SBJ/20100517/This Week's News

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  • Apparel, equipment sales slip for second year

    Sports apparel and equipment sales in the U.S. dipped 4.3 percent last year, marking the first time the sporting goods industry has experienced consecutive years of declining sales since the Sporting Goods Manufacturers Association began tracking those numbers in 1988.

    Lacrosse was named the hottest growth sport
    in the sporting goods group’s report for 2009.

    “2009 may be remembered as the most difficult year the sporting goods industry has experienced,” noted the SGMA’s annual State of the Industry Report, issued last week.

    Wholesale domestic sales of sporting goods equipment, fitness equipment, sports apparel, athletic footwear and licensed merchandise totaled $71.8 billion in 2009 — a 4.3 percent decrease compared with a weak 2008, when wholesale sales were $75 billion, a 3.2 percent decrease from the previous year and, at that time, the first drop in five years.

    The report, however, an amalgam of industry data and research along with consumer and business-to-business surveys, noted that the sports and fitness industry slowed at less than half the rate of general economic decline in 2009. Additionally, the report projected that industry sales will rebound in 2010 between 2 percent and 4.5 percent, outpacing the 2 percent growth projected for the overall U.S. economy. More than 63 percent of industry executives surveyed for the report said they expected sales to increase this year; only 8 percent predicted sales declines.

    Activities most likely to generate sales growth or decline
    HOT
    Lacrosse 50%
    Football 25%
    Fitness walking 21%
    Aerobic training 18%
    Fitness cycling 18%
    NOT
    Golf 42%
    Roller/Street hockey 21%
    Paintball 21%
    Baseball 21%
    Billiards 17%
    To read: 50 percent of those surveyed picked lacrosse as the sport most likely to generate sales growth; 42 percent cited golf as the sport most likely to generate sales decline.
    Survey base: A panel of 60 industry experts, primarily retailers and manufacturers.
    Source: SGMA State of the Industry Report 2010

    “We’ve gone from a year of doubt, where big retailers and manufacturers responded early with personnel cuts, to some cautious optimism,” said SGMA President and CEO Tom Cove. “We’ve learned that we’re not as discretionary a spend as luxury goods, but we’re still tied to the economy. The key factors to the rebound will be how much consumers’ definition of value has changed and, on the industry side, what the ‘new normal’ is, as far as how much inventory it’s appropriate to have on hand.”

    Among leading categories, sports apparel sales dropped 5 percent, from $29.6 billion to $28.1 billion; the overall sports equipment sector dropped 2.4 percent, from $20.8 billion to $20.2 billion; athletic footwear declined 0.8 percent, to $12.268 billion; licensed product sales plummeted 13.8 percent; exercise equipment declined marginally, from $4.2 billion to $4.1 billion.

    Among the few sports seeing increases in equipment sales were camping, football, soccer and martial arts.

    Lacrosse was named the “hottest growth sport,” followed by football and fitness walking. Running, named last year’s third-hottest sport, fell to ninth.

    Sales of golf clubs and accessories fell 11.4 percent to $2.48 billion, somewhat more than a 5.1 percent decline in golf participation would bring about. Sales of tennis equipment dipped 6.2 percent, while the sport’s participation numbers were flat.

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  • Bloomberg branches out with data products

    Bloomberg Sports this month is beginning an aggressive pursuit of several additional markets for its new baseball analytics products.

    The well-known financial data company last fall partnered with MLB Advanced Media to develop and market an extensive series of statistical products for both MLB teams and individual fantasy baseball players.

    The initial set of releases, which hit the market earlier this year, was led by a professional-grade product sold to teams that allows for a massive range of research on teams and individual players using MLBAM’s real-time statistics and location-based data. That was followed by a consumer-level offering that put forth some of the same information but in ways aimed at fantasy baseball use.

    The new initiatives are intended to increase the audience size and scope for the Bloomberg products. Among the latest moves:

    Online video with Keith Hernandez and
    smartphone platforms are among the
    Bloomberg initiatives.

    A sales effort to reach regional sports networks and other TV entities, aiming to have the outlets use the Bloomberg data on air. Among the early adopters, at least on a trial basis, are the Comcast-owned regional sports networks, YES Network and NESN.

    A similar push to reach individual players and their agents. The idea here is to help players with their own individual research as well as to prepare for free agency and arbitration proceedings.

    The creation of mobile applications on various platforms, most prominently the iPhone, for the consumer market.

    A deal with RotoHog to develop a casual fantasy game on Facebook using the Bloomberg baseball data.

    The development of a viral online video series titled “Mustrash Talk” that features former MLB star and current SNY analyst Keith Hernandez offering fantasy baseball trash talk, all the while showcasing his famed mustache. That effort has been joined by another online video series within MLB.com’s blog network called “Ballpark Figures” that offers fantasy tips, discussion on statistical trends in baseball, and interviews with various MLB players, with new installments to appear at least twice a week.

    An expansion of Bloomberg’s relationships with MLB teams to bring some of the data and analysis out of the front offices and onto stadium scoreboards, as well as having it used in various marketing efforts and sales promotions. The New York Mets are the first club to use the information in this fashion, as they have started to put data up on Citi Field’s scoreboards.

    “This is all about raising awareness in the right kind of way and showing the compelling nature of what we’re doing,” said Bill Squadron, head of Bloomberg Sports.

    Squadron said sales of both the pro and consumer products to date have met expectations, but he declined to provide specifics. Twenty-eight of 30 MLB teams are using the pro-level data, with Boston and the New York Yankees the two holdouts, according to industry sources.

    The RotoHog-powered Facebook game aims to extend Bloomberg’s fantasy reach from tools and analytics into actual gameplay.

    Said Kelly Perdew, RotoHog chief executive, “Our business model is about powering games for brands, and this is a validation of the investment we’ve made in our people and technology.”

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  • Charlotte speedway president paying attention to low and high ends of ticket prices

    The hum of race cars circling the track fills Marcus Smith’s corner office, serving as a constant reminder of his core business at Charlotte Motor Speedway. Smith, 37 years old and son of Speedway Motorsports Chairman Bruton Smith, is approaching the second anniversary of his appointment as the track’s president and chief operating officer for SMI. The University of North Carolina graduate oversees all aspects of SMI’s day-to-day business, which hasn’t been an easy job as the recession has taken a big bite out of SMI’s revenue. SMI’s first-quarter report earlier this month showed revenue shrank from $133 million in 2009 to $118 million this year. With two of his most important events approaching this month, the Sprint All-Star Race and the Coca-Cola 600, he recently sat down with staff writer Michael Smith.

    What trends are you seeing on sponsorship, hospitality and other business aspects of the track?
    Smith:
    I think things have finally started to turn the corner, thankfully. We’re seeing companies start to get back into entertaining and trackside marketing programs. We’ve filled a couple of holes [Coca-Cola, AAA, O’Reilly Auto Parts], so hopefully things have turned a corner and it’d be great once employment starts to turn around, too. … There’s been a perception in NASCAR that it’s really, really expensive, but we do have programs that not just big businesses can afford, but midsize and small businesses can afford as well. We also have to look at some nontraditional categories. The green industry is hot, so that’s an area where you could see some increases in sponsorship, hospitality and advertising. All properties are taking a closer look at those opportunities.

    What do people want from hospitality these days?
    Smith:
    As a company, you want to have something that is exciting for your customers or your employees or your sales team, but you also want to be affordable. That’s where we’ve had to look for different ways to help make a racing experience affordable for fans and groups. We’ve packaged tickets with coupons for concessions and a goodie bag with the sponsor’s hat and a keepsake from the race. We might skip the big tent and the formal sit-down portion and include a pit tour or concessions coupons for a hot dog and a Coke, and it cuts the costs tremendously when you do that.

