How distribution could work A different kind of labor leader UFC plans new digital net The Sit-Down: Dave Brandon Coors Light passes Bud for the lead In MLB's licensing spotlight Fox will sell for L.A. Coliseum ATP adding Michelob Ultra to U.S. nets Powdr buys ‘World of Adventure Sports’ From the Executive Editor
SBJ/July 17 - 23, 2006/This Weeks NewsPrint All
Call it a sign of the broadband revolution: Fox is planning to drive interest in its linear Fox Soccer Channel cable network by investing more heavily in its Web site, FoxSoccer.com.
Buoyed by a record amount of traffic during the recently concluded FIFA World Cup, Fox plans to invest “definitely seven fi gures” to build up the site, said Fox Soccer Channel GM David Sternberg.
FoxSoccer.com attracted 4.9 million unique visitors and 118 million page views during June, placing it second among soccer sites for the month behind the official Yahoo! FIFA World Cup site, which had 8.2 million unique visitors and 506 million page views, according to comScore Media Metrix traffic data. ESPN’s SoccerNet.com finished third for the month, with 3.8 million unique visitors and 66 million page views.
“One of the most impressive aspects is that we outdrew ESPN SoccerNet, despite the exhaustive cross-promotion on ESPN / ABC Sports,” Sternberg said. “I think a lot of that has to do with the fact that we do soccer 365 days a year.”
Also boosting the traffic was Fox’s partnership with MSN, which gave Fox’s soccer site prominent placement during the World Cup. MSN wound up “driving a ton of traffic to the site” during the monthlong event, Sternberg said.
Fox plans to use its seven-figure investment to beef up the most popular parts of the site during the World Cup, including expanded photo galleries, and more videos, blogs and game-tracking technology.
“We expect broad usage will help us continue making strides with our linear network,” Sternberg said. “We should be able to leverage our online audience delivery to get commitments for our linear network.”
Currently, Fox Soccer Channel is in about 25 million homes, via deals with Time Warner Cable, EchoStar and DirecTV. Sternberg expects to be able to increase that now that he has “hard numbers to take to the marketplace.”
Nike, Honda, Cingular Wireless and Warner Bros. Home Entertainment were sponsors on both platforms during the World Cup. Sternberg is negotiating to keep them all online now that the World Cup is over.
Soccer site traffic use
Rank SiteNo. of unique U.S.
visitors, 000sPage views
1 Yahoo! Fifa World Cup8,243506■ Yahoo! Fifa World Cup: English7,980460 2 FoxSoccer.com4,908118 3 SoccerNet.com3,78366 4 Fifa.com1,0867
NOTE: Unique visitors are a measure of people, not individual visits. A unique visitor is a person who visited a site at least once at home or at work.
Source: comScore Media Metrix
Bobby Ginn’s golf portfolio keeps expanding, though possibly at the expense of a longtime LPGA Tour event and not without prompting a controversy.
The real estate development firm of Bobby Ginn will sponsor a Memorial Day week event in Charleston, S.C., but the ShopRite LPGA Classic, which had the date, isn’t going away quietly.
LPGA Commissioner Carolyn Bivens declined to comment on the decision to insert the Ginn tournament into the Memorial Day slot. She said the LPGA had not entered into a contract with ShopRite operators for any future tournaments, and that the tour hopes to “negotiate a mutually acceptable agreement.”
But ShopRite organizers differ and are considering legal action. While tournament director Ruth Harrison said the event hasn’t had a formal contract with the LPGA since 2000, she points to a letter tournament organizers consider binding. The letter, dated June 29, 2005, and signed by Rob Neal, then the LPGA’s vice president of tournament business affairs, outlines the LPGA’s plan for the event to be played at the end of May through 2008. Robert Schmeck, general manager of host club Seaview Marriott Resort and Spa, said ShopRite officials requested the document in order for the resort to lock down the course and reserve other services during its booking window. Bivens, who had been named to replace Ty Votaw as LPGA commissioner but had not yet started, was among those to receive a copy of the letter.
But on June 12, the LPGA informed ShopRite organizers it wanted to move the event. That prompted a meeting last week in Philadelphia with tournament director Harrison, Mike Nichols, the tour’s vice president for business affairs, and Libba Galloway, the LPGA’s chief legal officer. Bivens, who participated in the meeting via conference call, offered alternative dates, including two spots in April, the weekend opposite the U.S. Open and the week of July 4.
Harrison said none of the proposed options were acceptable due to various reasons, among them holiday congestion along the Jersey Shore, early spring weather and a lack of television coverage.
She said that the tournament is set to take legal action if its date is taken away.
“It’s very ‘take it or leave it,’” Harrison said. “They offered us a lot of dates … (but) the weeks they have offered definitely would not work and would put this event into oblivion.”
A standoff with such a long-standing event would add to a lengthy list of controversy that’s surrounded Bivens’ tenure since she took over for Votaw last September, including the exit of several senior staff members and a dramatic increase in tournament fees. All of this has created a tense atmosphere between the LPGA brass and the Tournament Owners Association.
“It’s very careful right now, people are very cautious,” said association president Stephanie Hall. “The process of making decisions and understanding consequences and people’s reactions has not been weighed in the right way. A lot of these owners have been doing business for 15 or more years and a lot of them believe in the founding principles of golf — integrity, you call penalties on yourself. I think they expect that kind of mentality and attitude throughout the organization. So they’re being very careful. Everybody feels like they’re walking on eggshells.”
For now, the plan is for the Ginn International to be played at Ginn-owned RiverTowne Country Club with a $2.6 million purse and a winner’s share of $390,000 (both highs for a regular-season, full-field LPGA tournament).
It will be the third professional golf tournament sponsored by the company, joining the LPGA’s Ginn Clubs & Resorts Open, which is also bumping its purse to $2.6 million, and the Champions Tour’s Ginn Championship at Hammock Beach. A fourth event on a major pro circuit is likely, though Kent Atherton, president and COO of Ginn Sports Entertainment, a new division that manages the company’s sports ventures, would only say “another big announcement is planned.”
Atherton said Ginn is in talks with the Golf Channel about broadcasting the Ginn International’s early rounds. Weekend play will be televised on NBC from 4-6 p.m., with the French Open tennis tournament serving as a lead-in both days. The ShopRite received two hours of live coverage daily on ESPN2.
