Rick Horrow interviews Paul Tagliabue
Rick Horrow The Sports Professor
RICK HORROW’S TOP SPORTS BUSINESS/LAW/TECH/PHILANTHROPY PREDICTIONS
with Reed Weber
Here are Rick Horrow’s 20 top happenings and predictions for the busy sports business year ahead. Enjoy, and Happy New Year!
- The XFL is on its way as a serious competitor for professional football. After an unsuccessful XFL launch in 2001, WWE chairman Vince McMahon is making his second attempt to build a successful professional football league that will launch on February 8, 2020. According To Bleacher Report, this time around a slow and steady buildup has led to the creation of eight teams across the United States. Unlike the NFL, a focus will be put on a quicker-paced game as well as incorporating betting into normal football action. XFL CEO Oliver Luck noted that the league will not market itself using big names but instead plans to be a place to springboard names into the NFL, almost as stage upon which to showcase talent to the more established football league. There are 40 million people who crave more football after the Super Bowl, and if the XFL can find a younger age demographic than the ill-fated AAF, they will find success, as their price point of roughly $30-$40 for a pro football game is highly competitive, especially for younger, less affluent consumers.
- The Raiders, Chargers, and Rams will see new homes with the opening of Allegiant Stadium in Las Vegas and SoFi Stadium in L.A. The Raiders’ new stadium comes with a change of scenery as the longtime Oakland franchise is moving out to Las Vegas and into the reported $2 billion stadium that aesthetically pays tribute to the “Black Hole,” a name assigned to the group of fans in the most intense section in the team’s previous home. Meanwhile, the Chargers and Rams will share news digs in Los Angeles, where construction is estimated to cost $10 billion including work on the surrounding 298-acre former Hollywood Park footprint. SoFi Stadium will be a beefy 70,000 person venue. By taking a more-than-football approach in Los Angeles, the stadium may find itself being filled by fans who prioritize “being seen” at the city’s new hot spot over on-field action. SoFi will open in July with an added boost from two Taylor Swift shows, which will hopefully drive L.A. consumers to the first new football stadium built in the city in nearly 100 years.
- Tokyo 2020 brings six new sports to the Olympics. According to C|Net, the first of the six sports to debut is karate, which fittingly makes its Olympic debut in Tokyo, joining judo, taekwondo, and wrestling. Karate consists of two disciplines for both men and women: kata (forms) and kumite (sparring). Skateboarding and surfing will also be joining the Olympic fray, with park and street skateboarding and short board surfing. The other three new sports include sport climbing, which will consist of three disciplines: speed climbing, bouldering; and lead climbing; and baseball and softball make a return to the Olympics after having not been played during the last two summer Games. All of these sports will get a global popularity boost thanks to the influence and amazement of the Olympics.
- Olympic ad sales are on pace to shatter their previous record of $1.2 billion. According to AdAge, NBC Sports announced that it has secured $1 billion in American ad sales for its coverage of the 2020 Summer Olympics in Tokyo, putting it on pace to surpass the record $1.2 billion total it amassed three years ago during the Rio de Janeiro Games. While NBC hasn’t quite eclipsed the high-water mark set in 2016, the network still has eight months left to cut deals before the Olympic torch is lit in Tokyo’s New National Stadium. And more than half of the advertisers are newcomers to the quadrennial event. NBC Sports Group has worked up a single audience guarantee number for advertisers that is agnostic as to whether a particular viewer is watching the Olympics on a traditional TV set or via a streaming platform – meaning digital eyeballs will count toward advertising total reach figures this time around. Additionally, Japan Airlines is giving away 50,000 round-trip tickets ahead of the Tokyo Olympics to encourage international visitors to come out and watch the Games.
- Group1001 brings another women’s leadership and STEM-centric event to the LPGA Tour. Three weeks from now, the LPGA and Group1001 will kick off a new official LPGA Tour event in Boca Raton, Florida. The inaugural Gainbridge LPGA at Boca Rio will be held January 20-26 at Boca Rio Golf Club and feature a 108-player field competing for a $2 million purse. As a key part of tournament week, the Gainbridge LPGA at Boca Rio will host the Women’s Leadership Summit presented by Versant Health with top female leaders from a variety of industries, creating a space to empower women, develop and strengthen skills, build networks, and inspire change. The summit will feature a panel headlined by female business leaders, a fireside chat with an LPGA Tour professional, as well as inspirational stories and presentations from pioneering women. The Boca Raton event is a bookend of sorts to the Group1001-sponsored Indy Women in Tech LPGA tournament held in Indianapolis late summer, which also features multiple educational and networking events for women looking to reengage or advance careers in STEM and business/leadership fields.
