SBJ/April 15-21, 2013/Opinion

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  • Cartoon: Bank of MLB

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  • Reconsidering honor of Rutgers, Pernetti for Sports Business Awards

    Former Rutgers University Athletic Director Tim Pernetti was one of our five nominees for Athletic Director of the Year for the 2013 SBJ/SBD Sports Business Awards, which will be awarded on May 22. Pernetti was cited by our editorial committee for his work in gaining membership for his alma mater in the Big Ten and for positioning Rutgers for future business growth.

    When we placed Pernetti on the list of nominees, we didn’t have all the facts about the actions and decisions of the Rutgers athletic department during the period under consideration. When disturbing video surfaced two weeks ago regarding the behavior of men’s basketball coach Mike Rice, and the subsequent decision by Pernetti and Rutgers leadership to maintain Rice’s employment, it caused us to reconsider. Our awards endeavor to recognize the best in sports business. Based on decisions Rutgers and Pernetti made last year, we cannot continue our recognition of the university and Pernetti’s leadership of the athletic program. Therefore, our editorial committee has decided to withdraw Pernetti’s nomination from this category.

    We understand that this sets a precedent, but we don’t feel that recognizing him would be true to the spirit of the awards, fair to readers or, especially, the other nominees.

    This wasn’t an easy decision. There are many sides to this story, and Pernetti’s full role isn’t clear, nor is he the only person at fault. But as a nominee for this honor, he represented not only himself and his actions, but the actions and reputation of his university, all of which have become tainted by this episode. Regardless of the advice from counsel or others about legal liability, there’s no denying that Pernetti and his superiors made the decision to retain a coach they knew was abusing players, verbally and physically.

    Tim Pernetti will be heard from again in sports business. He is simply too talented not to be. But he won’t be recognized in the category of Athletic Director of the Year, and, as we move forward, we will highlight only the remaining four nominees in the category: Mike Holder of Oklahoma State, Tom Jurich of Louisville, the late Mal Moore of Alabama and Jim Phillips of Northwestern.

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  • Executives warn: Don’t disappoint fans today

    There were a number of thoughts and comments that stood out during the opening session at our recent IMG World Congress of Sports in Naples, Fla. Here’s a sampling that I found of interest.

    The fan experience at live events was a significant part of the discussion, with NFL Executive Vice President Eric Grubman continually stressing that fans can’t be disappointed. “If connectivity is important to that fan, we better provide it,” he said. “If the RedZone and what’s happening with a rival team is important to that fan, it better be on [the video board]. For that matter … if the Ryder Cup on Sunday is coming down to that finish of last year, and 10 or 15 percent of the fans in an NFL stadium really care about that, why is that not up there at those key moments that are so interesting to sports fans? We have to do that.” Anheuser-Busch’s Blaise D’Sylva agreed. “There are some very simple, basic things about not disappointing the fan that need to take place,” he said, “and I still wonder why today, in 2013, we’re talking about some of them. For example, I think in baseball, the replay rule and what they’ll show on the board in baseball to me is very, very draconian. You go to a game and you don’t get to see a lot of replays. I know that in the NFL this past year they made it a rule to show every call that was being challenged and that was being shown to the audience at home — that you would get to see it in the stadium. That’s the step in the right direction.” Golden State Warriors President and COO Rick Welts said finding the right content mix isn’t easy. “What is that combination of things that people want?” he said. “As leagues, we really struggle with our game and what can we share and what can’t we share. When the NBA went to an actual replay situation, we now show the exact same feeds at the exact same times that the officials are looking at that monitor on the scorer’s table, making that decision about whether that call was right or wrong. How great is that? We’ve let you under the tent.”

    One speaker who drew a buzz was Grubman, who opened eyes with thoughtful, straightforward answers. I can’t say I feel the NFL’s return to Los Angeles is close, based on his comments on the situation — especially referring to the current AEG proposal to lure a team for Farmers Field. “No owner, and certainly not the NFL, is going to go in and create something that has tremendous value for someone who’s taking the capital and leaving,” Grubman said. He added, “We don’t have to go to L.A., and L.A. doesn’t have to have an NFL franchise. We’ll both survive just fine. The different parties are going to have to compromise.” When asked to respond to criticism that the NFL hasn’t seriously engaged the city or potential partners in Los Angeles, he responded that anyone who felt that way “should look at my files. … My only regret is that we keep working on it without significant progress.” AEG Chairman Phil Anschutz said recently there was a deal to be made to bring the NFL to Farmers Field, and in looking closely at his words, perhaps the two most important ones are, “We’re flexible.” It’s obvious he’s going to need to be much more “flexible” in his deal parameters if he wants an NFL team playing in Farmers Field.

    Another deal I won’t hold my breath on is jersey advertising in the NBA. Welts has always been one of my favorite executives in sports, and he is among the most progressive and innovative minds in the business. Hearing him talk about possible jersey advertising in the NBA left me less optimistic that a deal is close to being completed. “Money is holding this up,” he said. “We are creating a disparity in revenue from big markets to small markets, and teams look at this as magnifying that [disparity] even more. So should we share that money? That’s a hard discussion to have with a brand-new source of revenue.” Welts said team presidents think there’s a “middle ground” where 25 percent of each team’s jersey sponsorship revenue goes into a shared pool. But he’s not optimistic that a deal is close. “Everyone knows there’s a big pot there,” he said. “It’s not uncomplicated, but the idea that we have hundreds of millions of dollars sitting out there and we can’t figure out a solution to bring it into the league, shame on us.” Meanwhile, based on Grubman’s remarks, don’t look for the NFL to go beyond ads on practice jerseys. “I don’t necessarily see that the value difference compared to the current model would make that much of a difference,” he said. “We’ll watch what other people are doing, but it’s not on the top of my list right now.”

    D’Sylva, A-B vice president of media, sports and entertainment marketing, kept hitting on an interesting theme of whether there were just too many sports options, specifically from the brand perspective. “I don’t know if there are too many sports as much as just too much of sports,” he said. He noted the NBA being praised for its 66-game schedule following the 2011 lockout, which brought up the idea that fewer games in a season would be a benefit for fans and sponsors. He added, “We have the permission to play in any sport. The challenge for us is we don’t have a bottomless bottom line.” Pac-12 Commissioner Larry Scott added, “In certain cases, less is more. I think it’s been proven in a lot of different places.” WTA Chief Executive Stacey Allaster, noting the tour has 54 tournaments scheduled for this year, said, “It’s too much. … I do think less is more in our sport in order to be relevant.” Allaster added, “Do we need Monday through Sunday? Do we need an afternoon session and an evening session?” However, D’Sylva acknowledged that the “genie is out of the bottle” and there will likely not be fewer sports or events, but he did argue that some sports could take a chance of being innovative in shortening seasons or changing the formats of their seasons. D’Sylva raises interesting points and it’s not surprising coming from someone writing the checks, but I don’t see any major catalysts to change the current models in sports.

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

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  • We’re engaged: Savvy teams use new tools to connect with fans

    There is an untapped opportunity for teams to put additional emphasis on social media to better engage fans, build lifetime value and monetize programs. In cases where teams have invested in technology and dedicated social media staff, they have produced wildly successful, repeatable programs. The proof of these concepts can be illustrated with the results of progressive team initiatives.

    Social media is all about engagement. A commonly asked question is: “How can we monetize social media?” My answer is always the same. When teams engage effectively and actively listen on social media, monetization opportunities present themselves either through ticket and merchandise sales or, more importantly, by nurturing lifelong fan relationships.

    I firmly believe that much like every team in North America uses an email marketing engine today, each team will graduate to using an enterprise-level social media platform along with dedicated staff. A recent survey performed by Turnkey Intelligence supports this notion. The survey, conducted with college athletics institutions, indicated that half the organizations have one dedicated person for social media, with the other half having two or more employees focused there. Additionally, I’ve seen a significant increase in the use of robust social media applications to publish content, manage conversations and listen to fans.

    Photo by: STEVE ZYLIUS / UCI COMMUNICATIONS
    Two great examples of social listening come from the University of Oregon and the University of California, Irvine. Inspired by an innovative idea from the New Jersey Devils, Oregon created a command center to listen to its fans and engage them socially. This command center, known as the Quack Cave, is managed by the Oregon athletics department but was designed and is staffed by social media-savvy students. The goal of the Quack Cave is to provide daily monitoring of the 30 to
    Social media command centers at UC Irvine (top) and the University of Oregon monitor fan chatter and offer the schools a channel  of communication with fans.
    Photo by: GODUCKS.COM
    40 Oregon athletics social media accounts and to interact with Ducks fans on game day and throughout the season. It has been a big success, and they are just scratching the surface with engagement and customer-service opportunities.

    UC Irvine took notice of the Quack Cave and deployed its version of the social media command center called Zot Com. UC Irvine’s social command center allows staff to engage and communicate with Anteaters fans through a social monitoring station that helps them to track social chatter on the Web, identify brand ambassadors and communicate with fans. This program is also managed by the UC Irvine marketing and media relations departments but staffed by students. As teams become more sophisticated with their CRM and social media systems, they will be able to track customer service opportunities, measure correspondences and analyze value of social media brand ambassadors.

    I’m confident that 2013 will be heavily influenced by social platforms that allow teams to maximize efforts to grow their databases and, more importantly, identify the “anonymous” social fan to market to with multichannel marketing programs. A great way to accomplish this is with unique social promotions and sweepstakes. The Wells Fargo Center in Philadelphia and the University of Michigan executed two perfect examples of this concept, and though they use some Paciolan tools, the innovation with these programs is all theirs.

    The Wells Fargo Center created a hugely successful Big Ticket promotion that enabled fans to enter a sweepstakes to win two tickets to every 76ers, Flyers, Wings and Soul game as well as tickets to every concert in the building for an entire year. The campaign grew the number of Facebook likes by 49 percent (more than 22,400) and, more importantly, generated more than 18,000 unique email address entries, which are fed into a lead-nurturing program through a multichannel marketing system to drive sales.

    Michigan leveraged a unique promotion to reward fans while achieving a historic Facebook 1-million-fan milestone for their football page. Fans who entered the sweepstakes were eligible to win unique prizes, including premium tickets, merchandise and other experiential rewards. At the conclusion of the campaign, Michigan had gained 17,914 new fans, including 9,512 unique entries during the course of the promotion, and gained more than 4,600 new subscribers who chose to opt-in to receive their Michigan Insider email. Combined correspondence from both social media and email marketing drives significant ticket sales for the football powerhouse.

    There is a growing trend of teams looking to unlock additional revenue streams through social media, including driving merchandise sales. Two teams that are leveraging social media to promote merchandise opportunities effectively today are Florida State University and the University of Southern California.

    FSU integrated its Facebook page with Pinterest boards to highlight Seminoles athletics images, fan photos and team merchandise. This enables FSU to create product-specific Pinterest boards to drive merchandise sales to their target Pinterest demographic: 25- to 34-year-old female fans. FSU found that Pinterest drove more referral traffic to their Fanatics fan store than Google+, LinkedIn and YouTube combined.

    USC integrated social sharing and merchandising opportunities into its YouTube brand channel. USC embedded a carousel of merchandise, such as jerseys, hats and T-shirts, which allows fans to instantly purchase items from the YouTube channel.

    The one trend that remains constant during the ongoing evolution of social media is that teams will continue to be aggressive in exploring new opportunities to engage their audience. I believe it is our role to help teams innovate and capitalize on trends that monetize efforts, build their fan base and harness viral marketing efforts.

    Dave Butler (DButler@paciolan.com) is CEO of Paciolan.


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