SBJ/September 1 - 7, 2003/This Weeks Issue

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  • Action sports universe poised for upheaval

    The action sports landscape could soon undergo a dramatic shift, as both the Gravity Games and the Vans Triple Crown series are straining to define their future while their television partner, NBC, is trying to lay the foundation for its own property, which could launch as early as next year.

    The Gravity Games is in serious flux, as Primedia recently informed equal partner Octagon that it wants out of its ownership stake in the money-losing event, according to both companies. Its new role will be determined over the next 60 days, but Primedia Television CEO Jim Ritts said it could retain a smaller equity stake.

    Meanwhile, Vans continues its yearlong effort to sell its Triple Crown series after several near-deals with Park City, Utah-based Evolve Entertainment fell through. Industry sources have said Casey Wasserman, owner of action sports management group The Familie and the AFL Los Angeles Avengers, has emerged as the leading bidder for the series, which features 18 events in 2003. But Wasserman said only, "I don't confirm deals before they're done."

    Wasserman's goal of developing a significant action sports portfolio is well known, and he is close to purchasing Phoenix-based Action Sports Management, according to Steve Astephen, CEO of The Familie (see "Purchase of action sports firm near ").

    Vans has been seeking a buyer for its Triple Crown series of events.
    Vans director of strategic alliances Mark Livingston refused to comment on negotiations for the property. Mitchell Edwards, CEO of Evolve Entertainment, said he feels his company is still in the running.

    NBC is a player in all of this, as both Vans and the Gravity Games buy time on the network for their broadcasts, and NBC produces the Gravity Games and six of 10 Triple Crown broadcasts. While NBC's deal with the Gravity Games ends with this month's event in Cleveland, sources said NBC has looked into acquiring a stake in the property. The Vans/NBC deal goes through 2004.

    NBC adds to the intrigue with its own proposed venture. For several months the network has been making presentations to event managers and venue operators such as Comcast-Spectacor and Anschutz Entertainment Group, gauging interest in a multi-event series that would be owned and televised by NBC but managed at the venue level by the various operators. In essence, NBC would be a licenser, and the plan conforms to the network's goal of owning more of its own properties.

    Some who have seen the proposal are impressed with the idea — and with the network's secrecy. "They made the presentation and didn't leave a single scrap of paper behind," said one action sports marketer.

    Primedia’s desire to exit has Gravity Games partnership up in the air.
    Jon Miller, NBC senior vice president of programming, declined to comment on a new venture. He did say the network is interested in being a part of the Vans Triple Crown beyond the current contract, and didn't rule out extending the Gravity Games deal, either. Despite giving both properties discounted rates on their time-buys, the network grosses low-seven-figure sums on the deals and is the only participant in both ventures to currently show a profit.

    But with the two top action properties — after ESPN's X Games — unable to secure enough sponsorship dollars to turn a profit, some marketers wonder how NBC can expect its own event — plus its partners' events — to succeed.

    In its presentations, marketers said, NBC has said the action sports business will grow enough to support all of the events, especially in a scenario where networks and event producers are sharing costs and playing to individual strengths.

    NBC's bullishness on the sports segment stems in part from the good marks it received in its broadcasts of the 2002 Salt Lake Olympics, which it energized by showcasing snowboarding and other action sports. In addition, the International Olympic Committee recently approved the addition of BMX events to the Olympic Games starting in 2008.

    Primedia inherited the Gravity Games in its acquisition of media company Emap USA two years ago, finding itself in the unfamiliar role of event owner and manager.

    The company's decision to drop its investment in the games reflects its tough financial position, as it has lost $2.25 billion in the last three fiscal years. Sources familiar with the Gravity Games said the property's bottom-line losses are not large, only in the very low seven figures per year on revenue of roughly $10 million a year.

    Large media companies willingly endure such losses for a relatively new property with long-term legs. So why the exit move?

    "We do have a strong belief in the future growth of action sports," said Primedia's Ritts. "Primedia Television, though, is not in the business of staging events, although staging and packaging sports events is a core business of Octagon. We have put a considerable portion of management time and energy against this, and it's just not the business we're in."

    Ritts would not discuss how Primedia would be disposing of its stake.

    The biggest challenge for its partner, Octagon, might be building up the games in the eyes of sponsors. The property has had myriad sales teams in its five years as it was shuttled from company to company. At an action sports conference earlier this year, some sponsors spoke highly of the games' efficacy in spreading their message, but a Dodge representative said Gravity had "not been there for us" in integrating Dodge's message on-site and in the broadcasts."I don't know that it's ever been mismanaged, I'm just not sure it's been managed as a property," said Octagon CEO Rick Dudley in an interview last week. "At Octagon, we have proven two things: We can put on a great event that the athletes really enjoy participating in and that the fans enjoy attending and watching, and that NBC showcases it like no one else."

    Dudley said Octagon, as owner and producer, will be looking to streamline the Gravity operation to improve the bottom line.

    Staff writer Liz Mullen contributed to this story.

    Print | Tags: Action Sports, AFL, AEG, Comcast Corp., ESPN, Football, IOC, NBC, Octagon Group, Olympics, Primedia Inc., This Week's Issue, Vans
  • Bobcats launch ‘Free SL’ deal for Hornets faithful

    The Charlotte Bobcats are turning to an old marketing strategy to attract new business by offering former Hornets season-ticket holders a free personal seat license program.

    The NBA expansion team last week rolled out what it's calling the Free SL program, offering former Hornets season-ticket holders full ownership of their seats at Charlotte's planned new arena at no cost should they purchase Bobcats season tickets for five consecutive years, beginning with the team's 2004-05 inaugural season.

    The Bobcats' 2004-05 season will be played in the existing Charlotte Coliseum, which was home to the Hornets before the franchise moved to New Orleans in 2002. The Bobcats will move into their new arena for their second season.

