Islanders look back and to future From the Field of Marketing Rebrand conveys MLS’s confidence Statues, schooling and ‘HD on steroids’ From the Executive Editor Agents, firm seek bankruptcy protection Cartoon: All the king's horses … Ryder Cup a ‘crowning moment’ ADs unsure what new freedom will cost Nets prep for playoffs minus mainstays
SBJ/March 20 - 26, 2006/This Weeks NewsPrint All
Carl Poston did nothing wrong in his negotiation of LaVar Arrington’s $68 million contract in 2003, and Arrington does not want Poston to be punished for his work on the contract, said Paul Aloe, Poston’s attorney.
The NFL Players Association’s Committee on Agent Regulation and Discipline voted to suspend Poston from representing NFL players for two years based on his actions in negotiating that contract. The suspension will not go into effect until after a hearing before arbitrator Roger Kaplan, who could decide to uphold, strike down or reduce the discipline.
The case stems from the negotiation of a $68 million contract in late 2003 in which Arrington and Poston say the Redskins orally agreed to a $6.5 million bonus, which did not end up in the final written contract. Aloe said the day the contract was completed, the Redskins were trying to meet a deadline and that “the Redskins had LaVar signing the contract without Carl seeing it.”
Poston gave his certification to the deal because he was told by a Redskins official that the $6.5 million bonus was in the contract, Aloe said. “Carl gave his certification because … that was the deadline for the deal,” Aloe said. “If he didn’t give his certification, they didn’t have a deal.”
Steve Brown, Arrington’s attorney, agreed with Aloe’s assertion that Arrington did not want Poston punished.
A Redskins spokesman would not comment.
Aloe said that Poston and Arrington wanted to appear in person before the committee but were denied that opportunity. Aloe also claimed that the NFLPA’s action violates the union’s one-year statute of limitations.
But NFLPA General Counsel Richard Berthelsen said the one-year statute of limitations applies after all related legal proceedings to an incident are completed. “The related proceeding in this case was LaVar Arrington’s grievance against the Redskins,” Berthelsen said. “The complaint was filed well within a year of that.
“Secondly, Mr. Aloe, Mr. Arrington and Mr. Poston gave a full account of their version of the facts to the committee before the committee acted,” Berthelsen said. “The committee still believed a two-year suspension was appropriate.”
Cleveland Cavaliers owner Dan Gilbert has taken a decidedly lower profile during his second season of NBA ownership, but the Quicken Loans entrepreneur is now actively leveraging the Cavs to launch his latest business venture: a children’s game.
“One of the reasons why we wanted to buy the Cavs is the benefit of using the tentacles of a major sports franchise as the vehicle to launch other kinds of businesses and help other businesses we are involved in,” said Gilbert, who last March bought the Cavaliers for $375 million.
Gilbert declined to disclose how much he has invested in his half share of Xeko, which was developed by Amy Tucker, a former marketing director of Gilbert’s Quicken Loans company. Part of the investment, however, is using the Cavaliers to launch and cross-promote the product via the team’s in-arena and media assets.
The game sells for $19.95. Gilbert is hoping Xeko will benefit from the popularity of the Japanese collectible card game Pokémon that was launched in 1996 and became a billion-dollar multimedia industry. Instead of selling collectible cards of monsters, though, Xeko focuses on wildlife and geography. Team officials said the game will be sold in various national retailers after its Sunday debut in Cleveland.
The Xeko launch centered on one of the team’s Cavaliers’ Kids Day promotions. The cross-promotional plan included a product giveaway at last Sunday’s game, scoreboard and LED signage, eight concourse Xeko promotional locations where kids can play the game, radio advertising during the game’s broadcast and a Xeko T-shirt giveaway. The team has not decided on any future Xeko promotions.
“Cavs fans will be the first kids in the world to get their hands on Xeko, and that’s a pretty cool treat to offer on Kids Day,” said Tracy Marek, vice president of marketing for the Cavaliers.
Gilbert said he will continue to use his franchise to promote other unspecified business interests under development. It’s a far different approach taken by Gilbert, who took a very public and controversial role with the franchise upon completing his purchase but has largely stayed in the background this season.
Since buying the franchise, Gilbert has hired a new coach (Mike Brown) and a new general manager (Danny Ferry). He has also renamed Gund Arena after his Quicken Loans financial services company and spent more than $10 million in arena improvements, including new seats, a new scoreboard and new LED boards.
