Sherwin-Williams signs with IndyCar MLS, SNHU sign new partnership The Lefton Report: Playing it Safelite Mike Slive: Going out on top Precourt thoughtful in remaking Crew Challenging schools on cheating DraftKings closes on $300M funding round NBC readies year-out efforts for Games Best opportunities outside of teams Fanatics' new era of racetrack retail
SBJ/Dec. 20-26, 2010/This Week's IssuePrint All
The Big Ten has 12 teams and the Big 12 has 10 teams. So what’s in a name?
That’s what an advertising and marketing agency in Austin, Texas, has been hired to determine. The Big 12 recently retained GSD&M Idea City to help the conference evaluate its old name, potential new names, and the best way to position the conference’s brand going forward after the loss of Colorado to the Pac-10 and Nebraska to the Big Ten.
Big 12 Commissioner Dan Beebe said at SportsBusiness Journal’s IMG Intercollegiate Athletics Forum that Idea City is interviewing school presidents, coaches and athletic directors within the conference to provide direction.
“We’re looking at how we position ourselves, our name and whether we need a name change,” Beebe said.
The agency also will look at the conference’s brand position.
“It’s bigger than just a name change,” said Idea City account director Jeff Orth. “With all of the changes they’ve had, we’re working with the conference with where they should go with their brand and how they should talk about themselves as they move forward.”
Idea City began working on the Big 12 project during the football season and sent its staffers to several games to interview fans. The agency is analyzing the feedback from the fans and school officials to create a brand position for the conference in the first quarter of 2011. Any recommendations on a name and logo change would be made in time for the Big 12 to act on it before the 2011 football season.
The Big Ten went through a similar process recently and said that it gave practically no consideration to changing its name, even though its number of teams will grow to 12 with the addition of Nebraska. Design firm Pentagram created a new logo for the conference, which it unveiled to mostly negative reviews last week. The Pac-10, which formerly was the Pac-8, has said it will change to the Pac-12 to accommodate the addition of Colorado and Utah.
The Big Ten has had its name since 1917 and decided it had too much equity to change. By contrast, the Big 12 (a combination of the former Big 8 and Southwest conferences) has been around for only 15 years in its current form, making a name change a stronger consideration.
That’s where Idea City comes in. The agency has worked on such projects as the PGA Tour’s FedEx Cup ad campaign in sports, and outside of sports its clients have included Southwest Airlines, John Deere and the U.S. Air Force.
In determining new name options for the Big 12, the agency is expected to look at monikers that don’t include a reference to the number of teams in the conference. But they’ll also consider keeping the current name.
“The Big 12 doesn’t have the history of the Big Ten, but there is still some brand equity there,” said Orth, a former college baseball player at the University of Louisiana-Lafayette.
“The fact that the Big 12 has 10 teams could be confusing, but at the same time the name stands for other things and those other values have not gone away.”
Idea City and the conference got together earlier this year when it became apparent that the Big 12 would survive with 10 teams. The agency had worked with the University of Texas and Texas A&M, giving it a level of familiarity with the conference, so Orth reached out to Beebe.
“Unlike some of our clients, the Big 12 doesn’t have $150 million to put a media plan together and buy units everywhere,” Orth said.
Major League Baseball’s once-exclusive group of $100 million player contracts has soared by seven this calendar year to 26, by far the largest one-year spurt of nine-figure deals and another prominent indicator of the sport’s improving fiscal landscape.
Pitcher Cliff Lee’s surprising return last week to Philadelphia, buttressed by a five-year, $120 million contract with a vesting option for a sixth year, ended the high-profile portion of the Hot Stove period for baseball. Joining Lee in the $100 million-plus club this month were Carl Crawford in Boston, Jayson Werth in Washington, and Troy Tulowitzki in Colorado. Earlier this year, St. Louis outfielder Matt Holliday, Minnesota catcher Joe Mauer, and Philadelphia first baseman Ryan Howard signed similarly historic deals.
The list does not include first baseman Adrian Gonzalez, newly acquired by Boston, who reportedly has worked out the parameters of a seven-year, $154 million contract extension to be signed in 2011.
The run of deals represents another manifestation of a league that generated nearly $7 billion in revenue in 2010, setting a new record. Also, nowhere in that list are the New York Yankees and Mets, Chicago Cubs or Los Angeles Dodgers — four clubs typically among the highest earners in MLB. That quartet of teams was involved in nine of the prior 19 $100 million-plus contracts. Just as in the standings this past season, and the San Francisco Giants-Texas Rangers World Series matchup, MLB’s economic middle class continues to grow more assertive.
Additionally, a strengthening U.S. economy and relatively stable attendance pattern for MLB has emboldened many teams to increase their player payrolls. Total MLB attendance has fallen each of the past three seasons, but the 2010 drop-off was a scant 0.4 percent. And baseball exited the Great Recession with nowhere near the double-digit percentage falloff briefly feared at the depths of the economic meltdown.
“We wouldn’t be here if we didn’t have the fans supporting us the way they supported us,” said Ruben Amaro Jr., Phillies general manager, last week at the news conference announcing the Lee signing. The Phillies have sold out 123 consecutive home games and recently created their first waiting list for season tickets. “It’s really plain and simple: We don’t sell out games, we don’t give ourselves a chance to be even in this stratosphere.”
Before 2010, the calendar year with the most $100 million player contract signings was 2000. That year presaged an ultimately aborted attempt by MLB to eliminate two clubs, as well as the bitter 2002 labor negotiations that introduced several fiscal reforms, including enlarged revenue sharing. But now, there is far more confidence around baseball that the industry can absorb the high-dollar player deals without creating economic and competitive schisms.
“We have more competitive balance around the league now than ever, and there’s no doubt that teams are feeling more confident as to the state of the economy than 24 months ago, particularly as it relates to attendance and sponsorships,” said Dave St. Peter, Minnesota Twins president. The club in March signed an eight-year, $184 million extension with Mauer, by far the largest in franchise history and a pact aided significantly by the opening of Target Field.
