29 Mar

15 to Watch: Horrow’s Top Sports News/Marketing/Deal-Making/Business/Corporate/Endorsement Issues for the Week of March 29

15 to Watch: Horrow’s Top Sports News/Marketing/Deal-Making/Business/Corporate/Endorsement Issues for the Week of March 29

1. Thanks to a strong performance in the NCAA tournament, the ACC will receive at least $28 million over the next six years to distribute to its member schools. Depending on how the tournament shakes out, the conference could be the first in NCAA history to make more than $30 million off one tournament. March Madness and Final Four generate substantial economic impact for all cities, especially Indianapolis with its Final Four history. Next event is geared for 2021 (notwithstanding the controversy over some of the latest Indiana legislation).

2. The NFL is considering moving an owners’ vote on Los Angeles expansion to the fall in order to give relocating teams more time to properly transition to the market. The league wants to have at least one team in L.A. by 2016. The current frontrunner is the St. Louis Rams, whose owner, Stan Kroenke, has unveiled plans for a $1.86 billion stadium in Inglewood. A fall deadline will add more certainty at the back end, and more frenzy in the next four months. The St. Louis referendum/legislative funding attempt is the most pressing deadline, with others following. Three absolutely mobile teams with up to seven different scenarios is unprecedented leverage for any major league.

3. Major League Baseball’s 30 teams are worth a total of $36 billion, according to the most recent valuations study conducted by Forbes. The average team is worth $1.2 billion, up 48% from last year, marking the biggest year-over-year increase since Forbes began tracking team values in 1998. Bud Selig’s ultimate success is measured by this stat. A 48 percent yearly return on ANY asset is incredible, compounded by the fact that a $1.2 billion asset is worth purchasing no matter what the debt.

4. Time Warner Cable is expected to write down the value of SportsNet LA by up to $1 billion as it continues to struggle increasing the channel’s distribution. TWC paid $8.3 billion over 25 years for Los Angeles Dodgers media rights, but the channel’s high subscriber fee has left 70% of the market without games. The giant game of “cable subscription chicken” is coming home to roost. Prediction: overall value reduction is a dramatic effort aimed at an early and definitive settlement.

5. MLS Commissioner Don Garber formally announced that Minnesota has been awarded an expansion team that is scheduled to begin play in 2018. When it enters the league, Minnesota United will be the 23rd MLS franchise. The club is aiming to play at a new soccer-specific stadium in downtown Minneapolis. MLS in an “environment of riches” as franchises are awarded quickly. However, stadium deals still in question in Minneapolis, New York, Miami, and (for the funding mechanism) Orlando. Much of the leverage has been removed in each case.

6. Fidelity National Financial Chair William Foley is confident he will be granted an expansion NHL franchise in Las Vegas, with an official announcement expected within a month. Foley last month launched a ticket campaign to gauge interest in the market, and a $375 million arena currently is under construction on the Las Vegas Strip. NHL in Vegas looks more real than ever, as Gary Bettman identifies the advantages of a monopoly market in a demographically interesting area. The question appears not to be “if” but “when.”

7. Barclays will not renew its title sponsorship of the English Premier League when its current deal expires at the end of the 2016 season. The bank signed a three-year extension of its original deal in 2012 for a total of $178 million, a nearly 50% increase from its previous agreement. This may be the highest level of league uncertainty since Sprint decided not to renew its NASCAR sponsorship. Similar to NASCAR, the English Premier League is so well situated (demographically, economically, television wise, etc.) that the replacement should be fairly easy to identify.

8. NFL owners voted down a proposed rule change that would have put fixed cameras on sidelines, end lines, and goal lines. The league reportedly does not want to add the cameras because of the costs associated with having them at all NFL stadiums. It may be that the change may have been less likely because of who proposed it (Bill Belichick). If the studies prove that additional cameras actually enhance the integrity of the game, it is impossible to believe that the NFL would not pull the trigger because of cost reasons.

9. President Obama said that universities need to be doing more for their student-athletes and that the NCAA should require schools to guarantee athletic scholarships. At the same time, Obama stopped short of saying that college athletes deserve to be paid. The President is saying what everyone else is saying now that it is easy to say it! That more revenues are generated and that athletes should be able to assume the full cost of scholarship. The competitive market should take care of this as the big five power conferences struggle to gain recruiting advantages.

10. The NFL is looking into Germany as a possible site for future regular season games. Frankfurt and Dusseldorf are the likeliest sites, with Berlin and Munich also under consideration. Germany is one of the NFL’s next two frontier markets, along with Brazil. Look for NFL International to increase its visibility and exposure in countries like Germany – not necessarily franchises or even a series of games. Rather, grassroots initiatives, marketing and merchandising processes, and the like. The Roger Goodell challenge of $25 billion of revenue by the end of this labor cycle is a solid motivation.

