SBJ/June 12-18, 2017/Leagues and Governing Bodies

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  • Rugby: Getting in the scrum

    In November 2014, USA Rugby hosted an international test match against the New Zealand All Blacks at Soldier Field in Chicago. The result on the field, a 74-6 drubbing by the visitors, was not a surprise. But the attendance was a stunner: A 61,500-seat sellout, tripling the previous high-water mark for a rugby audience in the U.S.

    Since then, a few more rugby special events have drawn good crowds, and in 2016, the sevens version made its Olympic debut. Meanwhile, NBC Sports has steadily added rugby to its programming, a big step for a game that was practically invisible in America just a generation ago.

    All this activity has made a small but passionate group of businessmen certain that the sport is ripe for commercialization, and they’ve put millions of dollars into their efforts to build an American rugby industry. Their enthusiasm starts with the sport’s high-income fan base of ex-players and immigrants, and grows with the belief that they can gain new followers by leveraging the game’s constant action and fast pace, along with anxiety over the dangers of American football.

    But their unity of spirit has been hindered by strategic and personal disagreements, high-profile failures and fierce competition for what is, by all accounts, still a very niche market.

    Today, at least five groups of entrepreneurs are trying to launch U.S.-based professional leagues in an era when even established, major-sport leagues face profound challenges in keeping fans’ attention.

    A New Zealand All Blacks-Team USA match in 2014 sold out Chicago’s Soldier Field, offering a glimpse of rugby’s potential in the U.S.
    Photo by: GETTY IMAGES


    The clutter is partly intrinsic to rugby, a game with two very distinct versions (seven-man and 15-man), but it’s also a reflection of profound differences of opinion on a key question: build a pro league now, or focus on more limited, lower-risk efforts to build awareness of the sport over the long term?

    “I don’t think there’s any reason why in a generation rugby can’t be the No. 1 sport in the world,” said Doug Schoninger, a former bond trader who launched the PRO Rugby league in 2016 but is now struggling to get a second season off the ground. “It’s got all the attributes that a good sport needs to have now: It’s connected [with fans], it’s good on TV, the personalities are interesting, it’s not particularly high cost.”

    But other marketers think a true league is too ambitious for the time being, and are instead focusing on annual tournaments and one-off showcases.

    TLA Worldwide, which helped promote the 2014 game at Soldier Field and the U.S.-Ireland match last weekend in Harrison, N.J., evaluated opportunities in international sports a few years ago and loved what it saw in rugby. “We’re very bullish on rugby in the States,” said CEO Michael Principe. But TLA believes promoting one-off events with recognized international brands is the best path for now.

    “The market’s still developing, and for a league to be successful, you need strong sponsorship, strong media and strong grassroots support,” Principe said. “And when all those three come together, the conditions are right for league play.”

    The leagues face long odds, said Bob Caporale, founder of the investment banking and consulting shop Game Plan.

    “The sports market in the U.S. is not just the U.S. anymore,” said Caporale, who does not have any rugby investments. “If you’re a soccer fan, you can watch on your television Premier League soccer games, and that just adds to the already existing proliferation of sports leagues we have. … And so to start a new pro league, you have a tremendous amount of — I don’t want to call it competition — I would just call it distraction.”

    ■ ■ ■ ■

    Stakes are high. Nobody wants to get it wrong, lest it poison the well for everybody. And there are nearly as many different strategies as there are investors.

    Schoninger’s league, PRO Rugby, played a season of 15s in 2016, but its future is in jeopardy after it canceled player contracts in December amid a dispute with USA Rugby. The four other would-be leagues — Major League Rugby (15s), the National Rugby Football League (15s), Grand Prix Rugby Football League (sevens) and the North American Super 7s Rugby League — say they’re within two years of launching (see related story). Meanwhile, rumors persist in the British media that Pro12, a European 15s league, wants to expand into the U.S.

    In the meantime, TLA, NBC Sports and AEG are all continuing with lower-risk plans to keep rugby in the American public eye. Later this year, as part of a recently announced four-year deal with AEG, the English Premiership will play a regular-season contest between the Newcastle Falcons and Saracens FC at Talen Energy Stadium in Philadelphia.