“Last year, I was forced in a public role and it was by default because there was no face to the organization,” Gilbert said. “Now we got the right guys in the right spots.”
The Los Angeles Dodgers have teamed with Les Otten’s Sports Loyalty Systems to create a fan loyalty program dubbed Think Blue Rewards, the first of several such efforts expected to be launched in Major League Baseball this year by the Massachusetts company.
Fans with enough points can get on-field batting
practice or a meet-and-greet with players.
Otten’s SLS last summer signed a deal with MLB Advanced Media to become baseball’s preferred provider of customer rewards programs. The Dodgers’ Think Blue program is the first resulting team program to hit the street. The club’s rewards include game-used equipment, batting practice at Dodger Stadium and use of the ballpark’s luxury suites.
Five more MLB teams are expected to follow the Dodgers’ lead by midseason, Otten said, with the Arizona Diamondbacks on deck. The rest of the league is expected to follow in late 2006 and 2007.
The Dodgers were the National League’s attendance leader last year, drawing more than 3.6 million people. The Think Blue program is aimed at pushing that total even higher and deepening fan ties to the club.
“Fans are absolutely passionate about their teams and want to get closer to their teams,” Otten said. “This system allows that to happen not only inside the ballpark on game day, but every day around the community.”
The Dodgers have partnered with several large retailers in the Los Angeles area, including 76 Gasoline and Welk Resorts. SLS also has brought Mall Networks into the program, which will let fans gain points by shopping at more than 200 online retailers, including Amazon.com, Expedia and Overstock.com.
Fans pay a fee to participate in the program, ranging from $19.95 to $99.95 annually. For that fee, each fan gets immediate returns, such as ticket vouchers, but also gets the affinity card with which the fan earns points when the card is used with purchases at participating retailers.
More than 1,000 fans have signed up for Think Blue since its launch earlier this month, Dodgers officials said, with a preliminary goal of more than 10,000 signed by midseason.
“Getting a sponsor, and our brand, at the retail level is absolutely huge,” said Marty Greenspun, Dodgers executive vice president and chief operating officer. “By getting a company like 76 [Gasoline] into this, that opens up a whole new level of marketing exposure.”
The affinity program operates on a commission basis, Otten said, with companies typically paying a marketing fee of about 1.5 percent for each transaction generated through the loyalty program. Those commissions are shared by SLS and the club.
If NFL Commissioner Paul Tagliabue and his union counterpart, Gene Upshaw, are to retire in the next few years, as many have speculated, they will certainly have been well-compensated for their years of service.For year ended March 31
In each year, total compensation
represents a mix of salary,
deferred pay and benefits.
Source: NFL tax returns
Certainly he is one of the top-compensated commissioners in sports. In the calendar year that ended March 31, 2005, the most recent that public tax documents are available for the league, Tagliabue earned $9.58 million in total compensation, including benefits and deferred pay. That was a decline from the previous year, when he earned $11.3 million. The league wouldn’t comment on the commissioner’s pay.
Upshaw, who has been in his post since 1983 and has been widely lauded for the strategy the union deployed in winning significant player pay increases, earned $2.4 million in the year ended Feb. 28, 2005, according to the organization’s annual report filed with the Department of Labor. That figure includes pay, benefits and business disbursements.
Upshaw, whose contract employs him through 2008, receives less money each year because his contract was front-loaded. The previous year, he earned $2.7 million.
Another top labor negotiator for the league also has done well for himself. Harold Henderson, chairman of the NFL Management Council, the league’s negotiating arm, earned nearly $1.9 million in total compensation in the year ended March 31, 2005, according to the council’s most recently available public tax filing. That represented an 11 percent increase from the previous season, when Henderson earned $1.7 million in total compensation.
Upshaw’s No. 2 at the union, general counsel Richard Berthelsen, earned $587,738 in total compensation in the calendar year ended Feb. 28, 2005, according to the union’s report, up from $557,021 the year before.
Despite his declining pay, Upshaw remains the top-compensated union chief.
Major League Baseball Players Association executive director Don Fehr earns $1 million annually, according to the organization’s most recently filed annual report. Billy Hunter, executive director of National Basketball Players Association, earned $1.8 million, according to that group’s most recent annual report.
The Canada-based National Hockey League’s players union does not file reports with the U.S. Labor department, but published reports have pegged executive director Ted Saskin’s salary at $2.1 million.