Others, however, cautioned that this year could prove to be more of an exception, in part due to a trend among recent free agent veteran players to seek out longer deals of five years or more that will likely take them to the end of their careers.
“This year may end up being an outlier, as we have seen certain years ignore trends and end up producing higher and longer deals,” said John Mozeliak, St. Louis Cardinals general manager. Holliday’s $120 million, seven-year deal with the club was driven in large part by the 30-year-old outfielder’s desire to get as many years in his contract as possible.
“It will be interesting to see if more [arbitration-eligible] players sign for long-term deals. With regard to the free agent market, I would think that future years will not show this robust spending, with the exception of a few elite players,” Mozeliak said.
The company, which reported $34 billion in revenue last year, makes fighter jets, helicopters, ships and other weapons and defense systems for the U.S. government. The company’s electronics are in the F-16 jets that will buzz over RFK Stadium on Dec. 29 just before the Military Bowl presented by Northrop Grumman kicks off.
While the vast majority of bowl sponsors will use the games to market their products or entertain customers, Northrop’s strategy isn’t about raising awareness or hospitality. In fact, the company is not allowed by law to entertain the people who buy its security systems — U.S. armed forces officials.
Instead, Northrop decided to spend in the mid-six figures to sponsor the Military Bowl this year because the game will benefit the USO, the nonprofit group that supports the troops. Northrop’s deal is for three years.
“For us, this is different,” said Randy Belote, Northrop’s vice president of strategic communications. “We might get a little image enhancement from it, but what we’ve tried to do is show a higher purpose and shine the spotlight on the USO.”
Northrop and the bowl, owned by the nonprofit D.C. Bowl Committee and managed by Lagardère Unlimited, worked together to create the Military Bowl title and incorporate USO into the official logo.
“Naming it the Military Bowl made it relevant to D.C., and our national security, so it became a great fit for us,” Belote said.
“If you go to the game, you’ll think it’s the USO Bowl,” said Brooks Downing, Lagardère’s executive vice president for media, events and collegiate.
The strategy behind highlighting the military was part of bowl Chairman Jeff Fried’s vision to elevate the game’s stature. The first two editions in 2008 and ’09 were lightly attended with fewer than 30,000 fans at each game.
“We were too dependent on the teams that were selected,” Fried said.
Wake Forest played Navy in the first game, while Temple and UCLA matched up last year. Maryland and East Carolina will tangle on Dec. 29.
“Because we’re in D.C., and because of the distinctiveness of the bowl, we really thought we could take this to more of a national level,” Fried added.
With a little more than a week to go, the bowl has sold nearly 40,000 tickets, and Fried expects a sellout of the 43,500 seats available. Each school received 10,000 tickets.
DirecTV could drop Golf Channel at the end of the year, potentially taking away about 15 million subscribers from the Comcast-owned channel. Golf Channel’s affiliate deal with the satellite distributor expires Dec. 31, and sources say that the two sides still are far apart.
DirecTV pays about 25 cents a subscriber a month to carry Golf Channel on its Choice Xtra tier, sources say. Golf Channel is looking for a license fee increase and is trying to keep DirecTV from putting it on a less-distributed tier.
DirecTV and Golf Channel still are negotiating and could reach an agreement by the end of the year. Or they could agree to an extension that would leave Golf Channel on DirecTV without a new deal.
But Golf Channel’s timing could not be worse. This fall, DirecTV executives have been open about their plans to drop less popular channels and already have showed that they plan to take a hard line in dealing with them. DirecTV already dropped two Comcast-owned channels, Versus and G4, this year over rate increases and channel positioning. Comcast also owns Golf Channel, and if it gets dropped by DirecTV, the move could signal another sign of a larger dispute between the country’s two biggest distributors: DirecTV and Comcast.
“There will be other channels that are going to come down — channels that aren’t watched as much will come down,” said DirecTV’s Derek Chang during a discussion about dealing with increased programming costs at an industry conference in November. “If we’re going to do anything to try and mitigate the rise in costs on programming that we consider ‘must have,’ it’s got to come from somewhere. Otherwise, bills for customers will continue to go up.”
DirecTV has dropped Comcast-owned channels before. It kept Versus off its system for 6 1/2 months, from September 2009 to March 15, just before the NHL playoffs. That caused Versus to lose the country’s second biggest distributor for most of the NHL season. DirecTV dropped G4, a channel geared toward the video game culture, last month and that dispute is continuing. DirecTV still has not cut a deal for Comcast’s regional sports network in Portland.
Meanwhile, Comcast refuses to allow DirecTV access to its regional sports network in Philadelphia.
DirecTV has about 18 million subscribers, with about 15 million taking its Choice Xtra expanded basic package. Golf Channel is in about 83 million homes.
But Golf Channel’s viewership, particularly out of season, has been low. In November, the channel ranked 78th of 90 cable networks in total-day viewership, averaging 55,000 viewers on a 24-hour basis. Of sports channels, only Fox Soccer, MLB Network and NBA TV ranked lower.
Golf Channel ranked 80th out of 88 prime-time networks in November, averaging 83,000 viewers in prime time, ahead of Fox Soccer and MLB Network.
Losing DirecTV distribution would be a big blow for Golf Channel, especially since the network carries PGA Tour event programming and has an exclusive deal with the LPGA for its events. In addition, the network would suffer an even steeper drop in viewership by being in 15 million fewer homes.
The executive ranks at Golf Channel are changing with the NBC-Comcast merger. Page Thompson stepped down as Golf Channel’s president in September, leaving Earl Marshall to run the channel on an interim basis. Comcast does not plan to announce a permanent replacement until Comcast’s acquisition of NBC gains regulatory approval. Asked for a comment for this story, Golf Channel issued this statement: “We’re currently in active negotiations with DirecTV and hope to come to a mutually beneficial agreement soon that will allow Golf Channel to remain at the same level of service DirecTV subscribers have enjoyed for years.”