11. NBC Sports plans to air some of this year’s Stanley Cup playoff games on USA Network in an effort to boost the network’s TV ratings. NBC puts all hockey playoff games on national channels and has used networks including CNBC for overflow games in the past. USA’s last major sporting event was U.S. Open tennis in 2008. Another example of NBC being “all in” with the NHL – as well as using vertically integrated platforms to “rehearse” for Rio and other mega-Olympic events. The beneficiary: NHL, its teams, and its players.

12. Duck Commander has dropped its title sponsorship of the Independence Bowl after just one year because the return on investment failed to meet the company’s expectations. Unlike most sponsors, Duck Commander operated under a letter or intent, having never made a lump-sum payment for the rights. Impossible to believe that Duck Commander is no longer affiliated with the Independence Bowl. What sponsor is left to make fun of during the next bowl cycle? We may have to be resort to NASCAR race names – like the SpongeBob SquarePants 400 in Kansas City.

13. A federal judge denied a motion from the NHL to dismiss a lawsuit brought by retired players accusing the league of concealing the risks of concussions. The ruling puts increased pressure on the league to reach a financial settlement or risk going to trial. Concussion issues continue to dominate the legal landscape in sports. As every piece of litigation moves closer to jury trials, the stakes get higher, the insurance carriers become more unsettled, and pressure increases to end the litigation and create solid and consistent processes.

14. David Beckham’s quest to bring an MLS team to Miami is heating back up. The soccer star recently held several meetings in the city with the hopes of landing a stadium deal. Beckham reportedly is considering building a stadium near Marlins Park just west of downtown Miami. As MLS awards franchises to Minneapolis and as New York struggles to identify its stadium location, Miami is on the hot seat for a quick response to a complex stadium issue.

15. The Cincinnati Reds have installed multiple self-ordering kiosks for food and drinks at Great American Ballpark. The ballpark has undergone several renovations this offseason in advance of the Reds hosting this year’s MLB All-Star Game. MLB again uses the All-Star Game to generate interesting experiments for fan convenience, stadium modernization, Internet access, and other major issues that will benefit this year’s game in Cincinnati, and future games in Miami and otherwise.

25 Mar

NBA Salary Cap Set to Explode 3/25

NBA Salary Cap Set to Explode
The NBPA has formally rejected the NBA’s proposal to gradually increase the salary cap over several seasons, opting instead for a large spike in the cap after next year. Without a so-called “cap-smoothing” plan, the NBA is poised for a major salary cap jump after the 2015-16 season. Because of the league’s new TV deals with ESPN and Turner, the cap could increase from $66 million to as much as $92 million. Previously, the largest cap growth between seasons was just $7 million. The NBA wanted an artificial, gradual cap increase to prevent teams from spending recklessly.

Another long-standing conflict between the league and union has been around underclassmen entering the draft. On that front, the league is in talks with the NCAA and the National Association of Basketball Coaches to reform the draft entry process. The proposal would move the withdrawal date for college players to late May, nearly five weeks later than the current April date. If the plan is adopted, underclassmen will be able to participate in a new invitation-only combine in mid-May.

25 Mar

SPORTS NEWS / DEALMAKING / BUSINESS / MARKETING / ENDORSEMENT / LEGAL ISSUES FOR THE WEEK OF MARCH 22

SPORTS NEWS / DEALMAKING / BUSINESS / MARKETING / ENDORSEMENT / LEGAL ISSUES FOR THE WEEK OF MARCH 22

1. Adidas has dropped its bid to extend its apparel contract with the NBA when the deal expires in 2017. The brand has been the league’s apparel partner since it signed an 11-year, $400 million deal in 2006. Since that time, Adidas has fallen to third in the sports apparel market behind Nike and Under Armour.

2. Toyota has signed on to join the IOC’s TOP sponsor program as part of a deal that runs from 2017-24 and is worth a reported $835 million. Toyota’s agreement falls under the newly created mobility category, which includes vehicles, mobility services, and solutions.

3. Nike in the last 12 months through January sold $340 million worth of LeBron James’ signature shoes, up 13% from the prior year. Sales of James’ shoe nearly doubles the amount of the NBA’s second best seller Kevin Durant, whose KD signature line had sales of $195 million last year.

4. FIFA officially announced it would move the 2022 Qatar World Cup to winter, with the final to be played on December 18 of that year. FIFA also made the decision to shorten the tournament to 28 days, down from the traditional length of 31-32 days.

5. Changes to the use of video replay and a rule that would allow teams to try for a “bonus” point after a successful 2-point conversion are among proposals that will be presented by the NFL’s competition committee at next week’s owners meetings. A total of 23 changes will be discussed at the meetings, 19 of which were submitted by teams and four proposed by the competition committee.