    There’s been intense discussion throughout the recession about the value proposition with tickets. Do you slash prices to entice more customers to come to the track or cling to the same prices, despite the economy?
    Smith:
    For us, we’ve got to have more lower-priced tickets. At the same time, we’ve got to take care of our frontstretch ticket holders and the fans who are looking for the best experience possible. We’re providing more low-priced tickets. You can get a ticket to Sprint Cup races for $39 and there are also military and student discounts. That $39 ticket includes a Coke and a hot dog. On the higher end with our frontstretch tickets, we haven’t raised prices in a few years, but we’ve added more benefits. For our customers who buy more races, we’ve done things like our Victory Lane Club, which is a season-ticket program. Buy all three of our Sprint Cup events in Charlotte, you get automatic entry into Victory Lane Club. You get a Speedway hard card, 10 percent off at the gift shop year-round, dining privileges at the Speedway Club, special invitations to press conferences. … A lot of things have changed.

    Is the racing doing its job to attract the fans?
    Smith:
    The TV ratings have been impacted significantly by the weather we’ve had, but the racing has been great. It seems like the drivers are driving to win. As fans, we all love that. I wonder if the drivers have collectively heard that from fans, saying, “I’m tired of points racing. I want my driver to drive for the win.” Points are important, but points have nothing to do with why I go to the race that day. I can’t see a points race. I see that day’s race. Points racing is boring. Fans want to see their guy win the race.

    Is racing suffering from Jimmie Johnson fatigue?
    Smith:
    There are always people who root against No. 1 or root for the underdog. We’re not any different than when the Patriots were always winning in the NFL. Some people just don’t like the Patriots because they always win. Or the Yankees because they always win. Jimmie Johnson has a lot of fans in the stands, and there are a lot of 48 haters in the stands. If you back it up, there were a lot of people who couldn’t stand No. 3 and Earnhardt, and a lot of people who loved him. This is not uncharted territory. … There are definitely 48 haters out there. I spend hours every weekend at our races, driving the golf cart around, giving fans a ride. I always ask them who their favorite driver is (and sometimes they tell me which driver they don’t like). I ask them where they’re from, if they’ve been to a race before and how long they’ve been coming. I ask if they’re camping or staying at a hotel. I just want to know about their experiences coming to the track.

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  • ESPN fends off Fox for ACC rights

    Editor's note: This story is revised from the print edition.

    ESPN won the TV rights to ACC football and basketball in a bidding competition with Fox Sports that was surprisingly close, industry sources say, and as a result made the conference several million more dollars.

    The back-and-forth bidding, which reached its final stages last week at the league’s spring meetings in Amelia Island, Fla., drove up ESPN’s rights fee from initial projections of about $120 million a year to $155 million, sources said, providing the ACC with more than double the revenue it was receiving from its previous football and basketball contracts.

    ESPN’s increase was in response to an unexpectedly strong pursuit by Fox Sports and sources familiar with the negotiations say the bidding was neck-and-neck last week.

    ACC TV rights revenue
    Current deals:
    Football: 7 years, $258 million with ABC/ESPN through 2010
    Basketball: 10 years, $370 million with Raycom Sports through 2010-11
    Average per year: $73 million to $75 million
    New deal:
    Football/basketball: 12 years, $1.86 billion with ABC/ESPN through 2022-23
    Average per year: $155 million
    Sources: Conference Form 990 filed with the IRS, SportsBusiness Journal

    The ACC broke from its spring meetings without announcing a new deal, and the conference said a formal contract had not been finalized. But industry sources pegged a pending deal with ESPN at $1.86 billion over 12 years.

    That annual figure of $155 million dwarfs the average of $73 million to $75 million the league was getting from its previous media deals, which expire at the end of the 2010-11 season (see chart), but falls well short of the $205 million a year that the SEC gets from its new 15-year deals with CBS and ESPN.

    Raycom Sports, a 30-year partner with the conference, is expected to continue running the syndicated package of football and basketball by sublicensing those games from ESPN.

    It is unclear what digital rights are included, but the deal is thought to be an all-encompassing arrangement between the ACC and ESPN that includes online and broadband.

    With the new package, ESPN will continue to choose from the ACC’s full selection of football games for its Thursday night programming, as well as its Saturday afternoon and night games on ABC. The basketball package keeps the highly rated North Carolina-Duke game on ESPN, and the network typically broadcasts ACC action on Tuesday, Wednesday and Thursday nights during the week, in addition to Saturdays. It remains to be seen if FSN will continue its Sunday night basketball programming by purchasing those games from ESPN in the new contract.

    The basketball package keeps the highly rated
    North Carolina-Duke game on ESPN.

    To win the rights, ESPN had to stave off Fox, which sent its big guns to Amelia Island to make its final bid. Fox was represented by Chase Carey, the chief operating officer for parent company News Corp.; Fox Sports President Ed Goren; and Fox Sports Networks President Randy Freer. Their bid included over-the-air and cable components, with a game of the week on Fox Sports and other games throughout the week on FX and FSN.

    ESPN had executive vice presidents John Skipper and John Wildhack, and Burke Magnus, senior vice president of college sports, at the meetings for its final pitch.

    Ken Haines, the longtime president of Charlotte-based Raycom Sports and a familiar figure around the ACC meetings, made his final presentation as well.

    ACC Commissioner John Swofford and the ACC’s media consultant, IMG’s Barry Frank, led the talks on the conference side.

    That Fox made such a competitive bid could be considered a heartening development for the Pac-10 and Big 12 conferences, which are next in line to negotiate new media contracts. Both have rights expiring in 2012.

    Turner Sports, which recently acquired with CBS the NCAA’s rights to broadcast the men’s basketball tournament through 2024, could be a factor in future rights negotiations as it seeks regular-season college programming to go with its NCAA package.

    Those networks might provide some much-needed competition in the college space for these conference deals, which have been dominated by ESPN.

    The ACC’s new contract, which will take the league through the 2022-23 season, will be structured differently than its previous contracts. In the past, the ACC sold its football rights to ESPN, while Raycom bought the basketball rights. Other broadcasters who wanted ACC basketball, such as CBS, ESPN and FSN, acquired their games from Raycom.

    The new deal puts the football and basketball rights in ESPN’s basket, from which Raycom, FSN and others will purchase their games.

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  • ESPN fends off Fox for ACC rights

    Editor's note: This story is revised from the print edition.

    ESPN won the TV rights to ACC football and basketball in a bidding competition with Fox Sports that was surprisingly close, industry sources say, and as a result made the conference several million more dollars.

    The back-and-forth bidding, which reached its final stages last week at the league’s spring meetings in Amelia Island, Fla., drove up ESPN’s rights fee from initial projections of about $120 million a year to $155 million, sources said, providing the ACC with more than double the revenue it was receiving from its previous football and basketball contracts.

    ESPN’s increase was in response to an unexpectedly strong pursuit by Fox Sports and sources familiar with the negotiations say the bidding was neck-and-neck last week.

    ACC TV rights revenue
    Current deals:
    Football: 7 years, $258 million with ABC/ESPN through 2010
    Basketball: 10 years, $370 million with Raycom Sports through 2010-11
    Average per year: $73 million to $75 million
    New deal:
    Football/basketball: 12 years, $1.86 billion with ABC/ESPN through 2022-23
    Average per year: $155 million
    Sources: Conference Form 990 filed with the IRS, SportsBusiness Journal

    The ACC broke from its spring meetings without announcing a new deal, and the conference said a formal contract had not been finalized. But industry sources pegged a pending deal with ESPN at $1.86 billion over 12 years.

    That annual figure of $155 million dwarfs the average of $73 million to $75 million the league was getting from its previous media deals, which expire at the end of the 2010-11 season (see chart), but falls well short of the $205 million a year that the SEC gets from its new 15-year deals with CBS and ESPN.

    Raycom Sports, a 30-year partner with the conference, is expected to continue running the syndicated package of football and basketball by sublicensing those games from ESPN.

    It is unclear what digital rights are included, but the deal is thought to be an all-encompassing arrangement between the ACC and ESPN that includes online and broadband.

    With the new package, ESPN will continue to choose from the ACC’s full selection of football games for its Thursday night programming, as well as its Saturday afternoon and night games on ABC. The basketball package keeps the highly rated North Carolina-Duke game on ESPN, and the network typically broadcasts ACC action on Tuesday, Wednesday and Thursday nights during the week, in addition to Saturdays. It remains to be seen if FSN will continue its Sunday night basketball programming by purchasing those games from ESPN in the new contract.

    The basketball package keeps the highly rated
    North Carolina-Duke game on ESPN.

