SBJ/June 9-15, 2014/Leagues and Governing Bodies

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  • That next $1B? NHL on its way

    The NHL is a year ahead of schedule in reaching its goal of generating an additional $1 billion in national revenue by the end of the 2015-16 season.

    A source close to the league said last week that the NHL had about $3.7 billion in revenue this season. With the 12-year, $4.9 billion (U.S.) Canadian media rights deal with Rogers Communications starting in 2014-15, the league is expected to easily eclipse the $4.2 billion mark in revenue next season.  

    With that, the league will have raised an extra $1 billion over its $3.2 billion haul in 2011-12 over two years, instead of its stated three-year goal announced last summer.  

    After 2011-12, the following season was shortened to a 48-game schedule by a lockout before the league and NHL Players’ Association agreed on a 10-year collective-bargaining agreement (with options for both sides after eight years).

    From the way the NHL has rebounded, that lockout is now a distant memory.

     EVENTS CALENDAR: The NHL plans to begin announcing a long-term, international calendar of at least two years of major events as early as 2015. The schedule would include the dates and locations for a two-year period for the World Cup of Hockey (expected to take place in August and September 2016), as well as the Bridgestone NHL Winter Classic, Coors Light Stadium Series, Tim Horton Heritage Classic in Canada, All-Star Game and any preseason and regular-season games the NHL may play overseas.

    “A more fulsome calendar would benefit the teams, players, event hosts, sponsors, our events staff, the fans and everyone involved,” NHL Commissioner Gary Bettman said. “As our events increase, scheduling them further in advance makes a lot of sense.”

    In other events news, a source close to the league said that the Stadium Series next season could be as brief as two games, down from four this year, in addition to the Bridgestone NHL Winter Classic already scheduled for Washington, D.C. A leading candidate to host one of the Stadium Series games is San Jose. Coincidentally or not, a multiyear national sponsorship deal for the NHL with SAP, the Silicon Valley-based technology company that is the naming-rights sponsor of the Sharks’ arena, could also be announced this year.

     LIVING LIKE KINGS: The day after the Los Angeles Kings beat the Chicago Blackhawks to advance to the Stanley Cup Final, there was a special guest at a meeting of the team’s managers: the Clarence S. Campbell Bowl.

    The trophy, given to the victors of the Western Conference, was placed at the center of the boardroom table at team headquarters in El Segundo, Calif., on June 2. Around the table for this 2:30 p.m. meeting were more than a dozen tired, but exhilarated, executives from the Kings and their parent company, AEG Sports — all faced with hosting Game 1 of the final 48 hours later.

    Los Angeles Kings managers welcomed the Campbell Bowl to their meeting June 2.

    “Work hard, but enjoy this,” said Luc Robitaille, the Kings’ former all-star player who is now the team’s president of business operations, speaking to the staff. “Take some time to cherish the moment and be proud of where we are, and also take this opportunity to elevate the Kings in the market.”

    With that, Kelly Cheeseman, COO of AEG Sports, smiled and proclaimed to the gathering, “This is our market.”

    It could be said that Cheeseman was not so much boasting but, rather, merely stating a fact. The Clippers were out of the NBA playoffs, while the (almost) perennially powerful Lakers sat out a rare postseason. The Dodgers and Angels may have their MLB day, but not until autumn. The rival Anaheim Ducks lost to the Kings in seven games in the second round of the playoffs. This appearance in the final, the Kings’ second in three years after winning the franchise’s first Stanley Cup in 2012, truly is the Kings’ time.

    Whether the Kings win or lose the final to the New York Rangers, it already has been a shining season for the franchise. Last summer, Cheeseman, Robitaille, and a mix of Kings and AEG executives drafted a five-year plan for the team. For the 2013-14 season, the top two goals were contending for the Stanley Cup and achieving more than $100 million in revenue.

    They achieved both goals. With 11 sold-out playoff games at Staples Center — three in each of the first three rounds, plus the games Wednesday and Saturday to kick off the final — the Kings said they easily exceeded the $100 million goal.