    The seat-license strategy is similar to what Hornets owner George Shinn called a charter seat program that he offered to early season-ticket buyers in 1988, when the NBA first expanded to Charlotte.

    Ward
    "The more we looked at it, the more we felt it would work for us," said Tom Ward, executive vice president of business operations for the Bobcats. "We are evolving as a franchise, and our goal is to instill long-term loyalty to our fans."

    The offer initially is available only to former Hornets season-ticket holders, who also get priority in making seat selections at the new arena when they agree to buy season tickets for the inaugural season at Charlotte Coliseum. The team expects to extend the Free SL program to new season-ticket buyers when it begins selling to the general public in November.

    "We are going to have some tough years and don't want our season-ticket holders to bail on us, so this is what is at the end of the rainbow for our fans," Ward said.

    Having a seat license would give a fan rights to that specific seat for future seasons. The Bobcats are not planning now to require a seat-license purchase with each annual season-ticket buy.

    The Bobcats decided to offer the Free SL program after beginning a marketing campaign last month aimed at the 6,000 former Hornets season-ticket holders.

    "The program was something that we had in the back of our minds, and we were inundated with people asking about what happened to the charter program," Ward said. "It was something fans came to expect."

    The Bobcats are counting on the former Hornets' season-ticket base to buy into the expansion franchise as it begins to sell full-season-ticket plans that cost between $731 and $4,300.

    The Bobcats began selling season tickets in early August. Current sales totals were not available.

    The team so far has sold 25 of the new arena's 60 suites and has set a goal to sell 30 by the end of this month. The team expects to begin selling sponsorships later this month, with suite sales to be included in the sponsorship packages.

    Print | Tags: Basketball, Charlotte Hornets, New Orleans Pelicans, This Week's Issue
  • Breeders’ Cup promo goes retail

    The Breeders' Cup World Thoroughbred Championships launched its first-ever consumer promotion last week, allowing fans to buy general admission tickets at 350 Ralphs supermarkets in Southern California.

    As part of the deal, Breeders' Cup sponsor Guinness has installed end-of-aisle displays that advertise the $10 general admission tickets shoppers can buy when they pay for their groceries. Shoppers also can receive discount coupons for Breeders' Cup merchandise sold at Santa Anita Park on race day, Oct. 25.

    "This is really the first Breeders' Cup ticket promotion that we have conducted that involves a retail partner," said Keith Chamblin, senior vice president of marketing and industry relations for the National Thoroughbred Racing Association. "We never really had the right marketing partner in place to carry out a promotion of this kind before, but Guinness turned out to be the perfect partner."

    The promotion will expose the event to grocery store shoppers who are not necessarily horse-racing fans, Chamblin said.

    Guinness signed a two-year deal to sponsor the Breeders' Cup last year. Unlike the event's other sponsors, the beer company is not sponsoring a particular race or thoroughbred division, but rather the starting gate for the event. One source said the annual sponsorship fee is in the high six figures.

    As part of the promotion, Guinness will sponsor an Irish rock band that will do a concert after the day's races. The event is called "Guinness Rocks the Rail" and will be held in Santa Anita's infield.

    Print | Tags: Horse Racing, This Week's Issue
  • Chevrolet shifts from Warner ’toons to tunes

    NASCAR and the music industry will lock arms as never before this weekend for Chevrolet's annual blowout promotion at Richmond International Raceway — and, for once, there won't be a country act in sight.

    In yet another example of stock car racing's move toward the mainstream, Chevy, Warner Music Group and motorsports merchandise leader Action Performance Cos. will combine on a weekend-long cross-promotion built around a handful of rock acts from Warner's record labels.

    Warner Music Group act Trapt will occupy real estate on Robbie Gordon’s No. 31 car.
    Six Chevy Monte Carlo entries will carry special paint schemes that promote the artists — including surging rock bands Staind and Trapt — during Saturday's Winston Cup race, dubbed the "Rock & Roll 400" by title-sponsor Chevy.

    Two of the acts, Sugar Ray and Franky Perez, will perform trackside before Friday night's Busch Series race. Trapt, Uncle Kracker and Hootie and the Blowfish will perform at the track before Saturday night's Winston Cup event. Staind, which will share real estate on Dale Earnhardt Jr.'s car with Budweiser's "True Music" mark, played at a NASCAR VIP event in Indianapolis last month. Third Eye Blind, featured this weekend on Steve Park's car, played when the promotion was announced in Charlotte in May.

    CDs from the artists will be sold at the speedway this weekend, along with other merchandise commemorating the promotion.

    The link that spurred the promotion came about when Chevy began considering ways to reprise a highly successful model that put Warner Bros.' Looney Tunes characters on cars at the Chevy-titled Richmond race each of the last two years.

    Chevy's current ad campaign features car-themed tunes, including Prince's "Little Red Corvette" and Don McLean's "American Pie."

    Chevy executives say the unifying paint-scheme theme allows them to drive home the extent of their position in NASCAR. Last year's Looney Tunes program generated $50 million in retail merchandise sales and more than 500 million consumer impressions.

    "The model is very similar to what we put together with Looney Tunes," said Terry Dolan, assistant brand manager for Chevrolet Monte Carlo. "What we've been able to do is create this envelope that pulls the mass together. ... It not only pulls together a unified message, but it allows for the participation of a multitude of partners.

    "As you look at Dale Jr., we've now opened up doors through the music of Staind."

    For the record labels, it's a way to get their acts in front of a loyal fan base.

    "It's national TV exposure, it's print, and it's an alignment with one of the top sports out there," said Laura Del Greco, vice president of corporate integrated marketing for Warner Music Group. "When we get national exposure like this, we usually see a lift [in CD sales].

    "The exposure is what it's all about. You can't get the concentration [through air play] on radio that you get through something like this. If you're integrated into some sort of programming and it becomes seamless and exciting, that's when you see a real return."