    To win the rights, ESPN had to stave off Fox, which sent its big guns to Amelia Island to make its final bid. Fox was represented by Chase Carey, the chief operating officer for parent company News Corp.; Fox Sports President Ed Goren; and Fox Sports Networks President Randy Freer. Their bid included over-the-air and cable components, with a game of the week on Fox Sports and other games throughout the week on FX and FSN.

    ESPN had executive vice presidents John Skipper and John Wildhack, and Burke Magnus, senior vice president of college sports, at the meetings for its final pitch.

    Ken Haines, the longtime president of Charlotte-based Raycom Sports and a familiar figure around the ACC meetings, made his final presentation as well.

    ACC Commissioner John Swofford and the ACC’s media consultant, IMG’s Barry Frank, led the talks on the conference side.

    That Fox made such a competitive bid could be considered a heartening development for the Pac-10 and Big 12 conferences, which are next in line to negotiate new media contracts. Both have rights expiring in 2012.

    Turner Sports, which recently acquired with CBS the NCAA’s rights to broadcast the men’s basketball tournament through 2024, could be a factor in future rights negotiations as it seeks regular-season college programming to go with its NCAA package.

    Those networks might provide some much-needed competition in the college space for these conference deals, which have been dominated by ESPN.

    The ACC’s new contract, which will take the league through the 2022-23 season, will be structured differently than its previous contracts. In the past, the ACC sold its football rights to ESPN, while Raycom bought the basketball rights. Other broadcasters who wanted ACC basketball, such as CBS, ESPN and FSN, acquired their games from Raycom.

    The new deal puts the football and basketball rights in ESPN’s basket, from which Raycom, FSN and others will purchase their games.

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  • French bank is tennis’ big hitter

    Quick. As tennis season swings into high gear with the start of the French Open on Sunday, name the sport’s top sponsor.

    It’s a company with a plethora of deals that span the globe, touching nearly every region and level of the game. And tennis is essentially the only sport it sponsors.

    The correct answer, BNP Paribas, and the company’s tennis story is largely unknown outside of the bank’s home country of France, despite BNP being the French Open’s principal sponsor and having plans to spend at least 25 million euros ($32 million based on current conversion rates) in the sport in 2010.

    That might not seem like much by NFL or Olympic standards, but in tennis, it’s sizable. Nike’s spending on athlete endorsements in tennis might be comparable in amount, and Corona’s new deal with the ATP World Tour is expected to grow in value for its second year to a sum roughly comparable to the $13 million annually Mercedes-Benz was paying before it bowed out at the end of 2008. There is no company in tennis, however, that sponsors and activates across so many regions and so many individual events as Paris-based BNP does.

    Nonetheless, few in the United States have heard of the bank, France’s largest and the 11th largest company in the world, according to Forbes.

    A recent survey conducted by Turnkey Sports & Entertainment on behalf of SportsBusiness Journal found that of more than 1,000 people polled, only 4 percent identified BNP as the top financial company sponsor in tennis. BNP scored behind Citi, which sponsors a single tourney in Asia; JPMorgan Chase; HSBC; and Barclays, which titles the ATP World Tour’s season-ending championship.

    Here in the United States, BNP is the title sponsor of the country’s largest tournament outside the U.S. Open: the annual event in Indian Wells, Calif. BNP’s retail bank, Bank of the West, is the title sponsor of a smaller, summer WTA Tour event in Stanford, Calif. Still, when asked to name financial institutions involved in tennis, only 1 percent of the sport’s fans chose BNP, which sponsors three of the eight mandatory events for players on the ATP circuit and is the principal sponsor of both the Davis Cup and Fed Cup.

    The results reflect the fact that BNP is a corporate bank, so it uses sponsorships differently than more consumer-based companies. Entertaining clients is a more significant driver of BNP’s sponsorship business than public brand exposure.

    BNP made big hospitality changes when it
    took the Indian Wells naming rights last year.

    BNP’s retail banking in certain markets is executed through subsidiaries, like Bank of the West in the United States. In Italy, it’s through BNL, which sponsors the Italian Open. In addition, BNP’s big brand push into U.S. tennis began only in recent years.

    “We have good visibility,” said Sebastien Guyader, BNP’s executive in charge of branding and sponsorship. And that is certainly true in France, where the bank’s research demonstrated that for three years running, it was the most-recalled sponsor among French sports fans. Outside the country, however, BNP has clear opportunity for gains in recognition.

    But specific details about any U.S. growth goals have yet to be made available.

    As a corporate bank, hospitality is at the core of BNP’s sponsorship strategy. During a recent round of matches in Davis Cup play, the bank entertained clients in countries including Bulgaria, Peru, Luxembourg, Mexico and Hungary. In Luxembourg, for a lower-level qualifying competition, BNP hosted 300 guests.

    For the women’s Fed Cup, another BNP property, the company targeted competitions in Italy and Japan for key hospitality and outreach efforts.

    “They really activate Davis and Fed Cup worldwide, sometimes in countries even we are surprised about,” said Jan Menneken, executive director, commercial, at the International Tennis Federation, which operates the Davis Cup and Fed Cup national team competitions.

    Hospitality is at the core of the changes BNP brought to the annual U.S. event in Indian Wells, Calif., the largest stop, by attendance, on the men’s and women’s tours. The company in 2009 assumed title sponsorship of the event, which since 2002 had been known as the Pacific Life Open.

    Through the influence of BNP, the tournament upgraded its VIP hospitality program and instituted a greeters system outside the gates to improve customer satisfaction, said Steve Simon, chief operating officer of the event, now titled the BNP Paribas Open.

    “In most European tennis events, the level of service and quality of food provided in a VIP hospitality [area] is of the levels seen at a fine-dining restaurant here in the States,” Simon said. “Once we signed BNP Paribas, we began going through our suites and changed out the furniture to reflect more of a European feel, checked every detail in the presentation of the stadium [suites], worked with Levy Restaurants, our master concessionaire, to develop quality menus that blended a California/international feel, and trained the hostesses assigned to each suite to take the level of service to much higher levels.”

    As a sponsor, BNP is somewhat of a throwback to an era when entertaining clients and displaying signage was the bulk of a sponsorship effort. European sports marketing, in general, has been viewed as trailing comparable U.S. business efforts, except in hospitality. The bank spends little on advertising or promotion behind the sponsorships, largely relying on the TV exposure it receives from on-site signage for branding.

    The bank did this tennis-themed TV spot, but
    spends little on ads behind the sponsorships.

    The bank has featured one generic tennis ad that shows fans rushing two players on a clay court. The spot, however, has received some criticism in the tennis world in large part because of the 1993 attack on Monica Seles, who was stabbed by a deranged fan who ran onto the court.

    Nevertheless, BNP’s ad budget is slight. Of the roughly 25 million euros the bank will spend in tennis this year, according to BNP’s Guyader, about 20 million is for the core sponsorship fees. For many companies, there is usually at least a one-to-one match between the fee spending and the promotional/ad spend.

    And then there’s the other unusual element of BNP’s sponsorship strategy: Other than its backing of Belgian soccer club Anderlecht FC, a deal the bank only assumed with its acquisition of financial firm Fortis last year, every penny it spends in sports is in tennis. The bank cites the sport’s global reach and elite demographic as reasoning behind the choice. That strategy, of course, carries certain risks.

    “Putting all of your money into one sport sort of makes you susceptible to the sport not doing well, or reaching only a tennis-fan audience,” said Bob Basche, chairman of sponsorship outfit Millsport/The Marketing Arm. On the other hand, he added, “they can make a bigger impression in one sport, in a sport that would seem to match up with their financial objectives.”

    BNP’s Guyader defends the tennis-only approach, noting that to sponsor the Olympics or next month’s FIFA World Cup would entail a major financial commitment. Tennis also brings great TV visibility, he said, because any single game in a match can last awhile, leaving the sponsor signage in sight longer than other sports. The sport extends nearly through the entire year, he added, and has the same rules no matter where it is played.

    “It is a good price,” he concluded “for the money.”

