Fermata offers licensing challenge Cartoon: Here's Johnny Coast to Coast People: Executive transactions Getting the studio into the mix The player’s been traded, so now what? Hall: No plans to address concussions Does IMG College face shifts in market? Fox Sports, Sporting News teaming up NFL preseason: Hall of Fame Game
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The Big Ten Conference generated more than $177 million in revenue during its 2006-07 fiscal year, according to documents filed this month with the Internal Revenue Service.
That amount, along with the $7.83 million in excess revenue after expenses, surpasses the comparable marks posted by other major conferences throughout this decade of growth in the college space.
Compared with the previous year, Big Ten revenue was up almost 40 percent in 2006-07, fueled by the launch of the Big Ten Network and the conference’s renewed media rights deal with ABC/ESPN. Both agreements were announced in June 2006, just days before the end of the 2005-06 fiscal year. Neither agreement took effect until fall 2007, well after the conference’s 2006-07 fiscal year had ended, but upfront payments and related signing bonuses are reflected in the conference’s bottom line for 2006-07.
The Big Ten has 51 percent ownership of the Big Ten Network; News Corp. owns the balance. While the Big Ten in its annual filing did not detail how much the partnership contributed to overall conference revenue, News Corp. indicated in a March 10-Q federal filing that the conference could receive an average of $112 million annually over the course of the deal. This year, according to that News Corp. filing, the network is paying the conference $66 million. The rights fee escalates over the course of the deal.
The new, 10-year national rights contract with ABC/ESPN is valued at $1 billion, starting at $83 million in the 2007-08 fiscal year, according to the Big Ten filing.
On the expense side, Big Ten Commissioner Jim Delany’s total compensation package, including benefits and expense accounts, rose 18.5 percent to $1.14 million. That includes deferred compensation of $272,584, a contractually obligated amount that increased slightly from 2005-06. A $1.5 million bonus also was awarded to Delany during the year. Robert Bruininks, University of Minnesota president and chairman of the Big Ten Council of Presidents and Chancellors, said in a written response to questions about the filing that the payment was “in recognition of the outstanding leadership [Delany] displayed during the successful negotiations of the conference’s media rights.”
Big Ten Deputy Commissioner Brad Traviolia said legal and consulting fees for the year increased to $5.35 million from $1.9 million, almost exclusively because of work related to the launch of the Big Ten Network. Notably, payments to Allen & Co. increased to $3.5 million from about $506,000. The New York-based private investment bank was the lead consultant to the conference during the network’s launch.
Derek Schiller, Atlanta Braves executive vice president for sales and marketing, joked recently that he’d never found a direct need in his sports career for his civil engineering degree from Vanderbilt University.
But more than a decade and a half since earning that degree, and after stops with the Atlanta Thrashers and New York Yankees before joining the Braves nearly five years ago, Schiller now is ensconced in complex mathematical formulas.
The club’s ticket sales office, led by Schiller, has developed a tool it’s calling the Attendance Projection Module. The algorithm-based system combines day of the week, month of the season, game start time and Braves opponent, and spits out an attendance projection that often is accurate within 3 percent to 5 percent for any individual game. Over long stretches of time, the accuracy improves to around 1 percent to 2 percent, club executives said.
The base data are attendance figures from 2005 to the present. The algorithm involves assigning proprietary point values to each of the four factors used to determine expected turnout, resulting in an aggregate point value for each game. A higher total point value means there are factors in favor of a big turnout, and a higher attendance is then projected.
The system marks a modern-day iteration of the time-honored but not entirely accurate practice of attendance estimation that combines the hard data of advance ticket sales and group bookings and mixes it with a fair amount of guesswork.
“What we’re trying to do is assign true logic and facts to something that previously was more experience-based,” Schiller said.
The club began using the module last year, after it was developed internally by several club employees, some with math or engineering backgrounds, including ticket department staffers Ryan McFerrin and Chad Graham. With the system’s reliability quickly shown, it has taken on greater stature this year for the club, holding more influence over staffing decisions for game operations and the timing, pricing and implementation of various ticket promotions.
Operations reports written up for each game and used internally by Braves front-office staff now include both the pregame projected attendance figure from the system as well as the actual turnout. The projection for the Braves’ June 5 game against Florida, in one example, showed an expected turnout of 27,954; posted attendance for the game was 27,238.
Before Opening Day this season, Braves officials used the module to project the team’s 2008 full-season attendance at Turner Field and found that, based on the layout of the schedule, the club would see a slight drop at the turnstiles. Indeed, the club is off about 4 percent thus far and faces an uphill climb to close the gap.
The Braves now are beginning to discuss with MLB potential wider uses for the projection module, such as inserting data from all 30 clubs into the system and perhaps using it to help draft the entire league schedule with maximum possible turnout in mind. Both camps brand those talks as very preliminary, though, and senior MLB officials have not yet conducted a full review.
“We’ve talked briefly about it, and that’s about it so far,” said Katy Feeney, MLB senior vice president for scheduling and club relations. “We’ll see what happens. I do know [attendance patterns] vary a lot from city to city.”
Neither Schiller nor Feeney was aware of a program similar to the Braves’ model being in place with another MLB club or in other leagues. Details on the cost to the Braves of implementing their program were not immediately available.The Braves’ system does not directly factor in weather and team performance for either its own club or the opponents on the schedule. Schiller acknowledged those two elements can cause short-term variances from module predictions in extreme situations. To that end, some Atlanta home games this year have shown variances from the model closer to 10 percent as the Braves, like many other MLB clubs, grappled with poor early-season weather.
Schiller said those factors typically smooth out over longer periods, though. Since the system relies in part on averages of continually updating data, sustained improvement from a once-woeful team — and, in turn, improved box office appeal for that club — would ultimately manifest itself in the attendance predictions.
“This is a guide and one that definitely helps in decision making,” Schiller said. “You don’t base 100 percent of your decision making on it, but it’s no doubt a valuable tool.”
CAA Sports is hoping to ace a new sport by expanding into tennis.
The sports division of Hollywood talent firm Creative Artists Agency, will announce today a partnership with two Israeli tennis agents who represent, among others, No. 3-ranked Novak Djokovic and French Open finalist Dinara Safina.
Tennis’ appeal is clear: While weak domestically, it offers a more global audience than U.S. stick-and-ball sports, an appealing proposition to companies looking to market overseas. The sport is booming in Asia and the Middle East, and remains strong in parts of Europe and South America.
CAA already represents David Beckham and recently signed a marketing pact with Chelsea Football Club of the English Premier League, which includes the ability to negotiate endorsement deals for the team’s players. Tennis will add to its emerging international sports reach.