    Print | Tags: Action Performance Cos., Motorsports, NASCAR, This Week's Issue
  • Delta plays with PGA Tour theme

    Some of Delta’s Crown Room Clubs will get PGA Tour-branded putting greens.

    The PGA Tour and Delta Air Lines are teaming for a sweepstakes promotion that offers consumers a chance to win a trip for two to the 2003 Presidents Cup, scheduled to take place Nov. 17-23 in Blanco, South Africa.

    The sweepstakes is part of a new, larger marketing agreement between the PGA Tour and Delta that will give Delta's airport lounges a strong PGA Tour flavor. Delta has 38 Crown Room Clubs and three Business Elite Lounges in the United States.

    Several PGA Tour-themed elements will debut in some of those clubs in October. A select number of Delta Crown Room Clubs will feature PGA Tour-branded putting greens. Action photography from PGA Tour and Champions Tour events will be on display in 12 Crown Room Clubs.

    PGA Tour-themed publications will be present in all the clubs, among them PGA Tour Partners Magazine, PGA Tour Annuals, and special tour sections appearing in Golf Digest and Golf Magazine.

    For Delta, the new marketing agreement with the PGA Tour is another way to enhance the Crown Room Club experience, said a spokesperson for the airline. The airline's high-end customers — frequent travelers who typically are Crown Room Club members — tend to be avid golfers, the spokesperson said.

    For the PGA Tour, the marketing program is another vehicle designed to "help raise the profile of the tour," said Sheila McLenaghan, a vice president for PGA Tour Marketing. "We like to have partners who actively leverage their relationships with the tour," McLenaghan said. Delta, a PGA Tour sponsor since the mid-1980s, is the tour's official airline partner.

    The infiltration of the PGA Tour into Crown Room Clubs started last month. Computers in the clubs began to feature access to PGA Tour video highlights via pgatour.com. Crown Room Club members became eligible for discounts on subscriptions to TourCast, the tour's Internet application that enables fans to follow tournament play through shot-by-shot graphics and real-time statistical data. PGA Tour pocket schedules became available in Crown Room Clubs in Atlanta, Dallas, Los Angeles, Washington, Salt Lake City, Cincinnati, Phoenix, Tampa, Jacksonville and Orlando and at New York's JFK Business Elite Lounge.

    Delta's PGA Tour-themed sweepstakes runs through Sept. 15. In addition to attending the Presidents Cup, the winner gets the chance to go on an African safari.

    To enter the sweepstakes, consumers can visit delta.com/deltagolf. To be eligible, they must become members — at no cost — of Delta Golf and the Delta SkyMiles program. Sweepstakes information is available in Crown Room Clubs, PGA Tour shops in major airports and at PGA Tour Tournament Players Clubs.

    Another new Delta/PGA Tour initiative, which started last month, involves offers to Delta Golf members. The current edition of the airline's monthly e-mail newsletter to its Delta Golf members offers discounts on PGA Tour-themed merchandise as well as a package to play the Tournament Players Club at Sawgrass in Ponte Vedra Beach, Fla., home of The Players Championship.

    Print | Tags: Golf, This Week's Issue
  • Earthlink titles CBS college halftime

    Internet service provider Earthlink has signed on to be the title sponsor of CBS' college football halftime show.

    Earthlink will title the halftime show for every regular-season broadcast on CBS, plus the SEC Championship Game and the Sun Bowl.

    Terms were not disclosed, but CBS had sought $3.5 million to $4 million.

    The package includes Internet components.

    — Andy Bernstein

    Print | Tags: CBS Broadcasting Inc., Earthlink Network Inc., Football, This Week's Issue
  • In Demand will feature MLB on HD channel

    In Demand has signed a multiyear deal with Major League Baseball to carry games on its soon-to-launch high-definition channel.

    "INHD" will launch Sept. 15 on cable systems owned by Cox Communications, Time Warner Cable and Comcast Cable Communications, the companies that jointly own In Demand. The first MLB game will be shown the next day.

    INHD will retransmit telecasts from local markets that already are produced in high definition, blacking them out in the competing teams' home cities. Teams that have local high-definition coverage include the Orioles, Philadelphia Phillies, Boston Red Sox and New York Mets, with more joining that group every year.

    Financial terms of the deal were not disclosed, but In Demand chief operating officer Rob Jacobson said that MLB made it affordable.

    "It wasn't free, but we fortunately have a very good relationship with MLB," he said. In Demand distributes the league's "Extra Innings" out-of-market package to cable customers.

    "I think they saw this as a valuable extension of that relationship, so we were able to do this at a level that made sense for everyone," Jacobson said.

    He said a deal with another "major professional league" will be announced soon. He estimated INHD will reach 500,000 homes at launch.

    Mark Cuban's HDNet carried MLB games until this season. It handled its own high-definition production, bringing a separate broadcast truck and set of cameras to each game, but used graphics and play-by-play calls from Fox Sports Net affiliates.

    Print | Tags: Baseball, MLB, This Week's Issue
  • ISP Sports adds Auburn rights through acquisition of network

    ISP Sports, the multimedia marketing rights holder for more than a dozen college athletic departments, acquired Auburn Network Inc., the marketing agency for Auburn Athletics.

    The deal gives ISP control of Auburn Network's football, basketball and baseball programming, which goes to more than 60 radio affiliates throughout the Southeast, and rights to basketball and football television shows, pay-per-view and tape-delayed television, sports publications, Web site, and stadium and arena signs.

    "We felt like we could bring a lot of strength to the table as far as national sales strength is concerned," said ISP President Ben Sutton, "and we felt we could bring a lot of efficiencies to [Auburn Network's] operations."

    Auburn Network's employees, including President Mike Hubbard, will remain in their positions to ensure a seamless transition, Sutton said.

    Auburn Network generates close to $5 million a year, said sources familiar with the company. Sutton would not reveal financial details of the deal.

