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Volume 24 No. 160

Events and Attractions

SportsBusiness Journal/SportsBusiness Daily’s IMG World Congress of Sports concluded Thursday with a discussion centered around the hottest topic in sports business: labor. The panel, titled “At A Crossroads: The State of Labor/Management Relations in Professional Sports,” featured NHL Deputy Commissioner Bill Daly; Octagon President Phil de Picciotto; Proskauer Sports Law Group co-Chair Howard Ganz; NFLPA and NBPA outside counsel Jeffrey Kessler; and MLBPA Exec Dir Michael Weiner. Kessler stepped up to the plate first to address the labor unrest in football -- nearly three weeks since the NFL locked out players -- and compared it to what MLB went through in the ‘90s. “If you look at all the sports, these things tend to go through different life cycles,” Kessler said. “They each have their own rhythm. There was a period of great contention in the NFL (in ’87). ... Unfortunately, we’re in a period now where there’s lots of disputes. You can find a similar history in baseball.” Pressed further on why the two sides are mired in such a contentious battle, he added, “There are changes on both sides. There is a whole new group of owners. There’s a new commissioner. There is a new leader at the NFL Players Association.” Weiner weighed in on the NFLPA’s insistence that owners show all financial information. “It’s critically important for both sides when they’re bargaining anything to have common information,” he said. Weiner later added, “It seems like it’s hard to do without financial transparency.” But Ganz added, “Clearly, as a matter of law, the NFL is not required to provide the information that the players wanted. ... I assume that the provision of the information satisfies curiosity. I’m not sure whether it really has an affirmative effect on bargaining.”

PLAYERS ANTICIPATING TEAM RESTRICTIONS: Kessler provided some insight into what the decertified NFLPA envisions could come about if Judge Susan Nelson rules in its favor next week and blocks the NFL lockout. Kessler believes if the lockout is lifted, teams will impose severe restrictions on the players. “We believe, and we have good reason to believe, their intention would be to impose restrictions that are going to be anti-competitive. In fact, more restrictive than anything that has ever been agreed to previously in collective bargaining.” Keeping in mind the Brady v. NFL antitrust lawsuit, Kessler said, “That’s why that case also seeks to stop them from doing that, to stop them from substituting for a lockout with a set of restrictions that themselves would be antitrust violations.” He added, “If the league wants to disabuse us of that notion, and not impose such restrictions, then life will be a lot easier, legally, for them. But right now, we have every reason to believe that if they’re forced to impose a system, it’s not going to be one that complies with the antitrust laws. But that’s what we’ll find out.”

HEADING IN THE SAME DIRECTION? While the NFL is stuck in a lockout and attracting much of the labor attention, less than three months remain on the NBA’s CBA and the two sides in that negotiation seem even further apart. But with reps from each side on the panel, a slight hint of labor peace emerged from the discussion. Ganz, outside counsel for the NBA, said, “Certainly a lockout is by no means inevitable. ... I think both sides, notwithstanding some public statements, are hopeful for a deal.” Kessler, in the thick of both the NFL and NBA labor battles, agreed with Ganz when he said, “I hope it’s not inevitable. One would hope that basketball can learn from the lessons that are being provided right now from football.”

PHONY BALONEY: Kessler and Ganz also touched on NBPA Exec Dir Billy Hunter calling the NBA’s financial statements it showed to the NBPA “baloney.” Ganz said of Hunter, “I think he’s changed his tune a little bit since then. That certainly did not advance a warm and fuzzy feeling between the parties. We’ve gotten over that, but it’s not a total one-way street in any respect.” Kessler later added, “He didn’t really call the financials ‘baloney.’ I know David (Stern) has been very upset about that comment. What he was saying was baloney were the conclusions that the NBA owners were drawing from the financial statements. Providing those statements from the union’s perspective was very helpful, and we viewed that as a positive thing that the owners did. But we did draw different conclusions as to what solutions the financial statements suggested were appropriate for basketball.” Ganz said, “‘Any place, any time’ is, I think, David Stern and Adam Silver’s mantra. That’s certainly been the case. I’m happy to hear Jeff amend the ‘baloney’ statement. I agree there was a difference of view about the conclusions one could draw or the remedies one might seek based upon the numbers."

ADDING SOME PERSPECTIVE: Daly added his two cents, having been through a lockout with the NHL that resulted in a canceled season before ultimately leading to a drastically changed CBA, which is set to expire in ’12. “We have six years of experience with this collective bargaining agreement,” Daly said. “There are things that worked well, and things that didn’t. And that’s what we try to fix.” Similarly, Weiner weighed in on MLB’s tumultuous past, even though the league now seems to be the model of stability. “It wasn’t just a period of turmoil,” Weiner said. “It was decades and decades of all-out war.” So how do sponsors, notably those tied to the NFL, operate during a lockout? “Uncertainty is not good for business,” said de Picciotto, whose agency works with several companies tied to the NFL. But he added, “There’s still a little bit of time. ... Every situation is different. So the advice is very specific to each one.”

