RyanSpoon.com

Another blog post about book excerpts (and a couple more to come) as I’ve had time to read more than just my Blackberry and computer screen (currently enjoying vacation in Chatham, Massachusetts). I am breezing through Christina Binkley’s “Winner Take All: Steve Wynn, Kirk Kerkorian, Gary Loveman and the Race to own Las Vegas” (link on Amazon here)

It’s fascinating. Part of the fascination for me is around Las Vegas - but the (surprisingly) more interesting aspect is the business savvy, curiosity and ambition of tycoons Steve Wynn and Kirk Kerkorian.

Amidst the flashiness of what Wynn and Kerkorian were building, Harrahs built an equally successful business on a very different consumer and experience. There are other great excerpts - but the below is really striking as you consider, for instance, the big-spenders that Wynn chased with his $2,000,000,000 Bellagio… which is no longer the glitziest casino on the strip. It also shows the very mathematical and methodical approach that Harrah’s takes to customer research and market (and they are the best in the world at it) - which stands in sharp contract to Wynn’s very instinct-driven approach (which he has proven quite adept at himself):

“Morgan and Boushy identified a small group of customers who produced most of Harrah’s profilts. It turned out that they weren’t the flashy high-rollers. They were low-rollers - average Americans who spent between $100 - $499 on a gambling trip. These people made up only about 30 percent of gamblers, but they gambled so frequently that they accounted for 80% of Harrrah’s revenue and nearly 100% of it’s profits.

Harrah’s decided to make these highly profitable customers its core audience, calling them “avid experienced players” or AEPs. “I felt like I’d discovered the Rosetta Stone of casinos,” Morgan said several years later.”

Tonight, the Boston Celtics have an opportunity to win the 2007-2008 NBA Championship against the Los Angeles Lakers. The game will likely draw huge ratings and put an exclamation point on a terrific, renaissance season for the NBA.

But not all news is good for commissioner David Stern. After the first game of the NBA Finals (and a spectacular game at that - pitting Paul Pierce against Kobe Bryant), the Tim Donaghy scandal worsened. Donaghy, who has now been under investigation by the FBI for over a year, claimed that the other referees fixed NBA games… citing a critical elimination Game 6 between the Los Angeles Lakers and Sacramento Kings (the Lakers won that game, then won Game 7 and went on to win the championship).

AdAge released a poll this week that was conducted before the Donaghy scandal - and it reveals a huge brand problem for David Stern that surely is worsened by Donaghy’s claims: 41% of NBA fans say the league alters games and 26% say the Lakers-Celtics finals a setup. Wow.

Those are troubling numbers… but they are also conflict the success the NBA has seen over the past year (viewership, ticket sales, etc). And the NBA isn’t the only league with problems:

- The NFL’s integrity has been questioned with the Spygate scandal and the league has had a long-running problem with players and the legal trouble

- Major League Baseball’s massive steroid problems were aired publicly and have ruined the era’s best hitter (Barry Bonds) and best pitcher (Roger Clemens)

- The NHL has neither problem, but playoff games draw lower ratings that ESPN’s rerun of past Word Series of Poker events

So does any of this really matter? Ultimately the health of the league is (mostly) predicated on talent and competition. The Donaghy scandal hasn’t deterred viewers for basketball. Too many Michael Vicks and Pacman Jones haven’t made the NFL any less popular. And steroids likely contributed to baseball’s resurgence. The only sport lacking a major scandal is the only sport struggling to stay afloat.

For the NBA, one thing is apparent: the players drive the league. Despite Donaghy (and whatever other external events occur) - fans want to see great athletics and great athletes. As long as Kobe Bryant, Paul Pierce, Lebron James and other stars continue to play, people will continue to watch.

This is the first of two brief follow up posts (I was going to label them “Part II’s” but they really aren’t thorough enough to qualify…).

