SBJ/January 21-27, 2013/Leagues and Governing Bodies

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  • Players expected to seek more from U.S. Open

    Will there be a U.S. Open Tennis Championships as normal this year?

    Justin Gimelstob, an ATP player board member, won’t go so far as to say that question is open, but he does say that he doubts players will accept the Open’s prize money increase as the last word. While the U.S. Open did increase prize money for the men by $2 million for 2013, that does not nearly meet the dramatic shift the players were aiming for, Gimelstob said. That combined with the move to a final on Monday from Sunday, also opposed by the players, leads Gimelstob to conclude, “I would be surprised if players accepted it.”

    The ATP has led an effort to significantly increase Grand Slam prize money, which has long trailed other ATP events and other sports in terms of percentage of revenue. The Australian Open has agreed to the changes, but the U.S. Open, based on a percentage of revenue, has not, according to the ATP. While the Australian Open now pays around 20 percent of revenue to players, and that will rise in coming years to 24 percent for both men and women, the Open pays around half that. The Open, which normally announces its prize money in July, did so last month.

    The ATP players have three options: stage an alternate event; reduce the ranking points players get at the Open, thereby diminishing its significance; or keep talking with the event. A formal boycott, ATP lawyers have advised players in the past, would be an antitrust violation.

    — Daniel Kaplan

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  • Poised, and dressed, for success at PGA of America

    Pete Bevacqua will walk the halls of his first PGA Merchandise Show this week as the body’s new CEO, and he’ll most likely be wearing a sweater or a golf shirt, not the suit and tie normally associated with the position.

    In his first two months since replacing Joe Steranka, Bevacqua has brought a loose and relaxed approach to the PGA of America’s top job. Employees in the Palm Beach Gardens, Fla., headquarters typically dress like golfers now.

    Pete Bevacqua's goal is for the PGA's members to know "that heqdquarters gets it."
    Photo by: PGA OF AMERICA
    “We’re in the golf business,” Bevacqua, looking comfortable in a purple sweater, said from his corner office two weeks ago. “I’m a lawyer, but our primary business is golf. There’s nothing wrong with wearing a suit, but hey, we’re in the golf business. We need to dress appropriately. We need to dress like our members dress. That’s who we are, that’s what we look like.”

    By the time Bevacqua’s tenure ends — he started Nov. 12 — his ultimate goal is for the 28,000 members of the PGA to know “that headquarters gets it, that they understand what we’re dealing with.” He’s adamant that communication from the top office out to the field of PGA pros be swift and helpful. Maybe dressing a little more like golfers is just a small measure of that effort, but it’s one symbolic place Bevacqua started.

    In his first two months, he also has identified the two men who will work closely with him to shape the PGA in the future.

    Bevacqua, 41, who came to the PGA from CAA Sports, elevated Darrell Crall to chief operating officer and Kerry Haigh to chief championship officer, a pair of newly created positions. Both were at the managing director level before, and Crall was a finalist for the CEO job that Bevacqua eventually won. Another promotion moved Kevin Carter, formerly the senior director for business development, to managing director.

    Two new hires will start this week. Mike Quirk, a senior director for merchandise, came from the U.S. Golf Association, where he previously worked with Bevacqua and ran merchandise for the USGA’s biggest events. Quirk will report to Carter. Also, Michael O’Donnell, a former Nike Golf executive, joined the PGA staff as senior director for player development and Golf 2.0, one of the PGA’s game-growing initiatives. O’Donnell will report to Crall.

    “The real focus in the first few weeks has been to learn the business and the staff,” Bevacqua said. “I’ve spent time in every department just listening and meeting the people, hearing the story of what they do. I’m not trying to come in like I’ve got it all figured out.”

    That’s been evident to the staff, said Julius Mason, senior director of communications and a 21-year PGA veteran. Mason described Bevacqua as “very smooth and soft-spoken, a leader who also has been a good listener.”

