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#pounditSunday, May 29, 2022

Sports Business

Lee Westwood loses sponsor over participation in Saudi league

Lee Westwood finishes a swing

Apr 8, 2022; Augusta, Georgia, USA; Lee Westwood plays his shot from the fifth tee during the second round of The Masters golf tournament. Mandatory Credit: Kyle Terada-USA TODAY Sports

Lee Westwood is one of the most notable golfers who plans to participate in the Saudi Arabia-backed LIV Golf league. His involvement in the league appears to have cost him a sponsor.

UPS is distancing itself from Westwood following a 14-year partnership. They asked the 49-year-old to remove their logo from his shirt and bag ahead of the PGA Championship.

“We value the relationship we’ve had but make decisions based on what is best for our business,” a UPS spokesperson said in a statement to Sports Illustrated. “We will continue to focus on sponsorship initiatives that are important for UPS and consistent with our business priorities.

“The decision to end our partnership is a strategic business decision that allows us to focus on other initiatives. We maintain alternative sponsorships across other sports as well as cultural, philanthropic and sustainability-led initiatives to support our brand and meet the needs of our business.”

Their decision comes after Westwood requested a waiver from the PGA Tour to play in LIV’s first event, which is next month in London.

Westwood is a former World No. 1-ranked golfer. He shot a 5-over 75 in the first round of the PGA Championship on Thursday.

Kyrie Irving could reportedly lose major endorsement deal

Kyrie Irving wearing his Nets uniform

Feb 1, 2020; Washington, District of Columbia, USA; Brooklyn Nets guard Kyrie Irving (11) during the second half against the Washington Wizards at Capital One Arena. Mandatory Credit: Tommy Gilligan-USA TODAY Sports

Kyrie Irving has not always made basketball his top priority over the past two seasons, and that could cost the Brooklyn Nets star one of his biggest endorsement deals in the near future.

Irving’s signature shoe deal with Nike is set to expire after the 2022-23 season. ESPN’s Adrian Wojnarowski and Ramona Shelburne reported on Friday that Nike is unlikely to extend Irving to a similar deal due to “uncertainties surrounding his NBA future.”

Irving, who has had his shoe deal with Nike since 2014, has a new edition of his sneaker coming out in the fall. That one could be the last.

A Nike spokesperson told ESPN that the company does not comment on contract speculation and that Irving “remains a Nike athlete.”

Nike will likely still offer some product or products associated with Irving, according to ESPN. It sounds like the apparel juggernaut is simply hesitant to continue with the lucrative deal Irving has had for nearly a decade now.

Irving has a $37 million player option with the Nets for next season. Brooklyn general manager Sean Marks appeared to send a strong message to Irving when discussing the star point guard’s contract situation this week.

Irving was unavailable for much of this past season due to his COVID vaccination status. The year before, he stayed away from the Nets for a while for personal reasons. All of that has created uncertainty about his future, and Nike is probably evaluating the situation for the same reasons the Nets are.

Denver Broncos sales price expected to reach unprecedented level

John Elway looks ahead

Aug 24, 2018; Landover, MD, USA; Denver Broncos executive vice president and general manager John Elway stands on the field during warm ups prior to the Broncos’ game against the Washington Redskins at FedEx Field. Mandatory Credit: Geoff Burke-USA TODAY Sports

The Denver Broncos are for sale, and the team is closing in on a new owner. The final sales price of the team is headed for unprecedented levels.

Pro Football Talk’s Mike Florio wrote an article on Monday about prospective owner Rob Walton visiting the Broncos that day. Last week, Walton was reported to be the favorite to purchase the team.

The price for the Broncos was expected to exceed $4 billion. But Florio now says the price is expected to be above $5 billion.

Walton is the heir to the Walmart fortune and said to have an estimated net worth around $70 billion.

A $5 billion sales price for the franchise would be more than double the largest sale for a team in North American sports history. Steve Cohen set the record when he paid $2.4 billion for the New York Mets in 2020. A $5 billion figure would also dwarf the $2.275 billion David Tepper paid for the Carolina Panthers in 2018, which marked the last sale of an NFL team.

