15 TO WATCH: RICK HORROW’S TOP SPORTS NEWS/ BUSINESS/ MARKETING/ENDORSEMENT ISSUES FOR THE WEEK OF MAY 23
With Jamie Swimmer
—At last year’s French Open, a teenager managed to outwit security and get on court to snap a picture with Roger Federer after his debut victory on center court Phillippe Chartrier. That feat will be impossible this year at Roland Garros, for two key reasons. One, the Swiss superstar and 2009 champion has pulled out of the tournament, citing unspecified injuries, and thus depriving the French Open and global TV partners of one of its biggest draws. Two, new tournament director Guy Forget has announced that the French Open has dramatically strengthened security, especially in light of the Paris terrorist attacks last November. “Security is at the heart of our priorities,” Forge said at a Tuesday press conference. “There will be double forces for security around Roland Garros,” and access points will be limited to three, all equipped with walkthrough metal detectors. The tournament, is also increasing its prize money, with €32 million representing a 14% increase from 2015.
—Jack has Memorial, Arnie has Bay Hill, Tiger has the World Challenge, and now Phil has the CareerBuilder Challenge. The PGA Tour has announced that Phil Mickelson will replace former president Bill Clinton as the face of the La Quinta event. In this capacity, Mickelson will promote the tournament and participate in various functions during tournament week. The CareerBuilder Challenge traditionally is the PGA Tour’s first stop on the California Swing following two weeks in Hawaii to start the calendar year. “I’m very excited to undertake the role of tournament ambassador and look forward to doing what I can to help with the continued growth of the CareerBuilder Challenge,” Mickelson said. The Clinton Foundation, which has partnered with the tournament for the last five years, will end its official role. However, the Foundation and the Clinton Health Matters Initiative remain committed to continuing their work in the Coachella Valley to improve the health and wellness of the nearly 400,000 local residents.
—Days after EPL side Chelsea announced the premature end to their kit deal with Adidas, the club has agreed to a multiyear jersey deal with longtime rival Nike, according to the London Telegraph. The deal with Nike is worth $87 million per season, almost double Chelsea’s current $44 million per season deal with Adidas. Despite failing to qualify for the Champions League after a disappointing 2016 campaign, Chelsea has landed the second-highest kit deal in soccer history – trailing only Manchester United and the $109 million it gets from Adidas annually. Chelsea’s Nike contract is "twice what Arsenal are paid by Puma and is more than three times what Manchester City earn from Nike, although City’s deal is due to expire” in 2019 and could soon be renegotiated. Since Roman Abramovich bought Chelsea in 2003, the elite English side has won four EPL titles and a Champions League crown, which has helped expand its fan base around the world.
—Big things are happening in Philadelphia: To go along with receiving the first pick in the upcoming NBA Draft, the Philadelphia 76ers have also signed the NBA’s first jersey patch advertising deal. StubHub has signed a three-year agreement with the franchise that will pay the team $5 million annually as part of a three-year NBA pilot program to allow teams to sell a 2.5-inch by 2.5-inch ad patch on game jerseys. The 76ers patch will first appear at the start of the 2017-2018 season, when Nike is set to replace Adidas as the league’s official uniform provider. Commissioner Adam Silver has received backlash since the 76ers made this announcement, with some analysts expressing concern about what this may lead to. The L.A. Times’ Bill Plaschke wrote, “This is all leading to something bad. (The 76ers) got $5 million for it – can you imagine how much the Lakers will get for it? In a couple of years, it will be advertisements everywhere.”
—The 2019, 2020, and 2021 Super Bowl bids will be decided at the NFL’s one-day May meetings in Charlotte on Tuesday. On paper, New Orleans looks like the best option: the city boasts a “fan-friendly downtown footprint, world-class nightlife, an extensive hotel room inventory, and an experienced staff of big event planners.” But according to the New Orleans Times-Picayune, Atlanta, Los Angeles and Miami are “considered the prohibitive favorites to win the bids.” The three favored cities all have one thing in common over New Orleans: stadium improvements. In Los Angeles and Atlanta, both cities would feature brand new, state-of-the-art facilities, while Dolphins Owner Stephen Ross has invested $400 in renovating their stadium. The theme of New Orleans’ pitch is “The Big Easy Super Bowl” and is meant to shed light on the city’s history of successfully hosting major sporting events. But it just may not be enough to win over the NFL owners, who are always on the lookout for the new, new thing.