    ISP also assumed operation of American Digital Satellite Network LLC, a state-of-the-art audio satellite business, which will be used to support radio networks that ISP produces for its other university clients.

    APPEALS HOLD UP HOOPS SCHEDULES: Indecision in a lawsuit over the NCAA's two-in-four rule, which limits the number of exempt tournament appearances a Division I basketball team can make to two such events in four years, has disrupted scheduling for schools and could result in the NCAA having to pay higher damages if the group of exempt tournament organizers, which filed the suit against the NCAA, wins its case.

    In late July, a U.S. District Court placed an injunction on the two-in-four rule after deeming the rule illegal because it violated antitrust law. The NCAA responded with an appeal and a request for a stay, which would keep the rule in place until the appeal was heard. The stay was granted late last month but could be overturned if the plaintiffs are successful in an appeal to the U.S. Supreme Court.

    Rick Giles of the Gazelle Group, which planned to hold four exempt tournaments with 40 teams this year, last Monday expected his company's tourney schedule to shrink to three events and 20 teams if the two-in-four rule remains in place. Giles said that if the stay is not overturned and the NCAA ends up losing its appeal, the NCAA stands a chance of having to pay an extra season of damages.

    The hold-up on the decision has affected schools invited to play in exempt events and schools that planned to play games against schools that were invited to play in exempt events. Without complete schedules, which usually are finished by now, athletic departments have been unable to finish their media guides, posters touting basketball schedules cannot be printed and fans have been unable to make travel plans, said various school officials.

    Both sides have requested an expedited appeal process and expect the case to be heard late this year or early next.

    ODDS AND ENDS: Washington, D.C., and Baltimore Wendy's restaurants have renewed sponsorship of Maryland athletics under a one-year agreement. The deal includes football- and basketball-related in-store promotions and sponsorship of two kids programs. ... University of Missouri assistant AD Ross Bjork has left Missouri to be associate athletic director for external operations at the University of Miami. Bjork replaces Patrick Nero, who left Miami earlier this year to be athletic director at Maine. ... Conference USA associate commissioner Brian Teter has decided to return to campus athletic administration and accepted a position as associate athletic director of external relations at Cincinnati.

    Contact Jennifer Lee at jlee@sportsbusinessjournal.com.

    Print | Tags: Colleges, NCAA, This Week's Issue, Wendy's International Inc.
  • More NBA clubs will go retro

    The NBA plans to expand its Hardwood Classics line of merchandise during the coming season as the league and licensing partner Reebok look to increase sales of the retro-inspired uniforms.

    Sales of the uniforms and related merchandise have increased 51 percent this year from 2002, according to NBA officials, though they declined to provide exact sales totals. Driving the sales efforts for the future will be an increased number of teams taking part in promotions that the league and Reebok have dubbed Hardwood Classics Nights.

    Last season, eight teams participated in the Hardwood Classics Nights promotions, each of which recognized a team milestone or era. As part of the promotion, the participating team wore the franchise's uniform from that particular era. For example, the Philadelphia 76ers donned uniforms from the 1983 NBA championship team for their Hardwood Classics Night in honor of the 20th anniversary of Philadelphia's last NBA title.

    The other teams participating in the promotion last year were Denver, New Jersey, Houston, Milwaukee, Phoenix, Sacramento and Washington.

    The league plans to announce the promotional schedule for 2003-04 at the start of the season in late October and will put the related merchandise in retail stores two weeks before each of the team-designated retro nights.

    "The Hardwood Classics Nights resonate with the teams and their fans because it is more than just wearing retro uniforms, it is a chance to celebrate their history," said Sal LaRocca, NBA senior vice president of global merchandising, in a statement.

    The Hardwood Classics line was unveiled by the NBA and Reebok in 2001 after Reebok signed a merchandise licensing deal with the league. Reebok becomes the exclusive NBA uniform licensee in 2004.

    Reebok and the NBA last week also announced plans to unveil a new uniform for the 2004 All-Star Game, scheduled for Feb. 15 at the Staples Center in Los Angeles. Reebok will sell matching all-star merchandise. From 1996 through 2002, each NBA all-star wore his team uniform for the All-Star Game. Last season, the all-star teams were outfitted in retro uniforms from the 1988 All-Star Game.

    Print | Tags: Basketball, NBA, Philadelphia 76ers, Reebok, This Week's Issue
  • New York Giants sign Wachovia

    Wachovia Corp. last week agreed to a three-year deal that makes the lender the exclusive financial services partner of the New York Giants.

    The deal follows the company in July opening its first two financial centers in Manhattan. Financial terms of the deal — which includes TV, print, online and stadium signage components — were not available.

    "This really helps bolster our more traditional banking presence in New York while helping to really announce our brand conversion from First Union to Wachovia in the New Jersey and Connecticut markets," said Dan Fleishman, Wachovia director of corporate marketing sponsorships and alliances.

    Fleishman would not say whether the company planned on signing separate deals with specific members of the Giants to leverage the partnership.

    Rusty Hawley, vice president of marketing for the Giants, called the deal significant, also noting that the Giants have had previous relationships with First Union and First Fidelity, both now under the Wachovia banner.

    Wachovia last week also renewed its sponsorship of the Miami Dolphins and Pro Player Stadium for the next five years. The sponsorship, which began in 1995, extends through the 2007 season and calls for Wachovia advertising in all of the Dolphins' bilingual radio, print, TV and Internet ventures. Financial terms weren't disclosed.

    Charlotte-based Wachovia, with assets of $364 billion as of June 30, has full-service banking offices in 11 East Coast states and Washington, D.C., and offers retail brokerage services in 48 of the 50 states.

    The Sports Business Daily and Charlotte Business Journal contributed to this report.

    Print | Tags: Football, Miami Dolphins, New York Giants, This Week's Issue, Wachovia
  • Nike promotes 5 execs to vice presidencies

    Nike Inc. last week promoted five executives to vice president positions.