I wrote about the shifting economy in Major League Baseball and how deals are shifting towards younger players with longer, more reasonable deals. ESPN’s Buster Olney (one of the reason’s I’m a paid Insider subscriber) had a terrific article today. Olney opened by reinforcing my premise:

… Everything that happens seems to reinforce two essential hypotheses.
No. 1: You almost never realize anything close to equal return in signing veteran players to long-term contracts.
No. 2: The perceived value of young players keeps rising and rising and rising.

And then he added insights that I never could:

The industry trend, as we have seen, has been toward player development, toward drafting and shaping young players and eschewing big-money deals, and nothing that has happened this year has changed that. Some executives already have come to strongly believe the following:

• By the end of Miguel Cabrera’s contract with Detroit, his $152.3 million deal will be viewed as a major mistake.
• Over the duration of [Johan] Santana’s contract, he will not be the kind of pitcher that the Mets paid for.

A couple things that strike me about this:

1) I love the use of the word “industry”. That’s what it is. And the dollars are large enough to support it.

2) Neither Cabrera’s nor Santana’s contracts were widely second-guessed in the off-seasons… in fact, many analysts lauded the deals.

3) The “collision course” between big veteran deals and youth extensions has happened seemingly instantly. The result is likely a very different trade deadline (now a few weeks away) and off-season free agency. Players like CC Sabathia and Mark Texiera turned down monster contracts in the hopes of getting $200m plus this off-season… those deals likely won’t happen and may be well off.

All of this, in my opinion, is good for the baseball. Keeping an open-’marketplace’ in tact, baseball is going to see small market teams effectively compete and to build for long-term success. Meanwhile, if the economic standards indeed shifts, there will be major consequences for striking major deals that don’t work… which is a good thing.

In the last few weeks, the economics of Major League Baseball (MLB) has been rewritten in a way that would make Money Ball’s Billy Beane proud. MLB has seen an influx of very talented, very young players (under 27) - and general managers are forced to ask themselves whether to lock them up to big contracts now… or have them hit the open market and potentially sign far bigger deals. The players are forced to ask themselves whether to sign long-term contracts now or continue earning minimum level salaries ($100,000s / yr) until they hit the open market.

It’s a fascinating time for baseball.

Just a few months ago, a flurry of massive free agent deals were signed:
Alex Rodriguez (32 years old): $275m / 10 years
Mariano Rivera (38): $45m / 3
Mike Lowell (34): $37.5m / 3
Jose Guillen (32): $32m / 3
Francisco Corderro (33): $46m / 4
Aaron Rowand (30): $60m / 5
Torii Hunter (32): $90m / 5
Jorge Posada (36): $52m / 4

These are all enormous deals for players that will likely decline noticeably towards the end of the contracts. So while the numbers might make sense for the first part of the contract, I assure you that Jorge Posada will not be worth $13m / year when he’s 39 or 40. But when a talented player hits the open market, the bidding puts *everything* in his control. Just ask Johnny Damon, Eric Gagne, Barry Zito and others…

So four teams from four non-major markets have started a new economic wave by signing their own talent to long-terms deals that are favorable for both the player and the team. The Milwaukee Brewers, Colorado Rockies, Florida Marlins and Tampa Bay Rays ALL say their talent leave to major market teams able to pay their players major dollars. To protect themselves, they paid their players handsomely (but far less than the average open-market contract) but locked them into long deals with team options for an additional 1-3 years. Those players are all in their young 20s and have yet to hit a major payday (despite making $100,000s / year). So the clubs are able to secure the future at reasonable rates (should these players be even close to top talent) and the players are able to land deals that will pay them very well… and potentially still enable them to hit the open market and fetch the big dollars:

Player Total Contract Contract / Year Age Years
Ryan Braun, LF $45,000,000 $5,625,000 24 8
Hanley Ramirez,SS $70,000,000 $11,666,667 25 6
Troy Tulowitzki, SS $31,000,000 $5,166,667 24 6
Evan Longoria, 3B $17,500,000 $2,916,667 23 6

And soon enough you’ll see the Red Sox do the same with Papelbon, Pedroia, Jon Lester, Bucholtz, and Ellsbury. The Yankees will sign Joba Chamberlain, Phil Hughes, and Ian Kennedy (they already signed Robinson Cano). The Mets have tied up Jose Reyes and David Wright.