    BNP Paribas sports sponsorships
    Events Comment
    French Open The deal that started it all in tennis for BNP; this will be the bank’s 37th year sponsoring the clay-court spectacle.
    BNP Paribas Open Comprises the largest events, by attendance, on the ATP and WTA tours; BNP in March completed its second year of a five-year sponsorship.
    BNP Paribas Masters A fall ATP event in Paris.
    Internazionali BNL d’Italia Sponsored by BNP’s Italian retail bank, the events are top ATP and WTA stops; BNL used them for a major Italian branding campaign in 2008.
    Bank of the West Classic Sponsored by BNP’s U.S. retail subsidiary, the event is a midtier WTA event.
    BNP Paribas Showdown Annual tennis exhibition at Madison Square Garden.
    BNP Paribas Fortis Best of Belgium New exhibition this July seeks to fill 40,000-seat Belgian stadium with exhibition between Kim Clijsters and Justine Henin.
    Davis Cup and Fed Cup BNP has been the principal sponsor since 2002.
    ITF Wheelchair Tennis One of four sponsors, though not the title sponsor (NEC holds that designation).
    Several national tennis associations, 2,000 clubs, 500 amateur tournaments, numerous educational programs Like any good sponsor, BNP also works the grassroots level.
    Anderlecht FC BNP’s one non-tennis sponsorship; obtained through its purchase of Fortis 12 months ago
    Sources: BNP Paribas, SportsBusiness Journal reporting
     
    WHO KNOWS BNP?
    BNP Paribas is generally unrecognized as tennis’ top sponsor, even among tennis fans, despite the company using the sport as virtually its sole sponsorship vehicle.
    When you think about tennis, what sponsors / companies come to mind?   When you think about financial institutions involved in tennis, what companies come to mind?
    Nike 24% Bank of America 14%
    Wilson 8% Citi 7%
    Adidas 7% JPMorgan Chase 7%
    Coca-Cola 4% Wachovia 2%
    Gatorade 4% Wells Fargo 2%
    Rolex 3% AIG 1%
    Reebok 3% Bank of the West* 1%
    Head 2% BNP Paribas 1%
    Mercedes-Benz 2% HSBC 1%
    Chase 1% * BNP U.S. retail bank subsidiary
    Note: Results from survey respondents who were designated “tennis fans.”
    BNP Paribas 1%
    Which of the following companies are you familiar with?
      U.S. population Tennis fans
    Citi 61% 75%
    JPMorgan Chase 58% 68%
    HSBC 35% 44%
    Barclays 20% 28%
    Credit Suisse 11% 18%
    BNP Paribas 5% 10%
    None of these 24% 11%
    Which of the following companies do you most associate with the sport of tennis?
      U.S. population Tennis fans
    Citi 15% 26%
    JPMorgan Chase 12% 23%
    HSBC 7% 14%
    Barclays 6% 13%
    BNP Paribas 4% 9%
    Credit Suisse 4% 9%
    Not sure 72% 51%
     
    Which financial institutions do you think are a sponsor of each of the following tournaments or do you associate with the event?
    Indian Wells, Calif. U.S. population Tennis fans French Open U.S. population Tennis fans U.S. Open U.S. population Tennis fans
    Citi 6% 11% BNP Paribas 10% 18% JPMorgan Chase 12% 24%
    JPMorgan Chase 6% 11% Credit Suisse 10% 16% Citi 14% 23%
    HSBC 6% 10% Barclays 7% 13% HSBC 7% 12%
    Barclays 5% 9% HSBC 4% 10% Barclays 4% 9%
    BNP Paribas 4% 7% JPMorgan Chase 5% 9% BNP Paribas 3% 7%
    Credit Suisse 3% 6% Citi 5% 9% Credit Suisse 3% 6%
    Source: Turnkey Sports & Entertainment, through its Turnkey Intelligence operation, conducted a national consumer research survey among a sample of 1,050 members of the Greenfield Online Omnibus panel who were at least 18 years old. Respondents were asked to rate their level of fan avidity with regard to professional tennis, with a score of 1 representing “Not a fan” and 5 being the most avid. “Tennis fans” data shown here reflects the views of the 397 respondents that selected a “2” or above to that avidity question. The survey was conducted April 12-17. Greenfield Online is part of the Toluna Group. The percentage responses listed have been rounded, and the margin of error for each survey question is +/- 4 percent.

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  • Jr.’s No. 3 Wrangler tribute car has sales sizzling

    Combine one of NASCAR’s biggest names with one of its most recognizable paint schemes from the past and you’ve got licensing gold.

    Merchandise commemorating Dale Earnhardt Jr.’s retro No. 3 Wrangler car is flying off the virtual shelves at NASCAR.com Superstore. The Wrangler machine honoring Earnhardt Jr.’s late father won’t appear on the track until the July 2 Nationwide Series race at Daytona, but the die-cast cars, T-shirts, hats and trinkets have been selling since the April 29 announcement.

    Gear from the No. 3 Wrangler car, which will run just once this season as a special paint scheme, likely will wind up as one of the biggest sellers of the year. In the first five days on the market after the April announcement, Wrangler No. 3 goods were responsible for 52 percent of all licensed sales.

    Some of the products offered at NASCAR.com, which include nearly 30 different items, feature the image of Earnhardt Sr. along with his son.

    Since the announcement, Wrangler No. 3 merchandise has accounted for eight of the NASCAR.com Superstore’s top 10 best-selling items and it has led all other driver categories in sales. Within 36 hours of the announcement, Superstore sold out of its second-highest-priced item, a special die-cast car that came in a limited edition of 333, priced at $89.99.

    The deal required negotiations involving three NASCAR
    teams and Wrangler. From left: DEI’s Taylor Earnhardt,
    JRM’s Kelley Earnhardt and Dale Jr., RCR owner
    Richard Childress, Craig Errington of Wrangler; DEI’s
    Teresa Earnhardt and Kerry Earnhardt; and Winston
    Kelley, executive director of the NASCAR Hall of Fame.

    Initial projections from the licensees forecast close to $5 million in retail sales in a very tight program centered on the NASCAR Hall of Fame inductions later this month and Father’s Day.

    Royalties are shared by three teams: Earnhardt Jr.’s JR Motorsports, which initiated the idea and is building the car; Richard Childress Racing, which owns the rights to the No. 3 in NASCAR; and Dale Earnhardt Inc., the organization that manages Earnhardt Sr.’s image and likeness.

    Merchandise is available trackside through Motorsports Authentics, as well as online at NASCAR.com and the teams’ websites.

    “There’s always some back-of-the-brain concerns about how a program will go, but clearly the fans have been very responsive,” said Mike Brown, RCR’s vice president of licensing.

    Because of the rights issues, it took the combined efforts of those three organizations to re-create the yellow and blue car that Earnhardt Sr. made famous while driving it from 1981-87. During that stint, Earnhardt Sr. was the lead in Wrangler’s “One Tough Customer” ad campaign, giving root to the relationship between the jeans maker and the Earnhardt family that’s in its 30th year.

    Wrangler maintains a personal-services agreement with Earnhardt Jr. and uses the NASCAR driver heavily in its advertising, but it has not previously appeared as a primary sponsor on a car from Earnhardt Jr.’s JR Motorsports.

    “We went into the season with some unsponsored cars and the message from Dale was to do something that’s meaningful with partners that have been good to us,” said Joe Mattes, vice president of licensing and marketing at JRM. “Dale said he’d do this if it was about his dad. If we were just going to paint the car, he didn’t want to do it. With Senior going into the Hall of Fame this year, it made sense to honor him.”

    In order to assemble the rights necessary, JRM needed cooperation from RCR and DEI.

    Mattes worked with Kelley Earnhardt, Dale Jr.’s sister and JRM’s general manager, to pitch the theme of “Family. Honor. Tradition,” which was presented to Wrangler and the other teams.

    “With Dale’s induction this year, plus a chance to do something with a 30-year sponsor, that’s what made this special,” said Jeff Steiner, executive vice president at DEI. “It took all three teams coming together and working in a nontraditional way to make this happen.”

    Earnhardt Jr. had not had anything to do with DEI, his former place of employment, since his messy and contentious departure in 2007, when he left the DEI shop to drive for Hendrick Motorsports.