Among big league commissioners, public information is harder to come by. Neither MLB nor the NBA is required to file tax returns publicly. The NHL files a public tax return, though the most recent report could not be obtained for this story. However, recently published reports have placed Commissioner Gary Bettman’s current pay at more than $3.5 million.
Hamilton, president and general manager of the Los Angeles Galaxy and COO of AEG Sports, passed away March 9 after an apparent heart attack.
Hamilton, 43, suffered the attack while returning to Los Angeles from San Jose, Costa Rica, where the Galaxy had played Deportivo Saprissa of Costa Rica in the CONCACAF Champions Cup quarterfinal on March 8. He was aboard a Lacsa Airlines flight, and a team doctor attempted to resuscitate him.
In addition to on-field success that included league championships in 2002 and 2005, Hamilton was responsible for making the Galaxy the only MLS team to show a profit in the league’s 10-year history.
Whit Haskel, general manager and senior vice president of MLS’s Chivas USA, said the league uses Hamilton’s business model when promoting ownership to possible new investors.
Galaxy spokesman Patrick Donnelly said AEG, the team’s investor/operator, had not decided on a replacement but that Tom Payne, the team’s vice president of programming and business development, had temporarily assumed leadership as the club’s highest-ranking official.
Michael Roth, AEG’s vice president of communications, said nothing had been determined in regard to a replacement.
The Knicks have the NBA’s biggest payroll, yet
are battling for the league’s worst record.
The team recently rewarded between 30 and 40 season-ticket holders with free tickets and suite access to two Billy Joel concerts held at Madison Square Garden in early March. The Knicks also are planning to offer select season-ticket holders free suite access for upcoming Faith Hill-Tim McGraw shows slated for June 21 and June 23. Other upcoming concerts and events at the Garden will also be included in the giveaways, but the team has not identified the specific events.
Additionally, the Knicks have begun to offer season-ticket subscribers seated in the upper reaches of Madison Square Garden a chance to move down to lower-level seats on a random basis depending on availability. In addition, the team has brought a group of season-ticket holders to the Knicks’ training facility in Tarrytown, N.Y., for open gym access and are showering other season-ticket holders with various benefits, including player autographs and gift baskets.
“We are really trying to let our fans know that
we want them to remain with us.”
VP, marketing, New York Knicks
“There is a lot more going on with the Knicks than what is happening on the court, so what they are doing is a smart answer from a team suffering from an image problem,” said Mike Reisman, principal and founding partner of Connecticut-based Velocity Sports & Entertainment. “They are in a bit of crisis management and they are doing the right thing.”
Infighting between Stephon Marbury and
coach Larry Brown has marred the season.
“It’s been a challenging year and we are really trying to let our fans know that we want them to remain with us,” said Hunter Lochmann, vice president of marketing for the Knicks. “We’ve never done it before, but it’s a necessity and we want to repay our fans who have been loyal.”
Lochmann did not disclose the Knicks’ season-ticket base and which season-ticket holders received the offers.
“It’s across the board and includes some of our longest-tenured customers as well as some first-year people,” he said.
The team has not yet released its ticket pricing for next season, but it traditionally does not boost ticket prices following a non-playoff season. The Knicks typically are one of the last NBA teams to begin selling for next season, banking on historically strong demand.
The Knicks will begin season-ticket renewal sales in early May, about the same time as last year. Last year, the Knicks had a season-ticket renewal rate of 85 percent, about average for the NBA.
Entering its second decade with the season that starts April 1, Major League Soccer is taking a hard look at itself.
The league has hired New York branding firm SME, along with several universities, to ask questions fundamental to the future of MLS, such as who its fans are and what makes its base of Hispanic, American and young people attend or watch games on television. MLS is planning to deliver the brand study to its board of governors at its July meeting.
Aside from SME’s work, the league is establishing a brand consulting team that will include people from some of its largest business partners, such as Adidas, ABC/ESPN and Pepsi, and from the AEG organization, which owns four teams.
Dateline: Charlotte. That is one of the biggest benefits overlooked amid all the buzz over the city’s recent selection as home of a publicly funded $154.5 million NASCAR Hall of Fame project.
Even as discussions center on tourism and prestige, plans are also in the works for a NASCAR news hub at the hall of fame, with the operation aimed at spiking national coverage of racing story lines Monday through Thursday — the days when teams and drivers aren’t at the track. Housing the news center at the hall of fame consolidates the media push for NASCAR while giving Charlotte a prominent role in nearly every story generated.
