Never mind real estate, the football bubble is about to burst

March 6th, 2010

Could the MLS have a lesson for the English Premier League? 

A incongruous as it sounds – how can an upstart, tier two organization teach the world’s most successful soccer league anything – consider the following.

1) The MLS and their players have broken off talks for a new contract. Chief among the rancor in the ranks is the MLS policy of the league controlling contract and dictating whether players can move or not. There’s also a salary cap which keeps all club on the same financial footing and theoretically means skill, discipline and shrewd management will prevail over the course of the season.

2) The EPL is in serious financial turmoil which threatens the survival of the world’s biggest money league. Portsmouth FC is in administration; the storied Manchester United and legendary Liverpool FC have both been saddled with smothering debt courtesy of their American owners who borrowed heavily to buy the clubs in the first place. Around the league there are stories daily about who is in trouble and who isn.t.

3) Playing along in its own seemingly isolated drama, the MLS has called for arbitration  in contract talks. The players have called on FIFA, the world governing body, to intervene, saying the MLS set up is in contravention of FIFA’s own rules. FIFA has declined to get involved.

So here’s the take away points from the above which ties the two story lines into one: FIFA will not and cannot intervene in the MLS dispute because it was complicit in allowing it to be created. When the MLS was born circa 1993-94 when the

US hosted the 1994 World Cup, it was structured as a tier two sport and a fragile interloper in a land where baseball, gridiron football and hockey reigned supreme. FIFA approve it because nothing happens in football without FIFA’s approval.

Since the arrival of Toronto F.C. in 2006, Seattle Sounders last year and the debut of Philadelphia this season and

Vancouver joining next year the MLS has grown to be a serious soccer league, reaching beyond its status as a “family day out for the kids and soccer moms for facepainting and other activities.”

Simply put, the atmposphere at MLS games are becoming as passionate as any Championship or Le Championat or Series B. Top foreign players are being lured here and top MLS players, David Beckham and Landon Donovan are holding places in

Europe with honour and dignity.

So, where’s the lesson? FIFA has been rumbling for sometime – as has it’s regional arm UEFA – about the “mad money” being sunk into the EPL and how it threatens to create a bubble which will eventually collapse and leave the game with a massive black hole.

FIFA’s Sepp Baltter has mused openly about instituting some kind of control system to reign in the spending. The issue has become even more critical with the purchase of

Manchester

City, a middle of the table EPL club which has been long overshadowed by their bitter crosstown rivals, Manchester United.

Manchester

City is now owned by a petro-state sovereign power with all the resources a state can bring to bear. The Abu Dhabi United Group for Development and Investment (ADUG) is a United Arab Emirates (UAE) private equity company owned by Sheikh Mansour bin Zayed Al Nahyan, member of the Abu Dhabi Royal Family and Minister of Presidential Affairs for the UAE.

It means that owning a EPL club is no longer the domain of billionaire Russian playboys (Chelsea) or highly leveraged American businessmen (Manchester United and

Liverpool).

It’s as if

Canada had bought a franchise and proceeded to deck the players in red and white strip with maple leafs and pour a billion dollars a year of tax money into the club to marry the concept of the country as a nation of winners who are prepared to do whatever it takes to win.

Part of the issue is also that the scrutiny process for prospective owners is lax. Apparently, all you need is a chequebook, regardless of whether you have the smarts or long term backing to stay in the game. And that’s what has done in Portsmouth FC this year – four owners, each of whom bungled and frittered away the franchise.

The EPL says its approach to a wide open ownership and anything goes strategy has created the most successful sports spectacle in the world and that is true. But it is clear in the race to stay in the EPL or even to get in to the EPL, clubs are recklessly gambling with huge sums of money and in doing so are indeed creating the bubble FIFA fears.

With the Euro in dire straits as the fallout from the global credit crisis still grinds into the economies of countries like

Greece, the future is grim.

It’s at this point that the MLS model looks more attractive to FIFA to impose on the EPL. Make no mistake, the EPL is in danger of becoming the tail that wags the dog. It is so big, so rich and has such a following that it threatens to overshadow FIFA and that’s a power struggle the governing body cannot afford to lose.