Robert Prazmark, who recently resigned as IMG’s president of Olympic sales, has joined Wasserman Media Group, where he hopes to represent international sports properties in sponsorship and marketing sales, among other things.
Prazmark, a founder of the International Olympic Committee’s TOP sponsor program, was named executive vice president of marketing for Los Angeles-based WMG and will report to WMG Marketing President Jeff Knapple.
Prazmark said his parting with IMG was amicable. He said he joined WMG because he believes the company, owned by sports entrepreneur Casey Wasserman, will be a leader in developing new sports, entertainment and marketing opportunities on a global basis.
“These people are going places, and I want to be a part of it,” he said.
Prazmark said he is looking forward to creating new business opportunities for sports properties globally. He added that many international sports properties are “undermarketed and underutilized.”
While at IMG, Prazmark represented the U.S. Olympic Committee from 1999 to 2005, and Knapple said, “It would be logical to assume we would build out an Olympic business and Rob would be a big part of it.”
What began nearly two years ago as a simple attempt by Major League Baseball to extend its national broadcast TV deal with Fox Sports has resulted in some of the most dramatic changes in the sport’s televised history — with more yet to come.
The effects of these long-term agreements will be seen next year, most notably with a change in the start of the World Series from a Saturday to the first Tuesday after the conclusion of League Championship Series play; an expansion in MLB’s national weekly presence during the regular season; a shift of the League Division Series playoff games to cable, via Turner; and the almost-certain move of part of the LCS to cable.
“These really are landmark deals for us,” said MLB Commissioner Bud Selig. “It’s hard to be happier with how this all turned out.”
Some of these changes were years in coming. Both Fox and MLB long have sought to change the World Series schedule in order to avoid four weekend games but have found navigating more deeply into the network’s entertainment programming schedule easier said than done.
Fox thinks shifting the start of the World Series
to avoid weekend games will help it reach more viewers.
Along with that came a need to soothe tough talk from Fox and other suitors. As recently as mid-May, News Corp. President Peter Chernin said Fox would walk away from baseball if a deal could not create profits for the network. Chernin’s tenor was mirrored by executives from NBC and Comcast/OLN, put off to varying degrees by MLB’s financial demands.
Two key actions helped MLB work through Fox’s concerns: Selig steadily negotiating with Chernin, and MLB President Bob DuPuy having lunch in San Francisco about a month ago with Fox Sports President Ed Goren and Fox Networks Group President Tony Vinciquerra.
“I went out there to see my granddaughter, and they were good enough to fly up the coast to see me while I was there,” DuPuy said. “And it was there we all laid out a desire to really work through this and finally get it done.”
Said Vinciquerra, “We spent the better part of two years negotiating, and we simply were not going to do another deal and lose money. But we continued to talk, were very honest about where we all were and got it done. This is a great deal for us.”
That lengthy negotiating with both Fox and Turner brought several additional programming and structural changes:
- An expansion of Fox’s Game of the Week schedule from 18 games to 26 games, and a shift in the start time of those games, from 1 p.m. to 3:30 p.m. ET;
- The creation of a non-exclusive, dedicated Sunday afternoon slot for Turner to form an extended national presence along with ESPN’s existing “Sunday Night Baseball” coverage; and
- The inclusion of a fantasy sports license for FoxSports.com with MLB Advanced Media, joining ESPN.com, Yahoo! Sports, CBS SportsLine.com and ProTrade.
Selig negotiated steadily with
News Corp. President Peter Chernin.
The deal also allows for some of Fox’s Game of the Week contests to be moved to prime-time, but Vinciquerra said the precise structure by which games would be selected and moved has not been determined.
Fox’s retreat from owning the LCS games exclusively or any Division Series games at once addressed two issues for the network: lowering its annual price for MLB and easing internal tension with network entertainment-side executives not emotionally wedded to baseball.
Networks such as Fox and NBC have long struggled with playoff baseball, which obviously can bring big ratings but also disrupt fall prime-time schedules. More specific to the LCS, ratings for that round of the playoffs have shown to be quite variable. Epic series in recent years involving the New York Yankees and Boston Red Sox produced huge audiences while last year’s matchups involving Houston-St. Louis and Chicago-Los Angeles produced far smaller results.
With the Fox and Turner deals now finished, MLB executives expect the rest of the TV landscape to develop in short order. While Fox could still acquire the other
unsold portion of the LCS, ESPN and Turner have each expressed interest in adding those playoff games and are considered strong bidders for the coverage.
More dramatically, MLB sees the unsold inventory as a potential means to jump-start the long-delayed Baseball Network. The venture, at one point pegged to hit the airwaves at the start of this season, has been put off for months while MLB first sorted out the primary broadcast contracts.
Digital rights are not part of either the Fox or Turner deal, beyond the fantasy license for FoxSports.com, providing yet another revenue opportunity still to be realized.
In the meantime, MLB must begin to tweak its scheduling to accommodate the change in slotting of the World Series. Among the possibilities are a slightly earlier start to the season and an end to the traditional Sunday conclusion of the regular season.
Additionally, MLB must sell the concept of placing more playoff games on national cable. The Turner deal does not involve a broadcast simulcast for local markets.
“As time goes on, more people, particularly our younger audience, simply sees no differentiation between cable and broadcast,” DuPuy said. “They’re all channels on the dial, so to speak, one moving into the other, and Turner’s good penetration within the cable market makes it that much more viable.”
Recent MLB TV ratingsAvg. rating/share (no. of games)2006200520042003
Regular season Fox2.4/7 (8)*2.6/7 (18)2.7/7 (19)2.7/8 (18) ESPN1.2 (57)*1.0 (101)1.1 (86)1.0 (87) ESPN20.8 (18)*0.6 (47)0.6 (66)0.5 (61) World Series Fox-11.1/19 (4)15.8/26 (4)12.8/22 (6) League Championship Series Fox (AL)-7.0/12 (5)11.7/20 (7)10.7/20 (7) Fox (NL)-7.0/12 (6)8.0/15 (7)10.9/19 (7) League Division Series Fox-6.6/11 (5)5.3/9 (6)7.5/13 (5) ESPN-3.8 (8)3.5 (9)3.9 (9) ESPN2-3.2 (2)2.3 (1)2.8 (4)
Note: Cable marks are coverage-area ratings, and related share information was not available.