    The biggest challenge to the Wrangler deal was getting Earnhardt Jr. and his stepmother, Teresa, to agree to work together. Teresa Earnhardt, Dale Earnhardt Sr.’s widow, runs DEI, and her split with Earnhardt Jr. in 2007 was the start of DEI’s downfall as a race team. DEI later merged what was left of the race operations with Chip Ganassi Racing.

    “Teresa said it was about a tribute to Dale,” Steiner said. That they got together on a deal “probably surprised some people. I’m sure it raised a few eyebrows, but it was fully supported by her. Teresa has been very engaged.”

    JRM serves as the licenser of record, with royalties flowing through the team and then dispersed to DEI and RCR.

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  • Lawsuits may affect big-name sports agencies

    A legal battle being fought in two states over the rights of a little-known sports agent could help determine the financial fate of some of the most powerful sports agents and agencies in the country.

    Close
    Condon

    The lawsuit, filed by former IMG coaches agent Matthew Baldwin when he recently joined CAA Sports, and a counterclaim filed by IMG center on whether agents can take their clients with them when they leave one firm for another, and they come as big sports agencies approach a pivotal period. The contracts of major baseball agent Casey Close and football agents Tom Condon and Ben Dogra at CAA Sports, and of Mark Steinberg, Tiger Woods’ agent at IMG, are set to expire in the next two years, and the case could affect where those agents land.

    Additionally, a new, well-funded company, French conglomerate Lagardère, is expected to officially announce that it is entering the U.S. sports market in the next few weeks through its acquisition of Blue Entertainment Sports Television. Lagardère, sources say, plans to build an agency to rival CAA Sports, IMG, Octagon and Wasserman Media Group, through acquisitions of agents and, presumably, their clients.

    Baldwin has filed suit in Los Angeles asking that a court free him from the restrictions in his IMG employment contract. IMG has countersued in Ohio, asking that a court enforce the contract, which prohibits Baldwin from taking IMG clients to CAA.

    Even though Baldwin, who worked for Gary O’Hagan, the head of IMG Coaches, isn’t a big name, the industry is buzzing about the case because it pits IMG, the firm widely credited with inventing the sports business, against CAA, which was built chiefly on the hires of former IMG executives.

    “I am watching it with interest,” said David Falk, once the most powerful agent in sports and the former chairman of the SFX Sports Group.

    CAA Sports was formed in April 2006 when it hired Condon, who headed IMG’s football division, and Close, who headed IMG’s baseball division. CAA, whose president, Richard Lovett, was a friend and admirer of the late IMG founder Mark McCormack, has hired away other IMG executives, including powerful hockey agent Pat Brisson in 2006, and, more recently, former IMG senior executives Bob Kain and Andy Pierce.

    CAA Sports recently signed Jack Nicklaus, a longtime IMG client, and Pierce is among the agents who will lead his representation (see story). CAA Sports also had talks with Steinberg in late 2008, but Steinberg elected to sign what sources said was a short-term deal to stay at IMG. Sources said that deal is up in the next two years. Steinberg did not respond to an e-mail asking for comment. 

    Although the details of the top agents’ contracts with CAA Sports are not known, it is believed that most of them have signed five- or six-year deals, and the sports division’s five-year anniversary will be next April. That is when Close’s deal is up.

    It is not clear the length of the deals signed by Condon and Dogra (who joined CAA Sports in summer 2006), but sources said those may be six-year deals.

    Many in the industry think powerhouse agents will stay where they are in the next few years, regardless of the lawsuits’ outcome, but others aren’t so sure. A number of sources say Close, who is no longer running the CAA baseball division, is likely to leave when his contract is up. Close, who represents Derek Jeter and Ryan Howard, has refused to discuss his employment situation.

    Although details of employment contracts are not known, it is “very standard” that those employment contracts contain provisions that prevent agents from taking clients with them from their previous agency, said David Cornwell, an attorney who has represented high-profile athletes, as well as agents and agencies in employment and other disputes.

    Laws governing employment contracts vary from state to state and lawyers say that California’s law favors employees in that it does not allow employers to enforce non-compete and non-solicitation clauses, whereas other states, such as Ohio, do allow employers to enforce such clauses.

    Falk

    As a practical reality, most athletes are loyal to their agents rather than to the companies that employ those agents. But agents are only as valuable to agencies as the clients they can bring, and many industry insiders say the Baldwin case could determine whether agents could take clients with ease in the future.

    “Just like clients change agents all the time, agents change companies,” Falk said. “The question is not that it’s being done. The question is, is it being done ethically?”

    Baldwin, who was employed by IMG in Minnesota but signed an employment contract governed by the laws of the state of Ohio, left IMG on April 2 and filed suit in federal court in California the same day. Cleveland-based IMG filed a countersuit in Ohio on April 15, asking a judge to order Baldwin to comply with the terms of his contract, which include that he not solicit or represent the 20 or so NFL and Division I college coaches he represented at IMG.

    “Baldwin, who is a lawyer from Ohio, signed an agreement saying that he would be subject to jurisdiction in Ohio,” said Mark Holscher, a partner at Kirkland & Ellis, who represents IMG. “This is a guy who, the same day he resigned in Minnesota, had high-powered New York lawyers file a complaint in California, saying he is a California resident.”

    Baldwin is represented by Dewey & LeBoeuf partners Adam Kaiser and Jeffrey Kessler, a high-profile attorney who counts the NFL Players Association and the National Basketball Players Association among his clients.

    Baldwin, Kessler said, “is not violating his contract. What he has done is file a lawsuit to determine if the restrictions in his contract are enforceable in California.”

    IMG sued Baldwin “for violating the provisions that are unenforceable and which he is not violating, in any event,” Kessler said. Baldwin has not taken any clients with him, but is awaiting a ruling in the courts on the issue.

    Kessler added that the nonsolicitation provisions in the Baldwin case are identical to those in another case, which involved another former IMG agent, Jay Danzi. Danzi left IMG in Ohio to join Wasserman Media Group in California in 2007.

    An arbitrator found that California law applies and that IMG’snonsolicitation provisions in its contract were not enforceable. That arbitration decision was later confirmed by a federal court judge in the same district of California where Baldwin filed for a declaratory judgment to free him from the same provisions.

     “Once the district court confirms the award, the award has the same force and effect as a district court judgment,” Kaiser said.

    Danzi was able to take golf clients he represented, including PGA Tour player Hunter Mahan, as a result of that judgment.

     In this case, Baldwin is asking that the case be heard in California, not Ohio, and arguing that the Danzi judgment should apply. It is not clear if that will happen. At a hearing before the Ohio court where IMG filed its case, U.S. District Court Judge Kate O’Malley questioned whether she should be bound by a decision of another federal district court, according to a transcript of the proceedings.

    A hearing is set for May 27 before Los Angeles U.S. District Court Judge George Wu on IMG’s motion to dismiss the action there.

    Kaiser said it is impossible to determine how long it might take for a decision and whether one court or another would agree to keep the cases. It is also possible that the issue could be heard in both courts, he added.

    Whatever happens, sports insiders are watching closely. “I think the outcome is that it will be settled because the ramifications could have such far-reaching consequences that it could severely impact the business,” said one executive at a major sports talent agency.

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  • MLB teams hang hopes on walk-up, single-game sales

    One of MLB Commissioner Bud Selig’s more-common phrases a decade ago was “hope and faith,” a line he used to underscore the need for a new economic model in baseball.

    That line is becoming increasingly needed again, as baseball’s hopes for an attendance rebound after two straight annual declines grow more tenuous.

    Selig last fall predicted a rebound this season, but through May 11, attendance was down 3.1 percent to an average of 28,092 per game. Eighteen of 30 teams have shown declines, including 10 by double-digit percentages, and several clubs have posted new single-game lows in their current facilities thus far this season. Selig, though, is keeping the faith.

    “I feel good about things,” he said last week as the owners meeting in New York wrapped up. “We’ve had a lot of horrendous weather [and] we can’t forget that we are in the midst of an economic downturn. Yes, things are, some people hope, getting better. But we don’t know that yet. So overall, I’m satisfied and still optimistic for this year.”

    Selig also cited Hall of Fame manager Sparky Anderson. “He used to say that you can’t make any judgments before you play 40 to 50 games,” Selig said, “and that’s true on the business side of the sport, too.”

