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The stories, so far, of 2016, and what to watch

As the calendar closes on the first half of 2016, here are the stories that have stood out and what I’m keeping an eye on for the second half of the year:

> THE NFL’S RETURN TO L.A.: This story had everything: big names (Jerry Jones, Bob Iger), big dollars (up to $3 billion in private investment by Stan Kroenke), big vision (returning to the nation’s second-largest market with a bold real estate development plan), rare sightings (Paul Allen attending an owners meeting and becoming an influential voice) and a generational chasm (split among ownership groups). One owner recently told me about that afternoon in a Houston hotel ballroom, “Now that meeting was fun!” Of course, he was on the side that had championed Kroenke’s Inglewood project.

Subplots continue from that afternoon, and it still has insiders buzzing — from Iger’s presentation on the Carson project (seen as flat), to Kevin Demoff’s pitch for Inglewood (overwhelmingly praised), to Jones’ widespread influence, to ownership bucking the Los Angeles committee’s recommendation of Carson, to Commissioner Roger Goodell approving a rare secret ballot and the ensuing political maneuvering.

While some wondered whether fissures in ownership would take long to heal, that doesn’t seem to be the case. But it’s clear that a group of owners is emboldened by its win for Inglewood. Going forward, fan support and the team’s success in Los Angeles is the simple storyline, but this is far more than just a team returning to L.A. It’s about the NFL establishing a multiuse campus on the West Coast that will host Super Bowls, league offices, studios and marquee events, serving as a major focal point and celebration for the league.

> ESPN STAYS IN THE GAME: When it failed to make a competitive bid for the first part of the Big Ten’s media package, many expected ESPN to walk away from the conference. But despite the cloud of cost-cutting hanging over Bristol, John Skipper made an aggressive bid to keep the Big Ten, proving that the media giant still puts a high priority on high-quality live rights. The move is certain to reassure a sports marketplace that feared a retrenching.

NASCAR’s Brian France appeared with Donald Trump in February.
Photo by: AP IMAGES
> THE TRUMP FACTOR: The political rise of Donald Trump has already affected sports and will through the election. Team owners and athletes close to the candidate have mostly shied away from him for fear of fan/consumer backlash. A source close to one team owner told me that they are very concerned of what a Trump endorsement would mean for PR and perception. All one has to do is look at the controversy that NASCAR’s Brian France faced after Trump touted France’s endorsement during a campaign stop in Valdosta, Ga., in February. But the global community is also watching and is fascinated/frightened by Trump. Los Angeles’ bid to host the 2024 Games and a U.S. bid for the 2026 World Cup would be significantly hurt by a Trump administration that will have few global allies.

> THE CHINA SYNDROME: The world’s most populous country is on a spending spree in sports, and the aggressive investments by China-based companies may be the most far-reaching development of the year. Dalian Wanda acquired Infront Sports & Media, World Triathlon Corp. and became partners with FIFA and FIBA. Investment fund Shanghai Jin Xin acquired a majority of MP & Silva. There are major investments in talent and amateur sports, all to make China a dynamic, global sports power.

> VEGAS WASN’T BUILT ON WINNERS: The often-asked question about the viability of the nation’s 28th most populous city as a sports market could soon be answered. The city opened the state-of-the-art T-Mobile Arena, the NHL approved Bill Foley’s bid to place a team in the market by the 2017-18 season; the Raiders’ Mark Davis is seriously flirting with the city; and the market has received public support from influential NFL owners Jerry Jones and Robert Kraft. Don’t overlook Tim Leiweke’s role in working with Majestic Reality and Las Vegas Sands Corp. for a 65,000-seat stadium. While there’s a lot of energy and focus on the market, no one seems really sure of its long-term sustainability.

> NASCAR’S REVOLUTIONARY CHARTER SYSTEM: This story is inside baseball, but its importance can’t be overlooked. The charter system, spearheaded by Brian France and top team owners, creates a predictable economic model for the sport and team owners and offers a way for new money to enter NASCAR. This was a major accomplishment that allows the sport to now address other issues through greater collaboration.

> MAKING THURSDAY NIGHT “MUST-SEE TV”: The NFL masterfully leveraged its popular Thursday night package by splitting rights between CBS and NBC, while keeping all the games on NFL Network. What makes this package unique, though, is the streaming deal with Twitter. The deal’s value is only $10 million. But the NFL is viewing this as a big test for consumer adoption, as the league wants digital companies to embrace these rights when its traditional media deals expire early next decade. While there are bigger, more important issues in sports business, top executives tell me the story they are watching most closely is how this deal is executed and its results.