“That’s something exciting to have in Charlotte, [to] have the communications coming right out at the hall of fame location with the byline of Charlotte, N.C., not only to the rest of the nation, but to the rest of the world,” Charlotte Mayor Pat McCrory said.
NASCAR Chairman Brian France said the idea is to generate media content — video packages, press releases, news alerts and interviews with locally based drivers and teams — at the hall of fame and then push it out across the country to broadcast and print media for use in developing their own stories.
“All week long, we’ll have opportunities to showcase our drivers, our teams, our tracks, with Speed Channel, ESPN, whoever it might be, to create some programming, things that come away from the hall of fame,” France said.
NASCAR’s top broadcast executive, Dick Glover, said the idea is to mirror the NFL’s weeklong news model, which places as much emphasis on midweek developments as it does on game previews and recaps.
To do that, he said, requires extensive access. And, with most NASCAR teams based here, the best way to provide that access for far-flung media outlets is to help generate interviews and news that can be edited and shaped by individual broadcasters and publications.
Generating the NASCAR content will likely fall to the sanctioning body’s video-production arm, Charlotte-based NASCAR Images. The production company occupies 30,000 square feet and employs a staff of 110 in the city. Glover said NASCAR Images may move to a proposed 300,000-square-foot office tower adjacent to the hall of fame, if NASCAR chooses to develop that property.
Erik Spanberg writes for The Business Journal in Charlotte, an affiliated publication.
Executives running the NCAA’s new Final Four corporate hospitality program expect it to meet their moderate expectations for the event despite being the new competitor in a tough market.
The NCAA created The Tournament Club program to generate revenue from the previously untapped secondary market. It targets the NCAA’s nine Corporate Champion and Corporate Partner companies with packages that include game tickets, hotel accommodations, local transportation and planned events, such as the Naismith Awards presentation.
Chicago-based sports marketing firm rEvolution is managing the club, which is the NCAA’s first venture into corporate hospitality. REvolution offers three main tiers of 10-person packages priced at $35,000, $45,000 and $55,000.
As of March 14, the company had booked 750 customers, president John Rowady said, and expected to meet its goal of 1,000 by the Final Four, scheduled for April 1-3 in Indianapolis. The program’s main banquet room in the city’s convention center holds 1,500 people.
All nine NCAA sponsor companies are club sponsors in some capacity, said Rowady, who declined to say how many have ordered packages on top of their sponsorship buy-ins.
Coca-Cola and CompUSA have, spokesmen for those companies confirmed. Lowe’s signed up for an NCAA hospitality program, but a spokeswoman could not confirm whether it is The Tournament Club.
At least three NCAA partners have ordered hospitality packages offered by RazorGator, one of several competitors in the market, said CEO David Lord. That includes The Hartford, but Lord did not name the other two.
Pontiac has signed up for hospitality programs with other agencies, a spokesman said.
The packages offered by RazorGator and other companies, such as TSE Sports & Entertainment, are cheaper than The Tournament Club, despite offering similar services. Experienced hospitality providers such as TSE offer more personalized experiences than the NCAA’s offering, said TSE President Robert Tuchman.
Both Lord and Tuchman said the club has not threatened their business. Befitting its stance that the Final Four is not a major hospitality event but rather a fan event, TSE expects to sell 150 highly customized packages.
RazorGator expects to entertain between 2,000 and 3,000 people, Lord said.
“We’re looking to step up hospitality in the college market,” he added. “This is the beginning of what now is going to become a competition of who is the best service provider.”
The Tournament Club will be competitive because, as the NCAA’s official vendor, Rowady said, it offers guaranteed access to special events, such as a brunch with former Final Four coaches and an awards show and reception.
Individuals have ordered Tournament Club packages in addition to firms.
“A lot of people who used to sit on the sideline, due to its official nature, are saying this is an experience that they’ve always wanted to go to,” Rowady said.
NFL Commissioner Paul Tagliabue will appoint an eight-owner committee to decide how to dole out the up to $900 million in revenue sharing the league approved as part of the new collective-bargaining agreement.
While the league earlier this month announced that as part of the new labor deal the top 15 teams would subsidize the lower 17 to varying degrees, that money apparently will not be automatic for lower-revenue franchises struggling with the higher labor costs.
