SBJ/Dec. 16-22, 2013/Year End
Stories of the year
Published December 16, 2013, Page 20
Facing mounting scrutiny over its handling of head injuries, the NFL moved to end what has been its biggest public relations challenge. While admitting no wrongdoing, the league proposed a $765 million (almost $1 billion with legal fees) settlement for thousands of claims against the NFL by former players for alleged injuries they suffered. More lawsuits have already begun, however, promising to keep the issue in the spotlight.
The bombings at the Boston Marathon echoed throughout the sports industry, forcing a review of the planning, logistics and spending around event security. But the weeks following the tragedy also demonstrated the ability of sports to unite people, helping them to heal and find hope in the shadow of incredible grief.
Fox raises the stakes
Fox Sports 1’s imprint on the sports landscape occurred well before its August launch. In fact, it occurred well before Fox announced plans to turn Speed and Fuel into all-sports networks, Fox Sports 1 and Fox Sports 2. It was the creation of these two channels that caused Fox Sports to invest so heavily in sports rights over the past years, cutting deals with everyone from Major League Baseball and UFC to college football and basketball.
The era of Jacques Rogge, who restored credibility and solvency to the International Olympic Committee during his 12-year presidency, came to an end in September. The organization elected German attorney Thomas Bach as his successor, making Bach only the ninth president in the IOC’s 119-year history. Bach has begun pushing the organization in a new direction, calling for changes to the way sports are selected for the Olympics, and calling for improvements to the bid-city process for hosting the Games.
Agencies in the spotlight
AEG was put on the market in late 2012, poised to be the biggest sports deal of the decade, but it will be remembered instead as the $9 billion blockbuster that never happened. Owner Phil Anschutz never got the price he wanted, pulled AEG off the market and parted ways with longtime CEO Tim Leiweke. Six months later, Forstmann Little put IMG up for sale. It is expected to close a more than $2 billion sale of the company before the end of the year to groups led by either William Morris Endeavor, CVC Capital or The Carlyle Group.
NASCAR drives a hard bargain
With TV ratings stabilizing, NASCAR signed media rights deals with Fox and NBC that are worth $820 million annually through 2024. That figure represents a whopping 46 percent annual average increase over NASCAR’s previous deals with ESPN, Fox and Turner. After years of suffering through declining TV ratings, the new deals ensure the sport’s financial health into the next decade and illustrate the value networks place on live sports.
When Guggenheim Baseball Management bought the Los Angeles Dodgers 19 months ago for a record $2.15 billion, the purchase price was premised significantly on striking a local TV rights deal that also would make history. But even the most aggressive of external expectations were blown away when the club announced a 25-year deal with Time Warner Cable worth an estimated $8 billion. The deal promises to shake up the market for sports media rights, cost structures in the cable TV business, and revenue sharing within baseball.
Getting back on the ice
Perhaps the only thing more resilient than hockey players is the NHL itself. In January, the league returned after its third lockout in two decades and didn’t appear to sustain serious financial injury. Television ratings for the playoffs were strong and, this season, more than half of the league’s teams were playing to 100 percent capacity into December. The NHL wants to increase its revenue by $1 billion within the next three years and received a boost toward that goal with a 12-year, $5.3 billion Canadian media rights deal.
Major League Soccer added its 20th and 21st franchises, both to begin play in 2015. The owners of the New York Yankees and English Premier League’s Manchester City paid $100 million — MLS’s highest expansion fee in history — and are looking at a potential stadium site adjacent to Yankee Stadium. Meanwhile, in Florida, Orlando City FC is building a downtown stadium after paying MLS $70 million to join the league.
The NCAA’s image issue
Ed O’Bannon v. NCAA, first filed in 2009, picked up steam in 2013 as the case moved into class-action status. The case over whether college athletes should own the rights to their likeness is scheduled to go to trial in the summer of 2014, but the momentum it gained this year for the first time made administrators wonder if the NCAA’s amateurism rules will hold up in court.