbeek? From the Newark Star-Ledger-
The Devils will enter Sunday’s 6 p.m. half-game against the Tampa Bay Lightning trailing by three goals. Barring a dramatic comeback, the resumption of Friday night’s suspended game will be a Devils loss.
It will definitely be a loss in the pocketbook, according to general manager Lou Lamoriello.
“No question there are going to be a lot of costs involved,” Lamoriello confirmed before Saturday night’s game in Montreal. “The circus was moving in tomorrow because the circus plays Tuesday. They had to change the ice. We had to make sure it was OK to hold up what had to be done with the ice to get the game played.”
What do you mean, you can’t put skates on Clowns and Elephants?
Seriously, the Prudential Centre was built for the Devils specifically. In order to keep the NHL team from re-locating. The operators of the arena should remember who their main resident is, and if they forget, then New Jersey management should remind them.
There is also the likelihood that the Devils will have to pay expenses for the Lightning to return to the Prudential Center. That could mean hotel and travel costs.
There’s always the Wyndham Garden Hotel Newark Airport formerly known as the formerly Ramada Inn Newark International Airport. The rooms are comfortable but not fancy and the food is good. I’ve stayed there when playing in Star Tournaments.
The game will be resumed at 6 p.m. Sunday. The teams will play the final 9:12 of the second period with one TV timeout and then go back to the dressing rooms for ice resurfacing. Then the final period will be played
The article makes no mention if there are seats available for the game.
I asked Lamoriello if he felt the fans who remained throughout the one hour and 42 minute delay Friday night were treated fairly. No announcements were made after play was stopped and players were told that the game had been suspended at least a half-hour before the media and fans were informed.
The GM said he felt the team handled the situation with fans properly.
Memo to General Manager Lou Lamoriello. If a NHL game is ever suspended in New Jersey again, tell the media about it first. Otherwise they will whine and make your life miserable.
There were many different problems. NHL bylaws prohibit players from playing on three consecutive days, but that has been waived.
I didn’t know about that rule before writing this blog post. It makes perfect sense because hockey is a rough physically demanding sport.
Both teams agreed to waive the rule.
Coach Jacques Lemaire didn’t want to discuss the fact that the Devils will be trailing, 3-0.
“I thought we were playing really well,” he said.
If down 3-0 is playing really well, what would the score of a Devils game be if they were playing horrible? 100-0?
The article makes no mention if the rest of the game will be on television or not. I won’t be checking later as my day will be spent watching the NFL playoffs and then the final round of the PGA Tour’s SBS Championship.
A difference of opinion and lack of a permit(?) are the causes for the stoppage. From the Sarnia Observer-
Simulcast operations at Hiawatha Horse Park in Sarnia have been shut down while contract negotiations with the Ontario Harness Horse Association (OHHA) continue.
A notice posted Saturday on the Standardbred Canada website states that Hiawatha’s management has been unable to secure a contract with its horsemen.
“Due to the unsigned agreement, OHHA has decided to close down all simulcast and HPI wagering through Hiawatha Horse Park,” the statement reads.
“Effective January 1, 2010, Hiawatha Horse Park will not be permitted to simulcast and will have to close its doors to wagering on horse racing.”
OHHA President Darryl MacArhtur said the issue stems from “a difference in opinions.”
A difference of opinions that will lead many track employees to lose their jobs till racing begins again in May. Doesn’t the North America horse racing industry have enough problems? Lack of racing will even further bettors to stop betting on the ponies.
Note- Hiawatha, which is about one hour from Detroit, has live horse racing from May to October and other forms of gambling all year long.
A Christmas present for South Florida horsemen. From Harnessracing.com-
With director of racing operations John Yinger quick to point out that they are not major increases, things are trending upward in the purse and handle categories at The Isle Pompano Park.
The Dec. 23 program marked the implementation of purse hikes ranging from about 2.5 percent to over nine percent in some categories. For $4,000 claiming pacers and trotters, the purse is increased from $3,200 to $3,500; for the $15,000 claiming pacers four years of age and under, the purse is increased from $6,800 to $7,000; for $12,500 claiming pacers, the purse is increased from $6,800 to $7,000; and in the non-winners of $6,001 in the last five starts condition, the purse is increased from $6,800 to $7,000.
“This is just a slight purse bump in a few classes where we felt it was needed and it was possible at this time” says The Isle Pompano Park’s race secretary Greg DeFrank.
While this is certainly good news, the most interesting part of the article is yet to come.
As for handle, the final two programs before Christmas produced the best nights of the meet since racing resumed on Sept. 19. Wagering on the Dec. 21 program topped $231,000 and on the Dec.23 card the recorded handle was a meet high at just under $400,000.
So Christmas is apparently a good time to go to the horse track for some people? Many years ago, my father would take us to Florida at holiday time partly so he could go to Pompano Park where some of our horses were stabled.