“Of course you care about ratings. You also care about things like passion and persistency,” Chang said at that November conference. “You’d like to deliver everything possible to all your customers. But the reality is that you’re running a business, and, like any business, you have resource allocations you have to make and you have to decide, ultimately, how you’re going to benefit your business on an overall basis.”
The NHL launched a Facebook campaign to promote its “Guardian Project” partnership with famed comic book icon Stan Lee, who along with a team of artists designed a superhero character for all 30 NHL teams. The campaign, which is called “Guardian 30 Match-Up,” has fans vote to determine the order in which each team’s superhero will be unveiled.
Each matchup has fans vote between two characters, beginning today with Pittsburgh’s “Penguin” character facing off against Washington’s “Capital.” The NHL will unveil the winner of the vote on Jan. 1, with successive victors unveiled each day of January.
“We’re most interested in starting a conversation with the next generation of hockey fans, boys ages 9-14,” said Brian Jennings, executive vice president of marketing for the NHL. “We looked at our mascots, and they are good, they are whimsical, but this is a nicer way to graduate young fans into the mainstream.”
The partnership between the league and Lee began in mid-2009 and led to the creation of Guardian Media Entertainment, an entertainment company based in Southern California. GME’s story line revolves around a fictitious teenage boy, Mike Mason, who can bring the Guardian characters to life to fight various enemies. According to Adam Baratta, chief creative officer of GME, the company’s short-term goals include the creation of actual comic books and websites devoted to the Guardian characters, with longer-term goals including video games and possible television shows or films.
“This is not just a merchandising play for the NHL, or a licensing deal,” Baratta said. “It’s a creative partnership between two brands whose goal is to expand the exposure of hockey. We’re expecting to have a great presence for many years to come.”
The league announced its partnership on Oct. 7 and featured a small presentation at New York Comic Con the following day. The presentation included a poster that displayed shadowy outlines of the comic characters.
“It created a nice viral discussion online where hockey fans and Stan Lee fans talked about what these [characters] were going to look like,” Baratta said. “We wanted to capitalize on that with the [Facebook campaign] and give each character his own day.”
The monthlong “Match-Up” campaign culminates with the Jan. 30 All-Star Game in Raleigh, N.C. The Guardian Project will have a major presence at the event, including a four-minute TV spot that will air during the second intermission, and an in-arena presentation during the game.
General Electric will become a PGA Tour official partner, capping a flurry of sponsorship activity for the tour in the final months of 2010.
With the GE deal expected to be in place for the start of the 2011 season, the PGA Tour ends the year with plenty of momentum. In all, the tour will see a 5 percent increase in sponsorship revenue in 2010 over 2009, said Tom Wade, the tour’s chief marketer.
“Given the environment that we’re in, it’s been an outstanding year,” Wade said.
In the last few months, the tour has locked down a number of important deals. It finalized GE, signed Cadillac to title-sponsor the WGC event at Doral, brought back FedEx as title sponsor of the St. Jude in Memphis, replaced official airline Delta with United/Continental, renewed Sony for the tournament in Honolulu, brought on Hyundai as title sponsor of the season-opening event in Maui, added Rolex as a Presidents Cup sponsor, and renewed the Puerto Rico Tourism Co. Earlier in the fall, Nationwide became the Memorial’s presenting sponsor, replacing Morgan Stanley, and Wyndham renewed for the Greeensboro tournament.
Another unnamed tournament sponsor is expected to come on board this week.
Title sponsors typically spend $7 million to $8 million for events that appear on network TV, while WGC sponsorships go for $10 million to $12 million. Official partnerships with the tour can range from the low seven figures into eight figures depending on the assets and media included.
“Corporate America seems to be piling up a lot of cash and not spending it,” Wade said. “But I’ve been doing this 17 years and, really, we’re in about the same situation, sponsorshipwise, that we’re normally in. It’s frankly not that much different from when things were good economically.
“From that standpoint, it’s been a very good year. Nobody could have predicted this kind of sponsor retention.”
The official airline deal is the first league sponsorship for United or Continental.
“Given our expanded coverage coming from the merger, we are in a position to expand our message using larger platforms like the tour,” said Jeff Jones, Continental’s manager of sponsorship marketing. “We have always focused on the business traveler, and this is a kind of business travel that often gets overlooked. The tour members are very much road warriors, and we’re prepared to look at ways we can assist and enhance their travel experience. … The audience the tour attracts also aligns perfectly with our current demos and advertising strategy.”
There also is a sense of relief in the golf industry that companies are willing to promote their association with the tour and its events. Through the recession, that wasn’t always the case. Wells Fargo pulled its name off the Charlotte event for a year.
“It’s great to see that sponsors are actually using their name with these deals,” said Scott Seymour, senior vice president of golf at Octagon. “We’re definitely seeing a lot more corporate interest in the game and the level of activity has been very positive. Golf still reaches an affluent audience and that’s the audience that’s still spending. That’s attractive to a lot of companies.”
Near the top of the tour’s priority list in 2011 will be replacing Nationwide as title sponsor of the developmental tour. GE, which is being represented by IMG Golf, engaged in talks with the tour about the title sponsorship of the developmental circuit, but industry sources say that tour officials have been in talks with other companies as well, including Putnam, a financial services firm.
Nationwide notified the tour that it would not renew the title sponsorship when it runs out at the end of 2012, but if a sponsor can be found sooner, the insurance company would step aside. The 29-tournament series runs from late January through October and more than half of the events are televised by Golf Channel.
The PGA Tour goes into 2011 with two tournaments missing a title sponsor: the Heritage in Hilton Head, S.C., which lost Verizon; and the Bob Hope Classic, near Palm Springs, Calif., which lost Chrysler two years ago. Those tournaments are fully funded for next season and are not in immediate danger.
Among the official marketing partners, Wade said the tour renewed or extended 13 sponsors, which brings the total number to 60. GE, which reported $156 billion in revenue in 2009 and was listed as the 12th-largest company in the world, is deeply diversified through financial services, industrial manufacturing and health care. It’s not yet clear which area GE will emphasize through its deal with the tour.
