SBJ/20100628/This Week's News

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  • All-Star Game activation includes BofA’s call to service

    MLB sponsors are generally following the league’s initiatives when it comes to All-Star Game activation, plugging into a variety of “Going Beyond” initiatives, or adding complementary cause-related activities.

    Bank of America will use the game to tout its call for volunteerism, which earlier this year saw BofA employees pledging 1 million volunteer hours to a variety of charitable causes. Its space at the All-Star Game FanFest will show attendees where and how they can help community causes, while the company plans to break creative during the All-Star Game on Fox that will showcase its commitment to volunteerism.

    Drawstring pack giveaway bears the
    MLB Authentic Collection logo; Taco
    Bell has its name on street banners.

    Around 40 percent of the ad inventory on the Fox broadcast has been purchased by MLB corporate sponsors, said John Brody, senior vice president of corporate sales and marketing for MLB.

    Among other partners, MasterCard will reprise its “Hit it Here” promo, in which any batter hitting the MasterCard signs during the State Farm Home Run Derby or during the All-Star Game will generate a $1 million donation to Stand Up To Cancer.

    Holiday Inn is sponsoring a hit tracker sign during the game and donating $1,000 for each hit to cancer causes.

    Taco Bell, headquartered in nearby Irvine, will be the presenting sponsor of the All-Star Game Selection Show on Sunday. Taco Bell will also have its name on the more than 500 street banners in and around Anaheim.

    New All-Star Game balloting partners this year were Scotts (at Lowe’s stores) and Firestone (in-park). Around the game, Scotts will help stage two baseball field refurbishments, which are also supported by Chevrolet.

    MLB also is reprising its Sunday morning 5K run for charity, again with Nike and The Sports Authority as lead sponsors and benefiting four cancer-related causes. The annual All-Star Red Carpet Show presented by Chevy will be broadcast on MLB Network at 4 p.m. EDT and show the parade of Chevy vehicles carrying MLB All-Stars to Angel Stadium on a route that includes Disneyland.

    Sponsors and licensees will also have their usual activation opportunities at the All-Star FanFest at the Anaheim Convention Center, which opens the Friday before the game. Spokesmen for FanFest are Angels players (past and present) Rod Carew and Torii Hunter.

    Taco Bell will sponsor the giveaway of branded ticket holders/lanyards at Sunday’s Futures Game; State Farm will replicate that giveaway at its Home Run Derby on Monday. The game day giveaway will be supported by the licensing side of the house. It will be a drawstring pack branded with the All-Star Game and MLB Authentic Collection logos, with All-Star Game Logo Bandz from licensee Team Beans/Forever Collectibles, along with a booklet of coupons offering discounts that can be used for purchases on MLB.com’s online shop.

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  • Bears should have second team store open at Soldier Field early in coming season

    The Chicago Bears’ proposal to build a second team store at Soldier Field has finally been approved by their landlord, clearing the way for construction on the new shop inside Gate O on the stadium’s south side.

    The 3,510-square-foot store should be open sometime in September or October during the first quarter of the NFL season, confirmed Bears spokesman Scott Hagel. It will not be ready for the Bears’ regular-season home opener Sept. 12 against the Lions.

    The Bears wanted to build a second retail shop in the summer of 2009, and at that time team President and CEO Ted Phillips said the club would pay construction costs. Delaware North Sportservice, the Bears’ food and retail vendor, is a partner in the project, but officials from both parties would not disclose the investment.

    The project never got off the ground last year in part because of a disagreement between the Bears and the Chicago Park District, owner of Soldier Field, over equipment expenses tied to the deal. The conflict was spelled out in a letter the district’s general superintendent, Timothy Mitchell, sent the Bears approving the project, a document obtained by SportsBusiness Journal. The Bears went so far as to file a demand for arbitration to resolve the conflict, as mentioned in the letter. The Bears withdrew the demand after agreeing to pay to replace a sprinkler system above the new store and cover other expenses tied to scaffolding, inspection, repair and maintenance costs.

    Scaffolding expenses alone are about $54,000, according to estimates that firms contracted to do the work submitted to the park district. The park district is responsible for paying the first $1,500 of those costs, the letter said.

    The existing Soldier Field Pro Shop takes up about 2,800 square feet on the facility’s north side.

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  • Blackhawks, Lakers winning at retail in afterglow of titles

    After some of the highest TV ratings in years for their league championships involving some of their most passionate markets, both the NBA and NHL, along with their licensees, are crowing about the sales of championship-licensed product.

    At the NHL, league officials said that two weeks after the Chicago Blackhawks won their first Stanley Cup championship in 49 years, the hot market was tracking as one of their top three ever.  Licensees are in agreement.

    Licensee cites “feeding frenzy”
    for ‘Hawks gear.

    “There’s a feeding frenzy for Blackhawks merchandise by fans and our retailers,” said John Killen, president and CEO of hard-goods licensee WinCraft. “It is our best Stanley Cup sales year ever, by at least double anything prior, and we’ve been an NHL licensee for 34 years.”

    Added NHL licensing executive Brian Jennings, “If you look at what is being planned even for back-to-school, this looks like a championship that has legs.”

    While repeat championships generally do not perform better sales than initial titles, NBA officials said the Lakers’ win over the Boston Celtics was yielding better sales than last year’s triumph over the Orlando Magic. Immediately after the Lakers won, the NBA’s online store had its biggest sales day ever, an increase of 46 percent from the comparable time in 2009. Combined sales from the NBA Store in New York and NBA.com were up 60 percent from last year. The final game at Staples Center produced what was said to be an NBA Finals retail per cap record of $22.28, and NBA Finals merchandise sales were up 86 percent over 2009.

    Linda Choong, senior vice president of the NBA’s global retail development group, said it was   too early to determine how this year’s sales would compare to prior championship sales.

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  • Charity and celebrities part of All-Star lineup

    MLB for the 2010 All-Star Game plans to revive the extensive charity and community service theme first introduced last year to significant success.

    This year’s midsummer classic, set for July 13 in Anaheim, will once again feature about $5 million in donations for a variety of national and local causes; an expansion of the high-profile, collaborative effort with People magazine for the All-Stars Among Us campaign; and a continuation of many cause-related marketing efforts by MLB sponsors activating on site (see related story).

    MLB last year deftly shifted the All-Star Game into a high-profile vehicle for community service and charity, greatly expanding elements that had been secondary themes. Even with the change, the event still generated strong economic returns, including in comparison to the record-setting 2008 showcase in New York.

    Last year’s FanFest attendance was a record 150,804. League executives are eyeing a further increase this year for the five-day event at the Anaheim Convention Center.

    A broad new cross-licensing deal with Disney is expected to spur merchandise sales well beyond last year’s returns. The deal also serves as the catalyst for the MLB-logoed Mickey Mouse statues being installed around Southern California and sold at retail as a lead-up to the game.

    A deal with Disney produced the MLB-
    logoed Mickey Mouse statues popping
    up in the area.

    Local economic impact projections have gone as high as $85 million, far below the record $148 million set in New York but far above any other All-Star Game host city. MLB also plans to use the suburban Los Angeles locale to heighten celebrity involvement in the event, again in the name of community service.

    “Like always, you look to adapt to each market and take on the personality of the host city,” said Marla Miller, MLB senior vice president of special events. “We obviously have a great opportunity to have a big celebrity focus and extend our charitable initiatives.”

    MLB has not yet disclosed the names of celebrities slated to take part in All-Star Game festivities.

    One major element not returning this year is the high-profile concert held the last two years on the Sunday before the game. After scheduling Bon Jovi in Central Park in 2008 and Sheryl Crow under the St. Louis Arch last year, MLB could not find a similar, suitable public venue to warrant a repeat effort.

    “It was something that worked really well in New York and St. Louis, but there wasn’t that same iconic setting available to us,” Miller said. “It gives us an opportunity to really market the Red Carpet Show, which will be going through the streets of Anaheim and Disneyland.”

    The Red Carpet Show, in its sixth year, will for the first time this year add the element of going through private property — Disneyland — in addition to the traditional public routing for the parade of players making their way to the ballpark for the game.

    People magazine, meanwhile, saw a tripling this year in nominations (to more than 7,000) for the All-Stars Among Us campaign, which honors ordinary citizens doing great things in their local communities, and a doubling in voting for the final honorees (to 1.7 million). The final 30 honorees, one representing each MLB team, will be announced today and recognized on the field during pregame ceremonies.

    “It’s been fascinating and really encouraging to see and hear how the exposure generated from this program has in turn expanded many of the causes that have been honored,” said Susan Parkes, vice president of marketing for the style and entertainment group at People parent Time Inc. “There’s a duality of this promotion that is really great, in that it helps us reach more men, and MLB reach more women.”

    The suburban setting of Anaheim differs from the downtown, urban footprints seen in recent years in St. Louis, San Francisco (2007) and Pittsburgh (2006). But with the convention center, Disneyland and numerous hotels all clustered near Angel Stadium, transportation for the game and its related festivities is being seen as a manageable component of this year’s event.

    “We see this area as an absolute natural,” said Angels Chairman Dennis Kuhl. “The convention center’s literally right down the street. Everything is within very easy reach, and, of course, that little thing called Disneyland is next door, too. All-Star is really going to work in this community.”