“We see limitless opportunities for tennis players in being represented by CAA,” said agent Amit Naor in a statement. Naor and fellow agent Allon Khakshouri will now work with CAA to represent and market the players. While they’re not employees of CAA, they will function as CAA Tennis, a source said.
In addition to Djokovic, a charismatic Serb who does impressions of other players and traded quips with Jay Leno during a March 12 “Tonight Show” appearance, CAA Sports will represent through Khakshouri and Naor four other athletes ranked among the top 30 men’s players: Radek Stepanek, Mikhail Youzhny, Ivo Karlovic and Ivan Ljubicic.
The tennis agent business has long been dominated by the big three: IMG, Octagon and what is now Blue Entertainment Sports Television, the former SFX Sports. Sources at these companies did not profess concern, noting that CAA did not buy Naor and Khakshouri ’s business.
But the development may herald further moves into tennis by CAA, which has entered several sports through acquisitions and then moved quickly to increase market share.
Some in tennis welcome news of CAA’s interest.
“It’s fantastic, actually,” said Patricio Apey, managing partner of Ace Group, which represents top U.K. player and 11th-ranked Andy Murray. CAA should bring a fresh perspective to the sport that the traditional agencies may lack, he said.
With tennis producing stars from every corner of the globe, there are more opportunities for new agencies to align with top players who in the past would have been automatically swooped up by the one of the big three. The No. 1-ranked women’s player, Ana Ivanovic, is represented by a Swiss businessman who funded her tennis development. Similarly, Naor and Khakshouri, who has run several tour events, funded Djokovic’s emergence from Serbia.
In the aftermath of the doping scandals that have plagued the sport of cycling in recent years, it seemed unlikely as recently as two weeks ago that a U.S.-based cycling team would enter the Tour de France in July with a title sponsor.
Now, not only will there be two U.S.-based teams for the first time in Tour history, but each will have a title sponsor.
High Road Sports announced last Monday a title sponsorship with Columbia Sportswear, the Portland-based manufacturer of outdoor apparel. Two days later, Slipstream Sports announced a three-year title sponsorship with Garmin International, the Olathe, Kan., manufacturer of global navigation devices.
Both deals are for three years, through the 2010 season, and each team will unveil new uniform “kits” in separate news conferences July 3, two days before the start of the Tour de France. Team High Road will be rebranded as Team Columbia, while Team Slipstream-Chipotle will become Team Garmin-Chipotle presented by H30.
Slipstream officials expect media to refer to the team as Team Garmin, though the longer official name reflects the second-tier financial commitment of Chipotle Mexican Grill and H30, a marketing and financial management firm.
Neither team’s owners nor title sponsors would reveal the terms of the agreement. A race team’s annual budget is typically between $11 million and $12 million, and teams seek to cover at least half of it through title sponsorship.
“It’s no doubt a primary and major source of funding, but I have the flexibility to layer additional partners over time,” said team owner Bob Stapleton, whose High Road Sports Inc. previously managed the T-Mobile team.
Tim Boyle, Columbia’s president and CEO, said the company was attracted by the prospect of exposing its outdoor lifestyle brand to the European market. The sport’s doping scandals were an issue, Boyle said, but the rigorous drug-testing procedures put in place by Stapleton helped alleviate those concerns.
Jon Cassat, Garmin’s vice president of communications, said his company also was looking to expand its presence in Europe. Cassat said Slipstream’s commitment to cleaning up the sport of cycling was another factor.
“Their vocal stance on anti-doping and the measures that are in place and being category leaders in this crusade to clean up the sport is very important to us,” he said. “We mirror the team’s feeling that the best results come from personal commitment and hard work.”
Garmin has advertised in each of the last two Super Bowls, and Cassat said the cycling deal will not necessarily affect the company’s spending on Super Bowl XLIII.
Chipotle, the Denver-based chain of burrito restaurants, has operated for eight years under a “food with integrity” campaign stressing that its meat comes from animals that have never been given antibiotics or growth hormones. That the company would put its reputation on the line as a sponsor speaks volumes about the company’s belief that a team can be competitive and drug-free.
“Just as you don’t need to raise animals that we’re going to eat with a lot of chemicals, you don’t need to dope up to become a champion biker,” said Jim Adams, executive marketing director for Chipotle.
The words “champion biker” and “drug-free” have not been used together often in recent years. Floyd Landis was stripped of his 2006 Tour de France victory over doping, despite his insistence to the contrary. Last year, three riders and two teams were withdrawn from the race following positive tests. Even Lance Armstrong, the seven-time Tour de France champion, has had to deflect persistent allegations.
Against this backdrop, it’s perhaps no wonder that until the Columbia and Garmin deals were announced last week, the two
U.S.teams were financed not by major sponsors but largely by wealthy businessmen still bullish on cycling’s marketing potential.
High Road, based in San Luis Obispo, Calif., is a descendant of the once-prominent T-Mobile team, which lost its longtime sponsor in November when Deutsche Telekom, the parent company of T-Mobile, ended its 16-year association with cycling because of numerous doping allegations last year.
Stapleton, 50, became team owner and has overhauled the riders and staff. A California native, he was co-founder of VoiceStream Wireless, which Deutsche Telekom bought in 2001 in a deal valued at between $30 billion and $35 billion.
Team Columbia is made up of mostly European riders, and Boyle said that also appealed to Columbia as it hopes to make inroads in European markets. Though many assume “High Road” is a reference to the team’s strict anti-doping measures, the name actually dates to 2005, when Stapleton founded the company to manage a women’s team that is still racing.
Team Garmin, based in Boulder, Colo., was founded in 2003 by Jonathan Vaughters, who rode for two top teams over a decade-long career before retiring in 2003, fed up with trying to compete in a drug-infested sport.
Vaughters, 35, launched the team with $50,000 in savings, intending to field a drug-free
U.S.junior and developmental team. In January 2005, he met Doug Ellis, a New York-based private investor and avid cycling fan. Ellis agreed to finance the team, renamed it Slipstream after an unsold screenplay he wrote about the sport, and set his eyes on the Tour de France. Though originally targeting 2010 as a breakthrough year, the demise of the U.S.-based Discovery Team, once home to Armstrong, and the general disarray of the sport prompted Vaughters and Ellis to accelerate their move into cycling’s big leagues.
More than half of Team Garmin’s 25 riders are Americans, though they train primarily in Girona,
Spain. Ellis, 44, says he’s covering more than half of the team’s annual budget of between $11 million and $12 million. Chipotle has not revealed its contribution, with Adams saying only that “it’s significant, especially for us.” Certainly it is far beyond the $10,000 that Chipotle CEO, founder and avid cyclist Steve Ells initially committed three years ago, but then that was before the team seemed to have any chance of getting into the Tour de France.