Other NFL owners must be salivating at the prospect of a $5 billion sales price and what that does to their franchise valuation.

Nakobe Dean reportedly fired agent after draft slide

Nakobe Dean at the NFL Combine

Mar 4, 2022; Indianapolis, IN, USA; Georgia linebacker Nakobe Dean (LB11) talks to the media during the 2022 NFL Combine. Mandatory Credit: Trevor Ruszkowski-USA TODAY Sports

Georgia linebacker Nakobe Dean was widely viewed as a first-round talent entering the 2022 NFL Draft. However, as each prospect had their name read off on stage, Dean fund himself sliding further and further.

Dean’s slide mercifully came to an end when the Philadelphia Eagles selected him in Round 3 (No. 83 overall). But the fall raised several eyebrows and left many draft experts without answers.

One general manager — Joe Schoen of the New York Giants — admitted there “was a reason” Dean slid as far as he did, but refused to divulge what exactly that was. Shortly thereafter, reports began to surface that Dean’s slide was a result of a pectoral injury that had been suffered in preparation for the draft.

The 21-year-old chose not to have surgery, which caused concern for many teams and their scouts.

That series of dominoes had other consequences as well. Shortly after the draft and frustrated by his slide, Dean parted ways with his agent and his agency, Wasserman, according to a report.

Despite the pectoral injury and the concerns many teams had over it, Dean was a full participant on Day 1 of the Eagles’ rookie minicamp. He also insists that none of the league’s 32 teams expressed a concern over his injury.

NBA legend part of group looking to purchase Broncos

John Elway looks ahead

Aug 24, 2018; Landover, MD, USA; Denver Broncos executive vice president and general manager John Elway stands on the field during warm ups prior to the Broncos’ game against the Washington Redskins at FedEx Field. Mandatory Credit: Geoff Burke-USA TODAY Sports

Several investment groups have been preparing bids to purchase the Denver Broncos for what will likely be a record figure, and one NBA legend has entered the fold.

Magic Johnson has joined one of the bidding groups that is trying to buy the Broncos, according to a report from Sportico. The group is led by billionaire Josh Harris, who owns the Philadelphia 76ers and New Jersey Devils.

Johnson, of course, is a part-owner of the Los Angeles Dodgers. He was part of a group that purchased the team back in 2012. The Dodgers won a championship in 2020 and have been to the World Series three times since 2017.

Sportico estimates that the Broncos will sell for somewhere around $3.8 billion. That would be a record for the highest price ever paid for a sports franchise.

Several high-profile sports figures have been linked to the sale of the Broncos, and Johnson is the latest. The Pat Bowlen Trust is aiming to sell the team before the start of the 2022 season.

Nets reportedly lost significant amount of money this season

Kyrie Irving wearing his Nets uniform

Feb 1, 2020; Washington, District of Columbia, USA; Brooklyn Nets guard Kyrie Irving (11) during the second half against the Washington Wizards at Capital One Arena. Mandatory Credit: Tommy Gilligan-USA TODAY Sports

Along with the Los Angeles Lakers, the Brooklyn Nets were the NBA’s most disappointing team this season. Now it appears that their failure is hitting the Nets where it really hurts — in the wallet.

Brian Lewis and Josh Kosman of the New York Post reported Saturday that the Nets and their home arena Barclays Center lost between $50 million and $100 million combined during the 2021-22 season. That gives owner Joe Tsai perhaps the biggest financial losses in the NBA, the report adds.

Lewis and Kosman also say that the Nets ranked fourth in the league this year in gate receipts (a ticket sales metric) with an average of $2.1 million. But with a $174 million payroll, the Nets would have had to average roughly double that just to break even. On a related note, Brooklyn is also a luxury tax team (thanks in part to the max salaries for Kevin Durant and Kyrie Irving). That will saddle Tsai with a colossal $100 million tax bill.