    But Selig, as well as many club executives, acknowledged that this year will see more importance placed on walk-up and single-game advance sales, which in turn are highly variable based on weather, team performance and other factors. Attendance remains baseball’s largest revenue source and a key indicator of the game’s health.

    Oakland A’s attendance is down 12 percent
    despite the team’s on-field success.

    “We’re very appreciative of the fans that do come, but it’s so discouraging,” said Oakland A’s owner Lew Wolff. “We’re not happy.” The A’s, bucking nearly all predictions with an early run of on-field contention, are down 12 percent at the gate thus far with an average of 16,415 fans a game. Actual turnout for many games, however, has been closer to 8,000. The club budgeted for flat attendance, but Wolff acknowledged the A’s may not get there.

    Complicating things for the A’s is a still-incomplete task force report on stadium options for the club to replace its ballpark. The A’s would like to move to San Jose, which is part of the San Francisco Giants’ territory.

    Many clubs are counting on a big summertime surge at the gate, as MLB attendance typically takes on a bell-shaped curve relative to the calendar. That again, for many clubs, relies on pennant contention.

    “Our attendance usually jumps a bit when school is out, but only when the team is competitive,” said Derrick Hall, the Arizona Diamondbacks chief executive. The club last week was in last place and down more than 10 percent in attendance. “We need to get out of the cellar to get back on our projected pace.”

    SURGING CONSUMPTION: MLB Advanced Media, making its customary report as part of the owners meeting, outlined more than 2.1 billion total minutes of consumed online video via MLB.com during April. The sum encompasses both live games on the MLB.TV subscription product and on-demand material, and it’s triple the site’s video-consumption number from April 2009.

    Many other major digital content publishers and video hubs are also reporting spikes in video usage, but MLB.com’s meteoric growth from its position of already having one of the highest sports-video usage counts is particularly striking. The gains are being attributed to improved quality and reliability of the streams as well as increased consumer expectations.

    “People are now expecting video,” said Bob Bowman, MLBAM president and chief executive. “It is now a standard requirement for any successful content publisher.”

    The much-discussed iPad was not a major driver of the overall video consumption total, but MLBAM has sold more than 45,000 copies of its $14.99 application for the tablet device, translating to roughly a 4.5 percent take-up rate of the 1 million iPads sold to date. “That’s a rate we’re very pleased with, one that’s better than any other device out there,” Bowman said.

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  • MLB teams hang hopes on walk-up, single-game sales

    One of MLB Commissioner Bud Selig’s more-common phrases a decade ago was “hope and faith,” a line he used to underscore the need for a new economic model in baseball.

    That line is becoming increasingly needed again, as baseball’s hopes for an attendance rebound after two straight annual declines grow more tenuous.

    Selig last fall predicted a rebound this season, but through May 11, attendance was down 3.1 percent to an average of 28,092 per game. Eighteen of 30 teams have shown declines, including 10 by double-digit percentages, and several clubs have posted new single-game lows in their current facilities thus far this season. Selig, though, is keeping the faith.

    “I feel good about things,” he said last week as the owners meeting in New York wrapped up. “We’ve had a lot of horrendous weather [and] we can’t forget that we are in the midst of an economic downturn. Yes, things are, some people hope, getting better. But we don’t know that yet. So overall, I’m satisfied and still optimistic for this year.”

    Selig also cited Hall of Fame manager Sparky Anderson. “He used to say that you can’t make any judgments before you play 40 to 50 games,” Selig said, “and that’s true on the business side of the sport, too.”

    But Selig, as well as many club executives, acknowledged that this year will see more importance placed on walk-up and single-game advance sales, which in turn are highly variable based on weather, team performance and other factors. Attendance remains baseball’s largest revenue source and a key indicator of the game’s health.

    Oakland A’s attendance is down 12 percent
    despite the team’s on-field success.

    “We’re very appreciative of the fans that do come, but it’s so discouraging,” said Oakland A’s owner Lew Wolff. “We’re not happy.” The A’s, bucking nearly all predictions with an early run of on-field contention, are down 12 percent at the gate thus far with an average of 16,415 fans a game. Actual turnout for many games, however, has been closer to 8,000. The club budgeted for flat attendance, but Wolff acknowledged the A’s may not get there.

    Complicating things for the A’s is a still-incomplete task force report on stadium options for the club to replace its ballpark. The A’s would like to move to San Jose, which is part of the San Francisco Giants’ territory.

    Many clubs are counting on a big summertime surge at the gate, as MLB attendance typically takes on a bell-shaped curve relative to the calendar. That again, for many clubs, relies on pennant contention.

    “Our attendance usually jumps a bit when school is out, but only when the team is competitive,” said Derrick Hall, the Arizona Diamondbacks chief executive. The club last week was in last place and down more than 10 percent in attendance. “We need to get out of the cellar to get back on our projected pace.”

    SURGING CONSUMPTION: MLB Advanced Media, making its customary report as part of the owners meeting, outlined more than 2.1 billion total minutes of consumed online video via MLB.com during April. The sum encompasses both live games on the MLB.TV subscription product and on-demand material, and it’s triple the site’s video-consumption number from April 2009.

    Many other major digital content publishers and video hubs are also reporting spikes in video usage, but MLB.com’s meteoric growth from its position of already having one of the highest sports-video usage counts is particularly striking. The gains are being attributed to improved quality and reliability of the streams as well as increased consumer expectations.

    “People are now expecting video,” said Bob Bowman, MLBAM president and chief executive. “It is now a standard requirement for any successful content publisher.”

    The much-discussed iPad was not a major driver of the overall video consumption total, but MLBAM has sold more than 45,000 copies of its $14.99 application for the tablet device, translating to roughly a 4.5 percent take-up rate of the 1 million iPads sold to date. “That’s a rate we’re very pleased with, one that’s better than any other device out there,” Bowman said.

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  • NASCAR Hall of Fame ‘looks fast sitting still’

    The NASCAR Hall of Fame in Charlotte was built for speed, its chief designer says.

    The programming inside the $195 million facility speaks to the sport’s theme, but it all begins with the 1,800-foot-long steel ribbon wrapping the building’s exterior, said Yvonne Szeto, a partner with Pei Cobb Freed in New York.

    That signature design element, a curving, sloping form that twists at the hall’s entrance, is meant to simulate the steep turns and banks of a speedway, Szeto said.

    “I was very pleased when someone told me the building looks fast sitting still,” she said.

    Architect Yvonne Szeto used a ribbon of
    steel outside the Charlotte building that
    plays off the form of a racetrack.

    Szeto, a civic architect, has worked more than 30 years for a firm that had never designed a sports-related facility before taking on the shrine to stock car racing in 2005. Her NASCAR education began five years ago by attending a race at Talladega (Ala.) Superspeedway, a track considered by die-hard fans to be the quintessential race-day experience.

    “It’s big, there’s bump drafting, extreme banking of the slope; that’s what makes Talladega special,” Szeto said. “It immediately struck us that we had to capture that in the architecture, the notion of speed and spectacle.”

    Inside the main doors, the sport’s twists and turns extend to Glory Road, a ramp containing 18 vehicles chronicling the 60-year evolution of stock car design and track surfaces tied to 40 facilities.

    Glory Road begins with Red Byron’s 1939 Ford, part of the first NASCAR race in 1948, and ends with Jimmie Johnson’s 2008 Sprint Cup champion Chevrolet at the rear of the pack. All 18 models, except for the 1959 Lee Petty Oldsmobile, a re-creation, contain original race chassis with the bodies restored for display, said Kevin Schlesier, the hall’s exhibits manager.

    The 33-degree bank at the top of Glory Road corresponds to Talladega’s steep incline, and provides visitors the opportunity to walk up a few stairs and stand on the surface at that perilous angle without falling down. It’s a difficult task.

    Technology plays a key role in NASCAR, and the hall spreads that message to visitors throughout the building, both in the exhibits and the mode of communication as patrons proceed through the attractions.

    Each paid attendee receives a smart card tied to radio-signal technology. They swipe the card at a kiosk, enter their personal information and select the voice of one of nine racing legends to guide them through a series of interactive displays at the Food Lion Race Week section on the third level.

