SBJ/May 30 - June 6, 2011/Opinion

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  • Cartoon: Crane connects

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  • The fascinating tenure of NBC’s Dick Ebersol

    Dick Ebersol was such a dominating figure in the sports business over the last 22 years that it’s odd to even think of him out of the picture. He leaves a huge void. He has served as a leading, imposing, inspirational and intimidating executive and a key trendsetter in sports business.

    You simply had to listen to what he said, watch his storytelling and appreciate the loyalty he inspired among his colleagues. He will deservedly go down as one of the most influential and important sports executives of the modern era.

    But his career is fascinating for its contradictions. Over the years, Ebersol was a maddeningly inconsistent voice and his larger-than-life presence drew the ire of competitors and colleagues alike. There was the Ebersol who was deemed a visionary for walking away from the NFL in 1998 while bemoaning the rising cost of sports rights. We all remember this quote: “The word aggressive has now been replaced by the word reckless. … We’re not in the business of putting the livelihood of our employees in jeopardy.” But then there was the Ebersol who paid whatever it took to reclaim the NFL in ’06, and eventually he conceded that NBC lost money televising the Vancouver Winter Games.

    Ebersol called out sponsors who dared to take on the Olympic movement, telling John Hancock’s David D’Alessandro to “shut up” in his criticism of the bid process in 1999. He wouldn’t hold back in calling out the U.S. Olympic Committee if he felt it was not fully representing NBC’s Olympic interests, saying in 2009 that the USOC was “a rudderless ship.” At times, it appeared Ebersol had as much loyalty to the Olympic rings as he did to NBC. And of course, he launched an in-your-face football league in a partnership that was roundly questioned, and it failed miserably.

    It was Ebersol’s inconsistency, though, that made him so fascinating. Personally, I like Dick. I have followed him intently over the years, and he is one of the most charming executives I’ve ever met. But, like many we cover in this business, he was sensitive to the written word. Just writing that gives me pause — I’m sure he’s going to hate it. But it’s true. He would shut off people for a sentence in a story or a headline that he felt unfair. Trust me.

    The fit with Comcast, obviously, was never right. Perhaps, in retrospect, we should not be surprised this divorce happened so quickly. Ebersol was a throwback, a connection to a much different era of television, and the DNA of the two companies were too different. One should easily understand how Ebersol, who had so much power and autonomy for so long, would chafe at working for any new boss, let alone one where the broadcast and cable backgrounds were vastly different.

    Ebersol exits at the end of June, and it’s still hard to visualize the Peacock’s sports division without his imposing presence. The culture at 30 Rock will change. It already has, according to several insiders. The Olympics will never be the same. It is, quite simply, the end of an era. Ebersol has been noncommittal about his next move — maybe a year off, never an executive again, maybe it’s Ebersol Inc. But we know the industry is better off with his contributions and voice. I hope he’s not out of the picture for long.

    Abraham D. Madkour can be reached at amadkour@sportsbusinessjournal.com.

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  • How to validate jersey sponsorship value

    Jersey sponsorship. If you’ve not considered it, now’s the time. Why?

    Small- and midsize-market teams are under tremendous economic pressures. Sponsors continue to seek new channels of fan engagement and better ways to immerse their brands in the game experience. Jersey sponsorships offer a potentially fresh alternative to both challenges. But what will be the industry’s basis for jersey sponsorship value?

    MLS started selling the front jersey sponsorship in 2007. A dozen MLS teams have front jersey sponsorships this season, with most of those clubs earning $2 million to $4 million per year. Clearly, brands have established a consistent market value for what they’re willing to pay MLS clubs for this asset.

    Who will be the first to break this ground in the NFL, NBA, MLB or NHL? It’s fair to point to MLS and say jersey sponsorships will be worth what brands are willing to pay. But these four leagues are different, with long histories and rich traditions. Brands will need to validate the price.

    Guidelines drawn from three areas can help minimize the risk associated with assessing the value of jersey sponsorships.

    Research: Horizon Media recently released a study suggesting the projected value for jersey sponsorships across the NFL, NBA, MLB and NHL was $370 million. The study used the cost of a 30-second spot as one factor in calculating value. As a client, I used this same factor to value branded college football coaches headsets but with a heavily discounted formula. Similarly, to effectively use this research study as a basis of valuation, it will be critical to understand how the study uses ad value and balance that with the brand objectives for the jersey sponsorship.

