Group Created with Sketch.
Volume 20 No. 46

Leagues and Governing Bodies

Regular-season viewership and average attendance for the Arena Football League is down despite the indoor league adding four new markets at the start of its 2011 season.

The 18-team league was averaging 7,659 fans a game entering the final weekend of its 18-game regular season, which ended Saturday. Last season, the 15-team AFL had a regular-season average of 8,138 fans a game. The league begins its postseason on Friday.

Through July 21, the Orlando Predators led the AFL in average attendance, with 12,414 fans a game. The Milwaukee Mustangs were last, with an average of 4,000 fans.

“The economy is still challenging us, and we have to be smart and do creative things to expose our sport to people who don’t know about us,” said AFL Commissioner Jerry Kurz.

The AFL this season put new teams in Pittsburgh, San Jose, Kansas City and Philadelphia, while shuttering its Oklahoma City franchise. All the new teams except Pittsburgh played in the old AFL, which shut down in 2009. The AFL also moved its Bossier City, La., team to New Orleans and its Mobile, Ala., team to Atlanta.

But the push into new and larger markets did not boost viewership on NFL Network, which televised AFL games every Friday night throughout the league’s regular season, from March 11 to July 22.

Heading into its last regular-season game last Friday, viewership of the AFL on NFL Network was down 27 percent from last year. The league this season averaged 65,000 viewers a game over 19 games, compared with an average of 89,000 viewers over 17 games heading into the league’s last game on NFL Network in 2010, according to The Nielsen Co.

The AFL did add three new founding sponsors — NAPA Auto Parts, the National Guard and Aaron’s — at the start of the 2011 season.

Sellout crowds in the Pacific Northwest combined with a new stadium and rebranding effort in Kansas City helped Major League Soccer post midseason attendance gains for the second consecutive year. The league has also seen an incremental increase in television viewership from most of its TV partners.

Through 177 games, the league’s average crowd increased by 6.3 percent from its 2010 midseason mark, to 17,526.

Expansion teams in Portland and Vancouver have lived up to preseason expectations and produced impressive crowds. The Timbers have sold out all 10 home games at Jeld-Wen Field, which after a $31 million renovation seats 18,627. Vancouver has sold 95.3 percent of its capacity and averaged 20,008 fans a game at its temporary home, Empire Field, while its permanent home, BC Place Stadium, undergoes construction. The region’s third team, the Seattle Sounders, which has topped MLS in attendance since it entered the league in 2009, has also posted its best midseason mark, 37,189, which is 104.8 percent of capacity.

For a June 23 match against the New York Red Bulls, the Sounders organization opened upper-bowl seats at CenturyLink Field and attracted a crowd of 46,054 — the club’s best draw against an MLS opponent, and the largest MLS gate so far in 2011.

“Clearly, what has been going on in the Pacific Northwest is tremendous, both with the size of the crowds and how that has translated onto television,” said MLS President Mark Abbott. “At some point before the season we realized we were going to end up with something special in terms of attendance. We knew it would be special, [but] it’s more special than I anticipated.”

Sporting Kansas City’s attendance jumped 81 percent after the team moved to its new home.
Outside the Pacific Northwest region, the New York Red Bulls, FC Dallas, San Jose Earthquakes and Sporting Kansas City have all posted double-digit percentage increases in attendance, with Sporting Kansas City growing the most at 81 percent and San Jose following at 36.7 percent.

The team formerly known as the Wizards rebranded itself Sporting Kansas City in November 2010 in the lead-up to the completion of its $200 million soccer-specific facility, Livestrong Sporting Park, which opened June 9. The club also launched an online supporters club, offered free tickets to away games and promoted the park’s sports bar, which is open to the public on non-game days. The efforts helped the team raise its season-ticket sales from 2,200 to just more than 11,000. The club is averaging 18,107 fans a game, compared with 10,006 in 2010.

The Chicago Fire, Toronto FC and Philadelphia Union posted marginal losses in attendance — the latter team’s 2010 average was inflated by two games at Lincoln Financial Field, home of the NFL Eagles. One team — the Columbus Crew — saw a drastic drop: a 22.7 percent decline to an average of 10,846.

