SBJ/20090907/This Week's News

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  • ACC granted live streaming rights

    Raycom Sports, which owns the live streaming video rights to ACC events, has loaned the rights for regular-season Olympic sports to the schools for the 2009-10 season.

    While the new arrangement significantly depletes the programming for ACC Select, the league’s live streaming feature, it will retain the rights to all ACC championship events.

    ACC schools previously had been without any live streaming options for their official Web sites because all of that content went to ACC Select. But now that they have ownership of those rights, there’s no guarantee the schools will immediately start streaming live video on their sites. In fact, most won’t because of the manpower and the expense to produce the content for live streaming.

    It was only in the last few weeks that ACC schools learned that they’d have this capability and most say they’re still evaluating whether to stream Olympic sports live and if so, how much.

    “We have a few options we’re looking at to see which avenue is the best way to distribute these events,” said Chris Alston, North Carolina State’s assistant athletic director for marketing, promotions and Web. The Wolfpack offer Pack Pass on their site, GoPack.com, which features video interviews, highlights and other programming, and will likely become the home for any live events.

    Virginia already has an in-house crew
    for lacrosse games.

    “It’s great because we certainly want to push as much video out there as possible,” Alston said. “It’s important to the fans to get that content out there. But all of this has happened so recently, we’re still evaluating if it should be a free model, a pay model, what the rate card should look like, all of that.”

    Raycom’s rights for ACC Select are part of the TV contract that extends through the 2010-11 season. The loan to the schools is good for one year and will be re-evaluated at some point next year, according to Ken Haines, president and CEO of Raycom Sports.

    “It is a way the schools may be able to generate some more revenue through their own sites,” Haines said in an e-mail. “It is for just this season to see how it works out for the schools. But ACC Select is still alive and is the home for all the conference championship events.”

    In the past, the schools received a stipend from Raycom, which paid for most or all of the production costs and included equipment so that schools could produce the events for ACC Select. Now that the events are back in the hands of the schools, the stipend has dried up and the schools must now figure out how to pay for the production if they want to stream the games live.

    Some schools, like Virginia, have an eight-person in-house production crew that already covers the games for video boards at football, basketball, baseball and soccer/lacrosse venues. Others, like N.C. State, have outsourced those duties in the past, using the stipend to pay for it.

    Like N.C. State, Virginia is evaluating its live stream options, according to Jim Daves, assistant athletic director for the school, but no decisions have been made.

    The school runs VirginiaSportsTV.com off of its main site, VirginiaSports.com, and offers exclusive, behind-the-scenes content. Daves said Virginia produced ACC Select content with its in-house crew, as well as some hired hands.

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  • Company equips golf bags with sponsor video

    A Phoenix-based company has introduced a golf bag with a video screen that shows rolling advertisements to spectators and television viewers. ProBagAds debuted the flat-panel LCD screen in August on the bag of 50-year-old PGA Tour player Michael Allen.

    The high-definition weatherproof monitor, 8 inches high by 10 inches wide, weighs about 5 pounds and rotates advertisements for up to nine hours. ProBagAds buys the monitors from New York-based General Digital and attaches them to the “belly” of the bag, the large panel opposite the shoulder strap.

    Depending on the quality of the image and the size of the font, the screen content is legible from up to 40 yards, or approximately half the width of an average golf hole roped off for tournament play.

    It costs $2,500 to $4,000 to install the screen, said ProBagAds owner Joe Kirkpatrick, a former pro golfer. Ads are now uploaded with a memory stick, but Kirkpatrick is working on a way to update them remotely.

    The company is still writing its business plan, but expects to sell local and national ads to companies each week for a couple hundred dollars or more, depending upon the stature of the tour and a player’s ranking. The screen also could incorporate national endorsements and charitable associations.

    Allen has used the bag in three events with ads from golf-related companies such as TaylorMade, The Golf Stik and Nineteenth Hole Wines, as well as various charities.

    ProBagAds is working directly with Allen, who does not have an agent, and has talked with golf representation agencies about making the technology available for their clients. ProBagAds would install and maintain the monitors in exchange for a flat fee or cut of sales from the agency.

    Kirkpatrick filed an application in May to patent the way the screen is attached to golf, tennis and nonsports bags, which should prevent agencies from developing their own version of the technology, he said.

    There is no rule in the PGA Tour player handbook specifically prohibiting digital ads on golf bags, and Kirkpatrick dismissed skepticism that the concept might not play well in a traditional sport like golf.

    “I’m a traditionalist and I don’t want to see some ‘Caddyshack’ bag,” he said, referencing Rodney Dangerfield’s bag in the movie that had a built-in car stereo. “But this is the way this kind of technology has hit every sport. Things progress.”

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  • DirecTV’s tough tack on Versus a strategy shift?

    Comcast executives were blindsided by DirecTV’s decision to take Comcast’s sports channel, Versus, dark last week. 

    But they weren’t alone. Across sports media boardrooms, executives were shocked that the video provider most closely associated with sports content would wind up dropping one of the country’s top sports channels.

    Many wondered whether the move, combined with former President and CEO Chase Carey’s exit to News Corp. over the summer, signaled a new and potentially significant philosophical shift at the satellite operator, which built its brand by closely aligning with powerful sports properties, like NFL Sunday Ticket.

    Executives from rival sports networks believe DirecTV’s move represents nothing more than one messy negotiation with one sports network. But the message from DirecTV seems clear: It will push back when it can to curb the cost of sports channels.

    That was hardly the message that was being heard last month, though. Up until last week, it seemed like business as usual during the carriage negotiations. Though DirecTV had threatened to drop the all-sports network, nobody at Comcast headquarters in Philadelphia really believed DirecTV would follow through on the threat.

    But it did, and the two sides remain far enough apart that a resolution does not appear to be close. For now, Versus finds itself in 14 million fewer homes, putting its household distribution at 62 million.

    Both sides seem content to wait until just before the start of the NHL season before re-engaging. Comcast believes its NHL programming, particularly around the playoffs, will be too powerful for DirecTV to ignore.

    DirecTV seems willing to take that bet.

    The stakes are high. If DirecTV bows to pressure on Versus, it will have a harder time negotiating deals with other sports networks, which are the highest priced networks on cable and satellite systems. ESPN, for example, costs more than $4 per subscriber per month. Most regional sports networks are above $2. And TNT is around $1.

    DirecTV had been paying Versus about 21 cents per subscriber per month.

    Up until Aug. 31, the day before DirecTV dropped Versus, negotiations seemed to be playing out exactly as it expected, with the pushes and pulls normally associated with these types of deals.

    With its contract expiring at the end of August, Comcast came out with an aggressive initial offer earlier in the summer — a 20 percent fee increase — while seeking full carriage on DirecTV’s biggest tier, which would have added about 4 million homes. DirecTV quickly rejected that offer.

    Comcast eventually came back with a lower offer, which DirecTV also rejected.

    DirecTV had gained the reputation as a bluffer over the years, and Comcast executives did not believe Versus would really go dark.

    Comcast representatives spoke to DirecTV early in the day on Aug. 31 and expected a long day of negotiations up to the midnight deadline.

    But nothing happened. There wasn’t the flurry of calls or frantic negotiations that typically define these battles.

    By late afternoon, it became obvious to Comcast executives that the channel was going to go dark. “It was like radio silence,” one Comcast executive remarked.

    The two sides have not spoken since.

    Sports media executives last week expressed surprise that DirecTV had taken the extraordinary step of kicking Versus off its service. Over the past year, as the economy went into a tailspin and DirecTV’s growth slowed, the satellite operator started looking for ways to keep its expenses in check. While Carey was still in charge, DirecTV executives developed a plan that would see the satellite operator take a stand with Versus.

    Versus’ renewal was up at the middle of its least-viewed month of the year. In August, for example, Versus averaged just 173,000 homes during prime time, putting it behind such channels as the TV Guide Network and Discovery Health, both of which cost less than a nickel per subscriber per month. Its sports programming during the month consisted of the poorly rated Indy Racing League and the IAAF World Championships.