The New York Post report contains other details about the factors that led to the Nets losing money this year, including Tsai’s decision to force out John Abbamondi, CEO of the team’s parent company. You can read the report in full here.

From a pure basketball standpoint, Brooklyn’s ticket sales were presumably affected by the significant turnover in their everyday lineup. Irving missed over half the season (most of them home games) due to being unvaccinated. Meanwhile, Durant missed 27 games because of injury, James Harden was a malcontent, and the guy that they got for trading Harden (Ben Simmons) was somehow even worse.

The end result was the Nets going just 44-38, needing to survive the play-in tournament to make the playoffs, and getting only two official home playoff games thanks to getting swept in the first round by the Boston Celtics. With Irving, Durant, and Simmons alone owed a combined $116.5 million next season and other problems looming as well, it may not get any easier in Brooklyn from here either.

Report: NFL Sunday Ticket ‘likely’ headed to new home

Roger Goodell at the podium

Kirby Lee-USA TODAY Sports

DirecTV has had held the rights to the NFL’s Sunday Ticket package since it first launched in 1994, but that is set to change after next season. Sunday Ticket is expected to land with a streaming service in 2023, and a favorite has emerged.

According to Matthew Belloni of PUCK.news, the NFL may already have a deal in place with Apple for Sunday Ticket. Belloni described the Sunday Ticket package as being “Apple’s to lose” and said one source told him a deal is in place but that Apple wants to keep it quiet for now.

DirecTV’s most recent deal with the NFL was renewed in 2014. The satellite provider pays $1.5 billion annually for the package. The new price is expected to be in the $2.5 billion range.

At least one other tech juggernaut was said to be competing with Apple.

The NFL is clearly committed to partnering with streaming services, as evidenced by Amazon becoming the exclusive provider of “Thursday Night Football” beginning next season. Many fans are unhappy with the changes, as they will come with added costs and inconvenience for those who still use cable and satellite providers.

H/T Pro Football Talk

Magic Johnson shares his 1 massive business regret

Magic Johnson looking on

Magic Johnson remains the gold standard for professional athletes turned businessmen. But even he has made decisions he would like to have back.

During a promotional appearance this week for McDonald’s, the retired Los Angeles Lakers great shared his one enormous business regret — choosing to sign with Converse over Nike in 1979. Johnson had been offered options in Nike stock to sign with them but chose the cash that was being offered to him by Converse instead.

“I never heard of stock at 19 years old, so I took the money,” Johnson said. “You know, usually [you think] ‘I gotta take this cash!’ Man, I would’ve been a trillionaire by now. You think about 1979, getting that stock then and what it’s worth today? Yikes! So that kills me every single time I think about that. I’m like, ‘Man, Michael Jordan would’ve been making me so much money.'”

Johnson’s infamous decision was depicted during a recent episode of HBO’s “Winning Time.” The Basketball Hall of Famer, who is being portrayed by actor Quincy Isaiah, was shown meeting with Nike co-founder Phil Knight. In the episode, Knight offered Johnson $100,000 in Nike stock options as well as a $1 royalty for every shoe sold. The show ran a graphic estimating that Johnson cost himself $5.2 billion by turning down that offer.

While it is hard to gauge how accurate the numbers given by the show were, we know Nike had its IPO (initial public offering) in Dec. 1980, debuting at $22 per share. Since then, Nike stock has split a total of seven times on a 2-for-1 basis each time. That means someone who purchased just one share at the time of Nike’s IPO would own 128 shares today. Nike’s closing price on Wednesday was $127.49, meaning that the one IPO share would be worth over $16,300 (not even counting the quarterly cash dividend Nike has paid to shareholders since 1985 and any such reinvestment of those dividends). It is also probably safe to say that Johnson would have owned a whole lot more than just one share of Nike if he had accepted their offer back then.

Granted, it is tough to fault Johnson for his choice as he was just a teenager at the time. Converse was the big dog on the porch during those days, and even Jordan was seen as taking a risk when he signed with Nike five years later in 1984. Johnson also got to star in some memorable Converse commercials with Larry Bird and other NBA stars.

