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I’m about to find out.
In 1978, I became the first sports promotion director in the now defunct Southwest Conference, and, along with others, created the Mustang Mania promotional campaign that catapulted SMU’s return to national prominence and helped revolutionize the collegiate marketing world. I and my colleagues, who are now leaders in the sports world, learned the trade together from a true pioneer, Russ Potts. He didn’t start the business, but he wasn’t far behind.
After being eased out at SMU by an athletic director with a different philosophy, I chose the self-employment route. Joined by a partner, we started a sports marketing company, and for 14 years created and managed events across the country. On paper, we did some extraordinary things. Our bank statement, just ordinary.
The never-ending risk of sometimes winning, sometimes losing (money, that is) inherent in that business drove me out of sports and into the commercial real estate business. I honed my skills and enjoyed my time at several great companies. However, for whatever reason — the economy, timing, me — I never turned the corner in terms of career satisfaction or monetary gain. With that thought slowly tightening as a noose around my neck, I woke up one night and screamed at myself, “What in the world am I doing?”
I had to go back to sports.
As I met with trusted friends and sports contacts of many years, I felt the excitement return. My decision to leave sports nine years ago was partly due to the lure of real estate riches and to a degree of burnout because I chose not to work my way up with a school, team or organization. As much as I loved sports, I had grown tired of occasionally going hungry.
My mentor hammered home the thought that although the best time to have pursued a more stable opportunity in sports was when I left, the second best time was now. I wasn’t about to let this one get away despite knowing that my name had recently appeared on the AARP rolls.
I was recently hired by a collegiate marketing company, a perfect fit for my skill set and passion. I’m working with and for a talented group of people, some of whom weren’t even born when I first started in this business.
Things have changed. The emphasis on technology only makes the basics easier. The ability to sell, create, be resourceful and communicate will always be the difference. Email may have replaced the fax machine but it will never replace the call you must make before and after.
Growing in computer savvy, social networking and digital media are my goals for 2011. I’ve found that repeatedly asking for help is frowned upon by millennials. No need to be scared, I can learn it.
My advice to them would be to build and nurture your network every day and cultivate curiosity. I was taught to link in way before LinkedIn. Although I had left the business, I never totally checked out. I was able to make the transition back into sports marketing because I learned early on that choices and people are all that matter. The SMU athletic director that eased me out remained a trusted friend and made a crucial call on my behalf to an executive at my new employer.
For those like me: Resolve to never again be a clock watcher. It stops for no one and can never be turned back. Our past clock can refine us, it does not have to define us.
It’s never too late to start over.
Brad Thomas (firstname.lastname@example.org) is a senior director of business development at Learfield Sports. Follow him on Twitter @brad23thomas.
That’s because “making the show” often exposes a number of undeveloped life skills. It’s most evident when a draftee is pushed from a protective collegiate environment into an often lonely first professional season.
The specters of fiscal mismanagement, rising debt, shady investments and lack of attention to earnings can converge on a 22-year-old and hang a financial albatross around his neck. Newfound friends, social popularity and back-slapping entourages are exciting and ego-building, but they also drain bank accounts and threaten statistical performance.
Many teams take the approach that it’s not their responsibility to help young players manage personal finances. After all, lottery picks probably earn more than the general manager and can afford the finest investment advisers. The problem with this approach is that the general manger knows certain young players have never been around money and haven’t enjoyed the luxury of positive financial influences.
Worse, the draftee may not know how to sustain a privileged lifestyle because they’ve never seen a checkbook or mastered the most basic tenets of personal accounting. In these situations, it’s no surprise that many athletes find by the time they report to camp they’ve already run up six-figure debt and made the decision to trust someone else to solve their problems.
Dez Bryant’s recent legal troubles were avoidable. Would financial skills training have helped?
And what’s the real issue here?
Well, where individual fiscal failure harms a team most is evident in the player’s emerging personal psychology. A player facing sudden or massive debt is more stressed and less mentally strong because no one is paying the pipers. To resolve this, many athletes turn to agents or someone in a trusted inner circle.
As the athlete abdicates financial control and ignores improper accounting or basic auditing, nervous or naïve behavior emerges. It makes young athletes susceptible to an increasing number of poor choices where they overlook their personal “burn rate.” From there, a vicious cycle kicks in that can often lead to financial mismanagement, debt, drug use, alcoholism, unplanned children with multiple partners, eating disorders and/or expensive divorces.
Naturally, assisting players is a delicate business, and teams and leagues vary on how to help players learn money management. The NFL has previously offered a finance session during the league’s rookie symposium. But in light of the NFL’s current lockout and ongoing legal developments, it’s worth asking whether the fiscal protection of young athletes should now be part of the league’s next collective-bargaining agreement. Should the NFLPA include this concept in their demands of the owners? Should the owners include mandatory participation by players in a money management program as part of their demands?
