SBJ/May 30 - June 6, 2011/Leagues and Governing BodiesPrint All
The league has allowed Jacksonville to cover nearly 10,000 seats since 2005.
Owners discussed the potential change last week during their spring meeting in Indianapolis. It could be brought up for a vote as early as a league meeting in Chicago on June 21.
“We talked about reducing manifests for blackout purposes,” said John Mara, New York Giants co-owner. “Manifests” refers to the number of seats that must be sold to trigger a sellout.
The league in one case has already made such an exception. The Jacksonville Jaguars since 2005 have covered more than 9,700 of the 76,000-plus seats at EverBank Field with tarps. The covered seats are not counted in determining whether a Jaguars game is sold out.
After the economic downturn hit in 2008, many teams struggled to sell tickets. Better in-home entertainment systems also are keeping fans at home. The league has been seeking innovative ways to get people into stadiums on game day, but it’s stoutly resisted calls to drop the blackout policy, which has been in place since 1973.
Commissioner Roger Goodell, asked last week about whether the league might suspend the blackout policy, did not address the possibility of easing the rule.
“The blackout rule has been in existence for three or four decades now,” he said. “It has been through work stoppages. It has been through economic downturns. We continue to try to address the issue of selling tickets through various policies and give teams as much flexibility as possible in getting tickets sold. It’s been a balance of trying to keep our game on free television with making sure that we have full stadiums. Last year, 26 games were blacked out. … We had much more significant blackouts as early as the ’90s.”
The blackout policy, however, poses another hurdle for teams. Many clubs that struggle to sell out in the days before a home game frequently cut deals with sponsors to sell the tickets for less than face value. Often, the team itself buys the tickets back for less than face value to ensure that the game is televised locally.
The club is still required to pay the visiting team’s share back to the league, though. That amount is 34 percent of face value.
One team source suggested this was a problem for many teams. Also, this source said, for teams with personal seat license holders, selling highly discounted tickets creates appearance issues with the fans who spent significant sums for their seats.
The NBA is looking to broaden its emerging presence in India with a deal with Times Internet Ltd., one of the country’s largest media companies.
The league struck a deal that will create an NBA section on The Times of India website.
Financial terms of the deal were not disclosed.
Content of the NBA section on the Times site will include daily video, original NBA editorial from Times of India staff, features, and other NBA-related team and league editorial content. The NBA said that the traffic on the network on the two Times sites averages about 12 million users per month.
The NBA will join cricket’s Indian Premier League with a dedicated section on the Times of India site.
“When we see The Times of India group making the investment in the NBA as their second sports property, it is of great significance to us,” said Heidi Ueberroth, president of NBA International. “It is a real exclamation point to what has been a growth season for us.”
NBA content on the two sites launched last week in the buildup to the Finals and will be updated continually after that.
“[The Times of India staff] will drive the overall look and feel for the editorial in the section and the content will be a mix from their journalists and analysts from NBA.com,” said Akash Jain, senior director of business development and partnerships for NBA India.
The expanded digital effort is the latest in a series of strategic moves by the NBA to develop the league’s brand in India while also creating grassroots programs to increase participation in the game of basketball in a country where cricket is the most dominant sport.
The NBA began stepping up its branding efforts in India in 2009 when it created a localized site on NBA.com.
The NBA has nine marketing partners in India, and last year the league signed a deal with Taj Television to broadcast live NBA All-Star, playoff and Finals games while also rebroadcasting two regular-season games a week during prime time in India on the Ten Sports network. The league also has a television deal with Sony to rebroadcast two NBA games weekly.
The league in 2010 created the Mahindra NBA Challenge, a five-city youth basketball tournament, and has launched Jr. NBA and WNBA programs in the country. In mid-May, Milwaukee Bucks guard Brandon Jennings traveled to India to host youth clinics, and more grassroots efforts are planned throughout the country going forward.
In addition, the NBA this year began selling NBA merchandise in 200 Adidas stores in India.
Jeff Pash says mediation is too focused on litigation rather than collective bargaining.
Pash contends that the mediation is too focused on the litigation and not enough on collective bargaining. There have been two, two-day mediation sessions since the lawsuit was filed and the league subsequently locked out the players.