    On the ticket front, the Angels did need to relocate a number of season-ticket holders to accommodate MLB sponsor needs, as is the case each year for the All-Star Game. The club used a program similar to what was in place in St. Louis last year in which season-ticket holders who volunteered to relocate from prime lower-level locations were given the option to purchase two All-Star tickets in the upper bowl or outfield pavilion for every one season ticket held.

    Prices this year range from $145 to $330 for the Home Run Derby and $185 to $360 for the game itself, figures that on the low end are generally twice the cheapest figures in St. Louis but largely unchanged at the high end.

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  • Deals tie Rangers, Stars buyers to joint media venture

    The future buyers of the Dallas Stars and Texas Rangers are obligated to pursue a joint media venture after the expiration of their current TV deals, according to terms of the Texas Rangers sale agreement that was made public recently as part of the club’s bankruptcy proceedings.

    Both teams are owned by Hicks Sports Group, but HSG is selling the clubs in separate transactions. The teams have TV deals with Fox Sports Southwest that expire in 2014.

    The commitment could tie the hands of each team’s buyer, experts say, and close off other media opportunities.

    “It could become very complicated in terms of length of a deal, rights fees per game and how to treat sponsors,” said Mark Lazarus, the former Turner Sports executive who now is president of media and marketing services for Career Sports & Entertainment. “I wouldn’t want any restrictions on things I could do, to be burdened with another franchise’s issues.”

    Under terms of the agreement that has Chuck Greenberg purchasing the Rangers, the buyer after closing shall “use commercially reasonable efforts to obtain a letter from the National Hockey League confirming that the agreement for the potential joint venture between Purchasers and the Dallas Stars regarding the media rights of the Texas Rangers and of the Dallas Stars hockey club … is in compliance with applicable rules and regulations of the National Hockey League,” the sales agreement states.

    The agreement describes a similar requirement for the Stars’ sought-after buyer.

    A “joint venture” could mean the joint selling of cable rights; it also could mean the formation of a regional sports channel. A source said that if a channel were to occur, the equity split under consideration is 70 percent for the Rangers and 30 percent for the Stars.

    The commitment to go into business together may be more valuable for the Stars than the Rangers, Lazarus said. “It is a drag-along tactic,” he said. “Without it, the hockey team is out there to fend for itself.”

    It’s uncertain if the media joint venture language would become part of any new agreement if the Rangers’ sales process were to be reopened and a new buyer emerges.

    — Daniel Kaplan

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  • Fight sites crucial for Showtime’s Super Six

    So popular in Germany is Armenian-born boxer Arthur Abraham that he sold out the 14,200-seat O2 World Arena in Berlin for his opening bout in Showtime’s Super Six super middleweight tournament in October.

    Prone to grand entrances, Abraham turned his ring walk into a ring hover, descending from the rafters encased in steel as the incendiary German band the Scorpions played live on a stage nearby. Airing on public TV across Germany, the bout against Jermain Taylor drew a peak share of almost 40, according to Abraham’s promoters.

    If the Super Six followed what has been the typical boxing course, scheduling one-off events that maximize revenue with little regard for the bigger picture, Abraham would stay tethered to German soil, where he and his Germany-based promoter, Sauerland Event, could generate the most cash.

    And yet, in his second Super Six bout, Abraham fought Andre Dirrell on Dirrell’s home turf, in Detroit, in front of about 5,000 paying customers — and lost. In his third Super Six bout, scheduled for Sept. 18 against England’s Carl Froch, Abraham likely will venture to the neutral turf of Monaco and the 4,500-seat Chapiteau Espace Fontvieille.

    Arthur Abraham (left) stopped
    Jermain Taylor in Berlin.

    It’s the sort of compromise that has become necessary in a tournament format that has six boxers each fighting three bouts, with the top four advancing into the semifinals.

    With the field tight heading into the third and final stage, venue selection has become a critical aspect of the process for all the fighters, especially Abraham and Froch, each of whom has lost once and could be eliminated. Abraham vs. Froch in Berlin would provide a larger payday, but Froch didn’t want to fight in Abraham’s backyard. Midway through last week , they were closing in on Monaco as a solution.

    “We’re now moving into a phase of the tournament where the fighters realize they need a little bit of home support,” said Kalle Sauerland, who promotes Abraham. “Do we go for the money or the home advantage? … We want to go where the money makes sense and the image of the fight makes sense.”

    The compromise of Monaco likely won’t offer the venue revenue of Berlin, where Abraham vs. Taylor generated nearly $1 million in ticket sales, but a prime-time European time slot keeps the German TV revenue intact.

    Showtime also likes the choice because it is fair to both fighters and adds a jolt of glitz.

    “You’re not getting 20,000 people, but it’s a very cool place to be,” said Ken Hershman, executive vice president and general manager of Showtime Sports. “There’s a lot of cachet.”

    Froch wanted to fight in his hometown of Nottingham, England, at the 30,000-seat City Ground soccer stadium. Sauerland said he was willing to put the fight there, but Froch’s injuries in his last bout pushed the window for the fight out of the summer months and into the English soccer season. Sauerland balked at other options offered by Froch’s promoter, Mick Hennessy, setting off a stalemate that lasted for two months.

    “We have lots of backups and fail-safes in this contract, and most revolve around Showtime as the independent party to lend a hand in pushing people to the right place,” Hershman said. “That’s exactly what we did [with Abraham vs. Froch].”

    The other two bouts in the tournament’s third and final stage — Andre Ward vs. Dirrell and Mikkel Kessler vs. Allan Green (who has replaced an injured Taylor as one of the six participants) — are set for a Showtime double-header on Sept. 25, with site negotiations still ongoing last week. Kessler will fight in Europe, where he brings a large crowd and a TV deal. Promoters for Ward and Dirrell are exploring a range of U.S. options. The Kessler-Green bout airs on tape-delay on Showtime, leading into a live telecast of Ward-Dirrell. Viewers in Denmark and Germany get Kessler-Green live.

    Both semifinals and the final will be held in the United States, Hershman said, with one caveat: If two of the Europeans are matched in a semifinal, that fight could be held in Europe, though it would have to be timed to air live in the United States in prime time.

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  • IndyCar adding Avis as official rental car

    Avis will be the official rental car of the IndyCar Series under terms of a new deal between the parties, with the intent of using the racing circuit as a platform to drive more corporate business.

    IndyCar obtained a commitment from Avis this month, and an announcement on the two-year deal is expected this week.

    IndyCar is not new to Avis, which has been a sponsor at Penske Racing since fall 2007.

    Financial terms of the deal were not available, but industry sources pegged it at mid-six figures annually.

    Terry Angstadt, president of IndyCar’s commercial division, said Avis will have a two-pronged attack, with a focus on creating more corporate rentals as well as a national campaign targeting consumers.

    Gina Rizzi, Avis’ director of business development, was a guest during IndyCar’s June 5 race weekend at Texas Motor Speedway, where IndyCar held its bNet forum, a business-to-business session that brings IndyCar sponsors together. There, Rizzi spoke about Avis’ initiatives for IndyCar and how it drives corporate rentals with other partners.

    “What businesses are finding is that they can get a good, positive return from involvement with our businesses,” Angstadt said. “Avis is a great brand, known for great service, and I think IndyCar will be featured quite a bit in their communications.”

    On the consumer side, Avis has plans for a sweepstakes for fans, online promotions and visibility at its outlets within the key race markets.

    The IndyCar sponsorship will be integral to Avis’ promotion of its Cool Cars collection, which include Camaros, Mustangs, Corvettes and other sports cars available for rent.

    “Car enthusiasts, like those that are fans of the IndyCar Series, are an important target group,” said Avis spokeswoman Alice Pereira. Online marketing and signage at rental locations will be at the core of Avis’ plans, she said.

    Mark Sibla, IndyCar’s manager of team business development, worked on the Avis deal.

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  • ISC chief: Focus on core fan must continue

    Note: This article contains additional content to the print edition.

    From Lesa France Kennedy's eighth-floor office overlooking Daytona International Speedway, she can see nearly every corner of the iconic track.

    “Got to keep your eyes on the prize,” she says with a laugh.

    Kennedy's office in the new International Speedway Corp. tower, directly across the street from the speedway, is unpretentious and absent the memorabilia that clutter the offices of most motorsports executives. Two framed pictures of her son, Ben, who will be a freshman this fall at the University of Florida, sit on the table behind her desk. The book she¹s reading is about how to let go when your child goes to college.

    Age: 49
    Resides: Daytona Beach, Fla.
    Family: Son, Ben
    Education: B.A., economics and psychology, Duke University, 1983
    Favorite vacation spot: I love Colorado. I like the outdoors there, the hiking and biking.
    Favorite movie: “The Blind Side.” That story was so compelling. I actually went a couple of times and took different people to it. It was phenomenal.
    How many Duke basketball games do you watch: Not enough. I follow them a little bit. I didn't see the national championship game.
    What kind of car do you drive: BMW
    Executive you most admire: One person I have the utmost admiration for is Bea Perez at Coca-Cola. She has great insight. Also Rick Hendrick, the way he runs his business, his fairness and his honesty.
    If you weren’t in motorsports, you’d be doing what: Probably something in the travel industry. I love travel. In the last few years, we’ve been to Africa, New Zealand, Costa Rica, Belize, Europe a couple of times — a lot of fun stuff.