—The Atlanta Falcons recently unveiled a plan to “sharply reduce prices on some popular food and beverage items for the new Mercedes-Benz Stadium,” according to the Atlanta Journal-Constitution. The unusual move was prompted by fans’ long-time complaints about high-priced stadium food. The “fan-first menu” features an onslaught of $2 items: soft drinks with unlimited free refills, water bottles, hot dogs, pretzels, and popcorn; a slice of pizza, nachos, waffle fries, and bags of peanuts are set to cost $3, while a 12-ounce domestic beer will only set you back $5. AMB Sports & Entertainment President Rich McKay said that the prices “will be in effect for Falcons games, Atlanta United soccer games and all other events in the new downtown stadium.” Mercedes-Benz Stadium officials hope this move will spur more demand for concessions, and that is why the new stadium will have 670 concession points – 65% more than the Falcons had to work with in the Georgia Dome.
—Global marketing technology company Amobee recently examined which NBA franchises generate the most digital engagement – and the results are hardly surprising. After measuring what people see, read, and engage with on over 600,000 sites on mobile, social, web, and video platforms, the Golden State Warriors came out on top, with the Cleveland Cavaliers, Los Angeles Lakers, Chicago Bulls, and Miami Heat rounding out the top five. Over the last year, the best team in the East – the Cavs – generated only 76% as much digital content engagement as the West’s best team – the Warriors. Despite the Lakers’ on-court, woes, the Kobe Farewell Tour helped generate 63% as much engagement as the league leaders, while basketball-crazy Chicago helped the Bulls generate 56% as much engagement as the Warriors. In terms of franchise values, the landscape is a bit different. The Warriors are only the 6th most valuable NBA franchise at $1.9 billion, and the Cavaliers are 12th at $1.1 billion. While on-court performance clearly drives media engagement, franchise values are rarely influenced by short-term success.
—Dedicated to the crossway of sports, race and culture, ESPN officially unveiled its new website, The Undefeated. Site Editor-in-Chief Kevin Merida shared the site’s mission statement, stating that the staff will be “brave, adventurous and independent, refusing to be crushed by setbacks that inevitably will happen along the way.” Challenging subjects, such as the image and depiction of black athletes, black ownership in professional sports and the scrutiny of black coaches, will be addressed head-on. The site’s launch date was chosen to coincide with the 62nd anniversary of the Supreme Court’s landmark “Brown v. Board of Education” decision, which declared separate schools for black and white students unconstitutional. Along with traditional news reporting, The Undefeated is set to “produce a rich mix of…innovative storytelling, provocative commentary, must-see video, narratives and investigations” in an unapologetic and unpredictable way.
—Several former college football players have officially filed class-action lawsuits, “claiming negligence over their handling of head injuries,” according to the New York Times. Among institutions targeted by the players are Penn State University, Vanderbilt University, the Big Ten, SEC, and Pac-12; Auburn University, University of Georgia, University of Oregon, and University of Utah are also targeted, but only their respective conferences have been named defendants. This “marks a new effort by athletes seeking financial relief for what they say are the lasting effects from concussions sustained in their college careers.” Student athletes filing the lawsuits played during the decades in which the NCAA did not require its members to undergo concussion protocols – that was changed in 2010. A Temple University law professor close to the issue said that he was “skeptical of the litigation’s moving forward because proving negligence against the NFL was easier than it may prove to be against colleges.”
—The Chicago Cubs’ surprise decision to apply for a patio permit has not been taken well by Wrigleyville community leaders, who claim the Cubs are “ignoring legitimate public safety concerns” in an attempt to create the “Midwest’s largest beer garden.” According to the Chicago Sun-Times, local leaders wrote a letter to Cubs Chairman Tom Ricketts accusing the organization of “pulling the plug on months of negotiations in favor of an end-run around area residents,” stating that “It is not the responsibility of the community to help the Cubs owners generate revenue. And we won’t be bullied into meeting the demands of the Cubs organization….” If the city ultimately approves the permit, the Cubs will build a liquor-licensed patio that is 30 times larger than Chicago’s biggest. Community leaders believe that the patio, which would be allowed to serve alcohol until 11 p.m. on weekdays and midnight on weekends, would threaten the neighborhood’s quality of life and residents’ safety.
