SBJ/October 31-November 6, 2011/Leagues and Governing Bodies

Print All
  • Final-race fatality overshadows season of growth in ratings and attendance for IndyCar

    Dan Wheldon’s death in the final race of the Izod IndyCar Series darkened what had been a strong 2011 season for the series on the business front.

    Over the course of 17 races, the IndyCar Series averaged the most TV viewers in three years, increased average attendance by 10 percent, re-signed all five sponsors up for renewal and added five new sponsors for the season.

    “The circumstances of Las Vegas unfortunately cloud a lot of the discussion, but by every [business] measure, they’ve had a dynamic year and are trending up,” said Chris Lencheski, the new president of Front Row Marketing Services and former CEO of Phoenicia Sport, which put together the deal for Telemundo to sponsor Newman/Haas Racing this year. “They have challenges still and the challenges remain that they have to increase the television audience … and they have to find markets where they can be celebrated, not just tolerated.”

    NEWSCOM
    The new street race in Baltimore helped drive up total and average attendance for the year.
    IndyCar averaged 1.3 million viewers for 15 races across ABC and Versus this season, excluding a rain-postponed race in Brazil and the suspended race from Las Vegas. The average was the series’ best since Versus acquired its broadcast rights in 2009. Last year, IndyCar averaged 1.1 million viewers for 16 telecasts, which excluded a rain-postponed race from St. Petersburg, Fla.

    On Versus, IndyCar averaged 402,000 viewers over 11 races, which was up 9.8 percent from 366,000 viewers over 12 races in 2010. On ABC, the series averaged 3.2 million viewers, up 17.2 percent from 2.7 million in 2010.

    The series saw similar jumps in at-track attendance. Average attendance for the year was 97,852 and total attendance was 1,663,500, which were both up from the previous year’s totals of 88,805 and 1,509,677, respectively.

    The attendance increases were driven by races in Sao Paolo, Brazil, which doubled attendance from 46,000 in 2010 to 100,000 in 2011, and Baltimore, a new street race that drew 150,000 spectators. Races in Milwaukee (25,000), Kentucky (30,000) and Las Vegas (30,000) drew the smallest crowds.

    The increases came in a year that the series added double-file restarts, and challenged drivers from other series to race in the IndyCar championship for $5 million. At its races, IndyCar undertook a series of measures to make the event more fan-friendly, including bringing four LED leaderboards to street courses, reducing the minimum age for garage access to 9 years old, and building a small portable stage that crew members can use to explain what fans see in the garage.

    At the start of the season, IndyCar CEO Randy Bernard said, “We want to give our fans value. We want to say, ‘We’ve had a tough eight years, but give us a chance and let us show you our sport again.’”

    IndyCar had five sponsors up for renewal in 2011. Firestone, Peak Performance Motor Oil, National Guard, Philips and Honda all signed extensions.

    Firestone was the only partner that threatened to walk away from the series. The tiremaker signed a two-year extension after Bernard put forward a proposal that reduced Firestone’s sponsorship cost and raised the price teams paid for its tires at races.

    In addition to re-signing five partners, IndyCar added deals with the Boy Scouts of America; MGM Resorts; the Las Vegas Convention and Visitors Authority; Trim Nutrition, which develops vitamin supplements; and GreenFuel Technologies, which makes solar power equipment.

    The series said that marketing and promotional spending by sponsors more than doubled from 2010 and exceeded $200 million this season. Its executives hope to push that spending higher in 2012 by adding more new sponsors. It is searching for sponsors in the financial services, health and wellness, green energy, alcohol and technology categories.

    Print | Tags: Leagues and Governing Bodies
  • NBA ad sales data show true cost of canceling games

    While negotiators were scrambling late last week to reach an agreement to end the four-month-old NBA lockout, an analysis of newly released data show the total amount spent by advertisers last season, excluding the NBA Finals, was $627.7 million, a figure that the networks would be hard-pressed to match if there is a significantly altered season.

    Given the strong ad sales market for televised sports and the popularity — and ratings growth — of the league last season, advertisers were expected to pay up to a 10 percent increase in ad rates. That could have pushed total ad sales revenue this season to close to $700 million given a full 82-game NBA schedule.

    The league has canceled the first two weeks of the NBA’s regular season, but late last week officials were in a negotiating frenzy to try to salvage a full season. Last season, advertisers spent $42.2 million on NBA game and pregame programming in November and $61.4 million in December for a total of $103.6 million across the league’s three national television partners (Turner, ESPN and ABC) during the first two months of the season, according to new research by Kantar Media. The figures do not include ad sales on shoulder programming.