Even big-market teams like the Red Sox, Mets, Yankees, Tigers, etc understand that you’d rather gamble on upside than on downside… especially when signing people on the downturn of their career can be more expensive.

And it hasn’t been proven that it’s easier to predict success for veteran players. A couple examples based on recent memory:

- Johnny Damon and Pedro Martinez were signed to long contracts by the Yankees and Mets respectively. Neither played as well as their Red Sox days nor has remained healthy (both are aging as well).

- Andruw Jones signed a monster contract with the Dodgers this year ($36m / 2 years). He’s been horrible.

- Eric Gagne got $10m this season after hitting the open market. He leads baseball in blown saves and has relinquished his role as closer.

- Jorge Posada got big money and a four year contract from the Yankees. He’s spent most of the year on the DL - and I can’t imagine it will get better as he approaches 40.

Player Total Contract Contract / Year Age Years
Ryan Braun, LF $45,000,000 $5,625,000 24 8
Hanley Ramirez,SS $70,000,000 $11,666,667 25 6
Troy Tulowitzki, SS $31,000,000 $5,166,667 24 6
Evan Longoria, 3B $17,500,000 $2,916,667 23 6
David Riske, RP $13,000,000 $4,333,333 31 3
Mariano Rivera, RP $45,000,000 $15,000,000 38 3
Alex Rodriguez, 3B $275,000,000 $27,500,000 32 10
Kenny Rogers, SP $8,000,000 $8,000,000 43 1
Aaron Rowand, CF $60,000,000 $12,000,000 30 5
Johan Santana, SP $137,500,000 $22,916,667 29 6
Carlos Silva, SP $48,000,000 $12,000,000 29 4
Luis Castillo, 2B $25,000,000 $6,250,000 32 4
Francisco Cordero, RP $46,000,000 $11,500,000 33 4
Octavio Dotel, RP $11,000,000 $5,500,000 34 2
Keith Foulke, RP $7,000,000 $7,000,000 35 1
Eric Gagne, RP $10,000,000 $10,000,000 32 1
Tom Glavine, SP $8,000,000 $8,000,000 42 1
Jose Guillen, RF $36,000,000 $12,000,000 32 3
Torii Hunter, CF $90,000,000 $18,000,000 32 5
Geoff Jenkins, RF $13,000,000 $6,500,000 33 2
Andruw Jones, CF $36,200,000 $18,100,000 31 2
Scott Linebrink, RP $19,000,000 $4,750,000 31 4
Mike Lowell, 3B $37,500,000 $12,500,000 34 3
Kazuo Matsui, 2B $16,500,000 $5,500,000 32 3

Two nights ago, Bob Costas hosted Buzz Bissinger (author of Friday Night Lights), Will Leitch (founder of the web’s largest sports blog, DeadSpin) and Braylon Edwards (starting wide receiver on the Cleveland Browns) on his talk show Bob Costas Now. The debate became an immediate internet sensation… which is probably shocking to stubborn-minded people like Buzz and pretty obvious to web savvy leaders like Will.

Once Costas leads with the blogs vs. journalism question, Buzz Bissinger goes wild:

As the founder of beRecruited (a site and service based on user-generated content), I clearly have strong feelings about this:

1. I have met and interacted with Will Leitch on a few occasions. He is smart, articulate and has built a readership larger than most journalists can dream of.