6. The Brazil World Cup helped FIFA generate record revenue of $2.1 billion last year, including $140.7 million in profit. FIFA accounts show its dependence on the World Cup, which was responsible for 84% of all revenue from 2011-14. Revenue tied directly to the tournament in Brazil totaled $4.8 billion.

7. The Missouri Senate passed a measure saying Governor Jay Nixon cannot extend bonds for a St. Louis NFL stadium without a vote of the Legislature or the people. Nixon’s administration previously said it didn’t need a vote to act on bonds for the proposed riverfront stadium.

8. Public support for the 2024 Summer Olympics in Boston is slipping, with just 36% of adults in the region in favor of hosting the Games. A January poll showed 51% of residents supported the choice, but by February, that total had fallen to 44%.

9. Nike has extended its on-field NFL apparel deal through 2019. While terms of the deal were not disclosed, Nike originally agreed to a five-year, $1.1 billion contract with the league in 2011. The extension includes expanded licensing rights and additional fees.

10. The IOC is considering changes to its advertising rules to loosen the restrictions on athletes endorsed by sponsors that aren’t official advertisers at the Games. The proposal is expected to be presented at the next IOC session in Kuala Lumpur, Malaysia, in July.

11. Soccer star Cristiano Ronaldo is interested in joining MLS when his Real Madrid contract expires in 2018. Several international stars have joined MLS in recent years, including Kaka in Orlando, Steven Gerrard in Los Angeles, and Frank Lampard in New York.

12. The University of Michigan athletic department a $13 million surplus during the school’s 2014 fiscal year. UM produced $157.9 million in revenues and spent $144.86 million leading to the surplus, which was an increase over the $11.3 million produced in 2013.

13. The NBA announced plans for its annual Green Week, which includes presenting sponsor Sprint hosting mobile phone recycling events as part of the Sprint Buyback Program. The NBA and Sprint are also working with the Arbor Day Foundation to plant a tree each time #NBAGreen is posted on Twitter.

14. The University of Texas has approved a 10-year agreement with 289c Apparel to become the new licensee for the school and will allow the school to handle its licensing in-house. The deal includes guaranteed revenue to limit downside risk for the first three years.

15. Syracuse has parted ways with Athletic Director Daryl Gross amid an NCAA report that led to the vacation of 108 wins, a fine of more than $1 million, and questions about the school’s academic integrity. Gross had been in the role for more than a decade, overseeing Syracuse’s move to the ACC from the Big East.

25 Mar

SPORTS NEWS / DEALMAKING / BUSINESS / MARKETING / ENDORSEMENT / LEGAL ISSUES FOR THE WEEK OF MARCH 15

SPORTS NEWS / DEALMAKING / BUSINESS / MARKETING / ENDORSEMENT / LEGAL ISSUES FOR THE WEEK OF MARCH 15

1. With competition from Carson and Inglewood, California, AEG has abandoned its plan to build Farmers Field in downtown L.A. The company had spent $50 million over the last five years on the effort, but never was able to secure a commitment from an NFL team willing to relocate.

2. The NBPA has formally rejected the NBA’s proposal to gradually increase the salary cap over several seasons, opting instead for a large spike in the cap after next year. The league wanted to implement a so-called “smoothing” plan to prevent teams from spending money recklessly.

3. The NFL is projecting revenue of more than $12 billion this year, a roughly $1 billion increase over 2014, according to Daniel Kaplan of SportsBusiness Journal. The expected increase is based on the league’s new TV contracts and better-than-expected local revenue.

4. The NCAA in 2014 posted a record $989 million revenue, resulting in an all-time high budget surplus of $80 million. Approximately $750 million in revenue came from various TV and marketing rights fees, primarily associated with the NCAA men’s basketball tournament.

5. Major League Baseball over the 2014 calendar year generated a league-record $9 billion in revenues, up 13% from $8 billion the year before. The growth can be attributed to new national TV deals with Fox, ESPN, and TBS, as well as lucrative local media rights contracts.

6. The NBA is in talks with the NCAA and the National Association of Basketball Coaches to reform the draft entry process for underclassmen. The proposal would move the withdrawal date for college players to late May, nearly five weeks later than the current April date. If the plan is adopted, underclassmen will be able to participate in a new invitation-only combine in mid-May.

7. Comedian Will Ferrell visited five Spring Training ballparks in Arizona for a new HBO special from Funny Or Die in partnership with MLB. Ferrell played 10 positions for 10 teams over five games in an effort to raise money for kids with cancer.

8. Farmers Insurance received an estimated $6 million in free media exposure for putting its name on Farmers Field. Despite signing a 30-year, $700 million naming rights deal back in 2011, Farmers wasn’t obligated to pay anything until stadium construction was completed.

