SBJ/Jan. 24-30, 2011/Leagues and Governing Bodies

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  • LPGA hires ESPN veteran Willett

    The LPGA has hired a former ESPN sales veteran to lead its business development efforts.

    Ed Willett spent nine years at ESPN before moving over to Quick Hit Inc. in 2009 and later Kaleidoscope Sports and Entertainment, a media and sponsorship consulting firm, where he led the sales efforts. He starts this week at the LPGA’s headquarters in Daytona Beach, Fla., and will report to CMO Jon Podany.

    Willett has experience selling media at ESPN, USA Today and Sports Illustrated, which will help because media is a large part of what the LPGA sells as part of its title and corporate sponsorships, but Podany said Willett’s background and contacts played a larger role.

    TeamWork Online worked with the LPGA on the search.

    Willett’s hiring and the LPGA’s new schedule of 25 official events in 2011, which grew by one over 2010, have Podany optimistic going into the year.

    “Two things have happened,” Podany said. “We’ve solidified the LPGA’s current partners, rebuilt the trust, and the economy is getting better. It’s not blazing, but people do seem to be opening the purse strings a bit for longer-term deals.”

    The LPGA also has two additional tournaments in the pipeline for 2012, including the return of the event in Toledo, Ohio, which is taking a one-year hiatus this season.

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  • New player reps get tour of issues, Congress

    Arizona Cardinals running back Jason Wright, the NFL Players Association alternate player representative for his team, went to the union’s offices in Washington, D.C., last week with a lot of questions and some skepticism about what was going on with the NFL labor situation.

    Wright described himself as “a skeptical guy” in a telephone interview after spending a day in union meetings with 24 other new player representatives who were elected in NFLPA team meetings last fall. But he said he came away with a lot of answers for his teammates as well as an understanding of “why we are doing what we are doing and why it is pretty legitimate.”

    Jason Wright (left) in D.C. with Ben Watson. “The biggest thing for us is we are so willing to deal,” Wright says.
    Wright and the other representatives went to Washington to meet with Congress as well as get a daylong orientation on their responsibilities to their teammates and an update on CBA negotiations. The collective-bargaining agreement expires after March 3, after which the owners can lock out the players.

    Wright said he has hopes of getting a resolution to the labor dispute before the CBA expires because, “in general, life without hope is pretty terrible.” He added that there is reason to believe a deal can be done if the owners are willing to open their books. 

    “The biggest thing for us is we are so willing to deal,” Wright said. “The biggest misconception about us is that we are sticking our feet in the mud.”

    But Wright noted that NFL players can’t agree to the league’s proposal to shave 18 percent off the revenue used to calculate the salary cap without financial transparency.

    “The big issue for us is we don’t know why they are asking for what they are asking for,” Wright said. “Honestly, there are very few sacred cows. We would be willing to discuss anything and everything if we knew why.”

    Among the Cardinals, the two biggest things players are asking about is the status of CBA talks and the elimination of health care if no deal is reached by the deadline, Wright said.

    The latter is an issue Wright is feeling on a personal level. His wife is pregnant and due in May.

    The NFL has notified players that the league will no longer pay for their health care if there is a lockout. NFL players would then be eligible for federal COBRA benefits, which they would have to pay for themselves. Wright said it’s on players’ minds because it would be the most immediate impact on players if there is a lockout.

    Cleveland Browns tight end and alternate player representative Ben Watson agreed.
    “I think health care is the biggest issue guys ask about,” Watson said. “There are a lot of players who have wives that are pregnant. You are looking at 50-some guys. Any year you are going to have [about] 18 women giving birth.”

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  • The takeaway on NFL talks: No progress, not sure why

    A key NFL owner last week called the lack of movement toward resolving differences with the players union “baffling,” continuing the escalation of the war of words between the two sides. The collective-bargaining agreement between the league and the NFL Players Association expires after March 3, less than six weeks from now.

    Carolina Panthers owner Jerry Richardson
    “It is baffling we are not making more progress,” said Carolina Panthers owner Jerry Richardson, co-chairman of the owners’ labor committee, upon leaving last Tuesday’s meeting of NFL owners. “The fact is we are just not making more progress.”
    Asked why, he declined to pin blame on either side.

    Commissioner Roger Goodell, who also was questioned as to why no progress had been made, responded, “I wish I knew.”

    Those were the on-the-record comments last week after the short, six-hour meeting to discuss the CBA. Anonymously, league sources painted the union as not being serious about reaching an agreement, often in unfavorable terms. That portrait is shredded by the NFLPA, which has said it is the owners who are seeking to lock out the players. On the same day the owners were meeting, the NFLPA launched an online publicity effort with the Twitter tag #LetUsPlay, part of the two sides’ increasing dispute in the social media space.