    A year ago, Kennedy was the newly named CEO at ISC, one of the two France family businesses along with NASCAR that drive stock car racing. She couldn’t have taken over at a more difficult economic time. Ticket sales are down, revenue streams are flowing like mud and a very pesky pothole ruined the sport's most-prized event, the Daytona 500 in February. Still, Kennedy keeps an optimistic outlook that forecasts better days ahead for her family¹s sport and the businesses that depend on it.

    In the weeks leading up to Saturday night’s Coke Zero 400 at Daytona, she spoke with SportsBusiness Journal staff writer Michael Smith.

    Two days after the Coke Zero 400, the speedway will be repaved (at a cost of about $20 million) for the first time since 1978. After the Daytona 500 pothole, it was time?
    Kennedy:
    It’s a huge deal and it¹s probably one of the largest capital projects we’ve had in the history of the track. We¹re starting Monday after the Coke Zero, bright and early, and we plan to be finished by the first of January, so we¹ll have some time to do some testing and get it polished up for the Daytona races.

    The pothole incident took on a life of its own. In retrospect, is there anything that could have prevented that?
    Kennedy:
    I don’t think there was any one specific thing that could have been done. We tore it apart in every single way you could. It was really just a collection of circumstances with the cold and the rain leading up to the race. We inspect the track every day (during Speedweeks) and did not see that coming. I don¹t really have a hindsight on that one. It really took us by surprise; it was very disappointing.

    Kennedy is preparing for a
    $20 million repaving project
    at Daytona that starts next
    week.

    Did the pothole lead to any other changes or review at other properties?
    Kennedy:
    We did an across-the-board look at all of our operations, but we’re pretty comfortable that the other tracks are in good shape.

    Big events are your business. Given the economy, what’s your sense of the value of big events?
    Kennedy:
    Big events definitely have the value they¹ve always had. The difference we’re seeing is that people are more cautious about when they make that commitment to go to the event. We’ve seen a big ramp-up in ticket sales as we get closer to our events and that¹s when people start to feel more comfortable that they’re in a secure financial situation. The buying cycle has changed and we’re adjusting our schedules and advertising and promotions more to the new buying cycle we¹re in. For the Coke Zero, our phone calls are increasing right before the event, similar to our other events.

    What’s your general sense of where things stand with NASCAR?
    Kennedy:
    There are some areas we could improve, obviously, but if you look at the core product and the changes that have been made, the fan response to that has been really positive. We really need to go back and continue to focus on the core fan, but in addition look at the younger fans. What¹s their thought process, what is the consumer of tomorrow going to look like?

    We’ve been giving that a lot of thought. [Pointing at the photo of her son] I’ve got one right over there. My independent marketing studies are conducted in the basement of my house, talking to the kids.

    What do they say?
    Kennedy:
    Technology is so important to them. I’m also seeing the green initiatives are very important to them. They’re starting them out at a younger age talking about it in schools and they’re interested in the environment more so than any of the past generations. That’s a regular topic of conversation. I think they’re going to be looking toward that and how it impacts our sport. Then, just the way they communicate, the Facebook, the tweeting. So how do you make your product appealing to them and also get the message out to them in the way they communicate? I was told recently by that generation that e-mail was antiquated. And I’m like, “Well, I’m still sending them out and I’m still getting them back.”

    The fact of the matter, though, is that NASCAR’s core fan is older and that the younger demos have been dropping off. How do you appeal to the core fan who is older as well as the younger fan to stop the erosion there?
    Kennedy:
    You can do both, and it goes to the overall guest experience. If you provide a good guest experience and a good product on the track, that¹s going to appeal to everyone overall. It goes to the way you communicate with them. Technology can enter into the sport to appeal more to the younger fans, but that doesn¹t mean you’re leaving your core fan. They can still enjoy the sport the way they have in the past. You just have to give people more options. NASCAR.com is a great example. You can still watch the race on TV, but the younger fan might want to go to NASCAR.com and see that different perspective. It’s not shutting anyone out, it’s just providing more avenues for people to enjoy the sport, and we¹ve got to continue to look at that.

    With the ratings trending down and the next round of TV talks two years away, what’s the level of concern there, especially given that TV revenue accounts for a third of ISC’s total revenue?
    Kennedy:
    We’re paying close attention to it all the time, but we also look at TV ratings as cyclical and we¹ve seen some rebounding recently. We understand that we’ve got a ways to go.

    Why is that something that NASCAR has had such a hard time getting a handle on?
    Kennedy:
    The viewing cycle has changed, but one thing that¹s helped are the consistent start times. That was a pretty dramatic change. That’s how we had it in the past and over time a lot of people had input on that and things changed. It was a bold change to go back to the consistent start times and we’ll see more over time how that’ll play out. People want to know when the events are. My father always preached to us about the core product on the track. That¹s something that has been addressed and the action is better this year, and that will help, too.

    What do you do on race day?
    Kennedy:
    Depends on the event. We might sometimes be exposing someone to a race for the first time, which is my favorite thing to do. Usually when you take someone to an event for the first time, they’re hooked and they’re really amazed by everything going on.

    Is there someone in sports business who has become a really good friend who you sometimes bounce ideas off of?
    Kennedy:
    One person I have the utmost admiration for is Bea Perez at Coca-Cola. She would be one of my first calls because she has great insight.

    The car owners have a whole different view. I wouldn’t be hesitant to call a car owner or a driver. Drivers are great at giving you their opinion.

    Coke Zero’s title sponsorship of the race this week is just part of a sweeping 10-year, eight-figure deal Coca-Cola has with ISC. What has that meant for the company?
    Kennedy: It¹s an unbelievable deal for us. It’s unparalleled for us. It’s not just a sponsorship and then they forget about us. They get involved with our fans, they activate, they get involved with promotions. They’re the best at that.

    Where is ISC most poised for growth?
    Kennedy:
    As far as the racing business we¹re focused on our core facilities.

    As far as expanding into new markets, probably on the side burner right now.

    But we do have a lot of land around all of our tracks. In Kansas, we¹ve built the casino and that’s a year-round use of the land we have at the track. We’ve done that a little in the past, but not to that extent. With that project, we’ll get a different view of things.

    Where do things stand with the mixed-use retail and entertainment project in Daytona?
    Kennedy:
    That’s been put on a slower brew. We’re waiting for the economy to recover. I think it will be a terrific project eventually, once we¹re able to tie in an overall entertainment complex with what we have going on at the speedway, not just for our race fans, but also year-round. It¹ll also elevate the visibility of this facility and give it a whole new look. You¹ll know things are happening here year-round. But we’ve got to have the right tenants and the right lease agreements in place.

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  • ISC chief: Focus on core fan must continue

    Note: This article contains additional content to the print edition.

    From Lesa France Kennedy's eighth-floor office overlooking Daytona International Speedway, she can see nearly every corner of the iconic track.

    “Got to keep your eyes on the prize,” she says with a laugh.

    Kennedy's office in the new International Speedway Corp. tower, directly across the street from the speedway, is unpretentious and absent the memorabilia that clutter the offices of most motorsports executives. Two framed pictures of her son, Ben, who will be a freshman this fall at the University of Florida, sit on the table behind her desk. The book she¹s reading is about how to let go when your child goes to college.

    Age: 49
    Resides: Daytona Beach, Fla.
    Family: Son, Ben
    Education: B.A., economics and psychology, Duke University, 1983
    Favorite vacation spot: I love Colorado. I like the outdoors there, the hiking and biking.
    Favorite movie: “The Blind Side.” That story was so compelling. I actually went a couple of times and took different people to it. It was phenomenal.
    How many Duke basketball games do you watch: Not enough. I follow them a little bit. I didn't see the national championship game.
    What kind of car do you drive: BMW
    Executive you most admire: One person I have the utmost admiration for is Bea Perez at Coca-Cola. She has great insight. Also Rick Hendrick, the way he runs his business, his fairness and his honesty.
    If you weren’t in motorsports, you’d be doing what: Probably something in the travel industry. I love travel. In the last few years, we’ve been to Africa, New Zealand, Costa Rica, Belize, Europe a couple of times — a lot of fun stuff.

    A year ago, Kennedy was the newly named CEO at ISC, one of the two France family businesses along with NASCAR that drive stock car racing. She couldn’t have taken over at a more difficult economic time. Ticket sales are down, revenue streams are flowing like mud and a very pesky pothole ruined the sport's most-prized event, the Daytona 500 in February. Still, Kennedy keeps an optimistic outlook that forecasts better days ahead for her family¹s sport and the businesses that depend on it.

    In the weeks leading up to Saturday night’s Coke Zero 400 at Daytona, she spoke with SportsBusiness Journal staff writer Michael Smith.

    Two days after the Coke Zero 400, the speedway will be repaved (at a cost of about $20 million) for the first time since 1978. After the Daytona 500 pothole, it was time?
    Kennedy:
    It’s a huge deal and it¹s probably one of the largest capital projects we’ve had in the history of the track. We¹re starting Monday after the Coke Zero, bright and early, and we plan to be finished by the first of January, so we¹ll have some time to do some testing and get it polished up for the Daytona races.

    The pothole incident took on a life of its own. In retrospect, is there anything that could have prevented that?
    Kennedy:
    I don’t think there was any one specific thing that could have been done. We tore it apart in every single way you could. It was really just a collection of circumstances with the cold and the rain leading up to the race. We inspect the track every day (during Speedweeks) and did not see that coming. I don¹t really have a hindsight on that one. It really took us by surprise; it was very disappointing.

