Closing Bell, March 14, 2002

WORLD CONGRESS, DAY 2: WHERE IS OUR INDUSTRY HEADED?

Today marks the second day of the inaugural World Congress of Sports in N.Y. presented by sister publication SportsBusiness Journal and Octagon. A panel this morning on the future of sports included Fox Sports President Ed Goren, NHL Commissioner Gary Bettman, PG Ventures Chair Phil Guarascio, Cowboys Owner Jerry Jones and Oxygen Sports President & Exec Producer Lydia Stephans.

Asked about new sports emerging in the next decade, Bettman said "hockey" to the laughs of the crowd. Guarascio: "I have been very interested in this whole area of niche sports. I'm talking about sports that can be marketed and participated more on a local or regional -- as opposed to a national -- basis, where there is more touch and feel interaction with a fan from a watching and participation standpoint. Things like beach volleyball. That is very approachable from a marketing standpoint, because the marketer

can get involved early with relatively little invested and get a big pay out in the end if the thing works.” Stephans added, "I think if we look to our youth, we are seeing tremendous growth in our extreme sports -- the skateboarding, the snowboarding and the in-line skating. I expect that trend to continue in a big way in terms of the marketability of the product, as well as the advancement of the sports themselves. From the women's sports side, I see huge growth potential in beach volleyball, indoor volleyball, in soccer and in basketball, which tend to be sports that continue to grow at a rapid rate at the collegiate level." Jones: "I'm particularly excited about the Arena Football League." Goren: "I agree with Jerry. If you are talking about viewership increases, Arena Football League, going from cable to NBC, viewership will be up 25-50%, so that is pretty good. It's great anytime you can make that kind of jump, and you will make that kind of jump going from cable to network. But here's a thought to leave you with: Who would have believed a year ago that the NBA would be a cable sport and Arena Football a network sport?"

Goren: "The idea that sports ratings have eroded is a fallacy relative to the rest of the marketplace." Noting increases in Fox’ MLB, NASCAR and NFL viewership numbers, Goren said, "As an industry, we do a disservice when we are talking about ratings. So, when we talk about ratings, we really should be talking viewership. Compared with every other aspect of network television, the erosion of sports in the last eight years at Fox for the NFL, as far as viewership, is about 1% a year. [But] primetime for the four networks, the erosion has been about 25% over that same period. Sports are very healthy -- big time sports, in particular."

Guarascio, on new trends in corporate advertising in sports: "I think that the new paradigm is that you are going to see more partnering, big sponsors taking on big projects together." Mentioning the Chevrolet/Coca-Cola Olympic Torch Relay, Guarascio said, "Either one of them probably could have afforded it, but you know what? It was a better deal for the two of them to make it happen. So I think what you are going to see -- assuming that the quality of what is before the fans keeps increasing -- is more big sponsors joining together to do things together."

Guarascio: "Advertising budgets don't get bigger because things get more expensive or because there are more options. So, everyone really needs to be much more clever and innovative in figuring out how to make the value work. I think that the major challenge going forward for the networks in the rights-fees area is to work with the leagues to try and find a way to drive more value into the deal for the sponsors, so that the rights fees can be maintained at the level that the leagues need them to be." Goren then asked Bettman, "You said earlier that you had $400 million in corporate sponsorship for the NHL. What requirements do those corporate sponsors … have to buy advertising time in your ABC/ESPN package?" Bettman: "We make it a requirement, almost across the board, where our sponsors are buying network time, either on cable or over-the-air, preferably both, because we want to have an integrated package. We don't want to see fragment[ation], where our official sponsor is different from the entity in the same category that is buying the time on television. We want to do one-stop shopping. We have walked away from potential sponsors who haven't made the buy." Goren said that the ad market is starting to get better: "We have sold more advertising for NASCAR this year without Daytona than we sold all of last season” (THE DAILY).

REEBOK INVESTMENT RATING DOWNGRADED TO “NEUTRAL”

REUTERS reports that Merrill Lynch “cut its mid-term investment rating [today] on Reebok International” to “neutral” from “buy,” saying that the company's athletic specialty segment “may be losing ground to rivals Nike and Adidas.” Analyst Virginia Genereux said a quarter of the 60 specialty athletic retail stores she surveyed in the past week characterized Reebok as “losing momentum.” No one characterized Reebok as “gaining momentum,” although 20% applied it to Nike and 15% applied it to adidas (REUTERS, 3/14).

Meanwhile, the ECONOMIC TIMES reports that Reebok and adidas “are all set to expand their retail operations in India” (ECONOMIC TIMES, 3/14).

CELEBRATED COACHES GIVE MARRIOTT THE BUSINESS

Marriott International will launch a national advertising campaign featuring Mike Ditka, Buccaneers coach Jon Gruden, Univ. of SC football coach Lou Holtz and Lakers coach Phil Jackson during tonight's CBS broadcast of “March Madness.” In each of the four spots, the coaches share personal advice with business travelers on how to get the most out of their trip. The campaign represents Marriott's second wave of television advertising in less than four months (THE DAILY).