9. Several groups have reportedly submitted non-binding bids to acquire the Atlanta Hawks, with at least one group offering to pay at least $900 million for the team. The Hawks are expected to solicit binding offers from prospective buyers over the next two weeks.

10. Tampa Bay Lightning owner Jeffrey Vinik has agreed to split with Hillsborough County the cost of a $25 million renovation of Amalie Arena. Construction on the arena will take place over the next two summers, and will include new concession stands, new restrooms, and rebuilt locker rooms.

11. Houston Astros owner Jim Crane blames the team’s low payroll and spending constraints on issues surrounding their local TV deal. Shortly after Crane acquired the team in 2011, CSN Houston, of which the Astros owned 46%, filed for bankruptcy. The Astros are expected to enter this MLB season with baseball’s lowest payroll.

12. The Arizona Coyotes’ latest rebuilding plan has created skepticism in the community regarding the team’s long-term future in Glendale. The Coyotes’ arena lease includes an out clause that allows the team to leave if it loses more than $50 million over a five-year period.

13. Supporters of the University of Alabama-Birmingham football program are collecting 2016 season ticket deposits despite the school eliminating the team. The goal is to get approximately 10,000 deposits of $25 each, which would rank UAB top amongst Conference USA schools in season-ticket sales.

14. The prospective NHL expansion team in Las Vegas led by Fidelity National Financial Chair William Foley is now only 2,000 deposits shy of its season-ticket sales goal. Additionally, the group already has commitments to sell half of the 44 luxury suites at its arena.

15. Texas A&M football donors have filed a class-action lawsuit against the school’s 12th Man Foundation after losing their seats as part of a $485 million expansion of Kyle Field. The suit accuses the foundation of reneging on endowment agreements dating back to the 1980s.

25 Mar

SPORTS NEWS / DEALMAKING / BUSINESS / MARKETING / ENDORSEMENT / LEGAL ISSUES FOR THE WEEK OF MARCH 8

SPORTS NEWS / DEALMAKING / BUSINESS / MARKETING / ENDORSEMENT / LEGAL ISSUES FOR THE WEEK OF MARCH 8

1. NASCAR is seeking $1 billion over 10 years for the title sponsorship of its top series. The sanctioning body wants an annual rights fee of $45-50 million, plus a commitment to spend the same in activation and media buys. Sprint is ending its 13-year sponsorship of NASCAR’s top series after the 2016 season.

2. A study commissioned by AEG warns of the security risks associated with building an NFL stadium in Inglewood, California, at a site proposed by St. Louis Rams owner Stan Kroenke. The report suggests that the stadium’s proximity to LAX could make it a target for terrorists. AEG has long championed a rival stadium proposal, Farmers Field in downtown L.A.

3. More than 60% of the Los Angeles market is still without access to SportsNet L.A., the Time Warner-owned cable channel with rights to televise Dodgers games. Neither TWC nor cable and satellite operators have been willing to budge in negotiations over the channel’s subscriber fee.

4. Goldman Sachs will finance the San Diego Chargers’ prospective move to L.A., including covering any short-term operating losses and renovations needed at a temporary venue. The Chargers and Oakland Raiders have proposed sharing a $1.7 billion stadium if they can’t secure new stadiums in their current markets.

5. The University of Kentucky signed an eight-year, $30 million extension of its footwear and apparel deal with Nike. The deal is the seventh-most lucrative on an annual basis among Nike’s NCAA contracts, and it follows long-term extensions Nike recently signed with Florida and Florida State.

6. Nickelodeon has signed a one-year deal to title sponsor the May Sprint Cup Series race at Kansas Speedway, which will be called the SpongeBob SquarePants 400. The kids network also plans to sponsor multiple teams at various points during the Sprint Cup season.

7. The MLBPA is in ongoing discussions with the league about the possibility of holding future Spring Training games in Cuba. Given the changing relations between the U.S. and Cuban governments, the country likely will become a top international priority for MLB.

8. The Pac-12 Conference’s TV revenue projections are significantly less than those of the SEC and the Big Ten. Whereas SEC and Big Ten schools are expected to make more than $33 million annually by 2018, Pac-12 schools are projected to bring in about $23 million. The big gap could impact the competitive balance amongst the conferences.

9. The Atlanta Braves last year borrowed $100 million to finance the team’s new ballpark. Until bonds are sold, the Braves are advancing money for construction. Between the stadium and a mixed-use project adjacent to SunTrust Park, the total cost of the Braves’ project is $1.1 billion.

10. Former Heisman Trophy winner Jameis Winston has filed to trademark the phrase “Famous Jameis.” Winston said he’s been called the nickname since playing Little League baseball, but it gained national popularity during FSU’s National Championship season.