    Kennedy is preparing for a
    $20 million repaving project
    at Daytona that starts next
    week.

    Did the pothole lead to any other changes or review at other properties?
    Kennedy:
    We did an across-the-board look at all of our operations, but we’re pretty comfortable that the other tracks are in good shape.

    Big events are your business. Given the economy, what’s your sense of the value of big events?
    Kennedy:
    Big events definitely have the value they¹ve always had. The difference we’re seeing is that people are more cautious about when they make that commitment to go to the event. We’ve seen a big ramp-up in ticket sales as we get closer to our events and that¹s when people start to feel more comfortable that they’re in a secure financial situation. The buying cycle has changed and we’re adjusting our schedules and advertising and promotions more to the new buying cycle we¹re in. For the Coke Zero, our phone calls are increasing right before the event, similar to our other events.

    What’s your general sense of where things stand with NASCAR?
    Kennedy:
    There are some areas we could improve, obviously, but if you look at the core product and the changes that have been made, the fan response to that has been really positive. We really need to go back and continue to focus on the core fan, but in addition look at the younger fans. What¹s their thought process, what is the consumer of tomorrow going to look like?

    We’ve been giving that a lot of thought. [Pointing at the photo of her son] I’ve got one right over there. My independent marketing studies are conducted in the basement of my house, talking to the kids.

    What do they say?
    Kennedy:
    Technology is so important to them. I’m also seeing the green initiatives are very important to them. They’re starting them out at a younger age talking about it in schools and they’re interested in the environment more so than any of the past generations. That’s a regular topic of conversation. I think they’re going to be looking toward that and how it impacts our sport. Then, just the way they communicate, the Facebook, the tweeting. So how do you make your product appealing to them and also get the message out to them in the way they communicate? I was told recently by that generation that e-mail was antiquated. And I’m like, “Well, I’m still sending them out and I’m still getting them back.”

    The fact of the matter, though, is that NASCAR’s core fan is older and that the younger demos have been dropping off. How do you appeal to the core fan who is older as well as the younger fan to stop the erosion there?
    Kennedy:
    You can do both, and it goes to the overall guest experience. If you provide a good guest experience and a good product on the track, that¹s going to appeal to everyone overall. It goes to the way you communicate with them. Technology can enter into the sport to appeal more to the younger fans, but that doesn¹t mean you’re leaving your core fan. They can still enjoy the sport the way they have in the past. You just have to give people more options. NASCAR.com is a great example. You can still watch the race on TV, but the younger fan might want to go to NASCAR.com and see that different perspective. It’s not shutting anyone out, it’s just providing more avenues for people to enjoy the sport, and we¹ve got to continue to look at that.

    With the ratings trending down and the next round of TV talks two years away, what’s the level of concern there, especially given that TV revenue accounts for a third of ISC’s total revenue?
    Kennedy:
    We’re paying close attention to it all the time, but we also look at TV ratings as cyclical and we¹ve seen some rebounding recently. We understand that we’ve got a ways to go.

    Why is that something that NASCAR has had such a hard time getting a handle on?
    Kennedy:
    The viewing cycle has changed, but one thing that¹s helped are the consistent start times. That was a pretty dramatic change. That’s how we had it in the past and over time a lot of people had input on that and things changed. It was a bold change to go back to the consistent start times and we’ll see more over time how that’ll play out. People want to know when the events are. My father always preached to us about the core product on the track. That¹s something that has been addressed and the action is better this year, and that will help, too.

    What do you do on race day?
    Kennedy:
    Depends on the event. We might sometimes be exposing someone to a race for the first time, which is my favorite thing to do. Usually when you take someone to an event for the first time, they’re hooked and they’re really amazed by everything going on.

    Is there someone in sports business who has become a really good friend who you sometimes bounce ideas off of?
    Kennedy:
    One person I have the utmost admiration for is Bea Perez at Coca-Cola. She would be one of my first calls because she has great insight.

    The car owners have a whole different view. I wouldn’t be hesitant to call a car owner or a driver. Drivers are great at giving you their opinion.

    Coke Zero’s title sponsorship of the race this week is just part of a sweeping 10-year, eight-figure deal Coca-Cola has with ISC. What has that meant for the company?
    Kennedy: It¹s an unbelievable deal for us. It’s unparalleled for us. It’s not just a sponsorship and then they forget about us. They get involved with our fans, they activate, they get involved with promotions. They’re the best at that.

    Where is ISC most poised for growth?
    Kennedy:
    As far as the racing business we¹re focused on our core facilities.

    As far as expanding into new markets, probably on the side burner right now.

    But we do have a lot of land around all of our tracks. In Kansas, we¹ve built the casino and that’s a year-round use of the land we have at the track. We’ve done that a little in the past, but not to that extent. With that project, we’ll get a different view of things.

    Where do things stand with the mixed-use retail and entertainment project in Daytona?
    Kennedy:
    That’s been put on a slower brew. We’re waiting for the economy to recover. I think it will be a terrific project eventually, once we¹re able to tie in an overall entertainment complex with what we have going on at the speedway, not just for our race fans, but also year-round. It¹ll also elevate the visibility of this facility and give it a whole new look. You¹ll know things are happening here year-round. But we’ve got to have the right tenants and the right lease agreements in place.

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  • Labor agreement keeps CFL rolling

    A major football league has imminent plans to announce a groundbreaking labor deal, helping to stave off player unrest and a possible work stoppage.

    Sorry, NFL fans. It’s the Canadian Football League, whose regular season is scheduled to kick off this week, presuming the paperwork is finished on the labor pact that was tentatively agreed to in late May.

    Touting itself as “Canada’s league,” the CFL has had its recent ups and downs. Average attendance in 1994 fell to its lowest mark since 1969 (less than 22,000) as the league expanded to add U.S. teams. But a stadium building boom approaching $900 million in total spending, improved TV numbers and attendance up to nearly 29,000 a game last year are signs that the league (now with eight Canadian-based clubs) is headed in the right direction.

    Perhaps most important is the new labor deal, which will keep a salary cap but sever it from overall revenue, sources said. That’s a major departure from how these deals are structured in the United States, where salary caps typically are determined by a percentage of league revenue.

    The CFL had been paying players about 56 percent of net revenue but will now have a fixed team cap each year, currently at $4.2 million (Canadian) for each of the eight clubs. The CFL declined to comment on the pending labor deal, citing its unfinished nature.

    “Hockey is Canada’s game, but the CFL is Canada’s league,” said Mark Cohon, the CFL’s commissioner since 2007 and a former MLB and NBA executive. “Forty-three percent of Canada tuned in to the Grey Cup, and this year’s Cup sold out 5 1/2 months in advance.”

    With the 100th Grey Cup league championship game scheduled in 2012, the CFL is building marketing plans around that date and expects to announce several big sponsors in the coming months.

    Cohon cites stadium expansion in the CFL
    as the impetus for a new labor agreement.

    Before Cohon, the CFL had become known for backroom squabbles and ownership difficulties. Its marketing could be quirky, with one slogan a decade ago the obvious double entendre “Our balls are bigger.” (The CFL uses a bigger game ball than the NFL, in addition to playing on a 110-yard field and with only three downs.)

    The league in the 1990s needed a $3 million loan from the NFL just to stay afloat. It has since been repaid. Now, seven of the league’s eight teams have major building projects under way, and Cohon, learning from his U.S. sports experience, has encouraged the teams to focus on the grassroots, family experience.

    “The CFL gets a tremendous amount of support — grassroots support — in the West,” said Reg Bronskill, who runs a Canadian-based sports event and marketing company. “In Toronto, it is much more challenging because there are so many other sports available.

    “Back in the ’90s, there was the thought the NFL would nudge them out,” Bronskill said. “I don’t think that will happen. There are too many people in Canada who think the product is a real product.”

    Five of the eight CFL teams are privately owned, with three community controlled, like the Green Bay Packers. Some of the teams are profitable, but Cohon, like his NFL counterparts, cites the cost of stadium expansion as necessitating a new labor deal.

    Among the league’s stadium projects is a $400 million upgrade to BC Place, home of the BC Lions, that includes the addition of a retractable roof to the 27-year-old venue. The Lions are playing at a temporary home this season before returning next year to BC Place, when it also will become the home of Vancouver’s MLS expansion club.

    Additional facility projects in Edmonton, Hamilton and Winnipeg are each valued in excess of $100 million.

    On the TV front, the league is talking to the NFL about putting games on the NFL Network and also is talking to ESPN. Currently, there is no deal to televise games in the U.S. this season.

    Expansion is on the horizon, too, with another team slated for Ottawa, pending a City Council vote on a local stadium development plan. The league would like to expand into eastern Canada, as well.

    The CFL has no issues with the Buffalo Bills playing a regular-season game in Toronto, Cohon said. “So far, it has had no impact on our league,” he said of the NFL initiative that began in 2008. And financially, the CFL is little threat to the NFL, which has approximately $8.5 billion in annual revenue. The CFL by comparison has roughly $150 million in revenue, or well less than the amount just one NFL team generates.

    There also, in Canada, is the matter of competing for fan interest and dollars with the NHL.

    “Whenever you have capital investment in a sector, it shows the sector is on an upswing,” said Tom Mayenknecht, a Vancouver-based sports radio show host. “Having said that, it is still, comparatively speaking, a small business compared to a large business such as the NHL.”