    Rugby International Marketing, the for-profit arm of USA Rugby, has issued sanctions to two of the pro leagues but has seen far more tangible results to date in commercializing international friendlies and tournaments, including selling title sponsorship to Emirates for the two-game “Summer Series,” made up of the Ireland match and a game versus Georgia on June 17. RIM was founded with minority partners CSM Sport & Entertainment, Rugby Football Union and the British Premiership side Harlequins FC.

    One company, United World Sports, is pursuing both a league and other strategies. It invented Super 7s, a proposed league in a modified form of sevens, but it’s also promoting and developing recurring rugby events. It’s seen success with its owned properties, such as the Penn Mutual Collegiate Rugby Championship, just completed in Philadelphia on June 4, and the annual Las Vegas stop on the World Rugby-owned HSBC Rugby Sevens Series, for which it owns commercial rights.

    UWS executives say they’ll launch a new sevens tournament at Avaya Stadium in San Jose on Nov. 4-5, the Silicon Valley Sevens, which will involve national squads before they start the international sevens circuit. President Jonathan First thinks annual tournaments are the best way to build his company’s value and the sport’s fan base.

    “It’s an emerging sport,” First said, “and it’s still viewed by the American consumer in general as a foreign sport. It’s going to take awhile.”

    ■ ■ ■ ■

    Despite the words of caution, there’s good reason to believe in rugby’s potential.

    U.S. participation has grown, on average, 13 percent annually since 2011, and its players are far more likely to hold advanced degrees and earn more than $100,000 than the average population, according to the Sports & Fitness Industry Association. It’s the fastest-growing team sport measured by the SFIA. Amid China’s emergence and the ongoing success of U.S. broadcasts of international soccer, it’s got a desirable international flavor, too.

    American rugby events with a track record, like the Penn Mutual Collegiate Rugby Championship, have steadily grown attendance and NBC clearly thinks it has a future on TV. “We’re very happy about how it performed in the Olympics,” said Jon Miller, NBC Sports programming president.

    The sport’s biggest proponents like to call it the next soccer, but there are big differences.

    When Major League Soccer formed in 1993, ahead of its 1996 launch, youth and scholastic soccer programs were commonplace throughout the country. In 2016, only 61 high schools in the country fielded an organized rugby team, according to the National Federation of State High School Associations. Also, rugby enthusiasm is heavily concentrated in California and the mid-Atlantic, and in Irish or British commonwealth ex-pat communities.


    Investors are bound to see the shortcomings, Caporale said. “I don’t think you can sell it, if you will, to anyone who isn’t already interested in the sport,” he said. “It’s too far down, if you will, on the list. Maybe friends and family, but I think it’s hard.”

    Rugby proponents are counting on the 2018 Rugby World Cup Sevens, to be held in San Francisco in July 2018, to do for pro rugby what hosting the 1994 World Cup did for soccer in the U.S. But there, too, the comparison is limited, because the rugby-familiar immigrant community is so much smaller than the natural soccer base provided by immigrants from Mexico and other Latin American countries.

    Arguably NBC Sports is the single most important factor in the story of rugby’s growth prospects. It started broadcasting the college club sevens tournament in 2010 and has steadily added rugby programming, including the Olympics last year.

    Ratings for its English Premiership matches have hovered around 100,000, though rugby sevens tournaments involving national clubs have been around 750,000 viewers, with five broadcasts clearing 1 million, according to Nielsen and NBC.

    NBC has no interest in a domestic league, Miller said. “I’m not necessarily a proponent of a pro league in the U.S.,” he said. “I think the hurdles are exceedingly high.”

    Instead, NBC is replicating its success with the Olympics and Premier League soccer, as illustrated by its recent deal to air English Premiership Rugby and its $10 million rights deal with World Rugby, the first time it’s paid a rights fee for the sport. That deal gives NBC exclusive American rights to the men’s and women’s World Cups in 15s and the World Cup Sevens through 2023.

