SBJ/March 28-April 3, 2011/Leagues and Governing Bodies

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  • With Madrid, Competitor looks to expand abroad

    The endurance sports media and event company Competitor Group Inc. has acquired the Madrid Marathon with the goal of expanding its popular Rock ’n’ Roll marathon series into Europe and Asia.

    The Madrid Marathon was first held in 1978 and now includes a shorter 10K race, with both events attracting a combined 15,000 runners. David Moross, executive chairman of Competitor Group and chairman and CEO of Falconhead Capital, said the acquisition is the first step in CGI’s plan to acquire more global running events.

    “We have a ubiquitous product, and we can go to Europe and employ the same strategy, so there is really no reason not to do it,” Moross said. “We have to go global with this thing.”

    Currently CGI operates 20 Rock ’n’ Roll races in the United States, including nine full-length marathons. The Rock ’n’ Roll concept showcases local bands and musical performers along all 26.2 miles of the race, creating a party atmosphere for participants. CGI either creates new events, such as the Latin Music 1/2 Marathon in Miami, or brings its marketing and music concept to existing races, such as the Denver Marathon.

    “Our sweet spot is the back-of-the-pack runner who is doing it for fun,” said Bouker Pool, CGI’s senior vice president of marketing.

    “[Rock ’n’ Roll] is very popular with women,” said Mary Wittenberg, CEO of the New York Road Runners. “They are smart to go to Madrid because the female [running] market in Europe is untapped.”

    In Madrid, CGI purchased the event and its operations team, called Elipse Iniciativas, which will continue to operate the marathon. The 2011 Madrid race, scheduled for April 17, will not showcase the Rock ’n’ Roll branding.

    Moross said CGI has letters of intent from six other major European marathons to join the Rock ’n’ Roll Marathon series, including events in the U.K., France, Italy and Switzerland. He also said the company is looking to acquire one of the five World Marathon Major events — New York City, Boston, Chicago, Berlin and London — but declined to discuss which race the company will pursue.

    “Our goal is to triple the size of [the Madrid Marathon],” said Moross, who said CGI will promote the European race to its 800,000 or so North American participants. “We want to find destination cities where we can bring up the bottom-line impact by putting heads in beds.”

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  • Early ticket sales point to rebound for MLB

    Major League Baseball is poised to end its three-year attendance slide based on preliminary ticket sales data for the 2011 season, set to begin Thursday.

    Commissioner Bud Selig declined to project a specific attendance increase for the season. But after drawing 73.06 million fans in 2010, down 0.4 percent from 2009, this year’s total will likely fall somewhere between 75 million and 78 million, an increase of 3 percent to 7 percent.

    Selig has established 80 million as a goal since finishing roughly 500,000 people short of the mark in a record-setting 2007, but that level appears at least another year away.

    “I’m really bullish on this season. We’ve got some great empirical data coming in,” Selig said. “I want to see a nice increase this year, and I’m very hopeful, very optimistic and confident that we’re going to do it. It should be a big, big year.”

    The pending ticket turnaround owes to several factors: an improving economy, continued aggressive discount offers and promotions by individual clubs, historic levels of competitive balance, and increased involvement by league officials in what has traditionally been a very local piece of the business.

    MLB over the offseason formed a new panel called the Commissioner’s Ticket Review Committee that involves several league departments, MLB Advanced Media and senior executives from six clubs: the Cincinnati Reds, Atlanta Braves, Chicago White Sox, Kansas City Royals, Seattle Mariners and Cleveland Indians. The group is exploring numerous trends around ticketing, including dynamic pricing, in an effort to better identify best practices from around the industry. Specific measures recommended by the committee and approved by Selig will then be disseminated to the other 24 clubs.

    The committee was established without a time frame and will stay at work as Selig continues to seek out that 80 million mark.

    “This is much more macro than traditional best-practices sharing,” said Jacqueline Parkes, MLB chief marketing officer. “There’s a tremendous wealth of knowledge that we’re looking to tap into as we look to learn how we can optimize the fan experience that the commissioner continues to believe is crucial to the growth of the game.”