Entering 2011, the tour will focus on automotive, where General Motors had been a tour partner for more than 50 years before pulling out in 2009. Even though Cadillac is back as Doral’s title sponsor, the tour is still seeking an official auto.
Wade also identified the consumer electronics and technology categories as opportunities.
The tour likely will enter into renewal talks with FedEx, umbrella sponsor of the seasonlong points championship, in 2011. That deal goes through 2012 and includes options to go longer. Locking down FedEx to a long-term deal that would include a heavy advertising commitment would be a bonus for the tour entering TV negotiations with CBS and NBC later in 2011.
“Any time we’ve got commitments like FedEx, it’s helpful,” Wade said. “But I think it would be an overstatement to say we must get it done” before the TV talks begin.
As many of you are aware, we have begun accepting nominations for the fourth annual Sports Business Awards, which will be presented in New York City on Wednesday, May 18. It’s been gratifying to see this awards program generate so much interest and, while it comes with incredible challenges, it’s a program we are certainly proud of.
The 2011 awards will recognize outstanding achievements in sports business from March 1, 2010, through Feb. 28, 2011. The deadline to submit nominees in the 15 categories is Friday, Jan. 7.
One element that’s new this year is a change in the voting procedure: We’re embarking on a significant overhaul that we think will add more transparency to the process and more clearly establish the Sports Business Awards as measures of true “industry” recognition.
Starting this year, once the nominees have been selected by the editorial department of SportsBusiness Journal/Daily in March, the final selection discussions will include a panel of sports industry executives who will serve as category judges. These industry executives and three members representing SportsBusiness Journal/Daily will evaluate the nominees and determine the winners of 13 of the 15 categories by a private vote. The list of judges for each category will be announced in the May 16 issue of SportsBusiness Journal/Daily. The categories of Sports Executive of the Year and Athletic Director of the Year will continue to be judged solely by the editorial staff of SportsBusiness Journal/Daily.
We are including outside judges to add more expertise, more transparency and more points of view to the selection process. We are not identifying the members of the selection committees until after the votes have been cast to prevent lobbying and outside influence during the deliberations. We have targeted well-respected executives who we feel will add great value to the awards.
Look for more on the awards in the weeks ahead, but please remember the deadline for submitting a nomination is Friday, Jan. 7.
If you have any questions, please contact me directly at email@example.com.
With just over three months remaining until the end of the NFL’s collective-bargaining agreement, there has been almost no progress between the NFL and NFLPA on a new deal, despite a recent spate of meetings, league sources said.
That message is consistent with what union executive director DeMaurice Smith told agents last week, and contradicts several recent optimistic comments made by league representatives, including New England Patriots owner Robert Kraft and Jeff Pash, the league’s chief negotiator.
“It’s going to be a long spring,” predicted a well-placed league source, indicating that there is likely to be no deal before the CBA expires on March 4. “There has not been much in the way of progress. Not much in the way of progress, at all.”
Even Commissioner Roger Goodell, in his press conference after last Wednesday’s special league meeting, took pains to distinguish between the talks that have occurred and productive ones.
“The reality is there is discussion going on, but it takes productive dialogue,” he said. “It is not just about meetings and dialogue, but getting significant dialogue.”
With that as the backdrop, some teams have begun planning for a future without a labor deal. The Houston Texans have what they call a CBA-response team, said the team’s president, Jamey Rootes. The response team comprises team executives who communicate with key partners of the team, from government agencies to sponsors and ticket holders.
Like several teams interviewed for this article, the Texans do not have a formal plan in place yet. The Denver Broncos will finalize their plan after the season ends, said team Chief Operating Officer Joe Ellis.
The Dallas Cowboys have significant efforts under way to respond to a lockout, said Stephen Jones, the team’s chief operating officer, but he declined to detail the plans.
Some teams do not want their plans to get out during the season for fear they might be an emotional downer for their squads. Others are simply worried they will be painted by the union as preparing for a lockout rather than looking to avoid one.
“Uncertainty. That is not a good thing for fans, for business partners, for potential for revenues,” Goodell said. “It can be damaging to the game, and that is something we are trying to avoid.”
Ten of the NBA’s 19 leaguewide marketing partners will air spots during the five Christmas Day television games to be broadcast on ABC and ESPN.
New league sponsor BBVA will buy into the broadcasts along with Cisco, Coca-Cola, EA Sports, Nike, Gatorade, State Farm, T-Mobile, Taco Bell, and Kia.
Gatorade, T-Mobile (see related story), Jordan Brand and Nike are breaking new spots during the broadcasts, which begin with the New York Knicks at Chicago Bulls at noon ET on ESPN.
In addition, Nike will roll out new Christmas Day edition sneakers to be worn by the Los Angeles Lakers’ Kobe Bryant, Miami Heat’s LeBron James and Oklahoma City Thunder’s Kevin Durant. The Heat-Lakers matchup is the marquee Christmas game on ABC, which will also air the Orlando Magic against the Boston Celtics as the first game of the network’s doubleheader.
The Thunder will play against the Denver Nuggets on ESPN, along with the Portland Trail Blazers against the Golden State Warriors.
20th Century Fox will also buy time during the games to promote two new movies; “Gulliver’s Travels” and “Big Mommas: Like Father, Like Son.”
“[The Christmas Day broadcasts] are largely a media opportunity and it has increased across the board,” said Emilio Collins, senior vice president of global marketing partnerships for the NBA. “Traditionally, we have had a handful of partners but now it is the majority. The Christmas Day matchups feature the most prominent teams and this traditionally is the turning point of the season.”
Major League Soccer has asked Fox Soccer Channel to renew its TV deal at $20 million a year — nearly seven times more than the $3 million that FSC has paid annually since 2007, according to several sources.
MLS’s renewal request is considerably higher than the $7 million-a-year deal that FSC already has offered. If accepted, the $20 million figure would make the Fox Soccer package MLS’s biggest media deal to date even though it covers some of the league’s least-viewed games.