    So not only were its ratings low, but now the channel was negotiating a renewal on its own — not bundled in with other Comcast channels, which would have likely helped.

    When Versus cut its original DirecTV deal, though, it figured it would be in a much stronger position. But many of its attempts to secure high-profile rights failed. It unsuccessfully tried to get an  NFL package and lost out on the U.S. Open Tennis Championships to ESPN and Tennis Channel despite bidding more for the package.

    Versus temporarily will add 4 million subscribers from EchoStar, which will try to take advantage of this spat. Several cable operators, including Time Warner Cable and Cablevision, also have expressed interest in temporarily moving Versus to better penetrated tiers while its fight with DirecTV continues, a source said.

    But DirecTV carriage is essential for any sports network that wants to be in the mix for future TV packages from the biggest professional sports leagues. The next few weeks should determine whether Versus or DirecTV has more leverage in this fight.

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  • ESPN alters college football ad platform

    With college football’s national championship being decided in the Rose Bowl on ABC this season, the network has developed a new advertising platform called “The Drive to the National Championship.”

    Brands including Dr Pepper, Ford, Home Depot, Nissan, Vizio and Taco Bell have jumped on board as sponsors of “The Drive.” At least two other companies also are attaching their brands to ESPN’s “Drive” platform.

    The most noticeable absence on the opening weekend of college football was Pontiac, which had been promoting the “Game Changing Performance” since the 2004 college football season. The platform, which urged fans to vote for the most remarkable play of the season, became hard to miss across ESPN’s college football programming on TV and the Web, and ultimately grew to include college basketball as well. Just like every other activation in the soon-to-be-defunct Pontiac portfolio, that platform is gone this season.

    Rather than targeting one sponsor to take over Pontiac’s position, ESPN decided to sell the ad time vacated by Pontiac to several other companies. The “Game Changing” platform will not be revived, said ESPN, which instead is putting its focus on the national title and “The Drive.”

    Pontiac’s departure from college football
    has opened the door for other sponsors.

    “The ‘Game Changing Performance’ was very customized to Pontiac,” said Eric Johnson, ESPN’s executive vice president of multimedia sales. “We decided to take that real estate and customize it for other advertisers.”

    For example, Ford will attach its name as the title sponsor of ABC’s “Saturday Night Football” postgame show. ESPN created another advertising opportunity around the BCS Coaches’ Trophy, which is awarded to the BCS title winner. Dr Pepper, a college football sponsor stalwart, will sponsor the trophy’s appearances on ESPN “GameDay” and other shoulder programming.

    The moves certainly take the spotlight away from General Motors. The “Pontiac Game Changing Performance” program contributed more than $2 million to universities through scholarship donations, according to the program’s leader, Chris Hornberger, the advertising manager for the Pontiac brand.

    Where GM goes from here with its college football presence remains to be seen, but it’s not expected to exceed traditional advertising.

    GM also continues to explore its options as an NCAA sponsor. It is in the final year of its corporate champion deal with the NCAA and has been widely expected to fall back into corporate partner status, but even that is not a certainty as the automaker attempts to recover from bankruptcy.

    “We don’t have a divisional brand that is officially assigned to replace Pontiac,” Kelly Cusinato, GM spokeswoman, said of the automaker’s presence in college football. “Furthermore, we are still in discussions with CBS and the NCAA regarding what to do when our current agreement expires at the end of this year. Since we have not made any decisions yet, I can’t provide much of an update.

    “Because of the larger media weight we have around college football, multiple GM brands — Chevy, GMC — could have a presence, but again that is all part of the ongoing discussions.”

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  • Favre provides licensing headline, but flat year expected

    Just like last year, when you talk about the NFL’s licensing business at the start of the season, it begins with Brett Favre. Last season saw Favre wearing new team colors, and that established sales records. Now Favre is with the Minnesota Vikings and again fueling jersey sales.

    “We were wondering how to anniversary Favre,” Leo Kane, NFL consumer products vice president, said with a laugh. “Turns out, we’re doing it with Favre.”

    The question is whether demand for Favre’s Minnesota jersey will exceed the records established during his lone year with the New York Jets, and that depends on the supply and demand of fabric.

    Will the Vikings edition
    of the Favre jersey beat
    last year’s Jets version?

    “We just can’t get enough purple right now,” said David Baxter, president of the Adidas Group's Sports Licensed Division. “Every piece we get goes right out the door, and we had a lot more inventory for his Jets jersey because it was the New York market.”

    With the recession, Kane is joining other large property executives in forecasting a flat year for NFL licensing. “That’s a conservative estimate, based on the economy, but retailers are playing it safe, so they’ll have to chase demand if and when teams or players get hot,” he said.

    Other NFL players generating interest include Terrell Owens and Michael Vick. After a strong Super Bowl performance, Arizona wide receiver Larry Fitzgerald is also starting to show some national appeal at retail, Kane said. Among the biggest licensing programs this season is a legacy program that commemorates the 50th anniversary of the AFL with a series of games, along with retro product for all teams.

    NFL Shop, the NFL’s catalog and online licensing business, looks like it will outperform the market. Bob O’Keefe, senior director of NFL Direct, is forecasting 10 percent sales growth. Last year, NFL Shop’s sales grew by 18 percent. The sheer number of NFL Shop catalogs is also expanding. Last year’s 16-page NFL Kickoff catalog was sent to 2.2 million homes. This year, it is going to 3.2 million homes and runs 68 pages. NFL Shop plans to send more than 11 million catalogs before the season ends, including two holiday books, which will exceed 100 pages.

    “With catalogs, our research has told us bigger is better,” O’Keefe said. “They last longer in homes and are a real stimulus to online shopping.”

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  • First down, UFL: StubHub signs as initial sponsor

    The United Football League has signed its first sponsorship deal, with secondary ticket provider StubHub.

    In addition to ticketing services and traditional sponsorship visibility, StubHub receives with the deal a presence on the front of the helmets of the Florida Tuskers, one of the league’s four teams. The UFL hopes to secure sponsors for placement on its other teams’ helmets, as well.

    The name of the helmet manufacturer, Riddell, which traditionally appears on its helmets’ front-center space, will be on the back of the Tuskers’ helmets.

    “Ticketing was only [part of this],” said Frank Vuono, the league’s chief operating officer. “It’s more sponsorship and brand related.”

    Vuono also emphasized the importance for the league of adding credible companies.

    “We are not selling to Chico’s Bail Bonds here,” he said.

    The UFL kicks off its first season next month with four teams and 13 games. The league views itself not as a competitor to the NFL but rather as essentially a football minor league.

    The UFL, which is receiving a six-figure annual rights fee in the multiyear deal, will be featured on StubHub’s Web site for cross-promotions and for co-branded incentive programs, details of which are not complete. StubHub will be included on the UFL’s on-field LED rotational signage and will receive commercial space on the league’s Versus and HDNet broadcasts.

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  • Geico’s MSG suite will host pregame, cut-ins for Knicks, Rangers

    The idea of selling beyond the 30-second spot has become a cliché in the sports media marketplace. It means that networks are pitching advertisers unique on-air sponsorships to go along with their traditional 30-second ad buys.

    This fall, MSG Media will roll out an example of this trend, having sold Geico a suite in Madison Square Garden where it will telecast parts of its pregame show for Knicks and Rangers games. It’s also planning in-game cut-ins to the suite.

    During the games, the “Geico Studio” will be inhabited by the insurance company’s characters, the Cavemen and Gecko.

    MSG officials would not say how much the sponsorship is worth.

    “This represents an increase in their commitment to the network,” said Art Ventura, senior vice president of integrated media sales for MSG Media. “We wanted to find ways of earning a bigger partnership with Geico.”

    This marks an extension of a 10-year relationship between MSG and Geico. In February, Geico told MSG it was looking for more unique sponsorships than it had been getting.

    “We sought to challenge them to enhance our partnership,” said Charlie Legg, supervisor of brand strategy for Horizon Media, which buys time for Geico.

    Horizon liked the idea because it provided ad space inside and outside the arena as well as on TV. And, of course, it will be supplemented with 30-second spots.

