SBJ/June 23-29, 2014/Opinion

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  • What we miss when we’re constantly looking down, not up

    AAt a recent sports industry forum, there was a fair amount of discussion regarding the “looking down, not up” media mode of how millennials and many other two-eyed creatures are consuming their favorite spectator sports. 

    It’s yesterday’s news that our lives are crowded with super-communicating devices. The sports world continues to keep shrinking through hyperconnectivity. There are some mega-trends that are creating new cash and confusing the sporting landscape.

    A picture is worth a thousand words

    Technology sometimes hinders human integration. It’s clear that millions of us now communicate through pictures and videos and less in words, especially if they are big with lots of letters. The heck with baseball cards, box scores, 8-by-10-inch glossies and printed programs; let me send you an Instagram. Here’s a shot of my favorite shortstop walking his schnauzer. 

    The positive interactivity of fans at games is going to be changed if we pay no attention to the fans sitting right next to us. Attending a live sporting event represents one of our last town squares. If our heads are constantly buried below eye contact we run the risk of becoming socially segmented. Sports are about verbalizing what we are seeing in real time. We pass along stories of magnificent moments and legendary athletes from generation to generation. People to people, not through hand-held video generators. 

    Content is king

    Why would you want to buy a pricey ticket to sit behind home plate when MLB.com offers access to every one of its 2,430 regular-season games for $130.

    We now have NFL RedZone, NHL Center Ice, NBA Game Time and MLS Live. Looking down is becoming much more compelling. Look up and you may miss something. 

    Everyone with a phone is now their own sports channel. Sports has been built through teamwork. It will be incumbent on leagues, live-event promoters, venue architects, tech companies, telecommunication giants, sponsors and fans to look up at each other to find a happy medium.

    Whose den is it anyway?

    The experience of viewing a game in a stadium has been changed by the Cowboys’ gargantuan LED center-hung, “galaxy’s largest” TV at AT&T Stadium. No matter how hard you try to look down at actual players and action on the field, your eyes will be pulled to the board. This is an analog of the “looking down, not up” equation but nonetheless it takes you away from live action.

    Fans want the best possible experience and they will determine which way they want to watch/communicate with their favorite teams/sports. Sports fans are the ultimate committed customers; they will do what they want no matter what the marketing mavens have up their sleeves.

    It’s a small world

    A conference speaker was pointing out the new trend of continental drift where owners are seeking out opportunities in nontraditional backyards. Franchise ownership borders are being redrawn as we speak. We have a Russian oligarch hooping it up in Brooklyn and politicking back home. Football teams beloved by millions in the U.K. are owned by football owners from the U.S. While we are looking down, the big spinning ball that we all live on is shrinking through sports.

    There were fears that Sochi wouldn’t work and Brazil’s social ills will suck the air out of a Samba party. But global sports events work because people interact with each other.

    It’s a bird, it’s a plane, it’s a … #$&%!

    Maybe the valuable lesson in the looking down, not up syndrome is baseball specific. Real baseball fans know that culinary seagulls never fail to fly into the ballpark around the seventh inning for the bird buffet. These seven-course meals are left by fans who are trying to beat the traffic.

    In this instance, make sure you continue to look down, not up!

    Andy Dolich (andy.dolich@gmail.com) is managing director of U.S. sports practice for Odgers Berndtson and has held team executive posts in the NFL, NBA, MLB and NASL.

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  • Cartoon: Court's in session

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  • Father’s Day at the ballpark foiled by lack of flexibility

    Minor league baseball sells itself as fun family entertainment, and by and large that is what I was hoping to get by arranging to go to a game with my 5-year-old son on Father’s Day.

    We never went, disappointingly, for one simple reason: food.

    The ballpark we wanted to go to would not allow us to bring in outside food, not even in a plastic baggie. My son has certain dietary issues, I am vegetarian, and we tend not to eat fried foods. We are obviously not the sweet spot of the sports concessions business, especially in the minor leagues.

    I talked to an executive at the team who couldn’t have been more polite and nice, but the one thing he could not be was accommodating. That’s because the league in which the team plays and the team’s concessionaire contract require the policy of no outside food.

    I asked Pat O’Conner, the president and CEO of Minor League Baseball, about such policies, and this is what he wrote back: “There is no universal policy regarding permissible ‘outside food and beverage’ at Minor League Baseball games. Those decisions are local and could be guided by any number of reasons including, but not limited to, local government (health department and alcoholic beverage control) regulations, contractual relationships with third party vendors, security precautions and club philosophies. In any case, the central office does not govern such club decisions. If fans have special dietetic needs I would like to think our clubs would consider those circumstances independent of any standing policy.”