    Even with a potential loss of NBA games, media buyers said they expect to spend roughly the same amount with ESPN and Turner during the fourth quarter of 2011 as the networks replace the games with other programming. But the networks face a far bigger challenge in holding NBA ad sales revenue if any work stoppage rolls through December. The most lucrative ad sales month last year was in May with $170 million in advertising spent during the NBA playoffs.

    “From a national standpoint, there will be minimal NBA ad sales displacement in the fourth quarter of this year. But we will start to get worried if there is still no resolution by December,” Jeremy Carey, U.S. director for Optimum Sports, said as labor talks were occurring in New York. Optimum Sports represents several clients buying into NBA national broadcasts. “What you will see is college hoops and hockey in the NBA windows.”

    The longer the lockout, the bigger the advantage for ESPN in offsetting any loss of NBA ad sales, industry analysts said.

    “Putting together a replacement package for the NBA is easier for ESPN than Turner,” said Brad Adgate, senior vice president and director of research at Horizon Media. “ESPN has the live sports content and Turner will turn to its drama and movies to make up for NBA programming.”

    Already, competition for the displaced NBA advertising dollars is growing, with syndicated male-skewing entertainment programs — like “South Park” or “American Dad,” for example — trying to poach those dollars.

    “Marketers are not just looking for viewers but for viewers who buy their products,” said Mitch Burg, president of the Syndicated Network Television Association. “[Non-NBA syndicated programming] becomes a more valuable opportunity.”

    Last season, the top five NBA advertising sales categories were the automotive industry at 18 percent of the total ad sales, followed by restaurants (12 percent), mobile and tablet (8 percent), beer/liquor (8 percent), and movies (7 percent), according to Kantar Media.

    According to separate research by Nielsen, Ford Motor Co. was the NBA’s top national broadcast advertiser with $19.3 million in spending during the 2010-11 regular season. Yum! Brands Inc. was second with $16.9 million spent on NBA national sales last season. Yum! Brands owns Taco Bell, which is an NBA marketing partner.

    ESPN and Turner will offer advertisers alternative programming to offset the loss of the first two weeks of the NBA schedule, which was set to begin Nov. 1 with a doubleheader on TNT, starting with the defending NBA champion Dallas Mavericks playing the Chicago Bulls followed by the Los Angeles Lakers playing the Oklahoma City Thunder.

    “Turner has a diverse portfolio of brands and platforms, and we are providing our advertising partners with a broad range of alternative programming options during the lockout,” said Turner Sports President David Levy.

    ESPN was to begin its NBA coverage Nov. 2. The network will use live college football and college basketball games to fill any programming gaps caused by the lockout. Last week, ESPN2 used coverage from the Pan American Games in place of a scheduled preseason NBA matchup. ABC does not have any NBA programming until Christmas Day.

    “We are working closely with our advertisers and are prepared to re-express dollars currently committed to the NBA to other properties,” according to an ESPN statement.

    Sponsors largely have committed to run a full season’s worth of advertising, but they gained the option of pulling back their spending or shifting it into other programming with the news that the season’s first two weeks were canceled.

    Turner earlier this month offered its recent MLB playoff coverage to ad buyers as a replacement for NBA games lost to the lockout, a source said. Now, the network is including programming on TBS, TNT and its Adult Swim network to NBA ad buyers as an alternative to the lost games.

    NBA national TV advertising last season

    OCT. 2010   NOV. 2010   DEC. 2010   JAN. 2011   FEB. 2011
    $28,520,600   $42,235,700   $61,489,200   $57,698,600   $76,037,200
    MARCH 2011   APRIL 2011   MAY 2011   TOTAL
    $49,826,500   $141,434,300   $170,506,100   $627,748,000

    Note: Includes game and pregame programming. Source: Kantar Media 10/26/10-5/26/11

    Print | Tags: Leagues and Governing Bodies
  • NFL teams to begin using handheld metal detectors

    NFL teams will start using handheld metal detectors in November to upgrade the screening process at all 31 stadiums, according to an email issued by Jeffrey Miller, the NFL’s chief security officer.

    In the Oct. 14 email obtained by SportsBusiness Journal, Miller informed stadium managers that the league plans to buy 3,100 handheld scanners from Garrett Inc. and distribute 100 to each NFL facility.

    There is no cost to the teams. In addition, Garrett will provide DVD instructional videos to train security personnel how to use the devices, and the league will conduct a video conference with Garrett officials demonstrating their use. The NFL’s intent is for teams to phase in the scanners in an effort to identify the best way to deploy them at their stadiums.

    The units will “close the security gap” in the overall screening process to ensure a safe game day experience for all fans, Miller reported.

    From a fan perspective, the handhelds are “much less invasive” than the pat-downs and “that’s great news,” said Mike Fox, director of Lucas Oil Stadium in Indianapolis. The Colts bought several scanners on their own to supplement the 100 the NFL will supply at no charge.