    Mayenknecht noted that the CFL, despite some nice TV numbers, is still primarily a gate-driven business.

    But the CFL does appear to have labor peace. The NFL’s labor deal expires in March, and the league and its players are far apart on reaching a new agreement.

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  • Magic signs PepsiCo for Amway Center

    The Orlando Magic has signed PepsiCo as its third founding partner for Amway Center, the team’s $480 million arena opening in October.

    The five-year deal is valued at seven figures annually, said Alex Martins, the Magic’s chief operating officer. It’s on par with deals the club signed with the first two founding partners, AirTran and technology provider Harris Corp. The Magic calls them Champions of the Community partnerships.

    PepsiCo has been a team sponsor with pouring rights for all 21 of the Magic’s seasons in the NBA at Amway Arena, the team’s old facility.

    The previous deal fluctuated in value over the years, Martins said. At one time, PepsiCo was a major media sponsor when the Magic controlled its television rights before surrendering them to the local Fox regional sports network.

    PepsiCo is the third founding partner at the
    arena, which is to open in the fall.

    Over the years, the Magic also had separate agreements with Gatorade, a well-known PepsiCo brand, Martins said.

    Moving forward, the new deal ties all PepsiCo brands, including its Frito-Lay snack line, together into one joint partnership with exclusivity in the hydration, carbonated soft drinks, bottled water, carbonated caffeine-based energy drinks and packaged salty snack foods categories.

    The deal places equal value on PepsiCo as an arena partner with all its brands on display 365 days year at Amway Center. Previously, there were events outside of Magic games at the old arena where Pepsi could not display its brands, Martins said.

    The soda maker and other founding partners’ exposure extends outside Amway Center on a 2,800-square-foot video screen attached to the east wall. The screen faces Interstate 4 in downtown Orlando, where thousands of motorists will pass the building every day.

    The Magic expects to sign four more Champions of the Community deals by the time the arena opens, team officials said. Those agreements do not include the 10-year, $40 million naming-rights deal that Amway Global signed last summer.

    The Magic handled the sponsorship sale in-house.

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  • Magic’s Dwight Howard signs with Lagardère

    Lagardère Unlimited, the French conglomerate that emerged as a player in the U.S. sports business this year by buying Blue Entertainment Sports Television, has signed four-time NBA all-star Dwight Howard of the Orlando Magic for representation on and off the court.

    Howard

    “Our team at Lagardère is thrilled that Dwight chose us to represent him,” said Lagardère’s president of basketball, Dan Fegan, who will co-represent Howard with Mitchell Butler, Lagardère vice president of basketball.

    “Dwight is one of a handful of iconic superstars with an authentic brand and global appeal,” Fegan said.

    Howard, who was chosen first overall in the 2004 NBA draft, had been represented by Aaron Goodwin of Goodwin Sports but left him a few months ago.

    This has been a big year for Fegan, who has been a prominent NBA agent for years. He also represents Kentucky point guard John Wall, who was widely expected to be the No. 1 pick of the NBA draft last Thursday. Fegan got Wall one of the biggest shoe contracts in years: a five-year, $25 million deal with Reebok (see related story).

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  • Moreno set for All-Star showcase

    When Arte Moreno purchased what were then the Anaheim Angels in 2003, he was widely celebrated as the first Hispanic to own a big league team in America. Moreno’s also a member of another minority: While the term “marketer” gets thrown around a lot in sports, there are, in fact, precious few team owners who made their living actually plying the marketing trade.

    Moreno, 63, has a marketing degree, and he made a fortune as a marketer, building up an outdoor advertising business, taking it public and eventually selling it to Infinity Broadcasting for $8 billion. Disney’s reputation of expertise in managing entertainment properties is unparalleled, but since assuming control of the Angels from Disney, Moreno has more than doubled the club’s revenue.

    By any business measure, the team is up since Moreno took control.

    With the Angels hosting the MLB All-Star Game in two weeks, Moreno spoke with SportsBusiness Journal about his team, his business and his love of the game.

    Everyone involved in hosting an All-Star Game has always told me how much extra work it is, and team sports are already labor-intensive. What’s in it for the Angels?
    Moreno:
    As a fan, you get to see things like Derek Jeter batting against “Doc” Halladay. We get to showcase our stadium, fans and environment. If people are more comfortable with their surroundings they’ll be more inclined to visit, whether it’s a restaurant or a ballpark. So it’s a way for people to sample our product.

    What does a person who is a marketer by trade bring to team ownership that another owner might not?
    Moreno:
    It’s about knowing your customers’ needs and wants beyond winning. A marketer does the research on what his customers’ needs and wants are and is flexible to changing those. It’s important to do the research first. The toughest thing in problem solving is understanding the problem, so we hire independent researchers to assess what our brand awareness is and what they like and don’t like. That’s ongoing.

    Still, technology makes it relatively easy to gather information. The question is whether you are flexible enough to adjust to what you’ve learned. … You have to listen, also. A lot of times businesses get to the place where they feel entitled instead of saying, “You are always welcome.”

    Nice mantra. How have you put that into practice?
    Moreno:
    Our season-ticket holders have told us that if they could get preferred parking they would pay more for it. OK. Some of them told us we need to give them a system to easily tell what tickets are available for any particular game. The communication part can’t be emphasized enough. But the marketing stuff, for me, is easy.

    If a good friend called you and said he was buying an MLB team, what’s the first advice you would offer?
    Moreno:
    I’d ask if he was doing it for fun or to make money. I’ve always had a flair for baseball and seeing sons and daughters going to baseball games, or a kid going to a ballpark for the first time still makes me happy. People always tell me how much [franchise value] appreciation we have had, but I haven’t been able to go in and buy a beer based on that yet. In the short term, there are other things I have done that have made more money. Long term, if you do a good job, you should have an asset that appreciates, just like a house.

    Is the crunch over? Are your revenues back to pre-recessionary levels?
    Moreno:
    Yes. Sponsorship revenues are up single digits over last year, and overall we are trending positive, but people and businesses are still so cautious with spending. Unemployment is still a big factor. They are waiting to make buying decisions. On the advertising [front], we are still seeing deals that aren’t as long term. Still, we are at over 25,000 season tickets, and this should be the eighth time that we’ve gone 3 million-plus [in attendance]; we are tracking to be 3.2 million-plus right now.

    Moreno doesn’t rule out a
    return to a corporate name
    on the Angels’ home, but
    “I still believe we are in the
    branding stage.”

    After the 2003 season, the Edison International Field of Anaheim was replaced by Angel Stadium of Anaheim. Can you foresee a time when the building will have a corporate name again?
    Moreno:
    Early on, we were focused on the branding of the Angels’ name, logo and colors. I still believe we are in the branding stage. I don’t think you ever completely get out of it, so I still believe that Angel Stadium works well in that regard. Don’t get me wrong, I am a businessman, so … . But it would have to be a very good partner and the number has to be right. In the short term, I haven’t seen anything like that.

    The name change to the Los Angeles Angels of Anaheim created controversy. Was it ultimately good for business?
    Moreno:
    You have to remember the history to understand that. It went from the Los Angeles Angels originally in 1962 to the California Angels later, which means nothing to anyone outside of California because there are five [MLB] teams in the state. They really shoved them in a box when they called them just Anaheim. There’s 300,000 people in Anaheim and 3 million in Orange County and 18 million in the metroplex. The Angels were doing about $100 million when we bought the team; last season, we did almost $230 million. That’s six years later. When it comes to corporate sponsorship, there are people that are buying for Orange County, but others buy for Los Angeles, especially those buying broadcast advertising.

    What we were trying to do with the name change is make it more inclusive. … When we are involved in an East Coast/West Coast series, they know who we are. We were trying to talk about our area and region. When you are talking about media markets and exposure, the [playoff] series last year we had with Boston and the Yankees, it gave us a good East Coast/West Coast rivalry and it makes for good TV ratings and positions us better in the media world.

    Did it raise your brand awareness against the Dodgers?
    Moreno:
    I don’t try to measure ourselves against them. I always say our biggest competition out here is the weather. The Lakers just won a championship, and you’ve got all kinds of other entertainment options out here, so I don’t specifically focus [on the Dodgers]. It’s great the Dodgers and us are [combined] drawing 7 million or more a year.

    With the All-Star Game in Phoenix next year, do you expect the Arizona immigration law controversy to be an issue at this year’s game?
    Moreno:
    I have no comment on that.

    So, it’s a no-win issue for you?
    Moreno:
    It’s a political issue, and we are talking about baseball.

    With all the league collective-bargaining agreements up in the near future, I’m wondering how interconnected you think all those are?
    Moreno:
    The magic word is always revenue. A lot of my business involves unions, and I have always looked at those relationships as partnerships, but any time the pendulum moves too far one way, that’s what causes unrest. You need to find balance.

    My optimistic view is that we’ve had numerous years without a work stoppage. We have 30 different [MLB] owners and issues, but I’m hoping we’ll sit down, work it out and move forward.

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  • NFL gets in toon with Nickelodeon

    The NFL and Nickelodeon are teaming to co-produce a football-themed cartoon show scheduled to debut in September, linking the two powerful entertainment brands in what is believed to be a first endeavor of its kind in sports.

    The show, titled “Rush Zone: Guardians of the Core,” will have a plotline featuring the typical superhero, good-versus-evil themes, with the lead character, named Ishmael, visiting each of the league’s 32 stadiums as part of a quest to save the world. New York Giants quarterback Eli Manning and New Orleans Saints coach Sean Peyton have already done voice-overs for appearances on the show.