The Garmin sponsorship will bring an end to the blue-and-orange Chipotle uniforms worn by the former Slipstream-Chipotle team this season, though team officials say the unique argyle pattern will be retained. Chipotle, which has 750 stores, has no immediate plans for European expansion, according to Adams, and in August will open its first store beyond the
United States, in Toronto.
Both teams employ the Agency for Cycling Ethics to conduct blood and urine analysis. Collections are done randomly 26 times a year, roughly every other week but sometimes more frequently, to build baseline profiles for riders. National and international anti-doping agencies test for the presence of performance-enhancing drugs.
The ACE profiles are meant to provide early warning signs of possible steroid use or blood doping so teams can suspend or sanction riders in the absence of a positive test. Such testing costs $500,000 annually, but the
U.S.team officials believe it is money well spent.
“The message I’ve gotten from sponsors loud and clear is that the image of your team is more important than the number of wins you achieve,” Vaughters said. “It’s possible to win clean, and the teams that can do that are going to be at the forefront of bringing the next generation of sponsors into the sport.”
Both Team Columbia and Team Garmin have performed well this season. Team Garmin won the overall team title at the Amgen Tour of California in February, with Tour de France veterans David Millar and Christian Vande Velde finishing second and third, respectively. The team also won time trials at the Tour de Georgia in April and the Giro d’Italia in May.
Team Columbia’s Kanstantin Sivtsov won the Tour de Georgia, with teammate Greg Henderson capturing the final stage. George Hincapie, the team captain, won a stage of the Tour of California.
“It’s going to help the sport having two teams for Americans to pull for,” said Chris Aronhalt, managing partner of Medalist Sports, which manages the Tour de Georgia and assists with the Tour of California. “There’s a lot of great young talent coming through the ranks.”
Pete Williams is a writer in Florida.
Eight months after ESPN Radio started streaming its five owned-and-operated sports talk stations from a single Web site, ESPNRadio.com, the company is now starting to stream affiliated local sports talk stations that it neither owns nor operates.
So far, stations in five markets have agreed to become part of ESPN Radio’s online affiliate network, including Washington’s WXTR-AM, WWXT-FM and WWXX-FM (all owned by Red Zebra Broadcasting), Denver’s KEPN-AM (Lincoln Financial Group), Cleveland’s WKNR-AM, Milwaukee’s WAUK-AM and West Palm Beach’s WEFL-AM (all owned by Good Karma Broadcasting).
“Our goal is to get the top 50 markets signed up by this time next year,” said Marc Horine, ESPN Digital Media’s vice president of digital partnerships and radio. “Ultimately, we want to get all 350 of our affiliates on board.”
Affiliates that agree to the deal will have their station streamed to ESPNRadio.com. Users can listen to the stations for free.
Plus, the stations can use ESPN Radio’s online template for their own local Web sites, complete with ESPN.com news feeds, audio, podcasts, video, scoreboards and polls. The local stations will be able to control that content.
So far, ESPN has not had much trouble talking affiliates into becoming part of the online network, even if it means occasionally losing some traffic from the station’s Web site to the broader ESPNRadio.com.
“We have great local content,” said Craig Karmazin, who runs Good Karma Broadcasting. “They have great technical and distribution across the dot-com network. As things get more sophisticated, we want to focus more on growing ad sales and leave the technical matters to someone like ESPN.”
The affiliate stations also will get built-in online advertising spots via templates that should help increase the stations’ advertising sales, Horine said.
The two sides still haven’t figured out how to split online ad sales, which account for less than 5 percent of a typical sports talk station’s ad revenue, Karmazin said. ESPN and the local stations will all wind up with a certain amount of inventory to sell.
“As the sophistication level of media buyers gets better, we want to stay a step ahead,” Karmazin said.
ESPNRadio.com’s monthly online audience includes nearly 2 million unique users and 275,000 live online listeners.
Wachovia deemed its consumer promotion around the PGA Tour stop that it title sponsors in Charlotte a success, based on the number of new account signups in the weeks after the tournament.
The Charlotte-based financial institution awarded a special 16 percent interest rate from June through August based on the final score. First-time winner Anthony Kim won the event at 16-under par, a record score for a tournament that produced winning scores of 10 to 13 under par in its first five years.
In the four weeks following the conclusion of the tournament on May 4, Wachovia said new account openings for its Way2Save savings program were up 43 percent compared with the seven weeks prior.
The Way2Save program was launched in January and automatically transfers $1 from checking to a savings account for each check card purchase, bill paid online or automatic debit.
The 16 percent rate results in a 7.98 percent annual yield for customers who signed up before eligibility closed at the end of May. Account holders typically receive a 5 percent annual yield and a 5 percent annual bonus in the first year, which drops to a 2 percent annual yield and a 2 percent bonus in the second and third years.
Wachovia touted the promotion using the television and print inventory provided by its sponsorship, and also made separate buys in USA Today.
Francie Gottsegen, vice president and director of sponsorships and alliances for Wachovia, would not speculate whether the bank would re-institute the promotion next year.
“We can leverage the tournament to target so many different audiences from a promotional standpoint,” she said. “We thought this was innovative and very unique, and after it’s done it becomes less so, but that’s not to say we wouldn’t consider doing it next year.”
Wachovia is thought to be the first PGA Tour tournament sponsor to tie a promotion to the final score of its event. The PGA Tour said no other title sponsors are planning scoring promotions in 2008.
When Chuck Wielgus sat down to write a staff memo in early January 2007, he felt uncomfortable about what he had to disclose. The executive director of USA Swimming had spent most of his career separating his personal and professional lives. Now he had to tell his entire staff that he had been diagnosed with colon cancer.
While sobering, he wrote, the prognosis was good. He closed the memo with the simple words: “I trust we can keep things running smoothly and as normal as possible. Thanks! Now, back to work.”
In the 18 months that have followed that memo, Wielgus simultaneously tackled his personal health issues and the professional challenges of preparing USA Swimming for the 2008 Beijing Olympics, setting its digital strategy and expanding its TV presence. He confronted everything with the patient, calculating resolve that has earned him a reputation as “the fixer,” a skilled problem solver who is adept at anticipating the future.
Since joining USA Swimming as executive director in 1997, Wielgus (pronounced “well gus”) has built what many consider to be one of the pre-eminent national governing bodies. He has expanded the organization’s annual revenue from $12 million to $22 million; established its first nonprofit arm, the USA Swimming Foundation; and created the Mutual of Omaha Duel in the Pool, a competition between top American and Australian swimmers. For all of that, perhaps his greatest achievement is turning the U.S. Olympic trials into a festival-like event similar to the NCAA Final Four or NBA All-Star Jam.