11. ESPN will pay $7-9 million for rights to the 2016 World Cup of Hockey, according to John Ourand of SportsBusiness Journal. ESPN’s bid was worth several millions more than bids from Fox and NBC, which reportedly were in the $4-5 million range.

12. Speedway Motorsports Inc. reported a $5.3 million decrease in ticket revenue across its eight tracks last year, trending downward with lower attendance overall for NASCAR. The company’s 5% drop in admissions income is consistent with declines from the previous two years.

13. Ottawa Senators owner Eugene Melnyk claims he has lost $94-110 million since he purchased the team in 2005. During his tenure as owner, Melnyk has alienated fans with his low salary cap and sponsors with his business practices. Melnyk once threatened to revoke Scotiabank’s naming rights deal because he didn’t like the terms of a loan.

14. Footwear brand Ugg Australia is marketing its new men’s line through a partnership with the NHL. The brand last month hosted an on-site VIP lounge for members of the L.A. Kings and San Jose Sharks during practices for their Stadium Series match.

15. Next month’s NFL draft in Chicago will utilize multiple locations throughout the city to stage events for fans. Teams will make their picks in tents along Michigan Avenue in an area called “Selection Square,” while Buckingham Fountain will light up in the colors of the team currently on the clock.

25 Mar

SPORTS NEWS / DEALMAKING / BUSINESS / MARKETING / ENDORSEMENT / LEGAL ISSUES FOR THE WEEK OF MARCH 1

SPORTS NEWS / DEALMAKING / BUSINESS / MARKETING / ENDORSEMENT / LEGAL ISSUES FOR THE WEEK OF MARCH 1

1. The Inglewood City Council voted unanimously to approve construction of an 80,000-seat stadium, a major step toward bringing an NFL team back to Los Angeles. An economic impact report commissioned by the city estimated that the stadium could be the most expensive in U.S. sports history at $1.86 billion.

2. At least seven groups are bidding on the Atlanta Hawks, with some first-round bids as high as nearly $900 million. The team was valued $825 million in the most recent Forbes valuations. Hawks owner Bruce Levenson put the team up for sale after it was unveiled he sent a racist email in 2012.

3. MLBPA Executive Director Tony Clark and Boston Red Sox star David Ortiz are among several MLBers speaking out against the league’s new pace-of-play rules. Ortiz in particular said he feels like most of the changes go in the pitcher’s favor.

4. FIFA is moving the 2021 Confederations Cup from Qatar to another Asian country because of Qatar’s high summer temperatures. The Confederation’s Cup typically serves as a dress rehearsal for the country hosting the World Cup the following year.

5. The Cleveland Browns were mocked on social media for hyping up the unveiling of their new logo, which is much like the old one, only with a brighter shade of orange. The redesign process began shortly after Jimmy Haslam bought the Browns in 2012, and the team considered 100 candidates before settling on the new look.

6. EPL club Chelsea signed a massive jersey sponsorship deal with Tokyo-based Yokohama Rubber worth $308 million. At an average annual value of $62 million, the deal is the second most lucrative shirt sponsorship in EPL history behind the $82 million a year Chevrolet pays Manchester United.

7. The Chicago Cubs have raised nearly half of Wrigley Field’s renovation costs by selling limited ownership stakes in the team. The Ricketts family won’t say how much was raised for the $375 million project, but sources said that the total is in the $175 million range.

8. FIFA may set aside $208 million to distribute to clubs for releasing players for the 2022 World Cup, up from the $70 million clubs received for last year’s tournament in Brazil. While FIFA said it would not directly compensate clubs and leagues unhappy about the tournament being moved to winter, the increased cash pool could ease club opposition.

9. Dallas Mavericks owner Mark Cuban said that the NBA is seriously considering adjusting its schedule to go later into the summer in order to reduce or eliminate the number of back-to-back games. NBA teams typically play between 16 and 20 back-to-back games per season.

10. MLB Commissioner Rob Manfred said he would entertain shortening the regular season if there’s interest in doing so. The league had a 154-game schedule until 1962, when it added eight games. Any change in the schedule would have to be collectively bargained with the MLBPA.

11. Every football coach in the SEC West will make at least $4 million next season, according to Jon Solomon of CBSSports.com. Over the last eight years, college football has gone from having no $4 million per year coaches to more than a dozen depending on bonuses and other incentives.

12. The University of Florida is postponing by a year an ambitious renovation plan for the Stephen C. O’Connell Center. Construction on the O’Dome was expected to begin this month, but the school reportedly has struggled to secure funding for the $60 million project.