Some of the biggest marketers in sports gathered on a panel at the IMG World Congress Of Sports Thursday morning to address why sports continue to provide a worthy marketing platform for brands. The panel featured Reliant Energy CMO Karen Jones; Farmers Insurance Exec VP & CMO Kevin Kelso; Subway Senior VP & CMO Tony Pace; and Coca-Cola North America CMO Bea Perez. The CMOs all weighed in on how important sports are to their respective brands. “It’s very important for our brand,” Pace said. “We try to be somewhat surgical with what we do in sports. When we focus on athletes, we pick an athlete first and foremost if they’re a Subway fan. Then you have to look at their short-term growth, long-term potential.” Jones, whose company title sponsors the Texans’ stadium in Houston, said, “It is increasingly important for us.” Kelso provided a different perspective, since Farmers is relatively new to the sports marketplace but made a huge splash earlier this year by agreeing to a $600-700M naming-rights agreement for AEG’s proposed events center/NFL stadium in downtown L.A. “Sports marketing is a new area for us to participate in,” Kelso said. “It’s been very high-profile for us.” On MLB’s Opening Day, Perez recalled some Coca-Cola history to describe how important sports have been for her brand. “The reason why Coca-Cola went into bottles,” Perez said, “is two gentlemen came to us ... and said, ‘We’d really like to be able to drink Coca-Cola at a baseball game.’” She added, “It’s a big part of the fabric of our brand, the DNA.”

WE ARE FARMERS: Kelso took conference attendees a little deeper into Farmers Insurance’s thoughts behind the L.A. stadium agreement. “Just the strength of the announcement really was a powerful thing for us,” said Kelso. He noted the California-based firm already has seen $3.8M worth of ad equivalency value just in media from the January announcement, adding that Farmers does not actually pay AEG until it is clear the stadium is going to be built. “One of our goals for the Farmers Field deal, for sure, was to put the brand on the national stage and let people know who we are,” Kelso said. “I think it’s changed consumers’ perceptions.” He added, “We live in the category that’s very noisy and didn’t used to be. ... Just because there’s so much noise in the category, we’ve had to try to create a national brand.” On a similar note, Jones discussed the competition Reliant faces in Texas, since the state deregulated the energy industry 10 years ago, which has led to more than 60 companies competing for consumers. “Three things we love in Texas: trucks, our big hair and sports,” said Jones, who also expounded on the various ways Reliant uses its partnership with the Texans to reach fans on Sundays at Reliant Stadium.

THE VALUE OF SOCIAL MEDIA: The marketers touched on the power of social media, a big theme throughout the two-day WCOS. “If you view digital and social media as part of the conversation,” Pace said, “you have to continue to push stuff out there.” Pace specifically highlighted endorser Apolo Anton Ohno’s activity on Twitter as a great plus for the Subway brand. Perez agreed with Pace about the importance of social media, while acknowledging that Coca-Cola has not quite figured it out yet. “We believe that will drive purchase, that will drive transactions,” she said. “Today, can I show you a spreadsheet that shows it translates to sales? No, I can’t. ... But we believe this is a space we will continue to learn from, and will be important to our business.” Kelso said social media is a way for Farmers to stand out in the crowded insurance space. “We are doing a lot of things in social media,” he said. “It’s a great place for us to engage with people. I think we’re all trying to figure out what to do with it. ... In terms of just promoting it, updating the brand, all that’s working.” Jones noted Reliant deploys 12 internal ambassadors to monitor customer feedback throughout different social media platforms, allowing the company to respond to complaints and address them directly. “We’ve found it to be a great retention tool for us, an up-sell tool,” Jones said. She added, “I do think it is an important part of our strategy. We’re also using mobile quite a bit.”

Competitor Group has told organizers of the Summerfest Rock 'n' Sole Half Marathon and 10K Run "to come up with a different name" for the Milwaukee race, worried that people will confuse it with Competitor's Rock 'n' Roll Marathon Series, according to Jim Stingl of the MILWAUKEE JOURNAL SENTINEL. California-based Competitor Group, in a letter to Summerfest President Don Smiley, argued that the Summerfest race name is "highly similar to the company's trademarks." Competitor Group said that this "would dilute those names," so Summerfest should "drop the name and immediately destroy any materials bearing the name." In response, Summerfest went to federal court in Milwaukee and "filed a motion for declaratory judgment saying the two names are not that similar and can peacefully coexist in the marketplace." Milwaukee-based attorney George Solveson, who is not involved in this case, said that "several factors are weighed to determine if confusion is likely." Stingl notes these "include the similarity of the names, the strength of the trademark, the type and proximity of the good or services being offered, and the intent in selecting the name in question" (MILWAUKEE JOURNAL SENTINEL, 4/1).