    “We think people in this country, and the Premier League is the perfect example of this — people want to watch the best of the best,” Miller said. “I think the best rugby is not played right now in the United States, it’s played in England, France, Italy, South Africa, Australia, and that’s what the Rugby World Cup is.”

    Sponsorship sales is another hurdle the leagues will have to clear. For all the upside the rugby demographic has, it’s just too small to come anywhere near the reach and frequency most classic sports sponsors want, said Mike Reisman, president of sports and entertainment at MKTG.

    Reisman advised AIG on activating its presenting sponsorship for the All Blacks’ weekend in Chicago back in 2014, and called it a rousing success. Even then, though, rugby has such a long way to go that it’s a portfolio play for “long-term moderate growth.”

    “They say it is the fastest-growing sport, and it might be, but the base is still so low,” Reisman said. “It’s an opportunity for a sponsor to grow with the sport, but it’s not an opportunity to get any mass reach. It’s an opportunity for the sponsor to appeal to the passionate few who are involved in it.”

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  • Hope, skepticism permeate U.S. rugby efforts

    The entrepreneurs planning professional rugby leagues in the U.S. think the best way to build media, sponsorship and grassroots support is to launch a product as soon as possible. But there have been high-profile failures and delays, and hope and skepticism run in equal proportion across rugby circles.

    The latest proposal is North American Super 7s, a concept developed by United World Sports that expands the standard rugby sevens format to make each match a viable standalone event. (Today, each sevens game takes less than 20 minutes to play and multiple matches are organized around single-site, multiteam tournaments.)

    Founder and CEO Jon Prusmack has raised more than $5 million to run an introductory barnstorming tour after San Francisco hosts the Rugby World Cup Sevens in 2018, which he hopes will spur more investor interest in funding a full league in 2019 that would need financing of up to $40 million.

    But he’s got competition. Four other bodies claim their own leagues, or precursors to them, are also coming by 2019. Prusmack dismisses them as hype.

    “There is no pro rugby in America right now,” he points out.

    It’s not for lack of talking about it. The Minnesota-based National Rugby Football League and California-based Grand Prix Network both claimed a launch was imminent earlier this decade but didn’t deliver. New York-based PRO Rugby did play a season in 2016, but its future is in doubt.

    PRO Rugby got its start in 2015, when Doug Schoninger, a former bond trader, signed a deal with USA Rugby for an exclusive sanction on professional 15s in the U.S. He spent $7 million last year to operate the single-entity PRO Rugby league, which fielded teams in San Francisco, Sacramento, San Diego, Denver and Columbus. At the time, he said he was prepared to spend up to $30 million over three years to build the league.

    But in December, he canceled players’ contracts because of a dispute with USA Rugby that led him to worry that his sanctioning wouldn’t be extended as he expected. Without any certainty of long-term protection against competitors, he’s reluctant to keep spending. Schoninger insists he will stage a competition in 2017 under his rights, but details are sparse so far.

    “We had one season,” he said. “And the reason we don’t have a concurrent second season is because of the action of others.”

    Grand Prix is the other business that holds an official sanction from USA Rugby. (UWS’s Super 7s isn’t a recognized discipline and is not eligible for sanctioning.) Grand Prix is owned by William Tatham, who along with his father ran the USFL Arizona Outlaws in the 1980s. He first acquired a sanction for the seven-man version, now played in the Olympics, in 2005, and recently extended it through 2024.

    Five years ago, a Grand Prix press release said there was “overwhelming evidence” that “the time is right” for a pro sevens league. It promised to launch in 2013 but never did.

    Now, Grand Prix is back, and Tatham says he is within weeks of announcing details for the Rugby Football League Million Dollar Champion Sevens, a $1 million prize purse sevens tournament to be held at LAFC’s Banc of California Stadium in 2018. The plan is to have that pave the path to a league a year later, called the Grand Prix Rugby Football League.

    Prusmack is skeptical. “What is Bill Tatham’s property?” Prusmack said. “He hasn’t done anything in 12 years except put out nice press releases.”

    Tatham said he’s been frustrated, too, by the lack of action but insisted he’s not going to launch his business before it’s ready and risk alienating fans by putting a bad product on the field. Tatham estimates he’s spent $10 million on rugby so far.