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  • Marketing activation for NFL Kickoff will top $50M

    The NFL has media and sponsorship partners combining for more than $50 million in marketing activation for its annual Kickoff celebration and concert to open the season. Promotional media supporting the entire kickoff weekend totals more than $40 million and is estimated to reach more than 100 gross ratings points.

    The concert was launched seven years ago as a celebration to boost the New York City economy after 9/11. Since 2004, the defending Super Bowl champion team has hosted the Kickoff game.

    This season’s Kickoff in Pittsburgh includes a youth football festival at Point State Park, a golf tournament and an NFL partner summit, along with a televised concert featuring Tim McGraw and Black Eyed Peas on NBC before the Thursday night game between the Tennessee Titans and the Super Bowl Champion Pittsburgh Steelers. The NFL is hoping for a crowd of about 50,000.

    EA Sports is back for the second straight year as presenting sponsor of the Kickoff. EA’s latest “Madden NFL” game launched Aug. 13. Sprint, Pepsi, GMC and Coors are other top-tier sponsors, while Monster, Visa and Gatorade are in as associate sponsors.

    Sprint is using the event to tout its NFL Mobile Live service. Pepsi will use Kickoff to launch its annual Rookie of the Year program. Various NFL sponsors are launching creative either within Thursday’s telecast or elsewhere in the Kickoff weekend. Coors will launch new “press conference” spots, while Bank of America will launch a “Football Fridays” campaign in five larger NFL markets. Gillette will launch new creative with Atlanta QB Matt Ryan (see related story, page 13). Procter & Gamble will use Troy Polamalu, a player known for his distinctive hair, in a TV ad for Head & Shoulders, now the NFL’s “official shampoo.” GMC and Sprint will also launch new NFL creative.

    The NFL is supporting with media across its broadcast partners and with print ads in USA Today, SI, ESPN The Magazine, US Weekly, the Pittsburgh Post Gazette and Rolling Stone magazine. Billboards will be in New York, Philadelphia, Chicago and Los Angeles, along with bus shelters and other out-of-home support in Pittsburgh.

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  • Mayweather-Marquez bout, PPV attract lineup of top brands

    Those in the boxing business spend considerable time debating the state of the sport, and a chief complaint is the lack of corporate support, especially since sponsorship has become an essential revenue source for most properties. So for the Sept. 19 match between Floyd Mayweather Jr. and Juan Manuel Marquez, marketers at Oscar De La Hoya’s Golden Boy Promotions are justifiably beating their collective chest about a sponsor roster that includes top brands, and some impressive retail activation.

    “Particularly in Hispanic households, boxing remains a core sport, so we hope we’ve shown marketers that there’s still a lot of value in boxing,” said Bruce Binkow, CMO at Golden Boy, which is co-promoting the fight with Mayweather Promotions. AT&T, Tecate beer, Shell’s Quaker State oil brand and DeWalt tools are major sponsors, along with Southwest Airlines.

    The Floyd Mayweather Jr. (left)-Juan Manuel
    Marquez fight will be shown as an
    HBO PPV and in theaters.

    Much of the marketing is in support of the $59.95 pay-per-view offering of the fight from HBO. For example, Heineken USA’s Tecate brand offered a rebate at 12,000 grocery and convenience stores for $20 for PPV subscribers. Another promo offers a $55 rebate on the PPV with the purchase of $100 of groceries. Tecate is also activating with commemorative cans in Western markets.

    AT&T, which has been using Mayweather in a spot for its LaptopConnect product for most of the year, is using its fight rights to market the Viva Mexico calling plan and has run Spanish-language promos in markets including Los Angeles, San Diego and Las Vegas, where the fight will be staged. It also got some video content for AT&T subscribers.

    Black & Decker’s DeWalt tool brand passed through its sponsorship rights to Home Depot, garnering valuable end-aisle displays at 1,500 stores with a sweepstakes offering trips to the fight. Mobile marketing vehicles have toured about 500 Home Depots. Other portions included Southwest Airlines online offerings, and Affliction Clothing, which marketed through hang tags on its wares. All sponsors get open and closing billboards on the PPV and signs at the bout.

    The fight marks the return of boxing PPV to theaters for the first time in almost 30 years. High-definition broadcasts will be held in more than 170 theaters, and 30-second trailers supporting those are being shown in about 1,500 theaters.

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  • Miller, Coors hit season touting teamwork

    Almost two years after the merger of Miller and Coors was unveiled, the company is touting this year’s programs from both brands as the largest and most integrated NFL marketing campaigns yet. 

    Separate campaigns see Miller Lite continuing to use its coaches campaign to carry its message of cool refreshment as well as debuting NFL versions of its “Great Calls” campaign that links memorable NFL moments with its message of superior taste. So that means one brand uses some of the NFL’s most visible ex-coaches and also relies on some hall of famers, like Walter Payton and Tony Dorsett.

     Jackie Woodward, vice president of marketing services at MillerCoors, noted that this season is the first year where the company has been able to plan for the NFL season in a unified manner, which has allowed for deeper and more distinct marketing programs. As an example, Woodward said that while previously Coors Light and Miller Lite advertised in nearly every NFL telecast, this season they will overlap on only five broadcasts, as the unified brewer picks and chooses its advertising by geographic region and in support of its team sponsorships.

    Coors has national NFL rights, while Miller and Coors combine for sponsorship of 22 NFL teams.

    Romeo Crennel is next up for questions in the fourth year of
    the Coors Light football coaches press conference spots.

    The “Great Calls” ads are breaking this week around the season opener. They include memorable NFL moments, like Tom Dempsey’s 63-yard field goal (a record since tied by Jason Elam) or Dorsett’s 99-yard touchdown run on “Monday Night Football,” the longest run from scrimmage in NFL history.

    Local executions show fans in markets such as Chicago, Green Bay, Minnesota and Carolina enjoying beer to the strains of memorable calls from their team’s championship seasons, i.e. “Tasting Greatness.” Company officials said it’s not coincidental the campaigns evoke the original Miller Lite ads with the tag, “Tastes Great; Less Filling.”

    “With light beer, you always have to be sure it isn’t perceived as a lesser beer, so in the original All-Stars campaign for Miller Lite, we delivered the message of taste in a masculine and appealing way, and that is what we’re back to,” said Grant Leech, vice president of marketing for Miller Lite. “It’s all about linking the great sports moments, which are a wonderful expression of masculinity, and linking them to the great taste of Miller Lite.”

    Billboards and even promotional glassware will carry messages like “Packers Fans Taste Greatness for the Season.” There are also Hispanic, digital and radio extensions of the effort.

    Overall spending on the effort was not disclosed.

    A cause-related tie-in offers fans the opportunity to bid on a pair of former NFL players coming to their house, with proceeds going to The V Foundation for Cancer Research.

    Meanwhile, Coors is in the fourth year of its coaches campaign, which is now using Herm Edwards, Romeo Crennel, Brian Billick and Marv Levy. A partnership with the Pro Football Hall of Fame will yield a faux induction into the “Press Conference Hall of Fame” next week, complete with ice sculptures of the Coors coaches. Fans will also be able to fashion their own coaches spots, a tribute to the hundreds of thousands of fans who did their own takeoffs on the ads and posted them on YouTube in the last year.

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  • New B2B event draws tracks, teams, sponsors

    The wealth of business-to-business opportunities is one of the attractions to NASCAR sponsorship, but accessing those 400-plus sponsors across the industry can be daunting.

    The sanctioning body has been running its B2B Council for official partners for five years, and NASCAR teams have grown more sophisticated in pairing their sponsors for business-to-business opportunities. What’s been absent, though, is a more inclusive platform for all team, track and league sponsors to mingle.

    That was the idea behind a business-to-business forum in Atlanta on Aug. 27 that invited sponsors and other NASCAR stakeholders to the Airport Marriott. GMR Marketing organized it with input from other sports marketing agencies, teams and sponsors.

    “Several years ago, this wouldn’t have happened,” said Mike Boykin, GMR’s executive vice president, referring to the turf battles and rivalries among the agencies and teams in NASCAR. “But in this economy, we’re all being challenged to deliver more value and I think that’s why everyone was so responsive. It made sense and everybody said, ‘Let’s find a way to do this.’