FIFA and UEFA needs to find a way to bring the EPL down to earth and at the same time stop the frenzied spending from infecting other leagues too deeply because it is creating another monster that the controlling bodies will have to find a way to control and shape to their own purpose, the Euro Super League.

We’ve already started to see the European Champions League start to take on a form of its own. If you’re not in

Europe you might as well pack up and go home because you’ll never generate the funds to penetrate the top echlon of your domestic league.

It’s been predicted that the Euro Super League will “break away” just as the EPL did from the Football Association League, bringing with it those lucrative television rights which will be shared among a smaller group of elite clubs.

The rich will get richer and the poor will get poorer and in the end it will hurt football. Already fans complain they can’t afford to see their favourite club because ticket prices have escalated astronomically. That’s not the case in the MLS.

So, which is a better model? The MLS has outgrown it’s training wheels and needs to step up to the next phase, a more open, freewheeling form of ownership and contracts but the EPL needs to reign itself in or find that FIFA will impose a new set of restraints.

Either way all fans like me care about is the game itself. We want top class player, top class entertainment that’s affordable and accessible.

Over hyped saviour

January 28th, 2010

I haven’t seen the new iPad or played with it yet but I’ve certainly heard the hype leading up to its launch yesterday and read and seen the coverage.

You’d think it was the second coming of Christ. Yes, it is another step towards creating a flexible medium for newspapers and magazines - and other content to be downloaded and consumed free of wires, keyboards and location.

For this alone, it’s a great thing. However, and here’s my beef, you have to buy the content through Apple’s store.

That’s like GM selling you a great car but saying you can only drive it on roads approved by GM and gas up at GM’s own stations.

Sorry. Don’t buy it. Like most of their other recent products, the iPad is a riff on existing products which blazed the trail - and assumed the risk - to create a market. the Kinder and the Sony eReader are both products which work and do many of the same things as the iPad.

Granted, the iPad has a faster processor which means the pages respond faster and a touch screen but I suspect we’ll see upgrades to the Kindle and eReader before long. Also worth looking at is the Que which debuted at CES this year and the long awaited Courier from Microsoft which is even more intriguing to me since it is opens like a book with two facing pages.

As a newspaper guy my first reaction to all of this is, great! Now we’ve got something to give us hope because pressing ink on to dead trees is in a death spiral. Oh, newspapers on paper will live on but they will not have the wide spread reach we’ve come to know and expect as a physical product.

Instead, the virtual product will be the one which breaks the geographical barriers that were an economic ball and chain to the physical. Simply put there’s a point in distance after which it is no longer economically feasible to distribute your physical product because the cost of carriage exceeds the revenue generated.

These readers are now in colour with sound. So you can listen to the words being read as you read…good for kids learning and those learning a second language. Or of course you can listen to music while you read….better than needing two devices. Single screen or twin screen, these early models are still better than reading on an iPhone with its limited screen or a laptop which requires a lot more power, is not as easy to read in sunlight and of course is a lot heavier.

The advantage of the readers is their portability and their screens which are very easy on the eyes when reading, unlike laptops or indeed computer monitors. It’s also more of an intimate experience since you hold the reader like a book or newspaper not like a laptop. Right now they cost about $300 to $400 each but I can see that dropping to $100 if they take off. Look what happened to big screen TVs and PCs.Just as radio did not replace newspapers or television replace radio and the internet did not replace all other existing media, merely encapsulated it into a subset,s all forms of media will survive.The book is not dead and with a reader I will likely read more especially if I can buy a book for $8 that once cost $30.Is the author losing? No, established authors can sell directly! Or should, which is why I don’t like the Apple model.Publishers will also have an incentive to find and develop new writers for it is in promoting the work of those writers that they can grow their market at very little cost.

Anyway, back to newspapers and magazines. Designing for these new readers as they evolve won’t be a huge issue since the underlying software is intelligent enough to recognize different formats and adapt.