Said Mark Murphy, president of the Green Bay Packers and a member of the owners’ labor negotiating committee, “The players have not negotiated since they decertified [on March 11].”
“The problem with litigation,” Murphy said, “is it delays the process. Topics are covered but they are not negotiated.”
Jeffrey Kessler, counsel to the players, referred questions about the NFL’s stance to the NFL Players Association. The NFLPA did not reply for comment.
The NFLPA, with its decertification, does not hold standing to represent the players for bargaining, operating instead as a trade association. The group’s executive director, DeMaurice Smith, is also counsel to the players.
Asked whether he was surprised by any developments so far, Pash answered only that the union had not decertified earlier than it did, because it is his contention that was the group’s plan for two years.
The mood among the owners at the meeting was somber but resigned to seeing the strife through. There was little noticeable celebration of winning what, for the owners, was a key victory earlier this month at the 8th U.S. Circuit Court of Appeals, keeping the lockout in place.
The owners’ message has been to get away from litigation and get to the bargaining table. The players’ leadership has resisted that approach and is pushing forward with the antitrust lawsuit — which, given the 8th Circuit decision, is one of the key bargaining chips the players have.
■ FINANCIAL CONSIDERATIONS: When the NFL replies to that antitrust complaint next Monday in a Minnesota courtroom, the clock on discovery commences. The presumption has been that the players will move quickly to seek the owners’ financial records. Before decertification, one of the arguments to the owners for acquiescing to the players’ demands for full financial transparency was that, ultimately, a court could order it. The owners never fully agreed, offering at the last moment for a third party to see financial documents, an offer the players rejected.
David Boies, an outside counsel to the league, questioned whether the financial records would be eligible for discovery. Those records, he said, are in the past, and the lawsuits the league is facing from both active and retired players involve the future of free agency. Boies said he would be hard pressed to see how a court could find relevance in the teams’ past financial documents.
■ NAMING-RIGHTS UPDATE: The New York Jets and Giants are getting closer to finding a naming-rights buyer for year-old New Meadowlands Stadium, sources said. Steve Tisch, New York Giants co-owner, said he is optimistic and does not believe the lockout will impede the search. One of the sources said that while unanticipated events could stop the deal, if all goes well, there should be a new name on the stadium by the scheduled start of the 2011 season.
■ NIKE GETTING READY: Nike hosted a suite across from the owners’ main meeting room at the Westin Indianapolis, displaying the fabric the company will use in uniforms in 2012. Nike agreed last year to become the new apparel supplier of the league in a deal valued at more than $1 billion over five years. The actual uniforms are not ready, but Nike wanted to show the owners the material the company will use. Reebok is in the last year of its deal.
■ PREPARING FOR LONDON: The NFL will decide in early August whether to move forward on the London game scheduled for October, but the league is in the U.K. market now collecting names for a ticket registry. Fans entering their names will be contacted when tickets go on sale. The Oct. 23 game, between Chicago and Tampa Bay, would mark the fifth consecutive season the NFL has played a regular-season game in London.
Colts owner Jim Irsay joked that he might not cut his hair till the lockout ends.
The NFL is ahead of the pace on season-ticket sales compared with this point last year, a counter-intuitive trend given the uncertainty of the league’s 2011 season with a lockout that has now stretched into its 12th week.
Owners were briefed on the sales results last week at their spring meeting in Indianapolis. The gains were ascribed in part to the earlier sales start many teams used this year in anticipation of a potential lockout, which began March 12. The selling season traditionally begins in mid- to late March.
Whether the development deflects from the NFL’s argument that it is losing revenue during the lockout is uncertain. It was also unclear whether the seemingly surprising development might influence any new offer the league makes to the players.
Specific sales numbers and details on the gains compared with last year could not be determined.
Questioned by the media last week about the economic effect of the lockout, NFL Commissioner Roger Goodell responded, “The longer it goes, the more damage that’s done to the game, the more revenue is down, the less money to be divided amongst the parties. Obviously, we made this point back in March.”