* Through July 9Sources: Networks, Nielsen Media Research, SportsBusiness Daily archives
Recent MLB TV deals
Network Contract periodRights holderTotal rights feeAvg. annual value 2007-2013Fox$1.8 billion$257 million 2001-2006Fox$2.5 billion$416.7 million Cable Contract periodRights holderTotal rights feeAvg. annual value 2007-2013Turner$700 million$100 million 2006-2013ESPN$2.37 billion$296 million 2000-2005*ESPN$851 million$141.8 million
Note: From 1996-2000, MLB?s TV deals with Fox, NBC and ESPN were valued at $1.7 billion, averaging $340 million annually.
* Terms of the deal replaced the terms of the previous MLB deal for ESPN for the 2000 season.
Sources: MLB, networks, SportsBusiness Journal archives
The New Orleans Hornets will divide up the duties of recently departed president Paul Mott, signaling more turmoil for the team’s beleaguered front office.
Paul Mott, hired in April 2005, is the latest
to leave the Hornets’ front office.
Neither Shinn nor Mott would comment on last week’s change.
Mott was hired in April 2005 to bring stability to the team, which already was struggling in New Orleans. The team’s front offi ce has been a revolving door since the franchise moved to New Orleans from Charlotte in 2002, the instability made worse by the team’s temporary relocation last September to Oklahoma City in the aftermath of Hurricane Katrina.
In the past 18 months, the team has run through two marketing directors, Tim McDougall and Tim Hinchey. Former general manager Allen Bristow resigned, as did longtime public relations manager Harold Kaufman. Other resignations include Jack Capella, executive vice president, and Todd Santino, vice president of sponsorship sales.
The problems facing the front offi ce also come while Shinn searches for minority investors. Shinn was on the verge of selling a minority stake in the team last summer, but the deal fell apart after the team was forced to move to Oklahoma City.
The team isn’t saying whether Mott resigned or was fi red, but his departure was unexpected. According to insiders, the fi rst hint came in a recent meeting during which Mott outlined the past year’s results but did not speak to business goals.
Before coming to the Hornets, Mott was a vice president for the league’s team business operations department.
Despite the front offi ce turmoil, the Hornets fl ourished last season in Oklahoma City, averaging 18,169 at the 19,000- seat Ford Center, up 28 percent from the 2005-06 season, spent in New Orleans. The team sold 10,400 season tickets last season, and team offi cials said they expect to surpass that number this season.
Under normal circumstances, Dan Griffis, vice president of marketing for Chip Ganassi Racing, would have been home last week with his wife and his newborn baby girl.
Juan Pablo Montoya
Hometown: Bogota, Colombia
Resides: Miami and Monte Carlo
- 1999 CART champion
- 2000 Indianapolis 500 champion
- 2003 and 2005 Premios Fox Sports Awards top Latin American driver
- CART record: 10 wins, 14 poles (1999-2000)
- Formula One record: 7 wins, 13 poles (2001-2006)
“I knew it would be intense, but this is just overwhelming,” Griffis said. “There’s just no way anyone could have anticipated this amount of traffic.”
In the two days following team owner Chip Ganassi’s July 9 announcement that Montoya would leave a successful Formula One career to compete in NASCAR, the team’s Web site, www.chipganassiracing.com, went from an average of 8,000 unique hits per day to 64,000. Fans from Montoya’s home country, Colombia, were buying No. 42 merchandise off the Web site before the driver had made his first left turn, Griffis said.
That’s exactly the type of buzz Ganassi hoped to create. Texaco/Havoline is in its fourth season as the primary sponsor on the car, and the trademark star with a T in the middle is expected to adorn the hood next season when Montoya takes the wheel full time. Ann Barker, director of motorsports and licensing for Chevron, Texaco’s parent company, said her company has a long-term deal with Ganassi’s No. 42 car.
While Barker said it’s too early to fully appreciate the opportunities presented by a driver with significant international appeal, she’s already had conversations with the marketing officials in Chevron’s Latin American division.
“They are thrilled about it,” Barker said. “They’ve got a lot of ideas already. The whole energy around this is incredible and very refreshing. As this unfolds, we’ll see more and more opportunities.
“We were looking for something outside the box, and Chip delivered in a big way.”
Montoya’s presence for a company that markets globally is prolific — the 30-year-old driver was voted the top Latin American driver at the Premios Fox Sports Awards in 2003 and 2005.
Research indicates that the Hispanic community is starting to pay attention to NASCAR. Scarborough research shows that 8.7 percent of NASCAR’s fans are Hispanic, and Hispanic viewership of this year’s Daytona 500 drew a 3.0 rating, a 36 percent increase from 2005.
“I think it will be great for NASCAR from a global perspective to have him, but as always that will only last a couple of years and then success is going to be based on how he does on the track,” said Steve Lauletta, president of Radiate Sports Group and a former sports executive at Miller Brewing Co. “Texaco should be thanking Chip every day for the next year. This is exactly the type of aggressive owner move a sponsor should love.”
Montoya’s impact likely will be felt far beyond the No. 42 car. His schedule hasn’t been determined yet — he’ll probably run a handful of Busch Series races this season before taking over the Cup car in 2007 — but the wheels are turning at tracks where he might appear in 2006.
Homestead-Miami Speedway President Curtis Gray said he was on the phone with Ganassi’s office within five minutes after the announcement. He wanted to know if Montoya, who won the 1999 CART championship and the 2000 Indianapolis 500, would be driving a Ganassi car in time for the track’s November NASCAR weekend. Montoya maintains a residence in Miami and has driven there before in open-wheel races.
“This is one of the biggest things that’s ever happened to our track,” said Gray, whose track employs full-time Hispanic marketing and public relations managers. Because South Americans are typically loyal to their athletes, Gray said, he plans to create travel packages from Colombia to South Florida for race week.
“They enjoy their open-wheel racing, but they’ll enjoy any racing with one of their superstars competing,” Gray said. “In some of our other events, we’ve seen Colombians bring their flags to the track and create quite an atmosphere, like with the World Cup.”