    Photo by: PGA OF AMERICA

    Executive Focus:
    Pete Bevacqua


    Position: CEO
    Organization: PGA of America
    Age: 41
    Hometown: Bedford, N.Y.
    Resides: Palm Beach Gardens, Fla.
    Education: Notre Dame (undergrad), Georgetown (law)
    Career: Davis Polk law firm, 1995-2000; USGA chief business officer, 2000-11; CAA Sports’ golf practice, 2011-12
    Golf handicap: 2.4

    This week’s PGA Merchandise Show in Orlando will be one of the first times where Bevacqua will be seen as the face of the organization and where he’ll address PGA members, golf’s constituents in the all-important equipment category, and the media.

    Many of his priorities will be familiar: Serve the members, grow the game and run great championships. Those are non-negotiable, no matter who the boss is.

    But he also faces a task that appears to be in need of some focus. The PGA has launched so many initiatives to grow the game that it’s become almost a mind-numbing alphabet soup. Golf 2.0. Golf 20/20. Get Golf Ready. Play Golf America. We Are Golf. Bringing a focus to the PGA’s messaging is one area where Bevacqua’s marketing background will likely come into play.

    “When the PGA hired Pete, they made a decision to embrace change and build on the foundation already in place,” said Kevin Ring, vice president of consulting at IMG, who pointed to Bevacqua’s role in establishing the groundbreaking corporate partner program at the USGA. “The PGA has a great history and strong assets, but, often, ahead of growth is change. He is not the type of person to sit still.”

    Before Bevacqua’s hiring, there was curiosity across the golf industry and internally about whether the PGA would hire a golf guy — in other words, a PGA pro — or more of an agency/marketing guy. Bevacqua, who ran the business of the USGA before his 18 months at CAA, contends the PGA got both.

    He grew up working as a caddie and then moved into the pro shop at Bedford (N.Y.) Golf and Tennis Club, handling merchandise and running golf events for the members. “From age 10 to 23, that was my life,” Bevacqua said. “Those were formative years where I was learning from a PGA pro.”

    Moving forward, the most visible aspect of what Bevacqua will do will revolve around the PGA’s biggest events (and biggest moneymakers), the annual PGA Championship and the biennial Ryder Cup.

    For the most part, Bevacqua thinks the revenue side of the operation is doing its job. The PGA’s annual revenue is $130 million to $140 million a year except in Ryder Cup years on U.S. soil, when it grows an additional $100 million or so.
    But Bevacqua said he will be taking a closer look at all of those areas, including the sale of a global Ryder Cup partnership, something the PGA has been working on for two years with the European Tour.

    Bevacqua also has his sights set on elevating the PGA Championship, one of golf’s four majors. One of the first steps in doing that is finding more sites in the Pacific time zone, which enables broadcasters to televise the tournament in prime time.

     

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  • Drewett’s bad news shocks ATP players, execs

    Few professional athletes transform themselves into top administrators of their sport, but Brad Drewett is one of the few to turn the trick.

    ATP President Brad Drewett announced last week that he has ALS and will step down.
    Photo by: GETTY IMAGES
    That is in part why the tennis world is in grief and shock given Drewett, the president of the ATP, announced last week that he suffers from ALS, or Lou Gehrig’s disease, and would be stepping down soon.

    “Brad is definitely one of the most successful examples of a high-level professional athlete who took a big role in the running of their sport,” said Mark Miles, who ran the ATP from 1990 to 2005 when Drewett ran the tour’s international expansion into Asia. “He is first and foremost a player and a guy who appreciates what players are going through.”

    Drewett, 54, played from 1976 to 1992, reaching a career high of 34th in the world in 1984.

    What will happen with Drewett’s signature effort, negotiating with the Grand Slams for a dramatic change in prize money allocation, is now uncertain. Already he had won huge increases from the Australian Open that will see the percentage of revenue the event pays to players rise into the mid-20 percent range in a few years.

    But the other three Slams are not near that, with the U.S. Open currently less than half that percentage, and that was to be a defining mission this year for Drewett.

    Justin Gimelstob, an ATP board director, said there would be no rush in replacing Drewett, and the players were intent on seeing the prize money issue through.

