SBJ/Aug. 11-17, 2014/Opinion

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  • CrossFit shows strength to excel among participatory sports

    We watched with interest recently as the Reebok CrossFit Games were televised on ESPN. Like most sports industry practitioners, we’d heard about this event and probably thought it was a nice way for young people to show off their muscles. Was this a fad that would pop up, catch a bit of attention and then just fade away?

    In chatting about it, we thought this was likely another participatory rage to put up on the shelf with karate in the ’70s, racquetball in the ’80s, yoga in the ’90s, and Pilates, P90X and Zumba aerobics more recently. Somewhere, we thought, a minor celebrity was lying on a beach, pocketing a mint after inventing the latest way to fight obesity and flabbiness.

    But after seeing CrossFit live (and checking out its website and chatting with a few friends, students and colleagues who participate), our views changed substantially, if not completely. Like the Tough Mudder, Warrior Dash, Spartan Race and Ironman events of the world (all of which have taken their share of the sport-participation pie), CrossFit looks poised to follow in notable tracks and perhaps go beyond.

    Looking for an unlikely game-changing industry example? How about the Ultimate Fighting Championship? That’s what CrossFit may be. In the same way UFC and mixed martial arts allow participants from any fighting background to participate (but also expand their fighting techniques), the CrossFit Games test athletes who don’t always know their specific events until just before they compete and they draw from a variety of workout disciplines that incorporate wide ranging fitness exercises and expertise.

    So imagine not only needing to be able to do 125 pull-ups, but also swimming, running, climbing, jumping, any Olympic-style lifting and more. It’s truly a test of all-around fitness with a strong dose of strategy thrown in. Anyone who watches, who has any kind of athletic background, is likely to observe at least one discipline in which they could shine.

    “CrossFit works because it tests the 10 general physical skills. It doesn’t strive to be great at just one particular skill; it wants everyone to be good at everything,” said Lance Weber, a trainer at CrossFit Billings in Montana. “It’s a sport that can test the elite athletes of all sports and fitness competitions alike, as well as be 100 percent scalable for older generations as well as any athlete in

    Participants compete in team and solo events at the CrossFit Games last month at the StubHub Center in Carson, Calif.
    Photos by: CrossFit Inc. (2)

    between.”

    So why is CrossFit a hot topic? Well, one reason may be the movement away from NCAA-style regulations and the disengagement of “regular” athletes. Another could be the culture.

     “The camaraderie in CrossFit is amazing,” said Weber, whose facility is owned by Kerry and Yurii Hanson of Billings. “It’s the one place where you will see the winners turning back to cheer on their competition. To be honest, the people in last place are getting the loudest cheers and applause, whether it’s in the gym or at the games.”

    That’s much, we imagine, like watching the final finishers of the Ironman crossing the finish line before midnight. It’s in those settings that the “every finisher is a winner” motto shows its value.

    “I played baseball in high school, dreaming of going to the pros,” Weber said. “But competing at a level of such high caliber wasn’t in the cards for me. I came across CrossFit in college and found a new sport that was more challenging than I could imagine. People from all over the world were getting the opportunity to become elite competitive athletes or else really reaching lifetime fitness goals. Either way, you’ve got to admit, that beats sweating on a treadmill for hours.”

    Heather Lawrence, a professor of sport management at Ohio University and a CrossFit Level 1 trainer, said there seems to be some misunderstanding about CrossFit. “[It] often gets viewed as an elite club of superior athletes pushing themselves to the brink of exhaustion during every workout,” Lawrence said. “In reality, coaches modify workouts for each individual to ensure the workout is high intensity but meets the individual’s needs. So it’s not uncommon for CrossFit classes to include a teenage girl living with cystic fibrosis, a stay-at-home mother, former college student athletes, weekend warriors, and a few high-level athletes all completing the workout together with modifications as needed. The result is a welcoming community of people bonding through the shared experience of pushing their physical and mental limits.”

    As people of all ages in developed countries battle the inactivity crisis in a world with numerous attractive inactive pursuits from spectatorship to video games on iPads, properties that are cool and sexy may just be the secret to helping stem health consequences and spiraling health care costs. And although we often talk about youth stagnation, we know adults need fun active programming as well. CrossFit’s growth trajectory may suggest older folks are figuring that out.