This week’s Olympic trials in Omaha, Neb., which begin Sunday, will attract more than 120,000 people over eight days — four times the attendance for the 2000 event at the Indianapolis Natatorium. As a result, USA Swimming will add a $3.5 million profit to its coffers, up from just $100,000 in 2000.
“He clearly is the most outstanding practitioner of the CEO role of an NGB,” said Craig Masback, a Nike executive and the former CEO of USA Track & Field. “He’s a great business person and strategic thinker and excellent politician.”
The view within the sport of swimming is similar. John Leonard, executive director of the American Swim Coaches Association, said, “Chuck right now is the most important man in American swimming. He’s earned a lot of confidence and a lot of rope to go a long way because he’s proven himself time and time again.”
Even before entering the Olympic world, Wielgus exhibited a love for sports and the business behind it. He spent his early career running a recreation center in Vermont. At the time, he loved basketball so much that he and then-teammate Alexander Wolff collaborated to write “The In-Your-Face Basketball Book,” which explored the culture of pick-up basketball.
But while Wolff, a Princeton student, used the book as a launching point for a job at Sports Illustrated, Wielgus opted to stay in sports business. He eventually took a job as director of USA Canoe & Kayak, where he developed a passion for the Olympics.
Still, it wasn’t until he reached USA Swimming in 1997 that his reputation as a fixer began to emerge. He started by solving small problems first. The organization at that time went by the name U.S. Swimming, but its logo featured USA Swimming. He immediately changed the organization’s name to match its logo.
Wielgus also established the organization’s first club development division. It features 19 employees who support 2,800 member swim clubs around the country by sharing best practices and data on business performance.
“It’s not a big, splashy deal,” Leonard said, “but club organizations and club associations are more effective now than at any time in the organization’s history because of that division.”
Such efforts earned Wielgus the trust of the board and the swimming community. Those groups rallied around him in 2007 when they learned that he had cancer.
Wielgus approached the disease the same way he approached problems at USA Swimming. Immediately after his diagnosis, he asked: What do we have to do to fix this? Over the next few weeks, he called a series of doctors and quickly found an oncologist. Because of the early stage of the tumor, he learned it was possible that he would make a full recovery.
Wielgus told his staff about the prognosis in the memo he sent out in January 2007. He also tapped then-Chief Operating Officer Mike Unger to lead the organization in his absence. But he continued working even as he began chemotherapy treatment.
That January, while undergoing chemo, he attended a USA Swimming board meeting where he updated the organization’s directors on the new media strategy he’d been pushing. He proposed a partnership with Wasserman Media Group that would see USA Swimming license out its media, event and marketing rights to WMG in exchange for Web support. The board approved the proposal in March with a 23-1 vote.
Wielgus underwent surgery a month later to have the tumor removed. He spent the next six weeks at home, getting regular visits and updates from Unger, President Jim Wood and USA Swimming’s head coach, Mark Schubert. Things appeared to be going so well in his absence, he said, “I started getting nervous that I may not be needed. That was when I got motivated to get back.”
He returned to work in a limited capacity in late May and made his first business trip a month later, flying to New York in June to meet with Dick Ebersol at NBC. Wielgus proposed that NBC and USA Swimming create a joint venture from 2008 to 2012 around annual broadcasts of the FINA World Championships and the national championships. Ebersol agreed to the concept, ensuring that two of swimming’s marquee events might appear on TV in the future.
NBC and USA Swimming remain in negotiations.
Wielgus admits that the trip to New York took a lot out of him, considering he was on chemo at the time. Fatigue continued to limit the time he worked, and it wasn’t until early this year that he felt 95 percent back to normal.
In his absence, the WMG deal had slowed to a crawl. The two partners shared a letter of intent but hadn’t agreed to final terms. Wielgus called WMG Chief Operating Officer Josh Swartz in early January and said, “I want to get this done as soon as possible.”
Three days later, Wielgus, Davis and Unger flew to Los Angeles and met with WMG. In one day they tackled everything from which events to webcast and how to present them, to when to launch the site and how to staff it.
The meeting was the catalyst for closing the deal last week, and ensured that WMG will roll out a new Web site, swimnetwork.com, in time to benefit from the exposure surrounding Beijing.
“The fact that we’re going to have the swimming deal inked first is a testament to his desire and ability to tackle tough issues,” Swartz said.
Wielgus tackled other issues as well. While reviewing the schedule of events in Omaha with Matt Farrell, USA Swimming’s managing director of business development, Wielgus felt plans for July 4 weren’t strong enough. He recommended giving attendees red, white and blue T-shirts in an effort to paint the stands the way the New Orleans Hornets did with white T-shirts during the NBA playoffs.
Still, senior staff and board members didn’t feel like Wielgus was fully back until April. The night before the FINA Short Course World Swimming Championships in Manchester, England, a group of 10 senior staffers and board members watched as Wielgus downed two plates of hot dogs at a local restaurant.
“Wow,” said Dale Neuburger, a board member. “It’s nice to see your appetite’s back.”
And it couldn’t have returned at a better time. USA Swimming has lofty expectations for both Omaha and Beijing, where it has the potential to be the largest contributor to the U.S. medal count. It will do it with a new Web site, an emboldened staff and a healthy executive ready to tackle the next problem in its future.
“He inherited an excellent organization and took it to a whole new level,” said Jim Fox, U.S. Figure Skating’s associate executive director. “He’ll do everything he can to take it to the next.”
As Tim Donahue walked through the midway at Daytona International Speedway in July 2003, he marveled at the U.S. Army’s massive 10,000-square-foot display.
Donahue, then the CEO at Nextel, only weeks before had signed off on the largest sports sponsorship in U.S. history, putting his company’s name on the title of NASCAR’s top racing series for $750 million over 10 years.
Nextel roared into the sport with all of the subtlety of a monster truck, and Donahue was touring Daytona in search of ways he could make an even greater statement.
“That thing,” Donahue said as he looked at the giant Army display, “times two!”
Donahue’s “Go big or go home” approach reflected Nextel’s business persona at the time. As the No. 5 wireless carrier in the category, it wanted to look bigger than it was, and in NASCAR it found the platform to do just that.
“The amazing thing was how decisive they were,” said George Pyne, NASCAR’s COO at the time and now CEO of IMG Sports and Entertainment. “They knew what they wanted and why they wanted it.”
When NASCAR and Nextel joined hands to announce the deal five years ago, on June 19, 2003, Donahue said he hoped the partnership would turn into “a lifetime arrangement.”
That’s how it felt at the time.
But with a technology partner came the volatility of its category, and the name Nextel didn’t even make it past the fourth season of a 10-year deal. Now that the company has merged with Sprint and taken its name, it’s on an almost weekly takeover watch as its stock price has plummeted and customers have slipped away to competitors.