    The hope for revived ticket sales represents a marked reversal from a lengthy period of uncertainty that included those three straight seasons of declines, a crippling global economic recession and calls from Selig for clubs to not get “cocky” on pricing. Even with the recent declines, though, attendance is still at historically high levels: The sport’s six highest turnouts have each come in the last six seasons.

    “As we stand here today compared to a year ago, we’re definitely more optimistic, and we were more optimistic a year ago compared to ’09,” said Marc Bruno, president of Aramark sports, entertainment and conventions. The concessionaire works with 13 MLB teams, and its business to a significant extent depends on the amount of foot traffic at the ballparks in which it operates. “There’s a general sense of health around the industry and that people are increasingly willing to spend.”

    DAVID DUROCHIK
    The Twins are set to defy the sophomore jinx with record ticket sales at Target Field.
    MLB ticket sales remain a critical measure of the industry. Gate attendance is the sport’s largest single revenue source, and MLB has more ticket inventory to sell than any other property.

    Beyond the aggregate view, local sales are brisk in many MLB markets. The Minnesota Twins have already sold more than 2.9 million tickets for 2011, and are set to defy the industry’s historical norm of sophomore slumps in the second year of a new ballpark by setting another franchise attendance mark at Target Field. The San Francisco Giants’ sales, predictably, have soared after the club’s first World Series title in the city since moving from New York in 1957. Other traditionally strong sellers, such as Philadelphia, Boston and the New York Yankees, also have reported continued strong business.

    “We’ve been blessed with another competitive team, a good amount of star power and a ballpark we believe is an absolute game changer,” said Twins President Dave St. Peter.

    MLB still has several question marks in terms of attendance, notably the New York Mets, who are battling a nasty clawback lawsuit in the Bernie Madoff financial scandal and have employed an array of price discounts in an attempt to reverse a 19 percent decline in 2010. But other clubs toward the bottom of the league’s ticket sales are also showing revived business.

    “Our goals are relatively low compared to a lot other teams. But we’re optimistic we’re going to reach and exceed our budget goals,” said Oakland A’s owner Lew Wolff. The club, still seeking to move out of Oakland, drew 1.4 million last year and is projecting at least a similar number for 2011. “We’re definitely seeing the sales pace tracking ahead this year.”

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  • NASL hires World Cup bid exec Downs as commish

    The North American Soccer League has hired David Downs, former executive director of the United States’ 2022 FIFA World Cup Bid Committee, as commissioner heading into its inaugural season as North America’s Division II soccer league.

    NASL
    David Downs
    Downs, 55, will start at the NASL offices in Miami on April 4. The eight-team NASL will occupy a level of competition that is recognized as a step below MLS, the country’s Division I league, by the U.S. Soccer Federation.

    “Every major soccer nation has a second division of some quality, and I believe there is room for one in the United States,” Downs said. “We are not in MLS markets, and we think there are plenty of large and passionate soccer markets which can create a fan base for the league.”

    Before working with the bid committee, Downs was an executive at Univision from 1999 to 2009 and held roles with ABC. He was one of five candidates who interviewed for the position and was chosen by the NASL Executive Committee, composed of Montreal Impact owner Joey Sapudo, FC Tampa Bay owner Andrew Nestor and league CEO Aaron Davidson.

    Davidson is also the vice president of Traffic Sports USA, the American arm of the Portuguese sports marketing and event management firm that owns three NASL teams and operates the league’s sales and marketing.

    “David’s primary responsibility is to chart the league’s strategy, both commercial and on a sporting side, as well as expansion,” said Davidson, who said Downs will report to the executive committee and the league’s board of governors.

    The NASL was founded in 2009 when eight teams broke away from Division II of United Soccer Leagues, citing a disagreement in ownership models. Davidson — who was then president of the Fort Lauderdale Strikers — spearheaded the schism, and registered the NASL trademark, which previously had been owned by the league that operated from 1968 until 1984.

    USSF President Sunil Gulati said he hopes the league will find investors to lessen the ownership influence of Traffic Sports. “I think in an ideal world we’d like to see the type of situation where there are individual investor-operator groups for each of the eight teams or any number of teams the league has,” Gulati said.