    Print | Tags: Leagues and Governing Bodies
  • Jet Fuel: Return to Winnipeg helps NHL enjoy big year for merch sales

    Fueled by strong sales of apparel and collectibles in Winnipeg, as well as a longer period of demand for championship gear in Boston, the NHL has seen its total merchandise revenue jump 12 percent over 2010-11.

    Commemorative coins and jerseys are among the big sellers.
    The league’s fiscal year runs from July through June, and just completed the first month of its second quarter. NHL officials declined to give a value for the jump in revenue, but said that in-arena per cap sales were up 31 percent for its opening weekend, and that sales on shop.NHL.com were up 21 percent.

    According to Jim Haskins, group vice president of consumer product licensing, Winnipeg’s demand for team apparel has mirrored that of the teams that entered the league in the mid-1990s. Haskins said the demand across Canada for Jets postage stamps and commemorative coins spurred the league to renew licensing deals with the Royal Canadian Mint and Canada Post that had lapsed in 2008.

    Haskins, however, said Boston’s longer-than-average
    championship sales cycle is unusual.

    “Typically you see a championship market get hot in the middle of the summer and then die down at the beginning of the season,” Haskins said. “Boston is still celebrating. This is the longest [sales cycle] we’ve ever seen.”

    Dave McCarthy, NHL vice president of consumer products licensing, said championship T-shirts, towels, hats and 3-by-5-inch car flags were the top-selling products in Boston.

    Haskins believes the construction of new in-stadium team stores around the league will continue to help overall retail numbers grow. The Penguins have built separate stores for Reebok, Brand ’47 and local apparel manufacturer Crons in the Consol Energy Center; the Flyers recently opened a Brand ’47 boutique and are completing a Reebok store in the Wells Fargo Center; and the Jets opened a Reebok store in the MTS Centre. Haskins said the Minnesota Wild and Montreal Canadiens also plan to open new in-arena team stores this season.

    Keith Leach, director of NHL merchandise at Reebok, said Reebok’s recent partnership with retailer Champs Sports will also increase sales. Select Champs Sports stores now feature special sections of Reebok NHL jerseys and lifestyle wear. “It’s a positioning of NHL in a mall distribution channel, and we think it helps reach a younger demographic,” Leach said. “We want to get product in front of a different type of fan.”

    Print | Tags: Leagues and Governing Bodies
  • Can Tseng’s success pay off for LPGA?

    Editor's note: This story is revised from the print edition.

    LPGA Commissioner Mike Whan stepped out of his limo into a chaotic public square in Taipei, Taiwan, earlier this month and knew that this just wouldn’t work.

    Hundreds of media members and camera-toting fans stood shoulder to shoulder so they could get a glimpse of Yani Tseng, the world’s hottest golfer and a native of the small island off the coast of China. Whan had arrived expecting the typical news conference to award Tseng the Rolex Player of the Year inside the Taipei 101 building, not in an outside square.

    “Once I took it all in, I could see that there wasn’t a building anywhere that could hold this many people for a press conference,” Whan said. “The whole scene was just amazing. Yani’s star power drove the whole thing. We’ve had our share of pretty big press events since I’ve been with the LPGA, but nothing like this. This was the most TV cameras and press we’ve ever had, by 2-to-1.”

    The presentation of the trophy to Tseng — her
    Yani Tseng has put together a historic string of victories in majors, including the 2011 Women’s British Open in Scotland, where she signed autographs for fans.
    Photos by: GETTY IMAGES
    second straight Player of the Year award — went off without a hitch and in the process the world got a deeper understanding of just how big Tseng, the world’s No. 1-ranked golfer, is in Taiwan, a country unaccustomed to being the best in the world in any sport.

    But in golf, Tseng has reached a level of domination unlike anyone before her.

    She has won four of the last eight majors, and her five major titles are the most by any golfer at age 22. Nancy Lopez didn’t do that. Neither did Annika Sorenstam or Tiger Woods.

    Tseng is setting a winning pace that’s never been matched.

    The question that hangs with her is whether her star power on the course can move the needle for the LPGA, especially in the U.S.

    “She’s the most dominant golfer in history at her age, but how do you capitalize on it, and will it translate to Madison Avenue?” said Ed Kiernan, senior vice president at GMR Marketing and a veteran golf marketer. “If she walked into a restaurant pretty much anywhere in the U.S., no one would know her. Taking her brand and making it mainstream is the challenge for the LPGA.”

    Tseng presents a familiar riddle for the LPGA in the U.S.: How do you market an Asian-born player, still trying to learn English, and distinguish her name on a tour that’s increasingly populated by other Asian golfers?