You see, journalism isn’t dead, it’s just expensive and underfunded and been subject to the death of a thousand cuts over the last decade. What’s broken is the model which funded it.What people, readers, want is timely content, well written, well researched, presented with a minimal bias in an affordable, easy to read and digest format.Whether it’s a book, a magazine or the disposable version, the newspaper (we tend to hang on to books, then magazines longer and throw them out in bundles and trash papers the same day or next day) the demand for that content is still there.What’s killing the print industry is clearly the cost of carriage, that is the cost of putting the text onto dead trees (presses + ink + dead trees) and then trucking it to stores and boxes all over the place.Back in the day when I worked at the Sun the 20 cents (yeah it really was a while ago) you put in the box basically represented the cost of printing plus the cost of delivery (the wholesaler made his cut too) but the real money was made from advertising as we know.In North America we have an advertising driven model because our geography is not dense enough to support the circulation driven model of Europe and Asia where the model is reversed. They don’t have 60 per cent advertising in their papers, much much less. But because they have sheer numbers (circulations of millions) they can make a few pennies on each sale and make a profit.With Online scything the big money makers from papers - the classified ads section for example which were a cash cow until Craigslist and Ebay  - and then diluting the reader draw of features like recipes, sports stats pages, stock pages and the like, it’s been a downward spiral.

What newspapers have - at least some - is the draw of quality reportage and insightful commentary.

Yes, you can get commentary online but most bloggers aren’t worth the pixels to create their logo. And real reportage online usually comes from one of the established, authoritative media outlets.

The broken link is the medium. Something that is comfortable to carry, to read, to navigate yet is affordable and not necessarily disposable but something that isn’t going to break the bank account if it breaks or gets lost (unlike smart phones or laptops which cost hundreds$$$). A pain to break or lose but not so much that it becomes an insurmountable hurdle to replace.

It must however be easy to fit in your shoulder bag or even (dare I dream) a man’s inside jacket pocket. Or maybe come with some unique self supporting carrying system. And it cannot weight more than 200 grams or so.

In fact, newspapers might even borrow from Cell Phone Carriers and offer free eReaders to those who sign up for long term subscriptions, recouping the cost of the readers which they can buy wholesale and customize to their product, much like Rogers or Bell does with their handsets.

While they won’t be able to charge $1 a day for their product as they can for the hard copy, 50 cents or 35 cents is still profitable when you consider the cost of carriage has been eliminated and the cost of carrying the debt on those presses.

At 50 cents a day with 500,000 readers (or more since geographic limits are shattered too) is $250,000 per day. An average newsroom with 200 people making an average $350 a day is $70,000. An IT department is 10 people at $300 a day is $30,000. General Staff and building costs would likely run $100,000 and the advertising department can support itself.

Even with some costs like travel, phones and bureaus there’s still a healthy profit margin without the traditional need to invest millions of dollars in presses and thus generate an ROI of 20 per cent.

So, yes, the iPad is just what the doctor ordered for an ailing industry. It’s good not because the product is so spectacular but because it represents the arrival of a concept for the mass market in the form of an Apple offering which in turn suggests this is a real market and one worth developing.

With the iPad, the Que, eReader, Kindle and Courier we can expect to see some convergence and new thinknig around newspaper design (think Harry Potter movies and the animated newspaper, that is desgin with embadded video and links just liket he web) content, (custom configured newspapers for example) and a way to drive sales since the ads will be interactive.

Talking of design, here’s something that might work with the Courier’s two page format and here’s a couple of interesting ideas around how the physical newspaper of the future might work.

In fact I can see the more sophisticated, more unique and compelling content driven paper also being a premium product of the future.

My only hope is that I can hang on long enough as a freelancer to start reaping some of the benefits as a journalist supply this new market or rather reborn market.

 

 

This is no new business model to save journalism

January 13th, 2010

Interesting piece here on the quest for new business models to save journalism.
As to the future of journalism….some good points. In fact, as this points out, there is no new business model. It remains the same. What will change is the dead trees and ink medium. Check out Microsoft’s Courier reader for a glimpse. Eventually, and not too far into the future, ePaper will be as flexible and about the size of and as thin as a laminated restaurant menu.

 Also check out the new Que….a reader already working with many newspapers

Credit crunch bites into Premiership

January 9th, 2010

I don’t confess to be an expert on high finance, though I have made some stupid purchases on my credit card while inebriated, such is the danger of online shopping.