Abbott said he is not worried about the decline in Columbus, and called the drop part of the “natural ebb and flow” of the franchise.

The league’s gains at the gate follow overall incremental growth in TV audiences. On ESPN2, ratings were flat through 12 games with a 0.2 cable rating, but viewership was down 6 percent. However, the three MLS games on ESPN, including the July 10 Cascadia Cup game between Portland and Seattle, averaged a 0.4 rating, up from 0.3 last year, and the network saw an 82 percent growth in total viewership, averaging 566,000 viewers.

Fox Soccer Channel registered similar gains, and registered a flat 0.1 rating but saw total viewership increase 33 percent to an average of 79,000 viewers across 13 matches. Fox Deportes increased its audience by 69 percent.

But MLS still trails international soccer in TV viewership. The league’s biggest audience this season tuned in for ESPN’s telecast of the March 15 MLS opener between Seattle and the Los Angeles Galaxy, which earned a 0.5 rating with 640,000 viewers. By comparison, the U.S. national team’s first match of the FIFA Women’s World Cup against North Korea earned a 0.8 rating and averaged 1.07 million viewers on ESPN. Fox Soccer’s June 25 game featuring San Jose vs. Los Angeles topped that network’s MLS viewership with 130,000 average viewers. Fox Soccer’s telecast of 2010-11 UEFA Champions League games averaged 186,000 viewers.

Abbott described the TV growth as significant for MLS, and credited the league’s TV partners for promoting the telecasts effectively across multiple platforms. When asked whether the league would push to change its TV schedule — ESPN2 telecasts on Thursday and Saturday, FSC on Friday and Saturday and Galavision on Saturday and Sunday — Abbott said it would discuss possible schedule shifts later in the season.

“We’re always looking for a broadcast combination to maximize the schedule,” Abbott said. “We’ll meet with our partners fairly soon. Those conversations have not begun yet.”

The NBA’s release of its 2011-12 regular-season schedule nearly a month earlier than the league’s usual schedule unveiling hands teams some marketing ammunition during the lockout while giving arena operators a jump on booking acts should games be lost to labor strife.

The NBA typically announces its regular-season schedule in early August, as it waits for free agent player signings to help determine marquee matchups and prime television dates. Last year, the NBA released its full regular-season schedule on Aug. 10.

But with the lockout this year wiping out the typical free agent signing period, which usually begins on July 1, the NBA set its 2011-12 schedule on July 19, though the work stoppage could cancel some or all of next season.

The defending champion Dallas Mavericks are now set to start the season on Nov. 1.
The 2011-12 season is set to begin on Nov. 1, when the NBA champion Dallas Mavericks play the Chicago Bulls.

NBA teams are forbidden to use current players in any marketing during the lockout, adding more significance to the early release of the schedule as teams sell against next season’s matchups.

Chris Granger, NBA executive vice president of team marketing and business operations, said the league’s season-ticket renewal rate so far is holding steady. Last season, the league had a rate of between 75 percent and 80 percent.

“We remain on par with last year’s renewal numbers, and new sales are solid,” Granger said.

The early schedule release has a payoff even for teams with strong season-ticket sales.

“It matters more for individual-game ticket buyers and group-ticket buyers and the purchasers of day-of-event suites,” said Steve Schanwald, executive vice president of business operations for the Chicago Bulls, who have a season-ticket waiting list. “It is also helpful to have the schedule early from a TV, sponsorship and promotional night scheduling standpoint.”

Arena managers said that getting the NBA schedule earlier than normal is helping NBA arenas compete with other regional venues should games be canceled.

“My hope is they would do this every year,” said Allen Johnson, executive director of Amway Center in Orlando.

Amway Center competes with the St. Pete Times Forum in Tampa for concerts, and the Tampa facility got a head start for booking shows after the NHL released its schedule in June. That is typical, but the uncertainty over the lockout this year puts added pressure and risk on NBA buildings.

The NBA requires arenas to submit 90 dates to book 41 home games. Now, even though those games are penciled in temporarily, Amway Center can start confirming special events around the NBA schedule.