Phoenix International Raceway and Texas Motor Speedway, tracks in communities with significant Hispanic populations, have their advertising campaigns mostly complete for their November Busch and Cup dates, but they’re eager to incorporate Montoya if he’s scheduled to race there.
“If he runs here, we’ll use his name and his likeness,” TMS President Eddie Gossage said. “I can’t think of another rookie we’ve done that with.”
Still, marketers have to be careful not to get carried away, PIR President Bryan Sperber said. There are distinctions to be made within the Hispanic community. The culture within the Mexican community is different than the Cuban or Colombian communities, and even the dialect can change from one group to another.
Montoya’s ability to speak fluent Spanish, though, will help bridge those differences.
“He can convey the emotion of the sport to the Spanish-speaking fans, and that helps tremendously,” Sperber said.
Often associated with images of infield masses and chicken-bone-heaving fans, NASCAR facilities have increasingly begun to target the most discriminating of customers with lavish settings and upscale food offerings.
Patrons check out the view from Octane at Phoenix
(above) and dine at Michigan’s Champions Club (below).
International Speedway Corp. COO John Saunders said developing high-end experiences is a priority for his company’s 12 NASCAR tracks. “The Octane-type experience is something we’re going to pursue,” Saunders said.
PIR President Bryan Sperber set out in early 2004 to create something opulent, yet native, with a view of the surrounding mountains in addition to a view of the racetrack. “Scottsdale martini bar meets NASCAR,” he said, was the vision.
What he got was Octane, a highly exclusive lounge six stories above Turn 1. Only 100 tickets are available to Octane per PIR weekend and an all-inclusive weekend pass to the lounge in November, which covers the Craftsman Truck, Busch and Cup races, costs $2,400. It sold out in April, at $1,900 a ticket.
“We have some of the finest five-star resorts in the Scottsdale area and we had to deliver to that level,” Sperber said. “We handpicked the staff from the best resorts, we partnered with chefs in the valley, and we made it exclusive.”
The view of the surrounding mountains, the comfort and the food and drink established Octane at an upscale level, but the unsung factor might have been the exclusivity.
“If you get too big, you water it down,” said John Moreland, the director of ticketing at Michigan International Speedway.
The market for exclusive seating appears to be there. A sheik from the Middle East wanted to rent a portion of the Speedway Club at Lowe’s Motor Speedway last May during the Coca-Cola 600 for about eight of his friends, club general manager Wanda Miller said. He asked for six servers and an enclosure so that his party couldn’t be seen. The Speedway Club, which normally entertains a few thousand fans on race weekend, couldn’t accommodate him, even though the sheik had said price wasn’t an object. At Texas Motor Speedway, a wealthy woman bought a 64-seat luxury suite for $100,000, and never has it played host to more than eight people.
For some companies, the ability to take a group of 50 or 60 customers to the race is inviting, but others simply want to do business one-on-one. By offering more outlets for those opportunities, tracks are better able to segment their fan base.
“You see a lot of consumer segmentation in packaged goods because your audience is not all the same,” said Roger VanDerSnick, ISC’s chief marketing officer, who worked 15 years at Procter & Gamble. “On the hospitality side, you want to offer a range of experiences that consumers and clients want to purchase. … Segmenting does reflect a systemic strategy change for us.”
Not all tracks have followed the same model or even pursued the same goals. Some are looking for new revenue streams, while others hope to attract executives who otherwise might not attend a race.
This rendering shows Club One, which opens
in October at Atlanta Motor Speedway.
“What we pay goes up annually,” Clark said of sanctioning fees and purses. “We’ve got to find revenues that offset that. We can’t just increase ticket prices every year.”
Octane’s limited numbers won’t allow PIR to experience a windfall, but Sperber has more long-term goals in mind.
“We wanted to access an audience that had not been served,” he said. “These are the movers and shakers in Arizona, the corporate decision-makers who can come in and maybe see their company as a track sponsor. This is the clientele who can green-light big deals.”
The high-end arms race appears to be just heating up. At LMS, Miller said she was replacing the 3,400 seats in her facility with 2,500 seats that are bigger and more comfortable. She’s ordered 15 new plasma TVs. In October, the Speedway Club will unveil a new magazine titled “Luxury Living” as part of its membership package.
“There is truly an art to understanding customer demand,” VanDerSnick said. “Are we at the end? Probably not.”
Upscale NASCAR seating
Atlanta Motor Speedway
- Name: Club One
- Cost: About $5 million; part of a $20 million facility improvement
- Located: Above Turn 1
- Opens: October 2006
- Menu items: Chef’s choice menu with open bar
- Interior design feature: Refinished antique bars with mirror backs; stone entryway with marble columns
- Capacity: 1,000
- Tickets: $795 for three days (Cup Qualifying Night, Truck, IROC and Cup races in October)
Daytona International Speedway
- Name: 500 Club/President’s Row
- Cost: Multimillion-dollar project was part of a $50 million trackwide renovation
- Located: Infield overlooking Gatorade Victory Lane
- Opened: February 2005
- Menu: Chef’s choice
- Interior design feature: Fourth-floor access for infield view
- Capacity: President’s Row: 80; 500 Club: 500
- Tickets: $5,000 for President’s Row; $3,000 for 500 Club, which includes Daytona 500 and Speedweeks events in February, plus Busch and Cup in July
- Name: Champions Club
- Cost: Not available
- Located: Third floor above Turn 1
- Opened: 2005
- Menu items: High-end carving stations
- Interior design feature: Art deco racing theme
- Capacity: 850
- Tickets: $650 for three-event pass (Truck, Busch and Cup in November)
Lowe’s Motor Speedway
- Name: Speedway Club
- Cost: More than $4 million in renovations the last two years
- Located: Fifth and sixth floor of Smith Tower
- Opened: 1987; renovated in 2005 and 2006
- Menu items: Certified Angus beef, prime rib
- Interior design feature: Onyx-faced bars
- Capacity: 3,500 seating — will feed about 1,400 people at a Cup race
- Tickets: $1,333 season pass; $442-$666 (Pole, Busch and Cup in October), available to club members who pay a $2,000 initiation fee
Michigan International Speedway
- Name: Champions Club
- Cost: Not available
- Located: Eight stories above the start/finish line
- Opened: June 2005
- Menu items: Carved and grilled meats, salads, fruit, desserts
- Interior design feature: Large murals behind each bar depicting past MIS race champions
- Capacity: 870
- Tickets: $450 for June or August weekend passes (ARCA, Truck and Cup in June; ARCA, Busch and Cup in August); $120 for July weekend pass (IRL)
Phoenix International Raceway
- Name: Octane
- Cost: Part of a $25 million overall project
- Located: Six stories above Turn 1
- Opened: April 2006
- Menu items: Sushi, pasta and meat-carving stations
- Interior design feature: Water wall
- Capacity: 100
- Tickets: $1,900 for two-event pass (Busch and Cup races in April); $2,400 for three-event (Truck, Busch and Cup races in November); season package $4,000
Texas Motor Speedway
- Name: Speedway Club
- Cost: $30 million
- Located: Nine stories above Turn 1
- Opened: 1997
- Menu items: Chef’s choice
- Interior design feature: Health club and spa
- Capacity: 4,679 grandstand seats
- Tickets: $572 season pass; $265 (Truck, Busch and Cup in November), available to club members who pay an initiation fee of $1,500 and up.