2. You might not enjoy DeadSpin’s content - but Will’s blog is read nearly 1,000,000 times a day. The market has spoken.

3. More proof that the market has demanded this new media: PerezHilton has a greater readership than People Magazine - the top read magazine year after year. Old Media has followed with constant streams of news and debate. For sports, SportsCenter rolls on ESPN for 6 hours while ESPN2’s First Take features (very enjoyable) debate on yesterday’s topics. E!, TMZ, Access Hollywood and a dozen other shows do the same things for pop culture. Old Media has moved to constant streams: their own blogs, podcasts, radio, etc.

4A. More proof (again): beRecruited is home to one of the web’s largest sports blogs, SportsWrap, which has been read more than 10,000,000 times in the last six months. Look at the server logs (a fascinating part of blogging) and you will notice that people arrive on SportsWrap seeking new breaking news, commentary, and very particular (often strange) tidbits of information. In the last 120 seconds on SportsWrap, users came from Google looking for the following (and this just a small slice of the data):

Candace Parker Tattoo
akin ayodele traded to the Miami Dolphins
Best Air Jordans
Lemans Crash
Peyton Manning going insane on the sidelines
Mark Jackson Knicks Coach
High school football highlihts
Paul Pierce fined
Atlanta Hawks scorekeeper Maria

4B. Why the market demands this media: once-a-week publications like Sports Illustrated now serve a different purpose than news-breaking sources. SI is the pinnacle of sports reading and I continue to be a subscriber… despite having not found once piece of ‘breaking’ news in the last few years (it’s always already broken and available). I read SI for the writing and commentary - I get my news through other sources: the web, mobile, podcasts, radio, etc. Here is a great example.

Dr. Z (one of the great NFL writers) published his NFL Draft Preview last week in SI. This used to be *the* way to prepare for the draft. Dr. Z is one of the most connected NFL gurus, but has to publish the article days before the draft begins. His results weren’t pretty:

- 1 correct pick in the top 10
- 4 correct picks in the top 31 (first round)
- predicted 5 wide receivers would go in the first round… not a single WR was picked

I am not critiquing Dr. Z. Rather, I am demonstrating that this new media that Buzz despises has value. We correctly predicted the top 6 picks in the NFL draft on SportsWrap and InGameNow. Does that make us smarter than Dr. Z? Absolutely not. But it does demonstrate the power of constant connectivity.

5. Buzz and Costas clearly don’t understand how blogs work. Their attacks on Will were predicated on comments and commenters. Community is unique to blogs and, in my opinion, one of the major reasons that new media content has grown so quickly. An article on DeadSpin might only be a couple hundred words - but the dialog can go on with hundreds of comments and is fascinating. Sometimes its intelligent. Sometimes it’s crass. But they are comments, not Op Eds.

6. Braylon Edwards comments on the panel also bugged me. First, like it or not, this isn’t the 1960s. Athletes make $10,000,000s - and a good deal of that contract inflation is due to increased media, promotion, awareness, etc… the web plays a major part there. Second, technology is everywhere. Be aware of it. Matt Leinart is a very rich celebrity athlete (and he revels in his celebrity). He should be more than aware that people have cameras and access to publish content… he should consider this before publicly doing beer bongs with herds of females. People should think about this before publishing photos to their own MySpace and Facebook profiles.

7. Another example of why Bob Costas and Buzz Bissinger don’t get it: for two smart people, they failed to get their message through effectively and caused massive backlash. Even if you agree with their sentiment (and you’re more than welcome to do so) - they didn’t deliver the argument well and probably caused a greater divide than existed previously. Bissinger has become an internet celebrity for all the wrong reasons: he surged to the top 10 google searches, had his wikipedia page vandalized throughout the day (hysterical stuff too) and has become the model for old-world thought ‘leadership’.

An excerpt from his new Wikipedia entry, which sadly seems very accurate:

H. G. “Buzz” Bissinger (born November 1, 1954, in New York City) is a pompous windbag. He is also an American journalist.

Most recently Bissinger appeared on an HBO’s Bob Costas On The Record to discuss the evergrowing sports media landscape. Bissinger then proceeded to make an ass out of himself and lose all credibility what so ever. His journalist tag has now been revoked.