    That ESPN carried the 2014 Reebok CrossFit Games last month on all of its platforms (ESPN, ESPN2, WatchESPN and primarily ESPN3) and Reebok is leveraging a 10-year partnership with CrossFit (including naming rights) should count for something. Reebok and ESPN3 may seem like lesser lights to some industry veterans but give CrossFit credit for cementing these deals.

     As for us, while we’re still not 100 percent sure about this latest fitness movement, we are certain CrossFit, Tough Mudder and the UFC should show up on the radars of industry practitioners. In the case of participation sports, get a handle on what makes something fun, sexy and cool (at the same time). For those with many constituent institutions (think the NCAA), give your “body” a chance to let more student athletes shine, particularly female athletes.

    Rick Burton (rhburton@syr.edu) is the David B. Falk Professor of Sport Management at Syracuse University. Norm O’Reilly (oreillyn@ohio.edu) is professor and chair of the Department of Sports Administration at Ohio University.


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  • U.S. summer of soccer: Is growth sustainable?

    I was first struck by the makeup of the crowd. Walking around Charlotte’s city center on a late Saturday afternoon before a Liverpool-AC Milan match, I couldn’t help but notice the number of young people — schoolchildren, young teens and mid-teens, some with their parents, others together in groups — making their way to Bank of America Stadium.  

    SBJ Podcast:
    Executive Editor Abraham Madkour and staff writer Tripp Mickle analyze the "summer of soccer," what it means for the sport in the U.S. and what it could mean for Major League Soccer.

    I followed the sea of red to the city’s hot spot, a group of open parking lots outside of soccer bars that hosted the city’s viewing parties around the World Cup. Fans packed the dense area for soccer-style tailgating, some hours deep in the day. These older groups, predominantly aged 20s to mid-40s, mingled before marching en masse to the match. I was struck by the energy and vibe and believe it was an experience that many NFL teams would like to re-create around their home games.  

    I had heard ticket sales for the Liverpool-AC Milan match, part of the Guinness International Champions Cup promoted by Relevent Sports, were strong, but count me among those surprised and impressed by the turnout and enthusiasm. The announced attendance just under 70,000 wasn’t a farce, because while there were pockets of empty sections in the far reaches of the upper level, for the most part the stadium was filled. With Liverpool, you have an immense global following, and that was obvious by how engaged the fan base was. They showed up, ready to play and party. 

    As I took in the surroundings, I was sent a news alert that stated nearly 110,000 fans had jammed Michigan Stadium on the same day for the Manchester United-Real Madrid match. The attendance figures build on the same feeling I experienced around the World Cup earlier this summer. To me, interest in soccer in the U.S. feels different — bigger and stronger. The ICC was able to draft off the World Cup’s momentum. And while not all the matches were big hits like in Michigan and Charlotte — there were noticeable soft spots and disappointing turnouts in Chicago, Washington, D.C., and Philadelphia — being around those passionate fans on that Saturday got me thinking more about soccer’s place in the U.S. sports landscape, as I am fascinated by the growth I perceive around the sport.  

    But do others feel the same way? I reached out to a number of executives last week to get their perspective on the ICC and the summer of soccer in the United States.

    Darren Marshall, executive vice president and partner at rEvolution: “It certainly shows fans’ appreciation for the top level of the global game, but those fans also know it’s a potential once-in-a-lifetime chance to see those teams play near them, which adds to the draw. Whether this translates into higher attendance at MLS games is the key question. You could use the analogy of the NFL games in London, which sell out within hours since they’re the only chance European fans have to see the game at the highest level, but the NFL is still rightly nervous about assuming that would translate into support for a franchise there.”

    Derek Aframe, executive vice president at Octagon: “A trend I expect to see based on the success of these events this summer is the furthering interest of elite European clubs to build their brand and monetize their content with Americans. The next phase for them might be to consider playing official regular-season matches abroad, the way the NFL, MLB and the NBA have helped build a global audience through this initiative.”

    >Scott Rosner, associate director of the Wharton Sports Business Initiative: “It’s more about the incremental gains that soccer has had in the U.S. rather than any monumental leaps forward. The American soccer fan is more sophisticated than ever due to an organic development of the fan base over a multigenerational period. There is obviously real demand for the biggest clubs on their summer tours, but there is some substantial value to the scarcity of the product and novelty of playing games in unique facilities, such as Michigan Stadium. So while fans might support the ‘circus’ when it comes to town for a very limited engagement, will they support a more extensive offering?” 