IRL THROWS PARTNERSHIP WITH CAA INTO HIGH GEAR

The IRL has retained Creative Artists Agency (CAA) to maximize the series’ public awareness and drive race attendance and TV viewership. CAA also will look to develop promotional sponsorship packages (THE DAILY).

BUZZER BEATERS

The AP reports Athens Mayor Dimitris Avramopoulos “has started a legal fight against plans to build a suburban railway” in Athens “designed to ease traffic during the 2004 Olympics.” The mayor argues that the railway would “worsen traffic problems because tracks would be laid at the expense of vital road space.” The IOC has cited Athens' traffic problems as one of the main areas of concern (AP, 3/14).

According to HANDELSBLATT.com, Puma AG said on Wednesday that it “expects sales to rise by at least 20% this year, and pretax profit to rise by a double-digit percentage.” Puma CEO Jochen Zeitz: “Within the next five years, our sales will break through the billion euros boundary” (HANDELSBLATT.com, 3/13).

The London GUARDIAN reports that Nike “ran away with seven gongs at the annual British Television Advertising Awards, but failed to grab the evening's big prize - best television commercial of the year - which went to Stella Artois” (London GUARDIAN, 3/14).

According to the NY Labor Department, striking workers at New Era Cap Co. “will receive extended unemployment benefits under the federal economic stimulus package.” President George Bush signed the bill on Sunday, adding 13 weeks of benefits to the usual 26 (BUFFALO NEWS, 3/14).

The Dolphins and WQAM Radio entered into an agreement for the station to continue as the team’s flagship for the next two seasons. WQAM has carried Dolphins games since the ’97 season (THE DAILY).

The NAIA announced today that Choice Hotels International has agreed to become the association’s “Official Hotel Partner” through ’05. As part of the agreement, Choice Hotel properties will be promoted exclusively to the NAIA membership through various means (THE DAILY).

TONIGHT’S EVENTS

The Clippers and Arco AM/FM will tip-off Night Hoops at the Harvard Recreation Center at 6:30pm PT in L.A. (THE DAILY).

FL development company EnCap Golf Inc. will present its plans to turn 900 acres of trash heaps and swamps in the Meadowlands into a $1.2B golf course to North Jersey residents today at 7:00pm at the Cleveland Avenue senior center (Bergen RECORD, 3/13).

The AFL Storm is scheduled to announce a new owner today, pending approval by the league (TAMPA TRIBUNE, 3/14).

LPGA Tour member Terry-Jo Myers will receive the ‘02 Samaritan Award at the PING Banner Health pro-am dinner and charity auction in Phoenix. Myers “was named this year’s recipient for her work to increase awareness about the need for the diagnosis and treatment of interstitial cystitis, a bladder disease Myers has been coping with since 1983” (Ft. Myers NEWS-PRESS, 3/14).

TODAY’S ARTICLES OF INTEREST

The S.F. CHRONICLE’s Glenn Dickey on whether the NCAA is exploiting their student/athletes.

The Toronto GLOBE & MAIL’s David Naylor on NCAA student/athletes seeking more of a voice in NCAA expenditures through the College Athletes’ Coalition.

The TORONTO STAR’s Geoff Baker on the Blue Jays making increased use of modern technology in scouting opposing hitters and pitchers.

See The Daily Insider’s Articles Of Interest section for more sports business-related links.

IN OTHER NEWS…

REUTERS reports that Yahoo! is “expanding its presence in Hollywood” next Monday when it opens a new office in Santa Monica to “house a growing staff at its Yahoo Entertainment division as well as employees of the Launch Media music site that Yahoo purchased last year” (REUTERS, 3/14).

The AP reported that Britney Spears could be the “next pop star to come out with a clothing line.” Spears: “That would probably be something I do when I take a little break; because I love clothes, I would really be able to put all my time and energy in to it” (AP, 3/14).

THE DAILY STATS: PAC-10 FINAL ATTENDANCE FOR '01-'02

The following presents final Pac-10 attendance for the '01-02 NCAA basketball season (THE DAILY).

CHANNEL SURFING

NHL Commissioner Gary Bettman will appear on CNN Headline News at 5:10pm ET.

ESPN2 will air Sabres-Flyers at 7:30pm ET and Blues-Kings at 10:30pm ET.

ESPN will air ATP’s Pacific Life Open, second semifinal, at 9:00pm ET.

ESPN Classic’s “SportsCentury” will profile Pete Maravich at 8:00pm ET.

DC Boxing Commission Vice Chair Michael Brown, Boxing promoter & analyst Rock Newman and USA Today columnist Jon Saraceno will be on FSN’s “The Last Word.”

E!’s “True Hollywood Story” will profile Paula Poundstone at 8:00pm ET and Robert Downey Jr. at 9:00pm ET.

A&E’s “Biography” will profile Marilyn Monroe at 8:00pm ET.

HEADLINERS

Here are tonight’s headline guests on the following talk shows:

If you have any questions, comments or suggestions, please let us know at:
dailyinsider@sportsbusinessdaily.com

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