    If the tour looks internally to replace Drewett, the runner-up in 2011 to Drewett was Mark Young, a longtime ATP administrator based in Florida. Stacked against Young, an American, is the sport’s tilt away from America, and his limited ties with players. Roger Federer, who has been integral in the negotiations with the Slams, had pushed former player Richard Krajicek before Drewett for the job, and perhaps his name will resurface again.

    For now, though, no one within the ATP seems capable of thinking that far ahead.

    One other ATP board member, reached in Australia on what would now happen with the issue of Grand Slam prize money, simply responded, “I have no idea. Simply in shock.”

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  • NBA owners debate how to share revenue from jersey ads

    The latest step on the NBA’s path to jersey advertising includes one proposal calling for teams to share 25 percent of the collective jersey advertising revenue.

    That revenue-sharing proposal, discussed as team presidents met in Miami last week, aims to solve one of the biggest roadblocks in the debate: how to split the revenue generated by sales on jerseys among the league’s 30 teams.

    One source familiar with the jersey discussions said that while there is little philosophical opposition to selling ads on the jerseys, there still is no agreement on how to share the estimated $100 million-plus in annual revenue expected to come from the jersey sales across the league. The idea of pooling a percentage of the proceeds among the league’s 30 teams, sources said, is one way the league is looking to offset the wide range in the value of jersey deals between high-revenue teams like the New York Knicks and Los Angeles Lakers and low-revenue teams such as the Memphis Grizzlies and Charlotte Bobcats.

    Estimated jersey deal values range between $1 million and $15 million.

    “[The teams] are getting closer to where people feel more comfortable,” said one source familiar with the issue.
    The likely time frame would be to get the deal approved this year, have teams sell the inventory next season, and then have the ads appear on the jerseys for the start of the 2014-15 NBA season.

    “We are not talking about anything for 2013-14, and if we were to do anything, the earliest season would be 2014-15,” said Sal LaRocca, executive vice president of global merchandising for the NBA. “[Manufacturing] guidelines are what they are, and we could probably work with them, but the people responsible for generating sponsor interest are telling us sponsors have their budgets set 12 months in advance. So if you are looking to tap into incremental money, you’d better be planning more than 12 months out.”

    The hope among team executives supporting the plan is to reach a consensus in time to put the issue up for a vote at the NBA board of governors meeting in April.

    “There was a lot of discussion among the team presidents to try get it on track for a vote,” a source said. “The prevailing issue is how the money will be shared.”

    While team presidents focused on jersey advertising issues, another major topic discussed at last week’s annual NBA sales and marketing meeting involved the league’s new partnership with Ticketmaster for NBATickets.com. League officials updated teams on the new site, which sells both primary and secondary tickets for all 30 teams on one site. The site began operating at the start of the season as the league looks to use a more centralized strategy to drive both primary and secondary ticket sales.

    In addition, NBA Commissioner David Stern and NBA Deputy Commissioner Adam Silver addressed the attendees, and team officials heard presentations from Facebook and Twitter executives regarding social media marketing efforts, as well.

    The league also brought in Shawn Achor, author of the bestselling “The Happiness Advantage” and founder of Good Think Inc., as a guest speaker.

    The subject of jersey advertising for teams first gained traction at last year’s league sales and marketing meeting.

    Staff writer Terry Lefton contributed to this report.

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  • Lower price helps nearly double initial subscriptions for streaming product, NHL says

    The NHL has nearly doubled the number of initial subscribers to its NHL GameCenter Live out-of-market streaming product compared with the 2011-12 season, thanks in large part to a dramatically lowered price.

    League officials did not disclose specific registration numbers last week but did say that initial response to a new $49.99 price for GameCenter Live for the abbreviated, 48-game 2013 regular season far exceeded the comparable number of early sign-ups last year.

    The NHL set the $49.99 price point as a goodwill gesture following the nearly four-month lockout. NHL GameCenter Live previously carried a price of $169 for a full season and $119 for a partial season. The league’s linear TV out-of-market package, Center Ice, also features sharply reduced pricing this year, costing $49.99 through InDemand on cable and $59.96 on DirecTV.

