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Volume 20 No. 42

Leagues and Governing Bodies

Frontier Airlines is making its first move onto the national sports sponsorship scene by signing an official partnership with the LPGA.

The low-fare carrier, based in Denver, has been active with team deals that include the hometown Colorado Rockies, Milwaukee Brewers, Milwaukee Bucks and a handful of college agreements, but this new two-year contract to become the official airline of the LPGA marks Frontier’s first leap into a national property.

“When you look at some of the companies we’ve signed this year, from RR Donnelley to CME Group and now Frontier, we’re seeing companies make their first foray into national sponsorships with the LPGA and that’s an encouraging sign,” said Jon Podany, the LPGA’s chief marketer.

Frontier’s deal will be a combination of cash, activation spending and business trade. The LPGA will drive as much business toward Frontier as it can with the help of discounted fares. LPGA staffers, players and other associates will have access to a discount code that can be applied for online purchases from the airline.

Ian Arthur, Frontier’s vice president of marketing and branding, described the airline as “strategic and selective” in its sports sponsorship spending. The airline does its sports marketing in-house and does not work with an agency, Arthur said. Frontier is considering options for TV advertising on the LPGA’s media partner, Golf Channel, but those likely won’t start until 2012.

In the case of the LPGA, Frontier knows it will get the tour’s business and it hopes to attract the LPGA’s fan base. The LPGA also will use Frontier for its charter flights when it must get a large number of players and staff from one event to another, as it sometimes does with international events.

“We all know golfers’ affinity for travel, so we want to capture that business as well,” said Arthur, who described himself as a golfer.

The LPGA will take the airline onto its Web pages and tournament sites with a range of activation. Frontier will have a prominent ad package on, where it will promote fare specials with click-throughs to

The airline also bought a hospitality package and will have the ability to activate on-site at several tournaments over the next two years. Those details are still being ironed out, but Frontier will have some branding and interactive elements at the golf course as part of the deal.

“What we do digitally and on-site usually has to do with promo cards and codes we hand out that offer discounts off the fare,” Arthur said. “Everybody wants discounts off airfares, and it’s a very effective way to get people to try the product. We’re convinced that if people try us, they’ll come back.”

Financial terms were not available, but the LPGA’s official partnerships range from the mid-six figures into seven figures, depending on the assets in the package.

“Their positioning from a brand standpoint is that they’re a ‘whole different animal’ and that matches up well with our position, ‘See why it’s different out here,’” Podany said. “We’re certainly a traveling business, and there will be ways where we can help each other’s business.”

The LPGA lists 15 official marketing partners.

Editor's note: This story is revised from the print edition.

In an effort to boost its television rights revenue, the Izod IndyCar Series is considering adding races to its 2012 schedule that would expand and sweeten the five-race package now held by ABC.

The rights agreement for ABC’s package, which includes the Indianapolis 500, is set to expire this year. The parties last week held their first negotiations. Currently, ABC broadcasts five races, and Versus, which has a revenue-sharing agreement with IndyCar, televises the other 12.

ABC televises five IndyCar races, including the circuit’s most famous event, the Indianapolis 500.
ABC pays $6 million annually for the rights to the Indianapolis 500 and four other races: St. Petersburg, Milwaukee, New Hampshire and Las Vegas. It has held the rights to the Indianapolis 500 for 46 consecutive years.

IndyCar has hired IMG and Barry Frank to represent it in its TV rights negotiations. ABC has a 90-day exclusive negotiating window that runs from April through the end of June.

“ABC has been a great partner, but I also know there’s significant interest from other networks,” said IndyCar Series CEO Randy Bernard. “It’s [Indianapolis Motor Speedway CEO] Jeff [Belskus] and my goal to make sure we get the best possible deal, and we’re confident we can do that with the help of Barry Frank.”

Frank said that as the series looks to increase its rights fee, it is open to adding more races to the package in order to sweeten the deal.

“We’re out to do a better deal than now,” he said. “It’s possible they would add [more events].”

Frank said he’s optimistic that ratings for the Indianapolis 500 will pick up this year. ABC earned a 3.6 Nielsen rating and 5.79 million viewers for its broadcast of the 2010 Indianapolis 500, which was won by Dario Franchitti. The rating was the lowest for the race since it began airing live in 1986. The ratings and viewership were down 10 percent and 9 percent, respectively, from a 4.0 rating and 6.338 million viewers in 2009.