13. Seattle Seahawks running back Marshawn Lynch filed a trademark application for the phrase “I’m just here so I won’t get fined,” which he made famous by repeating during Super Bowl week. Lynch is no stranger to trademarking, having filed for “Beast Mode” at the end of his rookie season in 2008.

14. Both MetLife Stadium and Levi’s Stadium are considering bidding to host the CFP National Championship later this decade. New York and San Francisco were two of a dozen cities that received an RFP for the 2018-2020 CFP title games. CFP officials have said that the group hasn’t ruled out any cold-weather sites.

15. The Miami Heat could face a 300% rent increase for a five-acre plot of county-owned land next to American Airlines Arena. A recent study found that the county is significantly undercharging the team to rent the land for valet parking and event staging.

24 Mar

Digital March Madness 3/24

Digital March Madness
Digital platforms are becoming increasingly popular for sports media rights, and few sporting events leverage digital as well as the NCAA men’s basketball tournament. On both digital and TV, ads are all but sold out for the tournament, with a 30-second spot on TV during April’s title game going for about $1.5 million each. Ads this year are being priced at a premium coming off last year’s tournament, which was the second-most watched in a decade. Advertisers include NCAA partners Coca-Cola, Capital One, and AT&T.

For the first time this year, YouTube launched a channel dedicated to updates from the tournament. The channel, which is being managed by Turner Sports, offers real-time highlights and recaps from all 67 March Madness games. Full-games are available for online streaming through the March Madness Live app, but users will need to be pay-TV subscribers. Finally, in a unique arrangement, Snapchat is partnering with the NCAA to show live sports on its “My Story” feature starting with the Final Four. Snapchat is looking to sponsorships rights for these stories and would split ad revenue with its league partners.

23 Mar

RIP Farmers Field 3/23

RIP Farmers Field
With competition from Carson and Inglewood, California, AEG has abandoned its plan to build Farmers Field in downtown L.A. The company had spent $50 million over the last five years on the effort, but never was able to secure a commitment from an NFL team willing to relocate.

When Farmers Field was originally proposed back in 2010, it had the advantage of being the most viable stadium option in L.A. However, as more time passed, the teams considering moving – the Rams, Chargers, and Raiders – were able to develop their own proposals that didn’t require selling the AEG. Without the commitment of a team, Farmers Field was doomed.

Still, the proposal wasn’t a total loss. Farmers Insurance received an estimated $6 million in free media exposure for putting its name on Farmers Field. Despite signing a 30-year, $700 million naming rights deal back in 2011, Farmers wasn’t obligated to pay anything until stadium construction was completed.

D

22 Mar

Bust Boom Hope Week of 3/22

Bust, Boom, Hope: NFL

Bust: The Missouri Senate passed a measure saying Governor Jay Nixon cannot extend bonds for a St. Louis NFL stadium without a vote of the Legislature or the people. Nixon’s administration previously said it didn’t need a vote to act on bonds for the proposed riverfront stadium.

Boom: Nike has extended its on-field NFL apparel deal through 2019. While terms of the deal were not disclosed, Nike originally agreed to a five-year, $1.1 billion contract with the league in 2011. The extension includes expanded licensing rights and additional fees.

Hope: Changes to the use of video replay and a rule that would allow teams to try for a “bonus” point after a successful 2-point conversion are among proposals that will be presented by the NFL’s competition committee at next week’s owners meetings. A total of 23 changes will be discussed at the meetings, 19 of which were submitted by teams and four proposed by the competition committee.

What it means: One of the major reasons Nike pushed for an extension before the NFL went to market with the rights was to block Under Armour. The two apparel giants appear poised for a bidding war for the NBA’s jersey sponsorship, which is up for grabs now that Adidas won’t extend beyond 2017.

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Bust, Boom, Hope: Olympics

Bust: Public support for the 2024 Summer Olympics in Boston is slipping, with just 36% of adults in the region in favor of hosting the Games. A January poll showed 51% of residents supported the choice, but by February, that total had fallen to 44%.

Boom: Toyota has signed on to join the IOC’s TOP sponsor program as part of a deal that runs from 2017-24 and is worth a reported $835 million. Toyota’s agreement falls under the newly created mobility category, which includes vehicles, mobility services, and solutions.

Hope: The IOC is considering changes to its advertising rules to loosen the restrictions on athletes endorsed by sponsors that aren’t official advertisers at the Games. The proposal is expected to be presented at the next IOC session in Kuala Lumpur, Malaysia, in July.

What it means: The IOC added mobility sponsorship category because of the logistical and traffic management challenges facing the games. Toyota’s marketing rights in Japan are effective immediately. The 2020 Summer Games, which are included in Toyota’s term will take place in Tokyo.