The committee will surely be tugged in different directions as high-revenue clubs want to see their downscale peers work more at generating extra money to qualify for the new program, while teams on the bottom want as few restrictions, or qualifiers, as possible on the bounty.
SBJ / SBD Online Poll*Who would be the best successor to Paul Tagliabue upon his retirement? Roger Goodell
(NFL Exec. VP & COO)
39.4% Condoleezza Rice
(U.S. Secretary of State)
26.5% Rich McKay
(Falcons President & GM)
17.8% Steve Bornstein
(NFL Network President & CEO)
16.3% * A nonscientific poll offering a snapshot of 411 readers' thoughts. Question was posted March 13-15 on sportsbusinessjournal.com and sportsbusinessdaily.com.
“The problem with qualifiers is teams all try hard to generate as much revenues as they can,” said Cincinnati Bengals owner Mike Brown, one of two owners to vote against the CBA. “They don’t get into trouble for lack of effort. They get into trouble because of the system.”
The committee will be composed of two owners from each of the 32-team league’s revenue quartiles, and if the group’s recommendation cannot win a super majority vote of the NFL’s owners, the commissioner is empowered to implement his own solution, sources said.
In Dallas, where the owners approved the CBA after two tumultuous days of meetings on March 7 and 8, several qualifiers were discussed. Among the concepts was denying revenue-sharing eligibility to a team during the first two years in a new stadium, as well as to a new owner.
The latter is a qualifier sure to be pushed hard by higher-revenue clubs. The problem they have is an owner using additional revenue-sharing money to help sell his or her club at a high price. So the idea would be for a prospective buyer to value the team minus revenue-sharing money. Of course, this means the franchise values of lower-revenue clubs could be modestly impaired.
A likely qualifier is one that already exists in the now-retired system, which distributed $40 million to needy clubs annually. Teams would need to be at least at 80 percent of the league average on ticket sales, or otherwise the revenue deficit would be assumed. In other words, if a team is $10 million short of the 80 percent threshold, that gap would be considered team revenue.
“The mood [in Dallas] was there should be qualifiers,” said John Jones, chief operating officer of the Green Bay Packers, which is ranked 10th in the league in revenue. Jones said he expected the commissioner to name the committee by next Monday’s annual league meeting, and for it to report back within six months.
One team source from a high-revenue club said that the qualifiers should include not just ticket income thresholds, but goals for all revenue categories, such as sponsorships.
The Bengals’ Brown has been criticized by high-revenue owners such as Jerry Jones of the Dallas Cowboys for declining to sell naming rights to his stadium. Instead, Brown’s late father Paul, the team’s founder, has his name on the venue.
Citing the local government’s ongoing lawsuit against his team, Brown declined to discuss his naming-rights situation. But he said half the league’s teams have no naming rights, in large part because the local corporate markets could not pay for it.
Seventeen of the league’s 32 teams have naming rights, though several more are planning to sell the rights soon in anticipation of moving into new stadiums.
Brown did want to clear one thing up. He said his relationship with Jones is good, and that contrary to media reports, the Cowboys owner during the Dallas meetings did not mockingly offer to buy the Bengals’ naming rights for $5 million a year because he thought he could easily resell it for twice that.
“I never heard it,” Brown said. Similarly, Jones of the Packers said he was in the meeting room the whole time and never heard the exchange.
Owners such as Brown on the bottom revenue level also say it is unfair to point out that they will be receiving revenue sharing without also emphasizing that the NFL’s stadium funding program will continue. Known as G3, the plan has funded or committed $773.5 million of stadium money, largely to high-revenue teams.
The plan was renewed as part of the new CBA, though there are changes to the plan that still need to be discussed among the owners.
“Details to be worked out,” a league spokesman said.
NFL revenue-sharing facts League revenue is $6 billion. The NFL agreed to a new labor deal with an average salary cap of 59.5 percent of this money through 2011. Of the remaining money, the teams share about half equally, representing money from broadcast deals, and another 30 percent is subject to some form of revenue sharing, affecting such areas as ticket sales. The remaining 20 percent is unshared, though the league as part of the collective-bargaining agreement significantly increased supplemental revenue sharing from an average of $40 million a year to up to $150 million a year. Source: SportsBusiness Journal research
Targeting the WNBA’s young female fan base, Ocean Spray has signed its Craisins brand of dried sweetened cranberries to a one-year sponsorship of the women’s basketball league.