ESPN, which has MLS’s top TV package, pays an average of $8.5 million a year through 2014 for both MLS and most U.S. national soccer team matches.
FSC and MLS remain far apart but are talking about renewing the package that ended this year.
MLS brought in media veteran Brian Bedol as a consultant last summer to help develop the league’s media strategy, including helping to negotiate this deal.
The two sides are negotiating for the league’s third TV package — behind the ones sold to ESPN and Univision. The FSC package includes weekly Saturday night games and two U.S. men’s national team non-qualifying games.
But the dollar figure MLS gets for this package is critically important for the league because it will set the market for future negotiations around MLS’s bigger media packages from ESPN and Univision, whose MLS rights also expire in 2014.
MLS is looking to significantly boost its rights fee to correspond with the investment it has made in growing the league. It has expanded into new markets (Seattle and Philadelphia), built new stadiums (Red Bull Arena and Rio Tinto Stadium) and signed high-profile players (David Beckham and Thierry Henry).
That level of investment, however, has not translated to the league’s TV ratings, which have disappointed MLS’s network partners.
The big question in the current negotiations deals with Versus, which had a preliminary meeting with MLS in September. At the time, Versus executives made a pitch to the league that it was looking to treat MLS with the same immersive approach that it has used successfully with the NHL.
Versus, however, has not met with the league since then, and talks did not advance to the point where specific rights fees were discussed, according to a Versus executive who asked not to be identified.
Versus officially declined to comment for this story. MLS also declined to comment.
Fox Soccer’s David Nathanson said: “We don’t negotiate in the press. We value our relationship with MLS and look forward to continuing to discuss our future together.”
It’s important for MLS to have another network, like Versus, enter the negotiations and potentially drive the rights bid up.
That type of competition could counteract the impact of TV ratings. The league’s main TV partner, ESPN2, averaged just 249,000 viewers for its 25 MLS games this season, down 12.3 percent from the previous year. Fox Soccer’s Saturday night rights were flat, averaging 53,000 viewers.
On the 12th floor of a trendy downtown Miami hotel, 10 men and women are crammed into a bedroom, intently focused on two video monitors showing what’s going on between a man and a woman in a bathroom down the hall. But this is no voyeuristic exercise: The man in the bathroom is accustomed to people watching him perform. It’s Dwyane Wade, the Miami Heat guard, who is one of the NBA’s most popular players. Wade, a T-Mobile endorser since 2006, is shooting one of two commercials the brand will debut this week on the league’s annual spate of Christmas Day contests — five games in 13 hours on ABC and ESPN. The hoops marathon has become a bellwether for the league — because of the holiday it attracts an inordinate amount of casual fans, and for many, it marks the unofficial start of the NBA season. More recently, it has become a launching pad for ad campaigns, a December-style Super Bowl.
“The pressure isn’t quite at Super Bowl level,” said Peter DeLuca, an ad veteran who joined T-Mobile as vice president of advertising so recently that this is just his second ad shoot for the company. “This work I knew was good the minute I saw the story boards, but Christmas makes it more of an event, and our campaign has been so popular, people expect us to top ourselves every time out.”
One way T-Mobile is trying to over-deliver is by adding director Spike Lee to the effective mix of Wade and Charles Barkley. Lee will add star power with a cameo role in one of the ads, as T-Mobile, the fourth-largest wireless carrier in the U.S., tries to grab consumers’ attention in a category where every brand spends well in excess of its market share. Rival Verizon is the top spender in advertising and AT&T isn’t far behind. While those brands have multiple sports sponsorships, T-Mobile relies on the NBA.
“We compete in a really noisy category,” said Mike Belcher, T-Mobile’s vice president of sponsorships and events, “and the NBA allows us to have a disproportionate share of voice. We certainly can’t outspend our competition, so you have got to find places where we can win, and we look at the NBA and its fans like a [consumer] segment.”
DeLuca said most of the scripts of the latest creative were in by late summer, but with some changes at the top, including the installation of new CEO Philipp Humm in November, there was some delay to ensure that strategy and creative meshed. As T-Mobile solidified its claim as the country’s largest 4G network, the strategy was clear: While others sold the capabilities of phones, T-Mobile would use its NBA ties to market the network.
“Sports fans are some of our heaviest users,” said DeLuca. “It really matters to them to get game information or video highlights first, and we are trying to show they have it all in one hand with our network. So it’s a brand statement and a technology statement, with the NBA as a platform to add relevance.”
Networks are all about speed, and the ads rely on the velocity of information in an age where the news cycle never stops to illustrate the speeds at which T-Mobile’s 4G networks operate. Wade’s spot shows him accidently locked in a hotel bathroom. Seeking a rescue, he posts “Get me out of here” on a social media site, but his plea is misinterpreted as a trade demand. Rumors abound among well-connected NBA fans, like Barkley and Lee, who offers to give Wade his apartment if he moves to New York and plays for the Knicks. Video chat via 4G escalates the rumors, and a maid cleaning Wade’s hotel room sees them on TV — before finding and freeing him from the bathroom. “You’ve got some explaining to do,” she tells him in a scene that took take after take until T-Mobile and the creatives from agency Publicis, Seattle, were satisfied that her reactions were realistic.
The next day it was off to a deserted section of Miami International Airport to film Barkley’s latest ad, another tribute to the volatile mix of viral information flow and high-speed communication. In the case of the famously loquacious Barkley, one of his verbal jabs is used as the basis for a music mix that becomes a runaway hit and gains national prominence, via the 4G network, of course. Barkley is unaware of it all until he is bombarded by responses on his smartphone, including Wade congratulating him on his exploding musical fame.
The few actual passengers in the airport area don’t seem to notice much, but looking closely, some notice the lineup on the moving sidewalk includes Lee, huddling with camera, lights and sound crew, and Barkley, who, even having lost 40 pounds, is large enough to attract attention wherever he is.