Will the New York harness racing track be ever able to collect the money? From Harnessracing.com-
The New York State Racing and Wagering Board on Tuesday ordered four off-track betting corporations in the state to pay Yonkers Raceway several million dollars owed as part of legislation passed six years ago that guaranteed that harness tracks would not be financially impacted by the nighttime simulcasting of Thoroughbred signals.
The ruling comes in addition to monies already owed to Yonkers. Earlier this month, New York City OTB filed for Chapter 9 federal bankruptcy protection, listed Yonkers as one of its two top creditorsâ€”along with the New York Racing Associationâ€”with $18 million owed. There is some question whether the New York City OTB will ever be able to pay the money.
The Board said that the New York City OTB owes Yonkers an additional $3.6 million, while Nassau OTB owes $1.8 million, Suffolk OTB owes $1.2 million, and Catskill OTB owes $940,000.
I wish the owners of Yonkers Raceway good luck in obtaining the money owed to them. They will need it. Raceways, racing associations, and off track establishments that are convenient for bettors, are having trouble surviving and this all started occurring before the recent economic downturn. Horse racing in the United States is dying. I don’t think anything can change the course the industry is on to extinction.
Anyone crave hockey and have 140 million dollars lying around?
The Phoenix Coyotes’ bumpy six-month journey through U.S. Bankruptcy Court has come to an end with a judge’s approval of the sale of the franchise to the NHL.
Judge Redfield T. Baum signed the order on Monday after a quiet, brief hearing in a mostly empty courtroom, a stark contrast to earlier scenes of high drama featuring countless high-priced attorneys locked in often-bitter arguments.
The NHL’s bid totals about $140 million. The official figure listed in the sale order is $128.4 million, but that does not include the $11.6 million the NHL has agreed to spend to purchase claims of nearly all the unsecured creditors in the case.- Associated Press
The NHL said it would now move quickly to complete the purchase. After that is completed, the league will look for new owners.
What part-Coyote team owner Wayne Gretzky thinks of all this is a bit of mystery. He didn’t object to the sale and could be out as much as 8.2 million dollars. I don’t think that can have a positive effect on the relationship between Gretzky and the NHL.
Now that the financial turmoil and question of where the Coyotes been temporarily shelved, are there many hockey fans left in the state of Arizona who care about the franchise?
The Phoenix Coyotes gave the Kings’ Drew Doughty an open look at the goal. He buried the chance.
Doughty scored the go-ahead goal with 4:51 remaining and Los Angeles rallied to beat the Phoenix Coyotes 5-3 Monday night.
Earlier Monday, U.S. Bankruptcy Court Judge Redfield T. Baum approved the Coyotes’ sale to the NHL with the league intending to find a buyer committed to keeping the franchise in Glendale. The conclusion of the team’s bankruptcy proceedings didn’t help the Coyotes avoid a franchise-record low announced crowd of 5,855.
Which leaves serious doubts as to whether NHL can ever be successful in Phoenix. I think it would be wisest for the NHL to entertain bids from owners who will take the franchise to somewhere where it can flourish.
More bad news for North American horse racing.
Centaur LLC, owner of Hoosier Park Racing & Casino, defaulted on a loan to senior lenders Tuesday, October 27 when it missed a reported $13.4 million interest payment. The Indianapolis-based company stated in a press release issued October 29 that the decision to forego the interest payment on a $400 million-plus loan was done as part of an effort to restructure corporate debt. Centaur used the loan to pay a $250 million casino licensing fee and spent a total of $150 million on grandstand renovation and construction of its 92,000 square-foot racino, which opened in June 2008.
â€œOur business operations at the property level are healthy and generate positive cash flow from operations. We remain committed to putting our capital structure on solid ground,â€ Centaur Chairman Rod Ratcliff said in the release. â€œRestructuring our corporate debt will place us in a position for long-term success and benefit our customers, employees, horsemen groups, host communities and other stakeholders. We are confident our steps will ultimately strengthen the company.â€
Down here in Florida, a racetrack is about to re-open. Hialeah Park which last had a race over eight years ago is going to host quarterhorse races beginning on November 28th.
Armed with its new quarter-horse permit — and racing dates approved this week by the state — Hialeah Park is gearing up for a Nov. 28 reopening. Roughly 150 construction workers are doing double shifts painting ceilings, patching damaged pipes and sweeping floors. As the deadline gets nearer, they might go to triple shifts.
“It will definitely be presentable. . . . for sure,” said Orlando Ceballos, the construction project manager.
Will Hialeah, which first opened in 1925, once again exude the grandeur that so many fondly remember?
Not completely, as large portions of the massive restoration effort won’t be done by the time Hialeah again welcomes the public.
Visitors at first will be allowed into the clubhouse area, but other sections still being repaired — such as the grandstand — will remain closed.
Gambling options will also be limited, as slot machines are not expected to arrive until a year or so from now.
I think it’s wishful thinking to believe Hialeah will prosper under those circumstances.