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News of Tom Jernstedt’s departure was delivered unceremoniously by the NCAA late on a Friday afternoon.
For 38 years, Jernstedt had been the architect of the NCAA’s basketball tournaments, a driving force behind its women’s championships and a security blanket to the organization’s presidents. But as incoming NCAA President Mark Emmert restructured and consolidated his front office, Jernstedt was one of three high-ranking executives who were not retained.
The lengthy 24-paragraph NCAA release detailing the personnel changes finally got to Jernstedt’s departure in the 23rd paragraph. Talk about burying the lead.
Jernstedt’s fingerprints have been all over the men’s basketball championship since 1973 when he and one other NCAA executive, Dave Cawood, essentially ran the whole tournament. Now it’s a property that recently drew a 14-year, $10.8 billion media contract with CBS and Turner.
His friends and associates called Jernstedt, who is 65 years old, the guiding force behind the tournament and one of the most influential figures in basketball over the last 30 years. Many of them had urged him to make a bid for the association’s presidency over the years, but he declined, saying he’d prefer to keep his hands on the tournament.
Now those friends are struggling to understand why the executive vice president was not part of Emmert’s administration moving forward.
“I was surprised by the announcement and, frankly, I’m displeased,” said C.M. Newton, a longtime administrator and coach who runs the NCAA’s NIT events and consults with the SEC. “Tom is the one common thread through the entire NCAA structure.
“Tom will be fine. I don’t know what else he could have done there anyway. I’m a lot more worried about the NCAA moving on without Tom.”
The NCAA also said that Dennis Cryder, senior vice president of branding and communications, and Elsa Cole, vice president of legal affairs and general counsel, would not return. The last day for all three will be Aug. 31.
Emmert said he understood and appreciated Jernstedt’s contributions over the years and that his 38 years of service will not go unnoticed. The NCAA is working on a proper send-off, he said.
“It was very difficult to eliminate the post he had,” said Emmert, the University of Washington president who plans to start at the NCAA’s headquarters in Indianapolis the first week of October. “It’s not something I relished. Tom’s got four decades of experience and he’s one of the best-known guys in the business. At the same time, as I looked at consolidating into a tighter structure, that was a decision that I made.”
Emmert said he intends for the NCAA to be a more nimble organization that can respond more quickly to any number of issues, from student-athlete eligibility to new legislation or any other changes in the sports landscape.
“The role of the national office is to serve the members and do that as directly and as speedily as we can,” Emmert said. “The office does many things well, but there are also many things we can do better. … We want to create a model for better communication and a smaller, tighter leadership team in each category. The goal is for the organization to be as responsive as we can, to streamline communications so we can make decisions more rapidly.”
The type of change that has the NCAA moving on without Jernstedt comes with new leadership, said Gene Smith, Ohio State’s athletic director and chairman of the NCAA’s basketball committee.
“Change occurs and we know that in every line of business,” Smith said. “I actually foresaw some of that, although I didn’t know what it would be. President Emmert is going to be a great leader for the association, but he’s going to do things differently.”
Jernstedt’s touch with the tournament led to its enormous growth, but he also represented college basketball as the NCAA’s liaison with FIBA and the NBA.
“You could poll all of the coaches and people who really count in basketball and it’d be unanimous that no one has had more of an impact,” said Jim Host, the NCAA’s first marketing partner and a longtime friend. “He’s been a gentle giant in this sport, but always behind the scenes.”
In Jernstedt’s typically understated fashion, he downplayed the accomplishments. He recalled the growth of the tournament and talked at length about the process of moving women’s championships from the old AIAW to the NCAA in the early 1980s.
When asked last week if the departure was his decision, all he said was, “You’ll have to ask the NCAA about that.” But he offered no regrets and little sentimentality for things to continue as they were.
“I was surprised,” said Jernstedt. “There had been, to my knowledge, no conversation about it. … But a new president is coming in and it’s fair for any new leader to put his management team in place.”
Jernstedt usually kept his mind focused on how to make the tournament better for the student athletes and ways to keep corporate partners happy while maintaining a clean, uncluttered environment for the game. He took the approach of measured growth for the tournament, using the Masters golf tournament as a guide.
“He always had a sense of what made the tournament special,” said Mike Aresco, executive vice president of programming at CBS Sports. “He was deliberate about pushing its growth, but still very flexible.”
Jernstedt’s satisfaction showed in the form of a simple pregame handshake with members of the basketball committee in the moments before tip-off of the Final Four, signifying the conclusion of another successful tournament.
Among Jernstedt’s fondest memories will be his final tournament, which ended with Duke’s dramatic victory over Indianapolis-upstart Butler, and the vetting process as the NCAA expanded the tournament from 65 to 68 teams, while also considering a field of 96.
“It was amazing to see so much concern about going to 96,” he said. “But we didn’t want to risk tarnishing what we have at this point and I’m pleased with the way it turned out.”
Jernstedt said he’ll continue his work as vice chairman of the Indianapolis Convention and Visitors Association and will consider any consulting opportunities that come along. His voice in intercollegiate athletics won’t go quiet.
“Tom knows everybody in our industry,” said Jon LeCrone, commissioner of the Horizon League, which is based in Indianapolis. “He’ll stay connected and he’ll continue to be a very valuable voice.”
Though Comcast is still months away from announcing the organizational structure for its planned NBC acquisition, some clues about how the merged company will look are starting to seep out.