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  • Owners discuss easing equity rule for heirs

    The NFL discussed lowering the amount of equity an heir of a team must control when assuming ownership of the club, sources said, a change that would be the latest league policy shift to reflect the hurdles posed by estate planning.

    Currently, a family must own at least 30 percent of a team, with the lead owner having in some circumstances as little as 10 percent. Under the policy being discussed, the overall percentage of a team that is passing to an heir that the family must own would be about 25 percent. The issue did not come up for a vote.

    The NFL has many teams, including the Chicago Bears, New Orleans Saints and New England Patriots, with heirs standing in the wings to take over their respective franchises, but at the same time, values of clubs have risen steadily in recent years. That poses estate-planning challenges, as the heirs must pay estate taxes on the slice of the team they inherit.

    The proposed policy change has not been voted on by the finance committee, but the sources said it is not unusual for a matter not voted on at committee to be brought up for discussion, and possibly even a vote, before full ownership.

    The league at one time required the control owner to have 51 percent of the team. That percentage fell to 30 percent, and in 2004, the number was changed to 20 percent for family-owned teams, with the family needing to cumulatively stay at 30 percent. In the wake of the difficulties of the Pittsburgh Steelers’ keeping the team in the Rooney family, the control portion percentage in 2009 was dropped to 10 percent. For non-family situations, the control portion remains at 30 percent.

    OTHER LEGAL NEWS: In all the legal rush during the last month there still exists the collusion case the former union filed against the league. The NFL Players Association in January filed a complaint with the special master who oversees such disputes, alleging that teams conspired in 2010 to limit restricted free agent signings.
    League sources said the case is at a hold, pending the NFLPA filing motions for discovery with the special master. George Atallah, spokesman for the now decertified NFLPA, declined to comment. The league sources said the earliest the collusion case could be heard by the special master would be the fall.

    MICHAEL GOOD PHOTOGRAPHY
    Tisch said L.A. came up at the meeting.
    L.A. VIEWING: New York Giants co-owner Steve Tisch said the long-debated return of the NFL to Los Angeles came up during the meeting, but owners were told a proposal by AEG to build a stadium could take more than a year to overcome procedural hurdles like an environmental impact statement. Neil Glat, the NFL’s senior vice president, corporate development, made the presentation, Tisch said. Ed Roski, who has a competing proposal for a stadium in City of Industry, Calif., is waiting in the wings, Tisch added.

    SEEING GREEN: The NFL passed a rule that teams must have green fields. Jacksonville’s Wayne Weaver, chairman of the business ventures committee, and Atlanta’s Arthur Blank said the rule was designed to head off a sponsor that might want to pay a team to shade a field its corporate color. They said they knew of no such proposal that elicited the rule. “The league was just trying to anticipate a sponsor going to one of the teams,” Blank said.

    EXTRA POINTS: The NFL has a new advisory committee on NFL giving, staffed by Charlotte Jones Anderson, Dallas executive vice president and daughter of owner Jerry Jones; Michael Bidwill, Arizona Cardinals president; Green Bay Packers President Mark Murphy; Mary Owen, executive vice president of the Buffalo Bills; and Delores Weaver, wife of Jacksonville owner Wayne Weaver.

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  • Does public opinion matter yet?

    No NFL game has been missed and no practices canceled, but there’s been no shortage of trash talk across the league in recent weeks.

    Phrases like “liar,” “modern-day slavery” and unions across the board have “exceeded their bounds” have become commonplace. And the combination of Twitter, Facebook and other 24-hour media outlets has created what amounts to a constant screaming match, unlike any sports labor conflict in the past.

    The taunting and name-calling is all part of a high-stakes battle to sway public opinion. It’s a battle that will likely have little effect on ongoing negotiations but could go a long way toward determining how deeply the fallout will be from the lockout. It’s also a dangerous game. Any lopsided shift in public opinion not only could add pressure on one side, it also could undermine the image of the league. In the long run, that could cost both owners and players revenue should the screaming match alienate fans too much.