Johnson, who now has an estimated net worth of over $600 million, has also succeeded with many other business ventures. He has several cash-cow investments (including his ownership stake in the Los Angeles Dodgers and his investment company Magic Johnson Enterprises, which owns countless businesses and franchises). Now 62, Johnson has made sure to pass on his business acumen to the next generation of NBA stars as well.

H/T theScore

Photo: Mar 23, 2018; Omaha, NE, USA; NBA former player Magic Johnson watches during the first half between the Clemson Tigers and the Kansas Jayhawks in the semifinals of the Midwest regional of the 2018 NCAA Tournament at CenturyLink Center. Mandatory Credit: Kyle Terada-USA TODAY Sports

Why is Tiger Woods wearing FootJoy shoes instead of Nike?

Tiger Woods stands with a club

Tiger Woods has made hundreds of millions of dollars through his partnership with Nike over the last 25 years, which is why golf fans were stunned to see him wearing FootJoy shoes at Augusta National this week. That apparently has to do with comfort.

Tiger, who has not played in a professional tournament in over a year, is practicing at Augusta this week in hopes of playing in the Masters. He wore a black pair of FootJoy shoes on the range on Sunday and a white pair on Monday.

What gives? There was so much buzz about Tiger’s spikes that Nike issued a statement. While the company did not go into specifics, the statement implied that the FootJoy shoes are providing Woods with better support as he works his way back from serious injuries.

“Like golf fans around the world, we are delighted to see Tiger back on the course. He is an incredible athlete, and it is phenomenal to see him returning to the game at this level,” Nike told ESPN’s Michael Collins. “His story continues to transcend sport and inspire us all. As he continues his return, we will work with him to meet his new needs.”

Woods suffered serious injuries in a car accident on Feb. 23, 2021. The injuries were so severe that he nearly had to have his leg amputated. It makes sense that he would prioritize comfort and support over a sponsorship at the moment.

Longtime sports business reporter Darren Rovell thinks there is a lot more to it than that. He speculated on Monday that Tiger is unhappy with Nike. It’s unclear when Tiger’s current deal with the company expires, but he does not have a lifetime contract like LeBron James. Rovell wonders if he wants one.

“But anyone who knows the business knows that if Woods needed something, it would have been voiced and fixed way before he got out on the course. If (Nike) couldn’t make him a new spike, they could have fudged it,” Rovell wrote at Action Network. “The only way Tiger walks out in shoes branded FootJoy is if Tiger wants to come out and wear shoes branded FootJoy.”

The storyline will be something to watch if Woods does end up playing in the Masters. Some footage has already surfaced of him hitting balls, and the 46-year-old looks great all things considered.

Photo: Dec 19, 2021; Orlando, Florida, USA; Tiger Woods with a smile while waiting on the third tee box during the final round of the PNC Championship golf tournament at Grande Lakes Orlando Course. Mandatory Credit: Jeremy Reper-USA TODAY Sports

Jarvis Landry reportedly makes notable change amid free agency

Jarvis Landry in Browns gear

Jarvis Landry may not be thrilled with how his search for a new team is going.

Landry has parted ways with agent Damarius Bilbo of Klutch Sports, according to Darren Heitner of Sports Agent Blog. The abrupt change comes a little over a week since Landry was released by the Cleveland Browns.

Landry was cut by the Browns after the team’s acquisition of Amari Cooper in a trade. There have been a handful of reports about interest in him since, with the team that released him actually figuring in them prominently. Perhaps that outcome would not be to Landry’s liking based on some things he said prior to his release.

The 29-year-old receiver was limited by injury in 2022 and posted some of the worst numbers of his career, with just 52 catches for 570 yards.

Photo: Aug 20, 2020; Berea, Ohio, USA; Cleveland Browns wide receiver Jarvis Landry (80) during training camp at the Cleveland Browns training facility. Mandatory Credit: Ken Blaze-USA TODAY Sports