The CAA World Congress of Sports touched on a number of themes over two days of discussions and networking. Many of them — the challenges of media fragmentation and direct to consumer modeling going forward — have been touched on. Here are a few other elements that I spent a lot of time thinking about after the event.
WHAT FANS WANT: The different points of view around the live-event experience were evident. Let’s start with concessions, long one of the most debated price points by fans. AMB Group CEO Steve Cannon had the first word in promoting the dramatic price cuts by Arthur Blank at the new Mercedes-Benz Stadium that has hot dogs costing $2.
“If you charge $8 for a hot dog, you have lost your way,” Cannon said. “Even if you are catering to a great demographic that can afford to drop that kind of money, it just leaves a bad taste in their mouth. So, we have broken the business model.”
A day later, Sacramento Kings President Chris Granger outlined a different philosophy when asked if venues selling $8 hot dogs had lost their way. “It depends on the hot dog. It depends on the quality. We have a different approach to food. It is not just about price sensitivity,” he said.
The bottom line is these two organizations personify the strategic differences when it comes to concessions. For every supporter of Blank’s cost-cutting approach I’ve talked to, there is an equally passionate opponent, believing it will dramatically reduce quality and negatively affect perception of the culinary offerings at sports facilities. Granger and the Kings have taken the approach of more expensive, yet locally sourced farm-to-table offerings that they believe will differentiate a Kings game experience from a regular night out in Sacramento. It remains to be seen what approach wins or if there is a hybrid in the future.
Outside of concessions, the buzz was about social and shared experiences in facilities, with communal spaces at venues only increasing in importance. There are an estimated 500 fans a game who never even go to their seats at the Kings’ new Golden 1 Center, with Granger saying, “The building was designed to foster social interaction.”
Janet Marie Smith, Dodgers senior vice president of planning and development, said that behavioral change is one of the biggest issues she’s seen in her career designing ballparks. “We’ll have a sellout at Dodger Stadium and it seems like half of them are on the concourse,” she said.
But broadcasters aren’t happy with this trend. Former Fox Sports executive Ed Goren noted, “It’s nice your fans can roam around. One of the worst things in baseball for TV is you get the center field camera and you see the empty seats behind home plate because those people are feeding themselves.”
Nothing irritates TV producers — and implies malaise — more than empty seats, so the contrast of an energized full venue with the constant roaming of fans at today’s venues is an issue to follow.
A SOCCER GENERATION: The session that generated the most audience response of the panels I moderated was one on global soccer. The audience consistently peppered the panel with questions on the tri-country World Cup bid for 2026, from qualifying changes to schedule balance to playing surface; there were also questions on the state of second-division soccer in the U.S. and future relegation and expansion in MLS. This interest meshes with what I experience in public speaking or on campus, as I’m asked about soccer more than other sports.
What stood out to me from this discussion: Look for the three-country bid to be awarded the 2026 Cup via an expedited bid process that could render a decision by June 2018, a full two years ahead of the scheduled vote. There’s virtually no opposition to the U.S./Mexico/Canada bid, and an early approval would significantly help event planning. I found MLS Commissioner Don Garber’s comment particularly interesting, saying the ’26 bid is about “shifting the power of this very, very powerful and valuable sport to the soccer infrastructure in this part of the world.”
That would be welcome, because we know the history of the European-based FIFA and while FIFA/CONCACAF’s Victor Montagliani was sincere in saying reform is a “process” and takes time, I really regret not pushing him to explain why ethics, honor and transparency can’t become immediate in an international governing body.
ESPORTS HERE TO STAY: It’s not a fad, and not going anywhere — so get used to esports being part of the conversation, which it was throughout the Congress. Executives all stated this genre is here to stay, but it will operate much differently after major consolidation over the next few years. MSG’s David “Doc” O’Connor said it’s one of the areas he’s most focused on, and one esports first-mover sees changes coming soon.
“It’s definitely a gold rush,” said Michael Rubin, 76ers and Devils co-owner and owner of Team Dignitas. “But any time you see market euphoria, there’s generally a reason for it. I think there’s going to be an incredibly successful esports business, but my guess is that it will be centralized around a very small group of parties. The question is who takes the prize.”
In addition to consolidation, more than one source told me not to focus solely on top-tier competition but to look at the massive broad-base participatory market. Turner’s David Levy spoke of the untapped opportunities beyond the pro ranks. “There’s a real opportunity in esports right now to be a part of the amateur play,” he said.
I’ll give props to Rubin’s ownership colleague, David Blitzer, when asked how he will measure success of his esports investment in three years. Blitzer responded, “Absolutely no idea.” He’s wasn’t the only one to express such uncertainty around the space.
WHAT I PUT AWAY FOR A RAINY DAY: I’ve followed the startup plans around 3-on-3 basketball; Ice Cube is behind a league starting up in June, and a group supported by longtime sports executive Andy Dolich is also behind a league. While one source was adamant that neither will amount to anything, I was interested in how bullish Nike’s George Raveling is on the concept.
“Three-on-3 basketball I’m certain will become an Olympic sport,” he said. “In 15 years … there will be a college national championship. The Ice Cube and [Allen] Iverson thing is good and bad. People don’t take it seriously because of the celebrity part of it. FIBA has invested millions in it and it’s coming.”
That translates to real business opportunities around it.
HIGH POINTS: One of the most impressive discussions at the event was LA 2024 Chair Casey Wasserman and U.S. Olympic Committee CEO Scott Blackmun outlining the strategy and politics around landing the 2024 Summer Games. Wasserman was diplomatic but clearly in charge of the issues and the nuance around the bid; I’ve rarely seen him better in public. Meanwhile, the military tension in the western Pacific has me concerned with the Winter Olympics in Pyeongchang just nine months away, and Blackmun acknowledged the new dynamic. “I would be lying if I told you I hadn’t thought about it,” he said. … Another speaker you’ll want to make time for is Blitzer. Smart, but honest and self-effacing about the business. Asked about his learning experience since buying the 76ers with Josh Harris and Rubin in 2011, he said, “We were completely clueless in that first year.” Asked if he had ever questioned the well-known “process” under former GM Sam Hinkie, he said, “Every day. It was brutal.” … One of the best group discussions over the two days was a provocative yet thoughtful and respectful exchange over the future of player protests and if we should expect to see more or less of them in the future. Most believed we’ll see less, with Adidas’ Mark King and Rubin particularly animated, with Rubin citing his discussions with fellow owners telling him they will avoid socially active/protesting players as an unnecessary distraction. CAA Sports’ Mike Levine was, not surprisingly, on the side of talent, but was vocal and persuasive in his opinion. This was one exchange that people talked about for the entire two days and one that we need more of at public events.
Abraham D. Madkour can be reached at amadkour@sportsbusinessjournal.com
