Friday Dump 🥟 - KC real estate issues, Premier League spending, Heisman Reggie returns

You’ve been missed, Friday Dump 🥟

Each Friday, we’ll breakdown 3 sports business stories that have caught our eye throughout the week. They will be assembled in the following format:

🔴 - Stories that make us stop, think, and question.

🟡 - Stories with a hint of risk and unpredictability.

🟢 - Stories that make us feel good to go and empowered.

It’s been way too long.

🔴 Super Bowl Champs begging for stadium charity. Drama alert! 🚨 Who said being a back-to-back Super Bowl Champion didn’t come with a little money drama? But hey, the Kansas City Chiefs have found a way to do so! About a month ago, Chiefs President, Mark Donovan, went on KSHB 41 in Kansas City and essentially threatened the voters of Jackson County, MO that if they rejected a sales tax that would help pay to renovate Arrowhead Stadium and build a new stadium for the Kansas City Royals (MLB), then they would pick up and move the team to another city 😳. Why are Donovan and Chiefs’ owner Clark Hunt acting like little kindergartners after not getting their way when demanding to go to McDonald’s? Let’s review…

• Arrowhead Stadium is the 3rd oldest stadium in the NFL (coming up on to their 52nd year 👴🏻). As buildings and stadiums age, more work and renovation needs to be done to keep things up to date and functioning properly…

  • …and according to the Chiefs, that would mean upwards of $800M worth of upgrades.

  • But don’t worry KC residents, because the Hunt Family is more than willing to contribute $300M of their estimated self-worth ($25B) to help finance the renovations 😂.

• The Royals are also in the midst of planning a new $2B ballpark ($1B plans to come from ownership), just to get their fans excited about anything after finishing last year with the league’s 2nd worst record.

• However, just a couple weeks ago, Jackson County voters went to the ballot box and turned down, by a 58/42 margin, a proposal that would have created a new ⅜-cent sales tax mechanism over 40 years to generate as much as $2B for these stadium upgrades.

🟡 A new soccer salary cap. Next Monday, the English Premier League (EPL) will be voting on a new type of salary cap that could change the entire outlook on how teams purchase players. This new salary cap would limit the amount of money a club can invest in their teams by tying it to a multiple of what the lowest earners get from the league’s centralized broadcast and commercial deals (a.k.a. “anchoring”). The whole point is to stop the league’s biggest earners from being able to outspend teams lower on the totem pole. So what would this look like?

• If anchoring was in effect last season, the cap would have been £518M, 5x the ~£104M that Southampton, who finished 20th, earned in centralized revenues.

  • Chelsea would have spent more than that on wages, transfer fees, and payments to agents (see Table 1).

• But let’s not jump to any conclusions just yet. The Professional Footballers’ Association (PFA), the players’ trade union, will most certainly have an opinion on the matter.

  • And it makes sense…any move that sets a ceiling on how much money an employer can pay their employees will of course bring about issues from the union.

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🟢 Reggie’s redemption. Admitting you’re wrong isn’t a bad thing. It shows strength and humility to raise your hand in the air and say, “I was wrong” to the people you know you affected. On Wednesday, 14 years after being forced to give up the most accomplished individual award in college football, Reggie Bush’s 2005 Heisman Trophy is being returned to him. The Heisman Trust formally announced Bush’s reinstatement where he will get the trophy back, and a replica will be given to USC. Additionally, Bush will be invited to all future Heisman Trophy ceremonies beginning with the 2024 season 👏. Why did this happen in the first place?

• The stud running back originally forfeited the trophy in 2010 as he was involved in a high-profile NCAA investigation with USC where it was revealed that Bush received improper benefits during college.

  • It was concluded that he and his family accepted gifts from agents and would-be agents who were drooling to represent him when he joined the NFL.

• The Heisman Trust, according to ESPN, cited “fundamental changes in college athletics” as a key reason for its decision. What are those changes? You already know 😉.

  • They include college athletes being paid for their name, image and likeness (NIL) — this originally referred to athletes using their right of publicity without facing NCAA penalty.

  • But, that has expanded to also include inducement-type arrangements with NIL collectives and, likely soon, direct payments by schools.

• In August, Bush filed a defamation lawsuit against the NCAA. The argument came down to whether the benefits he received were “pay-for-play”; Bush argued that he’d never been accused of “pay-for-play,” while the NCAA argued that it was.

  • But what’s central to the case is how to interpret “pay-for-play type arrangements.” (Hey, Harvey Spector, can you come over here for second, we have a legal question for ya!)

  • Even though, Bush’s alleged payments, were not made to play at USC — they were payments related to his future in the NFL (*headache is starting*) 🤔.