    While the NFL has reached out to the girls’ and women’s markets in recent years, this effort returns the league to one of its bases, with the press release due out today touting “Rush Zone” on the “boy-targeted” Nicktoons, the Nickelodeon channel on which the series will air.

    “This is new territory for us and new territory for Nick in the sports world,” said Peter O’Reilly, the NFL’s vice president of fan strategy and marketing. “They see this as a priority for them heading into the fall to drive new and more-engaged viewers.”

    The show builds off of NFL Rush Zone, a role-playing game on kid-focused NFLRush.com that was launched in December 2007 and has more than 2 million registered users.

    Hero Ishmael does battle with Blitz Botz (left),
    aided by NFL-inspired superheroes.

    The TV show will start as two- to five-minute episodes and conclude with a one-hour movie the day before the Super Bowl.

    The show’s hero, Ish, is an ordinary 10-year-old boy until he learns that all 32 NFL stadiums serve as secret strongholds of an otherworldly life force that he must guard. An evil villain, named Sudden Death, is determined to find the life forces and end humanity.

    Ish is given the physical abilities of an NFL player along with what the show’s developers describe as “a few additional super powers.” He must work with the Rusherz, the NFL superheroes representing all 32 teams, to stop the Blitz Botz, Sudden Death’s robots.

    Ish is taught by a mentor named O.T. and guided by NFL players and coaches in his journey.

    “We thought it was important to leverage what we bring to the table — we are storytellers and create narrative — [working] with the NFL in terms of its brand,” said Keith Dawkins, Nicktoons general manager and senior vice president of Nickelodeon Programming Partnerships.

    Nicktoons is available in 57 million homes.

    The show’s production partner is Curious Pictures in New York City.

    Currently, there are no efforts to sell ads or sponsorships around the series, and details of any licensing plans were not immediately available. The idea, Dawkins said, was to create the content and build a following and then monetize the show.

    Nick is planning significant promotional efforts on and off channel, though the details are not set.

    The lead character’s name, Ishmael, does not draw from football — as do most of the other characters’ names — but rather is the name of the young nephew of a writer on the show who died tragically.

    No other sports league is believed to have similar show or partnership. The New York Jets several years ago did produce an animated show called “Generation Jets” that aired locally, in the New York market.

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  • NHL expects total revenue to top $2.7B

    The NHL is projected to collect more than $2.7 billion in leaguewide revenue for the 2009-10 season, setting a record and extending a five-year streak of annual revenue increases.

    The total is a 3.1 percent increase from last year, and a 28.6 percent increase in the five years since the 2004-05 lockout. The projections were shared with NHL owners at last week’s board of governors’ meeting in Los Angeles.

    The increases this year were driven primarily by an increase in league revenue. Increased sponsorship sales, Winter Classic revenue, international growth, and online and NHL Network revenue increased the league’s earnings by 6 percent to 7 percent in 2009-10. Meanwhile, gate receipts across the league were relatively flat as paid attendance decreased but average ticket prices increased.

    The projected figure would extend a
    winning streak of revenue increases
    for the league.

    “Virtually all the elements of the league’s business continue to grow, which is a good thing,” said Deputy Commissioner Bill Daly. “The fact that that is happening in a difficult economy is a good sign for the future.”

    Hitting the $2.7 billion mark is significant for the league because of the way its collective-bargaining agreement is structured. The CBA, which was signed in 2005, was written so that the percentage of total revenue players were entitled to would increase from 54 percent to 57 percent as revenue rose until it hit $2.7 billion. The player share is capped at 57 percent for any revenue beyond $2.7 billion, so the NHL will keep more of what it earns if revenue rises in the future.

    The revenue increases won’t change the amount of player escrow withholdings that NHL teams will keep at the end of the season. NHL teams remain on track to receive at least $3.5 million in escrow this season, a slight decrease from the $4.4 million that most clubs received last year but still a boost to teams’ bottom lines.

    The NHL Players’ Association last week announced it would extend the collective-bargaining agreement through the 2011-12 season, ensuring that the league will have two more seasons under the existing agreement. It also approved a 5 percent “growth factor” in contemplating salary caps, a move that pushes the average cap from about $57 million to $59 million a team.

    As the NHL looks to continue to increase revenue next year, the focus will remain on expanding its special event and its media business — two areas Chief Operating Officer John Collins has emphasized. Next year, it will add a second outdoor game in Calgary and international exhibitions in Northern Ireland and Russia.

    The focus for the 2010-11 season will be on generating additional money from its television rights. Both its domestic and international TV rights expire at the end of next season, and it will begin negotiations on new contracts next season.

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  • Pace of NFLPA inquiry may be picking up

    Moves by federal authorities in recent weeks provide signals that the government is stepping up its investigation into whether former NFL Players Association leaders tried to undermine the union, experts say.

    The U.S. Department of Labor has been looking into whether former player leaders conspired to give information to the NFL that would give the league an advantage in collective-bargaining negotiations since at least spring 2009, but it is now seeking to interview NFLPA employees. Additionally, according to one source, federal authorities have recently served at least one subpoena on the NFLPA. The source asked for anonymity because the person was not authorized to speak publicly about an ongoing federal investigation.

    The NFLPA declined to comment.

    NFLPA associate general counsel Heather McPhee sent a memo to all NFLPA employees June 18 stating, “The NFLPA has been notified by government authorities that it may be the victim of violations of federal laws.” The memo said the NFLPA was cooperating with the investigation.

    “Employees of the NFLPA may be contacted by federal authorities seeking information,” the memo said. “If you are contacted, you may choose to speak to federal authorities and/or you may request that an attorney be present for this interview. If you choose to have an attorney present, the NFLPA will designate outside counsel pursuant to its policies; that lawyer can advise you of your rights and represent you individually for this purpose at no cost to you.”

    The investigation is being conducted by the Office of the Inspector General, sources said, and if charges are brought, it is expected that the U.S. attorney’s office in the District of Columbia would prosecute the case. The union is based in Washington.

    Spokespersons from both said it was their policy not to confirm or deny the existence of an investigation.

    The NFLPA confirmed the existence of the investigation in September 2009 but has not commented on any details.

    Experts in federal investigations said the memo may signify several things but that it could mean authorities are intensifying their efforts.

    “If it is just an inquiry and an informal inquiry and it’s not going anywhere, it is unlikely that there would be any notification of potential victims,” said Terree Bowers, former U.S. attorney for Los Angeles and now a partner in the law firm Arent Fox. “It sounds like the investigation has clearly got to the point where they are attempting to conduct individual interviews, but beyond that, it is difficult to draw any other information.”

    Federal authorities are required to notify victims of federal crimes under the Justice Department’s victim notification system, but that requirement does not kick in until charges are filed, said a source at a federal law enforcement agency. No charges have been filed in this case.

    Generally speaking, however, said this source, potential victims could be notified at any time during a federal investigation. The source asked for anonymity because the person was not authorized to speak publicly on the matter.

    Attorneys familiar with federal investigations said authorities might tell an organization that they may be a potential victim of a crime to explain the reason for interviews of employees as well as to gain cooperation.

    The investigation was first revealed in a civil lawsuit filed by former NFLPA head of human resources Mary Moran last summer. The lawsuit alleged, among other things, that former player President Troy Vincent and other player leaders as well as NFLPA employees were involved in activities that included meeting with NFL owners and officials to undermine the union’s collective-bargaining position. The league and Vincent, who was recently named NFL vice president of player development, have denied wrongdoing.

    Moran’s lawsuit also alleged that NFLPA Executive Director DeMaurice Smith, who defeated Vincent for the top union job in a March 2009 election, tried to quash the investigation. But lawyers familiar with law enforcement said the memo made it appear that the union was fully cooperating with the investigation.

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  • Reebok’s Shine: Wall an ‘aspirational’ player

    Reebok made its largest commitment to an athlete in years because it believes former University of Kentucky point guard John Wall is an “aspirational” player who can capture the imagination of kids worldwide, said Tom Shine, senior vice president of global sports and entertainment marketing.

    The agreement, announced last week, has been reported as being worth $25 million over five years, and though Shine would not discuss the size of the deal or any details about it, he did say, “No question, it’s the largest transaction we have had in sports for quite a while.”

    Shine said Wall is the type of player who comes along only “once every several years.”

    John Wall (center) speaks at the introduction
    of his new Reebok shoe, the ZigTech Slash,
    last Wednesday. With him are Todd Krinsky
    (left), Reebok’s vice president of sports and
    entertainment marketing, and Reebok
    President Uli Becker.

    A source said the deal includes guaranteed base salary, guaranteed royalties and performance bonuses, and two guaranteed signature shoes. Several companies vied to sign Wall, including Chinese shoe company Li Ning, which actually was prepared to pay more than Reebok, but Wall chose Reebok because of the amount of commitment in media dollars the company is willing to spend, said the source, who asked for anonymity because the person was not authorized to speak publicly on the deal.

    Wall was seen as a near lock to be drafted No. 1 overall by the Washington Wizards last Thursday, and East Coast coverage of the athletes who endorse Reebok is “critical,” Shine said.

    Also, Wall plays point guard, the most marketable of all basketball positions, Shine said.