—After doping samples from the 2008 Beijing Summer Olympics were retested, up to 31 athletes could face bans from the upcoming Rio de Janeiro Olympics, according to the London Telegraph. The IOC announced that 6.8% of the 454 defrosted samples from Beijing contained banned substances, while results from London will likely be disclosed later this month. The positive athlete samples represent six sports and 12 nationalities; other specific identifiers remain confidential for now. Further, the IOC acknowledged that it plans to reanalyze samples from the 2014 Sochi games after allegations against another state-sponsored doping program in Russia surfaced. In wake of the investigations, IOC President Thomas Bach warned that he would ban entire federations if the claims are validated – the FBI is also participating. On June 17, Russia will be notified whether its athletics federation has met reform criteria, allowing its athletes to compete in Rio.
—Ahead of Euro 2016, Carlsberg is planning its biggest sports marketing campaign in brand history. The 24 participating teams mark the largest qualifying field in the tournament’s 56-year history, and accordingly Carlsberg is sparing no expense. According to Bloomberg, the Danish brewing company plans to spend as much as $90 million on marketing around the tournament, having already spent about $45 million in advance of the matches. Carlsberg Senior Marking Manager Richard Whitty said that most of the focus “will be on the brewer’s digital footprint” because of the strict alcohol advertising laws in the host nation, France. Beer makers will not be allowed to attach their names to stadiums or on field-level billboards – only slogans will be allowed. Whitty also revealed part of Carlsberg’s strategy is to capitalize on the growth of soccer in Asia – particularly in Malaysia, Thailand, and Singapore.
—Change may soon be coming to Royal Troon Golf Club, as the host venue for this year’s Open Championship recently “dropped a heavy hint that it wants its 800 male members to vote in favor of admitting women members,” according to The Scotsman. The Ayrshire club currently shares its facilities with the Ladies’ Golf Club Troon, but both have separate clubhouses. The Open Championship at Troon this year marks the first time since 2004 that the club has hosted the tournament, and the “clock is ticking” as to whether or not change will come before the event commences. Club captain Martin Cheyne wrote a letter sent to all 800 members reiterating the necessity that the club “reflects the modern society in which we exist.” In 2014, The Royal and Ancient Golf Club at St. Andrews opened its membership to women for the first time in 260 years; Royal St. George’s followed suit by lifting its ban on women members last year.
—Over the past few years, outspoken Dallas Cowboys owner Jerry Jones has not been shy in voicing his opinion that Oakland Raiders Owner Mark Davis should give up his team. According to Bleacher Report, Jones feels that Davis is “incapable of maximizing revenues and the brand, creating value for the team and league, improving or advancing its goals or agenda in general.” When Davis pondered moving the Raiders to L.A., Jones was “highly vocal with other owners that if the Raiders were to be considered, Davis had to sell or give up control.” Davis recently met with Las Vegas officials and has been in discussions to relocate his team to Sin City, but Jones strongly opposes the potential move. Jones’s opposition could completely derail the move because of his influence over league owners. Apart from Jones, other NFL owners and league officials have been skeptical about whether Vegas can appropriately host an NFL franchise.
—Silicon Valley has shaped the Bay Area, and the technology hub of America has now expanded its reach into professional sports. Virtual Reality company Jaunt recently partnered with the San Francisco Giants to produce a series of VR videos, giving fans “up-close virtual access to their favorite players,” according to Fast Company. Starting on Opening Day, Giants fans got their “first look at the product at a cafe behind the left field bleachers.” Since then, Jaunt has continued to expand its involvement with the club and is looking at new ways of weaving VR videos into fans’ regular content consumption. The company noted that some of the VR videos in the works could include lying on the ground in between 2014 World Series MVP pitcher Madison Bumgarner and catcher Buster Posey as Bumgarner throws a pitch, or “standing directly behind a Giants hitter in a batting cage.”
