SBJ/March 19 - 25, 2007/This Weeks News

Athletes take stock in online presence

Visitors to NatalieGulbis.com, the official Web site for the 24-year-old professional golfer, have been able to read her journal, view her photos and order her calendar. Soon, they’ll also be able to watch her cook.

Sports celebrities are seeking ways
to update and monetize their Web sites.

Plans are in the works to launch a section on the site called “Nat’s Kitchen” that will include video of Gulbis preparing a meal. The goal is to attract a food sponsor and expand Gulbis’ brand from the fairway to the kitchen and beyond.

“It may even get picked up by the Food Network,” said Giff Breed, Octagon’s managing director of golf and Gulbis’ representative.

Call it athletes.com v. 2.0.

Once simple sites with relatively static features, athletes’ Web sites like Gulbis’ are adopting the latest Internet techniques from streaming video and blogs to social networking, podcasts and even e-commerce. Over the last month, LeBron James has launched a site in conjunction with MSN, Dwyane Wade has partnered with Google and Michael Phelps and Katie Hoff have joined other Olympic swimmers to create a social-networking site called Swimroom.com.

While no one has outlined a business model beyond the traditional advertising and merchandise structures of the past, athletes and their agents have ramped up their interest in having an online presence, feeling the Internet offers immediate promotional benefits and untapped revenue streams.

“It’s the single hottest thing going on right now,” said Patrick McGee, Octagon’s vice president of corporate business development who negotiated Anna Kournikova’s reported $10 million Web site deal with Lycos. “Sponsors, athletes and events are interested in conquering this — whatever it becomes — by tying all the elements of blogging, video and mobile together online in a way that allows them to benefit promotionally and monetarily.”

Additionally, the sites offer athletes a chance to distribute content that they control.

“If we didn’t create it, we’d be taking third calls from some other party looking to promote the athletes,” said Peter Carlisle, Octagon’s director of Olympics and action sports and the agent behind Swimroom.com. “That would be a missed opportunity.”

Paid sports content in the digital space was expected to reach $94 million last year and is predicted to hit $122 million by 2011, according to a 2006 report by Jupiter Research, which studies the impact of the Internet (see chart). As the industry expands, athletes and their agents are looking to cash in.

When AthletesDirect, a portal featuring more than 400 athlete sites, first launched in 1996, it often had to convince athletes that there was value in being online, according to Greg Hebner, who was with the company at the time. Today, agents and Web designers say younger athletes ask to have a presence online.

Gilbert Arenas, 25, updates his blog on NBA.com weekly, and has garnered more than 200,000 visitors a month since it was created last fall. Other young athletes, such as 24-year-olds Amare Stoudemire and Danica Patrick, also update their sites at least once a week, according to their site operators.

“It’s their image and they want to be seen on the Web,” said Brian Sibson, CEO of Ultimate Pros, which runs sites for Stoudemire and Randy Moss. “When they update their site regularly, it’s easier to monetize.”

The advent of social networking offers athletes a way to drive traffic beyond those regular updates. The success of MySpace and Facebook has shown that people are willing to spend time online if they can connect to others with similar interests.

Paid sportsWeb content
Year
Projected U.S. spending
2007
$101 million
2008
$107 million
2009
$112 million
2010
$117 million
2011
$122 million
Source: Jupiter Research

Carlisle has tried to replicate community with Swimroom.com, which offers people interested in swimming a place to interact with each other as well as with well-known athletes such as Phelps, Hoff and Ian Crocker.

It’s an effort that Dale Earnhardt Jr.’s marketers are already employing with some success in NASCAR. They created infieldparking.com, a social-networking site that features 20 drivers, including Earnhardt Jr., Dale Jarrett and Kasey Kahne. Since January, the site has accumulated more than 25,000 members.

Membership is free, but the site features advertisements from companies such as ABC Sports, Nivea and Sharpie (an Earnhardt sponsor). Thayer Lavielle, vice president of marketing and brand development for JR Motorsports, believes it will become a significant revenue stream for Earnhardt Jr. through sponsorship. She declined to say whether it was currently generating revenue.

Last year, online advertising revenue reached $16.8 billion, a 34 percent increase from 2005, according to the Interactive Advertising Bureau and Pricewaterhouse-Coopers.

That growth of advertising has convinced many agents that athlete sites can begin to generate revenue, said Bob McKamey, concept director at Uncommon Thinking, which has built sites for sports figures such as Lance Armstrong and John Wooden.

“It used to be, ‘Let’s have the site,’” McKamey said. “Now it’s becoming, ‘How can I make money off the site?’”

Some sites are trying to do that by offering merchandise and memorabilia and selling banner advertisements. T.J. Patrick, Danica Patrick’s father and the IndyCar driver’s manager, estimates that 10 percent of her merchandise sales come through the Web site during the season. But during the offseason, it accounts for 100 percent of merchandise sold, which she shares with Maingate Inc., the company that produces her shirts, hats and other items.

“It keeps the merchandise flowing in the winter,” he said.

Agents also are entertaining the idea of offering exclusive content for paying members, such as a digital library featuring an athlete’s training sessions.

“It’s still shaking out in terms of what will be a revenue opportunity,” McKamey said.

Most agents believe monetizing a site will happen naturally as it gains traction; creating it must come first. The barrier to entry is low. Sources put the cost of developing and maintaining a site between $15,000 and $20,000 annually.

“From my standpoint, it’s easy for me to do something like this,” Carlisle said. “I just need to know it creates another promotional opportunity for the athletes at an important time and that it serves to enhance the sponsorships these athletes already have and potential sponsors they add in the future. The ultimate value will be determined by how loyal, dynamic and active a community we can build.”

Carlisle has involved his action sports clients with a similar effort at Go211.com, a social-networking site that features Olympians Danny Kass, Seth Wescott, Kelly Clark and others. The site, which allows amateur action sports enthusiasts to upload their own videos, debuted in beta-testing mode two weeks ago.

Whether it’s social networking or a traditional Web site, T.J. Patrick doesn’t believe that his daughter’s Web presence will ever provide enough revenue to make it worth selling advertising for it. He sees it as a value-added proposition for sponsors.

“A cheap way of saying, ‘Thank you for backing us,’” Patrick said.

Carlisle envisions something more. His site, Swimroom.com, also will feature video of athletes as they prepare for the Bejing Games. He believes the site can be supported with a traditional business model of advertising and merchandise sales, but also capitalize on growing demand for video content online and the increasing opportunities to license that content to other businesses, such as Apple and YouTube. The only question he has is how much will those opportunities grow.

“It’s analogous to the gold rush,” Carlisle said. “We know there’s value there, and we’re going to spend money to get out there and find it.”

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