SBJ/September 3-9, 2012/Opinion

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  • Cartoon: No fumbles

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  • NFL in strong position but plenty of issues to watch

    It seems to be written every year, but everything is lining up for the NFL to have another strong business year. The preseason interest is high; there are strong new story lines with Andrew Luck and RGIII; there is a sense of parity, while the teams in top markets and key draws like Dallas, Green Bay, Pittsburgh and New York/New England all seem strong. The Saints provide a compelling us vs. the league element, Peyton Manning returns to the field in a new uniform and in a new city, the Tim Tebow factor remains, and TV partners have scheduled more shoulder programming to ensure a consistent din of NFL news. As evidenced by the buzz leading up to NFL Kickoff, sponsors are aggressively activating and drawn to the league’s big-event strategy, and new licensing partners like Nike should reignite merchandise sales.

    But there are some areas to watch. Although presale ticket numbers were strong, keep an eye on gate attendance to see whether fans are turning away from the in-venue experience and choosing to stay home. Teams have put major emphasis on actual ticket sales and filling their stadiums with enhancements, incentives and on-site activation. For a league that has seen slight attendance erosion, this is an issue to watch. Keep an eye also on safety — on the field and in the stadium with fans — to see whether those uncomfortable issues continue to worsen or whether issues seem under control.

    The early-season threat that the league should have avoided is the current (as of press time) standoff with officials. This issue may be one that certain league executives feel strongly about and feel is vital to the league’s future, but it’s a total loser in the public arena. Fans won’t back either side, but the league can only lose from a PR perspective. If fans believe that the gold standard of a sports product — the NFL — becomes a less-than-professional experience, they will vent. Yes, they will be engaged with the product, but the officials could become “the story” and not the game itself. This is a distraction that the NFL would be smart — and is smart enough — to avoid.

    One thing to watch is whether the quality of officiating is discussed by the NFL’s network partners. While those at 345 Park Ave. will surely hope their TV partners dial back comment, let’s hope the Aikmans, Collinsworths, Grudens and Simmses of the world are vocal — good or bad — on the quality of possible replacement refs. If there is a feeling that the officials are not of NFL quality, that type of public on-air pressure from those who know the game could certainly expedite any deal.



    FROM THE FILES: ESPN’s extension with MLB was smart for both sides. The deal was not the least bit of a surprise, not even the beefy rights fee increase. Fact is, they need each other. ESPN needs the tonnage of baseball content to fill its summer schedule, and MLB needs the promotion on the country’s biggest sports networks — both with their live games and shoulder programming like “Baseball Tonight.” … Finally from the home office, SportsBusiness Daily will be launching our “Weekend Rap” news feed starting this Sunday. It will be a brief, breezy read on all the key weekend news, with links to top stories, Twitter trends, highlights of the week ahead and, of course, the popular Back Pages. I hope you’ll give it a read and let us know what you think.

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

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  • Keep focus on athleticism of Paralympians

    Viewers of the 2012 Olympics likely saw coverage of Oscar Pistorius, the double amputee track athlete, nicknamed “The Blade Runner,” from South Africa.

    Pistorius ran a season best in his first qualifying run of the 400 meters, placing him in a semifinal where he finished last in his heat. Interestingly, much of the coverage of Pistorius did not focus on his athleticism, his times or the fact that even if he ran his personal best, he still was not likely to make the final in his signature event. No mention was made of Pistorius’ accolades or the fact that he had recently lost to American Paralympian Jerome Singleton.

    The coverage focused almost exclusively on Pistorius as an inspiration.

    As Paralympic promoters push to gain a foothold in the public market, the issue of marketing athletes as inspirations is a point of contention. Some promoters of disability sport are of the philosophy that any coverage is good coverage, while others reject coverage that involves the use of the inspirational story because it may hurt product image.

    Inspirational stories sell. Case in point: Wounded Warrior basketball games received coverage on ESPN’s website. Meanwhile, this year’s National Wheelchair Basketball Championships could be viewed only via live streaming online on independent outlets. The level of competition was much higher in the National Wheelchair Basketball Championships than the Wounded Warrior competition, but the Wounded Warriors received significantly more coverage because of the athletes’ service to their country. Players from the National Wheelchair Basketball Association include athletes who had congenital disabilities as well as athletes who were injured in a variety of ways.

    This issue of covering the story more than the athletics is, of course, not unique to athletes with disabilities. The historical sexual objectification of female athletes, the focus on the financial standing of the families of elite gymnasts at this year’s Olympics, and the attention paid to potential conflict on the women’s soccer team are just a few examples.

    However, covering the story more than the athletics promotes unique preconceived notions about disability and may affect athletes negatively. Because of this, promoters of disability sports have to decide how to most effectively address this challenge as NBC increases its TV programming and website coverage of the Paralympics.

    Dan James, coach of the U.S. wheelchair tennis team and the U.S. Tennis Association’s national manager of wheelchair tennis, notes that the best strategy is to not ignore the inspirational stories because these stories can position them more effectively. Specifically, James states, “It is part of our product, it’s inherent, it can’t be removed. … It’s important, but it’s secondary. The athletic accomplishments must come first.”

    Although James advocates for some focus on the inspirational stories, he believes that athleticism must be the primary focus. He points out the detrimental consequences of placing too much emphasis on the story. “Short term, it’s effective, but long term it’s simply not. If you market the inspiration first then people don’t remember the name or the results, just the disability. It’s neat but it doesn’t move the needle.”