    “God bless Jon Prusmack, because other than me he’s the only guy writing checks,” Tatham said. “And so, he indirectly promotes sevens, and proves people will buy tickets, and has proven it can get good ratings on network television.”

    Meanwhile, two other startups are promising to begin play soon in the 15s version: Major League Rugby, a Salt Lake City limited liability company owned by 10 existing club teams, which says it can launch in 2018, and the National Rugby Football League, which says it’s still working on its plans.

    MLR Deputy Commissioner Nic Benson said Major League Rugby is running a lean central office and expects its member clubs to lock down venue deals, pay players and produce the games. Some of the clubs are seeking new local investors to transition from clubs to pro teams.

    The league hopes by using existing club infrastructure and keeping costs low it can build slowly. “What we’re doing is a heavy lift,” Benson said. “It’s a five- to 10-year plan. We have to build this up, and we have to do this the right way, and we have to be smart about it.”

    The NRFL says it has committed franchise buyers and executives with experience from other sports but declined to comment on its financial wherewithal, sanctioning or a start date.

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  • Sanctioning stamp of approval a hot-button topic

    In 2015, the startup National Rugby Football League executed one of the more high-profile failures in trying to get a pro league off the ground.

    After running talent combines that lured intrigued American football players, it promoted an exhibition game between American players against the Leicester Tigers, an English Premiership side. But the match was abruptly canceled because it lacked a sanction from USA Rugby, making it effectively impossible for most players to play.

    The concept of sanctioning is a hot-button topic in rugby. Officially a process that extends liability insurance coverage to events, it’s also become a tool of the governing body to limit the Wild West of rugby entrepreneurialism. Players on sanctioned club teams or national teams, in either the U.S. or elsewhere, can be punished for participating in non-sanctioned events, a major complication due to the United States’ limited domestic talent pool.

    By issuing exclusive sanctions to a single league for 15s and a single league for sevens, the governing body is signaling its preference to a promising but limited marketplace, said David Sternberg, CEO of Rugby International Marketing, the business created by USA Rugby and several minority partners to commercialize the sport in the U.S.

    “If there were three or four leagues, or would-be leagues, asking for commercial support, it would be important to ask: Who is actually sanctioned to do that by USA Rugby?” Sternberg said.

    Currently, two startup leagues are sanctioned: William Tatham’s Grand Prix Network, which is proposing a $1 million sevens tournament in 2018 as a precursor to a league launching in 2019; and PRO Rugby, which played a season in the 15s version in 2016. Tatham’s sanctioning for sevens is locked up through 2024, and PRO Rugby, owned by Doug Schoninger, has 15s sanctions through April 2018, though the duration of that contract is in dispute with USA Rugby.

    Both Tatham and Schoninger believe the sanctions effectively grant them a monopoly on the professional rights to their rugby versions. But the groups proceeding without a sanction don’t think it’s so clear cut.

    United World Sports founder Jon Prusmack says he can populate his “Super 7s” league with college club athletes, and Major League Rugby’s Deputy Commissioner Nic Benson said his league is “ready to move forward” without a sanction and is in line with USA Rugby’s interests.

    UWS President Jonathan First predicted sanctioning would end up in court if any of the leagues eventually provide a viable professional option for elite players.

    “My view is, players are going to try to make a living out of this as opposed to playing for the World Cup if it comes down to that, and they may even take action against the world governing bodies,” First said. “We’ll see.”

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  • Rugby: Groups in the game

    Organizations, and the executives and partners behind them, who are at the center of rugby in North America.

    World Rugby
    Position: The world governing body, with 120 member unions, it organizes the Rugby World Cup every four years as well as the World Rugby Sevens Series, the World Under 20 Championship and the Pacific Nations Cup.