    Tom Arndorfer was named vice president and CFO of Nike USA; Jim Carter was named vice president, general counsel; Adam Helfant is now vice president of U.S. sports marketing; John Hoke was named vice president, global footwear design; and Bernie Pliska is now vice president, corporate controller.

    Arndorfer joined Nike in 1996 as controller for global footwear. Since last year, he has worked as CFO of Nike USA.

    Carter joined Nike in early 1998 in a regional role as general counsel for the United States and the Americas and manager of Nike's legal team. Helfant has served as director of global sports marketing for five years, the last two involving a joint assignment as director of U.S. sports marketing.

    Hoke has served as Nike's global creative director of footwear design for the past 18 months. Previously, he was global creative director for Nike Brand.

    Pliska joined Nike in 1995. Prior to that, he was with Price Waterhouse for 11 years.

    — From staff reports

    Print | Tags: PricewaterhouseCoopers, This Week's Issue
  • PVI sold to major creditors

    Virtual advertising pioneer Princeton Video Image Inc. has completed a sale of all its assets, creating a new company that will operate under the name PVI.

    Cablevision and Presencia Media, which were the company's main creditors, are now the principal shareholders of PVI Virtual Media Services LLC. PVI had been operating under Chapter 11 bankruptcy protection.

    The newly organized company will be led by former PVI chief operating officer James Green, who has been promoted to CEO.

    Former co-presidents David Sitt and Roberto Sonabend will be co-chairmen and operate the company's Mexican subsidiary.

    Green said the asset sale will allow PVI to continue on a business-as-usual basis, but it will now be cash-flow positive because it has eliminated the costs associated with being a publicly traded company.

    It will maintain headquarters in New York City and New Jersey, with offices in Mexico, Hong Kong and Toronto. The company has 80 full-time employees.

    Green said the primary source of revenue for PVI will continue to be selling advertising directly, and then placing those ads on network broadcasts electronically. He said PVI also is looking to grow its broadcast enhancement business, where it collects a fee for providing technological features such as the first-down line on CBS.

    "While those production deals are not very profitable," Green said, "they do get you in bed with the broadcasters, then we're able to leverage that to do advertising deals."

    PVI's executive team under Green remains in place, including veteran vice president of new business development Sam McLeery and PVI Entertainment President Lon Rosen. McLeery is in charge of PVI's relationships with broadcasters and sports properties, while Rosen heads the division of the company that inserts images of products into television shows.

    Print | Tags: Cablevision Systems Corp., CBS Broadcasting Inc., Princeton Video Image Inc., This Week's Issue
  • Raiders insist judgment be paid

    The Oakland Raiders intend to collect on a $34.2 million judgment against the Oakland-Alameda County Coliseum, even if it means going after rent payments made by the Golden State Warriors, an attorney for the Raiders said last week.

    Davis
    Just hours after a Sacramento jury said the Coliseum was liable for negligent misrepresentation that led the Raiders to move to Oakland, a new legal battle was beginning. Lawyers and officials for the Coliseum publicly declared that the team will never collect the money, while the Raiders' lawyers were already planning motions to execute the judgment.

    "Unless they pay the judgment or put up a bond for the judgment, the Raiders will seek to execute on the judgment," said Kenneth Hausman, an attorney for the Raiders. "To collect the judgment, the Raiders could take the assets of the OACC, including rent or other payments made by the tenants, such as the Warriors, to the OACC."

    But according to Ignacio De La Fuente, an Oakland city councilman and chairman of the city-Alameda County joint powers authority that now oversees the Coliseum, the OACC has no assets.

    "The old Coliseum board, that entity is defunct," De La Fuente said. "In our opinion, they have no way to collect."

    Hausman said the OACC is not defunct, and the Raiders provided SportsBusiness Journal with an Oakland-Alameda County Coliseum agenda for a closed session meeting that was issued the day after the verdict.

    "The Coliseum is the lessor for the Warriors and the Raiders," Hausman said. "It is an existing private corporation with assets, contracts and an indemnity from the joint powers authority of the city and the county."

    That means the city of Oakland and Alameda County are on the hook for the judgment if it is upheld, he said. Additionally, if the Coliseum appeals the verdict, which it has indicated it will do, it must put up a bond of 1½ times the amount of the judgment, he said.

    "After spending $10 million defending the Coliseum, the city and county are whistling past the graveyard in suggesting that it has no assets and the Raiders will not be able to collect," Hausman said. "These are the same public officials who told the taxpayers the stadium was sold out, so the Raiders' return would not be a cost to the taxpayers. The public officials and their attorneys have displayed the kind of arrogance one can only have with taxpayers' money."

    George Harris, attorney for the Oakland Coliseum, said, "I am not in a position to comment on the indemnity, if any." Harris would not say the OACC was defunct, but he said it had "very little assets."

    Harris took a position opposite Hausman's on whether the Coliseum would have to put up a bond in order to appeal the judgment.

    "Normally to stay a judgment, an appeal bond is required, but there are circumstances under which a bond is not required," Harris said. "Public entities are not required to post bonds under California law."

    However, Sacramento Superior Court Judge Joe Gray ruled in February 2002 that the OACC was a private entity for the purposes of the litigation with the Raiders.

    Harris said he was not sure that court ruling applied to the bond issue, but wouldn't comment further on it.

    Harris, noting that the Raiders asked the jury for an $833 million judgment, said the verdict "absolutely" was a victory for the Coliseum.

    "What the Raiders were seeking was a judgment that could be leveraged to get out of their lease and go to Los Angeles or elsewhere," he said. The $34.2 million verdict was not large enough to allow the team to do that, he said. The Raiders' lease expires in 2010.

    An owner of a major sports franchise, though, said $34.2 million was an amount that Raiders owner Al Davis could possibly use in negotiations to get out of a lease early. "He's got a marker now," said the owner, who asked not to be identified.