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Bust, Boom, Hope: NBA

Bust: Adidas has dropped its bid to extend its apparel contract with the NBA when the deal expires in 2017. The brand has been the league’s apparel partner since it signed an 11-year, $400 million deal in 2006. Since that time, Adidas has fallen to third in the sports apparel market behind Nike and Under Armour.

Boom: Nike in the last 12 months through January sold $340 million worth of LeBron James’ signature shoes, up 13% from the prior year. Sales of James’ shoe nearly doubles the amount of the NBA’s second best seller Kevin Durant, whose KD signature line had sales of $195 million last year.

Hope: The NBA announced plans for its annual Green Week, which includes presenting sponsor Sprint hosting mobile phone recycling events as part of the Sprint Buyback Program. The NBA and Sprint are also working with the Arbor Day Foundation to plant a tree each time #NBAGreen is posted on Twitter.

What it means: James’ best-selling shoe is just one sign that his popularity hasn’t waned since he left Miami for Cleveland last summer. Since that time, he’s signed an endorsement deal with Kia, launched an online marketing campaign with Progressive, and appeared in several commercials.

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Bust, Boom, Hope: Soccer

Bust: FIFA officially announced it would move the 2022 Qatar World Cup to winter, with the final to be played on December 18 of that year. FIFA also made the decision to shorten the tournament to 28 days, down from the traditional length of 31-32 days.

Boom: The Brazil World Cup helped FIFA generate record revenue of $2.1 billion last year, including $140.7 million in profit. FIFA accounts show its dependence on the World Cup, which was responsible for 84% of all revenue from 2011-14. Revenue tied directly to the tournament in Brazil totaled $4.8 billion.

Hope: Soccer star Cristiano Ronaldo is interested in joining MLS when his Real Madrid contract expires in 2018. Several international stars have joined MLS in recent years, including Kaka in Orlando, Steven Gerrard in Los Angeles, and Frank Lampard in New York.

What it means: The consequences of FIFA’s decision to move the World Cup to winter aren’t yet clear, but it’s highly unlikely that the four-year cycle will be as profitable as Brazil was. At this point, FIFA would rather make a mockery of itself and risk losing several millions of dollars than admit it was a mistake awarding the tournament to Qatar.

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Bust, Boom, Hope: College

Bust: Syracuse has parted ways with Athletic Director Daryl Gross amid an NCAA report that led to the vacation of 108 wins, a fine of more than $1 million, and questions about the school’s academic integrity. Gross had been in the role for more than a decade, overseeing Syracuse’s move to the ACC from the Big East.

Boom: The University of Michigan athletic department a $13 million surplus during the school’s 2014 fiscal year. UM produced $157.9 million in revenues and spent $144.86 million leading to the surplus, which was an increase over the $11.3 million produced in 2013.

Hope: The University of Texas has approved a 10-year agreement with 289c Apparel to become the new licensee for the school and will allow the school to handle its licensing in-house. The deal includes guaranteed revenue to limit downside risk for the first three years.

What it means: In addition to posting a surplus, both Michigan’s football and basketball programs were self-sustaining and the school’s Big Ten and NCAA distributions rose to more than $27 million. UM also received a $3 million facility rental from the NHL’s Winter Classic

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20 Mar

The Sports Professor’s Weekly Sports and Entertainment Dollar: The Madness is Upon Us

The Sports Professor’s Weekly Sports and Entertainment Dollar: The Madness is Upon Us
March 20, 2015
By Rick Horrow and Karla Swatek

It’s March. It’s now officially Spring. And we’ve all gone mad.

No sporting event comes close to matching the excitement of March Madness.  There’s also no other sporting event that has some of its biggest moments during the workday.  As the NCAA men’s basketball tournament tips off this week, businesses across the country can expect to lose millions – if not billions – of dollars in worker productivity due to the tournament.  With an estimated 50 million Americans participating in March Madness office pools, the firm Challenger, Gray & Christmas projects companies will lose $1.2 billion for every unproductive work hour during the first week of the tournament.

With the College Football Playoff being organized by conferences, not the NCAA, the men’s basketball tournament is by far the biggest source of revenue for college sports’ governing body.  Of the $913 million in revenue the NCAA generated in 2013, a whopping 75% came from CBS and Turner for rights connected to March Madness.  Needless to say, there’s big interest and big money in the tournament every year.

Coverage of the NCAA Men’s Basketball Tournament is 95% sold, according to Ad Age. Per the report, the going rate for a 30-second spot for the Championship game on CBS is notching slightly more than a cool $1.5 million, nearly tripling the price for a single ad unit in the 2014 NBA Finals (that was $520,000). Ads this year are being priced at a premium coming off last year’s tournament, which was the second-most watched in a decade.