15 TO WATCH: RICK HORROW’S TOP SPORTS NEWS/ BUSINESS/ MARKETING/ENDORSEMENT ISSUES FOR THE WEEK OF MAY 16
With Jamie Swimmer
1. Despite the Chicago Cubs breezing through competition on the field thus far, the franchise has run into stiffer competition off the field. The Cubs requested a patio permit to sell liquor in an open-air plaza adjacent to renovated Wrigley Field, but Chicago Alderman Tom Tunney quickly shot the plan down, according to the Chicago Sun-Times. The Cubs’ specific request was for a patio that would stay open from 11 a.m. until midnight, allowing people to drink pregame to postgame. Tunney decried the patio as “a public safety issue,” saying, “How does it make sense to allow a 4,000-person patio in a very small area adjacent to two of the busiest streets in the neighborhood?“ Currently, Chicago’s largest outdoor patio allows a maximum capacity of 240 people. Mayor Rahm Emanuel still has the final say on the Cubs’ plans, and if he sides with Tunney, the patio permit will officially be blocked.
2. Pop Warner, the nation’s oldest youth football program, announced Thursday that it has become the first national football organization to eliminate kickoffs. The ban will take effect in its three youngest divisions when the season begins this fall – instead of kickoffs, the ball will be placed at the 35-yard line at the start of each half and after each score move is aimed at significantly reducing the number of full-speed, head-on impacts in games. Pop Warner also announced a further reduction of contact time in practice across all divisions, from 33% of practice time down to 25%. After the season, Pop Warner said it will evaluate the results and consider implementing the kickoff ban in older divisions as well. U.S. Pop Warner leagues have 225,000 football players, and another 100,000 youths in cheerleading/dance programs. "We are constantly working to make the game safer and better for our young athletes,” said Jon Butler, Pop Warner’s executive director. “Eliminating kickoffs at this level adds another layer of safety without changing the nature of this great game."
3. While FIFA has come under massive scrutiny over the past few years for corruption, scandal, and accepting bribes, the IOC may now find itself in trouble concerning Tokyo’s 2020 Olympic bid. French financial prosecutors confirmed they are investigating allegations of “corruption and money laundering” involving more than $2 million in suspicious payments apparently made by the Tokyo 2020 Olympic bid to a secret bank account linked to the son of disgraced former IAAF President Lamine Diack, according to the London Guardian. The prosecutors involved confirmed they are investigating payments made to the Black Tidings company under the title “Tokyo 2020 Olympic Games bid.” From soccer’s international governing body to the Olympic’s reigning stewards, much more work needs to be done to ensure a level playing field for all nations, athletes, and sponsors of our most global of games.
4. In the wake of unbeaten Nyquist’s decisive Kentucky Derby win, ticket sales for the 141th Preakness Stakes are up 11% over the same time last year, and the event will likely sell out, according to the Baltimore Business Journal. The race drew a record crowd of 123,469 to Pimlico in 2014, which was "beat only a year later when 131,680 fans showed up” in 2015 to see American Pharaoh. Maryland Jockey Club General Manager Sal Sinatra said that an added section to Pimlico’s Turfside Terrace “allowed them to bring in 225 more seats.” Pimlico also “increased the popular mug club by 1,500 tickets and brought in a big infield LED board to improve the race day experience.” Black-Eyed Susan Day on Friday is also “expected to see higher than normal attendance.” The Friday races typically draw “around 35,000 visitors at Old Hilltop, but Sinatra expects more than 40,000 people this year. As in all other sports, a winning streak = fans.
5. The inaugural $12 million Pegasus World Cup, to be held at Gulfstream Park in Hallandale Beach, Florida on January 28, 2017, will become the world’s richest Thoroughbred race. A vision of Frank Stronach, founder of The Stronach Group, the Pegasus World Cup will be contested at 11/8 miles on dirt for horses 4 years old and up and is expected to attract the thoroughbred world’s biggest stars. The Pegasus World Cup will have Grade 1 status and feature 12 entrants who will pay $1 million each to buy a starting gate spot on a first come, first serve basis. The entrant can then race, lease, contract, or share a starter or sell their place. All entrants will not only be competing for the world’s largest purse, they will also share equally in 100% of the net income from handle, media rights, and sponsorships. The Dubai World Cup at Meydan Racecourse currently stands as the world’s richest Thoroughbred race with its $10 million purse.