    One thing the Raiders and Coliseum officials agree on is that the battle is continuing. "This has been going on for eight years," Harris said. "It won't stop now."

    Print | Tags: Football, Oakland Raiders, This Week's Issue
  • Team Sports pulls the plug on TRAC plans

    The aspiring stock car racing league that made noise with deals with a major speedway operator and ESPN in the last two years pulled the plug on the venture last week, conceding that it had been unable to land investors who were willing to risk $5 million to join as team operators.

    Team Sports Entertainment, the publicly traded company that planned to launch Team Racing Auto Circuit (TRAC) next May, was due to run out of funding at the end of September if it could not meet a scaled-down goal of lining up six owner-operators and a cadre of sponsors to back them. With no reason to believe it would do so, the company's board of directors voted last week to discontinue its efforts.

    TRAC executives said they believe the company will be able to meet most of its outstanding debts without filing for bankruptcy protection, said Terry Hanson, president of Team Sports Entertainment.

    Sports investment banker Moag & Co. had been soliciting ownership prospects for TRAC since June 2002. In April, TRAC retained Raycom Sports to sell sponsorships.

    "Once we continued to have problems selling teams, with no real prospects out there, it was our fiduciary duty to let people know where we are," Hanson said. "There were a lot of people interested in the concept. But, other than our [stockholders], nobody wrote any checks to us. You can't operate a company without income."

    TRAC management altered its initial business plan several times in the last two years in an effort to get its product off the ground. While the company was able to forge alliances with major industry players, it couldn't get any of them to risk cash.

    TRAC initially projected a $10 million-a-year television rights deal, but couldn't land anything close to that. When the circuit finally announced a TV deal with ESPN in April, it was a time-buy that required the property to pay the network $10.66 million to produce and air its races in 2004.

    TRAC's deal to run its races at Speedway Motorsports Inc. tracks gave the embryonic property a dose of credibility but did nothing to help its bleeding ledger sheet.

    "I thought we had a good business concept," Hanson said. "We had good cars. We had the venues lined up. We had ESPN. But nobody wanted to write a check. We thought it was a good idea, but nobody else felt it was a good enough idea to write a check."

    Print | Tags: ESPN, Motorsports, This Week's Issue, TRAC
  • Tennis execs’ top concerns: Exposure, economy, competition

    The year's final Grand Slam tennis tournament, the 2003 U.S. Open, is under way at the USTA National Tennis Center in Flushing Meadows, N.Y. Against that backdrop, SportsBusiness Journal's Langdon Brockinton e-mailed a few top tennis industry executives a series of questions touching on the status of the sport. Below is an edited version of their responses.

    Scott
    Larry Scott, president and CEO, WTA Tour

    Q: What do you see as the major business concern surrounding the game these days?
    A: Obviously, our sport and, frankly, all entertainment entities are challenged by the difficult global economy we have been experiencing over the past two years. However, I truly believe that our single greatest issue is also our single greatest opportunity. When you look at our sport holistically, we are differentiated by several key assets: We are a global sport; we feature male and female athletes in individual and combined formats; we have four of the most recognized sport and entertainment events in the Grand Slams; we have dynamic and appealing athletes; we are a healthy sport for all ages and incomes. So, what's the problem? We have yet to figure out the most clear and consistent way to present the totality of our sport to the consumer. Consequently, our marketing proposition for potential investors is not nearly as strong as it can or should be. We need to continue to work to find ways to make our sport more compelling to consumers, and I think it begins and ends with making it easier to watch and follow.

    Q: What needs to be done to grow the game in the U.S. from grassroots, television and sponsorship standpoints?
    A: At the WTA, we believe we need to do more to take our players and the game directly to key decision makers who influence the investment of marketing dollars. This includes senior marketing executives with major brands, but it also includes the advertising and marketing agencies that are integral to many of these decisions. We have some exciting plans for the near future that I believe will begin to address this. ... Lastly, with specific regard to television, it's hard to argue with the power that the pooling of rights would provide in terms of a consistent, compelling and economic packaging of the sport for the viewing public and broadcasters. This is a priority, and the U.S. Open should be a major player in that package. I think marketers hunger for this as well.

    Q: Other hot issues in the sport that you have your eyes on — men's rival players group, prize money at the majors, player boycott possibilities over prize money?
    A: I guess if I were to add anything, it would be the need for leaders in our sport to fully understand the business we are in. Sure it's tennis, but more importantly, modern sport is also about entertainment. Tennis happens on the court. Entertainment happens on and off the court. If we are to fully realize the fantastic potential our sport still has, we need to view it this way.

    Miles
    Mark Miles, ATP chief executive officer

    Q: What do you see as the major business concern surrounding the game these days?
    A: Like almost every sport, tennis faces exposure issues in the crowded mainstream sports and entertainment marketplace. From continued competition for television time in the U.S. and Europe to consistent coverage in the traditional sports media, we must continually seek creative solutions for making sure our strong fan base gets to enjoy and follow the sport. Tennis remains extremely popular in nearly every corner of the world, as evidenced by our solid tournament attendance figures, so I'm confident that as our rising stars such as Andy Roddick and Roger Federer establish themselves among sports fans, TV and media will follow.

    Q: What needs to be done to grow the game in the U.S. from grassroots, television and sponsorship standpoints?
    A: Obviously, we need to get tennis on television more. We're working with the USTA to build a "summer of tennis" concept, which would enhance our visibility for our North American hard court season leading up to the U.S. Open. On the sponsorship angle, Chris Clouser, our new president and CEO of ATP Properties, will be focused on growing our awareness in the marketplace and helping us secure appropriate partners such as our long-standing partner Mercedes-Benz.