    “We’re always keen to reinvest in the team and the product,” said AEG President and CEO Dan Beckerman, mentioning among those reinvestments the renovations at the Toyota Sports Center, the Kings’ practice facility in El Segundo. “The hockey ops staff has a constant green light to spend to improve the team and invest in player development, so for a lot of reasons it has been a really good year for the Kings.”

    They are banking on many more. With each season of the five-year plan, the Kings hope to increase revenue by at least 10 percent — therefore approaching $150 million in the 2017-18 season. The plan also sets specific goals for aspects such as season-ticket sales, sponsorships, fundraising and TV ratings.

    The team declined to make public those respective benchmarks, just as they declined to specify the total revenue figure above $100 million for this season. But in the boardroom meeting, which was also attended by Steve Simpson, senior vice president and general manager of local television rights holder Fox Sports West, decisions and plans were made to take advantage of the Stanley Cup Final spotlight.

    • Fans placing a deposit for new season tickets for the 2014-15 campaign would have the opportunity to buy tickets to at least one game in the final.

    • With Kings defenseman Alec Martinez describing his team’s pesky play after the Game 7 win in Chicago by saying, “We’re like cockroaches,” team marketers brainstormed some ideas to keep that theme alive.

    • Simpson shared his network’s plans for extended shoulder programming during the final.

    • More than 20 representatives from prospective sponsors and current ones, such as Kings playoff presenting partners McDonald’s and Toyota, were to be invited as the team’s guests for Game 3 in New York on Monday.

    Cheeseman pointed out that when the Kings won the Cup in 2012, Travel Alberta was invited by the team on a similar trip to the final against New Jersey. Later that week, Travel Alberta signed a multiyear agreement as the official travel destination of the Kings.

    In the meeting, Cheeseman, Robitaille and the rest of the executives highlighted the importance of positive customer relations during the hectic and tense period of the final.

    “We want to continue to treat people well and do everything with class,” Robitaille said, sitting in his office the day after the staff meeting, on the eve of the final. “People seem to forget this, but before we turned things around the last few years, we were still averaging around 16,000 people a game when we stunk. The fans have been loyal. They deserve to be treated with the highest respect whether we have plenty of tickets available or whether we have a waiting list.”

    The successful run has pleased AEG owner and Chairman Philip Anschutz, who Robitaille said was “as wired as I’ve ever seen him,” after the Kings won the West. Anschutz has been in regular contact with team leadership, sharing his ideas through phone calls and emails, and planned to attend every game of the final. It was Anschutz who inspired the idea last summer for the Kings’ five-year plan.

    “The biggest thing Mr. Anschutz preaches is for us to come up with a plan and stick to it,” Cheeseman said. “That’s what we’ve done with the business, and [general manager] Dean Lombardi and [coach] Darryl Sutter have done with the team. As much as Mr. Anschutz is happy with the results, he’s just as proud of how we got here.”

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  • Success overseas leads PBR to China series

    Following international expansions to Australia, Brazil and Canada, Professional Bull Riders is heading to China.

    PBR China, expected to be officially announced this week, will consist of a 32-event, 25-rider series running from Aug. 1 to Oct. 6. The series will operate as part of PBR’s minor league tour, the Touring Pro Division. PBR’s events in its other overseas locations are also Touring Pro Division events.

    “The decision to expand there was greatly impacted by our success overseas,” said Dave Cordovano, PBR’s chief global events officer.

    The earlier international expansions occurred in 2006.

    In China, riders will compete for a $450,000 overall purse and can accumulate points toward PBR’s world standings. The series will travel to three cities along the country’s eastern seaboard: Qingdao for 20 events, Nanjing for three events, and nine additional shows at the AEG-managed Mercedes-Benz Arena in Shanghai.

    James Wang, Yan Zhenlong and the PBR’s Jim Haworth and Dave Cordovano mark the arrival of PBR in China.
    Photo by: PBR

    Cordovano anticipates attendance at the events will near 250,000 overall and expects three rodeos from Qingdao to be broadcast online on PBR Live. China-based CCTV distributes an IMG-produced highlight show of PBR’s top circuit, the Built Ford Tough Series. PBR Chairman and CEO Jim Haworth said live coverage of PBR China could develop down the line.
    “What we’re probably pushing for is, this is like a dress rehearsal this year,” Haworth said. “Let’s get it up and running, and then next year we can see about expanding it to a live TV audience.”

