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Volume 21 No. 2

Leagues and Governing Bodies

Shortly before sitting down on a panel at London’s Beyond Sport conference last week, NASCAR CEO Brian France popped into Barbecoa, a Jamie Oliver-owned steakhouse across from St. Paul’s Cathedral. He was interested in trying the food there because, later that afternoon, he was to share the stage with Oliver during a session titled “Mobilizing Millions: How can we change the attitudes of the masses through sport?”

During a lunch of brined chicken laid over creamed sweet corn, France talked with staff writer Tripp Mickle about the economic turmoil that NASCAR has faced over the past four years and shared his optimism about the future of the sport.

NASCAR has come through a pretty tumultuous period over the last four years. What’s your prognosis of the sport?

TV talks “are going to work out very well as they have for virtually every rights holder. It’s all going to work out good.”
Brian France

FRANCE: Long term it’s really good. Short term there will be continued challenges with the economy. … We’re doing a fair amount of [ticket discounting], but we have public companies who don’t have stadiums that are publicly financed.

At what point do you think the erosion in attendance will end and there will be a rebound?

FRANCE: We have in some places like Michigan. California, despite the rain, we had an uptick in attendance. [The economy] disproportionately hurt us. When you think about how far fans have to drive, how long they have to stay, what’s really clear, and I’m not an economist, but the middle class is doing less. If they were taking a bigger vacation, they’re taking a smaller one or none at all.

What keeps you up at night?

FRANCE: The new car that we have coming in 2013. We want to make adjustments to that. We want to make changes to the [research and development] center to accelerate things we’re working on to get the racing product as good as it can be. I get pretty worked up internally if we come in and out of a weekend and our coverage is not fair. I don’t mean saying good or bad things, but I mean the amount of coverage.

How would you assess the performance of the new communications division?

FRANCE: They’ve hired a lot of very talented people. They’re marshaling the industry differently. … We worked the last four or five years to make sure we’re doing as many things together and are connected in as many ways as possible.

The TV rights sale is on the horizon. Where do things stand?

FRANCE: Things are going to work out very well as they have for virtually every rights holder. It’s all going to work out good.

There was so much concern about the ratings dip a year ago. Now getting into the discussions, what makes you as confident as you are?

FRANCE: There’s a lot of interest and very few other properties haven’t renewed, including the Olympics. And then what we know is that networks don’t look at things in a two-year cycle. Our deal is an eight-year deal. The next one could be longer.

How is the new website progressing?

FRANCE: It’s very dynamic.

When will we see it?

FRANCE: We better see it Jan. 1 or we’ll all be in trouble.

What will that do for the sport in your mind?

FRANCE: We found one of our real difficulties was not having our digital rights. For us, we’re an under-covered sport. The chance to have new media offers a lot more space to help us tell our stories to our fans.

NASCAR’s had four restructurings in the last two years. That’s a lot. Why so much of a shake-up?

FRANCE: Businesses change, and we believe we can be better. We did that review, which told us a lot. We felt these changes were necessary.

One of the biggest issues facing the sport is team health. The rise of co-primaries has made it difficult for teams to find funding. What needs to happen to get teams healthy again?

FRANCE: There are a thousand companies in the sport. We have attrition every year. In the heyday, we had attrition. Executives change. … It shouldn’t surprise anybody that sponsors drop out.

Right, but it appears that the trend of late is two sponsors leave the sport and only one comes in.

FRANCE: Unlike other sports, teams can take their costs down.

Do you ever see teams getting a bigger piece of the television revenue?

FRANCE: I see them getting more television money. We try to look at it from growing the pie, not the slice.

When do you expect to see results from the five-year plan?

FRANCE: We’re seeing results. For example, how we come in and out of a weekend. A year ago in Sears Point [Sonoma, Calif.] we were not covered in that market as well as we should have. [Integrated marketing and communications] made a concerted effort six or eight weeks out to merchandise story lines, information and relationships, so that when we were there, we were significantly in the [San Francisco] Chronicle and other news organizations. … We’re making progress.

Over the second half of the season, what’s your No. 1 priority?

FRANCE: To have great races and great story lines. That makes people look smart.

Major League Baseball last week held its inaugural Diversity Business Summit, as the league looks to attract more minority and women employees and vendors.

The one-day event at Chicago’s McCormick Place Convention Center drew more than 600 registrants. Job seekers paid $125 to attend, and businesses looking for procurement opportunities paid $325 for the chance to meet directly with league and team executives.

The event attracted more than 600 registrants, including job seekers and vendors.
Representatives from the league, all 30 major league clubs, MLB Advanced Media, MLB Network, and 10 minor league teams attended the summit, which was co-hosted by the Chicago White Sox. “It is in our self-interest to deal with the whole world, and diversity is really good business,” said White Sox Chairman Jerry Reinsdorf.

The event featured a keynote address by MLB Commissioner Bud Selig and a panel discussion involving Reinsdorf, Atlanta Braves Chairman Emeritus Bill Bartholomay, Arizona Diamondbacks President and CEO Derrick Hall, New York Yankees President Randy Levine, Houston Astros President and CEO George Postolos and MLB Chief Financial Officer Jonathan Mariner.