Source: SportsBusiness Journal research
The league wants to create a uniform look
for team Web sites, much like what
MLB has done for its teams through
MLB Advanced Media.
Under a plan approved last month by the NHL board of governors, each of the team sites and NHL.com will have a uniform look, conceptually similar to the strategy employed by MLB Advanced Media for MLB.com and the baseball team sites. In addition, higher-end content such as video-on-demand will be aggregated and distributed through each of the league and team sites.
Some of the changes, including the new look to the sites, will be in place for the start of the 2006-07 regular season in October.
“The owners have approved a broad strategy that will redefine how we go forward with regard to our online presence,” said Bernadette Mansur, NHL senior vice president of communications. “That strategy is still being shaped and defined. But this is a huge, huge project we’re undertaking.”
More specific data on the digital reworking is expected to be sent to the clubs later this month, Mansur said. One element already announced is NHL Connect, which is described as a league-sponsored social networking environment.
One of the key elements still being developed is control of advertising inventory, which also holds perhaps the greatest potential for internal dispute. Currently, the individual clubs oversee nearly all the advertising on their sites. Under one proposal being developed, teams would retain local rights in two sponsorship categories of their choosing, with the league controlling the rest and pooling the revenue, according to an industry executive familiar with the effort. How that interfaces with the league’s attempts to sell both exclusive and non-exclusive ad buys across all the Web sites is also yet to be finalized.
“The question being asked by some people, particularly some of the bigger-market clubs, is whether this is the best way to maximize revenue given the more localized nature of hockey,” said a team executive who declined to be identified.
Editorial direction for the sites will remain controlled by the clubs, Mansur said.
“There will definitely be a local editorial voice on the sites,” she said.
More a dozen teams contacted by SportsBusiness Journal declined to comment on the online initiative. The apparent unease to discuss the nascent effort also recalls the early days of MLB Advanced Media, during which the effort to pool together online rights and revenue created a sizable culture shock for baseball team owners, even though they had long engaged in similar cooperative activities with regard to national TV, licensing and leaguewide sponsorship. MLBAM in barely a half-decade has since grown from virtually nothing into a $300 million per year colossus.
Still, industry sources said the board of governors’ vote to approve the new NHL online measure, while not unanimous, provided a strong mandate.
“As it relates to the standardizing the team Web sites, we are in support of the league’s initiative but have just begun to educate ourselves on the entire measure,” said Mike Altieri, Los Angeles Kings vice president of communications and broadcasting.
Other key issues related to the effort, such as staffing and potential impacts on league revenue and the collective-bargaining agreement with the players, are also being assessed.
According to industry sources, one of the key figures in the online effort is Dallas Stars owner Tom Hicks, who also owns the Texas Rangers and is an MLB Advanced Media board member. Hicks was not available for comment last week.
Correspondent Allan Kreda contributed to this report.
The National Labor Relations Board says that there’s enough evidence to charge the NHL Players’ Association with violating federal labor laws but that it won’t take that step unless settlement talks fail between the union and a group of dissident players.
NHLPA Executive Director Ted Saskin calls
debate “a complete non-issue.”
By authorizing a complaint against the union, the NLRB served notice that if the union doesn’t settle the dispute, the NLRB is ready to issue a formal complaint that would compel the union to defend itself in court.
“The general counsel (of the NLRB) has decided to authorize the issuance of a complaint alleging the NHLPA violated the National Labor Relations Act by not providing certain side letters to players, side letters that are incorporated in the collective-bargaining agreement,” said Don Zavelo, deputy regional attorney in the New York NLRB office. “No complaint has been issued. It is our policy to always engage the parties in settlement negotiations before we issue a complaint that has been authorized.”
Detroit Red Wings player Chris Chelios, one of the leaders of a group of players that brought the complaint to the NLRB, said that he felt vindicated by the board’s decision. “I think it shows there is obviously something there,” Chelios said. “It’s not just a player thing. The NLRB investigated and found evidence that (NHLPA Executive Director Ted Saskin) may or may not have done something wrong.”
Saskin posted some of the side letters on the union Web site last year, after an agent and some players raised concern about the letters, including one that pledged union money to the NHL if the player salary escrow was not sufficient to bring the amount of money paid to players to 54 percent, as is required by the CBA.
Saskin could not be reached for comment. In a statement, he said, “I’ve reviewed all of these letters with the players. Not one player can think of any reason why they should be public. I am very confident this is a complete non-issue for our members.’’
Add former Houston Rockets President George Postolos to the list of prospective buyers of the Portland Trail Blazers.
Industry sources said that Postolos, who left the Rockets in June, is in the early stages of putting together a group to bid on the Blazers, a franchise that owner Paul Allen has said could lose up to $100 million in the next three years.
Postolos, 42, who worked for the Rockets for eight years and guided the team through construction of the Toyota Center, resigned to create The Postolos Group, a company that helps investment groups acquire sports franchises.
“I’m not at liberty to comment,”
said Postolos, when asked of any potential bid for the franchise.