    “It’s a position that every kid can dream of and pretend they are playing that position,” Shine said, noting the relatively smaller size of point guards compared with other position players.

    Shine negotiated for Reebok. Dan Fegan, Lagardère Unlimited president of basketball, and Brian Clifton, president of Pindar Management Group, negotiated the deal for Wall.

    “After meeting with top Reebok executives, Brian Clifton felt strongly and I agreed that Reebok viewed John Wall as a transformative player for the Reebok brand on potentially the same scale as Allen Iverson,” Fegan said.

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  • Ruling shifts power in sale of Rangers

    The attempted sale of the Texas Rangers gained an additional wrinkle last week with a federal bankruptcy judge’s ruling that gave lenders some powers to block the deal and removed team owner Tom Hicks from a position to vote on the deal.

    The team and MLB still hope to have their plan to sell the club to a group led by Chuck Greenberg and Nolan Ryan approved next month, but that will now largely be in the hands of William Snyder, the chief restructuring officer (CRO) appointed by the judge to decide whether the sale is fair to the lenders.

    Meanwhile, a second potential bidder, sources said, has been in touch with the creditors: Jeff Beck, a Dallas businessman who was the money behind Dennis Gilbert’s spurned offer for the team last year. Sources said Beck was making his overture without Gilbert.

    Houston businessman Jim Crane, another spurned bidder, also has been in touch about submitting another bid with the creditors, who were meeting with Snyder last week.

    “You can’t read this decision and say now ‘I know what is going to happen in this case,’” said Paul Rubin, a bankruptcy attorney at Herrick Feinstein who reviewed the judge’s opinion at the request of SportsBusiness Journal. “The appointment of a CRO is significant.”

    The Rangers, Greenberg and MLB all issued positive statements last week, indicating that they thought the team’s bankruptcy plan, which ends with the sale, would be approved.

    The Rangers’ parent company, Hicks Sports Group, defaulted on its debt March 31, 2009, and soon after put the Rangers up for sale. MLB took over the sales process on Jan. 16 and, over the creditors’ objections, chose Greenberg as the prospective buyer. The creditors refused to release their lien, and the team filed for Chapter 11 bankruptcy protection on May 24.

    Judge Michael Lynn of the U.S. Bankruptcy Court for the Northern District of Texas appears to have walked somewhat of a tightrope to the question of whether the lenders can block the sale because of their consent rights in their loan document. As of the end of last week, they could, according to his ruling, but he may have left a path in his decision for the team to change the Greenberg agreement and negate the lenders’ veto.

    Creditor sources disagree with that conclusion, but if it is true, the judge may be seeking an outcome in which neither side gets to make the decision whether the Greenberg sale goes forward. If the agreement can truly be restructured to take away the lenders’ veto, that removes the creditors from the decision. Lynn also removed Hicks from the decision, though, essentially leaving the choice in the court’s hands, awaiting Snyder’s recommendation.

    Snyder was meeting with all parties last week. He is an accomplished CRO who oversaw the emergence from bankruptcy in late December of chicken producer Pilgrim’s Pride.

    Beck, who did not return calls seeking comment, is the founder of Dallas-based real estate company Beck Ventures. He also was the founder and chief executive of Capital Senior Living Corp., a large developer and operator of senior living communities.

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  • Ruling shifts power in sale of Rangers

    The attempted sale of the Texas Rangers gained an additional wrinkle last week with a federal bankruptcy judge’s ruling that gave lenders some powers to block the deal and removed team owner Tom Hicks from a position to vote on the deal.

    The team and MLB still hope to have their plan to sell the club to a group led by Chuck Greenberg and Nolan Ryan approved next month, but that will now largely be in the hands of William Snyder, the chief restructuring officer (CRO) appointed by the judge to decide whether the sale is fair to the lenders.

    Meanwhile, a second potential bidder, sources said, has been in touch with the creditors: Jeff Beck, a Dallas businessman who was the money behind Dennis Gilbert’s spurned offer for the team last year. Sources said Beck was making his overture without Gilbert.

    Houston businessman Jim Crane, another spurned bidder, also has been in touch about submitting another bid with the creditors, who were meeting with Snyder last week.

    “You can’t read this decision and say now ‘I know what is going to happen in this case,’” said Paul Rubin, a bankruptcy attorney at Herrick Feinstein who reviewed the judge’s opinion at the request of SportsBusiness Journal. “The appointment of a CRO is significant.”

    The Rangers, Greenberg and MLB all issued positive statements last week, indicating that they thought the team’s bankruptcy plan, which ends with the sale, would be approved.

    The Rangers’ parent company, Hicks Sports Group, defaulted on its debt March 31, 2009, and soon after put the Rangers up for sale. MLB took over the sales process on Jan. 16 and, over the creditors’ objections, chose Greenberg as the prospective buyer. The creditors refused to release their lien, and the team filed for Chapter 11 bankruptcy protection on May 24.

    Judge Michael Lynn of the U.S. Bankruptcy Court for the Northern District of Texas appears to have walked somewhat of a tightrope to the question of whether the lenders can block the sale because of their consent rights in their loan document. As of the end of last week, they could, according to his ruling, but he may have left a path in his decision for the team to change the Greenberg agreement and negate the lenders’ veto.

    Creditor sources disagree with that conclusion, but if it is true, the judge may be seeking an outcome in which neither side gets to make the decision whether the Greenberg sale goes forward. If the agreement can truly be restructured to take away the lenders’ veto, that removes the creditors from the decision. Lynn also removed Hicks from the decision, though, essentially leaving the choice in the court’s hands, awaiting Snyder’s recommendation.

    Snyder was meeting with all parties last week. He is an accomplished CRO who oversaw the emergence from bankruptcy in late December of chicken producer Pilgrim’s Pride.

    Beck, who did not return calls seeking comment, is the founder of Dallas-based real estate company Beck Ventures. He also was the founder and chief executive of Capital Senior Living Corp., a large developer and operator of senior living communities.

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  • Site ranks teams, leagues by fans on Twitter, Facebook

    Indianapolis-based Coyle Media has developed SportsFanGraph.com, a new website designed to track the number of social-media followers held by sports teams and leagues.

    The site lists the number of Twitter and Facebook followers each team and league has, a ranking that’s topped by the NBA’s combined following of more than 4.5 million people. Ultimately, the site is being designed as more of an open-source tutorial on social media and strategies used to build large followings in these forums.

    Coyle Media developed SportsFanGraph.com.

    “It’s an extension of the Sports 2.0 community we’re trying to foster,” said Pat Coyle, president of Coyle Media. “What we’re looking to do soon is harness this data, begin to study the content deeper, and see what’s really working out there.”

    Data is generally updated every 12 hours and can be segmented by sport and geographic region. Non-U.S. teams and leagues, including the likes of Liverpool FC, Real Madrid and New Zealand rugby, are included.

    The site is free, and while Coyle said he eventually may put in paid or free password-protected content to SportsFanGraph.com, the destination for now is also serving as a marketing tool for his consulting practice and series of Sports Marketing 2.0 conferences.

    SportsFanGraph.com does not include player rankings, as there are already several other sites that perform various aggregations and rankings of athlete Twitter feeds.

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  • StubHub adds Georgia, Virginia Tech to growing college roster

    StubHub has signed multiyear deals with Virginia Tech and the University of Georgia to become the official fan-to-fan ticket marketplace for each school’s athletic department, continuing a push by the secondary ticketing giant into the collegiate marketplace.

    Similar to pacts signed early this year with the Big Ten and West Coast conferences for their men’s and women’s basketball tournaments, StubHub gains a variety of online and off-line assets with the new school deals, including in-game signage, regional radio and TV advertising, and exposure and links on university websites. StubHub also plans to use the deals to expand its profile in VIP and fan-loyalty events, building ticket packages out of the game offerings.

    StubHub is now aligned with 16 collegiate properties. Both Virginia Tech and Georgia are known primarily for their football programs and, as such, the deals are primarily targeted for that sport even though they cover the full athletic departments.

    “College football obviously is a major growth vehicle for us, and this also fills in some very important geographic areas in our footprint,” said Danielle Maged, StubHub head of partnerships and business development. “This also gives us better penetration in both the SEC and ACC, which is something we’ve wanted.”

    As college sports have increased in priority for StubHub, revenue from college football events has increased 20 percent over the past year. College basketball-related revenue has gone up 30 percent.

    Financial terms of the deals were not disclosed. StubHub struck the agreements with ISP Sports, which administers the multimedia rights for both schools.

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  • Summer Jobs

    We asked industry executives to tell us about the most memorable summertime jobs they had during high school and college.

    Responses were edited for clarity and brevity.

    David Wright
    Vice president, partnership marketing
    Major League Soccer/Soccer United Marketing

    Wright

    Job: Indiana University soccer camp coach/counselor (summer job while in college)

    “Having gone to the Indiana University soccer camp myself growing up, it was pretty cool to find myself in the role that I once looked up to. The highlight of camp always centered around A) late night pizza with other staff coaches, and B) ribbing coaches that ‘fell short of expectation’ during the weekly Staff vs. Camper all-star matches.

    “While the days were long, staying in Bloomington [Ind.] during the summers to coach, train and eat pizza will always be one of the highlights of my college years.”