Change has not been limited to the series name, either.
The press conference to announce the deal in the Nasdaq Building included NASCAR CEO Brian France and Pyne, as well as drivers Jeff Gordon and Dale Earnhardt Jr. Nextel was represented by Donahue, COO Tom Kelly and senior vice president of marketing Mark Schweitzer.
France is the lone executive whose position has not turned over. In the five years since, Pyne departed for IMG; Brett Yormark, NASCAR’s former vice president of corporate marketing and a primary architect of the Nextel agreement, left to become president and CEO of the New Jersey Nets; and each of the Nextel executives were wedged out during the painful merger with Sprint.
Michael Robichaud, who was Nextel’s senior director of sports and entertainment marketing and a key figure in the negotiations, took a buyout after the merger and wound up at MasterCard.
Dean Kessel, who joined Sprint after the merger as director of NASCAR marketing, spent two years as the face of the sponsorship before he left earlier this year to become president of Victory Junction Gang Camp. Now Steve Gaffney, Sprint’s director of sports marketing, oversees the sponsorship while the company looks for Kessel’s replacement.
Gaffney’s day-to-day contacts are NASCAR CMO Steve Phelps, Jim Obermeyer, managing director of brand and consumer marketing, and Chad Roney, director of series marketing.
Change, it seems, has been the only constant, yet Sprint maintains that the sponsorship delivers sparkling results for the $100 million or so it spends annually in sponsorship fees and activation. When Sprint’s new CEO, Dan Hesse, was hired, he met with some of his sponsorship chiefs earlier this year at the Super Bowl. After Kessel, still in his role at the time, spent an hour presenting sponsorship details and ROI, he said Hesse’s response was, “OK, I get this.”
“This sponsorship is not something that’s debated within the company,” Kessel said. “It doesn’t get touched.”
In a way, the partnership with a technology company also helped validate NASCAR by replacing 32-year sponsor Winston. That a technology-based company would make that kind of commitment to NASCAR indicated that perhaps NASCAR’s demographics were broadening and that this wasn’t the same old regional sport that generated so many negative stereotypes about its fan base.
Yormark called it “a game-changing deal. When you look at all of the things we were trying to accomplish, to contemporize the sport, that was accomplished.”
“I think it was an eye-opening deal,” Obermeyer said. “Having them jump in got a lot of people thinking about what the sport is across the U.S. and across a variety of demographics. It helped take down some of the stereotypes the sport tends to be faced with. It took us out of that stereotype that it’s just a Southeastern sport.”
Obermeyer and others said the Nextel deal also helped open doors for subsequent sponsorship agreements with Bank of America, Tylenol, Nationwide, Aflac and other businesses that have a national footprint.
“Nextel really was an enabler,” Yormark said. “It helped NASCAR broaden its base of sponsors and maybe break away from some traditional partners to go after more major businesses, companies that didn’t previously have a connection to motorsports.”
The growth of the LPGA as an international sports property and a new agreement with its tournament association led to a record distribution of television revenue for the 2007 season.
Neither LPGA nor LPGA Tournament Owners Association executives would disclose the total disbursement, but three tournament sources said their take was about $50,000 each, roughly double the year before.
The TOA doles out equal payments to its member tournaments and keeps a portion to help fund operations, according to its tax documents. The association represents the interests of nearly all of the 33 official money events on the LPGA schedule.
The LPGA typically completes its payment to the TOA during the first half of the following year, which is why 2007 data is available now.
The payment comes from rights fees generated by international and domestic television deals, but LPGA Deputy Commissioner Libba Galloway said much of the 2007 bump was tied to increases in international rights.
“It speaks volumes for the appeal of the LPGA, primarily internationally, which is where we get most of our rights fees from,” Galloway said. “A very small portion of the increase came from the United States.”
More than half of the international money annually comes from Asia. A large portion of the 2007 increase was due to a new agreement in Japan that runs through 2009.
One smaller contributing factor was a new five-year revenue-sharing agreement between the TOA and the LPGA that started in 2007. Under the previous deal, the LPGA kept all revenue up to a certain threshold before a payment was made to the TOA. The new deal eliminates that threshold, resulting in an incremental increase for the TOA and its tournaments.
The LPGA has averaged about 10 percent year-over-year growth in international television revenue since it started selling the rights in 1996. IMG markets the rights internationally.
The tour projected that this year’s TV disbursement will be about the same as 2007, one tournament director said. The LPGA said it expects any growth to come primarily from European and Latin American markets.
The total disbursement has grown substantially from a few thousand dollars a decade ago but still doesn’t cover television costs. Most tournaments pay about $250,000 to appear on Golf Channel or ESPN, while some pay upward of $1.5 million for time and production on network TV.
The LPGA is trying to negotiate a new series of network and cable deals beginning in 2010 that will create a more consistent schedule and reduce costs to tournaments.
With the NBA’s final box score of the 2007-08 season tallied, league sponsors are turning their focus to the NBA draft, scheduled for Thursday at New York’s Madison Square Garden.
For the third consecutive year, Coke’s Sprite brand has presenting sponsorship, both on site and on the five-hour ESPN draft telecast. NBA corporate partners running ads during the draft show are Sprite, T-Mobile, Kia, Wrigley, Nike, EA and Southwest Airlines.
Since the draft normally produces one of the most heavily trafficked days on NBA.com, there is plenty of online marketing activation.
Sprite has a “Pick ’em” game offering a trip to the 2009 NBA All-Star Game in Phoenix for the person who most accurately predicts the top 14 selections. Sprite also underwrites a “virtual green room” on draft day, with behind-the-scene access and video blogging from the event. Within the draft section on NBA.com, T-Mobile sponsors the prospect search, while fellow league sponsor Kia has the team overviews.
EA Sports sponsors the draft board itself, and is expected to announce its cover athlete for its “NBA Live 09” game during draft week.
Around New York City, where MLB already has All-Star Game banners with sponsor identification on streets, the NBA will be hanging its own banners with sponsor names and logos. Mobile marketing will also be used: The Wrigley-sponsored NBA Jam Van will be parked outside MSG, while the NBA Nation mobile basketball marketing playground, sponsored by Kia and T-Mobile, will be at South Street Seaport over the weekend in an attempt to extend the draft beyond a one-day event.
On site, a Spite-sponsored green-screen technology will allow fans to place themselves in a picture with NBA Commissioner David Stern. T-Mobile will give out premiums via a prize wheel, while Kia will display four of its Borrego midsize SUVs just outside MSG entrances. The carmaker has already been running an NBA draft sweepstakes.
At retail, lead NBA apparel licensee Adidas will push its NBA draft caps with window displays at the NBA Store on Fifth Avenue and Champs in Times Square.
