SBJ/February 13 - 19, 2006/Other News

Executives face challenge of
new revenue, new ideas

Which sports do the best job of handling sponsorships?
NASCAR 22 %
NFL 18 %
NBA 14 %
MLB 12 %
PGA Tour / Golf 12 %
Minor League Baseball 8 %
College / NCAA 4 %
NHL 4 %
Tennis 2 %
Volleyball 2 %
ABC Sports / ESPN 2 %
 
Source: Corporate Sponsorship Survey Report
There are some interesting nuggets in the 2006 Corporate Sponsorship Survey, an oral questionnaire of 50 of the top sports sponsors and advertisers. When asked if they plan to spend more, less or an equal amount on sports in 2006 as compared to 2005, 42 percent of sponsors plan on spending more, 46 percent an equal amount and 12 percent less. Asked which sports do the best job of serving their sponsorship needs, 22 percent said NASCAR, 18 percent said the NFL and 14 percent said the NBA (see below). In the 2004 Corporate Survey, NASCAR ranked tops among sponsors with 40 percent, and in 1998, NASCAR was No. 1 and led the next property by an astounding 21 percent. With the gap being narrowed, the survey may be proving that other properties have begun to improve their sponsor services. The NBA ranked No. 1 in sponsor service in 1996, the first year the survey was conducted. The survey was done over a three-month period last fall by Seaver Marketing Group, Ohio University, the W.P. Carey Sports MBA Program at Arizona State University and Turnkey Sports.

BETTMAN’S LIGHTER SIDE: NHL Commissioner Gary Bettman was in rare form as he gave the keynote address at the National Sports Forum in Philadelphia late last month. Many in the audience said they saw a side of the commissioner that they have never seen before. Bettman has always been good on the stump, as his legal background taught him how to clearly articulate and debate his point of view. But in front of a group largely made up of team and league executives, he was quick, witty, offered up clever sarcasm without being biting and even threw a few jabs. In nearly 30 minutes of questions from the audience, he demonstrated why the league’s team owners have so much trust in him.

Asked by an NFL team executive about dealing with the difference in local revenue and national revenue, an issue that has the NFL “perplexed,” Bettman smiled and said, “I’ve never heard anyone from the NFL say they are perplexed by anything.”

Gary Bettman (shown here in January) displayed his
quick wit for team and league executives.
Asked about doing more co-marketing with the Olympic national governing bodies around the Winter Games, Bettman acknowledged, “I would like to be more involved in the Olympics in cross-promotions and cross-marketing, but for anyone who has dealt with the Olympics, they are very hard to deal with.”

On the NHL’s attitude toward Las Vegas: “If there is no sports book on NHL games, than I am not concerned about it. It’s not a bad place to be. Whatever team goes to Las Vegas first, I think, will be very successful.”

A PALACE SPORTS MIRACLE?: Team executives continue to focus on developing new revenue streams inside their buildings. The conversion of dead space to premium areas, including bunker suites, was a model many people are talking about. Palace Sports & Entertainment CEO Tom Wilson said the new bunker suites at The Palace have sold well, at a cost of around $400,000 a year, and that while the suites don’t include a view of the court, they do include courtside seats. Wilson said that while the first wave of sales are strong, the biggest challenge will be on the renewal. “Selling it twice may be the biggest miracle of all,” he said. “We are all chasing revenue and we’re all in the business of trying to figure out how to keep fans for a longer period of time in our building. How do you make it an evening?”

THE CUSTOMER IS RIGHT: In discussing renovations to existing buildings, one of the more interesting comments — for its simple clarity — on how to figure out what changes are needed came from Wilson, who said, “The patrons will tell you what the problems are in your building. Are your concourses crammed? Are there lines nine-deep for the concessions? Are people calling up trying to get restaurant reservations because of how long they wait for food? You can watch how the fans use the building to find what the problems are.”

The “bunker suites” at The Palace have sold well
despite no view of the court or action.
EARLIER IS BETTER FOR NAMING RIGHTS: Andy Dolich, the Grizzlies’ president of business operations, called the team’s naming rights partner, FedEx, “one of the most focused companies on their brand image.” The company signed a 20-year naming rights deal for FedExForum in 2002. “They worked to get the FedEx logo (on the roof of the building and) in the flight path of the hundreds of planes that they fly into Memphis every day, and that was [FedEx CEO] Fred Smith’s idea,” Dolich said. “Now they are in the early stages of talks with us about an ambitious lighting plan that would light up the entire roof and really make the branding on the arena much more impactful.” Dolich stressed the importance of having a corporate naming rights partner in place before opening a building: “When you open a building and don’t have a naming rights partner with you, that is a situation you really don’t want to be in,” he said. “Early on, you can bring the company in with you to help create the building, and from a momentum and branding the building standpoint, once you have taken a bite out of that apple (and open the building), it’s very difficult to equal that once it opens.”

LONGING FOR THE DAYS OF DR. J: The sales and marketing challenges facing the Philadelphia 76ers were clearly evident during a recent visit to the Wachovia Center. The 76ers have had two 50-win seasons in 19 years and their attendance — and buzz in the community — is reflective of that mediocrity. Through games played on Monday, Feb. 6, the Sixers were averaging 15,723 fans a game this season for their 26 home dates, down 6.9 percent from an average of 16,895 for 21 home games through Feb. 6 last season. That could drop further as the team meanders through another .500 season, as it was 24-24 as of Feb. 7. Meanwhile, despite the yearlong lockout, the Flyers have made a solid return in this notorious hockey town, as the team was 31-15-9 as of last week and averaging 19,626 per game for 28 home dates, up 2 percent from 19,250 for 26 dates through Feb. 6, 2004, the last season played. One Comcast-Spectacor high-ranking employee put it this way: “There is a sense of [Allen] Iverson fatigue here. He’s been here 10 years, and since the Eagles made it to the Super Bowl, there is less patience among the fans here, they don’t just want [the 76ers] to make the playoffs anymore.