“I think over time those ratings will improve,” Frank said. “The Indianapolis 500 is a classic race in the sports scene. It won’t go away overnight. It will be important again.”

John Wildhack, ESPN’s executive vice president, programming acquisitions and strategy, who is handling the IndyCar negotiations for ABC, said the network remains committed to the Indianapolis 500 and IndyCar Series. He added, “We are encouraged by the momentum generated for IndyCar under Randy Bernard’s leadership and would like to renew.”

So far this season, the IndyCar Series has averaged a 0.6 rating and 872,000 viewers for three races on ABC and Versus. It has averaged a 0.2 rating and 313,000 viewers over two races on Versus. In 2010, the series averaged 0.2 rating and 404,000 viewers during three races on Versus.

Bernard said that in addition to a higher rights fee, the IndyCar Series is looking for more promotional support, marketing and event coverage from its future broadcast partner.

“We’re going to go in with a wish list of everything we want, and we’re going to go with reasoning why we believe we can move the dial,” he said.

As an example of the types of things that he believes will increase interest in IndyCar, Bernard pointed to his $5 million bonus to any driver outside of the series who comes to the season finale at Las Vegas Motor Speedway and beats series drivers in their own race. He also pointed to the addition of new manufacturers and a new car in 2012, which he thinks will attract new viewers.

“I’m very bullish on our future,” Bernard said. “The next couple of years are going to be a big proving ground.”

Major League Soccer’s National Sales Center is expanding its curriculum to include classes for existing MLS ticket sales representatives and managers.

A high percentage of graduating classes like this one from the National Sales Center have found jobs with MLS teams.
The center will hold four regional workshops and a to-be-determined number of weeklong training sessions at the center that are designed for existing MLS sales staff, according to Bryant Pfeiffer, vice president of club services for MLS. The center now holds 45-day courses for classes of 10 to 12 students who hope to work in ticket sales for MLS teams. Pfeiffer said the center receives an average of 100 applications for each class.

The Blaine, Minn.-based center, which opened in July 2010, has graduated 41 of 42 attendees and placed 39 of those as full-time ticket sales representatives at 13 MLS teams. According to the league, graduates have generated more than $1 million in total ticket sales.

Pfeiffer said the league originally planned to hold six or seven sessions annually, but it scaled that back to four.

“We’ve found that [holding] four classes [a year] is better from a recruiting standpoint because it seems to be on pace with the hiring flow from the teams,” Pfeiffer said. “The placement rate is exceeding expectations.”

MLS declined to discuss the cost of the center, but said that teams do not pay a fee or cover any expenses when they hire the center’s graduates. Pfeiffer referred to the center as a “significant investment” by the league. Students do not pay to attend the center, which includes dormitory housing, and the league provides students a stipend to cover travel and living costs.

The center employs one full-time employee — center director Brett Zalaski — and brings in a handful of outside teaching consultants, including members of a local comedy company called Brave New Workshop, who help the students develop improvisational skills along with their selling techniques.

In the course, students sell actual ticket packages for existing teams. The center alerts the teams when new classes are graduating and sets up interviews with clubs.

Kris Katseanes, director of sales and services for FC Dallas, said students from the center recently sold a two-ticket package for the team. “We got to know [the students] and familiarize them with the product,” said Katseanes, who has hired five of the team’s 21 ticket reps from the center. “If someone has 45 days of hands-on training, it gives them a big leg up.”

Pfeiffer said the curriculum for the shorter courses will include variations of the courses now taught. Michael Harloff, senior director of sales for D.C. United, employs two center graduates on his staff of 10 ticket representatives. Harloff said he plans to send current sales staff to the shorter courses.

“It sort of looks like a master’s degree program — you take a veteran rep and make them even better,” Harloff said.

Editor's note: This story is revised from the print edition.

NASCAR Chief Executive Brian France believes that sometimes the best way to get the most out of top executives is by lightening their load. That maxim guided him last week as he implemented the largest restructuring undertaken during his eight-year tenure leading the organization.

Paul Brooks, president of NASCAR Media Group, shed several responsibilities last week as NASCAR looked to streamline its business operations and prepare itself for its upcoming broadcast rights negotiations. Brooks will continue to oversee the NASCAR Media Group, but he will relinquish responsibility for NASCAR’s licensing and auto aftermarket divisions. Those groups will now report to NASCAR Chief Sales Officer Jim O’Connell, who will oversee the organization’s first consolidated intellectual property group.