Neither Barkley nor Marc Perman, his longtime marketing agent, can guess how many ads he has done since 1984, his rookie year in the NBA. “T-Mobile is the only time I feel pressure when I’m making a commercial, because it has been recognized as good work,” Barkley said, resting in his trailer during a break in the shoot. “Clearly, it’s gonna work for me, because I’m getting paid. But I want it to work for T-Mobile. People recite the T-Mobile lines back to me all the time, so I know it’s working.”
A supporting digital campaign, launching simultaneously on sports sites, has NBA fans engaged in trash talking using 4G smart video chatting. “The whole idea is that you can interact with the NBA as it happens, because of the speed and size of our network,” said Melinda McCrocklin, senior manager, advertising and brand integration at T-Mobile. “That’s our message here.”
The NBA will roll out a new advertising campaign during the league’s Christmas Day broadcasts on ABC and ESPN, with five new spots tied to the league’s vaunted “Where Amazing Happens” branding effort.
The campaign, tagged “Encouragement,” features 30-second spots showcasing some of the league’s top stars: Amar’e Stoudemire of the New York Knicks, Kevin Durant of the Oklahoma City Thunder, Chris Paul of the New Orleans Hornets, Steve Nash of the Phoenix Suns and Stephen Curry of the Golden State Warriors.
The Stoudemire and Durant spots will debut during the NBA’s five Christmas Day broadcasts, which include a doubleheader on ABC of Orlando against Boston followed by Miami against the Los Angeles Lakers. The Christmas Day games on ESPN have Chicago playing New York, Denver against Oklahoma City, and Portland against Golden State.
The ads are documentary-style commercials, with actual footage from each player’s past along with an on-screen actor commenting on the player’s current NBA careers. For example, the Stoudemire commercial shows footage of the now-Knicks star shooting in a gym as a 17-year-old while the actor discusses Stoudemire’s success as an NBA player.
The commercials will run through March, when the NBA begins its postseason ad campaign.
“We took a different approach to these spots, almost like a back-to-the-future approach with footage of players working on their game,” said Danny Meiseles, senior vice president and executive producer of NBA Entertainment.
The spots will also run on TNT, NBA TV, NBA.com and all of the NBA’s social media outlets. No print buy is included.
The Nash, Paul and Curry spots will roll out in January.
Goodby, Silverstein & Partners is the NBA’s agency of record. The new commercials fall under the league’s critically acclaimed “Where Amazing Happens” branding campaign that’s been in place for the past three seasons.
The NBA is also adding holiday-themed spots that feature bobbleheads of players from all 30 teams. The holiday spots are backed by the song “Come Home” by The Resource.
The 30-second bobblehead spots are an extension of the NBA’s season tip-off commercials that also used bobbleheads of stars, including LeBron James and Kobe Bryant. The new spots are team-specific and will run only on NBA TV through early January.
The NFL is considering hiring a single technology vendor to upgrade NFL stadiums. The league is not close to putting out a request for proposals, but it wants to find a way to bring down the cost of rewiring stadiums. While some facilities like Cowboys Stadium and New Meadowlands Stadium have already done so at great expense, the NFL’s idea is that awarding a contract for dozens of stadiums to one company would bring the average cost down.
It’s unlikely the league would move on the idea, however, before a new collective-bargaining agreement is signed.
PLAYOFF CHANGES UNLIKELY: Despite the chances a team from the NFC West may win the division with a losing or 8-8 record and then host a playoff game, there did not appear much steam here to re-seed the playoffs based on record. Commissioner Roger Goodell said that while he understood the arguments, he thought the playoff system worked quite well. And New York Giants co-owner John Mara, who is sympathetic to changing the rule so the team with the better record hosts the game, said it is unlikely to change because there is great sentiment to having a division winner host a playoff game.
INSURANCE TO COVER REPAIRS: The Metropolitan Sports Facilities Commission said it is on the hook for only $25,000 for the roof collapse at the Metrodome, at least when it comes to the cost of repair. The commission, which owns the dome and leases it to the Vikings, has a policy with insurer Affiliated FM, though that policy has a $500,000 deductible, said Mary Fox-Stroman, the commission’s director of finance. The commission also has a policy on that deductible, however, with Arch Specialty, that will leave the commission with a $25,000 bill. That does not account for the lost revenue the club has suffered. Fox-Stroman wrote in an earlier e-mail that the commission has business-interruption insurance.
SUPERDOME VOTE: Sometimes it’s good to be the king, and sometimes it can be annoying. Just ask Tom Benson, the New Orleans Saints owner and chairman of the powerful NFL finance committee. The one NFL vote the league took here was for a new lease amendment to the Superdome. Was it a significant amendment? Hardly. The team’s agreement with the state required the government to build a certain number of suites by 2011. It finished the job a year early, so the team agreed to forward some of the $1 million it gained from having the extra suites early to the city. The city also added 40 new parking spaces. The lease had to be reworded to replace 2011 with 2010. And for that the league required a vote. Why? Dennis Lauscha, the team’s general counsel, said the league wanted to act out of an abundance of caution. It also probably didn’t want the appearance, meritless as it may have been, of the finance chairman pushing through his own lease amendment without league approval.
TRADE FOR YOUR QB?: Jonathan Kraft, president of the Kraft Group, which owns the New England Patriots, was having a good-natured conversation with Miami Dolphins owner Stephen Ross, a successful real estate investor, and a divisional on-field rival. The conversation, which was about real estate, was loud enough to be heard nearby. And then Ross, obviously joking, said, “I’ll trade it all,” referring to some parcel of real estate, “for your quarterback. You have to think about that one,” Ross, of the quarterback-challenged Dolphins, said laughing to Kraft. Probably not. Tom Brady is truly irreplaceable, unlike real estate. Just ask the rest of the NFL.
One of Time Warner Cable’s top programming executives is joining the NHL at the beginning of the year to help drive distribution for the league’s cable network, NHL executives confirmed last week.