NBC Universal Sports and Olympics Chairman Dick Ebersol was spotted in Orlando on Wednesday taking a tour of Golf Channel’s operations, according to several sources. Ebersol flew in and out of the Golf Channel’s headquarters the same day, a trip that increased speculation that Comcast will pick the longtime media executive to oversee the merged company’s sports channels, including Versus, Golf Channel and Universal Sports, as well as NBC Sports.
Ebersol long has been viewed as the odds-on favorite for that position, which would report to Comcast’s chief operating officer, Steve Burke.
It appears unlikely that Comcast’s regional sports networks would be grouped with the national sports networks. Rather, sources say, Comcast seems to be leaning toward grouping the RSNs with NBC’s owned-and-operated stations.
Golf Channel is in 83 million cable and satellite homes. It has gained more than 9 million subscribers since signing a 15-year rights deal with the PGA Tour in 2007. Page Thompson has led the channel for more than three years. Versus is in 74 million homes. It has gained more than 11 million homes since it signed a rights deal with the NHL before the 2005 season. That deal ends after the coming season. Jamie Davis has led Versus as president since the spring of 2008.
The Comcast-NBC deal is in front of the Federal Communications Commission.
The 2010 FIBA World Championship tips off this week in Turkey, with organizers expecting about $50 million in total marketing and television revenue from the event, up 50 percent from the 2006 tournament.
In addition, total ticket revenue, all of which goes to the local organizing committee, is expected to range between $8 million and $10 million.
The quadrennial event is slated to run from Saturday through Sept. 12 in four cities: Ankara, Kayseri, Izmir and Istanbul, site of the championship game.
This is the first time Turkey has hosted the tournament. It was played in Japan in 2006.
FIBA, the International Basketball Federation, has signed 18 partners for this year’s event, led by presenting sponsor Beko, the appliance giant based in Turkey. Other sponsors include Mercedes-Benz, Tissot and Nokia.
“Our [sponsorship] inventory is about the same but the investment is higher, with all of our deals for at least four to five years with steady revenue growth,” said Patrick Baumann, FIBA’s secretary general. “Turkey has been a fertile market for us. We also are launching for the first time a sponsorship hospitality program with a high level of corporate service, and that has been a new revenue stream for us.”
Also new for the World Championship this year is a television deal with ESPN that was directly negotiated by FIBA. In 2006, ESPN’s rights to the event were negotiated by the NBA. The three-year deal, signed in 2009, gives ESPN rights to the World Championship and other major international basketball tournaments through 2011.
“We felt we are a mature enough property to go to market on our own,” Baumann said.
FIBA keeps all the television rights revenue from the championship, about $25 million, and two-thirds of the marketing rights revenue. The remaining one-third of that stream, about $8 million, goes to the local organizing committee.
In addition, FIBA said it is edging close to a sellout of its ticket inventory for the event, with a total expected attendance of 350,000 spectators. That’s a 10 percent increase in the number of tickets sold compared with 2006, though actual ticket revenue is down from 2006’s total of about $18 million, a decrease Baumann attributed to the value of the Japanese yen in 2006.
“We have sold over 30 percent of the ticket inventory outside Turkey, which is three times as many as in the past,” Baumann said. “That is an encouraging sign for the property.”
The NBA has no marketing rights to the World Championship, though the league does market USA Basketball, which currently has eight sponsors. The league also has a cooperative agreement with FIBA to help promote the World Championship through USA Basketball.
“It is not a formal marketing campaign and we are not putting any dollars into it, but at various times we have helped with promotions,” said Chris Heck, senior vice president of marketing partnerships for the NBA.
Baumann said the NBA has helped produce commercial spots to tout the tournament.
FIBA’s World Championship comes as the NBA continues its push to increase its international footprint, including the recently announced plans to hold in March its first regular-season games in London. Baumann, however, believes the NBA’s global growth does not encroach into FIBA’s reach.
“The NBA does have a growing presence, but it is an asset,” Baumann said. “It can create its own challenges at times, but we are fortunate to have the NBA.”
Fox’s action sports channel, Fuel TV, is hoping its production of the Maloof Money Cup will lead to more action sports events using its in-house production unit.
“We believe this is the launching pad,” said Scott Paridon, vice president of production and development for Fuel TV. “This represents the first of many deals like this.”
Fuel has produced three one-hour highlight shows around the event, which had stops in New York and Orange County, Calif., earlier this summer. Two of the shows will appear on Fox’s 19 regional sports networks, on Sept. 8 and Sept. 15. The other one, which will feature highlights from the Orange County event, will be on the broadcast channel on Saturday, in the time slot immediately preceding Fox’s weekly Major League Baseball game.
The deal placing the Maloof Money Cup on the broadcast channel is a time buy. The contract, though, has Fuel serving as a production company. The last two years, a company called Windowseat Pictures produced the shows for CBS and NBC.
So far, event creator Joe Maloof says he’s been impressed with the enthusiasm Fuel has brought to the productions.
“Fuel is the most enthusiastic television partner we’ve ever had,” Maloof said. “It’s translating into great things.”
In the last two years, Maloof bought time on CBS and NBC for the Maloof Money Cup. The Orange County event pulled a 0.5 rating on CBS in 2008 and a 0.4 rating on NBC in 2009. The New York event earlier this year pulled a 0.4 rating on Fox.
Fuel also carried four hours of coverage earlier this month.
Maloof cites the inclusion of a 24-hour action sports channel as a reason he believes the numbers should get better.
“They just have to maintain their enthusiasm for the event,” he said. “It’s their opportunity, if they want, to really make a strong impression in action sports.”
Fox is responding with a marketing push that it calls the biggest one Fuel has undertaken. It is pushing the event with TV ads across Fox networks. It has bought billboard space in New York and Los Angeles, and it has purchased ads in several endemic print publications.