    The NFL recently hired Frank Luntz, a leading Republican pollster and expert on messaging.
    For that reason, the NFL and NFLPA have sunk tremendous time and resources into message control during the work stoppage. The NFL has recently hired Frank Luntz, a leading Republican pollster with expertise in developing phrases that resonate with the public, like Newt Gingrich’s famed “Contract With America,” and the players have hired Phil Singer, a veteran political consultant who worked on Hillary Clinton’s 2008 presidential campaign. The high-profile hirings underscore what’s at stake for each side.

    “This is the preseason of communication,” said Ari Fleischer, head of Fleischer Communications and a former White House press secretary. “Come August or September, public opinion is going to become awful sharp and can create pressure on both parties. If you wait too long to be staffed up and ready, you’ve missed the boat, [because] if one side makes a mistake or one side is more savvy than another, it can shift public opinion into that lopsided area where you can get business leverage. ”

    Behind the battle

    The last major work stoppage in sports occurred seven years ago. When the NHL locked out players in 2004, league and union communications teams launched a nonstop battle to win public support.

    NHLPA Communications Director Jonathan Weatherdon remembers long days that began with compiling news clips at 6 a.m., outlining talking points with union leadership, posting key messages for players on an internal website, working the media throughout the day, and scheduling player interviews in markets across North America.

    “It was nonstop, and it never ended,” Weatherdon said.

    Communications teams at the NFL and NFLPA are working similar schedules.
    The NFL’s strategy is being directed by longtime NFL communications executive Greg Aiello and former Ogilvy & Mather executive Paul Hicks, who came to the league last summer.

    So far, the league’s strategy has emphasized making owners more accessible to media than they have been in previous sports work stoppages. Whereas in the regular season NFL owners were fined if they spoke about labor negotiations, recently both league and team officials have been seeking the press. Media analysis after recent talks broke down shows a number of owners speaking both in the national and local marketplace about the league’s willingness to negotiate and repeating a similar refrain — that players walked away from the table and are more interested in litigation than negotiation.

    Giants co-owner John Mara has been very
    visible and consistent in his remarks, and only a few owners have gone off message, namely, Dolphins owner Stephen Ross, who was particularly candid in saying this was “not his idea of ownership” and highly critical of unions.

    It’s unclear if ownership will continue to be vocal or yield to league officials as negotiations continue. Regardless, sports executives and media analysts all agree that the league and its owners will have to walk a fine line in talking about players because any comments that appear to vilify players would denigrate the very talent they use to market and promote their teams.

    “You never want your players viewed as the bad guys or in a negative fashion,” said Dan Courtemanche, executive vice president of communications at MLS, which signed a new collective-bargaining agreement a year ago. “We knew at some point our players would be back playing for MLS clubs, and we didn’t want fans to have a negative view of players that would make them less likely to attend a game in person or view one on television.”

    The NFL has several, inherent advantages in the communication battle. It does a weekly poll of 300 fans, and also has a panel of 10,000 fans it can survey occasionally — not to mention it has an e-mail database of 5 million fans it can deliver messages to directly. It’s using all three to stay in touch with fans and has tapped its e-mail database to deliver letters from Commissioner Roger Goodell about negotiations.

    In addition to its own communications staff, the league also has 32 teams with their own communication departments who have relationships with news outlets in 30 markets nationwide, doubling up in New York City and the Bay Area. Those departments have established relationships with media outlets that make it easy for them to schedule interviews for owners and team executives. The value of those local ties was evident earlier this month when the NFL urged teams to have their owners and presidents speak to local media after the union decertified. One team communications director estimated 19 of 32 teams did, amplifying the league’s message that NFL players walked away from negotiations in order to drown out the players’ position that the league had locked them out.

    “That’s a powerful tool leagues have,” Weatherdon said.

    Let us play

    George Atallah, the NFLPA’s assistant executive director of external affairs, crafted a communication strategy for players that’s designed to combat those challenges (see related story). The strategy has encouraged players to emphasize four key messages: This is a lockout, not a strike; open the NFL books; the lockout hurts local businesses; and players just want to play. The last point has been turned into the tag line, “Let Us Play,” for which the union created a commercial that CBS College Sports refused to air.