Today, though I worry not about my finances but those of my beloved football club, Manchester United.

 This is not a story about heroic sports figures. It is a story about how big business investment is destroying sport. They did it with Leeds United and they’re doing it with Portsmouth and they could yet do it with Manchester United, Manchester City and Chelsea.

You see, big money players don’t care a twat about football. For them, it’s about ego, marketing synergies and perceived opportunities which have more to do with a shell game of debt and finance than it has to do with winning and human triumph against adversity.

Manchester United was bought by the American Glazer family who promptly saddled it with 600 million pounds in debt in 2003. They have jacked up ticket prices and brought about the usual efficiencies business people do when they over spend for an asset but they are now running very close to the line.

From all reports, Man U spends about 70 million pounds a year to service its debt, some of which is at 14.25 per cent per year. It’s margin is about 90 million pounds a year meaning it has some 20 million pounds a year left to pay off the Glazer family, future investment and, oh, yeah, buy new players.

While they sold Cristiano Ronaldo to Real Madrid for 80 million pounds last summer, they’ve sat on those funds and all indications are they will not buy players this January during the transfer window.

The effects of not keeping pace are dramatic: United have lost their iron grip on the Premiership title and while they are second, a string of injuries and shock results - a 3-0 loss to Fulham and a 1-0 loss to Burnley have underlined their plight. Then they lost 1-0 at home to Leeds United, a team fully two divisions below them in the FA Cup.

Now their European Champions League knock out round run is overshadowed by chronic injuries. Simply put Man U are not the force they once were and look like they could fall out of the top five of the EPL which would mean they won’t qualify for Europe next year.

All of this means with fewer games, less gate money and less TV revenues the 20 million pound margin the Glazers depend on to service their debt will start to shrink and bingo bango you’re in big trouble.

Shocking to consider but Man U could end up seeing points deducted if they fall into recievership under the EPL rules. And if that happens they could start a free fall which would see them end up in the Championship and once that happens, it’s a slippery slope to get back on top, especially if you have no money.

Thanks to the Glazers and their greed the most stories football club in the world is in danger of financial collapse.

What a 1958 plane crash could not do, three American trolls are on the brink of achieving.

Shocking. Absolutely shocking.

Customer service part deux

January 6th, 2010

Grrrrrrrr.. and double grrrrr. This time its Microsoft. I got a new PC for the Man Cave but it hung during set up and it locked into a death loop.

It’s a micro PC box with no fan and can run constantly at low power and runs XP on an Atom processor. I tried the maker but they’rein Israel and not responsive.

I called Microsoft but they want me to pay $60 for support for a product I haven’t even officially activated yet. Reason? They stopped supporting XP in April. So WHY THEN ARE THEY STILL SELLING LICENCES FOR IT?

This was a legitimately acquired piece of software, acquired in good faith. But no, we’re not going to support it. And they wonder why people buy pirated software? Heck, if there’s no support attached why not go it alone?

You can’t suck and blow at the same time people.

Grrrrrrrr. Why companies need to address customer service issues.

January 4th, 2010

I have two angry rants to get off my chest this first blog of the New Year.

One is with Alienware, the Dell Computer subsiduary. The other is Rogers, again.

 I bought an Area 51 in the Fall of 2008 because spec for spec it was the most robust box I could find. It wasn’t cheap. Last summer one of the USB ports broke and then, later, it wouldn’t start.

The issue, they decided, was the motherboard. They would send me another and a tech would come to my house to fix it within three days. The motherboard arrived in two days. The tech took three weeks and countless phone calls.

In the meantime, I figured out that it was a peripheral issue (keyboard, mouse or other plug in hardware) and I fixed it.  The tech came, checked it out and agreed it wasn’t the motherboard. I sent the motherboard back Nov. 5 by Fed Ex. Alienware signed for it Nov. 6.

However, they dinged my credit card approximately $200 as a deposit in case I didn’t return the original. I figured it would take a week or so to get it credited back. As of today I still don’t have a refund. Why? It turns out that to replace the USB port which had broken Alienware sent an entire case to my house. Yep, the big box a desktop comes in with a power supply but nothing else. The tech looked at it and said: “I’m not stripping the guts out of one box to install on the other.”