Ocean Spray also will sponsor the league’s
“Be Fit” tour of fitness workshops.
Ocean Spray also will be a sponsor of the league’s “Be Fit” tour, a seasonlong, grassroots program across all 13 WNBA markets in which players and coaches participate in fitness workshops. Craisins will sponsor the tour’s “Cooking Demo” area, and its logo will appear on the Be Fit tour vehicle. McDonald’s was presenting sponsor of the Be Fit tour last year.
Under the deal, Ocean Spray gets rotational signage during nationally televised WNBA games, arena scoreboards and PA mentions.
The WNBA begins its 10th season on May 20 and league marketers are working on renewals in large categories such as beer (currently with Anheuser-Busch) and fast food (currently with McDonald’s).
With the Craisins deal, the WNBA is believed to be the first major sports property to derive sponsorship dollars from a branded dried fruit product. However, parent Ocean Spray has sponsored sports properties as large as the NCAA in previous years.
“When you look at the affinity people have for healthy foods and beverages now, food as a whole could be a great category overall for us,” said WNBA President Donna Orender, adding that she expects more new deals before the season opens.
Horse racing’s Triple Crown will likely be run this year without a title sponsor for the first time in nearly 20 years, after talks with Anheuser-Busch broke down over several issues, the biggest of which is the fact that the three races will be split over two television networks.
Visa had sponsored the Triple Crown for 10 years
but announced last year that it would not renew the
deal and would instead sponsor the Kentucky Derby.
Sources said Triple Crown officials had been in talks with A-B about making its Bud Select brand the title sponsor of the three races — the Kentucky Derby, Preakness Stakes and Belmont Stakes. An Anheuser-Busch spokesman would not comment. Seigenfeld would not identify the would-be sponsor, but said it was “a major, major company.”
Without a title sponsor, there will be no $5 million bonus offered to the owner of any horse that wins the three races. There has not been a Triple Crown winner since Affirmed in 1978.
Visa had sponsored the Triple Crown for 10 years, but announced last year that it would not renew the deal, but would sponsor the first race in the series, the Kentucky Derby, for five years. Louisville, Ky.-based Churchill Downs announced last month that it had also sold a presenting sponsorship to the Derby, which is a higher level sponsorship than the new Visa deal, to Yum! Brands Inc., parent company of KFC, Pizza Hut and Taco Bell.
Seigenfeld said that sponsorship commitments of the other tracks was one issue that made it difficult to sign a Triple Crown sponsor. “If someone has a commitment to XYZ company, it is hard to bring a Triple Crown sponsor in above them,” he said.
Seigenfeld would not comment on specifics, but sources said that Churchill’s deals with Visa and Yum! were an issue because the companies had taken some of the valuable inventory that a Triple Crown sponsor would normally get during the telecasts of the race, according to one source.
For example, when Visa had the Triple Crown sponsorship, the pony riders, who bring each of the Kentucky Derby horses to the starting gate, and the assistant starters, who load the jockeys and horses into the gate, wore large Visa logos on their jackets. Under Churchill’s new deals, the Yum! Brands logo will be on the pony riders’ jackets and the Visa logo will be on the assistant starters’ apparel.
Sources have said the old Triple Crown sponsorship
price tag was in the range of $20 million to $25 million
over five years, and that Triple Crown was
seeking an increase over that price.
“We had reserved space for signage — temporary and permanent — for a Triple Crown sponsor,” Koenig Loignon said. She added that the Yum! deal did take up advertising inventory during the broadcast on NBC, “but we feel comfortable in securing additional inventory if we identify a Triple Crown sponsor.”
Bill Nader, senior vice president of the New York Racing Association, which owns Belmont Park, said “As far as a lack of a sponsor, I think it’s somewhat surprising, because Visa had a tremendous run with the Triple Crown. I think it’s one of the most coveted prizes in all of sports and the next horse who wins it is going to be one of the major sports stories of the year.”
NBC Sports has broadcast rights to the Kentucky Derby and the Preakness Stakes through 2010. NYRA announced in 2004 that the Belmont, which has garnered the highest television ratings in years where there has been a Triple Crown contender, would go to ABC.
NYRA broke away from Triple Crown Productions to negotiate its own deal because NYRA officials were unhappy that Churchill Downs was receiving a higher percentage of television revenue under the old deal. Churchill had received 50 percent of television rights fees, versus 25 percent for Magna Entertainment Corp., owner of Pimlico, where the Preakness is run, and 25 percent for NYRA. (The Kentucky Derby typically gets the highest ratings in the years in which there is no Triple Crown contender.)