    Naming rights: By comparison, and based on today’s standards, naming rights are arguably a team’s most integrated and valuable asset. In 2009, stadium naming rights across the 122 teams in the big four leagues generated $187 million. By comparing a jersey sponsorship and naming-rights deals in the same market (possibly even with the same team) using common base metrics such as CPM, attendance, fan base, etc., a rationalized range in benchmarking jersey sponsorship value can be established.

    In addition, comparing stadium with jersey sponsorships with respect to reach implies an external/internal exposure trade-off. Brands associated with stadiums are routinely referenced in external media reports, whereas the jersey sponsor typically is not. Of course, media reports may also contain pictures of game play, including a jersey sponsor. Conversely, although the stadium sponsor may appear on the field of play, brands on jerseys are the focus of fans throughout the event, whether viewed live or televised. Given the active focus of fans on the players — and the jersey — one might expect more effective brand recall and association from the jersey sponsorship.

    International markets: International jersey sponsorship deals offer a relevant basis for valuation. The EPL may be the industry standard for jersey sponsorships. Liverpool and Manchester United have reported $32 million (all figures in USD) annual deals with Standard Chartered and Aon Corp., respectively. The EPL earns $160 million annually in jersey sponsorships across 20 clubs. Excluding these two top-level deals, the league still averages about $5.3 million annually per jersey sponsorship.

    However, it’s important to remember that stadium naming rights in Europe are less common because municipalities own many stadiums. Absent a corresponding stadium naming-rights deal (except for three current EPL clubs), the jersey sponsorship has been an EPL team’s most valuable asset, much in the same vein as naming rights are in the U.S. Undoubtedly, this has enabled EPL clubs to maximize jersey sponsorship value, a critical point in any comparison.

    MLS jersey deals offer a starting point for value, and common EPL properties go a step beyond. But the value of jersey sponsorships will indeed be determined by what brands are willing to pay. That is inevitable. If brands pay without validating value, that will be unthinkable.

    Bill Glenn (bglenn@themarketingarm.com) is a senior vice president for The Marketing Arm. Follow him on Twitter @Sponczar.

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  • Antitrust vs. collective bargaining: An issue of control

    I keep hearing that fans don’t care about the NFL squabble, as they see it as about money and all they want are games. Everyone wants games, the NFL and its players want games, but this issue is about more than mere money, as it is about who controls the NFL. This will be determined by whether the league/player relationship is controlled by labor or antitrust law.

    The difference between the two laws is distinct. Labor law allows combinations that restrain competition in the player labor market, for example, and antitrust law makes those restraints, if found to be unreasonable at trial, illegal. Antitrust also allows tripling of damages, so if found to owe the players $1 billion, the NFL will be compelled to pay $3 billion. If you think the parties are being tough-minded about this dispute, that is what they are playing for.

    This is not the first time the players have used antitrust to attack the league. In the earliest days of the union, Ed Glennon, a Minneapolis lawyer, conceived of a plan to use antitrust to attack the Rozelle Rule, which gave the commissioner the right to set compensation for free agent players lost. U.S. District Judge Earl Larson ruled that the Rozelle Rule was per se illegal, or illegal without redeeming virtue of any sort. From that victory, the players have filed most of their cases in Minnesota, where Judge David Doty has presided over disputes for twenty years. He is currently presiding over the TV fees case.

    The case at hand, naming Tom Brady and others as plaintiffs, was also filed in Minnesota. Judge Susan Richard Nelson enjoined the NFL’s effort to lock out players. The case, however, has some very curious twists. First is that the owners locked out the players by using a labor law weapon and the players sought an injunction claiming it was a violation of antitrust law. Antitrust cannot be used in labor, so the players had to decertify as a union to file the suit. This is a very complicated matter and it is being considered by the 8th U.S. Circuit Court of Appeals, which has issued a stay of the injunction, putting the lockout back in place after three days. It will rule on the legality of the injunction soon.