“We’re not using the Fox broadcast as a way to promote Fuel,” said Shon Tomlin, Fuel TV’s senior vice president of marketing and programming. “You’ll see some signage in the background.”
The contracts of first-round NFL draft picks have changed this year to reflect a belief in the marketplace that there may be a lockout in 2011 and that it could potentially delay the start of the regular season, according to multiple sources.
Notably, the timing of when clubs will pay option bonuses has changed from the first two weeks of the league year, which begins in March, to around the time the first regular-season game is played in 2011, whenever that may be. Option bonuses, which give clubs the option to extend deals by another year and are paid to rookies in their second year in the league, have accounted for a significant portion of guaranteed money top NFL rookies have received in recent years.
Additionally, 25 of 32 first-round picks received signing bonuses this year versus 16 last year, according to the NFL Players Association, an increase of 56 percent. Signing bonuses are paid in the first year of a player’s deal, when he signs his NFL contract, and in the case of 2010 draft picks will be paid this year.
The NFL collective-bargaining agreement expires March 4, and if there is no new labor deal by then, the NFL can lock players out.
Mark Levin, NFLPA director of salary cap and agent administration, said that this year 26 of the 32 NFL first-round picks have option bonuses and in each case the time period in which that bonus has to be paid was extended out at least six months, or whenever the first NFL regular-season game is played in 2011.
Agents said that is because there is uncertainty in the marketplace as to when a lockout might occur and how long it may last. The option bonuses do not specify when the first 2011 regular-season NFL game could be played, and agents said there is a feeling in the marketplace that it may not be played in early September, but later in the fall next year. Agents requested anonymity because they did not want to speak publicly about their clients’ contracts or their discussions with NFL clubs.
Levin acknowledged that negotiators were trying to account for when a lockout might occur in the language of the option bonuses. “For example, if there was a lockout from March to July, [clubs] don’t have to exercise [the option bonus].”
“Now that the [period of time] to exercise has been extended to the first regular-season game, if they only lock out for a couple of months, they would be able to make that decision under the language of the contracts,” Levin said. “We wanted the agents to put it in the contract so you couldn’t leave it in the hands of an arbitrator.”
Many first-round NFL player contracts have both signing and option bonuses, although some have had either one or the other. Option bonuses have become more prevalent in recent years because they are a way agents can increase the amount of guaranteed and overall dollars going to the players under the complex rules that govern rookie contracts.
The NFLPA, which certifies agents to negotiate contracts with NFL clubs, advised agents to put more money into signing bonuses this year, Levin said. “We advised agents to try to get more money in Year One,” he said.
The Maloof Money Cup skateboarding event is featuring its 2010 competition with a one-hour special on Fox this Saturday. The event’s founder, Joe Maloof, spoke with SportsBusiness Journal staff writer John Ourand about his plans for the event, including international expansion. He also discussed the coming season for the Sacramento Kings, the NBA team his family owns.
How do you plan to grow the Maloof Money Cup?
Maloof: After the Maloof Money Cup in New York in June, I had 27 cities contact me from all over the world that wanted us to bring the Maloof Money Cup competition to their city and to build a great course. People want the Maloof Money Cup because it’s strictly skateboarding and the course is designed by skateboarders.
What are your international aspirations?
Maloof: We have a three-year deal with Kimberley, South Africa . We’re going to build a beautiful skatepark there, and street course, as well as a vertical — a mini mega-ramp. Kimberley wants to be the action sports capital of that entire African continent.
When will it be profitable?
Maloof: It’s profitable now. … Next year, we will have five Maloof Money Cup events. We’ll have four in the United States and one in South Africa . I haven’t even started scratching the surface.
What’s the status of the new basketball arena in Sacramento?
Maloof: Nothing. There’s no new status. In fact, there’s been another delay for another two months. I think everybody wants to get something done, but there’s been no real progress.
What key business steps have you taken with the Kings this summer?
Maloof: Like everyone else in the country, we’ve taken a hard look at our business and found out that you can’t do business today like we did three years ago. We had some major cuts throughout the organization. We’re very lean now. We’re trim. We have no fat. Our goal is to get more fans into Arco Arena and try to get back the fans that we lost. We’re on the right track. Our business is up.
This year’s FIBA World Championship may be the last. Four years from now, the event could be known as the World Cup.
The International Basketball Federation (FIBA) has been considering switching the name for more than a year, with possibilities such as the FIBA World Cup, the Basketball World Cup or the World Cup of Basketball being discussed. The federation’s board is expected to vote on a name change in 2011.
“It’s a work in progress, and it seems like a likely outcome for the 2014 championship,” said FIBA Secretary General Patrick Baumann. “It’s not yet a decision, but people are getting more and more friendly with the idea, and that helps.”
Baumann said FIBA is working with organizers of the 2014 World Championship in Spain to develop an alternative logo and marketing plan should the name change.
By changing the name, FIBA executives hope the property would be more recognizable worldwide. Soccer, rugby and cricket all call their international championships a world cup. FIBA would be looking to borrow from the equity those sports have established.
NBA Commissioner David Stern has been one of the biggest proponents of the name change, Baumann said. He added that changing the name would benefit corporate and broadcast partners promoting the event.
“In some markets, it’s easier to identify the event,” Baumann said. “It will be debated. Right now, organizers [in Spain] feel there’s some value in changing the event [name].”
Baumann said he’s not concerned that there would be confusion between the FIFA World Cup and a FIBA World Cup. He suggested the organization could call the event the Basketball World Cup to avoid any confusion between the events.