Morgan Stanley is representing Allen with the sale, which includes the Blazers and the Rose Garden, the 12-year-old arena formerly run by Allen’s Oregon Arena Corp., which filed for Chapter 11 bankruptcy protection in February 2004. The arena was then sold to its creditors, the Portland Arena Group.
Allen and the Portland Arena Group have now agreed to bundle the team and the Rose Garden to facilitate a deal.
Other suitors made public include a group led by former Blazers player Terry Porter and another group that includes Hollywood Video founder Mark Wattles. Broadcom Chairman Henry Samueli, who also owns the NHL’s Anaheim Ducks, has also been named as a potential bidder.
The team and arena are expected to sell for between $300 million and $350 million, according to financial experts.
“The team has been a financial disaster and it will be interesting to see [who bids] once they look at the books because the losses are deep,” said one source familiar with the Blazers’ finances. “There has been some historical success in the market. It is going to take some deep pockets, but it’s a turnaround franchise if run right.”
From the MLB All-Star game
For the second consecutive year, the subject of steroids was hardly mentioned among business partners at MLB’s All-Star summer fest. The mantra repeated endlessly by the league’s corporate partners in Pittsburgh last week was: “NMP” or “Never More Popular.”
“There are some teams contending that usually don’t,” said Tom Fox, Gatorade senior vice president of sports marketing. “It’s not quite the parity of the NFL, where any team can rise to the top, but it’s starting to feel that way. As a result, baseball is in as strong a position as I can remember in the last 20 to 25 years, and the positive headlines are pushing past any attempts to drag it down into this [steroids] controversy.”
Judging by attendance, television ratings, the new TV deal announced last week and the remarkably enduring strength of MLB’s licensed goods in a market that is cyclical by nature, the only conclusion is that fan interest is unaffected by steroids — or, that fans are satisfied that MLB is policing itself.
“For a sport that has been around so long, it’s remarkable, but MLB is stronger than ever,” said MasterCard sponsorship chief Tom Murphy, whose company is in the final stages of a five-year sponsorship renewal. “You’ve had great rivalries like Yankees-Red Sox on center stage that helps bring in new fans, there’s a nice stream of young talent and there’s a ton of new ballparks like here in Pittsburgh that are as much of an attraction as the game itself.”
A FanFest kiosk let fans create their own
“I Live For This” video on DVD.
“In the year and a half we’ve been a sponsor, baseball has definitely gotten stronger nationally,” said Karen Jones, DHL vice president of advertising, brand and promotions, “and it’s delivering a wide audience to us, like women, one of our fastest-growing customer segments.”
“Like no other sport, it cuts across ages,” said Faust Capobianco IV, president of Majestic Athletic. “And it’s far less seasonal. Baseball is now strong all year for a lot of retailers. I can’t say that about another sport.”
CORPORATE SPEAK: One of our favorite pieces of activation in Pittsburgh was the relentless sampling of Baby Ruth bars by new MLB sponsor Nestlé, which distributed more than 250,000 mini candy bars.
We were also impressed by Dick’s Sporting Goods’ overwhelming presence and by product from licensees Nike and Reebok, the latter selling a shoe with All-Star Game marks for the first time.
Adidas was not evident, making us wonder about their future with MLB.
MLB’s FanFest itself drew more than 106,000 people, one of the top five draws ever and the most since 1999, in Boston.
Looking ahead, MLB’s biggest corporate sponsorship renewal is in the beer category. We hear renewal talks are not going smoothly with Anheuser-Busch, the incumbent since 1980, so there’s a real possibility MLB may shop that category.
Mascots cavort at the Home Run Derby; fans
greet their heroes at a player parade.
SPONSORS TO SUPPORT TV BROADCASTS: Somewhat overlooked in last week’s new television deals with Fox and Turner was the role that sponsorship plays. The new Fox deal, for example, guarantees that a minimum of 20 percent of all advertising inventory will be bought by MLB’s corporate patrons.
“More than one third of All-Star Game ad inventory was bought by our sponsors, so it’s fair to say growth of our sponsorship business is driving growth in many other areas,” said Tim Brosnan, MLB executive vice president of business.
CHEAP HELP: After several years of producing the ads for the “I Live For This” campaign, Jacqueline Parkes, MLB senior vice president of advertising and marketing, is letting fans in on the action. A kiosk at FanFest allowed fans to combine highlights from their favorite team with their own video exhortations to produce a customized “I Live For This” ad delivered on a DVD.
More than 4,000 fans played ad director last week, and the program served as a prototype for one that will be rolled out during the second half of the season to seven clubs: the New York Mets, Boston Red Sox, Chicago White Sox, St. Louis Cardinals, Kansas City Royals, Minnesota Twins and Seattle Mariners. Fans will pay $9.95 at parks to do their own MLB ads, where adding highlights for that day’s game will offer a unique, customized collectible.
“It’s not about revenue. If we break even, we’ll be happy,” Parkes said. “It’s just a great way to engage fans.”
It’s also a way to get new creative work, as the best ads will be used locally and nationally as part of the “I Live For This” campaign.
Participants have to sign consent forms.
Given the likely extensions into sponsorship, by adding sponsored content or traditional ads on the DVD, and by including coupons redeemable at stadium or outside retail, it’s an intriguing marketing platform.
Next up for MLB’s creative effort is a fall tune-in campaign that will attempt to convince baseball fans that no matter which team they are fans of, watching October postseason baseball is a necessity.
Ryan Howard’s blast made a winner out of
MasterCard and a lucky fan.
ADDING DEFINITION TO MUSCLE: ESPN used the Home Run Derby as a test run for its new, high-definition mobile production truck, a unit developed after the network gained rights to “Monday Night Football.”
Developed in conjunction with Pittsburgh-based NEP Broadcasting, one of ESPN’s key vendors for mobile TV production services, the two-trailer, $10 million setup essentially serves as a traveling version of its two-year-old digital production facility in Bristol, Conn. The key differences of the new facility compared with prior production trucks include an ability to handle all video and audio without the use of tape, and a connectivity with the Bristol campus that reduces the time for footage from remote events to be repackaged into other ESPN shows.
“This is a true big-game truck for us. Everything in it is state of the art,” said Rick Abbott, ESPN vice president of remote operations. “It’s essentially a production equivalent of a moving Super Bowl.”