“This is the first of its kind in sports, and [MLB’s diversity] numbers continue to grow with the help of our diversity committee,” Selig said. “While we have done well, we need to do better. It is not the right thing to do; it is the smart thing to do.”

The summit is the latest diversity effort by MLB, joining the league’s long-standing Reviving Baseball In Inner Cities (RBI) program along with its Urban Youth Academy program that develops youth baseball facilities in inner cities.

With the Rev. Jesse Jackson seated in the front row of the convention center ballroom, Selig said he hoped to partner with other leagues to continue to grow minority and women participation in professional sports.

The summit was developed in part by Wendy Lewis, MLB’s senior vice president of diversity and strategic alliances, who said it was much broader than other sports-related job fairs.

“We wanted to connect folks with individual clubs as well as allowing them to find out more about our business,” Lewis said.

Title sponsorship of the new PGA Tour Latinoamerica is proving to be a tough sell.

Tour officials said they likely will start the Latinoamerica tour season this fall without an umbrella sponsor. The PGA Tour has FedEx as its umbrella sponsor, while its U.S.-based developmental tour recently switched to from Nationwide. The Latinoamerica tour, the PGA Tour’s first series outside of the United States, will be a developmental tour on golf courses throughout Latin America that feeds players to the Tour.

Mexico’s Yucatan Country Club will host the Latinoamerica tour’s first stop in September.
Photo by: YUCATAN CC
But having an overarching sponsor is not necessary to underwrite the PGA Tour Latinoamerica, which will begin its inaugural season with an event in Mexico in early September. The 11-tournament season will run through mid-December. The Latinoamerica tour is fully sanctioned and supported by the PGA Tour. Tom Wade, the PGA Tour’s chief marketer whose team has been trying to sell an umbrella sponsorship for the Latinoamerica tour for roughly the past year, said the tour will be fully supported this year regardless of its sponsorship status.

“The tour is not contingent on an umbrella sponsor,” Wade said. “It’s important to penetrate the Latin American market as well as develop a following in the Hispanic population in the U.S. … This is a major move for us in the global marketplace. We’re pioneering something that we’ve never done before, in terms of starting a tour outside of the U.S.”

The PGA Tour has been making Latinoamerica tour pitches to brands and agencies in both the U.S. and throughout Latin America. Wade described the marketplace as curious, but it’s clear that finding the right fit will take a lot of legwork.

He said a deal with the tour could be beneficial for U.S.-based companies that are looking to generate awareness throughout Central and South America, as well as for companies that are based south of the border and do all of their business there. But the tour is so spread out, with events ranging from Mexico to Argentina, an umbrella sponsor would want to have a broad base to match the type of wide coverage the tour provides across seven countries.

The PGA Tour Latinoamerica will hit Mexico, Colombia, Brazil, Argentina, Peru, the Dominican Republic and Puerto Rico in its first year. In subsequent years, the tour will grow to as many as 18 to 20 tournaments, said Jack Warfield, president of the tour.

Future events would target Chile, Uruguay and Panama, as well as markets in Brazil, Argentina and Venezuela, proven areas that have a strong golf following.

Argentinian Angel Cabrera, a past winner of the Masters and U.S. Open, is largely credited with driving interest in the sport recently. Others have followed, including Colombian Camilo Villegas and Venezuelan Jhonattan Vegas. With the Latinoamerica tour providing a pathway to the Tour, the PGA Tour is hoping to provide more opportunities for Hispanic golfers, who could develop into stars in the United States.

“There are big commercial markets in that part of the world and we are there from a TV standpoint,” Wade said. “It’s also something that has the potential to strengthen our appeal to the fastest-growing demographic in the U.S., the Hispanic community.”

The PGA Tour’s own measurements show that interest in golf is growing in those regions. The tour has increased the TV distribution of its primary tour by 228 percent since 2000, increasing the number of available households from 10.2 million to 33.5 million in Latin American countries. That’s nearly twice the growth the PGA Tour has seen in other parts of the world.

Traffic on also has grown in key countries. Daily unique users from Colombia grew from just under 400,000 a year in 2007 to more than 600,000 a year in 2010. Argentina, Brazil and Venezuela have seen strong growth as well, although not to the extent that Colombia did. Traffic from Mexico has been fairly flat.

That growth has been central to the PGA Tour’s selling efforts. Wade’s team also has been emphasizing golf’s re-entry in the Olympics in 2016, saying now is the time to catch the wave as the sport’s popularity grows in that region.

An umbrella sponsorship on the Latinoamerica tour will go for $3 million to $4 million a year, industry experts say, and the PGA Tour is willing to be flexible in how it structures the package.

Many of the standard bells and whistles are included, such as extensive on-course branding, messaging on PGA Tour and Tour broadcasts, hospitality, eight pro-am spots, tickets, and visits from players.

The media piece would include a highlights package produced by Golf Channel Latin America that will be distributed to various outlets and There also are plans for a preseason show, a postseason wrap-up and eventually a weekly 30-minute highlight show with the sponsor integrated into the programming.

“We’re in discussions with a couple of companies and we’re taking our time,” Wade said. “We never really expected to have a sponsor for the first part of the new tour and we may not in 2013. But at some point, we’ll find the right partner.”