“I’m not sure we can find many disadvantages,” Baumann said. “Change can be good sometimes.”
The Charlotte Bobcats can credit their first playoff appearance and new owner Michael Jordan for helping generate more than 1,500 new season tickets this summer. But the franchise can also point to NASCAR for influencing the substantial uptick, given that the team uses one of the region’s pastimes as part of an aggressive mix of tools to push offseason ticket sales.
“We have found that going outside our building can be valuable,” said Pete Guelli, executive vice president and chief marketing and sales officer for the Bobcats. “It gets the client into a completely different environment. It feels much more casual and I think the customers respond to it. It is more like we are attending the event together and less like they are attending and we are working.”
But it’s not just the Bobcats. Sales tools that are increasingly being used across the league have helped drive new, full-season-ticket sales near the 40,000 mark, a record level that is up at least 30 percent over the same date last offseason.
Outside the arena
Some NBA teams increasingly are looking outside their own facilities and into other local sports franchises to drum up business. It’s a tool that NBA teams in the past tended to avoid.
“It is relatively new and it is rapidly spreading,” said Chris Granger, senior vice president of team marketing and business operations for the NBA. “You want to be at events where premium buyers are. It is about getting face-to-face contact.”
The Golden State Warriors this year rented a suite at the Oakland A’s ballpark when the New Yankees came to town. The Bobcats had Jordan drop the green flag at a race at Charlotte Motor Speedway while, at the same time, team officials wined and dined potential premium customers at a trackside suite. The team also had a continuing presence at this spring’s PGA Tour Quail Hollow Championship stop in Charlotte.
“It is becoming more common,” Guelli said. He would not say exactly how much revenue was generated, but the team already is planning to follow the same strategy next summer. “Both events were highly successful for us,” he said.
But some teams that have experimented with using outside events to market themselves now prefer to focus on their own assets. The Phoenix Suns in the past bought a suite at the PGA Tour’s Waste Management Phoenix Open, but this year did not return.
“While we have used those type of outside events, we found that we have a lot more to offer inside the US Airways Center,” said Jay Parry, senior vice president of brand and business development for the Suns.
Depth of data
All NBA teams use data from their ticket vendors to glean information on potential buyers. While companies like Ticketmaster and even secondary ticket sellers like StubHub have long been resources for teams in collecting customer data, Veritix’s Flash Seats paperless ticket system is also emerging as a tool in gathering data. The company, owned by Cleveland Cavaliers owner Dan Gilbert, uses a system is which ticket holders swipe their credit cards to enter an arena. The process allows teams to track all activity from its ticket buyers and use that data to better target their sales efforts.
“They have very rich data in terms of who is buying, but also who has bid on the tickets, what they are willing to pay and the types of games they are interested in,” Granger said. “It allows for a greater depth of understanding the data.”
Four teams this season — the Cavaliers, the Denver Nuggets, the Utah Jazz and the Houston Rockets — are using the Veritix system.
“It creates the opportunity to follow the ticket everywhere it goes,” said Jim Olson, senior vice president of sales and marketing for the Jazz. “We see who is getting the ticket and who is using it, where with other systems, once the ticket is resold, you lose track of it.”
So why aren’t more teams using the Veritix system? Mainly because competing ticket vendors like Ticketmaster are more established and are willing to pay teams more lucrative upfront fees for the ticketing rights. To some teams, the upfront cash from competitors trumps the Veritix system.
Another drawback is that teams must spend time and money to educate fans how to use the paperlesss ticketing system.
“For all these years, fans are used to having tickets in hand and now it is loaded on your credit card,” Olson said. “We have to get people comfortable with the new.”
Not all of the hottest ticket sales tools are based on the increasingly sophisticated use of data. Consider the Suns, who are using niche marketing events to drive new business.
In the past, teams would hold meet-and-greet events with a wide variety of potential season-ticket buyers, trying to draw as many of them together as possible and offer the chance to meet the team’s coach, general manager or other top front office executives. Now, the approach has become far more industry specific. The Suns this year are hosting at least five industry-specific events expecting to top last year’s event-based marketing, which generated $1.4 million in ticket revenue.
The team has worked with local auto dealers to bring in buyers of luxury cars and will hold a youth coaching clinic that brings in local coaches for a session with the Suns staff, with the goal of selling more group tickets.
“It allows us to get a targeted audience together and get out a specific message about our upcoming season,” Parry said.The Rockets are also aggressive in niche marketing events, holding three events that brought in attorneys, physicians and oil-and-gas executives to mingle with team executives, while the Indiana Pacers this summer also held an event for youth basketball coaches.
Leaguewide, the niche marketing events are resulting in a 10-to-1 return in sales compared with the event expense, Granger said.
“These sales events are becoming far more specific and allow teams to talk with a singular message to like-minded people,” Granger said. “In the past, there were town-hall-type of events. But now, teams are getting people in specific industries talking to each other about how they use season tickets. It is far more targeted and effective.”
Among the new sales tools making their way through the NBA are lead scoring systems from companies such as Vienna, Va.-based Eloqua and New Jersey-based Turnkey Sports.
Turnkey rolled out a product last fall and has deals with the Atlanta Hawks, Oklahoma City Thunder, Miami Heat, Philadelphia 76ers and Washington Wizards. Eloqua counts the Suns, Warriors, Portland Trail Blazers and Sacramento Kings as clients.
Teams pay for technology that scores potential ticket buyers based on personal demographic information, ranging from the type of car a potential customer drives to the square footage of their house.