Coming off a heady season in terms of playoff ratings and attendance, the league will be looking for new deals in the credit card, banking and insurance categories, said Mark Tatum, NBA senior vice president of marketing partnership
The NBA Finals delivered the highest television ratings since 2004, capping one of the strongest NBA seasons in recent history while leaving David Stern & Co. to bank on the momentum to drive offseason sales.
The six-game Finals between the Boston Celtics and the Los Angeles Lakers generated a 9.3 average rating on ABC, up 50 percent from the 6.2 average generated last year by the San Antonio Spurs’ four-game sweep of the Cleveland Cavaliers. Total viewership during this year’s Finals averaged 14.9 million households (see chart), the highest since the 2004 Finals, and the average rating satisfied ESPN/ABC’s guarantee to advertisers of a 9.5 Finals rating.
“We basically delivered and so we did not have make-good liability as an issue,” said Ed Erhardt, president of sales for ESPN/ABC Sports. “The Finals reaffirms the strength in the property and it is clear that advertisers are recognizing it, because we are seeing increased up-front sales in the NBA.”
Erhardt would not disclose specific new ad buys for next season, but expects to see some new advertisers.
“You sell off last year and the networks will be aggressive, but the reality is that once you catch lightning in a bottle, you can’t assume replication of it for next season,” said Larry Novenstern, executive vice president and director of electronic media for Optimedia. “[The networks] will push it as much as they can.”
Meanwhile, the league’s 28 other teams were looking to capitalize on the increase in postseason interest during their season-ticket renewal period.
To date, sales of NBA season tickets — a key measure of the league’s overall health — are running even with last year, which brought an 85 percent renewal rate. But continuing the sales pace given the struggling economy stands as a major challenge for the league.
“The game has been strong and ratings are up and that puts us in a position of strength, which is good timing for us,” said Scott O’Neil, senior vice president of team marketing and business operations for the NBA. “From the NBA perspective, there hasn’t been any dramatic changes given the economic environment.”
On the sponsorship side, the vibrant NBA regular season and strong postseason interest so far has helped insulate the league from the economic downturn — and from the former referee Tim Donaghy gambling scandal that troubled the NBA this season.
“There is some concern about the economy, but we have not really seen any negative impact,” said Mark Tatum, senior vice president of marketing partnerships. “We have not seen any decline in sales and as a matter-of-fact, we added Kia, Right Guard and Cisco this year.”
The strength of this year’s Finals also added to the league’s strong seasonlong merchandise sales. Officials at Boston’s TD Banknorth Garden said per cap record sales were just over $13 during the Finals.
“Sales at the NBA Store will be up 15 percent from last season and sales from our online store will be up more than 30 percent when it’s all over,” said Sal LaRocca, executive vice president of global merchandising for the NBA.
“It’s too early to say for sure, but early on, [this year’s Finals] has a lot of the size of the Chicago Bulls’ first ‘three-peat,’ which was our largest ever. The market is well beyond just Boston. I think this championship will be up there with our all-time best for licensed sales.”
NBC Sports has developed aggressive restrictions for outside media seeking to distribute online audio and video collected at U.S. Olympic trials events, furthering an industrywide battle over content rights in digital media and possibly forecasting further tension during the Beijing Olympics in August.
Credentialing rules issued through several national governing bodies for upcoming Olympic trials require that all audio and video files contain a link back to nbcolympics.com. The rules also heavily restrict all forms of multimedia in and around the fields of play, including athlete interviews, and require that all audio and video be removed from media sites by Aug. 7, the day before the start of the Beijing Olympics. Text-based blogging is permitted under the new provisions.
The rules will affect news coverage at three of the summer’s biggest trials: swimming, gymnastics, and track and field.
“This is the first Olympic trials where new media has been relevant,” said Jill Geer, USA Track & Field’s director of communications. “Everybody’s trying to figure it out.”
NBC executives declined to comment, saying only that a different set of regulations will be issued in early July governing the use of online audio and video during the Summer Games by those who are not rights holders. Unconfirmed industry chatter among media outlets is that NBC will seek heavy embargoes on content emanating from Bejiing through other outlets.
The rules for the trials clearly signal the lengths to which NBC appears willing to go to protect its investment in the 2008 Olympics, which cost more than $800 million in rights fees, and drive traffic to nbcolympics.com.
Other media outlets, however, see the move as an unnecessary trampling on editorial material that often is designed for far more dedicated fan followings than NBC’s more mainstream audience.
“This could completely change our approach to covering this event,” said Brent Rutemiller, publisher of Swimming World magazine, of the coming USA Swimming trials, set for June 29-July 6 in Omaha, Neb. The 48-year-old print title in recent years has morphed into a multimedia offering that includes a daily video show online.
“We have this long history, a lot of deep relationships with the individual swimmers and coaches,” Rutemiller said, “and now I have serious questions about whether it’s even worth it to spend the kind of money, time and effort we were going to spend to create content with such a short shelf life.”
The Olympic debate follows similar episodes in the last year in both football and baseball. The NFL limits outlets that are not rights holders to 45 seconds per day of online multimedia content involving team personnel at team facilities. MLB earlier this year amended its credentialing guidelines to include delineated limits on video, audio and photo galleries posted online. The limits were later relaxed considerably.
While NBC Sports has pursued some online ventures during the last few Olympics, the Beijing Games mark its first truly substantial push into online video coverage of the Olympics. The network plans to stream 3,000 hours of live video online from Beijing, with the broadband reach through nbcolympics.com expanded through mobile platforms and a content syndication deal with MSN.com. Much of the content will be live game action that never before has been distributed online.
In Athens four years ago and Turin two years ago, streaming Olympic content consisted mainly of limited amounts of off-field features and interviews. Since then, broadband Internet has become far more ubiquitous and streaming video technologies have improved greatly.
Paul Ziert, publisher of International Gymnast, said his organization didn’t plan to post any audio or video from last weekend’s gymnastics trials but that the restrictions still concern him.
“If you’re doing a personal interview, you should be able to use that wherever and whenever you want to,” Ziert said. “It does seem strange that they have to pull the strings that tight.”
The Green Bay Packers’ operating profit declined 37 percent to $21.4 million in the most recent season because of rising player costs, the team said, but investments boosted net income.
The mixed picture emerges as the NFL and the players union appear headed for labor battle, with owners claming the current labor pact has compressed profit margins to a point where the deal is no longer working economically. Because Green Bay is the only NFL team to publicly report its financials, the union has raised the club’s healthy results in the past as a defense of the current deal.
And the numbers that the team will mail out to its shareholders this week certainly have not changed the labor group’s mind.