The truck also will be used for the X Games, NCAA Women’s Final Four and NBA playoff games.
COMMISSIONER VOWS SOLUTION TO BLACKOUTS: Selig pledged to find an answer to baseball’s often-maddening geographic territorial system in which some pockets of the country are claimed by as many as six teams. That means for buyers of out-of-market packages such as MLB.TV and Extra Innings on digital cable and satellite TV, more than a third of a day’s scheduled games can fall under local blackout provisions.
Areas particularly susceptible include Las Vegas and parts of Iowa.
“I don’t understand [the blackouts] myself,” Selig said. “I’m watching games at home and even I’m getting blacked out from some games.”
LABOR DAZE: News on the collective-bargaining front continues to be sparse as MLB and the union pursue a new labor deal in an unusually low-key, private fashion. With drug-testing provisions already revised twice in the current accord, much of the attention predictably is centering on the economic front, specifically the use of revenue-sharing funds, which will total $323 million this year.
MLB officials insist the money is being used as intended, and in May produced an internal study indicating the recipients of revenue sharing from 2003 through 2005 spent far more on player payroll and development than they took via central-fund and revenue-sharing payments. The players’ camp isn’t sure, and to that end, the idea of a minimum payroll is again being discussed.
The union in 2002 refused management overtures of this concept, fearing it would prove a slippery slope to a much-hated salary cap. But with the Florida Marlins’ $15 million payroll this year representing a mere fraction of their anticipated revenue-sharing and central-fund receipts, the concept has resurfaced.
USA BASEBALL GETS BOOST: Lost in the din of MLB’s new television deals was a separate agreement for the league in which it will commit a minimum of $10 million over the next decade to USA Baseball in exchange for gaining ownership to the organization’s commercial and digital rights.
For MLB, the biggest upside may come through showing games online of USA Baseball’s Olympic and national amateur teams. More immediately, the nonprofit USA Baseball gains relief from devoting significant energy to fundraising.
“Making sure we cover expenses in order to grow the game was becoming a bigger and bigger issue for us,” said Mike Gaski, USA Baseball president.
USA Baseball’s new national training facility will open next year in Cary, N.C.
While being video game cover
guy, Cowher will also be in ads
for DirecTV and Motorola.
The NFL’s longest-tenured coach will be featured in ads for DirecTV and Motorola, after earlier coming on board as the cover boy for EA Sports’ new “NFL Head Coach” video game.
The DirecTV ad, from agency Deutsch, has already been shot and should break later this month. It will be similar to the ad running with Peyton Manning in which game footage is digitally interwoven with the ad (see page 11) to produce an effect that will have Cowher appear to “step away” from the action and talk to viewers about DirecTV.
The Motorola ad has not been shot.
In keeping with the coach’s wishes, all three deals were with NFL sponsors.
“Bill’s the quintessential team man, and that includes a team/league orientation in terms of marketing,’’ said Octagon President of Athletes and Personalities Phil de Picciotto, who would not comment directly on the new deals. “That didn’t change with a Super Bowl win.”
Cowher expanded a deal with Mounted Memories to make the company largely the exclusive provider of Cowher memorabilia. He did “less than 10” private corporate appearances since winning the Super Bowl, delivering messages of organizational stability and performance.
On the charitable front, Cowher is continuing to help Pittsburgh-based Family Resources, a child abuse prevention and treatment agency, raise money for a planned multisport athletic facility.
Brian Williams, senior vice president/group manager of sports and entertainment banking at SunTrust, died July 8 after an accident while diving at a lake near Nashville.
Williams was with SunTrust for 23 years and was behind its NASCAR “Sound and Speed” program, which combined motorsports and musical artists such as drivers Kyle and Richard Petty, Tony Stewart, Michael Waltrip, Sterling Marlin and artists Vince Gill, Trisha Yearwood, Trace Adkins, Kenny Rogers and others who joined to raise funds for the Victory Junction Gang Camp and The Country Music Hall of Fame and Museum charities.
A funeral service was held last week in Nashville. Donations can be made in Williams’ memory to the “Sound and Speed” charities he was passionate about. The donations can be sent to the Music Row office of SunTrust at 1026 17th Avenue South, Nashville, TN 37212.
Karen Clark, SunTrust group vice president/sports and entertainment banking, will serve as the interim head of the company’s sports and entertainment unit.
— Staff report
Nearly 2 1/2 years after trading Alex Rodriguez to the New York Yankees, the Texas Rangers still owe him $22.5 million over the next three years.
Sources differed on if part of
a recent loan would be
used to pay Rodriguez.
The $32 million the Rangers owe Rodriguez and the two unidentified players emerged as part of a recent loan the company that owns the team borrowed on June 30. That $75 million transaction was not explicitly to pay off Rodriguez, though one financial source said there was a good chance some of the money would be used for this purpose.
“They need to get through their deferred compensation issues,” the source said.
Another financial source said the team had prepared for the amount of money still owed Rodriguez when he was shipped to the Yankees, and the new borrowing of parent company Southwest Sports Group was not needed to pay him.
As part of the trade, Texas agreed to pay $67 million of the $179 million in salary that Rodriguez is owed over the final seven years of his contract. He signed with the Rangers in 2000 in a still-record $252 million, 10-year deal.
Southwest Sports Group, which also owns the NHL’s Dallas Stars, half of the American Airlines Center and other sports assets, now has $468 million of debt, a sign that bankers are sold on the financial story in Texas. Southwest declined to comment.
“Southwest Sports Group is a fantastic group of assets and I have a huge amount of confidence in Tom Hicks,” said Sal Galatioto, founder of GSP Capital, which is one of the banks lending the firm money. Hicks owns Southwest.
Southwest borrowed $325 million from a syndicate of banks led by JPMorgan Chase in December, and added the $75 million last month because, one financial source said, of favorable financial conditions. JPMorgan also led that deal. The Rangers also have a $68 million loan from MLB’s credit facility. JPMorgan declined to comment.
Southwest owes on average about $18 million in annual interest payments, a financial source said.
It was only nine months ago that OLN was setting itself up to be a national sports alternative to ESPN. The network had just won exclusive rights to the NHL, it was expecting to pick up exclusive rights to an eight-game package from the NFL and it figured to be in the mix for most major sports packages that were available.