“Turnkey uses each prospect’s historical purchase history, coupled with consumer data appends such as lifestyle cluster, discretionary spend score, net worth, presence of children, and mixes it up in their algorithm to calculate the lead score,” said Lara Price, senior vice president of business operations for the Philadelphia 76ers. “In our preliminary analysis, we’re finding that the leads with the better scores have a higher conversion rate than average and the sales cycles are shorter.”
Eloqua also uses similar data.
“We use explicit [demographic, purchase data, etc.] and implicit [Web visits, e-mail opens, etc.] data to score leads within our system,” Parry said. “The more activity you have for each, the higher your score for each. In reviewing the option, we felt Eloqua offered more integration opportunities regarding what’s driving the score.”
But not all NBA teams are convinced the lead evaluation systems are worth the investment.
“We have our own raw data that we use and we have some consultants that we brought in-house,” said Chris Dacey, vice president and chief strategy officer for the Rockets.
The NHL last week announced its first hybrid retail and licensing partnership with one of Canada’s largest retailers.
The deal makes Canadian Tire the official home improvement retailer of the NHL in Canada and gives the NHL a presence at a ubiquitous retailer that contends that 85 percent of all Canadians live within 15 minutes of its locations and 40 percent of the country shops there weekly. It also says it is the No. 1 hockey retailer in the world.
Sources valued the five-year agreement at more than $20 million overall, which includes media but not activation. The NHL previously had a partnership in Canada with The Home Depot. That deal ended after the 2008-09 season.
The agreement makes Canadian Tire the first company to become an official partner of the NHL’s outdoor game in Canada next year, the Heritage Classic, and it gives the retailer the right to develop a store-within-a-store concept featuring NHL-licensed league merchandise at some of the retailer’s 480 outlets across Canada. It also includes vendor-pass-through rights to work with some of Canadian Tire’s vendors who don’t conflict with NHL partners.
“It’s quite a creative piece that the league put into the deal that allows Canadian Tire to really ramp up the marketing opportunities and value of the deal,” said Mark Harrison, president of the Canadian marketing agency TrojanOne, which consulted Canadian Tire on the deal.
The deal comes at a time when big-box retailers such as Wal-Mart, Target and Sears remain reluctant to cut leaguewide agreements. NHL executives described it as a traditional sponsorship deal that includes limited licensing exclusivity, namely that Canadian Tire will be known as the official retailer of the Heritage Classic in Calgary on Feb. 20.
The Canadian Tire deal was put together over nine months by the NHL integrated sales and licensing divisions in collaboration with Canadian Tire and TrojanOne.
In negotiating the agreement, the NHL aimed to protect its existing licensing relationships. The result is an agreement that gives Canadian Tire some licensing rights but doesn’t keep the league’s existing licensees and retailers from continuing business as usual.
“This is a traditional sponsorship agreement with a licensing upside that can benefit our royalty business,” said Keith Wachtel, NHL senior vice president of integrated sales and marketing. “They’re looking to promote even more NHL licensed products.”
In addition to its Heritage Classic and store-within-a-store rights, Canadian Tire will receive the NHL’s support in promoting a grassroots website that offers hockey training tips for players, parents and coaches. The retailer signed Chicago Blackhawks star Jonathan Toews to promote the site, which will be known as the Canadian Tire Hockey School.
NFL owners will gather Wednesday in Atlanta for a brief, half-day meeting during which they may vote on Stan Kroenke’s bid to buy the St. Louis Rams and on whether to move forward with adding two games to the regular-season schedule.
The owners will also get an update on the season’s kickoff week plans, and they likely will hear a status report on the ongoing, contentious labor talks with the players union.
Kroenke and the NFL have been negotiating for the better part of five months since he executed an option to buy the 60 percent of the Rams he does not own. The league appears ready to bend on its cross-ownership rule that would have prevented him from buying the Rams because he owns the NBA and NHL teams in Denver. He is proposing to transfer those teams to his children. More at issue now are concerns the league has with his proposal to structure the Rams acquisition in two parts, leaving the current team owners with a stake. It’s unclear whether the deal will be ready for a vote, but a source last week said progress had been made on several issues.
On the talk of an expanded season, even if the owners do vote for an 18-game schedule, their approval would not set the issue in stone. Future agreements with broadcasters and the players union would still be needed before the owners’ approval would take effect.
The idea the NFL has suggested in the past is to add two regular-season games and drop two preseason games. Such plans could become fodder in the heated labor negotiations, with the collective-bargaining agreement set to expire in early March.
After this week, the owners are next scheduled to meet in Charlotte on Oct. 12.
Even with the uncertainty surrounding Tiger Woods’ game and whether he’ll qualify for all four FedEx Cup playoff events, the PGA Tour said sponsor activity will be on par with the past few years.
Like any new platform, the playoffs, which begin this week, required sponsors to adapt in the way they activate their golf sponsorships. The recession presented an additional challenge. Still, the final four events of the FedEx Cup, located in the New York, Boston, Chicago and Atlanta markets, presented the tour’s official marketing partners with unique opportunities to go big against tournaments with marquee fields.
“A lot of partners have understood the vision and what the playoffs are meant to do,” said Rob Ohno, senior vice president, corporate marketing, at the tour. “The activation programs around the playoffs have been very good, and we’ve seen that the last few years.”
With so many partners marketing around these events, the tour has decided to move its fall sponsor forum to Atlanta during The Tour Championship presented by Coca-Cola. In the past, the tour has held two sponsor forums each year, one at the Players Championship in the spring and one after the season, typically at tour headquarters in Ponte Vedra Beach, Fla.
Because so many of the tour’s partners attend the Tour Championship in Atlanta, it made sense to hold the forum there. It’s an opportunity for companies to share best practices and network with others.