“With some big, big opportunities like digital and so on, we just felt that this was the time to look at everything even more carefully, and we came up with something that I know puts the best people in the best positions to make a high impact for our fans and our stakeholders,” France said.

Just as Brooks shed some responsibilities in the restructuring, NASCAR Chief Marketing Officer Steve Phelps added some. Phelps will manage O’Connell’s expanded intellectual property group and oversee a focused digital division led by Marc Jenkins.

The additions further Phelps’ role at the organization. The former NFL executive was hired in 2005 as vice president of corporate marketing. He was promoted to chief marketer a year later and charged with overseeing corporate marketing, industry marketing, brand and consumer marketing, sales, business development and The NASCAR Foundation. Last year, he added to those responsibilities by leading an overhaul

of the communications division, which he now manages.

By bolstering Phelps’ and O’Connell’s responsibilities, France freed Brooks up to focus on NASCAR’s upcoming broadcast rights negotiations. He will work closely with NASCAR’s newly named vice president of broadcasting, Steve Herbst.

Herbst comes to the organization from CBS College Sports, where he was the network’s general manager, and the NBA, where he had a 19-year career and rose to senior vice president of broadcast and general manager of NBA TV. He will be responsible for managing broadcast relationships with rights holders Fox, ESPN and Turner, and will work closely with Brooks on developing NASCAR’s television rights negotiating process.

NASCAR’s current rights agreements end in 2014. It negotiated its current deals — which total $4.48 billion over eight years — in 2005, two years before Fox, ESPN and Turner took over those rights in 2007.

The negotiations will be complicated by NASCAR’s ratings declines over the past five years. In 2006, after NASCAR finalized its current media deal, it was averaging 7.855 million viewers per race on Fox, FX, TNT and NBC. During last season, the fourth of its eight-year deal with Fox, ESPN and Turner, NASCAR races averaged 5.992 million viewers over 34 races across all the networks.

That means that NASCAR has lost nearly 2 million viewers per race in the past four years, or 23.7 percent of its viewing audience. While Sprint Cup ratings have rebounded somewhat in 2011, they haven’t risen enough to return to the levels of a few years ago. Through eight races on Fox, NASCAR has earned a 5.5 Nielsen rating and 9.6 million viewers, giving it a 3.7 percent increase from 2010 and a 5.9 percent viewership increase.

“We’re pretty pleased [because] just about any metrics you use we’re up,” France said. “We’re not resting, [that’s why] these changes were made. It’s competitive out there.”

France said NASCAR doesn’t plan to launch a network of its own despite recently building a production facility in Charlotte and hiring Herbst, who has experience launching a network.

“We’ve got a unique situation in that we’ve got a relationship with the Speed Channel, which is in 74 million homes, so we’re going to build on that relationship before we consider trying to go a long way around,” France said. “We’re going to make sure that relationship serves the purpose of us having our own network.”

In addition to overseeing the broadcast group at a critical time, Brooks will take on responsibility for building and managing a new “innovation group” that will be tasked with developing new technologies for everything from cars to racetracks to media platforms. He will continue to sit on the board of the NASCAR licensing trust.

“Paul might have had too much responsibility for any one person,” France said. “He’s going to be instrumental in getting Steve Herbst up to speed. Paul’s going to have to sell technology and innovation through the entire industry.”

Last week’s restructuring is the latest in a series of recent shake-ups NASCAR has undertaken as it has tried to position itself more effectively for the future. It evaluated and overhauled its communication group last year in order to create its new integrated marketing and communications division, which is designed to bolster its communication internally and externally with tracks, teams and media outlets. It also has been more proactive in meeting with agencies operating in the sport.

By consolidating the sponsorship, licensing, auto aftermarket and new business development duties under O’Connell, France hopes NASCAR can begin to drive more revenue by delivering more value to existing and new partners. O’Connell has the authority to hire multiple high-level sales executives to assist NASCAR as it looks to shore up its official partnership portfolio and bolster its intellectual property revenue. Its top sales executive, Ted Van Zelst, left the organization last week.