- Name, Image, and Likeness will dominate collegiate sports conversations in 2020. No matter which Tigers win the CFP National Championship on January 13, regardless of whether a blue chip team or an underdog ignites the Final Four, primary conversations around NCAA events will center on looming Name, Image, and Likeness (NIL) legislation in California and 21 other states. The NCAA is under the gun to come up with a policy that’s acceptable to athletes and its member institutions alike before California’s Fair Pay to Play bill takes effect in 2023. On the issue of when an NCAA NIL policy will go into effect, NCAA President Emmert has said that 2021 is the goal, but could be impacted by what happens at the state level, emphasizing that we can’t have a model where multiple states have different rules. Congress and state legislators are now firmly vested in the process as well, looking to preserve the rights of student athletes as well as the Title IX structure and other anti-discrimination measures. Look for Emmert to produce a draft national NIL solution by year end – one that will be intensely debated and breathlessly revised in 2021.
- The 2022 Qatar World Cup is forging ahead in the desert, with major milestones within the country and decisions outside of it to come in 2020. According to ESPN, the 2022 World Cup in Qatar is less than three years away and the tiny Gulf state has now staged its first-ever major football tournament, having hosted the 2019 FIFA Club World Cup earlier in December, won by Liverpool. There will be an eight stadium rotation within the 2022 World Cup footprint, and Qatar is debuting a new metro system that will link the majority of the eight stadiums along a 46-mile path. Although the country looks to build its hotel industry to host a substantial number of World Cup fans, the number of rooms available at current count will fall well short of the likely 3 million incoming fans. And in 2020, qualifying countries that abhor Qatar’s poor human rights record will have hard philosophical choices to make about sending a national team. Another obstacle to overcome will be the country’s anti-liquor laws, which will push drinking into mainly hotel bars. The country, however, is likely to relax their tough alcohol rules to make the soccer masses happy and the World Cup a financial success.
- HSBC Rugby Sevens Series takes a “leap” of faith. After a successful long run in Vegas, the HSBC World Rugby Sevens Series 2020 returns to Los Angeles – on Leap Day. The USA Sevens, a key part of the HSBC World Rugby Sevens Series 2020, returns to Los Angeles for the 2020 edition of the World Rugby Sevens Series in the United States. World Rugby has confirmed that 2020 will be its biggest season to date. In the year just ending, the Series has seen record-breaking audience engagement figures, with over 198 million video views in 2019. After a decade of action in Las Vegas, U.S. tournament organizers have gambled on a return to the West Coast. Dignity Health Sports Park – until last weekend the temporary home of the NFL Los Angeles Chargers – is slated to host the fifth leg of the 2019-2020 World Series, with the U.S. event taking place February 29–March 1, 2020. The HSBC World Rugby Sevens Series 2020 also serves as crucial build-up for the Tokyo Olympic Games.
- New Collective Bargaining Agreements are on the horizon for the WNBA and MLS in 2020. The WNBA players’ association is looking for powers that be to “bet on women,” and a new collective bargaining agreement (CBA) with the league and new Commissioner Cathy Engelbert is expected to be announced by January 15. According to Swish Appeal, new provisions would take effect quickly, with free agency expected to begin on time on February 1 with players hoping to get paid more for their efforts. Meanwhile, January 31 is the date that the existing CBA between MLS and the MLS Players Association will expire. The hope is that a new deal will be hashed out, and the now 26-team league will keep growing as according to Forbes, the average valuation of MLS teams has increased by 30% from 2017 to a current average of $313 million. Both the WNBA and MLS have shown strong signs of growth in recent years, and players should expect to reap salary benefits from these positive changes.