    UPS and Stanley Works were among the
    players in NASCAR who took part
    in the business forum.

    “We told NASCAR what we wanted to do. They weren’t going to endorse it, but they understood it.”

    Andrew Giangola, NASCAR’s director of business communications, wrote in an e-mail, “We believe the two major ingredients for (B2B) success are having non-competing partners working together toward their common goals and a dedicated account management team with diligent follow-up. It’s flattering to now see others in and outside of NASCAR adopting a similar B2B platform. … We want everyone in the sport to be successful, because that helps drivers, teams, tracks and ultimately NASCAR fans.”

    GMR’s intent was to keep a behind-the-scenes profile because it did not want the meeting perceived as an end-run around NASCAR. It also wanted other agencies and their clients to feel welcome, Boykin said.

    More than 30 brands were represented, ranging from Goliaths like Coca-Cola, MillerCoors and Procter & Gamble to Hunt Brothers Pizza, NextEra Energy Resources and New Holland Agriculture. There were  NASCAR official partners like Bank of America and former officials like SunTrust. There were full-time team sponsors like Aflac and part-timers like R&L Carriers.

    About a dozen sports marketing agencies, six teams and a handful of speedways were in the room as well. Attendance was free, with GMR covering the cost of the room and other minor expenses.

    The agenda for the four-hour session included a keynote speech by Ann Trampas, a partnership marketing consultant, and Elon College professor Tim McMahon. Afterward, the 100 or so in attendance broke into small groups for “speed dating,” a process that allows companies to sit at a table and share information about their businesses.

    “It’s the first time that we’ve had something of this nature and it was great,” said Ted Lund, the director of business-to-business development for Stanley Works, a sponsor at Richard Petty Motorsports. “It was nice to have everybody in one place at one time. It gave you the chance to talk to sponsors from other teams, not just your own team, and make connections you wouldn’t usually make.”

    Lund ran Stanley’s motorsports program from 2005 to 2008 before moving into his current business-to-business role, and saw the difficulties of matchmaking at a noisy speedway.

    “To be able to sit down and have a quiet, 30-minute conversation, that’s really important,” he said. “At the track, everybody’s got a hundred things going on.”

    GMR’s Boykin said the agency’s clients drove the concept after seeing how NASCAR’s B2B Council worked.

    “We wanted to expand on that,” Boykin said. “We asked some of the teams and everyone thought it was a good idea. It took collaboration from a lot of people who haven’t worked together before but wanted to deliver value back to the clients.”

    Steve Chisum, the sponsorships and events manager for UPS, a NASCAR official partner, has seen how productive NASCAR’s B2B Council has been and said there’s a need to open new doors that go beyond the sponsors at the league level.

    “To see such a high level of participation, especially at the first event, was good,” Chisum said.

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  • NFL sides prepare for uncapped year

    The prospect of an uncapped NFL season, once regarded as a poison pill in the league’s collective-bargaining talks, is being increasingly embraced by owners and players.

    Many of the league’s 32 owners, who in 2006 agreed to a labor extension they now loathe in part to keep the cap, have shifted to arguing that not having a cap for the 2010 season might put them in better position to overhaul the system in their favor. It’s a stand that runs counter to the conventional thinking in sports: that management always wants a cap in order to control costs, particularly in the NFL, where the cap has been credited with underpinning the league’s growth into an $8 billion a year business.

    The NFL Players Association, meanwhile, maintains its long-stated position that once the cap is gone, it won’t return, though some players, as is the case among the owners, might find more benefit than others in an uncapped season.

    League and union officials have until March to reach a new deal before the current CBA makes 2010 an uncapped season, the first such season for the league since 1993. The CBA would expire after that uncapped year. While both sides say reaching a new deal remains their goal, getting to that new contract might now require an uncapped season first.

    “There is a strong reality we will be in an uncapped year,” said NFL Commissioner Roger Goodell last week

    To be sure, a season without a cap would not be a season of unfettered spending. Restrictions are in place that limit a complete free-for-all.

    For the players, years of service required for unrestricted free agency jumps from four to six. That means that more than 200 players who would be eligible for free agency under the current, capped system would lose that designation in 2010. Free agents, however, could sign deals for dollars likely unattainable with a cap in place.

    “There are lots of players who would like the fact that next year would be uncapped, because it is open season on contracts,” said NFLPA general counsel Richard Berthelsen. “Once you have a year without a cap, the players are not going to go back, and that has always been the feeling of the leadership.”

    On the owners’ side, the teams that finish in the top eight on the field this year would have some restrictions on their access to free agents. Perhaps more importantly, though, the loss of a cap also means the loss of a salary floor. Currently, teams are required to spend around 85 percent of the salary cap. Without a floor, teams would be free to operate as do some MLB clubs, who work in a capless system. Some teams, instead of spending millions on a season that all but certainly will end with losses both on the field and on the balance sheet, opt to rein in their spending so that at least the off-the-field losses are minimized.

    Jeff Pash
    NFL General Counsel

    “[The owners] think an uncapped year is not necessarily worse than the current arrangements they have, and if going into an uncapped year is necessary to help get to a better system down the road, that is something they are prepared to do,” said Jeff Pash, the NFL’s general counsel and chief labor negotiator.

    In 1993, the last season without a cap, player payroll spending reached 70 percent of revenue, an amount even higher than the 60 percent figure of today that the owners contend is too high. That happened despite the existence then of the very type of restrictions that would be in place for 2010.

    It also, however, happened with the owners’ knowledge that a cap could be triggered for 1994 by their spending in 1993.

    “There was a cap coming in that next year,” Pash said. “If you assume 1993 was at a certain level, then the cap came on in 1994.”

    Berthelsen said he thinks owners will spend again next year if there is an uncapped year.

    “There may be owners who want to go on the cheap and increase their profits,” he said, “but I think they will be in the small minority because by doing so, they are saying they don’t want to compete.”

    Berthelsen added that the union would be watching the player market extremely carefully in the event of an uncapped 2010 “to ensure there is no collusion.”

    The NFLPA’s Richard Berthelsen says
    many players look forward to
    an uncapped year.

    The NFL declined to comment on that suggestion.

    For their part, some players have expressed concern for what losing the cap could mean for retirees’ benefits. Concern also exists for prospective free agents who are not front-line players. Baltimore cornerback Dominique Foxworth, an executive committee member, spoke of both this summer to the Carroll County (Md.) Times.

    “It’s devastating to the retired players,” he said. “You lose the benefits and the salary floor. While the big-name guys may break the bank, everybody else is going to be working for much less than what their value is.”

    Josh Zuckerberg, a partner with Pryor Cashman who has represented both union and management interests, said “most player unions support free-market conditions.”

    “What I am wondering about is whether there are players within these ranks who are more vulnerable in a purely market-driven economy and who may have benefited more from structured payment minimums.”

    As for NFL agents, opinions differ on both the likelihood of an uncapped year and what its effect could be.

    “The game appears healthier than ever,” said Jonathan Blue, whose agency, BEST, represents 60 players. “Sometimes it is better not to tinker with things.”

    Other agents, who would speak only on the condition of anonymity because they are certified and regulated by the union but are not authorized to discuss union business, said big-market club owners or those teams with high revenue streams would spend freely in an uncapped season and would find a way around the restrictions in the system.

    Said Berthelsen, “Some of the best contracts ever obtained in this league have been by restricted free agents.”

    Pash would not comment on specific restrictive free agent scenarios, but when asked whether the uncapped year gave leverage to the players or owners, he said, “I think the uncapped year was designed to be a balance. Yes, there is no cap, but there are many other mechanisms to hopefully preserve competitive balance.”

    Both Pash and Berthelsen agree that the current system, designed by former NFL Commissioner Paul Tagliabue and the late NFLPA Executive Director Gene Upshaw, intended that the NFL never get to the uncapped year because of the potential negative ramifications for both sides.