    ■ Headquarters: Dublin, Ireland
    Key executives: Bill Beaumont, chairman; Brett Gosper, CEO and secretary general; Alan Gilpin, head of Rugby World Cup
    Sponsors: Canon, DHL, Emirates, Heineken, Land Rover, MasterCard, Société Générale
    Media: NBCUniversal networks will televise the 2019 Rugby World Cup in Japan and the 2023 World Cup after signing a seven-year, nearly $10 million deal last month, which also includes profit-sharing clauses. In addition, NBCU has the rights to international championships in women’s rugby and the Sevens Series, with the next Rugby World Cup Sevens set for San Francisco in 2018.

    USA Rugby
    Position: The national governing body for rugby in the U.S. It controls official sanctioning of rugby events in America, for both domestic and international players, and oversees the U.S. Olympic effort for the sport.
    Headquarters: Lafayette, Colo.
    Key executives: Will Chang, chairman; Rob King, vice chairman; Dan Payne, CEO; Jim Snyder, CFO; Matthew Bailey, director of global partnerships
    Sponsors: Adidas, American International Group (AIG), Crabbies Alcoholic Ginger Beer, Emirates, Gatorade, KT Tape, Gilbert (sports equipment), Thorne Research, WorldRugbyShop.com
    Media: Grand Prix Entertainment holds the exclusive right to own, operate and globally broadcast USA Rugby-sanctioned professional sevens matches, leagues or tournaments through the 2024 Olympics.

    United World Sports
    Position: Owner, operator and producer of the two largest annual rugby events in the United States — World Rugby’s HSBC World Sevens in Las Vegas and the Penn Mutual Collegiate Rugby Championship. UWS announced last month that its North American Super 7s Rugby League will launch with a barnstorming six-city tour across the U.S. in 2018.
    Headquarters: White Plains, N.Y.
    Key executives: Jon Prusmack, CEO; Jonathan First, president; David Niu, president of the North American Super 7s Rugby League; Jeff McDowell, executive vice president and CMO; Rob Cornelius, vice president of business development; Jon Hinkin, tournament director, HSBC Sevens Rugby Series Las Vegas and Penn Mutual
    Collegiate Rugby Championships
    Sponsors: Aspire Wealth Planners, Atavus Rugby, CallidusCloud, Coors Light, DHL, Dunkin Donuts, Fiji Airways, HSBC North America, Lyft, Magnus Irish Ciders, NormaTec, Penn Mutual, Rhino Rugby USA, South African Airways, Tag Heuer.

    PRO Rugby
    Position: PRO Rugby played one season of 15-man rugby in 2016 with five franchises — San Diego, San Francisco, Sacramento, Denver and near Columbus, Ohio. Its future is in doubt after the league canceled contracts with players and coaches in December. It currently holds the exclusive USA Rugby sanction for professional 15s, but that’s due to expire in April 2018, though owner and CEO Doug Schoninger believes he has a legal case to extend it under the current contract.
    Headquarters: New York City
    Key executive: Owner and CEO Doug Schoninger

    Grand Prix Network
    Position: A production and distribution company that holds the exclusive right to own, operate and broadcast USA Rugby-sanctioned professional rugby sevens matches, leagues or tournaments through the 2024 Olympics. Grand Prix has held these rights since 2005. Its startup tournament, the Rugby Football League Million Dollar Champion Sevens, is under development for summer 2018, with a full-fledged Grand Prix RFL targeted for 2019. WhiteCap Sports Group is selling franchises, led by Managing Partner Bob Malandro.
    Headquarters: Los Angeles
    Key executives: William Tatham, chairman and CEO; Kevin Wynne, executive vice president and chief sports officer; Bruce Skinner, COO; Karyne Bazzano, CMO; Rich Rose, EVP/CRO; Ruth McCartney, chief entertainment officer.

