SBJ/June 20 - 26, 2005/Marketingsponsorship

As AFL season fades to black, worries about TV ratings persist

As multicolored confetti fell to the turf at the Thomas and Mack Center in Las Vegas last week, where just minutes before John Elway’s Colorado Crush defeated Home Depot co-founder Arthur Blank’s Georgia Force on the game’s final play, all seemed copacetic in the world of indoor football.

Gatorade, one of two major potential sponsors exercising trial runs during the playoffs, had product placement on the awards stage, while victorious athletes quaffed the isotonic beverage as they conducted postgame interviews.

Honda, another first-timer sampling the league, had end zone signage considerably larger than any of its automobiles, along with a logo on the field itself.

The Colorado Crush celebrated victory in the AFL’s championship game, televised on NBC.
It was the close of the AFL’s first neutral-site championship, a concept that had been kicked around league meetings for more than a decade. And this day was arguably the finest moment of team-owner-turned-commissioner David Baker’s nine years in the job.

Baker paid a $400,000 fee to enter the league as an owner a decade ago; contrast that to the deal to bring an expansion franchise to football-crazed Kansas City, which will open the new Sprint Center in 2007, that went for $18 million.

Now the ownership ranks include Blank, Jerry Jones and Jon Bon Jovi. New business partners such as Nike and EA Sports promise to add youthful relevance to a property that prides itself on a demo younger than most pro sports.

Still, even as championship Nike caps and T-shirts were distributed to winning Crush players, and audience and athletes grooved to a postgame concert from Kool and the Gang, the nettlesome problem of the league’s underwhelming ratings on NBC could not be ignored.

“I would like to take America by the scruff of the neck and say ‘watch this,’” said NBC Sports President Ken Schanzer, at the AFL’s well-received first Partnership Summit, held during ArenaBowl weekend. “This league seems ready to take [off], yet we don’t see the viewership that would be evidence of that, so we’re struggling.”

The AFL on NBC averaged a 1.0 rating for the regular season this year, a slight decrease from last year’s 1.1. Overnight ratings for ArenaBowl XIX on June 12 were a 1.1/2, down from the prior year’s 1.3/3.

NBC’s AFL rights run through next season. Under the groundbreaking deal, which started two seasons ago, the network pays no rights fee but shares advertising and sponsorship revenue while receiving 5 percent of expansion fees in excess of $12 million.

Even with all the positive indicators, many league insiders felt the clock was ticking on the NBC deal. “Read between the lines in what Schanzer said,” cautioned a longtime AFL owner. “They [NBC] are going to dump us.”

Even the newer breed of AFL ownership is perplexed by the ratings. “I’m disappointed, but it doesn’t mean we’re losing hope,” said Philadelphia Soul owner Bon Jovi.

NBC Sports senior vice president of programming Jon Miller insisted no renewal decision had been made. “AFL continues to put a good product on the field, their ownership gets better with every new team and we’re excited about things like EA,” he said. “But frankly, there are some franchises that have disappointed, New York being one of them, and we’d like to see stronger franchises in the Midwest.”

A New York franchise, most recently owned by Charles Wang, has underperformed, and while the AFL has franchises in Chicago, Columbus and Grand Rapids, Mich., there are no teams in the Pittsburgh area or the Detroit market.

Miller said the anticipated debut of the NHL on NBC next season could help AFL ratings, since Saturday’s hockey schedule will provide a platform to promote Sunday’s football telecasts.

“NBC’s been very good to us, but they have said they want to see growth,” said former CBS Sports President Neal Pilson, now an AFL TV consultant. “We’ve built awareness; the next step is building relevance, so people, especially in larger markets, will watch their home teams.”

MEASURING UP:
AFL RATINGS ON NBC
Ratings for the AFL on NBC in 2005 compared with the most recent full-season ratings of the network’s other sports properties
Property
Avg. rating/share (year)
Olympics
8.8/21 (2004)
NASCAR
5.2/11 (2004)
PGA Tour
3.3/9 (2004)
Notre Dame football
2.5/6 (2004)
AVP
1.0/2 (2004)
AFL
0.9/2 (2005)
Notes: AFL’s average includes regular-season and playoff games but does not include a final rating for the ArenaBowl (overnight: 1.1/2). NASCAR’s average does not include the 2004 Daytona 500 (10.6/24), which was on NBC but alternates with Fox annually. The 2004 Olympics average is for all day parts, not just prime time.
Source: NBC
Research by Katherine Johnson-Reid, SportsBusiness Daily
With the amount of sports on cable, the absolute need for a national broadcast contract was a point of discussion. Ken Butler, president of Aaron’s Sales and Leasing, and one of the league’s most active sponsors, said it was vital. “If it wasn’t for that [a network TV contract], we wouldn’t be here,” he said.

Baker noted the larger aggregate audience watching cable, as opposed to network TV. “The television world is changing. Not just for us, but for the NHL, NBA and even the NFL,” he said.

Blank hopes NBC will see continued AFL broadcasts as a bookend to its new NFL rights package, in much the same way he sees his AFL franchise as complementary to his ownership of the Falcons. “National TV is vital, because a lot of people across America still don’t know what arena football is,” he said.