Before the lockout, the NFL predicted that if it did not have a new labor deal in place before the expiration of the old one, the league would lose $120 million in revenue. The projected revenue loss would increase to $350 million by early August, the league said, and $1 billion if the season did not start on time in September.
The losses are not just in ticket sales, but also from sponsorships, merchandise, licensing and other team activities. The league emphasized to reporters in late January that replacing season tickets is much tougher than simply renewing them.
The league could, of course, begin to fall behind pace if the lockout lasts much longer, but for now, most teams that publicly talked about their sales reported being ahead.
“The good news on the league financials is that everyone seems to be doing well,” said Mike Dee, president of the Miami Dolphins, one of the few teams down somewhat from last year. But Dee described his team’s season-ticket sales as not far off last year’s pace.
“It’s in the same ZIP code,” he said.
One team that does appear to have significant issues at the moment is the Jacksonville Jaguars. Because the club last year employed a significant sales effort following a down year in 2009, the team is having trouble keeping pace this year, said Bill Prescott, Jaguars chief financial officer. The team is about 10 percent off last year’s pace, he said.
Dick Cass, Baltimore Ravens president, said team ticket sales are tied more to market factors than the lockout. He did not comment on his club’s ticket progress.
Under league policy, fans are refunded money for lost games, but the NFL has left the decision to the teams whether fans also should receive interest.
Minor League Baseball President Pat O’Conner said last week he has “unfinished work yet to do,” prompting him to pursue a second four-year term leading the affiliated minor leagues.
Pat O’Conner is finishing a four-year term as Minor League Baseball president.
“I wasn’t interested in this being just a maintenance-type job,” said O’Conner, 52. “But I still see some really big, important and meaningful things out there I want us to tackle.
“We can still do more deepening our bonds with the fans, particularly coming out of where we’ve been with the economy over the past couple of years. There are things we still need to tighten up” in Vero Beach, Fla., site of a MiLB-controlled sports complex, and Durham, N.C., site of another MiLB-operated multipurpose venue and industry training facility.
He also wants to keep expanding the Baseball Internet Rights Co. and the organization’s partnership with MLB Advanced Media.
O’Conner, who has spent more than 30 years in minor league baseball at the team and national level, has already overseen a sweeping series of changes in his first term as MiLB president. Among them are the pooling of the industry’s online rights, a six-year extension to 2020 of the master Professional Baseball Agreement with MLB, and the realignment of two Class A leagues.
A formal election on O’Conner’s candidacy will occur in December. It is not yet known whether he will face any competition, but in 2007, after years of serving as chief operating officer to former MiLB President Mike Moore, O’Conner ran virtually unopposed.
“I have no idea who else might be a candidate. But with Pat, there are definitely a lot of positives coming out of this decision,” said Reid Ryan, president and chief executive of Ryan-Sanders Baseball, owner of two minor league teams, and a member of MiLB’s board of trustees. “When you weigh everything that’s happened with him, there are many more marks in the plus column than not.”
The PGA Tour is diving deeper into the production business as a way of promoting its up-and-coming players and bringing more exposure to the tour.
Personalizing golfers not named Tiger Woods has been a core challenge for the tour, which, as a players organization, has been hesitant to endorse one player over another. But with new leadership and a new focus on delivering PGA Tour content to nontraditional media outlets, the tour has refreshed the objectives for its production arm, PGA Tour Entertainment.
Highlighting the personalities of its players and taking that content to channels that don’t typically carry golf is chief among those new priorities.
“There’s real value in being able to show a different side of Bubba Watson, for example,” said Paul Johnson, the tour’s senior vice president in charge of entertainment and new media, who moved into the new role last August. “There’s a big-picture impact that we need to be thinking about, and that’s how entertainment can deliver more value to the tour.”
Among the division’s latest projects: a documentary on the Junior Invitational at Sage Valley (top) that aired on CBS and a video for Darius Rucker’s “Together, Anything’s Possible.”
The CBS special will mark the second one-hour special produced by PGA Tour Entertainment this year for the network. The first was a documentary on the Junior Invitational at Sage Valley that aired May 22.