    GETTY IMAGES
    Commissioner Roger Goodell and the NFL’s lawyers used a labor statute to lock out players.
    In stopping the lockout, Nelson paid a lot of attention to the players’ claim that they would suffer irreparable harm if she didn’t. “Irreparable” in this context means that no amount of money can compensate an injured party. Sports, however, is a business that has inherent balance. Where one player is harmed and loses a job, another earns a job. A harmed player can certainly claim that the harm caused them to suffer monetary damage. Suing management has never been a problem before.

    There is also the legal issue of whether the court could enjoin a legal lockout. Several statutes suggest that it doesn’t have that power, as federal labor policy encourages an evenness in negotiations that allow both sides to use economic power to bring about a deal. Players can strike; management can lock out. To keep this structure in place, courts have very limited roles in labor negotiations. Courts are used in unfair-labor-practices cases like the one that ended the baseball deadlock in 1995, can enjoin strikes and lockouts in national emergencies, and can rule on violations of labor contracts. There should be no injunction here.

    This federal policy favoring non-intervention of the courts is found in the doctrine of primary jurisdiction. This means that Congress has decided that labor law is so important that primary jurisdiction is in the National Labor Relations Board and not in courts. Labor law experts are to be judges here, not federal trial court judges with little labor experience.

    The hearing at the Court of Appeals that will decide this matter is scheduled for Friday. The winner at the 8th Circuit will have a real advantage.

    Conventional wisdom teaches that the ultimate goal is a collective-bargaining agreement, with the players again certifying as a union. However, this time things may be different. The concept that labor law gives management too much power so that the players should try antitrust has been circulating in the sports law world for years. In this case, it seems that the players are thinking that they should use antitrust and its treble damages provisions to force their will on the owners. In short, they want every collective decision of the NFL to be subject to antitrust law scrutiny.

    This includes everything, even the existence of the league that may be a combination in restraint of trade. Clearly all rules concerning players will be subject to antitrust and the league will be compelled to show pro-competitive benefits for each rule.

    Think this is easy? What are the pro-competitive effects of the draft? Your answer must be limited to pro-competitive effects in the player vs. player market, not the team vs. team game market; antitrust law does not allow a defendant to show that anti-competitive restraints in one market have pro-competitive effects in another. For those of you who are not sports law practitioners, welcome to our world.

    For all fans everywhere, we all want games, and to get there easily, we need a collective-bargaining agreement between a union and management, just the way it has always been.

    Clark C. Griffith (ccgpa@ccgpa.com), an attorney and law professor in Minneapolis, is a former owner, treasurer and executive vice president of the Minnesota Twins. He was chairman of Major League Baseball Properties and a member of the MLB labor negotiating committee. Follow him on Twitter @ccgpa.

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  • How athletes can engage, entertain, serve … with a purpose

    Rich Gotham had it right. The Boston Celtics president had joined the team’s public relations staff and me on a conference call to discuss the preseason team media training session I would be conducting. When the conversation turned to Twitter, Gotham provided very specific guidance.

    “Tell the players, ‘If you’re going to tweet, tweet with a purpose.’”

    Gotham wanted to help the Celtics avoid the self-inflicted Twitter turnovers that can distract a team or even hurt the club on the court. Careless use of social media has resulted in fines (Brandon Jennings of the Bucks) and suspensions (White Sox manager Ozzie Guillen), players being benched (former Jets wide receiver David Clowney, now with the Panthers) and even waived (former Chiefs running back Larry Johnson).

    Public apologies following ill-advised tweets are a regular occurrence. Steelers running back Rashard Mendenhall recently expressed regret after his controversial tweets about the killing of Osama bin Laden. Mendenhall tried to clarify his intent, but the damage was done, and Champion terminated his endorsement contract.

    Players get accustomed to the informality of the 140-character world and forget, as Saints coach Sean Payton told his team, every tweet “is a one-minute press conference.” In other words, if you wouldn’t say it in front of a room full of reporters and cameras, don’t tweet it.

    But for all the headlines devoted to those who tweet their way into trouble, there are plenty of pro athletes who, as Gotham suggests, tweet with a purpose — and that purpose is to effectively connect with the public in a way that reflects favorably on the player, team and league.

    Swisher has more than 1M Twitter followers.
    Fans crave a connection with their favorite players. A survey of MLB and NFL fans conducted last year by Catalyst Public Relations in conjunction with SportsBusiness Journal revealed “three-quarters of fans want athletes to engage with them directly through social media.”