6. Alongside Jordan Spieth’s incredible year on the course, he has focused on building his brand. According to a cover story in D CEO Magazine, the 22-year-old’s brand-building "has been accelerating as fast as one of the golfer’s 300-yard drives.” While Spieth’s endorsement value remains private, Golf Digest has estimated it at around $30 million. As his portfolio now stands, Under Armour, AT&T, and Coca-Cola are Spieth’s “big three” corporate partners. The Atlanta-based soft drink company is his newest addition, and he is now its first golf endorser since the 1980s. Spieth spoke about his marketability, saying, "I’m learning every day different aspects of what it takes to build my brand and, while I rely heavily on my team, the overall decisions are mine.” Jordan’s father, Shawn Spieth, said that his son’s next step “might be adding a financial services company to the Spieth corporate empire, but there’s little rush.”
7. In a surprising turn of events, EPL club Chelsea will end its kit deal with Adidas six years early, according to the Financial Times. The club plans to sign a more lucrative deal with a rival sportswear company, ending a partnership in place since 2006 and planned to run through June, 2023. Neither side has officially commented on why the deal was terminated prematurely; an unauthorized source claimed the decision “came after a review of Chelsea’s sponsorship deals led club executives to believe its arrangement with Adidas was well below current market value.” Chelsea currently receives about $43 million annually from Adidas. The German-based sportswear company will receive a payoff of at least $57 million as a result of the terminated contract, and characterized the move as illustrating a “strategy of partnering with fewer sports teams.” Nike is a likely candidate to be Chelsea’s new outfitter, although no official announcement has been made.
8. Las Vegas Mayor Carolyn Goodman is confident that the Raiders could relocate to her city “if Nevada handles this properly.” Appearing on ESPN.com’s “Capital Games” podcast, Goodman said Raiders Owner Mark Davis has assured city officials they are “not getting played” in a prospective stadium deal. The Raiders have pledged $500 million to a stadium, while the Las Vegas Sands Corp. and Majestic Realty would contribute $150 million to the project. That leaves around $750 million to come from taxpayer money, and Goodman said, “As in most cities, there’s always pushback by the public to use public funding.“ She said the city is in the process of investigating the “different alternatives and ways for funding.” While the $750 million funding gap is a legitimate concern, the bigger hurdle at present is likely the NFL’s reticence toward putting a franchise in a town filled with sports books earning close to $2 billion annually on its games, according to the American Gaming Association.
9. Even though rumors continue to swirl that UFC is up for sale, that hasn’t stopped the MMA giant from selling product. Buffalo Wild Wings is offering customers a new UFC Takeout Pack that offers MMA fans around the country a new takeout offer during the weekends of UFC 198, 199, and 200. The promotion started May 13 and features 60 boneless or traditional wings, chips and salsa, and the option to upgrade to Chili Queso dip. To launch the promotion, the company released a new hidden camera video entitled “Takeout Fakeout” that features an unsuspecting UFC fan who arrives at a local Buffalo Wild Wings in Las Vegas and is greeted by UFC Hall of Famer Forrest Griffin and current UFC middleweight champion Luke Rockhold. The trio watches some of the UFC 197 preliminary fights before moving to the MGM Grand Garden Arena to meet UFC President Dana White. Once again, marketing creativity spreads its wings.
10. After being named the Kia NBA MVP, the Golden State Warriors’ Stephen Curry saw his NBA partners activated in celebration. Under Armour introduced fans to an upcoming “Back 2 Back” MVP shoe pack in honor of its marquee spokesman, and promptly sold out of the limited-edition shoes. Videogame 2K maxed out Steph’s overall rating (99) on NBA 2K16 for 30 hours, referencing his jersey number. Audio manufacturer Harman International Industries, the parent company of JBL audio, congratulated him with a special-motion graphic social media post, while Oakland-based Kaiser Permanente health care ran celebratory out of house creative in the Bay Area. Curry is the first player in NBA history to win by unanimous vote. The Warriors’ guard picked up his second NBA MVP trophy on the eve of the team’s NBA Western Conference Finals run against the Oklahoma City Thunder.