- Legal U.S. sports gambling and media platforms continue to grow. According to Digiday, sports media will rush to embrace gambling in 2020 in order to boost ad revenues, following the path of ESPN’s popular “Daily Wager” show that launched in 2019. Currently, sports betting is legal in just 11 states, but seven more states are preparing to take the sports betting plunge in the near future. Research published recently by the consultancy Gambling Compliance projects that 40 U.S. states will have legalized sports betting by 2024. That rush of legalization, encompassing an estimated $150 billion industry, is expected to attract the attention of almost every kind of mainstream sports publisher. Over the past year, both Vox Media (with DraftKings) and Bleacher Report (with Caesars Palace) signed long-term deals to create wide varieties of content designed to build interest in sports betting. The potential for multiple income streams from sports betting – via related ads and the bets themselves – will be a cash cow for sports media companies.
- Baseball’s new marijuana policy will spark change in NBA and NFL rules. Earlier this month, Major League Baseball and its players’ association announced that the league would drop punishments for positive tests of “substances of abuse” such as marijuana and cocaine, treating those violations the same as alcohol-related situations, with players facing voluntary treatment rather than suspensions and fines. The change in MLB policy could be a short term trigger for similar changes within the NBA and NFL. According to a study done by ESPN last spring, 82% of teams over the four major pro North American sports leagues play in states or provinces where recreational and/or medical marijuana use is legal. The NFL and NBA put players who test positive in a substance abuse program before fines and suspensions for subsequent positives. The NHL, the pathfinder in this area, recommends treatment for “abnormally high levels” of THC but does not punish players. The NHL and MLB are now treating their athletes more like ordinary people. This will likely give the NFL and NBA precedent to change their respective recreational drug policies.
- Bolstered by support from Bernie Sanders and Elizabeth Warren, the fate of 42 Minor League Baseball franchises will become a solid rallying point during the 2020 U.S. presidential elections. The current dispute between MLB and MiLB became public in October, when Baseball America reported that MLB had offered a plan to eliminate as many as 42 minor-league teams after the 2020 season, when the Professional Baseball Agreement between MLB and MiLB expires. In November, the New York Times released a list of the 42 teams that would be cut. “Suddenly,” Sporting News noted, “we knew what towns could potentially lose teams, which communities — some significant to the sport’s history — could be without baseball. That made it much more real.” Politicians coast to coast have rightfully joined the effort to save grass roots pro baseball at its best. Democratic presidential candidate Sanders has been the loudest voice. He’s met with MLB Commissioner Rob Manfred, and in mid-December, Sanders also met with people representing minor league baseball in Burlington, Iowa. Not coincidentally, that’s one of the towns on the elimination list. Expect other presidential would-be hopefuls to join the charge to save the MiLB teams as well.
- Zion Williamson will finally play in 2020 and he will have a big impact on the NBA market. According to Forbes, season-ticket sales calls for the New Orleans Pelicans reached historic levels after the team won the NBA lottery with Williamson. But a couple of lawsuits are going to delay many off-court endorsement options. Currently, most of the money being made from Zion’s likeness is unlicensed merchandise. All of the different styles of street market shirts, posters, and even rosary candles are not Zion blessed products. Williamson is so good that he’s even reviving the basketball card industry single-handedly and is sure to raise ticket prices when he’s on the road just due to his presence. Williamson will eventually get a huge shoe deal, and will net a huge raise once he hits the NBA open market as a free agent, perhaps becoming even more marketable than LeBron James within the next two years. If LeBron is the NBA’s current most marketable basketball player, Zion is the future.
- The Athletic is vying to become a billion dollar sports media company through online subscriptions. According to Awful Announcing, the company is currently valued at over $300 million with a subscriber count north of 600,000. They also have expanded into the UK and are beginning to dabble in video content while still expanding their coverage zone. On the upper end of the spectrum, The Athletic could battle ESPN + as the largest online sports publisher and end up being valued at greater than $1 billion. The Athletic seems to have no rigid beliefs that they have to limit their content to just sports, and are leaving competitors behind as they continue to add award-winning veteran sports journalists to their roster. The Athletic’s deep bench of established writers with loyal fans allows them to grow at their own pace and could showcase an example of thriving journalism in the new decade.