Nader said he did not think that the situation of the Belmont being on a different network “was an impediment in trying to find a sponsor.”
But Seigenfeld said that was, in fact, the biggest obstacle. “The fact it will cross over to from ABC to NBC makes it tough,” he said.
Barry Frank, vice chairman of IMG Media, agreed that it would be difficult for Triple Crown to sell the sponsorship with the races on two networks. “Because NBC, which owns the first two races, is not going to promote in any shape or form the Belmont. A sponsor does not have the full benefit if you don’t have the three races on one network,” he said last week.
Chip Campbell, senior vice president of television and sponsorship for the National Thoroughbred Racing Association, said, “The problem with having the Triple Crown on more than one network is not a financial problem, it’s a promotional problem. No one will promote the other guy’s net, so it’s that much more difficult to promote the Triple Crown as an entity. You won’t have the sponsorship muscle a single sponsor can provide where they are hammering home the Triple Crown message with themed TV ads. And short of a Smarty Jones or a Triple Crown winner, the sport needs the help an overall sponsor could provide.”
Seigenfeld said the other factor hurting the sale of the Triple Crown sponsorship was the price of it. “We are not an inexpensive proposition,” he said, though he would not reveal the asking price.
Sources have said that the old Triple Crown sponsorship price tag was in the range of $20 million to $25 million over five years, and that Triple Crown was seeking an increase over that price.
Seigenfeld said that Triple Crown Productions and Velocity Sports & Entertainment, an outside sports marketing firm hired by the company, will continue to try to find a sponsor, but are now focused on finding one for 2007, not 2006.
Terry Lefton contributed to this report.
Turner Sports will break its NBA playoff advertising campaign with eight new spots directed by Spike Lee. The centerpiece of the 30-second commercials, which will debut the week of March 27, will be the San Antonio Spurs, with Tim Duncan and Robert Horry appearing in four of the commercials, along with entertainer Ali G, who Turner used in its NBA season-opening spots.
Director Spike Lee (right) talks with Robert Horry and
entertainer Ali G while filming the playoff advertising
campaign, which will run on TNT and TBS.
Turner again will use the “40 Games in 40 Nights” and “Win Or Go Home” tag lines in the campaign, just as they did for last year’s playoffs. Lee helped write the network’s playoff ads last year.
Turner is spotlighting the reigning NBA champion Spurs because the network has the rights to the NBA Western Conference Finals this year, with ESPN airing the Eastern Conference Finals. Terms of the NBA’s deal with Turner and ESPN call for both cable networks to alternate conference finals coverage every season under the six-year deal that ends after the 2008-09 season. Turner’s contract also gives it the exclusive broadcast rights during the conference semifinals, eliminating any local broadcast competition.
While the campaign will run on TNT and TBS, additional details of where the ads will run were unavailable. In addition to the television ads, Turner is expected to promote the NBA playoffs through other off-channel efforts, though network officials would not disclose specifics. Last year, Turner bought local radio and print media during the playoff season in select NBA playoff markets.
“We’re still finalizing our plans, but it will be the heaviest [NBA playoff] promotion we have ever done,” said Jeff Gregor, senior vice president of programming for Turner Sports.
Turner is hoping the campaign will improve on last year’s overall 3.0 playoff rating from 44 playoff broadcasts, which was down from a 3.4 rating from the previous year’s 43-game playoff broadcast schedule.
This regular season, the NBA on TNT is generating a 1.3 average rating over 42 games compared to a 1.2 year-to-date rating for the same number of games last season.
The Washington Nationals’ recent victory in their pursuit of a new ballpark brought the franchise another, perhaps even tougher, challenge.
HOK Sport and Devrouax & Purnell unveiled ballpark
designs for the Nationals last week.
Developing that stadium, however, will be a race against the clock. With groundbreaking not slated to occur until early next month at the soonest, the district, along with a building team of Clark Construction, Hunt Construction and Smoot Construction, will have 23 months to meet a March 2008 deadline specified in the relocation agreement that brought the MLB club to Washington.
No modern-era baseball stadium in the Northeast has been built in less than 24 months, and only then after significant site preparation work, which has not yet occurred in Washington.