TBS has long carried Braves baseball, but that
will end with the new MLB agreement.
The moves have industry executives now pointing to TNT/TBS, not OLN, as cable’s second most important sports outlet, behind ESPN.
“Turner is definitely building something,” said Tim Brosnan, MLB’s executive vice president of business. “It’s very interesting to see what they’re doing.”
Turner bolstered its position as a sports outlet when it agreed last week to shell out about $100 million a year for exclusive rights to MLB’s League Division Series games and 26 non-exclusive, regular-season Sunday afternoon games through 2013. It also acquired the rights through 2013 to any tiebreaker games and the All-Star Game selection show, rights currently held by ESPN.
The deal finally gives a stable home to the divisional playoffs, which have been on several different outlets in recent years, including Fox, ESPN, Fox Family, ABC Family and FX.
Last week’s deal dissolves the agreement Turner signed last year to carry 70 Atlanta Braves games a year nationally. Turner will stop carrying Braves’ games nationally after next year.
Industry insiders speculated that TBS is dropping its national Braves coverage because its corporate parent, Time Warner, is selling the team. Turner officials denied such a connection.
“Turner was obviously looking for a way to get out of the Braves situation because of the team’s sale,” said former Clear Channel TV Chairman Mike Trager. “If someone else owns the team, they have no real incentive to carry them nationally.”
Turner Sports President David Levy said last week that the months of negotiations with MLB leading up to last week’s deal swung once the league agreed to give the network exclusivity on the LDS playoff games. Those games will not be broadcast on over-the-air local broadcast stations.
“Exclusivity was key to us,” he said.
It apparently was the lack of that exclusivity — at least, as far as the Sunday afternoon regular-season games go — that made OLN take a step back from the table. After meeting with MLB executives several times over the past couple of months, OLN became increasingly concerned about the glut of regular-season baseball games on cable. Officials there viewed the $700 million price tag as too steep, a source said, and not in line with their current programming strategy.
That strategy calls for building signature elements out of its sports agreements, whether it’s with the hockey and pro bull riding content currently in the OLN lineup or with the exclusive eight-game NFL package the network wanted.
“We feel like we can be a unique network and can stand for something that makes us valuable in the field of all the networks that offer sports and entertainment,” OLN President Gavin Harvey said. “We don’t necessarily have to have another [major sport]. But I wouldn’t rule that out. … There will always be the worldwide leader in sports and entertainment. There is room for other unique brands in the sports world.”
Industry observers believe OLN, which is rebranding to Versus in September, will continue to be in the mix for sports rights packages.
“With Comcast, it has deep pockets,” said Larry Novenstern, Optimedia’s executive vice president and director of national electronic media.
For Turner’s part, the baseball deal helps it further its “One TV World” ad-sales strategy that more closely aligns itself with over-the-air broadcasters than a cable sports network.
Novenstern predicted that TBS will treat the baseball playoffs in much the same way that Fox treats them: to heavily promote its entertainment schedule.
“Fox used the baseball playoffs as a centerpiece to gain momentum and a promotional platform for new shows to come,” Novenstern said. “TBS has to do the same thing.”
Turner plans to use the same strategy of “appointment viewing” for its TBS baseball coverage that it uses for its coverage of the NBA on TNT.
“Just like you know on Thursday nights that you can find the NBA on TNT, we hope to do the same thing on Sunday afternoon for baseball,” Levy said.
TBS will not be using its baseball playoffs to charge cable and satellite operators a license fee surcharge now that it has the MLB rights. Turner drew the ire of the cable industry four years ago, when it extracted a surcharge from most cable operators for TNT’s NBA and NASCAR programming.
According to cable operator sources, TBS currently charges cable and satellite operators about 75 to 85 cents per subscriber per year. By comparison, ESPN charges about $3 and OLN charges roughly 25 cents.
ESPN is in 91 million homes, TBS in 90 million and OLN in 69 million.
Several of the biggest cable operators say TBS’s contract does not expire for several years, adding that they are happy to see TBS making moves to strengthen its programming lineup.
“We view this as a top-rated network that is looking to bolster its attractiveness by investing in live sports programming,” an executive with one of the biggest multiple system operators said.
That lineup includes NBA programming, six NASCAR races per year through 2014, and early round coverage of the British Open through 2009 and PGA Championship through 2011.
The Sony Ericsson WTA Tour will allow players’ coaches on court next month at two events, long a taboo in the tradition-bound sport but the latest initiative to bring more intrigue and entertainment to the game.
Coaches and players mix at international events
like the Fed Cup but not on the pro tours.
Now coaches, often outsized personas in team sports, could be stepping out of the shadows in tennis, where they are largely non-entities to the average fan.
“The overarching strategy is we are actively introducing things over the next few months designed to enhance the entertainment quotient,” said Larry Scott, the WTA’s chief executive. “We are working hand in glove with TV to make the coaches more a focal point of interest to TV commentators and viewers.”
Indeed, ESPN, which this year will broadcast more than 600 hours of tennis, proposed on-court coaches at a WTA player meeting in January, along with a host of other initiatives that would give TV cameras more access to players, said Jason Bernstein, the channel’s director of programming and acquisition. ESPN has not decided how it will cover the coaches but this year has already been interviewing some of them in the stands.
Currently coaches are restricted to their seats and are banned from offering advice during the match. Insiders say, however, that the prohibition is widely ignored and that hand signals from coaches are the norm.
Critics counter that what makes tennis unique, other than in the infrequent World TeamTennis format, which allows coaches, is having two competitors on court without a lifeline to any advice or help. By allowing players access to their coaches, the WTA also could be helping those players with more resources to hire a high-quality coach.
The WTA’s initial experiment will be limited to the Rogers Cup in Montreal (Aug. 14-20) and the Pilot Pen Tennis in New Haven, Conn. (Aug. 21-26), though coaching also might be considered at the season-ending championship in Madrid. Players will be allowed one coaching break per set, as well as between sets, and if the other competitor takes an injury or rest-room break.
The ATP briefly experimented with on-court coaches several years ago but shelved the idea after fans and players didn’t take to it, said David Higdon, a spokesman for the men’s tennis governing body. The group, which has become far more open to change under its new leadership, will closely monitor the WTA results, he said.