    Major League Rugby
    Position: A startup league owned collectively by 10 existing rugby clubs, who have in some cases sought local co-investors to help professionalize their organizations and fund the league. Expects to start play in 2018 with teams in Austin, Texas; Dallas; Glendale, Colo.; Houston; Kansas City; Los Angeles; Minneapolis; New Orleans; Salt Lake City and Seattle.
    Headquarters: Salt Lake City
    Key executives: Dean Howes, commissioner; Nic Benson, deputy commissioner

    Rugby International Marketing
    Position: Created by USA Rugby in 2015, RIM is a for-profit entity designed to monetize the national governing body’s commercial rights and develop new revenue streams. RIM represents the U.S. men’s and women’s national teams, the Americas Rugby Championship, Grand Prix Rugby and the 2018 Rugby World Cup Sevens. RIM also oversees The Rugby Channel OTT platform, launched in April 2016. Minority investors include the England Rugby Football Union, CSM Sport & Entertainment and Harlequins FC.
    Headquarters: Lafayette, Colo.
    Key executives: David Sternberg, CEO; Melissa Brennan, vice president of corporate partnerships

    CSM Sport & Entertainment
    Position: The exclusive commercial sales agent for Rugby International Marketing, for which CSM is a minority shareholder. The agency is part of Chime Communications, which is owned by Providence Equity Partners.
    Headquarters: London
    Key executives: Harlan Stone, chairman, North America; Jeff Shifrin, group CEO; Ross Meltzer, executive vice president of properties; Rob McQueen, president of North America; Dave Mingey, managing director; Tori Stevens, senior vice president of sports strategy

    TLA Worldwide
    Position: A sports marketing agency that arranged the match between the Irish national rugby team and the USA Rugby Men’s Eagles earlier this month at Red Bull Arena in Harrison, N.J. It was the first match of the Emirates Airlines Summer Series. Since 2014, TLA has promoted several high-profile rugby matches in the U.S., including the Ireland-New Zealand match at Soldier Field in Chicago and the London Irish-Saracens match at Red Bull Arena in 2016.
    Headquarters: London, New York City and Melbourne, Australia
    Key executives: Bart Campbell, chairman; Mike Principe, CEO; Greg Genske, president and partner; Donald Malter, CFO; Dwight Mighty, COO; Howard Schwartz, senior vice president of sales and marketing

    WME-IMG
    Position: The global sports and entertainment agency has been the exclusive commercial representative for the Rugby World Cup since 1995, with an agreement that extends through the 2019 event. Also, a 10-year agreement signed in October 2014 with USA Rugby gives the agency marketing rights to the governing body’s Collegiate National Championship weekend and its College 7s National Championship.
    Headquarters: New York, London and Beverly Hills, Calif.
    Key executive: Nick Chesworth, senior vice president, IMG Media

    — Compiled by SportsBusiness Journal


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  • First Look podcast: State of rugby in the U.S.

  • Cubs’ trickle-down helps MiLB extend streak

    Minor League Baseball and its teams sold a record $68.4 million in merchandise in 2016, a 5 percent increase over 2015’s then-record total of $65.1 million, according to data scheduled to be released this week.

    The revenue represents sales of team-branded apparel, headwear and novelties by the 160 member clubs that are based in the United States and Canada. It also includes licensing fees and royalties paid directly to MiLB through baseball trading card contracts and the use of historic club marks. The record haul marks the category’s seventh straight annual increase and an overall growth rate of 49 percent during that span.

    The South Bend (Ind.) Cubs and Iowa Cubs took advantage of their parent club's World Series championship through increased merchandise sales at the end of last year.
    Photos by: SOUTH BEND CUBS / IOWA CUBS


    MiLB does not release team-specific data. This is the 24th straight year, since the 1993 season, that MiLB has released merchandise sales data.

    While the annual list is often populated by teams with unique, locally inspired names (the Lehigh Valley IronPigs, for example, have made the list in every one of its nine seasons, and the Toledo Mud Hens have been there 21 times), this year’s tally includes a double dose of a moniker that looks strikingly similar to one that set numerous sports industry merchandise sales records last fall.

    The Iowa Cubs, the Class AAA affiliate of the 2016 World Series champions, made the list for the first time in team history. Shelby Heimbuch, the I-Cubs’ director of merchandise, said the club definitely benefited from the parent team’s success.

    “We had quite a bit of excitement from the World Series, which caused a huge push in sales at the end of the year,” she said.

    Sam Bernabe, the Des Moines-based team’s president and general manager, said sales last year were 25 percent higher than what they had generated during a record 2015. Sales so far this season are pacing 18 percent ahead of where they were at this time a year ago, Bernabe said.