David Proper will become the NHL’s executive vice president of media strategies and distribution, where he will report to the league’s chief operating officer, John Collins. The NHL Network’s current senior vice president of distribution, Jody Shapiro, will report to Proper.
He has spent the past 3 1/2 years as vice president of programming at Time Warner Cable, the country’s second biggest cable operator. During that time, Proper was instrumental in cutting carriage deals with cable and broadcast networks such as ESPN and Fox.
Before joining Time Warner Cable, Proper spent a decade as the NFL’s senior counsel.
He becomes the latest in a long line of former NFL executives who have joined Collins at the NHL. Collins, who worked at the NFL in two stints between 1989 and 2004, hired Charles Coplin from the NFL in September to be executive vice president of content.
Previously, Collins hired Keith Wachtel from the NFL to be senior vice president of integrated sales and marketing. Other former NFL executives on Collins’ staff include Don Renzulli, senior vice president of events, and Perry Cooper, senior vice president of direct and digital marketing.
Proper comes to the NHL as the league looks to expand its media businesses. Coplin is handling NHL Network’s on-air look; Proper will head up its affiliate sales and marketing. He also will be responsible for its international media distribution.
NHL Network is in about 40 million homes. Distributors pay, on average, 35 cents a subscriber a month for it, according to figures from SNL Kagan.
The school is targeting a launch date of next fall for an Oklahoma channel that will have a look and feel similar to what the University of Texas has proposed, according to sources with knowledge of the school’s plans.
The Sooners are working with Learfield Sports, their multimedia rights holder, and an outside media adviser on the channel. They have had discussions with Cox Communications, Fox Sports and ESPN about partnering on a channel.
Cox, which is the dominant cable operator in the state, and Fox, which already operates a regional sports network in the market — FS Oklahoma — are considered the front-runners.
While Texas has settled on a single partner in ESPN, it’s conceivable that Oklahoma could partner with both Cox and Fox — Cox as the distribution partner and Fox as the programming partner.
School officials say they have not settled on a financial model. Cox, Fox or both could be equity partners in a channel or they could pay a fee to the school and Learfield for the rights to create a channel.
“We are encouraged by the interest we have received and we’re making good progress,” said Oklahoma Athletic Director Joe Castiglione. “We’re being diligent so that we can develop a product that can be sustained for the long term.”
At Texas, ESPN and Fox entered into a bidding war for the right to partner with the school and IMG College on a Longhorns TV network. Texas has entered into exclusive negotiations with ESPN as a partner, but that deal hasn’t closed yet.
Sources say ESPN’s bid to Texas was significantly more than Fox’s. ESPN is believed to be working on a 20-year deal that would pay Texas and IMG College close to $12.5 million a year.
If ESPN completes its deal with Texas, as expected, it puts pressure on Fox to cut a deal with Oklahoma. Both schools will be influential in determining the conference’s next TV deal, and both ESPN and Fox have expressed interest in cutting such a deal.
The league’s cable contract with Fox Sports Net expires after the 2011 football season, and its broadcast contract with ABC/ESPN expires after the 2015 season. Both networks plan to pursue the Big 12’s media rights.
As with Texas, an Oklahoma channel’s programming would carry one or two live football games, re-airs of archived games, Olympic sports, shoulder programming and coaches shows.
Olympus Corp. of the Americas countersued the U.S. Tennis Association in New York state court last week, seeking reimbursement of a significant amount of the more than $10 million in sponsorship fees it has paid the tennis group since 2003.
The USTA last month sued Olympus, a key U.S. Open sponsor and title sponsor of the U.S. Open Series, for breaking its sponsorship deal in September, one year before the contract allowed. In its first public response, a reply filed Dec. 15, Olympus said that a new Panasonic sponsorship at this year’s Open no only violated Olympus’ deal with the USTA, but that there had been a continuing pattern of conflict with the tennis group. In fact, Olympus alleged in its legal filing that in 2006 and 2007 the USTA reimbursed Olympus some of its fees because of sponsorship conflicts that occurred at the U.S. Open during those years.
“The USTA ... did not live up to its promises,” the complaint states. “In particular, Olympus was not pleased that the USTA continued to court its primary competitors in the camera market.”
Olympus also blasted the new USTA leadership, contending that under the old regime the camera maker’s concerns were ultimately addressed. The complaint specifically named Harlan Stone, the USTA’s chief business and marketing officer, for this year failing to address issues with Panasonic’s sponsorship.
“Unlike its prior management team, the USTA’s new management team largely dismissed Olympus’ concerns,” the complaint stated. The USTA hired Stone in 2009, shortly after Arlen Kantarian stepped down as head of the tennis body.
The USTA could not be reached for comment on Olympus’ allegations. In its initial complaint, the USTA argued that the Panasonic sponsorship covered televisions only and did not compete with Olympus’ camera category.
Olympus rejected that distinction. “Olympus and Panasonic compete for virtually the same consumers by offering similar cameras with identical lens mounts,” the complaint said.
Olympus is seeking damages to be determined at trial, plus attorney fees. It also wants a declaration from the court that its sponsorship is ended.
After spending more than 20 years guiding Roush Fenway Racing’s evolution from a small, 70-person shop to a 500-person operation, longtime Roush Fenway Racing President Geoff Smith is retiring. This is his last week with the team.
Roush Fenway Racing was scheduled to announce today that Smith, 64, will be replaced as president by Steve Newmark, who joined the team in April as senior vice president of business operations. Newmark spent 12 years as an attorney with Charlotte-based law firm Robinson, Bradshaw & Hinson. He was part of the legal team that worked with the NCAA, CBS and Turner to complete their 14-year, $10.8 billion media deal earlier this year.
“The task this organization has before it has never been more difficult,” Smith said. “It’s going to take a lot of hard work, but we’ve got the right guy. He complements the people we have here and will do a great job.”
Jack Roush founded Roush Racing in 1988 and hired Smith to run it in 1990. Smith was an attorney in Michigan and had done contract work for Roush for more than a decade.