Among the sponsors with big plans through the playoffs are MasterCard, which has found several different ways to reward its cardholders at the golf course. Consumers who buy tickets with MasterCard receive discounts, and those who spend at least $75 in merchandise receive a free ticket to Sunday’s final round.
In conjunction with that effort, Bank of America will have designated on-site areas in the merchandise tents offering benefits for consumers who sign up for the PGA Tour MasterCard.
Title sponsor FedEx is again running its global golf sweepstakes, heavy media, and more social media through Facebook and Twitter updates from the players. Several other partners are entertaining at the events and using pre-tournament promotions to drive interest.
Delta has been running FedEx Cup in-flight entertainment and ads in its Sky magazine as well as posting brochures in the Sky Clubs.
“Brands have figured out how to ramp up activation and capitalize on the momentum going into the playoffs,” said Ed Kiernan, a senior vice president at GMR Marketing who used to lead sports marketing at Peter Jacobsen Sports. “Initially, everybody had concerns if it would work, and four years later, we’ve seen a lot of interest and success.”
Soccer has corporate logos on jerseys, and NASCAR has them on cars. Soon swimmers could have them on swimsuits.
USA Swimming is considering amending its swimwear rules to allow professional and amateur swimmers to wear two corporate logos on their suits, caps, goggles and other clothing. If the rule is approved by USA Swimming’s board in September, swimmers will be able to wear the logos on their suits and caps for the first time at USA Swimming events.
To date, swimmers have been allowed to wear only the trademark logo of their suit, cap or goggle manufacturer. The new rule would allow them to wear the logo of any corporation provided it is not associated with tobacco, alcohol or pharmaceuticals that contain banned substances. Logos could even conflict with existing USA Swimming partners.
The proposal means that instead of stepping onto the starting block in an unadorned black swimsuit as Amanda Beard did earlier this month at the USA Swimming National Championships, she could step on the block in a suit featuring the logos of one of her existing corporate partners, like Mission Skincare.
The rule change is part of a concerted effort by USA Swimming to provide swimmers and swim clubs with more revenue-generating opportunities, and it would make swimming the latest national governing body to allow corporate logos at what are typically austere Olympic sporting events.
Selling logo space for athletes is already commonplace at Olympic organizations like USA Ski & Snowboard and USA Cycling. Other large national governing bodies like USA Gymnastics and USA Track & Field allow logos at domestic meets.
“It’s the only way to make these smaller sports revenue positive for athletes,” said Trent Staley, an athlete representative at USA Swimming who co-chaired a task force that developed the rule change. “Time will tell how much this really helps, but it could lead to the most revenue expansion for athletes in years.”
Swimmers would be able to wear the logos only at USA Swimming events like the national championships and Grand Prix events. They couldn’t wear logos on suits at events staged by FINA, the international swimming federation, or at the U.S. Olympic trials, unless FINA or the U.S. Olympic Committee allowed it.
USA Swimming executives plan to ask the USOC to consider allowing the logos to be worn at the U.S. Olympic trials before the 2012 London Games.
Even without being able to wear logos at the Olympic trials, athletes and agents expect the rule change to open new sales opportunities. Evan Morgenstein, CEO of Premier Management Group, which represents Dara Torres, Beard and other elite swimmers, said that an established Olympian could sell those logos for as much as six figures a year, while a less established swimmer could draw low- to mid-five figures.
USA Swimming’s proposal to allow athletes to sell logo space follows a recent study by the organization that revealed some of the financial challenges swimmers face, especially now that swimwear companies like Speedo, Nike and Tyr have eliminated or cut back on endorsements.
In an effort to help swimmers fill that lost revenue, USA Swimming not only is proposing an amendment to its rules that would allow swimmers to sport logos, it also is planning to double its monthly stipend for post-graduate athletes from $1,750 to $3,500.
“We saw that finances were going down, yet performances were going up, so we felt we really needed to find a way to support these swimmers,” said Matt Farrell, USA Swimming’s chief marketing officer. “That precipitated this whole thing.”
USA Swimming dropped a proposal that would have tied its stipend increase to a marketing agreement that would require swimmers to make two appearances annually on USA Swimming’s behalf and sign autographs. Agents questioned the proposal, and USA Swimming capitulated to their concerns, deciding to double swimmers’ stipends without any requirements.
“It’s basically just additional funding, which is what it should have been all along,” said Peter Carlisle, the head of Octagon’s Olympic division. “It’s the right decision, and it’s the right decision not to predicate it on turning over rights.”
SMG has hired veteran talent buyer Jim McCue to take over its sports and entertainment division and expanded the focus of the group’s operations.
McCue is a former booking executive with Palace Sports & Entertainment in Detroit and the Rose Quarter in Portland, and most recently was co-producer of the “Walking With Dinosaurs: The Live Experience” touring show.
As SMG’s senior vice president for entertainment, McCue is responsible for programming content at the 220 venues that SMG manages in North America and Europe. McCue starts his new job Sept. 7 and is relocating from Denver to SMG’s corporate office in suburban Philadelphia.
McCue worked at two NBA arenas for more than 10 years. During his tenure in Portland, he was instrumental in landing the 2005 U.S. Figure Skating Championships.
In addition, McCue booked the Roy Jones Jr.-Clinton Woods fight at the Rose Garden in 2002, and said he is eager to reconnect with fight promoters and develop relationships with mixed martial arts and action sports groups to book their events at SMG-managed facilities.