Baker seemed somewhat resigned, even while lauding NBC. “They’re great partners who have treated our game with enormous respect,” he said, minutes before kickoff in Vegas. “We’ll continue to grow together, but there’s also Fox and there’s other guys. I don’t know any league that had one TV network forever.”

Beneath all the compliments for NBC, there were plenty of questions on whether the famously in-your-face Fox would be a more aggressive and appropriate AFL promoter. Fox Sports Net is already the league’s cable rights holder.

Gatorade senior vice president of sports marketing Tom Fox was one of many AFL business partners urging patience. “The risk is that you try to define success quickly as simply a big rating increase,” he said to the 400 people at the Partner Summit. “The thing you have to remember is that while it’s almost 20 years old, the AFL has really been going at this like the other big sports leagues for the last two or three years.”

VEGAS REVIEWS: Given the short time to prepare for Las Vegas, league officials seemed relatively happy with the site. Another year should allow for a larger audience, fueled by such marketing plays as having clubs use ArenaBowl tickets as season-ticket incentives.

Related events like the sparsely attended “Arena Battle” skills challenge and the desolate Fremont Street Fan Fest, easily outdone by the game-day fan activities outside the Thomas and Mack Center, should also improve with more time to prepare. We also would have liked to see more and better hotel signs at the MGM Grand promoting ArenaBowl and better integration with Saturday night’s Maroon 5 “Arena Bash” concert.

“Our clock is now running with a year cycle,” said AFL Properties President Glenn Horine. “We got all our partners in one place, so now everyone has a long list of ideas for next year.” The AFL board must approve the return to Las Vegas, something most consider a formality. “Our intention is to be here for at least three years,” Baker said, “but we’d like get it to other venues eventually.”

While the league was disappointed with a crowd of 10,822 in a facility that holds 15,621, it was the league’s biggest championship gate and revenue generator ever, since tickets were scaled at $40-$125, compared with past ArenaBowls, when tickets started at $10.

ANNIVERSARY ’APPENINGS: After XIX comes XX, and the AFL is planning a seasonlong 20th anniversary marketing platform that should be a good test of whether its more recent marketing partners like Nike, EA Sports and Champs can carry its message to more fans. A logo has been developed, and the AFL is hoping to stage a season-opening fete at the home of the champion Colorado Crush, similar to the model that the NFL is using. “The next big step for us is partner activation,” Horine said. “That’s what’s going to raise us to the next level.”

FIVE RINGS OVER VEGAS: Dallas Desperados/Cowboys owner Jones lobbied for international expansion of Arena Football, arguing that indoor football is the key in transforming American football into a viable export product.

“It [Arena League football] is the Olympic game,” Jones said on a sponsor summit panel. “We in the NFL for years … have tried to get our [NFL] skills into the Olympics. This game can get them there. This is our way to get it, and international expansion is the way to get there.”

EA’s AFL release, to go on sale next year, will put league sponsors in the game.
VIDEO VAMPS: The AFL has consistently been described as a video game version of the NFL, so the challenge to EA is bringing that to life in an actual video game, which will be released next February. EA’s standards are high: Its Madden NFL game is the top seller of any game, and its NFL Street and NCAA Football titles are also top sellers. “This game will be very different,” promised EA Sports vice president of marketing Todd Sitrin. AFL partners are eager to participate, and at least one club hopes to use animation from the game in its marketing. Sponsors are being offered in-game enhancements, including a “Player of the Game” vignette, along with the standard in-game signs.

LICENSING LINEUP: The combination of Champs (which has mall exclusivity) and Nike put AFL licensed apparel in about 200 AFL market stores this year, the widest selection ever. We’re still curious if there’s a downstairs retail

The league is talking about getting its licensed goods into mass merchants.
opportunity for AFL apparel. Horine acknowledged some early talks with mass merchants. We’re also hearing rumblings of a possible deal with Nike’s Starter brand, which Horine would neither confirm nor deny.

CHEERS FOR THE AFL: Aaron’s Sales and Leasing was the most visible sponsor in and around AFL events. Butler, the company president, said he had agreed to terms on a renewal. The key ingredient in the new deal? Cheerleaders. Aaron’s gets its name on an all-star Dream Team of AFL talent at three ArenaBowls. Aaron’s will also use them to support the company’s considerable NASCAR investment.

“We need gals in racing too, so we’re going to bring them to Talladega [Aaron’s-sponsored Busch race],” Butler said.

HEARD ’ROUND THE ARENA: Rock star turned pro team owner Bon Jovi, on the genesis of his decision to buy an AFL franchise. “It was late and I was drunk,” he quipped. As evidence of what his star power means for the AFL, the league was paying for Bon Jovi’s hair and makeup over the weekend. … We also enjoyed the 6-foot-9, 400-pound Commissioner Baker’s tongue-in-cheek explanation at the conclusion of the summit as to why he’s the man in charge. “David Stern may have a better legal mind and Gary Bettman may be more intellectual at times,” he said hefting the cumbersome James Foster AFL Championship Trophy, “but neither one of them could lift this thing.”

Terry Lefton can be reached at tlefton@sportsbusinessjournal.com.

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