Brands launching new campaigns will include NCAA Corporate Champions AT&T, Coca-Cola, and Capital One as well as official partners that include Allstate, Buick, and Burger King. At least two known marketers – AT&T and Amazon Kindle – are airing new spots developed by Turner Sports’ in-house custom ad unit. Turner also has taken the Coke Zero-sponsored social media integration around March Madness Live fully in-house after that brand worked for several years with Ball State’s SportsLink program.

Digital platforms are becoming increasingly popular for sports media rights, and few sporting events leverage digital as well as the NCAA men’s basketball tournament.  

With this in mind, Microsoft’s web search engine, Bing, has struck a multiyear agreement with CBS and Turner Sports to be an NCAA corporate partner, launching now. CBS and Turner own the NCAA’s marketing rights and sell sponsorships, which can range from the high seven figures to low eight figures at the partner level, depending on the deal. Bing will be the NCAA’s 18th sponsor joining the above list of partners as well as Buffalo Wild Wings, GM, Enterprise, Infiniti, Lowe’s, LG, Nabisco, Northwestern Mutual, Reese’s, Unilever and UPS.

The digital Buick-sponsored “Boss Button” again comes with three different user options: a dummy PowerPoint presentation tailored for office users, a false Evernote page for students, and a fictional search-engine page for home users. This year, Turner Sports is also making a heavier social media push around the “Boss Button.”

CBS Sports also bulked up its app ahead of the NCAA Tournament, offering varied options for office pools with features that include Bracket Manager, Bracket Challenge, and Round by Round. In addition to the bracket games, the CBS Sports app offers a live-updating tournament bracket, scores, stats and more.

For the first time this year, YouTube launched a channel dedicated to updates from the tournament.  The channel, which is being managed by Turner Sports, offers real-time highlights and recaps from all 67 March Madness games.  Full-games are available for online streaming through the March Madness Live app, but users will need to be pay-TV subscribers.  Turner Sports predicted further audience growth for March Madness Live this year. In 2014, a record 69.7 million live video streams were counted, alongside more than 15 million hours of consumed.

In a unique arrangement, Snapchat is partnering with the NCAA to show live sports on its “My Story” feature starting with the Final Four.  Snapchat is looking to sponsorships rights for these stories and would split ad revenue with its league partners.

Campus Insiders, meanwhile, launched this year’s March Madness activation with pre-tournament coverage highlighted by its 68 in 60 Presented by John Deere series. The 68 video on demand segments, hosted by Jordan Cornette, previewed each tournament team in 60 seconds or less with supporting editorial content. And for the first time, Campus Insiders will provide an on-site locale for fans to gather during Final Four weekend in Indianapolis, with a set constructed at Cadillac Ranch in the middle of Indy’s downtown.

Already, ESPN has a new record for its Men’s Tournament Challenge, drawing 11.57 million brackets submitted. Of course, only three games in, less than 1% were still perfect. At the peak period of entries, according to Cynopsis Sports, fans registered 7,791 brackets per minute (129 brackets per second). More people picked Kentucky, Wisconsin, Duke, and Virginia to reach the Final Four than any other teams.

And in a cool new philanthropic twist on the tournament, 36 American corporate thought leaders have submitted entries for Bloomberg’s Bracket Challenge, each pledging $10,000 to the winner’s charity of choice. Participants include Bloomberg CEO Mike Bloomberg, AOL CEO Tim Armstrong, Under Armour CEO Kevin Plank (playing for the V Foundation), Strauss Zelnick, chairman and chief executive officer of Grand Theft Auto video-game maker Take-Two Interactive Software Inc, Cisco Systems Inc. Chairman and Chief Executive Officer John Chambers, Brewers owner Mark Attanasio, Lakers CEO Jeanie Buss, Cavs Owner Dan Gilbert, Bucks owner Mark Lasry,  Celtics co-owner Steve Pagliuca, Fortress CEO Mike Novogratz (Playing for Beat the Streets Wrestling),  and Goldman Sachs CEO Gary Cohn (Playing for Harlem RBI) are amongst those in the game, which is updated in real time.

The NCAA, finally has taken its famed March Madness brackets to new levels by building 165-foot tall bracket on the JW Marriott Indianapolis. Designed and built by Sport Graphics, the line art will remain on the building for the duration of NCAA March Madness and the Final Four, taking up 44,000 square-feet.

“Indianapolis has a great history of hosting the NCAA Final Four and providing a one-of-a-kind championship experience for college athletes,” said JoAn Scott, NCAA Managing Director of Men’s Basketball Championships. “We want to get everyone excited for the Final Four and what better way to do this than by putting a larger-than-life bracket on display in the city.”

Larger than life. That’s what March Madness, indeed, has become.

Follow Rick Horrow (@RickHorrow) and Karla Swatek (@kswak) on Twitter.