“Our first ‘hold’ is for the NBA, and the second ‘hold’ is for a concert,” Johnson said. “If the first hold goes away, the second one moves up.”

In Los Angeles, the NBA’s action does not dramatically improve the outlook for Staples Center, home of the Lakers and Clippers. As it stands now, AEG, the arena’s owner and operator, expects to host between 230 and 250 events for the coming season, a total that includes NBA playoff games and Los Angeles Kings hockey games. Staples Center has just 17 open dates from November through April, said Lee Zeidman, the facility’s senior vice president and general manager. In a season without the NBA, the arena would still play host to about 160 events.

“Right now, it allows me to complete the picture between the NBA and NHL and meet with the agents, promoters and the bands, and forecast in my own mind, if the lockout continues this fall, what dates I may be getting back,” Zeidman said. “You can’t get a show with only three weeks’ notice, but you can contemplate, cobble and create something to fill the gaps.”

NHL Commissioner Gary Bettman’s total compensation increased 4 percent during the 2009-10 season, pushing his salary plus benefits to $7.5 million for the fiscal year ending June 30, 2010, according to the league’s most recent tax filing.

For 2009-10, Bettman’s base salary was $5,787,524, other compensation $826,369, deferred compensation $877,597, and benefits $25,988.

Commissioner Gary Bettman was atop the list of 10 executives whose pay was listed on the league’s tax filing.
The NHL declined to comment on Bettman’s pay increase and the tax filing, which does not include the revenue or expenses of NHL Enterprises or the NHL Network, which are not tax exempt.

The increase represents three years of pay raises for Bettman, whose salary is still a fraction of the salaries of MLB Commissioner Bud Selig ($18.35 million) and NFL Commissioner Roger Goodell ($10.9 million). NBA Commissioner David Stern’s salary is not reported publicly because the NBA does not claim tax-exempt status; it is believed to be more than $10 million.

Bettman’s salary has doubled since the 2004-05 lockout, when he was paid $3.7 million. Since the lockout, total revenue generated by the NHL, NHL Enterprises and member clubs has risen from $2.1 billion to $2.9 billion.

The filing reported compensation for 10 of the league’s top executives. NHL Deputy Commissioner Bill Daly saw his total pay rise 7.4 percent to just more than $2 million; Colin Campbell, senior vice president and director of hockey operations, earned $1.5 million; Craig Harnett, chief financial officer, earned $1.1 million; officiating manager Donald Koharski was paid $1.1 million. Ed Horne, former executive vice president of club services, was paid $811,573. John Collins, the NHL’s chief operating officer, saw his pay increase 35.5 percent to $1.2 million.

The filing did not include salaries for Stephen Walkom, former director of officiating, and Michael Murphy, senior vice president of hockey operations, whose salaries were listed on the 2008-09 filing.

The executive pay raise was part of a 10 percent increase in expenses for the league, which listed $83.3 million in expenses for 2009-10. Employee salaries rose 19.6 percent to $24.4 million, and team-related costs rose 16 percent to $4.5 million. Travel ($7.3 million) and officiating costs ($5.2 million) remained static.

The league’s legal costs continued to rise. In 2008-09, legal fees rose 48.6 percent to $3.94 million as the league concluded a lawsuit with Madison Square Garden over the New York Rangers’ digital rights and began bankruptcy hearings for the Phoenix Coyotes. In the 2009-10 filing, the league reported legal expenses of $2.31 million, which represents a 41 percent drop from 2008-09. However, in supplemental forms the league lists $11.01 million in legal services paid to law firms Skadden, Arps, Slate, Meagher and Flom ($9.0 million); Proskauer Rose LLP ($1.6 million); and Covington and Burling ($746,095). The NHL did not list expenses for independent contractors in supplemental forms for its 2008-09 filing.

Skadden represented the NHL when it acquired the Coyotes in November of 2009.

During the 2009-10 fiscal year the league collected $83.3 million in total revenue, an increase of 9.7 percent. The league grew revenue from licensing by 33 percent to $6.6 million.

The National Hot Rod Association has overhauled its ticket sales operations, opening an outbound sales call center and hiring its first ticket sales manager.