    The circuit at this point is without sponsorship, but Cordovano noted there has been what he called “significant interest” from PBR’s sponsors as well as brands in China. Typical PBR partnership targets include financial services, beer brands, payment card companies and the automotive industry, he said.

    PBR Built Ford Tough Series 2014 stats

     Average TV viewership of 1.2 million across six events on CBS, up 25 percent from last year.

    Visits to up 24 percent for January-April compared to same period in 2013; number of unique visitors up 41 percent.

    Facebook “likes” up by more than 400,000 since the beginning of the year.

    Event attendance up 41 percent through 12 events.

    Attendance records at six of those 12 events.

    Source: PBR

    “We’ve learned how to adapt and do business in each one of these international territories,” Cordovano said. “The biggest difference in China is that, in all the other countries that we’ve expanded to, they’ve had an existing western lifestyle, bull-riding culture, so they have the livestock and the riders.”

    The largest investment PBR will make for the push to China, Cordovano said, is in the livestock itself. PBR has shipped nearly 100 bulls from Australia to China, where they will be housed and cared for. He said breeding programs that are started there will be developed with the intent of “making this a long-term series, just like any of the other territories we’ve expanded to.”

    Haworth originally thought 2015 was the earliest possible starting date for PBR China, but a December meeting with the Chinese People’s Association For Friendship With Foreign Countries quickly changed that. The association, charged with the development of cultural activities for Chinese people in sports, was intrigued by PBR. “They gave us approval because of the way we look at our animals, as athletes, and they were really excited about that,” Haworth said. “They felt this was a sport that they could develop some riders for the future to really help build and make this something they can embrace as a culture.”

    PBR’s expansion to China comes on the heels of what series officials call a successful first half of the season in the United States. As the Built Ford Tough Series hits its annual three-month summer break, the series has seen year-to-date increases in several key metrics (see chart).

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  • USTA near Open Series extension

    The U.S. Tennis Association is close to renewing its partnership with eight American tournaments to extend the Emirates Airline U.S. Open Series through 2018. The current pact runs through August.

    The media campaign for the U.S. Open Series breaks this week, with ticket sales tied into the USTA-owned U.S. Open. Ads featuring top players like Serena Williams will run in tennis specialty publications, local newspapers in event markets, as well as some national TV spots.

    The 2014 U.S. Open Series begins next month at the BB&T Atlanta Open.

    While spots hit to promote this year’s events, the USTA is also looking long term to extend the concept it launched in 2004 as a way to brand what were often disconnected summer hard court events leading up to the U.S. Open.  

    “We talked to the tournaments about another four years,” said J. Wayne Richmond, general manager of the USOS, who expects completed agreements in the next few weeks. Most of the tournaments sent representatives to a meeting with the USTA in New York last month.

    The 2014 USOS, which starts July 21 in Atlanta and runs through late August, is covered under an existing deal with the events. The USTA, which owns some of the tournaments, handles the creative for the events and their websites, helps manage ticket sales and TV ads, and pays the tournaments a dividend.

    In total, Richmond estimated the events on average benefit by half a million dollars, which for some is sizable and can mean the difference between profit and loss.

    The USOS has been knocked in some tennis quarters because players who compete only in events required by their tours often win the bonuses that the USTA pays out. The Cincinnati and Canadian stops are required for top players, so last year, Rafael Nadal won the USOS playing just those two, even though part of the point of the series was to provide top players with an incentive to enter the U.S.-based summer events that often struggle for exposure and attendance.

    The USTA is tweaking the formula this year by doubling the USOS points for players who compete in three or more events. Players earn points by how well they do in the eight events.

    The top three finishers of the series earn extra prize money at the U.S. Open. The total possible amount to be won is $2.6 million combined for the top six (three top women, three top men). The winner of the USOS can earn $1 million extra by winning the U.S. Open.

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