    Lothery

    Karlyn Lothery
    President
    Sports Talkers

    Job: Philadelphia Phillies usher

    “As a longtime Boston sports fan, it went against my nature to cheer for any team other than the Red Sox, Patriots or Celtics. And any sports fan from Boston will tell you that you can’t like their teams and like a team from New York. However, the summer of 1992, when I worked as an usher with the Philadelphia Phillies after my freshman year of college, made me a temporary New York fan and permanent dedicated worker.

    “Here’s why: As an usher, you make minimum wage. You stand up for the entire game and sweat uncontrollably in the summer heat. All the while, you pray it never rains since you have to wipe down and dry off all of the seats in your section before play resumes. It’s a very thankless job, unless you have fans who tip.

    “New York fans are the best tippers around. So when the Mets came to play, their fans came to pay. They would tip you as they walked themselves to the seat. They’d tip you extra if you wiped their seat for them. They’d tip you again if you had to wipe the seat after the rain delay. They were quite generous!

    “Once I got a taste of the New York tippers, I worked harder (which says a lot for a 19-year-old kid) and boosted my ‘customer service’ to see if I could earn a tip from any of the other visiting or hometown fans throughout the season. I guess you could say that summer job helped strengthen my work ethic but also gave me a greater appreciation for rewarding good behavior/hard work.”

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  • Supercross event jumping to Dodger Stadium

    The Monster Energy Supercross Series will attempt to freshen its schedule next winter with its first trip to Dodger Stadium.

    Supercross has long fed the hearty Southern California appetite for its sport, with three early season events in Anaheim since 2001. Based on attendance last season, though, there were signs of Supercross fatigue in the market.

    The 2010 season-opening event at Angel Stadium drew 43,841, but subsequent events at the same venue dropped off to 31,874 and 34,227, two of the smallest crowds on the 17-race circuit that runs from January to May.

    2011 Monster Energy Supercross schedule
    Date Venue City
    Jan. 8 Angel Stadium Anaheim
    Jan. 15 Chase Field Phoenix
    Jan. 22 Dodger Stadium Los Angeles
    Jan. 29 Oakland-Alameda Coliseum Oakland
    Feb. 5 Angel Stadium Anaheim
    Feb. 12 Reliant Stadium Houston
    Feb. 19 Qualcomm Stadium San Diego
    Feb. 26 Georgia Dome Atlanta
    Mar. 5 Daytona International Speedway Daytona Beach, Fla.
    Mar. 12 Lucas Oil Stadium Indianapolis
    Mar. 19 Jacksonville Municipal Stadium Jacksonville
    Mar. 26 Rogers Centre Toronto
    Apr. 2 Cowboys Stadium Arlington, Texas
    Apr. 9 Edward Jones Dome St. Louis
    Apr. 16 Qwest Field Seattle
    Apr. 30 Rice-Eccles Stadium Salt Lake City
    May 7 Sam Boyd Stadium Las Vegas

    Feld Motor Sports, the Chicago-based agency that manages Supercross, decided it was time to shift one of the Southern California events out of Orange County and move north, into Dodger Stadium in 2011.

    “We feel like the move to Dodger Stadium will expose Supercross to a new set of fans,” said Ken Hudgens, Feld’s chief operating officer. “We felt like it was time to tweak the schedule and try to expand the base. Dodger Stadium gives us that chance to grow while still delivering two other events to the Orange County base that’s been so vital to the series.”

    The new schedule also features a shift out of San Francisco across the bay to Oakland. Hudgens said that Feld has enjoyed successful events in Oakland with its Monster Jam property and hopes the same support will filter to Supercross. The Supercross event at AT&T Park this year drew 41,872.

    Overall, Supercross saw a moderate lift with its attendance, from an average of 46,289 last year to 46,329 in 2010.

    Feld doesn’t go into financial details of its properties, but Supercross is called a profitable series by the promoter. Feld rents the stadiums in which Supercross events are held and typically shares revenue, including ticket sales, parking, souvenir sales and concessions, with the venue.

    “The more revenue streams we can vend for ourselves, the better,” Hudgens said.

    Title sponsor Monster Energy will be back for 2011, and Supercross will again look to increase the number of live events televised on Speed. Five Supercross races were televised live this year.

    Feld also buys time on CBS for a handful of one-hour broadcasts each year.

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  • Toronto FC keeps bank’s name on jerseys

    The Bank of Montreal has signed a multiyear renewal of its jersey partnership with Toronto FC, ensuring the bank’s logo will remain on the jersey of one of MLS’s most successful clubs.

    The bank and Maple Leaf Sports & Entertainment, which owns Toronto FC, agreed to a five-year extension that industry sources valued at more than $4 million annually. The deal will keep Bank of Montreal’s BMO logo, which first appeared on Toronto FC’s uniform during the team’s inaugural season in 2007, in the same place through the 2015 season. It is an increase of about three times the reported $1 million to $1.5 million initial jersey deal.

    Bank of Montreal has held the jersey rights
    since Toronto began play in 2007.

    “To have BMO front and center on the jerseys has been a huge win for us,” said Sandy Bourne, vice president, advertising, sponsorship, events and merchandising, BMO Financial Group. “There’s nothing better than to see someone walking around the streets of the city with our brand name proudly represented on their shirt. It puts the BMO brand on a much different level and creates a tremendous brand presence for us.”

    “We held hands and jumped off the cliff into soccer together a few years ago,” said Tom Anselmi, MLSE’s chief operating officer who worked on the deal with MLSE senior vice president of corporate sales Dave Hopkinson. “We didn’t know how deep the water was, but they were right there with us then and we’re excited they’ll be with us in the future.”

    MLS was the first professional sports league in the U.S. to permit advertising on uniforms when it approved the practice in 2006. More than half the league’s teams managed to sell a jersey sponsorship, boosting those clubs’ bottom lines by $1 million to as much as $5 million.

    MLS Jersey Sponsorships
    Team Sponsor Annual value
    Los Angeles Galaxy Herbalife $4 million-$5 million
    Toronto FC Bank of Montreal $4 million-plus
    Seattle Sounders FC Microsoft $4 million
    D.C. United Volkswagen $3.1 million-$3.7 million
    Chicago Fire Best Buy $2.6 million
    Chivas USA Extra $2 million-plus
    Houston Dynamo Amigo Energy $1.9 million
    Columbus Crew Glidden Paint $1 million
    Real Salt Lake XanGo $1 million
    Vancouver Whitecaps Bell Canada NA
    NA: Not available
    Source: SportsBusiness Journal

    Other leagues have followed suit in hopes of generating revenue. The WNBA and Women’s Professional Soccer league teams began selling jersey sponsorships last year. Each league has had four teams sign jersey partners.

    Many MLS teams have reached the end of their initial jersey agreements and have begun negotiating renewals. The Chicago Fire is negotiating a renewal with its jersey partner, Best Buy, and the Houston Dynamo is negotiating a renewal with jersey partner Amigo Energy.

    Real Salt Lake, which signed the first jersey deal in 2007, negotiated a renewal last year with Utah-based beverage company XanGo. Toronto FC’s renewal with Bank of Montreal was the second renewal in the league.

    In contrast to the first agreement, Toronto FC was able to show Bank of Montreal the value of jersey partnership. The team has become one of the most popular in the league, selling out 46 consecutive games. It draws an average of 50,000 to 200,000 television viewers a game, and it is third in the league in jersey sales behind Seattle and Philadelphia.

    Those impressions should increase in Canada in the future as MLS adds expansion teams in Vancouver in 2011 and Montreal in 2012.

    The bank has been a committed supporter of soccer in Canada for years. In addition to the relationship with Toronto FC, where it also holds naming rights for the club’s stadium, it sponsors the Vancouver Whitecaps, the Canadian Soccer Association and the grassroots Canadian nonprofit Play Soccer.

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  • Veritix expands NCAA deal to include other championships, reservations for big events

    Ticketing venture Veritix has signed a multiyear deal with the NCAA to provide primary ticketing services for select NCAA championships, expanding a prior relationship between the two sides that provided for paperless student ticketing at the Final Four.

    The deal has three primary components: the use of Veritix’s ticketing system for the championship events; the use of the system for advance reservations for high-demand events, such as the Final Four and Frozen Four; and a continuation of the paperless ticketing used the last two years for student seating at the Final Four.

    Veritix will continue to provide paperless
    ticketing for student seating at the Final Four.

    Financial terms were not disclosed, but the deal represents a major win for Cleveland-based Veritix, one of several companies seeking to challenge Ticketmaster’s traditional dominance of primary ticketing business. Beyond the previous Final Four work, Veritix’s presence in the collegiate space to date has been official relationships with Boise State, Texas A&M and Oral Roberts University.

    “We’re giving the NCAA a lot of flexibility and the ability to control their own ticketing destiny under their own brand name,” said Jeff Kline, Veritix president. “For us, this certainly represents a major springboard, [as] we see a lot of opportunity in the collegiate market.”

    Veritix also has a secondary ticketing component to its business with its Flash Seats platform, but the NCAA remains aligned with Primesport for the secondary ticketing and hospitality segments of its business.

    The deal calls for initial implementation at the NCAA’s highest-profile events, such as the Final Four and Frozen Four, and gradual expansion from there to other of the NCAA’s 88 championships. The existing primary ticketing deals for some of those championship events, including some with Ticketmaster, carry various expiration dates.

    “The flexibility of their software platform and forward-leaning approach made it seem like a very good fit to put this into full action,” said Greg Shaheen, NCAA senior vice president for basketball and business strategies.

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