And why would he? With two drives, liquid cooling, sound dampening and a few other boards installed, it’s a bit of a palaver for a simple fix. He did the right thing and swapped the USB module.

Since then, the new box minus, the USB module, has sat in the spare bedroom. Today Alienware, on my call asking why I haven’t got a credit for my motherboard return, informed me it’s because I haven’t sent the box back. I haven’t sent the box back because they didn’t ask me to, until now, and have yet to send my a shipping label so I don’t pay for the costs.

Duh.

Now this box weighs near 20 poounds. It must have cost a lot to ship. And now it’s being shipped back. Eventually, when they send me a label. Who knows how long that’s going to take?

I think I’ve made somewhere near 15 phone calls on this and spend some7 hours trying to resolve this since the start. Someone should have escalated the call at the outset. It was a simple question. Where’s my money?

Now they have a pissed off ex-customer. Yep. Ex. Because I’m never going to buy or recommend their products again.

It’s the same with Rogers. I added a second digital box which I bought over the holidays when it was on sale at Future Shop. there’s no cost to add the box since I pay for digital already.

However, when I got confirmation of my bill, my montly went up by $4.

Sure, it’s a piddling amount. But that’s $48 a year plus tax for all eternity.

Why? It turns out I don’t have enough outlets to add a second box.

Huh? When I built this house in 1983 I wired every room with cable and phone. Since then I’ve added a wired Ethernet (and later Wifi too). I was with Shaw Cable back then. When Rogers swapped assets sometime in the late 80s or early 90s I ended up as a Rogers customer. I’ve never once asked them to install an outlet or to fix one. All the issues I’ve had with signal strength have eminated from their side of the gate, that is the service up to the entry point of my home.

Like Bell, which I believe is now blocked from charging for extra phone jacks (unless they install them) on a monthly basis due to either a CRTC ruling or court ruling, shouldn’t the service be as far as your wall just as it is for municipal services like water.

Suppose the city wanted to charge you extra for water services if you added a new bathroom? Doesn’t Rogers realize that the more set top boxes it activates in a home the more opportunity they will have to upsell services and movies on demand?

Last month’s bill, for example, including $40 in on demand charges that my kids ran up (okay I watched a couple of the movies too), flush with the novelty of digital.

But no. I don’t have enough outlets so they cancel my basic cable extended at $56 a month and up me to $63 a month for the VIP package. With the bewildering and I suspect, temporary, discounts, it works out to $4 a month more plus tax. Do I get any more services? Channels? Options? Nope.

Cha-ching.

Thanks Rogers. You’ve done it again. Between upping my Internet costs because I want high speeds and yet still throttling speeds and packages to ensure no one comes along and usurps your plans for Movies on Demands Downloads, dicking around with my Cable and maintaining the highest Return per Subscriber revenues in the world for cell phone service - meaning our rates are higher than other countries - it reminds me once again how grateful I am for the CRTC which keeps enshrining this monopoly.

Bah! Humbug I say. When will companies learn that front line customer service is what makes or breaks their brand, not those touchy feely TV ads. To hell with brands and brand image. Social media is killing it off. It’s word of mouth and what people say about you that determines your brand image.

Wake Up.

FIFA Fair Play? Hmmmm

November 20th, 2009

Some thoughts on the Hand of Frog goal which eliminated Ireland from the World Cup Finals.

Cheating has always been part of the game. Players dive, feign injury, sneak in rabbit punches, kicks, and pushes. They play the ball when it’s out of play and deny it; They claim offside when it wasn’t and handball when it wasn’t. They demand cards for the slightest of infractions. They bad mouth players, insult their wives, girlfriends and sisters. Just ask Zidane Zidane what set him off and caused him to head butt the Italian during the WC final in 2006?

We do it because referees are human and not infalible when we’re on the other end of it…we howl blue murder.

 That said, with the stakes that ride so high on the professional game, turning a blind eye and hiding behind the rules over the blatant handball that led to the goal that elminated Ireland does neither the game nor FIFA a service.