    Q: Other hot issues in the sport that you have your eyes on — men's rival players group, prize money at the majors, player boycott possibilities over prize money?
    A: More than anything else, I want to seek the best avenues to take advantage of the tremendous excitement created on-court by our stars. ... This generation of players is the future of men's professional tennis, and since they're the first to have grown up in the information age, they realize what it takes to make it off the tennis court, too.

    Worcester
    Anne Person Worcester, tournament director, Pilot Pen Tennis,a WTA Tour event

    Q: What do you see as the major business concern surrounding the game these days?
    A: Professional tennis must focus on staying competitive with not only other sports but all other forms of entertainment.

    Q: What needs to be done to address it?
    A: The factions in the game — WTA, ATP, Grand Slams and ITF, must come together to plan the business for the future. The sport needs leaders who have a vision and are willing to do what needs to be done to make the game not only viable but also "cutting-edge."

    One specific area for review is that Fed Cup/Davis Cup need to be "fixed." Both events have great potential and great challenges at the same time. A competition that the public can understand must be developed. We are dealing with a worldwide sport, not just American. Fed Cup and Davis Cup should be a proud tribute to the international game.

    Q: Other hot issues in the sport that you have your eyes on — men's rival players group, prize money at the majors, player boycott possibilities over prize money?
    A: Given the economy and state of the game, the men have picked a difficult time to ask the Grand Slams for a $50 million prize money increase. A boycott would set the game back 10 years.

    Separately, the tournaments are the entities that produce all the revenues that support pro tennis. Thus, they need to have commensurate decision-making abilities in the sport.

    Print | Tags: ATP, Tennis, This Week's Issue, USTA, WTA
  • The Bull Monty? Nope, but male dancers sought

    The Chicago Bulls, clearly hoping to beef up the fun factor at the United Center, are taking a weight-and-see approach with their fans next season.

    The Bulls put out a call last week for fans who could round out a team of 12 to 15 "Big Bulls fans." The ideal fan, according to the team, not only wants a chance to be on the court during a game and is open to "sacrificing a little pride for big laughs," but also carries a nickname of Tubby, Moose or Lumpy.

    The Bulls took the idea from the Dallas Mavericks, whose "Maniacs" group was a big hit with fans last season.

    "We thought Chicago is a perfect market because we have fans like that," said Marianne Caponi, corporate communications manager, who is handling the group's application process. "We have the LuvaBulls [cheerleaders], and we have the IncrediBulls [athletic spirit squad], but this gives men a chance to show their spirit on the court."

    Call them the EdiBulls?

    "We don't have a name yet," Caponi said, "and we won't until we get the group assembled."

    ‘Big’ Bulls fan
    application
    Among the items applicants can check, if applicable:
    I have been accused at least once of having “plumber’s butt”
    I can do stunts with the rolls in my stomach
    I have worn women’s clothing in public
    Homer Simpson is my idol

     

    Print | Tags: Basketball, Chicago Bulls, NBA, Reebok, This Week's Issue
  • USTA looks at potential competitors for CBS on U.S. Open rights

    The U.S. Tennis Association has been quietly gauging interest from the broadcast networks to see if any would make a competitive bid against CBS for the rights to future U.S. Open tournaments.

    CBS' deal expires after this year, but the USTA has an option to extend it for one more year. A USTA-affiliated source said no decision has been made on exercising.

    It's been a difficult time for the other tennis Grand Slam rights holders, as the French Open and Wimbledon both settled for rights-fee reductions on the cable side and did not get increases with their latest broadcast network deals.

    But the U.S. Open has generally been considered a strong property for CBS and a moneymaker in most years.

    ABC could have interest but would run into Saturday afternoon conflicts with college football.

    The more likely contender would be NBC, which already has Wimbledon and the French Open. NASCAR represents NBC's main scheduling conflict.

    USTA officials could not be reached for comment.

      ADT DEAL WORTH ALMOST $30M: The ADT Security Services Inc. deal that includes title sponsorship of the college football national championship trophy, announced last week, will cost the company close to $30 million over three years, making it one of the most lucrative advertising packages sold by the ABC Sports/ESPN sales team. But ADT is paying less than previous sponsors. Sears paid $10 million a year for four years, and Circuit City did a one-year deal for $9.5 million a year ago, a source said.

    ABC Sports/ESPN’s Ed Erhardt (from left), ADT Security Services Inc. President Mike Snyder, and ABC commentator Terry Bowden with the ADT-sponsored college football national championship trophy

    ADT negotiated a slightly better price for the package, which includes extensive advertising inventory on both ABC and various ESPN networks, the source said.

    The deal includes presenting sponsorship of the featured college football game on ABC to be called the "BCS Spotlight Game of the Week," sponsorship of an "ADT Spotlight Game of the Week" on ESPN Classic and sponsorship of the "ADT Coaches Spotlight" on ESPNews.

    It includes advertising inventory on ABC broadcasts of all four BCS games.

    ADT views the deal in a "holistic" sense, placing value on both the media and sponsorship marketing elements, said Jay Stuck, vice president of residential marketing and corporate communications.

    "The media exposure is big and will benefit our sales efforts," he said. "Secondly, from a brand-building aspect, the national championship trophy is definitely going to increase awareness of ADT."

    Sears and Circuit City arguably never got traction with consumers around the trophy, which did not exactly knock the Heisman off its perch as the most recognized piece of hardware in college football. It probably didn't even have as much recognition as the Dick Butkus Award, which goes to the nation's top linebacker.

    But Stuck said ADT has consumer promotions and tie-ins planned that will help make the ADT Trophy a household name for many years.

    "We view this as a multiyear relationship," he said. "At the end of three years, I'm sure we're going to look back with an eye toward continuing."

    Next up for ABC Sports/ESPN: presenting sponsorship of the Rose Bowl. It was a late sell to Sony PlayStation last year, but ABC/ESPN hopes to have a deal done much sooner this time around.