> COLLEGE RATINGS MISS THE MARK: The year started off with a wake-up call for big-time sports event ratings as viewership plummeted in year two of the College Football Playoffs. The biggest culprit was the calendar: Having two semifinal games on New Year’s Eve proved too much for ESPN to overcome, as viewership for the games was down a staggering 40 percent from the two-game average on New Year’s Day for year one. That low lead-in affected the title game a week later, as Alabama’s defeat of Clemson was down 23 percent. The numbers rocked the sports industry and led to a healthy debate over the future schedule of football’s final four and pressure to avoid the New Year’s Eve window. CFP officials eventually acknowledged they overstated their ability to change viewing habits on a national holiday. But it wasn’t just college football’s big event that was down, as college basketball ratings were affected by a move to cable. TBS/TNT/truTV combined for 17.8 million viewers for the NCAA hoops title game, a thrilling Villanova win over North Carolina, down 37 percent from CBS in 2015.

Sixers strike first with StubHub.
Photo by: COURTESY OF THE PHILADELPHIA 76ERS
> THE NBA’S NEW AD INVENTORY: After debating for years, the NBA finally found common ground on the financial split and structure to move forward and allow teams to sell a 2.5-by-2.5-inch advertising patch on the front upper left shoulder area of game jerseys beginning in the 2017-18 season. It wasn’t surprising to me that the aggressive Scott O’Neil and the Philadelphia 76ers were the first out of the gate in a deal with StubHub. What to look for going forward: What are the kind of brands that sign on to this inventory? What are the financial terms of the league mandated three-year deals? (Few believe the $5 million-a-year valuation people are putting on the 76ers deal). And, of course, what leagues will be next?

> WOMEN TAKE ON U.S. SOCCER: This public spat pits members of the popular U.S. women’s national soccer team against their national governing body in a complaint charging wage discrimination. While the players came out aggressively with an appearance on NBC’s “Today” show in March hitting all the right talking points about wages and equality, U.S. Soccer fired back detailing its broad support of the women’s game and NWSL, in particular.

> ESPORTS: EVOLUTION OR REVOLUTION? There’s almost a herd mentality driving investment in esports. True believers are convinced it’s the next big thing, but most admit they have little sense of where it will all lead. Turner and WME-IMG launched its ELeague, EA Sports is rolling out its series, Budweiser made its move into the market by aligning with athletes, and Comcast’s Xfinity has jumped into event and team sponsorship. I didn’t anticipate deal flow so quickly or that the names getting in would be such heavyweights. But pay attention to the details in these deals; there’s a big difference between really believing and kicking the tires.

> ON EVERY CAMPUS, CHURN, CHURN, CHURN: Through early last week, 23 Division I schools had introduced a new athletic director in 2016. Add in the 13 jobs that are still vacant or interim (including high-profile Texas and Baylor), and that means that only halfway through 2016, more than 10 percent of the Division I schools have had or will have a turnover at the top of the department’s hierarchy. This proves again the overwhelming pressures on this high-profile position.

> NFL’S STANCE ON CTE: In March, Jeff Miller, the NFL’s senior vice president of health and safety, was asked by a U.S. House committee if there was a link between football and neurodegenerative diseases. Miller said in response: “The answer to that question is certainly yes.” The comment surprised the football world, marking the first time a top league official publicly acknowledged a link between football-related head trauma and CTE. A week later, a different message came from the Cowboys’ Jones when he was asked whether there was enough data to establish a connection between CTE and playing football. Jones: “No, that’s absurd. … We have had millions of people who have played this game, millions of people at various ages, right now, who have no issue at all.” Days later, Commissioner Goodell called Miller’s statements “consistent with our position over the years.” Taken together, the remarks showed a league still grappling in how to publicly address one of the biggest challenges to its future.

> THE RUSSIANS AREN’T COMING: The move from the International Association of Athletics Federations and International Olympic Committee to bar the Russian national track team from competing in Rio is unprecedented and the strongest move yet by the powers that be when it comes to doping. One longtime sports business executive told me earlier this month that this was the story he was watching most closely, hoping the international community would take a no-tolerance stance, indicating a tipping point on drugs in sports. I’ve long believed fans have come to accept drugs in sports, and perhaps now the athletes, the original source of this investigation, will expose the culprits and demand accountability and a culture change.

The Curry-James rivalry fueled Finals ratings.
Photo by: GETTY IMAGES
> THE BALLAD OF LeBRON AND THE CAVS: A player and team captured the nation’s attention with an incredible comeback against one of the hottest brands in sports. LeBron James fulfilled his promise to bring a championship to Cleveland, which will affect how the city views itself, and put the Dan Gilbert-owned franchise in prime position as it goes to market naming rights at its arena and practice facility and sponsorship for its jersey. This run by the NBA matches its salad days in terms of star appeal, drawing casual fans and generating water-cooler talk. Experts point to media fragmentation when it comes to rating comparisons to previous years. That’s what makes the NBA’s recent seven-game Finals series so amazing. Game 7 averaged 31 million viewers, just below the highest NBA game audience ever, Bulls-Jazz Game 6 in 1998 — 18 years ago. The NBA is really having a good run.