    “We would like to have a deal tomorrow and we continue to have March of 2010 as a very important deadline,” Berthelsen said. But he added that while Pash and other NFL officials have said they don’t want to lock the players out in 2011, “We still remain without a proposal [for a new labor deal], and that is a matter of great concern to us.”

    The NFL would not comment on that directly, but Pash did say, “We are a long way from shutting any business down … and that is not our goal. Our goal is to make a deal.”

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  • NFL.com kicking off some site upgrades

    The NFL has revamped several key pieces of its official Web site, its mobile offerings and portions of its overall digital strategy in preparation for the 2009 season.

    This is the third full season of the NFL running its digital operations in-house. Many of the moves being implemented were not originally contemplated when team owners voted unanimously in October 2006 to pursue the internally run digital plan.

    Among the new elements on NFL.com:

    • Redesigned Game Center pages featuring an animated drive chart with 3D-type depth and perspective. The Game Center pages, showing live statistics for games in progress along with previews beforehand and recaps afterward, are some of the most highly trafficked pages on NFL.com. The new graphical renderings will distinguish day and night games and perhaps include weather animations later in the season.

    NFL.com’s Game Center has a new look.

    • A sharply expanded social media and community section at NFL.com/fans, including fan postings, live chats with players and coaches, fan-edited video highlight reels, aggregated Twitter and Facebook feeds, quizzes, polls and other similar material.

    • A bulked-up content subscription area, led by Game Rewind, which offers full-length online game replays; Field Pass, a live audio product; and Game Pass, which allows most fans outside of the United States to see live games online. Each of the products existed last year, but Game Rewind did not debut until late in the season, and the video and audio technologies powering the offerings have been rebuilt in conjunction with league technology partner NeuLion Inc.

    • Reworked wireless sites that will convey most of the new NFL.com functionalities to mobile devices.

    “We think this combines to show a real evolution of the site,” said Laura Goldberg, NFL Online general manager. “We’ve developed the whole platform in a way that’s really now gone beyond the first articulation of the [in-house] plan.”

    The video elements take advantage of a reconstructed video player, based on Adobe Flash software, that debuted in the spring with a much higher rate of resolution and expanded functionality for embedding social media, advertising and other content.

    The league also amended portions of its digital policies during the offseason to allow clubs to engage more freely in external social media hubs such as Facebook and Twitter and use the sites to help drive ticket and merchandise sales and other commerce. Several clubs have quickly assembled large fan followings over the summer on Facebook and Twitter.

    Recently struck rules with regard to game-day social media conduct, in which players and team personnel are prohibited from posting items from 90 minutes before kickoff to the end of postgame interviews, still apply, but local-level NFL content on external social media will be aggregated to NFL.com.

    Clubs additionally are not allowed to post game-highlight clips on external social media sites, as the league’s policy of restricting all online highlight video to NFL.com and the 32 club sites remains in effect. Goldberg, as she did earlier in the year, suggested there may be a change in that stance to allow outside outlets access to that high-demand content, but she offered no further details or possible timetables.

    Corporate sponsors for the new Game Center pages will rotate in and out frequently, with Sprint, Campbell’s, Lexus, FedEx and Ticketmaster on deck for September. Samsung is slated to begin in October, with others expected to follow as well.

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  • Owners’ sons step down from Panthers posts

    Carolina Panthers President Mark Richardson and his brother Jon, the president of stadium operations, left the Panthers’ front office with a sudden announcement last week. Both had been with the team since its earliest days.

    Their father, majority owner Jerry Richardson, remains in charge, while Mark and Jon retain ownership shares but have no day-to-day role with the organization.

    Mark was a member of the NFL’s competition committee, broadcasting committee and NFL Network committee. Jon Richardson was a member of the stadium security and fan behavior committee.

    Jerry Richardson, who is 73, had heart-replacement surgery in February. In recent months, those around the team say, Richardson recovered his stamina and began taking a closer look at the franchise. It’s obvious he wanted changes made, though nothing has been said publicly.

    Morrison

    The Panthers named Danny Morrison, the 55-year-old athletic director at Texas Christian University, as Mark Richardson’s replacement.

    Morrison has spent his career in college athletics, including stops at Jerry Richardson’s alma mater, Wofford College, and a stint as commissioner of the Southern Conference. He grew up in the Carolinas and has counted the elder Richardson as a mentor for nearly 40 years.

    Morrison is scheduled to start work in late September.

    “You can have a fabulous situation where you are and then an incredible opportunity comes around,” he said. “This is one of those incredible opportunities to work in a class organization and compete at the very highest level of professional sports.

    “I have a learning curve having not been in the NFL before. I think I have a good background with having played, coached, athletic administration, commissioner of a conference. It’s a broad background … I’ve known Mr. Richardson for enough years to know that he has high, high expectations, OK? That was understood from day one. The main question I had for him is the lack of NFL experience and Mr. Richardson wasn’t worried about that.”

    Industry experts say Morrison will be able to adapt to the NFL, and they predict the transition will be made smoother by what Mark and Jon Richardson left behind.

    “I think Jerry is extraordinarily lucky to find a guy like this available from a qualifications standpoint and in terms of the mutual respect they have for one another,” said Max Muhleman, principal at Private Sports Consulting and a key adviser to the Richardsons when they were pursuing the franchise.

    Erik Spanberg writes for The Charlotte Business Journal, an affiliated publication.

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  • PGA Tour’s investments suffer in ’08

    The PGA Tour’s financial reserves lost more than a quarter of their value in 2008 as the stock market experienced its worst year since the 1930s, with the value of the players’ retirement funds taking a comparable drop.

    The PGA Tour ended 2008 with an estimated market value of $694 million in investments, representing a year-over-year decline of 27 percent from $947 million at the end of 2007.

    The majority of the drop was due to investments in stocks and mutual funds. The tour ended 2008 with an estimated value of $401 million in mutual funds, down 35 percent from $614 million in 2007. The market value of the tour’s stock dropped 38 percent, starting the year at $128 million and ending at $80 million.

    The value of the player retirement benefits was hit hard by the investment losses. According to the tour’s balance sheet, the value of the assets set aside to satisfy expected obligations under the retirement plan decreased 26 percent, ending the year at $451 million, down from $610 million at the end of 2007.

    PGA Tour Investment Performance
    (In Thousands of Dollars)
    12/31/2007
    12/31/2008
    U.S. Treasury securities and obligations
    $54,271
    $79,986
    Mortgage-backed securities
    $15,440
    $10,552
    Corporate and other debt securities
    $50,840
    $57,519
    Equity securities
    $127,650
    $79,760
    Mutual funds (primarily equity securities)
    $614,087
    $400,851
    Other investments
    $84,877
    $65,749
    Total
    $947,165
    $694,417
    Source: PGA Tour annual report

    The entire portfolio, heavy on stocks and mutual funds, likely experienced a moderate rebound this year based on overall market gains ranging from single to low double digit percentage points, depending upon the index. That investment performance will be published in the 2009 annual report.

    According to the tour’s financial statements, investments are used to help fund retirement benefits, purses, capital needs, and other unspecified programs.

    All figures were disclosed in financial documents audited by PricewaterhouseCoopers and recently released to players in the tour’s annual report. The dollar value placed on unsold investments are market-driven estimates based on stock prices and market conditions at the end of 2008, and do not represent actual recorded investment losses.

    Figures posted in the PGA Tour’s consolidated income statement paint a more positive view of financial activities in 2008. Combined revenue from tournaments and supporting business, such as licensing, television production and the network of Tournament Players Clubs is creeping closer to the $1 billion mark.

    Income from television and tournaments was $773 million, up 3 percent from $752 million in 2007. Revenue from supporting business like licensing, the network of Tournament Players Clubs and PGA Tour Productions fell 5 percent to $208 million.

    As a nonprofit, the PGA Tour reinvests nearly all of its net profits in the form of prize money, retirement funds and spending on tournaments. The tour generated $538 million in net profit in 2008, down from $563 million in 2007.

    The largest single decline came from investment income, which fell from $75 million in 2007 to less than $1 million in 2008.