These specials, along with a music video that PGA Tour Entertainment produced for Darius Rucker’s “Together, Anything’s Possible,” show how the tour is stretching its production legs. That’s a byproduct of Johnson’s leadership and an accompanying set of new priorities. Creating more and better programming tops the to-do list for the 100-person division that has been best-known for producing the 25-year-old series “Inside the PGA Tour” and mostly one-off projects.
“If we can get the shows out there about these young players and drive a better familiarity with these players, that can create a rooting interest,” Johnson said. “Then you have more people likely to tune in. … The Olympics have done tons of that with their athlete profiles, and it drives interest in the competition.”
PGA Tour Entertainment’s other priorities include increasing the amount of work it does for official marketing partners and title sponsors, and more internal videos to support the sales, marketing and public relations departments. The group has shot some commercials and “return-on-investment” videos for tour partners, but Johnson believes that amount can be doubled.
The division also is in the process of digitizing thousands of hours of archived footage, another area that’s been underutilized, Johnson said. He’s fond of the NCAA Vault and ACC Vault, websites created by Denver-based Thought Equity Motion to make those NCAA and ACC archives an advertising platform that generates revenue and extends their brands.
“When you have archives that are digitally mastered and you put that in the hands of the consumer, that’s a powerful tool to grow the game,” said Kevin Schaff, CEO of Thought Equity. “Broadcast partners don’t have the rights or the motivation to add value [to the archives]. Leagues are doing a much better job of capturing these opportunities.”
Creating new content is the first step. Finding networks hungering for golf programming is just as important. While Golf Channel has been PGA Tour Entertainment’s No. 1 customer and will continue to be an important ally, scores of other channels have programming needs, whether it’s Versus, a Fox RSN, the Big Ten Network or perhaps even ESPN’s new Longhorn Sports Network.
The PGA Tour is interviewing six candidates — among them CAA, IMG, Intersport and Winnercomm — to be a distribution partner for the entertainment unit.
“We don’t have the contacts with every single network,” Johnson said. “We don’t know exactly what they’re looking for. We don’t have 30 guys out there selling shows all the time. So there’s a business element where a partner can help.”
Moving deeper into production and distribution of its own content is a process NASCAR Media Group began about five years ago. It built a $43 million facility next to the NASCAR Hall of Fame in Charlotte, which opened in 2010, and its production credits now include several shows on Speed and movies on Dale Earnhardt and Richard Petty.
“The biggest challenge is making sure you have a clear strategic direction and that you focus your resources against those objectives, as opposed to chasing every opportunity that comes along just to make money,” said Jay Abraham, COO of NASCAR Media Group. “We’re here to support the industry, and we’ve also got to fund the infrastructure. Those financial and strategic objectives can be in conflict sometimes.”
After coming up through the digital ranks and running new media for the tour, Johnson added the entertainment division to his responsibilities last August, when the former head of the division, Gil Kerr, left the tour. Johnson now leads a consolidated entertainment and new media unit.
Johnson’s first step was to reassess PGA Tour Entertainment, which he did internally. Externally, he hired Chicago-based Silver Chalice to analyze the market and the competitive environment.
Johnson ultimately saw a need to ramp up the group’s production and distribution efforts to expose the tour in new ways.
“As the league, you can have an authenticity that no one else has,” said Silver Chalice COO Jason Coyle. “As long as you’re publishing credible content, that should be a place for fans to go for the most authoritative content of all. It used to be that the lines between the team and the broadcaster were very clear. Now you have leagues asking themselves, ‘Why can’t we be content companies?’”
WNBA President Laurel Richie has no qualms explaining why she had never attended a WNBA game before joining the league last month. In fact, she uses her own lack of fan engagement to define the biggest issue facing the WNBA, which tips off its 15th season on Friday night.
NBAE / GETTY IMAGES
The Chicago Sky ranked last in average attendance among WNBA teams last year.
It’s a question that Richie is addressing as she begins her tenure as the third WNBA president. “I do believe that there are a lot of people like me, and our job now is to find them,” Richie said.
As Richie begins her introduction to the WNBA — which started with her first team visit, to San Antonio, in mid-May and will send her to each franchise this spring and summer — she inherits a league that has gained some business momentum.