After being disappointed by Will Ferrell’s Semi-Pro (and the box office results agree), I was excited to see Forgetting Sarah Marshall… but the box office response was far from overwhelming (although I thought it was great). This past weekend, it placed 2nd ($17.3 million) behind the Forbidden Kingdom. In fact, movie ticket sales in 2008 have been down and year-over-year growth has been flattening:

So what’s the connection between Forgetting Sarah Marshall and GTA IV? First, I had seen these Sarah Marshall billboard ads everywhere:

from Defamer

And then I saw the below GTA ads placed on a series of LA buildings (from Kataku). Not only has Rockstar created an awesome mural ad - video games are a big, big business. Grand Theft Auto III has sold 14.5 million units - at $50 a copy, that’s $725mm in sales. Titanic is the highest grossing domestic film ever at $601mm.

Want a free cup of coffee tomorrow?

Just roll into your local Starbucks at 12est / 9pst for a free serving of Starbuck’s new Pike Place Roast - a smooth drip coffee that is being ‘launched’ tomorrow. That said, several of the San Francisco Starbucks have been serving Pike Place for the last few days (you might also notice the new cups which have a brown Pike Place logo rather than the traditional green Starbucks emblem).

I’ve had a couple cups so far and it is quite good - decently strong, but not bitter. And supposedly this blend is a response to the critique that Starbuck’s coffees tend to taste overly bitter. I still prefer Sumatra, but Pike Place beats many of the regularly offered drips. From the official press release:

Smooth, Welcoming Taste

This blend was created using input from Starbucks customers and represents our 37 years of coffee roasting experience, knowledge and passion. Taking the wide range of customer preferences as a guide, this everyday brew is a unique blend featuring Starbucks signature bold flavor with a smoother finish balanced by soft acidity and subtle, rich flavors of cocoa and toasted nuts.

Fresh, Hand-Scooped

The Pike Place Roast™ coffee beans will be hand-scooped, freshly ground, and freshly brewed and served, giving the coffee a consistent, pure taste. To further ensure customers enjoy the freshest, high-quality cup of brewed coffee, stores also will brew smaller batches with a hold time of no more than 30 minutes. Licensed stores in the U.S., as well as Starbucks locations outside the U.S., will also transition to a 30-minute hold time over the coming months.

“Our partners (employees) are excited about bringing back the coffeehouse atmosphere,” said Schultz. “They really like the physical act of scooping and grinding the beans — they like staying close to the coffee. They’ve told us that it makes them feel more in touch with our Company’s core values. And they like that they can offer their loyal customers such an amazingly fresh cup of coffee.”

I can’t get enough of this TV spot.

Burger King uses power ad agency Crispin Porter + Bogusky and I have always loved their ads. They continually create hilarious, viral ads that somehow always find their way into my inbox… I guess if your spots are routinely emailed around, you’re doing a pretty good job:

I love the Sonic commercials.

The latest pokes fun at the web culture and the much-overused Web 2.0 phrase (I’m of course guilty). Sorry for the poor quality:

In general, I don’t understand why April Fools jokes on the internet have begun on March 31st - but apparently that’s now standard. I also struggle with April Fools internet ‘jokes’ because they are mostly just made up stories (easy to do - though cleverness is clearly difficult) - but that’s what makes YouTubes ‘prank’ so great: they actively made a product change and, in doing so, poked fun at themselves.

YouTube RickRoll’d their users and their videos - linking all their featured videos to that classic 80s music video.

It’s debatable who’s career was resurrected more by web 2.0: Chuck Norris or Rick Astley.

If you don’t know what a RickRoll is, here is a great example. Yesterday’s #1 story on Digg was titled “Lala (Tiki Bar) Showers Video”, raked in nearly 7,000 diggs and linked to this video:

Flick’Rolled:

Some guy RickRolling his class: