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SBJ/Dec. 9-15, 2013/OpinionPrint All
We began the planning for this issue about a year ago, and thanks goes out to all of our editorial staff. A tip of the cap to Austin Karp and Rick Ellington, who spearheaded many of our amusing and entertaining Top 20 lists, as well as Liz Mullen and Bill Magrath, who tracked down the executives in our “Where Are They Now?” section. But a special thanks goes to Ross Nethery, who balanced this time-consuming project with his other roles within our newsroom and digital operations. In addition, graphic designer Corey Edwards brought a dynamic vision to the presentation and helped us piece these elements together in a vibrant package. But this issue is only the start of the stroll down memory lane. All this week in SportsBusiness Daily, we’ll roll out other elements that add context to the two decades: additional lists, like the Best in Fashion and Entertainment, as well as a look at some of the trends in naming rights and facility development over the 20 years. In addition, we will offer more of our favorite Quotes of the Day and anecdotes of industry executives remembering when they first started reading the publications and the impact they’ve had. We hope you’ll enjoy the ride.
> MOST INFLUENTIAL: There are a lot of “lists” in this week’s package of issues. In the weekly, you’ll get our annual listing of the Most Influential People in Sports Business. Our editorial staff spent much of November arguing about who should take our top spot, and there was no consensus or, frankly, much conviction behind anyone’s arguments. That bothered all of us. We’ve worked hard to keep our lists focused on the executives who run our industry; we’ve stayed away from using concepts to take spots on our lists, like “the fan” or “the economy.” As we hashed out this year’s list, our discussions increasingly focused on the massive media rights that continue to flood the market. While ESPN and NBC Sports are driving much of that marketplace, it’s the arrival of Fox Sports 1 and Fox Sports 2 that created such a seller’s marketplace and changed the economics of this business. Randy Freer and Eric Shanks are the architects and the day-to-day operators behind these launches. We’re not concerned with the small viewer numbers these channels have delivered in the first three months. There’s little doubt that these channels will be a long-term play. With its deep pockets and multiple platforms to showcase sports programming, as well as a new outlet for the advertising community, Fox Sports automatically becomes a more powerful voice at the negotiating table with coming deals for the NBA, Big Ten and, perhaps most importantly, a new NFL package of Thursday-night games. It’s Freer and Shanks’ actions that have caused others to react (see ESPN’s hiring of high-profile talent such as Keith Olbermann and Nate Silver) and altered the economics of the industry. That’s why they take our top spot this year.
Other takeaways from this year’s list:
■ A good argument could be made that MLB Commissioner Bud Selig is listed too low and should outrank his colleagues at the NBA. Selig has shown remarkable consensus-building and leadership, but the thinking here is that the coming NBA media rights negotiations have the potential to significantly shake up the landscape. Everyone knows ESPN and Turner want (and in some cases need) to keep the NBA. But Fox Sports, which has deals with 16 teams for their RSNs, wants in, and expect NBC Sports Network to take a close look. That’s why outgoing Commissioner David Stern and his heir, Adam Silver, sit where they do. Still, Selig’s role in choosing the next MLB commissioner should not be overlooked.
■ Some may be surprised at the six-spot gain by MLS Commissioner Don Garber, but he scores points for mapping out an effective expansion in New York and Orlando and getting massive increase in franchise fees. NYCFC, with the big brand combo of the Yankees and Manchester City, was said to go for $100 million, and Orlando’s city leaders rolled out the red carpet for the league with plans for a publicly funded new facility and a franchise fee of $70 million. Garber effectively has established MLS’s national footprint, but he now must turn his focus to growing a TV audience, because those viewership numbers surely will be a big point of contention in the coming TV negotiations.
■ NHL Commissioner Gary Bettman is up four spots and the reason is simple: He was held back over the years because of labor uncertainty. He now has a 10-year labor deal, if it runs its full course, and can focus on growing the game and building revenue. That’s where we want to see Bettman continue to push his capable executives, and you’re already seeing that with innovations like the stadium series and a lucrative new deal in Canada with Rogers that changes the league’s distribution partners.
■ Many will wonder why Kevin Plank is up six slots, but we find Plank to be among the most sought-after executives in sports. People want to have a relationship with Under Armour, and people want to do business with Plank. His brand’s connection with today’s youth makes him a go-to guy for anyone looking to reach that demo, and with little market share outside of North America, Under Armour has a long runway for growth in front of it.
■ The jumps of big NCAA conference commissioners Mike Slive and Jim Delany represent the continuing appeal of college sports and their effectiveness in building their respective conferences into powerful, moneymaking brands. If you want to make a mark and do big business in collegiate sports, you start by seeing these two men.
■ A jump of 13 slots for John Henry seems like a pretty big leap for an owner who took his eye off the ball in recent years. But Henry’s leadership in getting the Red Sox back as baseball’s best, in addition to his publishing vision in acquiring The Boston Globe and related assets, as well as his Premier League role with Liverpool, has him back among the most influential owners in sports.