    Of course, there really should not need to be a dietary reason; it is enough that the paying customer wants to eat his or her own food. This is not a movie, where you are in and out in 90 to 120 minutes. In my case, it would have taken an hour to get to the game, figure a half-hour before the game starts, an additional three hours for the game. Then, because it was Father’s Day, the kids were going on the field after the game, and then another hour home. So I was likely looking at a good six hours of my time invested.

    Here’s my humble suggestion to teams with such policies: If you are underpricing your tickets because you make it up on concessions, then offer higher-priced tickets that allow fans to bring in their own food. In my case the tickets were about $15. I would have gladly paid $20 or $25 a ticket to enjoy the game with my son if that meant we could have brought in our own food.

    Some people love going to the ballpark and enjoying a hot dog and fries, and many teams now sell package deals for food and admissions. But that is not everyone, and whether it’s because a kid is a picky eater, a mother is diabetic, a father doesn’t eat meat, or whatever, sports should be more accommodating.

    So alas, Father’s Day at the ballpark was not to be. Instead, nearby parks beckoned, playgrounds, all good fun. But who knows, maybe my son would have become a fan for life had he gone.

    Staff writer Daniel Kaplan can be reached at dkaplan@sportsbusinessjournal.com.

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  • By design: High standards set by Pittsburgh facilities

    IIf you’re interested in how sports venues can be successfully integrated into an urban core, visit Pittsburgh. I spent three days there earlier this month and marveled again at how planners artfully and effectively developed PNC Park, Heinz Field and Consol Energy Center into the city’s footprint. PNC Park is one of the most impressive facilities in baseball, and Heinz Field has a grandness to it as its open south end overlooks the Allegheny River. After a reception one evening at Heinz Field, I had an easy walk over to a Pirates game at PNC while looking out at the Roberto Clemente Bridge and the city’s skyline. Add the Consol Energy Center, pitched up a hill at the end of downtown, and you will experience one of the most picturesque yet accessible urban sports centers I’ve seen in the U.S.

    > DIGGING IN THE DIRT: After three days speaking to executives at our Veritix Sports Franchises & Facilities forum, a few things stood out. First, a relentless pursuit to increase the life span of today’s sports venues so that an organization can save itself from the skyrocketing costs of massive renovations or a total rebuild. The belief is that venues have a 30-year life span, and so the building boom of the last two decades means we are having to look at these buildings again and assess their long-term viability. All operators hope the design and bones of a building are strong enough to allow them to implement incremental improvements. We’ve all seen buildings with design challenges become quickly outdated and razed for newer, increasingly more expensive structures; Three Rivers Stadium and the Charlotte Coliseum come to mind. Meanwhile, buildings with solid location and design remain relevant through renovations. Arrowhead Stadium is an example. If the design of the lower bowl is sound and the building’s bones are good, a facility can maintain relevance and save a city and owner the increasing cost of a new venue — a price that can hit $1 billion even for today’s arenas. 

    A perfect example is PNC Park, which offers the best downtown view of any facility I’ve seen.  Pirates owner Bob Nutting acknowledged the team is establishing a master plan for PNC Park for the next decade to keep it competitive and refreshed (see my colleague Don Muret’s Breaking Ground column on Page 13). He acknowledged that the team’s previous facility, Three Rivers Stadium, didn’t have the “sustaining legs” as a ballpark design but he believes PNC Park “has sustaining legs as one of those iconic ballparks, like a Wrigley, like a Fenway.” Purusit of “iconic sustainability” should be the goal going forward.

    Cavs CEO Len Komoroski noted that Quicken Loans Arena is 20 years old, saying, “We’re the third-oldest arena in the NBA that isn’t either new or hasn’t had major structural renovations.” He also said the building’s design and structure are strong and it is in position to have an extended life with some enhancements. “The building has a good operational footprint,” he said, “but from a fan experience end, we lack what I would say are neighborhoods, spaces where people can be communal. We lack spaces for interactivity, which you would see at new-generation venues. We’re always rethinking our space as a whole.”   

    The takeaway isn’t surprising, but it’s relevant. Flawed design diminishes renovation as an option because it’s throwing good money after bad. Today’s venue designs are so sophisticated that this should be less of a problem going forward, enabling buildings to have a lasting impact. But watch the buildings developed in the late 1980s through early to mid-1990s and assess their viability going forward. 

    > WHO ARE YOU? Another takeaway from the conference is that teams still don’t know enough personal and behavioral information about their fans. Most executives acknowledged that half to two-thirds of the people in their facilities are nameless/faceless buyers. Mark Rossi, vice president of sales and marketing for Dover International Speedway, said during a session, “We only know one in about four ticket holders in our grandstands.” AEG Digital President Bryan Perez summed it up well when asked what type of CRM technology his company is still seeking. “It’s, ‘Who are you with? Who is in your group?’” he said. “I don’t know whether the person who purchases tickets is the one who went, or was it someone else. The more that we can drive electronic and mobile ticketing, the better, because that transfer really tells us who is in the building. … Any technology that could triple my database overnight is going to be pretty interesting.” 