The statistics of failure are not mythic. Sports Illustrated noted in 2009 that “by the time they have been retired for two years, 78 percent of former NFL players have gone bankrupt or are under financial stress because of joblessness or divorce.” Likewise, “within five years of retirement, an estimated 60 percent of former NBA players are broke.”
We believe every sports organization investing massive sums in college graduates should consider providing comprehensive ways of introducing basic money management concepts, including controlling one’s financial affairs. If nothing else, we believe allowing players to think much more proactively about protecting earnings and guaranteeing substantial future income is good business.
There is no great secret to wealth management. The problem exists when individuals who have never been exposed to affluence must suddenly deal with a new lifestyle. For a team to fail to offer simple financial counseling is to subliminally play a role in the development of a problem that will return to haunt them when victories are on the line.
Most of us shake our heads in wonder when we read about players who earned $50 million and are now broke. Or read about star athletes found dead in back allies after seeking drugs. We shake our heads but rarely ask what early career initiatives could have prevented that fall from grace.
A 2009 article by Business Pundit listed 25 wealthy athletes who went broke. Guys like NFL running back Deuce McAllister, who turned a $70 million career into a $6 million debt in just a few years. Other examples include the NFL’s Travis Henry, who fathered nine children by nine women and reportedly lost $20 million in the process.
To that end, the creation of some simple “master” classes by teams or life skills classes while athletes are still in school (we teach one at Syracuse) could easily provide simple financial counseling that requires no investment by the player and no pitches from financial services organizations. These classes could include life skills (e.g., safe sex, recognizing addictive behavior, etc.) as well as financial management strategies.
The benefit of higher education is more often than not to prepare citizens for a productive future and teach them to never stop learning. Pro teams might view entry-level fiscal education as an important employee training program that picks up where college left off.
Rick Burton is (email@example.com) is the David B. Falk Professor of Sport Management at Syracuse University. Norm O’Reilly (firstname.lastname@example.org) is an associate professor of sport business at the University of Ottawa.
In early November, during routine cleaning of Madison Square Garden’s ceiling, debris fell onto the arena floor. Out of concern that the debris might contain asbestos, Garden officials postponed a game between the NBA’s New York Knicks and Orlando Magic. The Garden reopened a few days later after testing confirmed that there were no traces of asbestos in the arena. The game between the Knicks and Magic was rescheduled for late March.
Another major sporting event was postponed in mid-December after heavy snow in Minneapolis caused the roof of the Hubert H. Humphrey Metrodome to collapse. The resulting damage forced Metrodome officials to reschedule the Sunday afternoon game between the NFL’s Minnesota Vikings and New York Giants for the next evening at Detroit’s Ford Field. Fans attending the game in Detroit were granted free admission, and the Vikings offered refunds to thousands of ticket holders who had purchased Metrodome seats for the postponed game.
The collapse of the Metrodome roof forced the rescheduling of a Minnesota Vikings game.
Event cancellation coverage compensates policyholders for the financial losses that can result from the cancellation, abandonment, postponement, interruption or relocation of a sporting event. Policies are triggered whenever an event is canceled or postponed due to a covered peril. Policyholders can insure against a number of perils, including property damage to the event’s venue, power failure, and natural disasters such as earthquakes, floods and fires.
Event cancellation policies can cover various forms of financial loss. Some policies limit coverage to the policyholder’s out-of-pocket expenses associated with organizing and putting on the canceled or postponed event, whereas other policies also cover the policyholder’s lost profits and revenue. Event cancellation policies may also cover additional costs incurred when the insured event is rescheduled or relocated to another venue. These additional costs could, depending on the nature of the event, include the costs associated with marketing the rescheduled event, issuing new tickets, and transporting equipment to the new venue.
Regardless of the type of event cancellation coverage purchased, policyholders must make sure to satisfy all terms and conditions of their policies. In particular, policyholders should strive to present a timely and well-documented claim in the event of a loss. To that end, policyholders should keep a few tips in mind when making a claim for coverage under an event cancellation policy.
Avoid time traps
In the event of a loss, a policyholder must pay close attention to the policy’s timing requirements. For instance, event cancellation policies will typically set forth a specific time frame (sometimes as short as 30 days or less) in which the policyholder must provide notice of the loss. Therefore, policyholders should promptly notify their insurers of any canceled or postponed event, even if the event’s cancellation or postponement received substantial media coverage. For instance, even though the Knicks-Magic postponement received national television attention and coverage from the various news media outlets, Madison Square Garden officials would still want to formally notify their event cancellation insurer of the postponement — even if only to avoid giving the insurer a basis to contest coverage.