There was already some suspicious that minnows Ireland were being set up by being drawn against France . There was a last minute change of rules by FIFA to ensure the big fish, France, Portugal, Italy and Russia didn’t draw each other in some twist of fate and leave room for the small fish to wriggle through to the last rounds in South Africa.

That smelled bad enough.

And no one really expects FIFA to order a replay. They didn’t do it when England  were knocked out by Maradonna’s infamous goal driven in by his fist and tabbed the Hand of God.

And they haven’t done it in any other game before or since and there have been many controversial calls over the years.

What they need to do is institute video replay and two extra officials, each behind one goal to ensure that the spirit of the game and the intent of the rules are not subverted.

Referees can’t be everywhere and see everything especially given the pace of the modern game.

But a second sober thought can often change a bad call into the right call and at the end of the day fairness is what matters.

Isn’t that the name of FIFA’s game: Fair Play?

You can’t talk the talk if you don’t walk the walk.

If anything this travesty against Ireland may lead to a fundemental change in the way high level games are policed so that skills and strategy prevail, not officiating errors.

Fearmongering

October 29th, 2009

Isn’t it kinda sad about the media fear mongering around swine flu?

I guess that’s what it takes to raise public awareness. ERs are full of kids and people who have colds fearing it’s the H1N1, no one knows if a sniffle is the Angel of Death. It’s a redux of the Plague circa 1600 in

London: Ring a Ring of Roses, pocketful of posies, atishchoo atishchoo we all fall down. Ignorance feeds fear and the media….oh, how we love doom and gloom. Stay tuned or you could be dead. What a great tonic for flagging circulation and declining audiences. Finally, a doom and gloom story to beat back the economy from the front page.

 We must be very pleased with ourselves? After all, we’re only doing our job. 

There are some attempts to reign this in, notably the Globe’s front today which urged people not to panic, that the headlines are as usual, sensationalistic, not that it’s a bad thing for headlines to be. LOL. I am a tab guy, after all. 

Random Rants

September 15th, 2009

Okay, so TV is boring and my satellite is down.

So, some random rants.

Ever notice that the Roger’s Internet ad on TV shows a kid “whose parents may not share his taste in music but 6,000 other do” with shots of him apparently webcasting or streaming over the Web.

Hmmmmmmmm. We’re sure, of course, that he has the licences necessary to stream music like that, even if he’s just sampling and remixing. Of course, Rogers knows that that unlicenced use of creative content is piracy.

Just checking.

Next, the touchy feely fun suckers are complaining that we shouldn’t make an issue of fat kids in schools. That we should accomodate them and be sensitive. That perhaps they should be excused from gym class. That they shouldn’t be bombarded with media images of buff bodies. Well excuse me, don’t the doctors and nutritionists on the other side say we have a national epidemic of obesity in our children. Shouldn’t we be holding up healthy bodies (not necessarily those runway waifs) as a goal? Works for me. It’s the reason I go to the gym and play footie obsessively. I don’t want to be a fat, bald, old guy.

Finally, what’s all this about competition in wireless? Sure there’s a slew of new players coming into the market and sure, we’re all expecting their offerings to be aggresive and undercut the Big Three, Rogers, Telus and Bell.

And yes, we all want that because our voice and data rates are among the highest in the world. We need competition to bring those rates down so we can all afford Web 3.0….the mobile, do it all anywhere Web.

But now, analysts are predicting, it’s all a sham. That those companies’ strategy is about bleeding money, undercutting the market and then rolling over and being bought out by the big guns in 2014 when the licences are transferable.

It’s sickening but it plays right into the convenient cabal that telecommunications regulation has become in this country.

Excuse me if I don’t continue to constantly figure way to circumvent the status quo with Skype, FTA and IPTV.

I guess I’m just a cynic.

I like this guy!

August 13th, 2009

Anyone who is willing to spend $200 million to invigorate a daily newspaper is a friend of mine.

This is what publishers need to do. Make it better. Now, not everyone has $200 million to throw around but  Mort Zuckerman has two things going for him: One he is passionate about newspapers and two, he has a net worth of about $8 billion.

His plans for the New York Daily News got me excited. Too bad a certain publisher in Canada who has a chain of tabloid newspapers does feel the same way.

Read all about Mort’s Great Plan!