■ The reasoning for having Jed York and Asim Pasha on the list is a nod to the future. York, the 33-year-old CEO of the 49ers, is not on this list for his influence within the league’s inner circle or the power he wields in dictating league policy. He’s not there yet. But we like the organization he has been building under former Yahoo executive Gideon Yu, and the vision for Levi’s Stadium that we believe will be a trendsetter when it comes to merging technology with the on-field and fan experience. Meanwhile, the inclusion of the 25-year IT veteran Pasha will generate a response of “Who?” from many readers. But when teams and properties are talking about some of the most technologically progressive elements being developed in-venue, many point to Pasha and what he and his team are doing as the architects at Sporting Park in Kansas City.
Those are highlights of some of our thinking in developing this list. We’d love to hear your thoughts, comments and questions.
Abraham D. Madkour can be reached at firstname.lastname@example.org.
Nevertheless, with six months remaining on the sponsorship agreement, the real estate company’s president informed the team’s account representatives that it would have to receive more inventory and a 25 percent reduction in pricing in order to continue the relationship. The inventory in the sponsorship package included signage in the stadium, advertising in the team’s programs, promotion on the electronic scoreboards and a suite that the real estate firm could use to entertain clients. The pricing of the package was $500,000 per year. In addition to the requested price reduction, the real estate brokerage suggested that it would also need in-game radio ads as well as more prominent signage included in the deal if it was to go forward with the team.
Although there were other real estate firms in the marketplace that the sales team might call upon as alternatives to this client, the team really desired to hold on to the relationship because of the brokerage’s prominence and long-term connection with the team. Some of the sales team felt they should provide the client with the additional inventory and try to minimize the reduction to something in the range of 10 to 15 percent.
We advised the team’s corporate sponsorship group that their offer to the real estate firm ought to take some of the inventory off the table while emphasizing to the client the real benefits of the relationships, such as the exclusivity in the client’s business area. We also suggested to the sales team that they present a price increase in order to be consistent with other contracts being executed with sponsors — perhaps in the range of 15 percent.
After some resistance for fear of losing the account, the corporate sponsorship group agreed to pursue our recommendation. The sales executives also agreed that in this case a written proposal would express the team’s position with clarity and a certain level of unambiguous definitiveness. We then asked them to script out how they would make the initial presentation to the client, and after several rounds of devil’s advocacy the following e-mail on team letterhead was developed:
The (sports team’s) brand within the region is strong and is growing. Last year special events and concerts were added and over 80,000 flocked to (our athletic facility) to enjoy them. Customized activations and marketing programs were created. Attendance is up 36 percent vs. 2010, TV ratings are up 108 percent vs. 2010, radio is up 50 percent vs. 2010, page views on (our website) are up 119 percent, and Facebook friends are up 118 percent.
Simultaneously the (sports team’s) brand association and return on investment for partners is strong and growing. Numerous awards have been won by our marketing and promotions staff for marketing initiatives and in-game entertainment execution. Vendors have experienced double-digit sales growth. Within the past season we have added over a dozen new corporate partners and have had record in-season partnership sales. To deliver the most effective and valuable experiences for our fans and partners, we will continue to create and enhance opportunities. Some recent examples are programs for kids and social media initiatives.
Due to the factors above, the (sports team) has increased team expectations in regard to the value of team assets and exclusivity in partnerships. Due to the competitive nature of the marketplace, we have identified the real estate brokerage category as one where we must grow revenue with current partners and/or secure additional partners.
You have stated your need to reduce the financial investment in our partnership. At the same time, however, you should know that while we can adjust your investment terms, we are unable to maintain assets or exclusivity on a flat or reduced investment.
Please see the attached spreadsheet that has two options for your review. Option A, with a price increase of 15 percent, maintains almost all assets from the previous agreement, and also includes several additional assets which you requested. Option B, which uses your current pricing level, includes reduced assets and the elimination of exclusivity for your suggested investment level.
We hope you will find one of these options acceptable and look forward to the continuation of our mutually beneficial relationship.
Best Regards, (Team Executive)
After several more rounds of discussions and scripted face-to-face presentations (which denied the real estate company’s continuous requests for inventory increases and price reductions) a deal was made. Much to our client’s surprise, not only was the team able to actually hold the line on inventory, but it also achieved a 10 percent increase in the pricing of the sponsorship package for the next five years.
In fact, the team executives who led the negotiations later commented on the impact the scripting had on their success and said, “We reached a deal that was considerably above our highest goal and strengthened the relationship. The preparation, the scripting, and the counsel were outstanding.” They also said, “Not only did the scripting process produce an immediate return on investment; it also implemented a systematic approach for us to negotiate future deals more effectively.”
Best known as a baseball agent whose clients included Cal Ripken Jr., Kirby Puckett and Joe Mauer, Ron Shapiro has evolved into a negotiations expert whose firm Shapiro Negotiations Institute has counseled teams, governments, universities and Fortune 500 companies.