The WNBA has an 80 percent season-ticket renewal rate, the highest in league history, coming after the 2010 season brought a 2.5 percent decline in average attendance, to 7,834. Excluding the Shock, which moved from Detroit to Tulsa in the 2009 offseason, eight of 11 teams saw attendance rise in 2010.
WNBA teams also were bolstered this offseason by an undisclosed share in revenue from the league television rights with ESPN and from national sponsorship revenue.
Individually, WNBA teams now average 40 local sponsorship deals, up slightly from last year. The Washington Mystics recently signed Inova Health System as their jersey sponsor, giving the league its fifth team with a seven-figure marquee jersey sponsorship deal. Other marquee deals are expected to follow.
New league marketing deals include American Express and InterContinental Hotels Group. The league signed promotional deals with CieAura, Deuce Brands and Parenting Magazine.
“The operating performance at the local level has gotten better,” said Chris Granger, who as executive vice president of the NBA’s team marketing and business operations division ran the WNBA from last December, when Donna Orender announced her resignation, until earlier this month, when Richie came on board. “We clearly have a ways to go in some situations. But every metric is going in the right direction.”
Yet there is little debate about the league’s pressing need to drive increased fan awareness. Although the WNBA has set a record season-ticket renewal rate this year, it comes off a season-ticket base that averages 2,000 full-season tickets a team.
Big-market teams are among those struggling. The Chicago Sky last season ranked last in average attendance, and the Atlanta Dream, which reached the WNBA Finals last season, ranked 10th out of 12 teams.
“The great challenge [for the Sky franchise] is still the commitment people are willing to make and the barrier to trial,” said Adam Fox, president and CEO of the Chicago Sky.
Redefining the WNBA’s brand is another one of Richie’s chief tasks. She’ll draw on her vast marketing experience, which includes two decades at Oligvy & Mather and, most recently, an assignment as chief marketing officer of the Girls Scouts USA.
Since she joined the WNBA on May 16, her primary mission has been to understand the current WNBA fan demographic.
“The first thing I want to do is get a tight, crisp view of our prime prospects,” she said. “We need to prioritize our audiences, and one of the things I am mindful of is not to reach all people on all channels immediately. It needs to be a disciplined and rigorous approach so we can measure as we go.”
Though the league’s fan base varies by market, Richie said the league’s core groups are family, women over the age of 35, and followers of college basketball. She said the league’s core television audience is mainly African-American and it skews male.
This season, ESPN2 will air 12 games along with postseason coverage; ABC will broadcast one regular-season game and the WNBA All-Star Game. The WNBA last year averaged a 0.2 cable rating and 257,705 viewers over 18 games on ESPN2, compared with a 0.2 rating and 269,180 viewers for 12 regular-season games in 2009.
Richie likens the challenges of the WNBA to that of her stint at the Girl Scouts, where there was brand awareness but not enough engagement.
“People understand that from a sports standpoint, [the WNBA] is a great game, but how do we translate that into a good feeling of going to a game, of becoming a season-ticket holder or a sponsor,” she said.
Richie said she is already sifting through internal research and likely will commission additional, outside market-data studies.
Complementing Richie’s data-driven strategy is a blunt management style.
“I am very direct and very honest and I like to be challenged,” she said. “I am very confident making decisions, but until that moment, I consider it my team’s job to push me and share their opinions.”
Richie, who has no experience in professional sports management, said she has reached out to both Orender and founding WNBA President Val Ackerman to better understand the business.
“The ongoing challenges are linked to [the WNBA’s] visibility,” said Ackerman, who served as president from 1997 through 2005. “It’s a much better product than when we started. It is now a matter of figuring out its place in a cluttered landscape.”
It is also a matter of getting teams profitable, something that most WNBA teams have failed to do since the league’s inception.
“It’s about top-line revenue,” said Karen Bryant, president and CEO of the 2010 WNBA champion Seattle Storm. “For us, revenue growth is the goal. How do we take all that we have learned in 14 years and drive sales? We are hoping that [Richie’s] experience can help us do that in short order.”