    “She’s certainly better known in Asia and around the world than she is here,” said Jon Podany, the LPGA’s chief marketer. “You’ve got to do what you can to give the U.S. audience a chance to know her, respect her greatness and develop a rooting interest. It might be a square peg in a round hole, but you’ve got to give it a shot in the U.S., and we are.

    “Over time, we’ve seen that there’s an increasing appreciation for international stars in the U.S., compared to five or 10 years ago. You look at Dirk Nowitzki, athletes that are truly great, and they have a better chance of being appreciated in the U.S. We understand that there’s going to be a stronger response in the U.S. to American players, but we think there’s a real curiosity factor with Yani.”

    LACOSTE
    Tseng just happened to be wearing a Lacoste golf shirt with the gator logo when she won the LPGA Championship, which led to an agreement in 2009. They recently extended through 2013.

    OAKLEY
    Sunglasses category

    ADAMS
    Equipment deal that expires this year. Both sides in renewal talks.

    SEMITEC
    Japanese company has logo on left side of headwear.

    REIGNWOOD PINE VALLEY
    Country club and resort ownership group in China has the right sleeve.

    TAISHIN FINANCIAL
    Taiwanese bank owns space on Tseng’s golf bag.

    AUDI
    Shares left sleeve with Adams.

    HSBC
    Corporate outing and one logo exposure in the tournament in Taiwan.

    Source: Yani Tseng’s management


    Tseng, who has greatly improved her English in the last year because she wants to be more fan friendly, is beginning to experience some commercial success, though it’s coming more internationally than in the U.S.

    She has an apparel deal with France-based Lacoste that just renewed through 2013, an Audi deal on her left sleeve, and an equipment contract with Adams Golf, which expires this year.

    “Tom Watson has always been the face of Adams Golf,” said Jeff Wood, the company’s director of marketing. “We’ve never had a female face like Yani before, and she’s taken that position, for sure.”

    She wears Oakley sunglasses and represents two smaller Asian companies, Taishin Financial in her home country and Reignwood, a Beijing-based resort and golf club owner.

    In all, Tseng is making about $3 million off the course, industry insiders say.

    Her deals are a combination of upfront money and incentives, which pays her bonuses for major victories and Player of the Year awards. She’s won five majors and two LPGA Player of the Year trophies.

    “For companies that don’t really know Yani’s impact or value, we haven’t pushed as much on up-front money and we’ve been more willing to do the performance-based deals,” said Ernie Huang, Tseng’s longtime adviser and self-described quasi-agent. “Because of how well she’s played, that’s added up pretty good. … With Yani’s success, we are more aggressively pursuing corporate sponsors.”

    Huang, a native of Taiwan who moved to the U.S. in 1973, met Tseng when she was 12 and became her sponsor as she traveled the international junior golf circuit. His relationship with Tseng and her family has made him the most influential person in the golfer’s camp.

    When Tseng turned pro in 2008, she spent two years with IMG before breaking away and creating her own homemade team to handle her marketing. The economy was tanking and Tseng was just emerging as a competitive pro golfer, both of which hindered IMG’s ability to strike off-course deals, Huang said, so Tseng decided to try a different approach.

    Huang, whose background is in biomedical science, worked with Tseng’s father to assemble a team that handles her golf business.

    Naya Hsu, a former Nike employee in Taiwan, usually travels with Tseng and serves as her manager. Two others, Gina Yang in Taiwan and Sherry Lin in Shanghai, monitor her affairs in Asia.

    “Perhaps this is not the best business model, but we thought it would work until we find an agent that fits our structure,” Huang said.

    That search continues, and Huang isn’t certain whether Tseng will go with a traditional agent relationship or continue to cultivate their homemade approach. Tseng’s team intends to hang on to the Asian territory, which means a new agent essentially would have the U.S. and Europe.

    The LPGA, meanwhile, intends to keep Tseng front and center in 2012, although she will share the spotlight with the tour’s other stars like Paula Creamer, Cristie Kerr, Michelle Wie and others. Tseng will be the defending champion for seven tournaments, which will lead to a lion’s share of the promotion for a quarter of the tour’s events.

    She’ll also be featured in the LPGA brand campaign with other players that will be shot in mid-November during the CME Group Titleholders in Orlando. The LPGA plans to work with its media partner, Golf Channel, to find opportunities like the one that ran on “Golf Central” earlier this year, featuring Tseng in the Orlando home she bought from Sorenstam.

    “I tell people that if they think the LPGA of 1972 is coming to town, they’re wrong,” Whan said. “You have to flip that and say that the best golfers from around the world are coming, and Yani couldn’t be a better ambassador. If she had grown up in Texas, the U.S. media would know what to do with her, but she didn’t. She’s a unique story, and we have to help tell that story.”

    Print | Tags: Leagues and Governing Bodies
Video Powered By - Castfire CMS Powered By - Sitecore

Report a Bug