Policies may include other timing requirements, as well. For instance, in the weeks following a loss, a policyholder might be required to submit a “proof of loss” with specific information about the claim. An event cancellation policy might also include a limitations period that sets forth the amount of time that a policyholder has to initiate litigation against an insurer, should such action be necessary.
An event cancellation policy will invariably require that the policyholder take all reasonably practical steps to minimize (or mitigate) the financial loss resulting from a canceled or postponed event. Often, mitigation provisions of this sort will require that the policyholder reschedule the event, even if the rescheduled event is not likely to net the same profits as would otherwise have been the case.
For example, even though most of the spectators at the Vikings-Giants game in Detroit did not pay for their tickets, the rescheduled game did mitigate losses to some extent. Indeed, the rescheduled Vikings-Giants game was broadcast in a handful of television markets, providing at least some revenue to the two teams to offset their respective financial losses.
Because event cancellation policies require policyholders to mitigate their losses, a policyholder can and should include mitigation costs in the claim for coverage. Such expenses should be recoverable, so long as they were reasonable and calculated to avoid even greater financial loss.
Carefully document the claim
When making a claim for coverage under an event cancellation policy, policyholders should document the claim thoroughly and accurately. Some components of loss are relatively straightforward. For instance, policyholders usually have little trouble proving the amount spent on pre-event advertising, and the same is generally true when a canceled or postponed event requires the policyholder to offer refunds to ticket holders. Still, it is important for policyholders to retain canceled checks and invoices so as to simplify the claims adjustment process.
Other aspects of a policyholder’s loss, however, are harder to establish. As noted above, many event cancellation policies insure the policyholder’s anticipated revenue or net profit. These aspects of a policyholder’s loss are, at least to some degree, necessarily speculative.
However, policyholders are far more likely to recover their lost revenue or profits if they can justify their financial projections with historical data. For this reason, and for numerous others, policyholders should endeavor to keep detailed financial records for all of their events. Doing so will help policyholders maximize their recovery and obtain the full benefit of their insurance coverage.
Shaun Crosner (email@example.com) is an associate in Dickstein Shapiro’s insurance coverage practice and co-leader of the law firm’s entertainment and sports insurance initiative. He is also an editor and principal author of the “New Appleman Sports and Entertainment Insurance Law & Practice Guide,” which was recently published by LexisNexis.
In Rick Burton and Norm O’Reilly’s article, “Understanding why sponsorship continues to grow,” (SportsBusiness Journal, Jan. 24-30) they clearly detail why sponsorship works as a brand marketing and business growth tactic. They detail the benefits that a sponsorship brings, predicting its growth as consumers’ attention — and their use of various media — gets more fragmented.
The recent announcement of Castrol’s sponsorship of the NFL clearly points to the growth Burton and O’Reilly predict: Castrol, a brand under parent company BP, will receive media avails across the NFL’s varied platforms, along with rights to the NFL’s intellectual property. This enables strong brand positioning and effective promotion, a much-needed effort for a BP-owned subsidiary, considering its recent troubles in the Gulf of Mexico.
Next, the Castrol NFL sponsorship will most likely include hospitality opportunities. Beyond the use of rights or general media inventory, it’s the effective and efficient use of the assets afforded to Castrol via the NFL sponsorship, commonly referred to as the activation, that can be a challenge. Being able to efficiently make use of these assets creates the opportunity to measure the return on the investment the sponsorship brings. This can be a difficult task, especially for larger organizations entering a new sponsorship. Given that the benefits of many sponsorship programs in sports are perishable inventory — like tickets — it becomes even more important for a sponsor to understand what is available, and to effectively manage the assets.
Another challenge is knowing which hospitality packages were used for measurement of the sponsorship: It’s well-documented that out-of-the office experiences foster greater relationships. Yet tickets often go unused due to lack of lead time, poor communication or faulty processes for requesting tickets and inviting guests. In fact, a PricewaterhouseCoopers study pointed to corporate entertainment and hospitality assets such as tickets and suites as the single greatest ROI increase opportunity among the asset classes studied. Surf the Web, and find many different measures of the level of waste for entertainment assets: One report lists that 43 percent of tickets from sports sponsorships go unused, another lists 20 percent as “wasted inventory.”
If a main use of sports sponsorship is corporate hospitality for building relationships, it’s imperative that the sponsor have controls and processes to ensure that the tickets and hospitality opportunities are used appropriately, and not just given out because they were available. Only with such monitors in place can a true measure of the return on investment be found.
In Burton and O’Reilly’s article, they point to the use of sponsorship, and its impending increase in North America, saying that sponsorship will see growth by a compounded annual growth rate of 5 percent in 2012 and 5.6 percent in 2013. Recognizing that using a sports sponsorship is a significant investment, having systems in place to ensure the proper activation, and use of the perishable inventory made available by the sponsorship, shouldn’t be ignored.
White Plains, N.Y.