GALLOWAY LOOKS AHEAD: John Galloway, Pepsi vice president of sports marketing and media, said, “It will be a short time period before the merger of the Internet and television.” He told a team-based audience, “Sports Web sites are unique. You should look at those like TV channels, because that is what they are going to be in a few years. And if the programming and content is good, then that’s an advantage for you and I am going to pay to advertise on that.”

Galloway was frank about the disappointing box office returns of “First Descent.” The film, which was financed and developed by the Pepsi-backed MD Films, has taken in just over $750,000, and will be released on DVD on Feb. 21. He acknowledged the fi lm was “a big gamble for the brand Mountain Dew,” and added, “We missed our target with the audience, but we got a lot of credibility for the brand within the action sports space, and so the brand will live on, and is stronger for it.”

MANDALAY EYES PROGRAMMING: Mandalay Baseball President Howard Nuchow said an opportunity for his operation, which includes fi ve minor league baseball teams, is searching for the next killer app from a programming perspective. “We are looking to create shows or programming that we own, like ‘Disney on Ice,’” Nuchow said. “We are looking hard at that, programming that we can roll out and test in our buildings and venues and repurpose to fi ll minor league stadiums around the country during times when games are not being played.” Mandalay has buildings in Dayton, Ohio; Frisco, Texas; Las Vegas; Hagerstown, Md.; and Erie, Pa.

NBA team execs (from left) Len Komoroski, Andy Dolich and
Tom Wilson answer a question from CBS’s Armen Keteyian during
the Turnkey Sports Challenge at the National Sports Forum.
FINAL ANSWER? A fun afternoon in Philadelphia tested the knowledge of some of the industry’s top executives during the Turnkey Sports Challenge, a “family-feud” type game that was hosted by CBS’s Armen Keteyian. Eight teams of three from various industry segments — NBA, NHL, MLB, MLS, NFL, motorsports, agencies, and a wild-card team of female executives in sports — squared off. Each team was asked to predict the results of industry-related questions of recent Turnkey Sports polls, many of which have appeared in SportsBusiness Journal and SportsBusiness Daily. Among the highlights was a key question facing the NBA team of Cleveland Cavaliers President Len Komoroski, Dolich and Wilson, who were asked to respond to the statement: “The NBA has placed too much emphasis on the hip-hop culture in marketing their league.” The trio studied the options: “Strongly Agree,” “Somewhat Agree,” “Strongly Disagree,” and “Somewhat Disagree,” and answered correctly when they said, “Strongly Agree,” which allowed them to go to the next round. The agency team of Radiate Sports Group’s Steve Lauletta, ANC Sports Enterprises’ Scott Carmichael and GMR Marketing’s Greg Busch was tripped up on the question, “Should the Indy 500 sell title sponsorship?” While the trio of sellers/consultants guessed an emphatic “no,” the survey results showed that 66 percent of those polled felt yes. The finals pitted the MLS team of Real Salt Lake General Manager Steve Pastorino, AEG NY Senior Vice President Rob Chibbaro and David Schifrin, from the WP Carey School of Business at ASU, against the NBA executives. The NBA veterans sealed their 3-1 victory by answering the question, “What do teams find as justified for a season ticket percentage increase after winning a championship?” The three guessed that a 6 percent to 10 percent increase was justified. That was the No. 1 response of the poll with 47 percent.

Ripken says in minor league baseball,
“Our mascot is more important than our shortstop.”
QUIPS: Minor League Baseball team owner and Iron Man Cal Ripken: “It pains me to say this, but [in the minor leagues] our mascot is more important than our shortstop.” … .The increasing influence of women in sports continues to be a key industry driver. Their spending power is well known, and their emergence as a force in sports licensing and merchandising sales was echoed by more than one executive. One said it’s easily the biggest growth area of their team’s merchandise sales. Also, Ripken said his group at Ripken Baseball was doing much of its target marketing toward women — both for baseball camps and team ticket sales. Dennis Mannion, the Ravens’ senior vice president of business ventures, had a humorous anecdote when highlighting the growth of the Ravens’ female fan base: “We had our NFL 101 program, but now you have to be careful because all of our fans are so much more sophisticated,” he said. He noted that during these seminars targeted toward women, basic football content was reviewed and covered. “After one of our events, I had a woman get right in my face and she was yelling, ‘This thing stunk! You didn’t even TOUCH on the Cover-2 Defense!’” Mannion began to chuckle when recalling, “I just looked at her and said, ‘I don’t KNOW ANYTHING about the Cover-2 Defense.’”

… Keep an eye on Mike Haynes, NFL vice president of player and employee development. The 14-year NFL veteran was extremely visible in Detroit and is clearly an influential player within league circles.

… In accepting the Man of the Year Award, Peyton Manning showed again why he is one of the NFL’s most respected players. Supremely articulate, punctuating his words with care and emphasis, Manning talked about his belief in giving back to others. He talked of visiting victims of Hurricane Katrina with his brother, Eli, and of the importance of “listening” to people in need. “We just sat there and listened for hours to their stories,” Manning said. His remarks were a refreshing change from a business full of people who love the sound of their own voice. He also implored his colleagues in sports to do more. “I challenge each player to consider the impact they have as professional athletes,” he said, “and do something with that.”

Abraham Madkour is executive editor of SportsBusiness Journal and SportsBusiness Daily.
He can be reached at amadkour@amcity.com.


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