A group of proverbial heavyweights in the sport industry gathered at West Virginia University Wednesday night to share their insight, opinions, and plenty of jokes during “The Business of Sports” discussion.
The distinguished lecture series featured Ken Kendrick, managing general partner of the Arizona Diamondbacks; Bob Nutting, principal owner of the Pittsburgh Pirates; Oliver Luck, president and general manager of the Houston Dynamo; and Sam Huff, a Hall of Fame linebacker and current radio broadcaster for the Washington Redskins. It was a great opportunity to hear the foursome’s viewpoints on a variety of timely topics and their responses to questions were, at times, as humorous as they were insightful.
Below are some of their thoughts on a variety of topics that were discussed.
• On public financing of stadiums
There has been plenty of research, much of which has been published in the International Journal of Sport Finance, regarding the benefits and/or drawbacks of public financing for construction of new stadiums and arenas. All three panelists associated with professional teams claimed that there were long-term benefits for communities that receive a new professional sports facility, despite many sports economists who claim otherwise. Both MLB owners on the panel also happen to own teams that received public financing to help fund stadium construction projects.
Pittsburgh footed a large portion ($174 million) of the bill for the Pirates’ new PNC Park, which opened in 2002 but was five years prior to Nutting’s ownership. Kendrick’s Diamondbacks and their retractable roof stadium (Chase Field Ballpark) cost taxpayers approximately $238 million.
“It’s difficult to talk about public funding of stadiums during these economic times,” Kendrick admitted. “Economic impact studies show there can be a return on investment. Over time, there is tremendous tax revenue and jobs are created and I think that model still works. But having said that, in this time (of economic struggles) I think public funds should be used other ways.”
Luck was previously the CEO of the Harris County-Houston Sports Authority, which oversaw the construction and financing of Houston’s three new professional sports venues—the Astros’ Minute Maid Park, the Rockets’ and Comets’ Toyota Center, and the Texans’ Reliant Stadium.
“The city of Houston took on approximately $1 billion in municipal debt to build three new venues,” Luck said. “All three were up for a public vote and all narrowly passed and they were funded by hotel and rental car taxes. Because of those new venues, Houston has been chosen to host the Super Bowl (2004), Final Four (2011 and 2016), MLB all-star game (2004), NBA all-star game (2006), and (in 2010) the MLS all-star game and that’s important for a city that was down on its luck after the Oilers left Houston. It helped to rejuvenate the urban core of Houston.”
• On small- and mid-market teams competing in Major League Baseball
Both Nutting and Kendrick consider themselves owners of mid-market clubs, although based on the most recent MLB revenue reports the Diamondbacks are a few rungs above the Pirates. The biggest limitation, according to Kendrick, was that small- and mid-market teams are less able to successfully cope with injuries to key players. If they retain All-Star caliber players, often much of the team’s salary is invested in that one player.
The Diamondbacks, winners of the 2001 World Series in a dramatic Game 7, 9th inning rally to defeat the New York Yankees, have had some very talented players on their roster. In fact, five of the past 10 National League Cy Young Award winners played for Arizona (Randy Johnson in 1999, 2000, 2001, and 2002, and Brandon Webb in 2006). Arizona made it to the playoffs in 2007 and finished second in the NL West in 2008 but this past season finished in last place in its division due in large part to an opening-day injury to Webb.
“This year our top pitcher, who had won the Cy Young, was injured in the first game of the year and he missed the rest of the season,” Kendrick said. “That was a devastating injury for us to try to overcome.
“It would be nice to have unlimited money like the New York Yankees. But I think that (Arizona’s) competitive model is a very good one and, frankly, for me it’s a lot of fun to beat teams like (the Yankees).”
• On Major League Baseball adopting a salary cap
Nutting said that the Pirates, who recently endured their 17th consecutive losing season—the most ever by a franchise in the four major American sports leagues—don’t use the lack of a salary cap as an excuse for not being a playoff contender and must find ways to be competitive without waiting for a salary cap to be implemented.
“A team like Pittsburgh would certainly benefit from a better revenue-sharing agreement but we want to work within the system that we have,” he said. “What a team like Pittsburgh can do is focus on the areas where we can compete, and try to do that extremely well.”
• On head injuries in football
It was interesting that the two former West Virginia University and NFL players on the panel took somewhat differing stances concerning this issue, which has been a hot topic in the news recently. Huff, a middle linebacker, was inducted into both the College Football Hall of Fame and Pro Football Hall of Fame. Luck, a quarterback, was a two-time Academic All-American and played five years in the NFL.
Huff downplayed whether anything should be done to minimize the number or ferocity of impacts to the head that football players sustain. “This is what football is all about. It’s a game of hitting hard,” said Huff, who was the subject of a 1960 CBS special called “The Violent World of Sam Huff.” “It’s war without guns. My attitude was, the harder you hit me, the harder I’m going to hit you back.”
Luck, who previously served as president of NFL Europe, took the stance that the NFL must further investigate the long-term consequences of collisions and determine whether anything can be done to minimize any potential health risks. “One of the biggest challenges the NFL faces is head trauma,” he said. “The research that’s coming out now is scary. It’s really a serious issue that the NFL, and the NCAA, needs to look at.”
• On baseball no longer being an Olympic sport
The International Olympic Committee (IOC) withdrew baseball and softball from the Summer Olympic program, making the 2008 Beijing Olympics the last one in the foreseeable future to include those two sports. Among the sports added in their place was golf.
“Baseball is not played in as many countries as other sports and golf has become a very international sport,” Kendrick said, attempting to explain the IOC’s reasoning in what many in the US considered a political move.
Luck suggested that one of the problems was that many of the world’s best players don’t participate in the Olympics due to it conflicting with the Major League Baseball season and the IOC wants to feature sports where the greatest athletes in their respective sports will participate.
“It would be extremely difficult to interrupt our season, which is very long, and send our players away and have the rest of the players wait for them to come back,” Kendrick said. “We’re caught in a calendar issue that really prevents us from doing that.”
It should be noted, though, that the WNBA does take an intermission in its season during summers of the Olympics in order to allow its players to compete on national teams. The WNBA season, however, is much shorter than Major League Baseball’s, so a brief respite from play doesn’t impact the length of the season nearly as much as it would for baseball.
The discussion was co-sponsored by WVU’s College of Business & Economics and the College of Physical Activity and Sport Sciences.