“I do have some very serious concerns about this,” said Nationals President Tony Tavares. “There are some issues that are going to have to be addressed, and people are going to have to be absolutely indefatigable in their pursuit of building this ballpark.”
District officials are seeking to complete the acquisition of the stadium property within the next few weeks. That process originally was to be done by the end of 2005.
A possible resulting scenario could be a situation similar to that in St. Louis, where the new Busch Stadium will open next month for play as scheduled but will not offer its full battery of seating and amenities until the second half of the season.
“This certainly could be like the [Washington] Convention Center here, where we opened on time, held functions and still had six months of work to do,” said D.C. Council member Jack Evans of the $800 million, three-year-old building that will be an architectural cousin of the planned ballpark. “The convention center opened, and I think there were something like 30,000 items still left on the punchlist.”
The development team will be subject to fines if it misses the March 2008 deadline and is at fault, but allowances will be made if gaining full control of the site is delayed further.
“There will be a number of finishing touches that will need to be done after we open,” said Bill Hall of the D.C. Sports & Entertainment Commission, which is overseeing the ballpark construction. “But as long as we can deliver the site in April, I think we’ll be OK.”
Despite the looming pressure of the construction calendar, the last two weeks have marked a decided upswing in the Nationals’ fortunes. After more than four years of MLB ownership, league officials intend to select a new team owner by mid-April, quite possibly before Opening Day.
MLB Commissioner Bud Selig and President Bob DuPuy planned to meet last weekend to advance the Nationals issue while attending the semifinals and final of the World Baseball Classic in San Diego. Ideally, the pair will have a buyer to present to MLB owners for approval at league meetings in mid-May. The club is expected to sell for at least $450 million. The top candidates are the family of Maryland developer Ted Lerner and a bid group led by Washington businessmen Fred Malek and Jeffrey Zients.
Ticket sales are also beginning to rebound after a marked slowdown during the lease conflicts of the fall and winter. Nationals executives expect to surpass 2.5 million in attendance in 2006, a sum that would represent an 8 percent drop from last year’s total of 2.73 million. Season-ticket sales have reached 18,500 full-season equivalents, 83 percent of last year’s total, with an aggressive push now happening to sell partial-season packages and individual game tickets.
Before the intensified lease battles of the last six months, the Nationals had hoped to eclipse their 2005 draw, as the club believed last year’s total was artificially low due to the rushed relocation from Montreal, minimal TV exposure and operational challenges at RFK Stadium.
Yahoo!’s Web pages devoted to Winter Olympics coverage drew more unique visitors than NBCOlympics.com, according to a widely used Internet traffic measurement firm.
In data compiled by comScore Media Metrix, the Yahoo! Olympics pages attracted more unique users in each of the three weeks of the Torino Games than NBC’s site (see chart). This was despite NBCOlympics.com being able to offer video from the games and being promoted heavily on NBC television coverage.
Yahoo!, which also posted strong traffic numbers during the 2004 Summer Olympics, successfully redirected many users from other parts of its portal to its Olympics pages. The numbers surprised Yahoo! officials, and provided a strong testimonial to the company’s evolving interest in original content. For the Olympics, Yahoo! brought in a large stable of writers, licensed video from the U.S. Figure Skating Federation and other sources, and bulked up its Webcast show, SportStream.
“Given everything NBC did to boost its online distribution for the Olympics, such as its deals with ESPN, Google and the like, I really wasn’t sure how competitive we were going to be,” said David Katz, Yahoo! head of sports and entertainment. “But we’re thrilled with these numbers.”
Yahoo!’s development from a content aggregator to content generator remains a work-in-progress, with Lloyd Braun, head of Yahoo!’s media group, recently opting to move away from developing TV-style Web shows. Within sports, however, Katz said the plan is to increase original content significantly under Dave Morgan, the new executive editor for Yahoo! Sports.
NBC, while not responding directly to Yahoo! or the comScore data, is putting its faith in data compiled through WebTrends, a rival measurement outfit contracted by NBC, in which it said NBCOlympics.com generated 15.7 million unique visitors between the beginning of January and the end of the games.
NBC’s totals in the comScore study did not include traffic on ESPN.com, which received day-old highlight clips through a licensing deal between the two parties.
Olympics traffic Unique users (000s) for week ending: Feb. 12 Feb. 19 Feb. 26 Yahoo! Sports 2,390 4,515 5,121 NBCOlympics.com 1,834 3,442 3,508 Source: comScore Media Metrix