    In the coming years, disability sport promoters will be forced to make difficult strategic decisions involving the promotion of athletes based on their athleticism and their inspirational stories.

    These decisions will have serious consequences regarding how these athletes are perceived by the general public.

    Like all sports promotion professionals, disability sports executives will need to balance selling tickets today with changing perspectives for tomorrow. An imbalanced approach could cause these athletes to be viewed sentimentally, and not competitively.

    Michael Cottingham (mcotting@central.uh.edu) is an assistant professor of sport and fitness administration at the University of Houston.


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  • Team alliances, flexibility for buyers can sell premium inventory

    One of the biggest issues I am seeing in my consulting practice is dealing with large blocks of unsold premium inventory. Suites, club seats and, to a certain extent, courtside seats make up this inventory. (Loge boxes, which are a much newer concept, seem to be selling well.)

    This problem has two root causes. The first occurs in buildings built in the mid- to late-1990s, which generally were built with too many suites. The second reason is the fallout from the economic downturn several years ago that made “premium” and “luxury” words to be avoided and introduced a level of financial scrutiny and accountability that had not previously existed. Many organizations are reducing their current suite inventory by remodeling them into loge boxes, converting them into inclusive club areas that accommodate 100 to 200 patrons, or eliminating them altogether.

    “The challenge is repurposing this space while maintaining the value and integrity of the premium product we are selling,” said Vic Gregovits, senior vice president of sales and marketing for the Cleveland Indians. “With entertainment and hospitality ‘dirty words’ these days we have to focus on business development and how people can use premium for a proven ROI.”

    A compounding variable is the emergence of the secondary market that I now argue has become the primary market. The secondary market has excelled at allowing customers to purchase exactly what they want and even allowing purchasers to customize and create ticket plans that might include several teams in the market. While many consumers purchase on the secondary market looking for lower prices, many others patronize the sites looking to buy exactly the games and the number of games they wish to buy in premium locations, often at premium pricing for the right to pick and choose.

    To address the excess supply of premium inventory and to stay a step ahead of the secondary market, I offer the following concepts for your consideration.

    The strategic alliance

    For the purposes of illustration, City X is a city with NBA, NFL and MLB teams, all with unsold suite inventory. I propose that all three teams create a multiteam suite plan with fractional ownership in each venue. A possible plan might include 20 baseball games, 15 basketball games, and four or five football games. Food and parking can be included to make this a turnkey product for business purchasers. The games are sold at market value or at season-ticket prices and not discounted, as the buyer is buying convenience and less than the normal contractual relationship.

    The games from each team should be a mix of premium and nonpremium games, weekends as well as weeknights. The inventory targeted for such purposes should not be the least desirable locations, nor should it be the best locations, but something representative of the total inventory. If the team currently has some fractional ownership, this product can be utilized to fill in those suites. Each team has the ability to promote and sell the product as part of its inventory offering to the general public and to potential corporate partners who might be seeking a way to enter the suite market but are unable in invest the resources in three distinct suite leases.

    The premium flex

    This is designed for teams with excess premium in a variety of areas. The purchaser does not buy a set number of games but instead pays a set amount, say $75,000 or more, into a flexible spending account that can be used to purchase a suite, courtside or home plate club seats, loge seats, or club seats. The purchase of food and other amenities is at the discretion of the buyer, but it can also be packaged along with parking to create a turnkey product for business clients. As with any flex product, the sooner the buyer commits to selecting a game, which would be dynamically priced, the better the selection of seating locations and options available for purchase.

    A flex plan would give a customer a variety of premium seating options, depending on his needs.
    Photo by: MARK FREERKS
    The needs of the business purchaser might vary dramatically throughout the course of the season. There may be times when the potential buyer needs the privacy and intimacy of a suite to host 12 to 15 clients for a dinner and a business meeting. On another occasion, a potential client could be “courted” by sitting courtside. Club seats offer the purchaser an opportunity to reward employees with a special all-inclusive night out. The flexible spending account could also offer the opportunity to purchase a party suite for 100 to 200 employees and their families for a holiday party. Flexible not only describes the amount of the spend, but the location and the rationale for that spend.

    A side benefit of this premium flex is the sampling opportunity — exposing the buyer to a number of price and location options and creating a broader understanding of how many options are available to assist the purchaser in terms of business development, client entertainment, and rewards and recognition. It also provides the opportunity for a well-trained sales or service team to connect with the customer after each game purchased to assess interest in possibly purchasing that location as a permanent option.

    If the team is having a successful run, or if the buyer purchased a majority of top-of-the-line locations for the highest dynamically priced games, the initial investment might not last the season and there might be a need to purchase additional inventory.

    The organization has the opportunity to offer other sporting events, concerts, family shows and miscellaneous entertainment events to the potential buyer to make the purchasing option more attractive. But a team wouldn’t want to make the option too attractive, as there is a risk of cannibalization to the traditional one-product lease/purchase. Perhaps the non-team-related assets could be used to move the purchaser into a more traditional product. But either way, this is a product that, once introduced, will have a following and become a permanent part of the sales inventory.

    But don’t wait too long. I’m sure that the new primary market is reading this column as well, and if you don’t create it and control it yourself, I would count on seeing this product offered by a third-party vendor in 2013.
     
    Bill Sutton (wsutton1@usf.edu) is the founding director of the sport and entertainment business management MBA at the University of South Florida, and principal of Bill Sutton & Associates. Follow him on Twitter @Sutton_Impact.


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