    KEVIN KOSKI / NFLPA
    George Atallah (center) crafted a communications strategy for the players.
    Like the NFL, which created nfllabor.com to chronicle the lockout, the players launched nfllockout.com. The site details the players’ position on what the lockout is about and provides links to stories like a recent Sports Illustrated article about NFL revenue and repeats the players’ allegation that owners won’t open the NFL’s books.

    The players have supplemented the site by posting Ustream videos and direct chats with players such as Brian Dawkins, a Denver Broncos defensive back who attended the recent players meeting in Florida.

    The addition of Twitter and Facebook as media platforms has made it easier for players to communicate directly with fans. Some players, like NFLPA player representative and Saints quarterback Drew Brees, have more than 400,000 followers, and have used those platforms to their advantage. The day the league locked out players, Brees wrote, “The NFL brought this fight to us — they want $1 billion back, we just want financial information to back up that request.”

    But the immediacy those platforms provide mean they have some downsides, as well. Unlike the league, which has only 32 owners to keep on message and the ability to fine those who get off message, the players association has to manage and follow comments by more than 1,500 players. Atallah called the task impossible.

    While players such as Alge Crumpler have stayed on message, saying “We just want to get back on the field,” others have attacked league executives personally and made incendiary remarks. As a result, the players association has had to deal with players like free agent Kevin Burnett calling Goodell a “liar” and Vikings running back Adrian Peterson comparing the NFL to slavery.

    Both management and labor officials said those types of remarks and personal attacks can turn off fans whether they’re made by players or management.

    “Anyone who degenerates into that type of rhetoric hurts themselves on both sides of the table,” said Stan Kasten, former president of the Washington Nationals, who worked through collective-bargaining negotiations in MLB and the NBA. “Fans don’t want to hear it. If you’re being personal and unprofessional, it maximizes the damage.”

    Pulse on the polls

    There’s no clear winner yet in the battle for public opinion, but early polling favors NFL players. Five of eight polls by outlets ranging from CBSsports.com to Bloomberg News show fans blame owners for the current labor unrest. The margin of blame, however, was more narrow if fans had the option of blaming both parties.

    Executives who have been in labor battles downplayed the early polling results, saying that fans won’t be truly engaged in the labor issue until it affects them directly by disrupting training camp or games.

    “Right now, public opinion is secondary because America has not lost this pastime,” said Ian Pulver, a hockey agent who worked as an associate counsel for the NHLPA during the 2004-05 lockout. “It’s getting ready for baseball and the NHL and NBA playoffs. America won’t speak out until they’ve lost their pastime.”

    Right now, most experts agree that the NFL and NFL players’ spat appears to fans to be over nothing more than money.

    “I don’t think anyone wins in a story like this,” said Kevin Sullivan, a former White House communications director. “The average person doesn’t want to hear that it’s hard to agree on how to divide up the billions, and the issues are so complex.”

    The key to winning the public relations battle going forward will be changing that perception and showing how a labor agreement will benefit fans. The NHL did that by arguing that a salary cap would create more competitive balance in the league. To date, neither the NFL nor the players have effectively done that, said Mike Berland, who worked on behalf of the NHL during the 2004-05 lockout and runs market research company Penn, Schoen Berland.

    “The ultimate benefit has to be the fans,” Berland said. “If you can’t articulate why there’s a dispute and how the game will end up in a better place, as a fan, you’re left wondering why they’re taking away the sport.”

    The longer that remains the case, the more damaging it could be for the NFL. The league enjoys a pristine image and sustained economic success that’s unrivaled in sports, and all of that could be damaged by prolonged labor unrest.

    As one senior league executive, who declined to go on the record, said, “They do everything right and everything turns to money for the good of everybody, so PR and image is extremely important to them.”

    Kasten said that if a deal gets done in time for players to go to training camp, there won’t be any lasting damage from the early skirmishes in the battle for public opinion.

    “Football as a product is so strong that they’ll bounce back quickly,” Kasten said, “but I’ll never take that for granted.”

    One thing is clear: The NFL and its players aren’t.

    Staff writers Daniel Kaplan, Liz Mullen, John Ourand and Terry Lefton contributed to this report.

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