> AND DON’T FORGET THESE OTHER IMPORTANT STORIES: A framework for state legislation on daily fantasy sports is being established and the pending deal in the important New York market was vital for FanDuel and DraftKings. ... The buyouts at Fox Sports proved it’s not just ESPN facing headwinds in sports media. … The highly respected Mike Tirico, going from ESPN to NBC, is a coup for Mark Lazarus. … Under Armour’s massive $280 million deal to outfit UCLA shows the company’s fervent desire to establish a larger presence on the West Coast, as well as Kevin Plank’s bullishness on college sports. … The development of a new ballpark for the Texas Rangers in Arlington portends a trend signifying a shorter lifespan for today’s sports venues. The Ballpark in Arlington opened in 1994 and now, just 22 years later, the team and city of Arlington plan to replace the ballpark with a new $1 billion facility set to open in 2021. … The opening of Daytona Rising and the renovated Daytona International Speedway offered a model for the future of motorsports facilities. …One of the most novel sponsorship deals of the year was the PGA Tour landing speciality retailer Dean & DeLuca as the title sponsor for the former Colonial in Dallas. It’s good to see a nontraditional, high-end, premium brand recognize the value of sports. Smart, unique deal for both sides.

>WHAT I’M WATCHING GOING INTO THE SECOND HALF OF 2016:

CHARLOTTE’S WEB: NBA Commissioner Adam Silver will likely decide the future of the All-Star Game in Charlotte, clouded by the HB2 controversy, by Labor Day. The sources I speak to see little chance Silver can keep the game in the city, largely because of the amount of frustration from the entire NBA community toward the legislation. Many expect TV talent, sponsors, musical acts, performers, celebrities and the long line of pop culture followers of the game to boycott the game, leaving Silver the choice of a significantly weakened product or moving the game. Silver has said he’d rather keep the event in the city and use it as a platform for change, but the prospect of a compromised event may not leave him with much of a choice.

WAIT UNTIL THAT DEAL GOES DOWN: I wish I had insight into the travel schedule of NASCAR’s Brent Dewar, Steve Phelps and Jim O’Connell, because that may give you a hint into the sport’s efforts to sign a Cup series title sponsor. There’s no hard timetable, but they’ll want to provide a new partner some ramp-up time to activate in year one. While Sprint was paying between $50 million and $75 million this year in the final year of its deal, you can understand the tremendous challenge NASCAR sales executives have in creating a proposition that ensures major retail and in-market activation while addressing complicated content rights that any sponsor wants in a deal this size. While the series title sponsorship is a national platform with plenty of touch points, the high annual fee is a tough proposition for companies that continue to manage costs, despite hoarding cash for years. Everyone tells me it’s perfect for an international brand looking for a bold entry into the U.S. market, but does that mesh with affinities of the traditional NASCAR fan base? Or perhaps the inventory is split throughout the season or presenting sponsorship is sold to the “Bill France Cup.” This is a great story to watch.

AROUND THE HORN: We’re all watching Rio and the challenges that come with it. You name it: Zika; polluted water; financial, political and social instability, topped off by major transportation issues. But we’ve seen this story before, and traditionally the Games go on fine. … What will come from MLBAM’s plans for BAM Tech and will it complete a deal with Disney or Silver Lake? How active will NBC Sports’ OTT service, Playmaker Media, be as a rival to BAM Tech with so many league rights already negotiated? … One of the hottest companies in sports that I’m watching is Topgolf. It has plotted an aggressive expansion, with plans to add 20 locations backed with additional private equity capital. Can it maintain its trajectory? How will it leverage its success? And will golf’s governing bodies learn from its efforts to make the game more hip and cool? … How will the NFL’s new communications czar, Joe Lockhart, continue to revamp the league’s PR approach and public response on important issues. We’ve already seen the change in being more aggressive against mainstream media like The New York Times on the concussion issue. … It’s a hyperlocal issue, but I’m closely following the Cubs vs. Mayor Rahm Emanuel feud over the ambitious renovation at Wrigley Field. You have two of the city’s oldest institutions — Chicago politics vs. the Cubs — in a dispute over key pillars of the sports business: venue expansion, community relations, pedestrian access and food and beverage offerings. All coming while the Cubs could be on the precipice of a historic year and the mayor’s popularity is at an all-time low. … New ownership or new investors in the UFC. … And finally, stadium security — a frightening, real and massive threat to the future of sports business.

The Flyers founder died in April at age 83.
Photo by: GETTY IMAGES
> LEAVING A LEGACY: We lost a member of our 2012 class of Champions of sports business with the death of Philadelphia Flyers founder Ed Snider. I’ll never forget the stories he told during dinner and the following day when we spent time together in California a few years ago. Passionate, fiery, tough, smart — he had all the attributes that make for a great hockey player and leader.

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

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