    “We’ve seen a lot of positive early momentum out of the box on this,” said Steve McArdle, NHL senior vice president of strategic planning and business development. “We’ve been monitoring fan sentiment in social media and other channels very carefully, and there’s some real consensus this is a fair price and one that balances a real recognition on our part of what fans have been through and the patience they’ve shown with business realities. We think there’s definite pent-up demand.”

    When the lockout ended, there was fan and media outcry for the out-of-market packages to be offered for free. NHL Commissioner Gary Bettman said contractual provisions, particularly with the various cable and satellite distributors, made such a gesture impossible.

    No pricing decisions have been made regarding the 2013-14 season, but as of now, the league is terming the current offer for NHL GameCenter Live as a “special” price for this current season only.

    Still, NHL GameCenter Live arrives with a vastly reworked user interface and back-end infrastructure that had been planned prior to the lockout. Additional video content has been placed in front of the paywall as part of the free version of the mobile application. Navigation has been completely redesigned, and the Microsoft Xbox 360 video game console has been added as a connected device that can access NHL GameCenter live, joining a wide array of other devices.

    National marketing of GameCenter Live, slated to begin this past weekend with on-air mentions on NBC and the NHL Network among other activations, will focus more on the portability and utility of the product as opposed to the reduced price.

    “We’ve got something that is a lot cleaner, a lot more consistent across the various platforms, and works either as a second-screen companion to TV or for primary viewing,” said John Pacino, NHL vice president of digital design.

    The NHL is again working with partner NeuLion on GameCenter Live and overall GameCenter mobile application. Another major enhancement is a live game simulator that will display real-time shift changes.

    “We’ve made this all about hockey and appealing to that hard-core fan,” said Chris Wagner, NeuLion executive vice president and co-founder. “There are plenty of general game trackers out there on the more casual sites, but we’ve built something we think will have the deepest and timeliest information.”

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  • New speedskating trials will be televised on NBC

    U.S. Speedskating has created its first Olympic trials event for TV since 1992 ahead of the Sochi Games and picked up coverage on NBC for it.

    The organization has struck an agreement with the U.S. Olympic Committee and the Utah Olympic Oval to hold an Olympic trials competition for long-track skating from Dec. 27-Jan. 1 and short-track skating on Jan. 2-5, 2014. NBC and NBC Sports Network have committed to show more than 10 hours of competition live.

    The first-time event is an effort by U.S. Speedskating to raise awareness of the sport ahead of the Sochi Games and generate new revenue for the national governing body. It comes at an important time for the organization, which attracted national attention last year when 14 skaters accused their national team coach of abuse.

    “Is this a critical piece of moving forward for us? Absolutely,” said Tamara Castellano, U.S. Speedskating’s sponsorship and marketing director. “This allows us to shine a light on what we do best, which is produce amazing athletes.”

    The national governing body historically determined its Olympic team through qualifying events in September, November and January. Those qualifiers were held before the International Skating Union told U.S. Speedskating how many spots it would have in an upcoming Olympic Games, so U.S. Speedskating held the events and then determined later which skaters would go to the Olympics.

    As a result, the qualifiers lacked drama and were never broadcast. ESPN was the last network to broadcast speedskating trials when it showed short track in 1992.

    To change that ahead of the 2014 Sochi Games, U.S. Speedskating overhauled its schedule and solicited proposals to host trials from Salt Lake City and Milwaukee. The Utah Olympic Oval ultimately won the rights to host the competition.

    Van Wagner Sports, which assisted with planning the trials, and the USOC worked with U.S. Speedskating to get NBC Sports to broadcast the events. NBC, which is still determining its broadcast schedule, will sell the ad inventory during the broadcast.

    Van Wagner, on behalf of U.S. Speedskating, will be able to sell on-site sponsorships at the event to USOC partners.

    “It’s too early to say [if this will be profitable],” Castellano said. “I don’t know if we’ll have a lot of ticket revenue. I don’t know if we’ll sell a lot of merchandise. We really just want to name the best team we can and draw people in.”

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