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  • PNY, Nets do first NBA practice jersey deal

    The New Jersey Nets are the first NBA team to sell a practice jersey sponsorship, which will put the logo of PNY Technologies on practice uniforms this fall.

    The company, a flash-drive manufacturer based in Parsippany, N.J., also bought the naming rights to the Nets’ practice facility in East Rutherford, N.J., to be called the PNY Center as part of a two-year sponsorship agreement. Brett Yormark, president of Nets Sports & Entertainment, refused to comment on the value of the sponsorship. PNY officials would not disclose the specific value but said they are paying in the low six figures for the overall team deal.

    To boost visibility and the value of the deal, the Nets’ coaching staff will also wear PNY-branded gear during post-practice interviews. The deal also includes a team Web site presence, and the PNY logo will be seen on the media backdrop used for interviews at all practices. In addition, the team will give PNY four tickets to all Nets away games.

    The deal comes as part of the company’s renewal with the Nets and is not a season-presenting sponsorship agreement. Last year, the Nets had a season-presenting deal with Vonage. That deal is expected to be renewed for this season.

    PNY logo at practice center and in rendering on jersey

    “This is an integrated deal but it is not a day-of-game type of deal,”  Yormark said. “It is an upsell of an existing partner but does not include any arena assets. The branding is not between 7 and 9:30 p.m. at the Izod Center.”

    “The practice jersey is a complementary part of our deal and it is certainly new to the advertising arena but it gives us added exposure with our brand,” said Margaret Salleroli, senior marketing communications manager for PNY.

    Like the NFL, the NBA this year allowed teams to sell practice jersey sponsorship deals as the league continues to mine for additional revenue streams for its clubs.

    But one issue surrounding the new inventory for NBA teams this offseason is how to value the exposure.

    “Our teams understand the advertising impressions of a practice jersey that an NBA player and team will get on video, Web and print is extremely valuable,” sad Chris Heck, senior vice president of team marketing and business operations for the NBA. “What we don’t know is exactly how much this is worth until we track it throughout this season starting at training camp.”

    “Teams will decide one of a number of different strategies with selling their practice jerseys this season,” Heck said. “That may include selling to a current high-level partner, placing a special anniversary season logo or cause-marketing patch, or selling to a new partner that is interested in making a big splash.”

    Since they’re looking to move to Brooklyn, N.Y., the key for the Nets to secure a deal was to create a separate sponsorship package around the team’s practices.

    “Teams are looking at it differently,” Yormark said. “For us, we now have a platform outside the [Izod Center] arena that has value.”

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  • Rays start marketing operation

    The Tampa Bay Rays have launched a subsidiary business unit, Sunburst Entertainment Group, designed to drive new business and revenue for the club.

    Ideologically akin to Fenway Sports Group in Boston and outside marketing endeavors pursued by the San Francisco Giants, Cleveland Cavaliers and others, the Rays’ new outfit will operate as a sports and entertainment consulting company, working in brand management, sales and sponsorship support, promotions, and event management.

    “We see a lot of demand for these kinds of client services,” particularly with regard to community relations and collaboration, said Rays President Matt Silverman. “This puts our shingle out there and allows us to expand to a broader group of clientele.”

    The Sunburst effort additionally builds on the club’s effort to repair and enlarge its relationship with the central Florida business community following the embattled tenure of previous club owner Vince Naimoli.

    The Rays developed a successful postgame
    concert series this summer.

    Silverman will run the new operation in concert with senior team business executives Mark Fernandez, Rays senior vice president and chief sales officer; Michael Kalt, senior vice president for development and business affairs; and Brian Auld, senior vice president of business operations. No new staffers will be hired specifically for Sunburst at the outset.

    The concept has generally proved successful in other markets where it’s been attempted, particularly in Boston, where FSG has grown into an industry power with a wide array of clients. FSG owns a 50 percent interest in prominent racing outfit Roush Fenway Racing as well as a Red Sox-affiliated minor league baseball team in Salem, Va. FSG is a sister company to the Red Sox and New England Sports Network.

    The Rays made their own recent equity play before the announcement of Sunburst, buying an interest in the United Football League’s Florida Tuskers.

    “[Merger and acquisition] is not a primary objective, but opportunities will be the byproduct of the conversations,” Silverman said.

    Also high on the list of objectives: filling Tropicana Field with additional events. The Rays this summer developed a successful concert series following select games.

    Alexis Muellner writes for the Tampa Bay Business Journal, an affiliated publication. SportsBusiness Journal staff writer Eric Fisher contributed to this report.

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  • Renewal talks on tap for Heineken, U.S. Open

    Heineken expects to begin renewal talks with the U.S. Open soon after this fortnight ends, even though there is one year left on its deal. The beermaker has kept its 17-year sponsorship of the Open even as it has moved away from other sports efforts and into music. It is closely associated with the Open and has spent as much money activating the sponsorship this year as it has in past years despite the down economy, said Christian McMahan, chief marketing officer of Heineken USA.

    “We haven’t backed off our investment,” he said without disclosing specifics of the spend.

    Heineken opened a new lounge on-site at the USTA Billie Jean King National Tennis Center this year and sponsored the player party for the second year in a row the Friday night before the event. McMahan said he expects the brewer to extend the deal.

    Heineken has been on the scene as
    a U.S. Open sponsor for 17 years.

    LET’S MAKE A DEAL: Three of the top five ranked male players have their apparel and sneaker deals expiring at the end of the year, making this an interesting time in that area given the down economy. The most high profile is Andy Murray, the No. 2 player in the world, who has worn the British brand Fred Perry since he was a junior but is widely expected to move to a more global company. Novak Djokovic, at No. 4, has his contract with Adidas expiring, while Andy Roddick, No. 5, has his deal with Lacoste coming to an end.

    Roger Federer and Rafael Nadal, the No. 1 and No. 3 players, respectively, have long-term deals with Nike in place.

    Not to be outdone, Sam Querrey, the fast-rising American who won the U.S. Open Series and is ranked No. 22, has an Adidas contract expiring, and American John Isner, currently ranked 55th, has his Nike deal expiring.

    BRITTON PICKS K-SWISS: At least one deal got done here, though relatively small. Devin Britton, the NCAA champion who lost in the first round to No. 1 seed Federer, though not without showing some skill, signed a multiyear deal with K-Swiss, an increasingly active company in signing players. Financial terms could not be determined. Sources said Britton is expected to sign a racket deal with Prince, as well. Britton’s agent is Tom Ross of Octagon.

    DELL SHOWCASES BOOK: Newly minted tennis hall of famer Donald Dell, who founded ProServ, was captain of the U.S. Davis Cup team and currently is helping run BEST’s tennis group, hosted a book signing last Wednesday evening in SoHo for his just-released “Never Make the First Offer.” The event was at Jack Olive, an upscale clothing boutique that provides gift bags to many of BEST’s clients. Attending the event were Ken Solomon, CEO of Tennis Channel, and Phil de Picciotto, head of athlete representation at Octagon and whom Dell hired as an intern in 1983.

    A MORE-OPEN IMG?: IMG Tennis was notoriously tight-lipped under its late founder Mark McCormack: Good luck, as a member of the fourth estate, trying to needle information out of them. But now, at least on the surface, five years into the ownership of Ted Forstmann, some of that has changed. Witness the reporter roundtable IMG Tennis hosted last week at its New York headquarters, with breathtaking views of Central Park.

    Attending were Fernando Soler, head of IMG’s tennis division; Nick Bollettieri, the famed tennis coach at IMG Academies; and George Pyne, president of IMG. Little in the way of news was made — Soler did say that the ATP was making progress on finding a top sponsor — but one amusing moment came when this publication asked for Soler’s thoughts on some of the dustup from IMG client Federer donning specialized Nike apparel featuring the number “15” immediately after wining Wimbledon, representing his record-breaking number of Grand Slam titles. The move was criticized in some quarters as disrespectful to his opponent, Roddick, as it showed Federer presumed he would win. Soler, a former player himself, professed to have never heard of the criticism.