      MTV HITS THE STREET: Exploring the mythic roots of street basketball through the Nike brand, MTV will air a prime-time special on Sept. 7 called "Battlegrounds: Ball or Fall," chronicling a six-city one-on-one streetball competition staged by the sneaker giant. Nike served as the executive producer of the show, which will include highlights from the competition as well as profiles of the players who go one-on-one in an elimination tournament to win the title of "King of Kings" and $35,000. New York-based Radical handled the main production duties.

    The distinctly urban special is hosted by the poet Sekou and features appearances by NBA stars such as Gary Payton, Penny Hardaway and Baron Davis. Players compete on a customized half court with hip-hop music blaring in the background. Each regional winner got a one-year Nike apparel deal, a billboard in his home city, a $5,000 check for his favorite charity and, according to an information sheet released by Nike, "a lifetime of street cred."

    Andy Bernstein can be reached at abernstein@sportsbusinessjournal.com.

    Print | Tags: ABC, CBS Broadcasting Inc., Colleges, ESPN, NASCAR, NBA, NBC, Sears, Roebuck & Co., Tennis, This Week's Issue, USTA
  • WNBA foresees bump in team revenues

    Despite a dip in average attendance for its regular season, the WNBA expects to see increased team revenue figures this year, thanks in part to the individual team ownership structure adopted this year.

    "We feel very good about where we ended up," said WNBA President Val Ackerman.

    Average attendance for the league's 14 teams was 8,830. Last season the league averaged 9,228 per game.

    The league had 16 teams in 2002, but with restructuring in the off-season, NBA operators of WNBA teams in Portland, Miami, Utah and Orlando decided to cease operations instead of making the transition to ownership of the teams.

    Two teams, Orlando and Utah, were relocated to Connecticut and San Antonio, respectively, and both did well given their respective circumstances, Ackerman said.

    The San Antonio Silver Stars, owned by Spurs Sports & Entertainment, averaged 10,384 fans a game, which was 17.6 percent higher than the league average.

    WNBA on TV
    2003 2002
    No. of games
    Rating
    No. of games
    Rating
    ABC
    7*
    0.8
    NBC
    10
    0.9
    ESPN
    12*
    0.29
    ESPN2
    9
    0.24
    10
    0.26
    Oxygen
    13
    0.2
    NA
    NA
    * Includes All-Star Game broadcast
    NA: Not available
    Note: Original broadcasts only
    Sources: WNBA, networks
    WNBA ATTENDANCE
    Year Avg. attendance Pct. change
    2003 8,830 -4.3%
    2002 9,228 1.7%
    2001 9,075 0.0%
    2000 9,074 -11.1%
    1999 10,207 -6.1%
    1998 10,869 12.4%
    1997 9,669 NA
    NA: Not applicable
    Note: This season’s average reflects a late-season adjustment in
    attendance figures as originally reported
    Sources: SportsBusiness Journal research, WNBA box score figures

    The Silver Stars' success "speaks volumes to the receptiveness of the market, but also to the hard work the Spurs put into [the team]," Ackerman said.

    The Connecticut Sun, on the other hand, averaged only 6,025, but team and league officials say they are happy with where the team ended up attendance-wise, especially given the fact that the Sun had relatively little time to promote itself in the market.

    The WNBA did not grant Connecticut a team until earlier this year, which gave the team only about two months to staff up and begin team operations. In contrast, San Antonio was granted a team last fall and had been preparing for a team for three years.

    "I'm very proud of our staff and what we've done in the short time we've done it," said Chris Sienko, general manager of the Sun. "And I think the Mohegan Sun as the ownership group couldn't be more happy with what's been accomplished this year."

    Overall, Ackerman said she's pleased with what the league and its teams were able to do this season in light of a slumping economy and the off-season obstacle of having to complete a new collective-bargaining agreement with players. The last-minute labor deal interrupted teams' sales efforts in what typically is a "critical selling time" for the league, Ackerman said.

    Despite the dip in average attendance, the league is expecting team revenues to be up this year in comparison to last, thanks in part to the new operating model, which places more accountability on teams to generate revenue.

    The revenue increase came mainly from an increase in local sponsorship sales and ticket sales, Ackerman said.

    Even with an increase in revenue, teams may still find themselves in a difficult financial position, since teams under the new ownership structure are now responsible for player costs and many teams committed extra staff and resources as a result of the new ownership structure.

    Russ Bookbinder, senior vice president of business operations for Spurs Sports & Entertainment, said the group is "thrilled" with the team's first year but added: "It's certainly no bonanza financially. We went into this with eyes wide open understanding what this business is about. We're committed to it. We believe in the long-term future of women's basketball."

    Print | Tags: Basketball, This Week's Issue, WNBA
  • WNBA ratings slip marginally

    The WNBA didn't exactly set any television ratings records this season, but it at least proved consistent, with ratings off just a tad on average.

    ABC averaged a 0.8 rating for seven telecasts including the All-Star Game (see chart), while ESPN2 averaged a 0.24 cable rating for 10 games, including one rebroadcast. The Oxygen network, in its second year of a two-year deal to carry the league, posted a rating of 0.20 for 13 games.

    The ESPN2 ratings hold their own when compared with many other sports properties on the network, such as the NHL, which averaged a 0.23 during the regular season, or MLS, which has averaged a 0.19 this year.

    The WNBA's audience is split almost evenly between men and women, a breakdown that might not be as appealing to advertisers as the male-heavy audience for men's sports.

    One of ESPN's motives for carrying the WNBA is to attract female viewers and support women's athletics.

    "Ideally, we'd love to see ratings improve, but in this case it's not all about ratings," said Carol Stiff, a director of programming and acquisitions at ESPN. "It's really about our commitment to women's sports and the league."

    ESPN and ABC just finished the first year of a six-year agreement to carry both the NBA and WNBA. With the WNBA, the league sells all the advertising and shares revenue with the networks.

    Print | Tags: ABC, Basketball, ESPN, NBA, This Week's Issue, WNBA
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