    The NFLPA did not respond for comment for this story but has said before it is willing to meet and continues to ask that the NFL not lock out the players. Last week, after the owners meeting, Goodell met one-on-one with NFLPA Executive Director DeMaurice Smith.

    Indeed, at the owners meeting, there was talk that the two sides were ready to meet face to face either late last week or early this week. That came as much of the recent public rhetoric had devolved into who didn’t want to meet and which side really wants to shut the game down.

    Goodell, asked why no more progress had been made, said, “I wish I knew.”
    On a conference call with reporters earlier this month, union representatives said they wanted to meet but the NFL turned them down, resulting in no in-person meetings since around Thanksgiving. Jeff Pash, the league’s lead negotiator, responded after the owners had concluded their meeting that he knew of no dates offered by the union, and he quipped that he was like a high school kid: “I am always ready for a date,” he said.

    Clearly, though, the league is ready to pursue a lockout of the players if the CBA expires, or the imposition of work rules drawing from what was proposed under the last league offer. The mood at this gathering of owners was grim, with multiple sources saying that while they thought a deal could get done based on the league’s relative health, they did not believe the union wanted to solve the differences at the negotiating table. The union has filed complaints that the league undersold its TV deals in order to ensure payments during a work stoppage and, more recently, that owners colluded to not sign restricted free agents before the 2010 season.

    Owners were thus briefed last week on a post-March 3 strategy. At that point, sources said, the league while still negotiating would begin its campaign to refute an antitrust challenge to the NFL, if the union decertifies, by documenting what it hopes will prove the union has not bargained in good faith and an impasse had been reached. It’s possible then the league would impose work rules, and the legal battle could stretch into years.

    But for now, there is still a chance to hash out a deal. The owners want what amounts to, based on where league revenue now stands, a $1.44 billion credit to offset the cost of new stadiums and other capital intensive projects. Presuming a 59 percent salary cap, that would result in a more than $850 million decrease in the amount of money going to the players.

    The union did make a counterproposal in late November, and the NFL responded to that, said Mark Murphy, the Green Bay Packers president and a key member of the owners’ labor committee. One source said nothing had been communicated between the sides in recent weeks.

    For his part, Richardson clarified something he said earlier this month, which was reported as him contending NFL teams had operating losses. Instead, he said his comments were that the NFL has suffered operating losses on the revenue generated since 2006, when the CBA was last renewed, not on overall revenue.

    The league has made the post-2006 claim for several years now. The distinction is key. If Richardson contended that NFL teams suffered operating losses, the union could then argue the NFL’s position is one of financial distress, which would trigger federal labor laws requiring the league to disclose its financials. But Richardson said he did not make that claim, only that the revenue generated since 2006 has not exceeded the expenses incurred since 2006. Taking overall revenue, NFL teams would then continue to report profits.

    The union has pushed aggressively for the league to open its books, contending the NFL must prove its margins are shrinking before the union will consider concessions.

    • GANG GREEN: Whether the New York Jets won or lost Sunday in the AFC championship game, it is worth noting how the Jets made a little money on the playoffs, something NFL teams usually do not do. Unlike the other three major leagues, deep runs into the playoffs can mean losses for NFL teams because of the travel costs involved and the fashion in which the NFL shares playoff revenue. So the Jets chartered a plane from team sponsor JetBlue and sold packages for $800 to 150 people. Players’ families had first dibs. The packages included airfare, hotel and game tickets.

    Matt Higgins, Jets executive vice president of business operations, said the club could have charged more but wanted to keep the price down for team personnel and their families. Combined with Pepsi Max’s sponsorship of the team’s Twitter feed during the playoffs, the club has generated at least six figures off just these two endeavors.

    49ers owner Jed York said his team will handle stadium naming-rights sales.
    NINERS LOOK INSIDE: To all those big marketing agencies out there, cross the San Francisco 49ers off your call list. Team owner Jed York said the 49ers would not retain an outside agency to sell naming rights to the club’s planned stadium in Santa Clara, Calif. Instead, the sales effort will be handled in-house, he said.

    NAMES AND NOTES: The NFL promoted Jeff Miller to senior vice president of government affairs. He had been vice president. … Nice gesture by New England Patriots President Jonathan Kraft, congratulating Jets owner Woody Johnson after the meeting for the Jets’ playoff victory over the Pats two days previously. … There’s been some recent buzz that there might not be an NFL annual meeting if a lockout occurs. General managers and coaches come to that meeting, which would not seem necessary in the case of a lockout. Pash, however, said the New Orleans meeting is still on for March 20-23 … Goodell said negotiations were ongoing with ESPN over renewing “Monday Night Football.” The two sides remain in an exclusive negotiating period, but he said there was nothing to announce. SportsBusiness Journal has reported the two sides have been talking about a renewal for nearly $2 billion annually, a huge jump over the current $1.1 billion annual fee (SportsBusiness Journal, Jan. 10-16, 2011, issue).