In conjunction with McCue’s hire, SMG has reorganized its sports and entertainment division, selecting general managers at arenas in Albany, N.Y.; Long Beach, Calif.; Tulsa, Okla.; and Pensacola, Fla., to serve as the division’s regional managers.
They join SMG vice presidents Jon Petrunak, Bob Papke and Chris Wright in reporting to McCue, said Bob Cavalieri, senior vice president of business development.
In addition, McCue said he plans to work closely with Doug Thornton, SMG’s senior vice president of stadiums and arenas. Thornton oversees the Louisiana Superdome and New Orleans Arena, and is an expert in forming proposals to bid for Super Bowls and Final Fours.
McCue replaces Mike Evans, who accepted a newly created position in June as Live Nation’s president of arenas.
Wal-Mart’s potential move into NASCAR has led the retail giant deep into negotiations with Hendrick Motorsports over sponsorship of Jeff Gordon’s No. 24 Chevrolet next season.
There continue to be several moving parts to the Wal-Mart discussions with Hendrick and NASCAR, which began in the spring and have progressed through the summer. Wal-Mart’s play could have tentacles in both sponsorship and licensing at the team and league level, according to industry sources.
The retailer has been hesitant to spend money on sports sponsorships in the past, so Wal-Mart’s entrance to NASCAR would provide a huge boost to a sport that has been ravaged by the recession and attracted little new sponsorship money in the last two seasons.
“It’s very significant,” said Mark Dyer, senior vice president at IMG and formerly chief of the licensing division at NASCAR until 2007. “We tried for years to get Wal-Mart’s attention when I was at NASCAR and we made some inroads. If they truly decide to take a position in the sport, that’s a big deal to get a company that should have been in that space all along.”
While Wal-Mart ponders a new place in NASCAR, other consumer packaged goods sponsors are clearly energized and they’re not waiting for contracts to be signed before mobilizing.
Sources say that six of NASCAR’s official consumer packaged goods partners met earlier this month to discuss a retail strategy for Wal-Mart. Those sponsors were Coca-Cola, Kraft, Mars, MillerCoors, Procter & Gamble and Unilever.
Phil Grieco from Mars’ sponsorship and marketing division helped arrange the meeting, according to industry sources. Matt Shulman from NASCAR’s partnership marketing division attended, as did Erik Brothers from Bulldawg Marketing, a retail-focused agency based in Mooresville, N.C., near many of the team shops. Bulldawg has worked with NASCAR and its consumer packaged goods partners on retail programs in the past, including this year’s promotion with Brookshire’s, a Texas-based grocery chain, and the Ahold chain of grocery stores.
Those executives reached said they couldn’t comment on the meeting because of the continuing nature of their planning.
Wal-Mart was not present, but sources said the consumer packaged goods marketing executives met to discuss ways to take national programs to Wal-Mart, with the belief that the retail giant is close to finalizing sponsorship and merchandising agreements to enter NASCAR.
“We’ve never been able to put together a national program with Wal-Mart,” said one source familiar with the talks. “A multivendor campaign, which would be exclusive to NASCAR partners, would put more weight behind it.”
The meeting, which took place just outside of Wal-Mart’s headquarters in Bentonville, Ark., was described as an all-day brainstorming session to form plans for a 2011 promotion that would be exclusive to NASCAR official partners.
For companies like P&G, Unilever and Kraft with similar products, they would stick with only the brands that have NASCAR official designations for the promotion.
“The opportunities with this are huge,” the source said. “In the past, you could get regional activation with a Wal-Mart close to the track, but they liked to control their national promotions. They typically develop their own programs and then bring in the manufacturers that they choose. But we’re hearing that it could be changing.”
The store’s sponsorship of Gordon would be the most visible bet that Wal-Mart believes an association with NASCAR would help its business. Sources say that Wal-Mart has been seeking ways to reconnect with its core U.S. customers, who compare favorably with the avid fans in NASCAR.
Wal-Mart has experienced gains internationally with strong sales growth in Mexico, Brazil and China, but domestic sales continue to lag. Stores in the U.S. that have been open at least a year have seen sales drop for five straight quarters as core customers continue to be pressed by high unemployment and tight credit.
During its second-quarter report, Wal-Mart said its strategy to roll back prices did not work as well as hoped and it is exploring other options to spur sales.
Gordon, who ranks second in this season’s Sprint Cup standings, remains one of the sport’s most popular drivers and is a likely future hall of famer. DuPont has been his only primary sponsor since he became a full-time driver in 1992, but the most recent deal between DuPont and Hendrick Motorsports ends this year.
While DuPont might be back on the No. 24, it is expected to be in a reduced role. Pepsi and National Guard also have associate sponsorships on Gordon’s car this year. Gordon, 39, has said that he plans to drive for four or five more years and that he’s over the back injury that at one time was considered a threat to his career.
If Wal-Mart completes an agreement for the No. 24 Chevrolet, it remains to be seen whether the retailer will keep its marks on the car or sell off races to vendors.
Wal-Mart also has been in discussions with NASCAR’s licensing trust to be the sport’s exclusive retailer in the mass merchandise space. If NASCAR granted Wal-Mart a direct license, it would allow the store to select its merchandise partners and set prices. Those talks have been going on since the spring.
“He’s the E.F. Hutton of the place. Tom is the most powerful, quiet force in college sports, and quiet by choice. He speaks volumes with his quiet, measured approach to anything he’s involved in. That’s reflected in the variety of initiatives and projects that bear his fingerprints, everything from the corporate marketing program to the inclusion of women’s championships to the overtime format in college football — a lot of things that most people don’t know about.”