    Six hours east on I-80, the South Bend (Ind.) Cubs became Chicago’s Class A affiliate in 2015 and have now made the list two years in a row. The franchise made the list just once prior to that, in 1997 when it was known as the Silver Hawks.

    Nick Brown, the Indiana club’s vice president and general manager, said that its 2016 numbers were down slightly from a record 2015, but that sales soared after the parent club broke the 108-year World Series drought.

    “This product was already out there after 2015,” he said. “People who bought four shirts in 2015 only bought one last year.”

    Brown said the World Series accounted for end-of-year gains as the team set up kiosks in a local mall to capture holiday sales. Sales so far this year are pacing 75 percent ahead of the first five months of last year, he said, with World Series-related merchandise being the “staple” items.

    Beyond the glow provided by the Cubs, the Columbia (S.C.) Fireflies, the New York Mets’ Class A affiliate, made the list after their inaugural season in South Carolina’s capital. The club was the South Atlantic League’s lone representative on the list but helped the league generate $4.3 million in sales, an MiLB-high increase of 36 percent over 2015.

    John Katz, the team’s president, was elated. He said the club’s sales were up 519 percent versus 2015, its last year as the Savannah (Ga.) Sand Gnats, 62 percent over its projected budget and 8.5 percent better than the ownership group’s highly successful 2009 launch of the Class A Fort Wayne (Ind.) TinCaps.

    Expectations are even higher for 2017 based on one very popular Firefly.

    “The brand has continued its growth in 2017, as we are up 43.6 percent versus 2016 year-to-date,” Katz said. “Contributing to this are our growing fan base, increased attendance and, yes, the presence of Tim Tebow. Our online sales are up 258 percent, and we think that much of that is influenced by Tebow.”

    Katz noted that online sales represented about 3.5 percent of the club’s merchandise sales in 2016 but are at 8.8 percent of that total thus far in 2017.

    Returning to the list were the Portland (Maine) Sea Dogs, the Boston Red Sox’s Class AA affiliate, who in 2015 for the first time since the club was born in 1994 failed to appear on the top 25. John Kameisha, the Sea Dogs’ senior vice president, said that last year’s merchandise sales were the highest the club had generated since 2009 and that revenue was up 5 percent over 2015.

    Other highlights from the data:
    Twenty different MLB organizations were represented by affiliate teams on the list. The Cubs, Cincinnati Reds, Houston Astros, San Francisco Giants and San Diego Padres each placed two affiliates in the top 25.

    In 2015, the Padres were the first — and still the only — MLB club to have four affiliates on the list — the El Paso (Texas) Chihuahuas, San Antonio Missions, Lake Elsinore (Calif.) Storm and Fort Wayne TinCaps.

    The Class AAA Reno (Nev.) Aces failed to make the list for the first time since the club debuted in the city in 2009.

    In 2015, the Biloxi (Miss.) Shuckers and San Antonio Missions (both AA) each made their first appearance on the list. However, neither made it in 2016.





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  • Warriors target decisions on PSLs, patches

    Sitting inside a private lounge at Oracle Arena 90 minutes before Game 1 of the NBA Finals, Golden State Warriors President and COO Rick Welts addressed two highly anticipated business decisions facing the franchise this summer.

    One is whether the Warriors will go the NFL route and sell personal seat licenses inside the 18,000-seat Chase Center, set to open in San Francisco in 2019. The other major effort for the team is to sign a jersey patch deal in time for next season.

    Selling PSLs is a rare move in the NBA, but given the crush of demand surrounding the Warriors and the burden of privately financing the $1 billion arena development, they could be a viable option.

    Welts said the team is close to a decision on a potential PSL strategy.

    “We have not yet decided,” Welts said. “We are sensitive to how fans perceive it. We will make it by the end of the summer.”

    The team is also in discussions with potential partners for a jersey patch deal. Finals challenger the Cleveland Cavaliers recently sold a three-year jersey patch deal with Goodyear that is worth $10 million annually.