    Print | Tags: Leagues and Governing Bodies, Labor and Agents
  • NHL on track for 5 percent revenue increase

    Boosted by an increase in television viewership, sponsorship sales and online traffic, the NHL is on pace to generate $2.9 billion in total revenue for the 2010-11 season, a 5 percent increase from last season. The increase would mark the league's fifth consecutive season of revenue growth and an all-time record for league revenue.

    "The numbers confirm the league's strategic choices," said NHL Chief Operating Officer John Collins, who pointed to the Winter Classic and season-opening Face-Off events, the HBO series "24/7," and the league's online presence as areas that have extended the league's reach. "All of these choices combined to create a path for advertisers to reach our fans, and that is what has fueled our continued growth, despite the tough economy."

    U.S. broadcaster Versus has seen the number of viewers increase 6 percent to an average of 301,000 through 29 telecasts, compared with 284,000 for the same period in the 2009-10 season. CBC's "Hockey Night in Canada" is averaging 1.52 million viewers over 24 telecasts, up 7 percent from last season's average of 1.42 million. TSN is averaging 686,000 viewers over 38 telecasts, a 6.5 percent increase from 2009-10.

    NBC's prime-time broadcast of the Winter Classic became the most-watched regular-season NHL game in 36 years, earning a 2.3 rating and a 4 share, and averaging 4.5 million viewers, up 21.6 percent from the 2010 game.

    Excluding broadcast contracts, league revenue from consumer products, digital media, the NHL Network, and sponsorship and advertising has grown 14 percent from 2009-10 and 85 percent since 2006-07, when the league initiated new strategies for digital products and sponsorship sales.

    NHL At MidseasonTV Ratings
    Network (No. of games) Avg. rating Avg. No. of viewers Change
    NBC (1) 2.3 4,500,000 21.60%
    Versus (29) 0.3 301,000 6.00%
    CBC (24) NA 1,520,000 7.00%
    TSN (38) NA 686,000 6.50%

    At The Gate

    Top 5
    Bottom 5
    Team Avg. attend.
    Avg. attend.
    Chicago Blackhawks 21,290 New York Islanders 10,112
    Montreal Canadiens 21,273 Phoenix Coyotes 11,140
    Philadelphia Flyers 19,607 Atlanta Thrashers 12,848
    Detroit Red Wings 19,378 Columbus Blue Jackets 13,495
    Toronto Maple Leafs 19,303 New Jersey Devils 14,205
    NA: Not available Source: SBJ research

    The NHL renewed partnerships with Bridgestone, Cisco and McDonald's over the past year and signed new deals with Canadian Tire, Tim Hortons, Hershey and Discover.

    "We're now seeing our partners leverage their association with the NHL to do hockey-themed advertising, especially around the big events," said Brian Jennings, NHL executive vice president of marketing. "And we are especially pleased with the digital numbers."

    Heading into Sunday's All-Star Game in Raleigh, the average number of monthly unique visitors to this season has risen 18 percent, to just under 21.2 million. Revenue from the league's GameCenter Live streaming service has increased 25 percent, and video starts on have risen 128 percent. The league just recorded its 1 millionth download of its mobile application and now boasts 1.3 million "likes" on Facebook and 483,000 Twitter followers.

    The growth in revenue comes despite relatively flat numbers at the gate. Through Jan. 17, the NHL's average attendance was 16,974 fans per game, or 92.3 percent of capacity. The number represents a 0.2 percent increase from 2009-10.

    "When you look at attendance, there is a finite amount of capacity," Jennings said. "Absent of building new arenas with demonstrably more seating, you're not going to see attendance spikes."

    Of the league's 30 teams, 16 have shown attendance growth this season, with 12 teams playing at or above 100 percent capacity. The Stanley Cup champion Chicago Blackhawks lead the league, averaging 21,290 spectators a game, which is 108 percent capacity. The Tampa Bay Lighting and Nashville Predators lead the league in growth, with both teams enjoying between a 12 percent and 13 percent increase in attendance.

    Chris Parker, executive vice president and chief sales and marketing officer for the Predators, said the team's emphasis on multigame ticket packages and seasonlong promotions helped the team boost its average from 14,239 to 16,000 fans a game.

    "We've done a much better job of maximizing our advertising and our individual game promotion," Parker said. "And the team's performance has improved on the ice."

    But sharp drops in attendance by a handful of clubs have soured the league average, and seven clubs recorded attendance averages below 15,000. The Columbus Blue Jackets, Dallas Stars and New York Islanders have all seen double-digit attendance drops, with the Islanders losing 17.6 percent and averaging 10,112 fans a game. Although the Phoenix Coyotes posted a 4.1 percent increase, the club's average of 11,140 is still only 65 percent capacity.

    Print | Tags: Leagues and Governing Bodies, Media
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