    Maybe at least a little tight-lipped, still …

    RATINGS UP IN EARLY RETURNS: Tennis insiders have predicted that ESPN2, in its first year of coverage of the Open, could bring in more casual fans than did predecessor USA Network and that ratings could double. The increase wasn’t to that degree, but for the first two days of the tournament, the average rating was up, to a 0.7 from a 0.6, and the household count was up 9 percent, to 650,000. Perhaps most significantly, the average rating for men ages 18 to 49 doubled, to a 0.4. In prime time for all viewers, ratings were up to a 0.9 from a 0.7, and households were up 34 percent, to 910,000.

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  • Tab for Chicago ’16 bid near $50M

    The price tag to bid for an Olympic Games continues to escalate.

    Chicago has spent $48.2 million on its bid to host the 2016 Olympics — 37 percent more than the $35 million that The New York Times reported New York spent in 2005 on its bid for the 2012 Games.

    The cost of Chicago’s bid between July 2006 and June 30, 2009, was disclosed last week in a Stewardship Report released by bid organizers. Organizers raised $72.8 million to cover expenses through private contributions. Chicago expenses are expected to increase over the last month of the bid. The International Olympic Committee will select the host of the 2016 Games on Oct. 2 in Copenhagen, Denmark.

    Chicago 2016 major cash expenditures
    July 2006 through June 30, 2009
    Expenditure Amount
    Salaried employees and contractors $9,471,822
    Employee benefits $1,089,275
    Olympic Games venue and operation experts $4,651,636
    International relations $3,017,037
    Public relations $1,147,348
    Airfare and hotel/housing accommodations $2,827,399
    Advertising and messaging $3,493,994
    Film production $1,721,190
    Merchandise $1,506,817
    Event services $3,626,943
    Payments to USOC $5,000,000
    Total of all expenses $48,268,628
    Source: Chicago 2016 Stewardship Report

    The cost of bidding to host an Olympics has risen steadily since the late 1990s as a result of technical requirements the IOC endorsed in the wake of the Salt Lake City bid scandal and increased demand to host the Olympics, which cities view as a major marketing and tourism event.

    “The Olympic Games are the ultimate municipal lottery ticket,” said Terrence Burns of Helios Partners, which consulted for Sochi, Russia, on its bid for the 2014 Olympics. “The global awareness, the prestige and the Olympics’ ability to accelerate existing or planned infrastructure development is unequaled by any other event. The larger the prize, the more expensive it is to play.”

    The greatest expense for Chicago’s bid was concentrated on subject matter experts, firms and individuals with technical expertise in areas such as international relations and venue development. Chicago spent approximately $11 million on those experts “to ensure [the] bid is technically and operationally sound.” Among those experts, the biggest recipients were public relations firm Hill & Knowlton ($3.1 million), architecture firm Skidmore, Owings & Merrill ($1.2 million) and HOK Sport Facility Group (now Populous) ($1 million).

    Staff compensation was the second-greatest expense. Chicago spent $9.4 million on employees and contractors. Approximately 10 employees were paid more than $100,000, including Chief Operating Officer Dave Bolger ($300,000), President Lori Healey ($250,000), Chief Bid Officer John Murray ($250,000) and venues and operations expert Doug Arnot ($250,000).

    The organization spent $9.2 million on outreach to promote its bid. The largest expenses in that category included advertising ($3.4 million), event services ($3.6 million) and film production ($1.7 million).

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  • Tab for Chicago ’16 bid near $50M

    The price tag to bid for an Olympic Games continues to escalate.

    Chicago has spent $48.2 million on its bid to host the 2016 Olympics — 37 percent more than the $35 million that The New York Times reported New York spent in 2005 on its bid for the 2012 Games.

    The cost of Chicago’s bid between July 2006 and June 30, 2009, was disclosed last week in a Stewardship Report released by bid organizers. Organizers raised $72.8 million to cover expenses through private contributions. Chicago expenses are expected to increase over the last month of the bid. The International Olympic Committee will select the host of the 2016 Games on Oct. 2 in Copenhagen, Denmark.

    Chicago 2016 major cash expenditures
    July 2006 through June 30, 2009
    Expenditure Amount
    Salaried employees and contractors $9,471,822
    Employee benefits $1,089,275
    Olympic Games venue and operation experts $4,651,636
    International relations $3,017,037
    Public relations $1,147,348
    Airfare and hotel/housing accommodations $2,827,399
    Advertising and messaging $3,493,994
    Film production $1,721,190
    Merchandise $1,506,817
    Event services $3,626,943
    Payments to USOC $5,000,000
    Total of all expenses $48,268,628
    Source: Chicago 2016 Stewardship Report

    The cost of bidding to host an Olympics has risen steadily since the late 1990s as a result of technical requirements the IOC endorsed in the wake of the Salt Lake City bid scandal and increased demand to host the Olympics, which cities view as a major marketing and tourism event.

    “The Olympic Games are the ultimate municipal lottery ticket,” said Terrence Burns of Helios Partners, which consulted for Sochi, Russia, on its bid for the 2014 Olympics. “The global awareness, the prestige and the Olympics’ ability to accelerate existing or planned infrastructure development is unequaled by any other event. The larger the prize, the more expensive it is to play.”

    The greatest expense for Chicago’s bid was concentrated on subject matter experts, firms and individuals with technical expertise in areas such as international relations and venue development. Chicago spent approximately $11 million on those experts “to ensure [the] bid is technically and operationally sound.” Among those experts, the biggest recipients were public relations firm Hill & Knowlton ($3.1 million), architecture firm Skidmore, Owings & Merrill ($1.2 million) and HOK Sport Facility Group (now Populous) ($1 million).

    Staff compensation was the second-greatest expense. Chicago spent $9.4 million on employees and contractors. Approximately 10 employees were paid more than $100,000, including Chief Operating Officer Dave Bolger ($300,000), President Lori Healey ($250,000), Chief Bid Officer John Murray ($250,000) and venues and operations expert Doug Arnot ($250,000).

    The organization spent $9.2 million on outreach to promote its bid. The largest expenses in that category included advertising ($3.4 million), event services ($3.6 million) and film production ($1.7 million).

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  • Trust issue did in Kelly at NHLPA

    In the end, it was Paul Kelly against the world.

    Kelly’s downfall as executive director of the NHL Players’ Association began long before last week’s union meeting in Chicago. Ultimately, the players decided to fire Kelly because of what they saw as ineffective leadership, failure to develop new business opportunities and an inability to work together with other members of the NHLPA staff. But his fate was sealed by a breakdown in trust, illustrated by a presentation to player representatives that described an effort by Kelly to circumvent union rules.

    Kelly’s departure leaves the union without a leader a year before it is expected to begin collective-bargaining negotiations with the NHL. It also closes another tumultuous chapter for a union that has been beset by a series of scandals over the last two decades, from Alan Eagleson’s embezzling in the 1990s to Ted Saskin’s surreptitious surveillance of players’ e-mails.

    Kelly declined an interview request but denied any wrongdoing and said in a statement, “I always acted in the best interests of the players, including taking affirmative actions required of me based on my obligations to the players and NHLPA.”

    Paul Kelly says he acted in the best
    interests of players.

    The problems with Kelly first surfaced as long as a year ago at a Chicago meeting of player representatives when then-NHLPA ombudsman Eric Lindros presented a report on issues that employees had with Kelly.

    One of those issues came from the then-NHLPA director of human resources, Sara Zlabis, who was the union’s second-longest-serving employee. Lindros read a letter from Zlabis that was critical of Kelly’s review process for NHLPA employees. A few months later, she was fired.

    “I don’t think it was a coincidence that she was fired within the next few months,” said Buzz Hargrove, who replaced Lindros as ombudsman earlier this year.

    The episode was one of several that raised a red flag for players. Another occurred during the NHL all-star break when the NHL suspended all-star Detroit Red Wings NicklasLidstrom and PavelDatsyuk for a regular-season game because they failed to attend the all-star festivities. Kelly had agreed with Commissioner Gary Bettman the previous summer that players who skipped the All-Star Game could be subjected to suspension, player-side sources said. Other union employees and players felt that the Lidstrom and Datsyuk suspensions should have been contested and questioned the legitimacy of Kelly’s agreement.