11. International Speedway Corporation locked in its fifth founding partner at Daytona International Speedway (DIS). DIS inked Axalta Coating Systems to a deal that includes naming rights for the Center injector as well as branding rights within specific areas of the “World Center of Racing” zone, the central “neighborhood” overlooking the famed start/finish line inside the new stadium. “Axalta has been a long-standing and strong sponsor of our sport for many years and we’re thrilled to welcome them as a partner at Daytona International Speedway,” said ISC Chief Executive Officer Lesa France Kennedy. “Their activation will enable us to further enhance the fan and spectator experience which is a main focus of our new stadium.” Axalta joins other DIS injector sponsors Sunoco, Toyota, Florida Hospital, and Chevrolet. The injectors had asking prices of $2-2.5 million annually over 10-15 years, according to sources.
12. Spurred by the success of its first two years, the USGA’s PLAY9 program is now expanding, encouraging more golfers to play nine holes during six scheduled “PLAY9 Days” on the ninth day of each month May through October. Since 2014, the USGA’s PLAY9 program has focused on the benefits of a nine-hole round as a quicker, less intimidating way for more golfers to fit the sport into their busy days – especially since nine-hole layouts make up more than 30 % of U.S. public courses, and 90% of 18-hole public facilities offer nine-hole rates. In its first year, the PLAY9 program sparked a 13% year-over-year increase in nine-hole scores posted to the USGA’s Golf Handicap and Information Network for the two months following the program’s launch. Nine-hole scores posted to GHIN increased another 11% in 2015. “What we love about PLAY9 is the opportunity to welcome more people – both recreational golfers and non-golfers alike – to enjoy the great game of golf,” said USGA CEO Mike Davis.
13. MLB is planning its inaugural “Play Ball Weekend,” a league-wide initiative to engage young baseball fans and celebrate youth participation in baseball and softball. The program launched May 14 and will see all 30 MLB clubs feature a slate of customized and unique ballpark elements, including pre-game parades of young players on the field and baseball cap giveaways. Additionally, MLB clubs will collectively distribute more than 320,000 plastic bat and ball sets throughout the U.S. and Canada, at ballparks and community events. Organizations such as USA Baseball, ESPN, Little League International, Ripken Baseball, and PONY Baseball/Softball also will support Play Ball Weekend. And in another sweet move sure to please young baseball fans, the Mets on Tuesday announced a partnership with Mars candy brand M&M’s, whose branding will be on the 102-seat left field area “formerly known as the Party City Deck,” according to Newsday. The deal, which coincides with the brand’s 75th anniversary, will include M&M’s characters walking the concourse for photo opportunities.
14. While it is good to have the Force with you, Electronic Arts is showing that it can manage just fine without it. The Redwood City, CA-based videogame publisher posted a solid close to its fiscal year on Tuesday, with strong gains in revenue and operating income, once adjusted for deferred sales related to some online games. The performance was helped by “Star Wars Battlefront,” which launched in December. But the fiscal fourth quarter ended in March benefited even more from Ultimate Team, an online service for EA’s flagship sports properties like “FIFA” and “Madden NFL” that helped drive an 18% increase in adjusted digital revenue. And more than half the company’s revenue now comes from a digital side driven by expansion content and full-game downloads, which offer higher margins than games sold at retail. EA has become a well-diversified company, generating strong returns from its sports games and mobile offerings.
15. Russia and Kenya won 27 medals at the London Olympics in track and field. Their total in Rio could be zero. The Olympic hopes of the powerhouse teams from both countries took serious blows Thursday after the World Anti-Doping Agency delivered stinging rebukes to attempts to clean up their drug-addled programs. The WADA foundation board suspended Kenya’s anti-doping agency after determining a new law passed there to combat doping was “a complete mess.” The agency also released new numbers out of Russia showing that testing by independent authorities has decreased by more than two-thirds in the past year. At the London Olympics, Russia won 16 medals and Kenya won 11. While Kenya has received a reprieve for now, the final call on whether either country’s track team will be eligible for this summer’s Games is left to the sport’s governing body, the IAAF, which is set to decide about Russia at a meeting on June 17. IAAF also has jurisdiction over the Kenyan track team.