The drag racing governing body manages ticket sales for five of its 22 annual races. It oversees sales at tracks in Indianapolis; Gainesville, Fla.; Atlanta; and Pomona, Calif., which hosts two races a year. The other 17 races are sold by the independently owned and operated tracks that host them.

The NHRA handles ticket sales for five of its 22 annual races.
Historically, the NHRA ran a ticket management center that processed and fulfilled ticket orders. It was what NHRA chief marketer Gary Darcy described as more of an “inbound” call center than a proactive sales operation.

After the organization last year hired Atlanta-based ticket consultant Bernie Mullin, founder and CEO of The Aspire Group, to speak at a national track operator meeting, it decided to revamp its ticketing division to emphasize retention and upselling.

In early July, it hired Erik Blaisdell as its first ticket sales manager. A former account executive with the ECHL Ontario Reign, Blaisdell will oversee a sales center with two other yet-to-be-hired sales executives. The group will make outbound calls and try to reconnect with fans who attended races in the last five years but haven’t returned in recent years.

Darcy said he expects the new sales division to lift total ticket revenue by 7 percent to 10 percent in 2011. The NHRA reported $43.9 million in admissions revenue in 2009, down 16 percent from $52.2 million in 2008.

“We’re really trying to build a relationship with fans, with the No. 1 job being retention,” Darcy said. “The No. 2 is upselling, and the No. 3 is finding new fans. We’ve modeled it out in terms of warm leads and what revenue we’d get per call, and we’re enthusiastic about this.”

The NHRA also is emphasizing group ticket sales for the first time. At the start of 2011, it adopted best practices for group sales from The Aspire Group and began seeking referrals for groups more aggressively than in the past. Group sales are up 5 percent to 10 percent to date.

Darcy said that if the group sales efforts and outbound call center succeed in lifting ticket revenue, the NHRA will share the best practices that result with its track partners. He added, “Once we get numbers, it might be possible we can work with them directly to help what they’re doing.”

The U.S. Ski & Snowboard Association signed a three-year deal with Tiffany & Co. that makes the jeweler the first sponsor of the organization’s famous Gold Pass, which provides top donors with unlimited access to any ski resort in the country.

The deal is valued in the mid-six figures annually. It will make Tiffany the official vendor for the USSA’s Gold Pass and see it develop a line of signature licensed product, such as U.S. Ski Team cuff links, money clips or bracelets.

The USSA Foundation offers the Gold Pass to donors that contribute more than $10,000 annually. The pass provides unlimited access to any ski resort in the country. The nonprofit, which serves as the fundraising arm of the USSA, sells more the 300 Gold Passes a year to some of its most affluent donors.

Tiffany’s logo will be on the 2011-12 Gold Pass. It is the first time the USSA has sold a sponsorship for a piece of inventory controlled by its foundation.

“They’re taking an asset that would have sat in our foundation and leveraging it commercially,” said Andrew Judelson, USSA’s chief revenue and marketing officer. “The season is perfect because those Gold Passes are delivered in late October [in a Tiffany box], right before the holiday sales season. It’s a target audience at a very strategic time.”

Tiffany has sponsorships with USA Basketball, the Chicago Cubs, the New York Jets and Giants, the U.S. Open (tennis), the PGA Tour, and the ING New York City Marathon. Tom O’Rourke, Tiffany’s vice president of business sales, said the company signed on because of the demographics of recreational skiers and the hospitality experience it will be able to offer clients at USSA competitions.

“The audience USSA reaches is not one we traditionally have a way of getting to,” O’Rourke said. “From a gut level, you know the recreational skier simply has to be more affluent because of the nature of the sport. The audience aligns well with our consumer.”

USSA announced the deal last week during its partner summit in Park City, Utah. More than 140 people attended, a 55 percent increase from 2010.

USSA also announced a plan to hold the 2012 NASTAR Championships, the grassroots national ski event, at the same time and place as the 2012 U.S. Alpine Championships.

The USSA generated $7.4 million in sponsorship revenue in 2010, according to tax filings, but Judelson said deals with Tiffany, The North Face and other new sponsors this year put it on track to exceed that revenue in 2011.