    Patrons score points by participating in those interactives, from car inspections to racing simulators. The goal is to define the role in NASCAR that suits them best, whether it’s a driver or crew chief. “It’s a fun way to add some competition to the learning experience,” Schlesier said.

    The hall plans to use the personal information to alert visitors to future activities at the hall, said Winston Kelley, the facility’s executive director.

    Upstairs on the fourth floor at Heritage Speedway, race fans over the age of 40 should especially enjoy the artifacts on display, ranging from racing writer Chris Economaki’s 1957 typewriter to the iconic orange fiberglass Union 76 spotter ball used at the Daytona 500 from 1969 to 1984.

    Also noteworthy is the authentic moonshine still built by Junior Johnson, a charter member of the NASCAR Hall of Fame. It works, Schlesier said.

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  • NBA hires new CFO from Skadden, Arps

    The NBA has hired a new chief financial officer as the league adds staff to meet its increasing finance management demands.

    Carol Sawdye will join the league as executive vice president and chief financial officer on June 7 and will report to NBA Commissioner David Stern.

    Longtime NBA executive vice president of finance Bob Criqui has been promoted to president of administration. Criqui has worked as the league’s CFO since 1998. Steve Richard, senior vice president of finance, has been promoted to deputy chief financial officer.

    Sawdye

    Criqui reports to Stern while Richard reports to Sawdye.

    Stern said he is adding to the management staff in order to meet the increased financial challenges for a league that counts $4.3 billion in overall revenue.

    “Bob has been CFO since 1998 and every time there is a new responsibility, the department takes it on,” Stern said. “We have 16 offices around the world, have television arrangements in 215 countries, we are running three leagues and have a separate NBA China enterprise. We are also now dealing with a $2 billion credit facility, have collective bargaining and a sophisticated revenue-sharing model. There is a major shift in responsibilities consistent with the expanded business needs of the NBA and its related enterprises.”

    Sawdye comes to the NBA after working for eight years at the Skadden, Arps, Slate, Meagher & Flom law firm, where she most recently worked as chief operating officer. She also worked as the firm’s CFO.

    Prior to her time with the firm, Sawdye spent 17 years at the Pricewaterhouse-Coopers accounting firm, including six years as a partner in the firm’s media and entertainment practice.

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  • New owner quickly becomes face of Nets

    Welcome to the Mikhail Prokhorov era.

    The New Jersey Nets are wasting no time trying to recast themselves. The hapless franchise that lost $64 million is undergoing a transformation under the new ownership as the Russian Prokhorov finally takes control of the team.

    If the first week of Prokhorov’s tenure is any indication, the billionaire oligarch will take a public role with the team as he begins the sizable task of rebuilding the Nets, who went 12-70 this season while ranking last in the NBA in average attendance with 13,103 fans per game. The team in fiscal 2010 lost $64 million under former owner Bruce Ratner.

    The team rolled out a local media buy on May 13, the day after Prokhorov closed his deal, with the tag line “Meet Our New Big Man.” Prokhorov also will represent the team during the upcoming NBA draft lottery broadcast live on Tuesday on ESPN. On Wednesday, the Nets will formally introduce Prokhorov during a press conference at the Four Seasons Hotel in Manhattan.

    No wholesale management changes are initially expected under the new ownership.

    “Our fans are really excited about our fresh start, from new ownership, to the draft lottery, to a new coach, to free agency and to a new home,” said Brett Yormark, president of Nets Sports and Entertainment. “We’re off to the best start in new season-ticket sales in team history, in large part because our fans see how committed ownership is to winning and because we have such a compelling story to tell.”

    Yormark did not disclose the new ticket sales numbers.

    Eight months since the purchase agreement was announced, Prokhorov finally closed on his deal May 12 to buy 80 percent of the franchise and a 45 percent minority share of the Barclays Center for $260 million. Prokhorov also will have the right to purchase up to 20 percent of the Atlantic Yards development in Brooklyn that surrounds the new arena expected to open in 2012. The Nets will play the next two seasons in Newark’s Prudential Center.

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  • Relaunched AFL struggles to gain yardage

    Call it a slow build for the relaunched Arena Football League as it struggles to rebound after its yearlong shutdown in 2009.

    Six weeks into its new 18-week 2010 schedule, the 15-team AFL is averaging 7,978 fans a game, compared with a 12,957 average in 2008, the last season played before the league was shuttered.

    Since then, it’s been bought out of bankruptcy for $6 million and reinvented.

    Through May 12, the Tampa Bay Storm is leading the AFL in attendance with an average of 13,732 fans a game. The Utah Blaze is last in the league with an average of 4,728 a game, league officials said.

    Overall budgeted sponsorship revenue is down 60 percent from original projections, according to AFL Commissioner Jerry Kurz, who said he isn’t surprised by the league’s slow business start given that the AFL hit the market just a few months before its April 3 kickoff.

    The AFL is back on the field with
    a smaller league office and a
    smaller sponsor roster.

    “Our owners know that this is not a one-year process,” he said. “There is no doubt that there was resentment about the way the AFL was shut down, and every day in some markets we are fighting it.”

    By design, the restructured new indoor league is a shell of its former self.

    Gone are the 58 employees who worked in the former AFL New York-based office. Instead, the league office is now a seven-member staff based in Tulsa, Okla., charged with running the single entity. Player salaries are paid by the league, with each of the 15 teams owning an equal share in the AFL.

    Gone is the 2008 salary cap of $2 million a team, replaced by the $400 per game salary paid to most players. Up to three players per team can be selected as “marketing players” who make up to $1,000 a week. Those players must also make promotional appearances on behalf of their teams. Each team has an annual operating budget of between $2 million and $3 million.

    The AFL’s regular season ends July 31, with the ArenaBowl championship set for Aug. 21

    Running the league is Kurz, who was an original investor in the former AFL, and two senior staff members. Ron Armour, a veteran of the former AFL’s AF2 developmental league, now works as AFL senior director of team development, while Sarah Gomez is the league’s chief financial officer. The league recently hired longtime Tulsa-based PR executive Pat Schnake as its director of media services. Three other staffers help support the league’s day-to-day operations.

    The AFL has outsourced its sponsorship sales efforts to Shamrock Sports and is also looking to hire its own in-house sales executive. The league’s current sponsorship roster is small, with Spalding, Russell Athletics and Riddell — holdovers from the old AFL regime — signing re-negotiated deals.

    “We still would like to think there is enough runway to bring on some deals and the primary focus has been finding a presenting sponsor for the remainder of the season and for the ArenaBowl,” said Shamrock Sports President Brian Corcoran. “We wish we were further down the track, but we have a robust pipeline.”

    The league has licensing deals with Nifty TV, which streams AFL games online, athletic glove maker Cutters Gloves and ring maker J. Lewis Small.

    “We knew that it would be a challenge because when we launched, most companies had already committed their sponsorship dollars for the year,” Kurz said.

    The AFL Friday night broadcasts on the NFL Network are drawing an average of 125,000 viewers, Kurz said, compared with some 200,000 viewers during the 2008 AFL season on ESPN.

    He said the current footprint of the league does not have a franchise in the Northeast, a key region for television viewership.

    “We are not where we want to be in television advertising and that relates to our timing,” Kurz said. Terms of the league’s deal call for the AFL to sell the advertising inventory, with the indoor league and the NFL Network evenly splitting all revenue.

    The 15 AFL teams are made up of a combination of seven former AFL markets, and seven former AF2 minor league markets. The lone new AFL market is Jacksonville. 

    The strongest markets in the newly launched league have been Tampa, Jacksonville and Spokane, Wash., though some teams are facing a tough time in getting re-established after a yearlong absence. The Chicago Rush is averaging about 7,767 fans a game through May 11, compared to the 12,000 that the team averaged during its 2008 season.

    “The one thing that has surprised me is how much momentum got lost in the shutdown,” said Chicago Rush co-owner Bill Niro, who owned 10 percent of the old AFL. “It was really moving along and it just dropped off the radar screen and it has had a tremendous impact on our ability to come back.”