    Prior to Twitter there was no way for the masses to make this connection, described by SportsFanLive CEO David Katz as an “unvarnished, authentic glimpse into the lives of these athletes that we follow on TV and watch in the games.”

    The survey also found that “fans who connect with the leagues through social-media sites say they are more avid fans of the leagues now than they were prior to the advent of such sites.”

    NBAE / GETTY IMAGES
    The Knicks’ Amar’e Stoudemire asked for Twitter fans’ opinions on his footwear.
    In other words, athletes on Twitter can be good for business — as long as they tweet with a purpose. Here are my three keys for using Twitter to forge a productive connection with fans, sponsors and, just as importantly, potential fans and sponsors:

    • Engage with your followers.

    Twitter at its best is a dialogue. There are many ways to accomplish this. Knicks forward Amar’e Stoudamire (@Amareisreal) polled his followers on which model of Nike shoes he should wear. Trivia contests for prizes and tickets can work well. Jaguars linebacker Kirk Morrison (@kirkmorrison55) allowed his followers to vote on which T-shirt he wore every day during training camp. The Yankees’ Nick Swisher (@nickswisher) — the only MLB player with more than a million followers — and Matt Duchene (@Matt9Duchene) of the Colorado Avalanche are among those who retweet messages from their followers on request.

    • Be insightful and entertaining.

    Tampa Bay manager Joe Maddon (@RaysJoeMaddon) regularly gives his followers behind-the-scenes glimpses of life with the Rays. Recently Maddon tweeted, “One of our mottos is ‘we catch line drives.’ The sophistication of putting guys in the right spots on the field is big for us.” Without breaking news or spilling secrets from the playbook, there are plenty of ways to bring Twitter followers inside the team. New York Giants tight end Kevin Boss (@KevinBossman) gets this. One memorable tweet from training camp made it clear just how hard Boss was working: “Getting mentally prepared for my Saturday sled workout … pulling a 60lb sled for 30yds 50x’s.” While comedy on Twitter is a high-wire act best left to @danecook, @chrisrock and the professionals, players should use their natural personalities and make sure they are fun to follow. Texas Rangers pitcher C.J. Wilson (@str8edgeracer) strikes the right balance. Sharing photos is a nice touch.

    • Put a spotlight on community service.

    Tampa captain tweets about charitable causes.
    Tampa Bay Lightning captain Vincent Lecavalier (@VLecavalier4) is among the athletes who do a nice job promoting charitable causes. A bonus is that it often puts athletes in a state of gratitude and humility, two surefire ways (especially coming out of a recession) to forge a bond. And thanking the fans for their support never gets old.

    The added value of Twitter is that players can build their personal brands, and enhance their team brands, as syndicators of their own content. They can push out material the media wouldn’t normally be covering. And they can counterprogram when needed. For example, when the Saints’ Reggie Bush (@reggie_bush) was in the news for returning his Heisman Trophy, he was able to post his own commentary on the subject in addition to alternate, positive story lines. Jets quarterback Mark Sanchez (@Mark_Sanchez) was a one-man wire service during the recent “Jets West” workouts — given the added significance of the NFL lockout — sending his nearly 400,000 Twitter followers to his Facebook page for videos and images from the workouts in California.

    Shaquille O’Neal, Lance Armstrong and Steve Nash have earned a spot on the Mount Rushmore of sports tweeting. The fourth name could be PGA Tour pro Stewart Cink (@stewartcink), a fun and insightful follow. But the vote here is for Saints quarterback Drew Brees (@drewbrees), who hits all the right notes. He engages with his nearly 500,000 followers (up from 5,100 two years ago) by regularly hitting a few key themes: Gratitude to the fans, his dedication to improving on the field, giving credit to his teammates and coaches, his off-the-field work with his Brees Dream Foundation and the President’s Council on Physical Fitness, and occasional, and often funny, personal touches about his family. He does it all — and always with a purpose.

    Kevin Sullivan (ks@ksullivancomms.com) founded Kevin Sullivan Communications after serving as White House communications director and as a public relations executive at NBC Universal and the Dallas Mavericks. Follow him on Twitter @KSullie.

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