    > AMERICAN BEAUTY: One of my stock questions over the years has been to ask team executives what organizations, outside of their own, do they admire most. One answer is constant: the Pittsburgh Steelers. It’s easy to understand why when seeing the consistent success of the organization and the respect for how the Rooney family operates. It’s been a challenging offseason for the organization, with the deaths of longtime scout Bill Nunn and hall of fame coach Chuck Noll, but sitting with Art Rooney II in his hometown, what stood out was his simple, straightforward view on balancing the tradition of the “game” with the push to improve the fan experience. 

    “There’s a new generation of sports fan that expects different things,” he acknowledged, before offering a caveat. “You’re constantly trying to improve your stadium, but not to the point where it’s a distraction from the game. We’re not trying to re-create someone’s living room at Heinz Field. We want a great in-stadium experience. The little things count, the convenient things, like access to the stadium and parking.” His message was clear: Focus on the game. When teams focus on fan enhancements, it should be additive to the actual game.  

    A couple of other points: Rooney grew up in the league and understands the benefit of a productive relationship between the league and union. When I stated the relationship between the NFL and NFLPA seemed “strained,” he was blunt: “‘Strained’ might be one way to say it.” He said the lack of an agreement on HGH testing has been “a thorn in everyone’s side. We feel very strongly about it. It’s not something we can compromise on. The players association has made it a bone of contention that they will not let go. It’s taken much longer than any of us would have liked.”

    Rooney echoed the sentiment of Miami Dolphins owner Stephen Ross from a few weeks ago when he said that there is still great interest in the Los Angeles market but it remains a building issue, and the league will have an active role if any team lands there. “It’s all about a stadium,” he said. “I believe we will have one, maybe two teams, there in the next 10 years. The league just wants to make sure it works this time.”

    Not surprisingly, the football traditionalist is less bullish on a team in London and specifically cited travel issues. “I’m not necessarily sold on the idea that we need to have a team there to be successful,” he said.

    As for a typical game day at Heinz Field? “I arrive about three hours before the game and meet with the staff,” he said. “I walk the building with [stadium manager] Jimmie Sacco. I enjoy those hours before the game, speaking with fans, with people who work in the stadium, with people from the visiting team. After kickoff, I’m not much of a socializer. I focus on the game.” Talk to anyone in the Steelers organization and they will tell you he’s well-known for watching the game in a room in the corner of the press box with only his father, Dan, and general manager Kevin Colbert.

    > QUICK HITS: Targeting youth is still the biggest issue weighing on executives, and Nutting acknowledged a frustration for baseball that “not enough young people are playing.” Asked what the biggest challenge facing baseball is, he said, “Now that we put some of the ethical issues and performance-enhancing drugs behind us, I think a main focus is engagement with youth and building that next generation of passionate fans. Part of that goes to young people playing the game and loving it.” … I  am eager to see consumer reaction to the 20 poolside cabanas in Jacksonville, a project worth keeping an eye on.  Legends is developing the cabanas for the Jaguars — with a lounge area, cushioned furniture and TVs — and they are bullish on them. “We took input from the marketplace,” said Mike Ondrejko, COO of Legends Global Sales, of the idea. “We’re confident the cabana concept is going to be an absolute home run.” As of last week, the team said 65 percent of them had been sold. Meanwhile, the novel amenity has not surprisingly hit the mainstream media. Comedy Central’s Stephen Colbert talked about the cabanas, saying, “This bold plan raises a lot of questions, like, ‘Why?’ and, ‘Really, why?’” The team said that it wanted to use “underperforming” areas in the stadium and “get creative.” Colbert: “They should tackle the stadium’s most underperforming area: that green liney space in the middle. Let’s get creative in there. You know what? Maybe put a professional sports team on that thing.”  The team had to expect such a response.… The Pirates’ Coonelly, on the challenges of updating Wi-Fi at PNC Park: “It’s taking a while, but we will be completely wired by August. You will be amazed how many wires it takes to become wireless.”

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

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  • How athlete’s drop in NFL draft could still bring big payday

    Marqise Lee likely lost about $5 million in future earnings because of his drop from a projected top-five pick in the NFL draft to pick No. 39 at the beginning of the second round. The good news for Lee: Insurance may pay the difference. 