    Pilson Communications President Neal Pilson noted the increased knowledge in global soccer by the American public “will clearly benefit” MLS. “But growth for MLS will continue to be slow since it must compete for attention and for top athletes with team sports that have a much longer history in the U.S. and much stronger economics, principally baseball, football, basketball and hockey,” he said. “When MLS games regularly play in 50,000-seat stadia with world-class athletes in their prime and generate TV ratings and sponsor dollars comparable to the established sports, we will know it has arrived. I would say they have another generation to go [20 years], which is not a long time when you look at the 100-year history of other team sports.”

    >Bill Sutton, University of South Florida and Bill Sutton & Associates: “Soccer has positioned itself much like Under Armour and, in another era, Pepsi — the choice of a new generation; your sport, not your father’s. It’s the world’s game, which is more important to a generation that is more accepting of diversity and embracing differences than previous generations of Americans. The friendlies are more event-centric and stand out from other sport offerings on the calendar. … Americans appreciate excellence. The EPL and Champions League offer that.”

    Mike Trager, chairman of The Trager Group, admits he looks at the numbers “a bit differently,” saying, “Although the Champions Cup seems to be a successful venture for the organizers, there was no United States team in the tournament this year. What is driving the popularity of soccer here seems to be the occasional matches between international football powers residing outside of our country. There does seem to be a thirst here to see the world’s best. The real measure of success in this country will lie in the growth of our U.S.-based professional leagues and our ability to compete at the highest levels of the sport. The ultimate test will be the continued growth of a dedicated fan base in more than just a few cities.”

    Media consultant Ben Grossman: “This summer’s attendance figures are just more drumbeats of momentum of the consistent and inevitable growth of soccer into a major player on the U.S. sports marketplace that had already been happening for years. My 6- and 8-year-old sons, who wear San Jose Earthquakes jerseys to school and can’t wait for the Champions League draw later this month, don’t look at soccer as any less of a big sport than football or baseball.”

    Michael Neuman, managing partner of Scout Sports & Entertainment, which advised Geico on its ICC sponsorship: “The attendance record does not come as a surprise. Give ICC credit: They know what they are doing. A combination of strong matchups [and] in carefully selected markets were key ingredients to what drove record attendance. Along the way, they had to make tough decisions to move certain matches out of venues that weren’t selling tickets and into others. However, this year’s showing is proof that interest here for quality soccer has grown tremendously. The success of this tour will fuel growth in future tours and the expansion of brand reputation for overseas soccer clubs seeking to carve out a wider swatch of fandom here on American soil. The real test is, how this will translate into higher attendance and ratings for MLS.”

    > Glenn Wong, professor, sports management, University of Massachusetts: “European soccer is looking at marketing and growth potential in the United States the same way the U.S. views London for the NFL and China, India and Brazil for the NBA and other leagues. While the United States does not currently have the same sheer number of soccer fans as some other countries, it has potential: passionate sports fans with significant disposable income and corporations that will spend money on sponsorships.” 

    As for the related trend lines he’s watching, Wong said: “How can MLS capitalize on this interest? If soccer booms in the United States, what sport(s), if any, will be adversely impacted?”

    So there are some consistent themes of baby steps along the way for a sport whose potential is often highly touted but frequently chided for under-delivering. There’s been massive interest in the international game, but still skepticism around its U.S. sustainabilty. You tell me: Is soccer as a business proposition in the U.S. a stock you’re buying?

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

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  • Use CEO’s strengths to win support for sports sponsorship

    The best chief executive officers share common qualities that have helped drive their personal successes: Integrity, mission focus, vision, the ability to direct complex organizations and communications skills.

    Understand these perspectives, incorporate them into your sports marketing programs, and you will win their support.

    Transparency

    Integrity requires transparency throughout the organization. This means clearly accounting for each component of your sports marketing program: How much are you spending on elements such as naming rights, hospitality, advertising and staffing?

    Understand that each of these elements represents a broad category. Within hospitality, for example, you should clearly understand and be able to communicate how much you are spending on travel, lodging, food and beverage, gifts, etc. Further, you should understand how each cost component relates to the goals you are trying to achieve.

    For one of our clients, a global electronics manufacturer, the first step in optimizing results of a multimillion-dollar sponsorship investment was standardizing the company’s budget definitions. They were then able to link their efforts to finite goals and begin to redistribute resources more effectively.