“Net income went to $23 million, poor little Green Bay,” said Gene Upshaw, executive director of the NFL Players Association. “This is why they [the NFL] don’t want public disclosure of their numbers. If this is the middle, based on the size of the Green Bay market, what is the top?”
Nonetheless, Green Bay described the decline in operating profit from $34 million to $21.4 million as troubling, even though revenue jumped 11 percent to $241 million.
“Traditionally the national revenues have covered player costs,” said Mark Murphy, the team president. “And the trend is at this point it (revenue) is not keeping up. That is the crux of the issue we have with the players union.”
Team operating expenses rose nearly 20 percent to $219.9 million, which the team blamed on player costs. But the union pointed out that the team let several front office executives go, and severance payments could have contributed to the rise. The team’s cash spent on players actually decreased by about $1 million in 2007 to $101.5 million, the NFLPA said.
Murphy attributed that to timing of payments. Vicki Vannieuwenhoven, the Packers’ vice president of finance, said by the team’s calculations, player costs rose 7 percent in 2006, and 13 percent in 2007.
The league has told the union that profit margins are slipping into low to mid-single digits, so Green Bay would still appear to be an outlier in this regard with an operating profit margin now at 9 percent. Green Bay is aided by being one of the few NFL teams with little debt, as the city and state paid almost entirely for the renovated Lambeau Field.
Upshaw pointed out that borrowing is a voluntary decision of clubs, and that the teams, not the players, own the underlying asset carrying the debt, so it’s unfair to ask the union to share in that risk.
Green Bay’s results were helped again by a rise in leaguewide NFL money from sponsorships, licensing, and satellite TV and radio. The figure, categorized as other national revenue, after rising 74 percent in 2006, rose another 26 percent in the year ended March 31, 2008, to nearly $33 million. Extrapolated over 32 teams, that means the NFL distributed $1.05 billion from these sources, compared with $480 million just two years ago.
The NFL last month opted out of the current collective-bargaining agreement. This coming season and the following are left intact, and 2010 would become the third and final campaign, though there would be no salary cap that year.
The Packers have been building a fund in part to cover expenses in the event of a labor disturbance. Dubbed the Packers Preservation Fund, the pool was at $127.5 million as of March 31.
Premier Partnerships has been chosen to sell sponsorships and other commercial inventory in and around the 20,000-seat stadium built for the new Philadelphia MLS franchise that will be an anchor of a $500 million, 100-acre mixed-use development in Chester, Pa.
Premier will sell commercial inventory throughout the site. CEO and President Randy Bernstein estimated that the development would yield $50 million or more in contractual sponsorship revenue. While the yet-unnamed MLS team won’t begin play until 2010, Premier will attempt to jump-start sales by selling “Philadelphia 2010 Under Construction” sponsorships to 12 to 18 partners, including one $250,000 presenting partnership. Those packages include a number of events, grassroots opportunities and right of first refusal on later deals.
Premier also will be selling naming rights and is initially looking for a 20-year deal at $2 million to $3 million a year.
“The intriguing thing with naming rights is that we control the whole 100-acre facility, so for the right deal, we could name the whole complex,” said Nick Sakiewicz, CEO and operating partner of team owner Keystone Sports and Entertainment and a former colleague of Bernstein during MLS’s formative years.
Bernstein said eight to 10 founding partnerships will be targeted with about 40 total commercial affiliates are being sought. He said the company won’t go to market until next month.
Premier, which represented Herbalife in its Los Angeles Galaxy shirt deal, will also sell the new team’s jersey sponsorship.
Allison Howard, senior director of corporate partnerships, is heading sales on the project for Premier, which also sold most of the commercial inventory at MLS venues Pizza Hut Park in Frisco, Texas, and Dick’s Sporting Goods Park in Commerce City, Colo. However, unlike those two facilities, the Chester development will not include a complex of youth soccer fields. Sakiewicz said the team is developing a separate practice facility.
He added that the team name is expected to be announced in November or December, with colors, a logo and jersey being developed by an internal team, league master licensee Adidas and MLS to be rolled out next spring.
AAA is sponsoring a “Races and Bases” sweepstakes that will award a fan and a guest with tickets to a Boston Red Sox game and a NASCAR Sprint Cup race at New Hampshire Motor Speedway on the same September weekend.
Races and Bases is the latest example of Roush Fenway Racing using its NASCAR and baseball assets to drive opportunities for its sponsors, said Mike Dee, the Red Sox’s COO and president of Fenway Sports Group.
“This is right out of the textbook for what we had hoped for when we acquired 50 percent of Roush Racing,” Dee said. “It opens new doors for our partners and provides them with a broader platform than they would have had individually. This is an example of the kind of program we’re touting.”
AAA is the primary sponsor of Roush Fenway’s No. 6 Ford, driven by David Ragan, while its Southern New England AAA affiliate is in its first year as a Red Sox sponsor.
The automobile club and insurance company is using the promotion to generate exposure for its new AAA Mobile program, a navigational application that AAA delivers straight to a wireless phone. Consumers will register for the sweepstakes by going to AAA.com/AAAmobile.
The ticket giveaway will be for the Red Sox game Sept. 13 against Toronto and the Sprint Cup Sylvania 300 on Sept. 14. AAA’s marketing agency, GMR, is assisting with the sweepstakes, which will launch this week. Advertising will hit NASCAR.com and MLB.com, as well as RacingOne.com and MRN Radio.
In addition to its sponsorships, AAA also has a promotional relationship with MLB Properties, and affiliates, AAA Northern New England has a sponsorship with the speedway.
The Starter brand is close to completing a five-year deal with Dallas Cowboys quarterback Tony Romo that could pay him as much as $10 million, which would make him the highest-paid athletic footwear and apparel endorser in the NFL.
The news of the Romo negotiations rippled through the sports industry last week, drawing attention both for the size of the deal and the re-emergence of a buyer in a down endorsement market for athletes. Iconix Brand Group, which bought Starter from Nike last year, has publicly stated a strategy to reinvigorate the brand by signing major sports stars to endorsement deals and building its league and team sponsorship and licensing business.
“Right now we have no comment on that,” said Tara Levy, public relations manager for Iconix.
Neal Seideman, who left his job at IMG as senior vice president of licensing late last year to become Iconix vice president of business development, said there was no deal completed between the company and Romo. He would not comment further.
R.J. Gonser, a marketing agent in CAA Sports’ football division who sources said is negotiating the deal for Romo, did not return phone calls to his office in St. Louis.
But sources said Reebok, which previously had an apparel and footwear contract with Romo, had passed on its right to match the Iconix deal.
“We had the right to match,” confirmed Tom Shine, senior vice president of global sports marketing for Reebok. “I think [Romo] is a very nice young man, and I wish him the best.”