Roush managed the competition side of the team while Smith oversaw business operations. In that role, he secured additional sponsors that allowed the team to add a second Winston Cup car in 1992, Busch series cars in 1992 and 1994, and a truck team in 1995. He managed the team’s relocation and consolidation from shops in Liberty and Mooresville in North Carolina to its current location near the Concord, N.C., airport.
Through the years, Roush Racing distinguished itself from other teams and earned a reputation for running its team as a business. It was a pioneer in developing a multi-team operation that shared resources and information across multiple cars in order to improve performance.
“Geoff is one of the most well-rounded presidents of a race team,” said Zak Brown, CEO of Just Marketing International, which has represented UPS, Crown Royal, Subway and others in sponsorships with Roush Fenway. “He does sponsorships, contract negotiations with drivers and helps run the team on everything except the technical standpoint. I kept going back to them [with sponsorships] because Roush had a culture of over-delivering.”
Mark Martin, who drove for Roush Racing for 19 years, said, “Geoff is really, really classy at putting deals together that work. He and I did an awful lot together through the years. Most of the time, we never even involved Jack. I have a lot of respect for Geoff and I wish him well.”
When Roush sold a stake in the team to Fenway Sports Group in 2007, Smith signed a three-year contract to manage the team. He added an extra year because of the recession and put plans in motion earlier this year to step aside.
Newmark will oversee the business operations of the team and be the primary liaison between the team and its ownership board. He spent the last eight months learning the business and dealing with an array of issues ranging from a licensing issue with a sponsor around a video game to the team’s relationship as a service provider for Richard Petty Motorsports, which recently changed ownership. He believes the organization is structurally sound and doesn’t plan to institute any major changes after taking over as president.
“We are fortunate to have one of the largest sales and marketing teams in the industry, and the caliber of individuals in that group is actually one of the reasons that this opportunity was so appealing to me,” Newmark said. “That said, as with any leadership transition, there will be certain cultural changes and we do have a number of new initiatives that we intend to pursue, which are primarily designed at enhancing the value of our programs to our partners.”
The 2011 season will be an important one for Roush Fenway Racing. The team is seeking full sponsorships for Nationwide Series cars driven by Trevor Bayne and Ricky Stenhouse Jr., and a partial sponsorship for the car driven by Carl Edwards. It also will be working on renewals with its biggest Sprint Cup partners, 3M, Aflac, Crown Royal and UPS.
Sports architect HKS has entered the event production business, launching a company called HKS World Events.
The Dallas-based firm is assisting the ACC Football Championship with ideas to generate additional revenue tied to sponsorships, hospitality and merchandise for next year’s game at Bank of America Stadium in Charlotte.
HKS World Events also has a contract in place with the 2011 U.S. Figure Skating Championships in Greensboro, N.C., where the firm designed the layout for the Jan. 22-30 event’s three components: competition, practice ice and the fan fest.
“We are interested in working with big events that move,” said Sims Hinds, managing director of HKS World Events and a 32-year veteran of sports facility management.
“The past [year] we spoke to different organizational leaders, and while their logistical operations have been handled well, what’s missing is a Disneyesque experience for fans and sponsors,” Hinds said. “The real challenge is to create an event presentation that develops value for everybody.”
Two people with whom Hinds has worked — Jeff Elliott, the ACC’s chief financial officer, and Hill Carrow, chairman of the figure skating championships — used HKS World Events to help develop their events.
In Charlotte, five of the firm’s workers, including Hinds, were given media credentials for the 2010 edition of the championship game Dec. 4 to record their observations, and will submit their review to ACC officials by early January, Elliott said.
The two parties could do a deal for next year’s game at the same venue if it makes sense for the conference, he said.
“We will analyze it and see where it leads us,” Elliott said. “There may be things we can do that we are not doing to increase revenue for our member schools.”
Up Interstate 85, where the Greensboro Coliseum Complex is preparing for the U.S. Figure Skating Championships, it is the first year that all of the event’s activities will be set up under one roof.
HKS World Events developed a logistical plan to manage traffic flow for the main competition inside the 24,000-seat arena and the practice rink and fan fest in the adjoining events center.
Practice sessions will be free to the public for the first time, said Carrow, whose company, Sports & Properties, is managing the event and subcontracted with HKS. The fan fest is free as well.
“It is a unique presentation, convenient for the athletes and the fans,” Carrow said. “But it is more complex, and all of that HKS is assisting us with.”
HKS is not the first sports design firm to work in event production. Populous has been doing much of the same thing for about 30 years.
The U.S. Olympic Committee has shelved plans for either branded lottery games or a national lottery.
The USOC began to explore the idea as part of a long-term strategic planning project led by CEO Scott Blackmun. The organization’s executive team briefed the USOC board on the idea during a September meeting, underscoring that national lotteries had been used in other countries like Canada and the United Kingdom as a way to defray the cost of Olympic development.
The board requested more details on the proposal at the time, but it was not on the agenda for last week’s board meeting in California, and USOC spokesman Patrick Sandusky said the idea has been abandoned.
“We decided, after detailed due diligence, that pursuing lottery funding was not a priority for the USOC at this time given the other revenue streams that we are focused on,” Sandusky said.
The USOC began developing a long-term strategic plan in 2009 under the direction of former CEO Stephanie Streeter. At the time, the organization’s primary revenue source, domestic sponsorship, was under pressure. A number of sponsors, including Home Depot, General Motors and Bank of America, had declined to renew multimillion-dollar agreements with the organization, and it was looking to diversify its revenue streams so it could survive future economic downturns more effectively.
Blackmun picked up the strategic planning process after replacing Streeter as CEO last January. The idea of a lottery was developed at his direction.
The USOC has tinkered with the idea of a lottery in the past. After professional sports leagues like the NFL and MLB changed marketing rules to allow teams to license their marks for lotteries, USOC marketers spoke to a lottery licensing company several years ago about pursuing something similar, a source said.
According to the USOC’s board notes, the USOC’s current chief marketer, Lisa Baird, explored the option again this year.