    Lee purchased loss-of-value insurance before his final season at the University of Southern California last year. The coverage insures against the loss of money paid to an athlete whose draft value falls because of an injury. But payment is not a sure thing. 

    The athlete must show that his fallen draft status resulted from his injury or illness rather than poor conditioning, personal issues or another reason. In fact, there are no reports of insurers having paid a single claim under a similar loss of value policy for athletes. 

    How Lee’s insurer handles the claim, therefore, and whether Lee receives payment — which could be as much as $5 million after taxes — could be a bellwether of athletes’ ability to recover under such policies in the future. At a time of increasing turmoil regarding college athletes’ rights to insurance and other benefits, collegiate athletic departments, agents and insurers will be keeping close watch over the results.

    USC generally encourages its top football players to buy loss-of-value coverage. Prior stars Carson Palmer and Matt Leinert both did so. They did not experience serious injuries in their final year of college, however, like Lee, who suffered a moderate MCL sprain. 

    Marqise Lee’s loss-of-value insurance could pay him up to $5M after his draft position dropped. 
    Photo by: GETTY IMAGES

    At the beginning of last year, Lee was projected by many draft analysts to be a top-five pick. According to some observers, however, he was never the same after the injury. His production plummeted and some teams at the NFL combine reportedly expressed concern about his leg. The result: Five wide receivers were picked before him, until the Jacksonville Jaguars selected him in the second round.

    Depending on the specific terms of his policy, Lee appears to have a strong claim for coverage. But he likely will have the burden of showing that his draft status fell because of his injury. The insurer might argue that Lee’s value fell for other reasons. Among them, the departure last year of other top-performing teammates, such as quarterback Matt Barkley.

    Morgan Breslin, Lee’s former teammate at USC, might have an easier time proving his claim. Breslin also purchased loss-of-value insurance last year and suffered a serious hip injury in November, which caused him to miss 75 percent of the Trojans’ season. Last summer, he was projected by some as a first-round pick, but he went undrafted and signed as a free agent with the San Francisco 49ers. Breslin reportedly could receive as much as $1 million in coverage.

    The benefits of loss-of-value coverage are clear and other highly touted players are signing up. University of Oregon juniors Marcus Mariota, quarterback, and Arik Armstead, defensive lineman, already have purchased the coverage for next season.

    The consequences of failing to buy the coverage can be severe. Barkley, Lee’s former quarterback, did not buy the coverage for his senior year in 2012. 

    According to Hanleigh Insurance, one of the few insurers that offers the coverage, Barkley likely would have been the fourth pick in the 2012 draft and received approximately $20 million in guaranteed money. Barkley chose to come back for his senior year, however, and injured his throwing shoulder near the end of the season. In the 2013 draft, Barkley was not picked until the end of the third round. Based on Hanleigh’s estimate of Barkley’s 2012 draft status, Barkley might have received a maximum payout had he obtained the coverage.

    Loss-of-value coverage is only one component of insurance for college athletes. The most common coverage for top athletes insures against permanent disability. Offered through the NCAA, the insurance provides a lump-sum payment — up to $5 million — for a qualifying athlete who is unable to play their professional sport because of an injury or sickness that occurs during the policy period. The more money the athlete is likely to earn, the more coverage will be available to them. The coverage is even relatively affordable. The NCAA’s chosen lender offers a low-interest loan to cover the premiums. 

    But there are complications with the coverage. First, it is not available to all student athletes. Only those with the potential of being selected in the first three rounds of the NFL draft or NHL draft, or the first round of the men’s or women’s basketball drafts or Major League Baseball draft, are able to obtain the coverage. An athlete’s potential for high selection is determined by scouts hired by the insurers. The vast majority of athletes who go on to play professional sports, therefore, have to look to the private market for insurance. 

    As with loss-of-value coverage, a severe injury will not necessarily trigger coverage. Rather, according to the NCAA, an athlete must show a “disability,” which means the athlete “is unable to engage in sporting activity at the professional level” and the disability prevents the athlete from entering into “any employment contract with any professional team as a professional athlete in his or her sporting activity.” 

    This determination is made by a physician one year after the athlete’s injury. Given advances in medical treatment of athletic injuries, with treatment of anterior cruciate ligament tears, for example, becoming routine, severe injuries no longer pose the same risk of ending a player’s career that they once did. One example: the quick comebacks of Adrian Peterson and Robert Griffin III from ACL tears.

    The handling of Lee’s claim likely will reverberate through collegiate and professional sports. If Lee receives coverage, more top athletes could pursue coverage. If his claim is denied, it could squelch demand and add to the growing chorus of voices seeking more benefits for college athletes.

    Noel Paul (npaul@reedsmith.com) is a lawyer in the Insurance Recovery Group at Reed Smith.

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