“It is an exorbitant contract,” Shine added of the Starter deal. He declined to comment further.
The record for an NFL apparel and shoe deal is believed to be the reported five-year, $5 million Adidas deal with New Orleans Saints running back Reggie Bush. NBA players have the highest shoe and apparel deals in team sports, with LeBron James’ reported seven-year, $90 million deal being the highest.
Industry sources said Starter was interested in signing Romo as an endorser because he is the quarterback of the high-profile Cowboys, who like Starter have a blue-and-white star as their symbol, and because of his romantic link to celebrity Jessica Simpson.
Starter does not have a license with the NFL that would allow Romo or any other NFL player to wear Starter on the field, and the company has not held any talks with the league about acquiring such a license, NFL spokesman Brian McCarthy said. The lack of a relationship with the NFL also means that Starter could not use images of Romo in an NFL uniform in advertising.
Neil Cole, CEO of Iconix, has indicated the company may be seeking licenses with sports teams or leagues. In November 2007, when Iconix announced it had agreed to buy Starter from Nike in a $60 million cash deal, Cole said, “We are working on a multifaceted strategy, including signing some major professional sports figures and growing our team sports business, which is Starter’s heritage.”
Starter, which was founded in 1971, has had several different owners, declared and emerged from Chapter 11 bankruptcy, has had licenses in the past with the NBA, NHL and NFL. Starter had an NFL license in the 1990s through the 1998 NFL season. Starter has been licensed to several manufacturer/wholesalers selling primarily to Wal-Mart.
Last month, on a conference call with Wall Street analysts, Cole said, “We are working to convert our Starter brand into a direct to retail license with Wal-Mart and we have several exciting growth strategies in the works including major athletic endorsements and license(d) team sports product.”
Levy would not answer questions about Cole’s comments or whether Iconix planned a relaunch of the Starter brand. Starter’s Web site, starter.com, displays the company’s logo, the words “The Season Begins Soon,” and a link to buy Starter clothing through a Wal-Mart Web site.
Stu Crystal, vice president of marketing and consumer products at MLS, who worked at Starter for eight years in the ’90s, said there is still equity in the brand. “They’ve kept up a presence in sports,” he said. “They have kept up a presence with advertising at stadiums and places like Sports Illustrated, so to a consumer, they still are a viable sportswear brand.”
Staff writer Terry Lefton contributed to this report.
Companies that are aligned with Tiger Woods are already being affected by the announcement that he will be out for at least the remainder of 2008 to recover from knee surgery.
Buick took the fastest hit of all of Woods’ sponsors. The company hosts this week’s PGA Tour stop in Detroit and had to cancel its Tiger Woods-hosted clinic at Comerica Park. He will not take part in the tournament’s 50th anniversary activities as expected.
In addition, Buick shelved a contest that awarded Woods’ courtesy cars and the chance to have him serve as the winner’s caddie. The GM brand has Woods signed through 2009.
The future of consumer promotions with Nike, Gillette and Gatorade were not decided as of late last week.
Despite the necessary moves, Woods’ agent does not expect the injury to further affect his corporate commitments.
“Much of his sponsor fulfillment is not centered around golf,” said IMG’s Mark Steinberg. “It’s around entertainment, hospitality and photo shoots. Once he gets through the actual surgery I’m hopeful that he’ll be able to fulfill those obligations. … As long as it doesn’t require playing golf or physical activity I think it’s going to be business as usual.”
Despite the canceled plans and refocused efforts, one agency marketer suggested that Woods’ absence from competition could create more opportunities for brands to leverage the relationship.
“If one of my clients worked with him I would be huddling with my team and IMG to find out how we can utilize him now that his schedule is opened up a little,” said Scott Seymour, senior vice president of golf for Octagon.
Both Nike and Accenture squeezed in pre-planned advertising shoots with Woods last week. Gary Beckner, director of global events at Accenture, said his company’s campaign should break this fall even without Woods playing.
The injury and Woods’ limited annual schedule also might play a part in the PGA Tour’s attempts to extend a crop of title sponsorships. Earlier this year, the tour began working to extend all tournaments expiring in 2010, and almost half of the events in which he regularly plays are part of that group, including all three World Golf Championships, two Buick tournaments and two FedEx Cup playoff events.
Greg Luckman, president of the North American arm of GroupM ESP, said companies looking to renew their deals might push back talks into the first quarter to gauge the likelihood of Woods’ recovery.
“I think it’ll be a little bit of a leveraging point in negotiations,” he said. “If we were in the middle of a negotiation [for an event Woods plays] right now we would definitely be putting in clauses about protections against drops in ratings and attendance.”
Jon Podany, who leads sales efforts on behalf of the PGA Tour, believes Woods’ absence in 2008 will not have much bearing on decisions.
“Are they not going to renew because Tiger Woods is not playing the second half of 2008?” he asked. “I don’t think that’s the way they’re going to think about it. If it’s a year later and he still hasn’t come back, or he came back and it’s clear that this could affect the rest of his career, then I would be more worried.”
The YES Network has struck an online content syndication deal with The New York Times, extending a run of digital media deals for the New York regional sports network.
Under the terms of the pact, the newspaper’s nytimes.com will use segments from YES’s original, wholly owned video content within its own coverage of the New York Yankees, including interview segments from YES’s pregame and postgame shows; its long-form interview program, “CenterStage”; and the weekly “Joe Girardi Show.”
The most common application, at least at the outset of the deal, will be the use of player interviews taken from postgame coverage to complement game stories and Yankees columns on nytimes.com. The video content will mirror what already appears on YESNetwork.com, but with what is typically the largest online audience for any American newspaper, often measuring around 18 million to 20 million unique users per month, nytimes.com offers YES significant additional reach. Traffic for nytimes.com in particular has surged since it switched last fall from a gated, pay model to a free, ad-supported offering.
Specific financial terms were not disclosed, but the agreement is a revenue-sharing pact built around ad revenue related to the online content. The newspaper is handling sales for the venture.
“We’re looking at anything we can do to enhance our coverage, new ways to help tell the story even more, and this was a situation where our brands and our audiences matched up very well,” said Tom Jolly, sports editor for The New York Times and nytimes.com. “There’s obviously great interest in the Yankees. They’re an international brand, and this is a boost for us and for YES.”
YES already has in place similar content syndication deals with the likes of Yahoo!, YouTube, Amazon and Joost. One of the Times’ local rivals, the New York Post, also receives some YES video content through a third-party deal with Kit Digital, parent of online video syndicate Rootv.com.
“This is very similar to those other deals,” said Michael Spirito, YES director of business development. “We’re trying to get as big an audience as possible, and the Times obviously offers us a real breadth of viewership.”