— Greg Shaheen, executive vice president, NCAA
“Tom offered tremendous behind-the-scenes guidance to NCAA presidents. The tournament is obviously the crown jewel in his accomplishments, but he also was a great ambassador of college basketball and he made enormous contributions in other ways to the association.”
— Mike Aresco, CBS Sports
“If you picked up the phone and called Tom at 5:45 in the afternoon and didn’t get him, he’d call you back in five minutes. You don’t always see that kind of membership focus. That’s been lost in a lot of industries.”
— Jon LeCrone, commissioner, Horizon League
“Tom’s been the soul of the NCAA and the soul of the basketball tournament. He was like a beacon of light that illuminated the path of the basketball committee.”
— Laing Kennedy, former Kent State AD and committee member
“When you look back at the names who chaired the basketball committee — Vic Bubas, Dave Gavitt, Tom Butters, Jim Delany — you’re talking about some very, very strong personalities and accomplished people. But the one constant has been Tom. He kept everyone’s sanity, he reminded everyone to keep the focus on the players and he kept it clean of too much commercialism. He just understood the tournament in a way no one else did and then transferred that to the committee members.”
— C.M. Newton, chairman, NIT
“Tom had such a focus on serving the membership that many nights he would go home for dinner, eat and then go back to the office. He never lost focus that the NCAA was a membership organization.”
— Jim Host, Jernstedt’s longtime friend and the NCAA’s first marketing partner
— Compiled by Michael Smith
Leading hard goods licensee WinCraft has acquired fellow licensed products company McArthur Towel & Sports. Terms were not released.
McArthur, which traces its roots to 1885, will continue to be headquartered in Baraboo, Wis., and be rechristened as McArthur Towel & Sports — a WinCraft Company. Dick Pope, chief executive of Winona, Minn.-based WinCraft, will be the CEO of the merged companies. John Killen continues as president of WinCraft, and Gregg McArthur as president of McArthur Towel & Sports.
While the deal took less than four months to complete, Pope said he’d been talking to McArthur for more than five years about finding ways to work together. The companies expect to benefit from sharing some marketing, information technology and manufacturing functions. McArthur has about 35 employees, while the merged companies will total slightly more than 500 workers.
McArthur is known for its rally towels, including the Pittsburgh Steelers’ “Terrible Towels,” and others that are often used as gate premiums at sports events. More recently, McArthur convinced all four of the big stick-and-ball leagues to put its championship towels on the field, court or ice at the MLB, NBA, NFL and NHL title games. The same towels were later sold at retail.
While WinCraft’s diverse line of sports licensed products includes clocks, wooden signs and lamps, McArthur adds capabilities in textile products. McArthur also has team-identified golf accessory products, like licensed head covers, towels and ball sets, which will be a new area for WinCraft.
WinCraft sells to about 40 percent more retail accounts than McArthur.
“We’re looking to tap into a larger overall customer base, and we really think we’ll be able to leverage [WinCraft’s] infrastructure,” McArthur said. “We both manufacture and decorate domestically, as well, and we think they will allow us to get deeper into e-commerce.”
It’s not the first time McArthur has changed ownership. In 2002, McArthur was purchased by Action Performance. McArthur later bought the company back. “We just didn’t fit inside of a motorsports company,” McArthur said.
“This is a great strategic fit for WinCraft, as they further solidify their dominance in various hardlines categories and extend their product mix,” said Gene Goldberg, a former NFL consumer products vice president who is now an independent consultant. “Who would have thought over the years that a McArthur towel would become an integral part of a league’s championship locker room assortment?”
The WNBA last week was on track to cap its 2010 season with an increase in its regular-season television audience but a drop in average attendance compared with 2009.
The 2010 WNBA playoffs begin on Wednesday.
Average attendance for the 12-team league through last Wednesday was down 3.7 percent to an average of 7,679 fans per game, compared with last year’s average of 7,971 through the same date. The 2009 average includes teams in Detroit and Sacramento, markets that are no longer in the league. The Detroit Shock relocated this year to Tulsa, Okla.; the Sacramento Monarchs ceased operations.
Comparing only the 11 teams that played in both 2009 and 2010, average attendance was up 0.5 percent heading into the season’s final games this past weekend, WNBA officials said.
Through Wednesday, the New York Liberty was leading the league in attendance with an average of 10,895 fans per game. The Chicago Sky, who this season moved from the UIC-Pavilion to the suburban Allstate Arena, was last, with an average of 4,210. The biggest drop at the gate was in Washington, where the Mystics had seen their average attendance fall 19 percent, to 9,122 fans per game. Connecticut had posted the biggest increase, up 13 percent, to 7,486.
The WNBA this year signed new league partnerships with Jamba Juice, Coca-Cola and Pirate’s Booty snack food and doubled its number of team marquee deals, which include jersey sponsorships, to four. Microsoft’s Bing search engine signed a marquee deal with the Seattle Storm this year, while the New York Liberty signed a marquee deal with Foxwoods Casino. Those joined earlier deals for Phoenix with LifeLock and Los Angeles with Farmers Insurance Group.
WNBA President Donna Orender said the number of total team sponsorship deals increased about 20 percent.
“Over the past two seasons, our teams have been diligent in improving the business model,” Orender said.
On TV, the WNBA as of last week was averaging a 0.2 cable rating and 263,000 viewers over 17 games on ESPN2, compared with a 0.2 rating and 234,000 viewers for nine regular-season games on ESPN2 last year.
The league broadcast an additional 150 games on local team outlets this year compared with 61 local broadcasts in 2009.
“There has been more comprehensive coverage, and we firmly believe the quality of the game and presentation is getting better,” Orender said.