- Streaming service Quibi sells out of its $150 million in first-year advertisement inventory. The mobile only streaming service (short for Quick Bites) debuts in April, 2020 and will be a sort of Netflix for the mobile era, where higher-quality content is chopped up into smaller bites. According to The Wrap, Quibi content will only be available on mobile devices, with each episode running no longer than 10 minutes. The app will cost viewers $4.99 per month for ad-supported viewing, or run $7.99 for ad-free viewing when it debuts next spring. On Quibi’s sports content front, ESPN will post a daily sports show on the platform to cover game highlights. ESPN’s daily show will clearly be a pathway for more sports shows in Quibi’s future.
- Tech wearables will be even bigger business in pro sports. According to Tech Radar, spending on wearables will hit $51.5 billion next year, with smartwatches leading the pack. Wearable tech is only going to keep growing, and in 2020 there will be several major new devices from key players in this space. Look for Google and Samsung to enter as serious competitors in the smartwatch race alongside Apple. Additionally, look to Oculus Go, Quest, and Rift S to provide virtual reality sports upgrades, while the North Focals 2.0, a pair of augmented reality glasses, may add to the sports viewing experience in the next few years.
- Augmented and virtual reality offer all sports leagues and teams a new revenue stream. According to Front Office Sports, there is ample opportunity for teams to grow revenue streams by selling advertising around augmented reality activations. But to do that, more clubs and pro sports leagues have to embrace the technology first. The AR market in sports remains largely underpenetrated, even as more examples of franchises using augmented and mixed reality pop up. In fact, the NHL Los Angeles Kings remain one of the few pro teams to be utilizing the technology to date, offering their fans interactive player cards and videos. Companies like Teslasuit are also providing full biometric feedback through bodysuits that could be applied to simulate highly accurate stadium realities for fans, or game-like situations for players who want a different way to practice.
- Look for women in philanthropy to give back to women in sport. According to Axios, women are taking the lead on donating to women’s collegiate sports teams, as former female athletes are donating millions of dollars to build facilities, endow scholarships, and support coaching positions at their alma maters. The New York Times reports that participation in women’s college sports teams is at an all-time high, outnumbering men’s sports for more than 20 years now. And yet, marketing and sponsorships opportunities and support from benefactors for female collegiate teams has caught on slower than men’s sports. Turnout for national women’s sports grew at an average of almost 40% since 2013, according to a study by sports marketing agency Two Circles. Now, 51% of personal wealth in the U.S. comes from women, based on data from 2015, and is expected to keep growing, so assume that more female benefactors will be there to push for more coverage and opportunities for gender equality in sports.
- Esports looks to build on a successful 2019 with more tournaments, teams, and leagues. According to Esports Insider, Intel has announced the Intel World Open, a July 22-24 esports tournament that will take place in the lead up to the Tokyo 2020 Olympic Games in Japan. The tournament will feature Japan-based title Street Fighter V and Rocket League, with a total prize pool of $500,000. The tournament’s timing, held just days before the Games commence, will ensure excellent worldwide exposure. Esports teams continue to receive their very own stadiums, while esports players could earn nearly as much as NFL salaries in the near future, according to FaZe Clan president Greg Selkoe. The audience for esports is on pace to nearly double over a six-year period, as the 2017 audience stood at 335 million and the 2023 estimates are around 646 million fans. Expect more esports advertisements and major new investments in the industry in 2020.
- MLB looks for a new business plan featuring jersey sponsors and robot umpires. According to the Associated Press, umpires agreed to cooperate with Major League Baseball in the development and testing of an automated ball-strike system as part of a five-year labor contract. MLB has discussed installing the system at the Class A Florida State League for 2020. If that test goes well, computer umpires could be used at Triple A games in 2021 as further debugging prior to a big league call-up. Meanwhile, Nike has taken over as MLB’s official outfitter for the next 10 years; the company now has their logo on the front of every MLB jersey. MLB Executive Vice President Noah Garden has also stated that it’s “inevitable” that jersey patch sponsorships are coming. It’s believed that jersey ad patches could arrive as soon as 2022, when the league enters a new labor deal with the MLBPA.
Rick Horrow The Sports Professor
Rick Horrow The Sports Professor
Rick Horrow the Sports Professor
Rick Horrow The Sports Professor
Rick Horrow The Sports Professor
Rick Horrow The Sports Professor