    Hargrove said that beginning in February several NHLPA staff members came to him with complaints about Kelly. Although Hargrove would not be specific about the complaints, he said the problem was that Kelly did not want to listen to what anyone else on staff said.

    That kind of management style runs contrary to the NHLPA’s constitution, which was rewritten after Kelly was hired to give players more power over the union. Indeed, the constitution is structured so that players, not the executive director, can fire the ombudsman, the general counsel and the advisory committee. It generally gives the NHLPA chief less power than the executive directors who run the NFLPA, MLBPA and National Basketball Players Association.

    The complaints brought to Hargrove also underscored a split among union employees regarding Kelly. Players addressed the divide in June during the NHLPA player meetings in Las Vegas. NHLPA player representatives decided to create a committee to investigate the dispute. Matt Stajan and Mike Komisarek of the Toronto Maple Leafs, Brad Boyes of the St. Louis Blues and Andrew Ference of the Boston Bruins volunteered to lead the investigation.

    In July, the four players along with human resources consultant Anne Marie Turnbull interviewed 25 members of the NHLPA staff. The players compiled firsthand accounts from staff regarding Kelly’s leadership of the union.

    “They weren’t favorable to him whatsoever, from his ability as a leader of the NHLPA to his ability to create a business plan and negotiate with Gary Bettman,” said a source familiar with the players’ report.

    The four players shared the results of the investigation with Kelly on Aug. 26, days before a scheduled meeting of player representatives in Chicago. The following day, TSN reported that Kelly was under fire and could be ousted.

    A total of 27 player representatives gathered Aug. 30 in Chicago to hear a report on their colleagues’ investigation. The meeting began with NHL legend and former Red Wing Ted Lindsay defending Kelly. The appearance of the NHL great struck most players as odd because Lindsay doesn’t have an official role with the union and was unfamiliar with the questions surrounding Kelly’s leadership.

    Kelly followed Lindsay and defended his work as executive director. He accused those allied against him of being participants in a coup and went so far as to single out NHLPA general counsel Ian Penny, Hargrove, members of the advisory board and divisional player representatives, the six former players who support player representatives at each team and help facilitate communication between the NHLPA office and the membership.

    “At the end of the day, you weren’t left with anyone else,” a source said. “He basically went through the entire organization and named them as part of the coup.”

    Afterward, Kelly left the room and the four players who conducted the investigation presented their findings. They noted the positive traits employees admired in Kelly such as his strong communication skills and his open-door policy. But the players also raised employee questions about Kelly’s ability to generate new revenue and negotiate a new CBA. The four players ended their presentation by recommending Kelly’s dismissal.

    Hargrove followed with a presentation of his own. The presentation culminated, a source said, with Hargrove laying on a table a series of e-mails between Kelly and an NHLPA employee in which Kelly asked the employee to provide him with sealed and confidential transcripts of minutes from the June players meeting in Las Vegas. The minutes Kelly sought concerned a meeting of the NHLPA advisory board in which the four-member panel that would investigate the complaints against Kelly was appointed.

    A source said that after the employee expressed concern to Kelly about retrieving the sealed transcripts, the employee notified Hargrove of Kelly’s request. According to Hargrove’s presentation, the source said, Kelly contacted the court stenographer who took notes on the meeting, and requested and secured the sealed transcripts, thereby circumventing NHLPA rules.

    The episode recalled former NHLPA Executive Director Ted Saskin’s efforts to monitor players’ e-mails and was grounds for immediate dismissal.

    “The guys were in shock,” a source said. “[The union] just went through the Saskin stuff with the e-mails.”

    The players brought Kelly back into the room and asked him to address Hargrove’s evidence. He said that he accessed the sealed transcripts in order to protect the players in case they were being misled, according to a source.

    Kelly was asked to leave the room shortly after 3 a.m. and the players took a vote. Of the 27 player representatives present, 22 voted to fire Kelly.

    In a statement, Kelly said, “My personal ethics and reputation are beyond reproach. All of these stories, whether anonymous or by those seeking to protect their individual interest, intend to defame my reputation and good name. They not only harm me, but do harm to the reputation of the over 700 hockey players who make our sport the best in the world.”

    In the days after the vote, Lindros, Penny and others were accused of leading a coup against Kelly. But sources say they had nothing to do with what happened. It came down to trust.

    “If you lose trust, it’s gone,” a source said. “How can you be a leader of a union and not have trust? Even if Saskin had never happened, this would have been an incredibly bad thing.”

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  • What does future hold for Phoenix Coyotes?

    The future of the Phoenix Coyotes has hung in the balance since owner Jerry Moyes filed for bankruptcy protection in May and Research In Motion co-CEO Jim Balsillie filed a $212.5 million offer to buy and relocate the team.

    On Thursday, a Phoenix bankruptcy court will hold an auction for the team that could provide some resolution. Some answers to questions still swirling around the case.

    Who is bidding to buy the team?
    There are three bids currently before the court. The first bid is Balsillie’s $212.5 million offer, which is contingent upon being able to relocate the team to Hamilton, Ontario. The second is the NHL’s $140 million offer, which is designed to withdraw the team from bankruptcy proceedings and allow the league to sell it in a more orderly fashion. The last is a $150 million bid by Ice Edge Holdings, a Canadian group that wants to buy the team and have it play eight games in Saskatoon, Saskatchewan, in 2009-10.

    How will the auction work?
    The judge is expected to take the bids, ask if there’s anyone else in the open courtroom who cares to file a bid, and hear arguments about remaining issues in the case. Ultimately, he will determine under bankruptcy code what the highest and best bid is. The highest bid may not be the best.

    Will the case end after the auction?
    Probably not. The judge said that he has so many issues to decide that he may not decide them before Sept. 14 and hopes to have a final decision by NHL season. The NHL also guaranteed that it would appeal the case should it lose.

    What issues are outstanding?
    The court is considering a host of issues, including: Whether it has the legal right to force the NHL to accept Balsillie as a member after the board of governors rejected his membership application because of character and integrity concerns; whether it is possible to relocate the team to Hamilton during the 2009-10 season; who has to pay Coyotes coach Wayne Gretzky and how much he should be paid; and whether Glendale’s lease can be rejected.

    Why does this matter?
    This is more than a fight over a struggling NHL franchise. At its core, it’s a battle over whether leagues can determine the locations of their franchises and manage the sale of a franchise. If Balsillie wins, it could set a precedent that damages all sports leagues. His ability to buy and relocate the Coyotes out of bankruptcy could inspire other owners to file for bankruptcy protection to circumvent league rules and sell their team to a buyer willing to pay more if the franchise can be relocated. Should the court force the NHL to accept Balsillie as an owner, other rejected applicants for ownership in leagues could see the court as an avenue to force a league to accept their membership.

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  • Zappos.com sponsoring WCC hoops tournaments

    The West Coast Conference has secured its first title sponsor — Zappos.com — for its men’s and women’s postseason basketball tournaments.

    WCC’s rights partner, IMG College, sold the deal to Zappos, an exclusively online retailer of clothing, shoes, bags and accessories based in Las Vegas. The conference announced last month a new three-year agreement to play the tournaments in Las Vegas at Orleans Arena, and Zappos’ deal with the conference will run concurrently with the arena extension through 2012. Financial terms were not available.

    The tournaments, which previously had been held at campus sites, moved to Orleans Arena in 2009 for the first time and set attendance records for total and single-session crowds, playing 14 men’s and women’s games over four days. The men’s title game drew 7,845.

    Before signing the deal to title sponsor the tournament, Zappos.com was a premier-level sponsor of last year’s tournament and ran a shoe drive that donated 5,200 pairs of shoes to Soles4Souls, a nonprofit organization that distributes shoes to needy children internationally.

    Zappos also held an event to pass out shoes in Las Vegas in conjunction with the tournament and will likely repeat the effort as part of its activation next season.

    The league’s teams are Gonzaga, St. Mary’s, San Diego, San Francisco, Santa Clara, Portland, Pepperdine and Loyola Marymount.

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