    Selling sponsorship

    Top 5 issues to address in order to make your CEO happy:


    1. Transparency

    2. Relevancy

    3. Vision

    4. Controls

    5. Collaboration

    Only by clearly defining what you are doing, how much each component costs and what you hope to achieve can you deliver the type of transparency that will satisfy the CEO. Simply taking this one step will likely free up 10 percent to 20 percent of your sponsorship marketing budget that is currently nonproductive.

    According to a report by the consultants McKinsey & Co., only 36 percent of chief marketing officers use analytics. That represents a 64 percent opportunity for you to stand out.

    Relevancy

    The CEO’s focus on the mission means every initiative must be relevant to the overall strategy. One of the first steps in achieving sports marketing by objectives is defining your goals, in line with the corporate strategy. In order to obtain CEO support, you must then communicate these goals and get executive buy-in.

    Understand that broad objectives such as “brand awareness” and “share of voice” will carry relatively little weight because they are not closely tied to the bottom line — sales and profits. The CEO is looking for what the executive suite calls KPIs: key performance indicators. These are metrics that every department in the organization uses to define performance. For example, in manufacturing operations, quality will be an important goal. KPIs for quality may include metrics on tolerances, returns, third-party ratings, etc.

    For your sports marketing program, you should be looking at components of return on investment, sales, cost per sale, customer acquisition cost, customer retention cost, etc.

    One of our clients, a global firm with business-to-consumer and business-to-business sales, found during the course of our analysis that ticketing costs were out of line with best practices. It turned out that ticketing had been rolled into naming-rights negotiations, with insufficient consideration for the implications. Separating these two components to eliminate unused and essentially unwanted tickets saved the company millions of dollars and significantly reduced cost per sale.

    Vision 

    Your goals should demonstrate both short-term and long-term vision.

    The CEO will be very focused on short-term results, particularly those that deliver to the bottom line, while taking into account how actions contribute to sustainable growth. Components of your sports marketing program very likely will be geared toward this longer-term objective, especially if you have a multiyear naming-rights deal in place.

    In this case, you are thinking toward future results, such as preserving and increasing marketing share. This can be termed “marketing mix modeling”: How much of your sports marketing budget is going toward short-term results? How much is building toward a strong market position in the future?

    One of our clients, a global manufacturer of office supplies, signed a long-term sponsorship with one of America’s best-known universities. Short-term, the deal delivered an immediate win in terms of access to the university’s significant office-supply needs. Longer term, the deal offered benefits well beyond the ivy-covered walls, as the corporate B-to-B sales force was able to leverage the sponsorship assets nationwide, and even globally, given the university’s renown in the sports world. The resulting ROI on this sponsorship was very high in context with other deals of this magnitude.

    Controls

    Complexity quickly becomes unmanageable without proper controls. Once your spending is well-defined and clearly attached to both short- and long-term goals, you can (and should) confidently communicate to the CEO the controls that are in place to achieve and consolidate savings.

    Help to define a set of parameters that will guide your staff to monitor expenses and alert them when any component goes out of whack. 

    Another area to consider is how your spending compares with industry best practices. For example, assess your spending with the various agencies that are helping to execute your programs. Are their costs in line with each other and with industry norms? If not, start negotiations toward more favorable rates, or look for a new agency.

    In one relevant example, our client, an automotive manufacturer, ran simultaneous consumer-focused activation programs on both coasts to support launch of a new hybrid-electric vehicle. By defining appropriate spending per consumer, we were able to ensure that both launch teams were working efficiently to deliver the type of impact that the carmaker required.

    Collaboration

    Internal communication relies on the ability of various departments to collaborate toward the common good.

    The university sponsorship provided a good example of how collaboration can drive ROI by linking marketing with sales. We saw similar success with a major beverage distributor. We worked with them to define relevant KPIs, including shelf space and end-cap placements, that would drive sales, and linked them with sponsorship assets that could be leveraged at the retail level, including silhouette “stand-ups” of celebrity athletes.

    In another case, a sponsor was able to score millions of additional consumer “eyeballs” by providing their top-line products as part of a fast-food chain’s sweepstakes. This value pumped up the sponsorship ROI by delivering marketing value at very little cost. The lesson: Collaborate internally and externally to maximize your results.

    Raymond Bednar (raymondbednar@hyperion-marketing.com) specializes in advising and implementing optimization strategies for investments in marketing channels at Hyperion Marketing Returns - Rockefeller Consulting.

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