NASCAR’s sponsorship approach has changed considerably under O’Connell over the last several years as it has tried to consolidate categories and sign larger deals with fewer partners. By bringing sponsorship and licensing under one roof, NASCAR hopes to eliminate confusion that used to exist in the marketplace. For example, before its recent renewal with Mars, NASCAR’s licensing group had a licensed chocolate out of Charlotte, which allowed another chocolatier to be affiliated with NASCAR. But its most recent agreement with Mars made the confectioner the official licensed chocolate and official chocolate of NASCAR.

“We’re going to make sure we have consistent objectives and messaging to the marketplace,” O’Connell said. “It allows us to more fully integrate all our assets for partners and create more value and a bigger return for partners. By having consistent messaging and decisions it allows you to do it.”

France began to review NASCAR’s structure in March. He worked closely with Eric Nyquist, vice president of strategic development, and Paula Miller, vice president of human resources, to map out the changes. They consulted members of NASCAR’s leadership team and let management know of the changes last Thursday.

“This is a good step,” France said. “It’s actually a leap for us in terms of what this new management team in their realigned positions will be able to accomplish for us.”

After a seven-month search for a new CEO, USA Track & Field has narrowed its list of candidates to three finalists and is within weeks of making a decision, said Steve Miller, the chair of the organization’s search committee.

Miller declined to name the three finalists for the job. New York Road Runners President and CEO Mary Wittenberg and University of Oregon track coach Vin Lananna have been associated with the job in press reports.

The finalists were interviewed by the USATF board in Denver over 2 1/2 days in mid-April, and the board is now in the process of negotiating terms with the final candidates.

The participation of all the board members represents a shift from the selection of the previous CEO, Doug Logan, who was voted on by the board over the phone with several abstentions.

As a result, he never had the full support of the board and that contributed to the board’s decision to fire him last September.

The search for a CEO began a month later, and Miller said it has taken longer than anticipated because USATF has worked to engage all of its constituents in the search.

The search committee, which includes six members of the 15-person USATF board, spoke to 94 track insiders last year and developed a criteria for the ideal CEO candidate. The criteria focused on three skills: an ability to sell and attract sponsors; an understanding of the television and communications marketplace; and an ability to effectively communicate and build consensus.

“After reading it, you may have had the thought we were looking for a deity and not a person,” Miller said.

Without a chief executive, USATF has been run by COO Mike McNees, USATF President Stephanie Hightower and the USATF board. Miller acknowledged that the lack of clear leadership has tested the organization.

“Hopefully, in a year or two years, you’ll interview somebody and the sport will be rolling and we’ll see enormous change, and we’ll say, ‘Wow, that was worth going through,’” Miller said.

Laurel Richie has no professional sports management background and has never attended a WNBA game, yet the newly appointed WNBA president is charged with bringing to the league what it has yet to accomplish in its 14 years: profitability for all of its teams.

“No special goals other than a simple one,” said NBA Commissioner David Stern. “It’s Laurel’s job to make all of our teams in the league very profitable. We gave her the plan, which is these guys break even this year or come much, much closer than they ever have before.”

Richie begins her job with the WNBA on May 16, taking over for Donna Orender, who resigned in December after having worked for the league since 2005. The 12-team WNBA begins its 15th season June 3.

Before joining the WNBA, Richie had been chief marketing officer for the Girl Scouts of America since 2008, and she previously spent two decades working for Ogilvy & Mather, where she left as a senior partner.

“Both the [Girl Scouts and the WNBA] are well-loved brands in need of a little bit of refreshment, with their DNA strong and solid,” she said. “I would never at this juncture put forth a concrete plan of action. But I think the places where I want to put some great thought are in how do we communicate and demonstrate the quality of the game so people truly understand that.”

Richie was approached by the WNBA after a February speaking engagement in Seattle where an award was being given to the owners of the WNBA Seattle Storm.

“We made a terrific connection there,” she said. “Coming out of that meeting the league actually reached out to me and we started the process.”

Richie said while she has watched the WNBA on television, she has never attended a WNBA game.

“I think it was a combination of not necessarily being approached,” she said, when asked why. “So what I want to think about is how do we reach out to people and engage them versus assuming or putting the burden on them to come and grab us.”

Richie will begin visiting WNBA teams as she learns league operations, one of her first big challenges.

“There are plenty of resources to get her up to speed,” said Chicago Sky President Adam Fox. “Clearly she has been involved in grassroots marketing efforts and with major companies in branding their products, so that will be of great value.”