    The Warriors are selling the patch with other teams in mind. “There is a sense of responsibility to help set the market,” Welts said. “Every deal that gets done affects the value of other teams.”

    The Warriors are not using an agency to sell the patch.

    “Our expectation is to get it done by next season,” Welts said. “We have some talks that are ongoing. We are in different stages of conversations with different partners.”

    The Warriors are also looking to add founding partners for the Chase Center, which would build on deals made with United Airlines and Accenture.

    “It’s an interesting time in the franchise’s life,” Welts said as the team prepares to spend another season in Oakland at Oracle Arena while working on moving to the Chase Center afterward. “We have parallel tracks. The big prize is two seasons down the road.”

    Golden State is considering fan reaction as it weighs whether to sell PSLs at Chase Center.
    Photo by: NBAE / GETTY IMAGES


    CAVS FOOTBALL-READY: Like the Warriors, the Cleveland Cavaliers made their third consecutive trip to the Finals, but the franchise also has football in its sights. The organization is selling sponsorships for the NFL Hall of Fame Village in nearby Canton, adding to the team’s business reach.

    “It’s a great opportunity for a great brand and a great natural extension,” said Brad Sims, executive vice president and chief revenue officer for the Cavs.

    The team’s agreement with the NFL Hall of Fame Village and with developer IRG comes after the NFL Hall of Fame Village signed an 18-year naming-rights deal with Johnson Controls for the $700 million sports and entertainment project.

    “They are bringing their expertise as we build the village,” said Pat Lindesmith, vice president of sponsorship and gold jacket relations for the Pro Football Hall of Fame. “We are working with them to bring in new partners.”

    For the Cavs the project adds to its portfolio, which, in addition to the basketball team, includes the AFL Cleveland Gladiators, the D-League’s Canton Charge and the AHL’s Cleveland Monsters.

    Initially, the Cavs are approaching their own sponsors about adding a deal with the Hall of Fame Village.

    “There are a lot of opportunities throughout the village and there is a lot of inventory,” Sims said.

    E-LEAGUE UPDATE: The NBA is putting some big resources behind developing its NBA 2K esports league, which will debut next year with 17 teams.

    The league’s team marketing and business operations division will assign account managers to each esports team to help drive the nascent league’s business. In addition to the 30 NBA teams, TMBO works with the 12 WNBA teams and the D-League, which next season will have 25 teams.

    “It’s a huge priority,” said Amy Brooks, executive vice president of team marketing and business operations for the NBA. “We intend to treat it as any of our leagues. We will have a set of account managers helping teams grow.”

    The esports league is run by former TMBO senior vice president Brendan Donohue, who recently was named its managing director. Aaron Ryan, another former TMBO executive, was named senior vice president of business operations.

    STRONG TICKET SALES: In other TMBO-related news, Brooks said the NBA is on pace to set a record for new full-season ticket sales, surpassing the 300,000 new full sales made during the 2015-16 season.

    The five teams, in no specific order, driving new full-season ticket sales are the Houston Rockets, Milwaukee Bucks, Philadelphia 76ers, Utah Jazz and Detroit Pistons, a team that will move into the new Little Caesars Arena in downtown Detroit next season.

    The NBA’s season-ticket renewal rate is tracking in the mid-80s, the eighth consecutive season that the league has posted a renewal rate of more than 80 percent.

    SPONSORSHIP SUMMER: The NBA’s sponsorship business flourishes in June as league partners activate around the Finals and the NBA draft, set for June 22, but this summer will be particularly busy. The league will put the finishing touches on two major rollouts as Nike prepares to take over from Adidas as the league’s uniform supplier and the D-League is rebranded as the G-League, thanks to Gatorade beginning its title sponsorship of the NBA-owned minor league.

    Kerry Tatlock, senior vice president of global partnerships for the NBA, said the league will see after the Finals how it will bring the G-League partnership to life. “There will be a true unveiling this summer. We are working with them and their sports science institute. While it is the Gatorade League, it is about working on innovation and science.”

    Tatlock added that Nike soon will begin unveiling its uniforms for the league’s 30 teams.

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