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  • Ross pushes for handhelds at Super Bowl

    Miami Dolphins owner Stephen Ross has asked the NFL to make Game Day Vision handheld devices available at all future Super Bowls, sources said.

    Ross in December bought Game Day Vision, the company formerly known as Kangaroo TV. He has been making a push to get NFL teams to embrace the venture’s technology, which makes other NFL games, stats, different camera angles and additional data available to fans inside a stadium.

    Game Day Vision was in use at this year’s Super Bowl, but that was because the game occurred in Ross’ venue, Sun Life Stadium. More broadly, the technology is part of a push by leagues and companies across sports to find new ways to entertain fans in stadiums during games.

    A spokesman for the Dolphins, and one for Game Day Vision, did not respond by deadline for comment. An NFL spokesman declined to comment.

    In March, NFL Commissioner Roger Goodell estimated that half of the league’s 32 teams had expressed interest in using Game Day Vision. Ross has proposed paying the several-million-dollar per-club cost of setting up the devices.

    It’s unclear when the NFL might take up Ross’ proposal, though unlike Ross’ quest to get teams to use the devices, the Super Bowl option would require league approval. The league is meeting in Dallas next week, but the Ross proposal likely would not require a full ownership vote.

    The owners will vote next week on a more-pressing Super Bowl matter. At the meeting, owners are widely expected to give the 2014 game to the New York area, making the contest the first outdoor cold-weather Super Bowl in the game’s history. Tampa and South Florida are also bidding for the game.

    The New York region normally would be ineligible to host the game because the average high temperature in February falls well below the 50 degrees Fahrenheit minimum required by the NFL. The league’s Super Bowl advisory committee, however, gave the bid a one-time exception. The game would be played at New Meadowlands Stadium, the newly opened home of the New York Jets and Giants.

    The Super Bowl host vote is expected May 25 and will consume much of the meeting. In fact, the league has so little else to formally discuss that it shaved off the half-day Wednesday that normally ends the May meeting, leaving only Tuesday for the gathering. Committee meetings are scheduled for Monday afternoon.

    One item not expected to be a big discussion point is, ironically, one of the more-discussed subjects this year: labor. There has been so little progress between the NFL and the players union on reaching a new collective-bargaining agreement, sources said, that the subject was not on the agenda as of late last week.

    While time remains before the March expiration of the current CBA, and such negotiations often occur pressed against a deadline, the two sides for the moment have no plans to meet and have not recently exchanged proposals. The NFL’s top outside negotiator, Bob Batterman, was recently quoted in the student newspaper of Hofstra University, a client of his firm, saying, “We are as far apart as I could imagine.” Batterman declined to comment for this story.

    The Dallas meeting is the second-to-last owners meeting scheduled before the March expiration, though there are expected to be specially called owners meetings and CBA negotiations before then.

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  • SUM plans new office to support Canada’s MLS teams

    Editor's note: This story is revised from the print edition.

    In the wake of MLS’s announcement that it will add a third Canadian team in Montreal, Soccer United Marketing has begun finalizing plans to support the Canadian clubs.

    SUM, MLS’s marketing agency, plans to open an office in Canada that will sell MLS intellectual property rights across the country. It also plans to bid for the rights to manage exhibition games and sell sponsorships for the Canadian Soccer Association, which will see its marketing agreement with IMG expire at the end of this year.

    The effort highlights SUM’s aspiration to become the leader in soccer not just in the U.S. but across North America. It already has rights to the Mexican soccer federation and is planning to open an office in Mexico City to support that business. It is also in discussions with the Mexican federation about playing exhibition games in Canada.

    SUM also plans to bid for
    exhibition, sponsorship
    rights to the Canadian
    Soccer Association.

    “We look at the region of North America — not just the U.S., not just Mexico, not just Canada — as being our market,” said Doug Quinn, SUM’s president. “Our plans for Canada are taking shape. We’re going to put people up there and manage that business sooner than later.”

    New Montreal owner Joey Saputo said, “It will be great for the three Canadian clubs to take advantage of the corporate opportunities here in Canada. [SUM Canada] is a great initiative and it will be well-supported.”

    SUM was created in 2001 after MLS acquired the broadcast rights for the 2002 World Cup. The agency later acquired the rights to the Mexican national team and other properties. Its portfolio includes U.S. representation of the Mexican national team, FC Barcelona, Chivas de Guadalajara, CONCACAF Champions League, Gold Cup, Women’s Professional Soccer, grassroots events, and SuperLiga and InterLiga (two tournaments featuring Mexican club teams), as well as the U.S. national team.

    The Canadian Soccer Association last qualified for the World Cup in 1986, but adding the Canadian Soccer Federation to its portfolio still would deliver a modest bump to SUM’s bottom line. More than that, though, it would give the organization a property that appealed to all Canadian businesses. SUM could leverage that relationship to add MLS partners across Canada.

    Sandra Gage, the Canadian Soccer Association’s director of business development, said the organization is in discussions with IMG and is weighing its options. She added, “Nothing has been decided at this point.”

    SUM’s ambitions in Canada mirror similar efforts undertaken by the NBA and NHL. Both leagues have offices in Canada. The NHL operates its office directly and sells sponsorships to companies like The Home Depot and Hershey. NBA Canada sells the league’s rights in the Canadian market.

    MLSE had proposed a similar arrangement with SUM after Toronto FC joined MLS in 2007. But the planned expansion to Vancouver in 2011 and Montreal in 2012 made the league decide it should operate a potential SUM Canada independently.

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  • Toymaker rolls at Dover with sponsorship, charity, hospitality

    It’s unusual for a NASCAR licensee to find itself on the hood of a car, but toymaker K’nex was featured as the primary sponsor of Dale Earnhardt Jr.’s No. 88 Chevy last weekend in the Nationwide Series race.

     K’nex, a NASCAR licensee since 2009, just unveiled a new line of building-block toys that form race cars like Earnhardt’s No. 88 National Guard car and Jeff Gordon’s No. 24 with the Pepsi marks.

    To help launch those products and promote others to come in the fall, K’nex partnered with Earnhardt’s JR Motorsports to sponsor last weekend’s car, piloted by temporary driver Jamie McMurray. K’nex added a cause marketing piece to the program with a donation of toys to the Dale Jr. Foundation and the NASCAR Foundation.

    “This gave us a great chance to promote a product launch in the NASCAR space,” said Michael Araten, K’nex’s president. “Through a lot of creativity on the part of the team, we can do something charitable as well and build that into the program.”

    K’nex’s building blocks were featured on Dale
    Earnhardt Jr.’s No. 88 Nationwide Series car.

    When JR Motorsports, Earnhardt Jr.’s Nationwide Series team, found itself with several unsponsored cars going into the 2010 season, the team began searching for some unique partners. Knowing that a new line of K’nex toys were coming out this spring, JRM created a program that would put the licensee on the car as the primary sponsor for the Dover race, which is convenient to K’nex’s Pennsylvania headquarters.

    The paint scheme featured the building-blocks toys on the car, and McMurray’s driver suit was splashed with the building blocks as well. A typical driver suit costs $1,600 to make, but McMurray’s ran $2,800 because of the extra embroidery.

    “Instead of just doing these one-offs where we put a sponsor on the car, collect a check and it’s done, we were looking for ways to work with our partners and bring them more value,” said Joe Mattes, JRM’s vice president of marketing and licensing. “As an industry, the toy category is probably our biggest void, so it’s also a way to do something that’s youth-oriented and brings awareness to a product in the NASCAR world.”

    As K’nex built out its one-race deal, it arranged for display space in Dover’s KidZone, where it showed off a five-foot toy replica of the No. 88 K’nex Chevy. In an online consumer contest leading up to the race, K’nex asked fans to guess the number of parts required to build the toy replica and 100 winners were given two tickets to the race.

    K’nex planned to donate 10 percent of its online product sales for the month of May to the Dale Jr. Foundation and distributed toys to the first 1,000 children at the race. Additionally, K’nex donated $100,000 worth of its toys to the Dale Jr. Foundation and the NASCAR Foundation, which distributed them to 19 separate charities.

    For the hospitality piece, K’nex bought a suite for 60 guests at Dover, and a total of 200 employees were expected to be in attendance in both the suite and grandstands.

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