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Volume 21 No. 1

Leagues and Governing Bodies

It’s been one year since Andrew Messick stepped down as president of AEG Sports to take over as CEO of the World Triathlon Corp., owner of the popular Ironman brand of races. Messick came to the WTC having overseen the Amgen Tour of California, the country’s biggest professional bicycle race. So far, Messick has had a busy year. The WTC expanded with eight new races in 2012, including this month’s Ironman U.S. Championship in New York City.

Correspondent Fred Dreier caught up with Messick at New York’s inaugural Ironman race to talk about the sport’s growth.

Having spent one year in triathlon now, how does the business culture here differ from cycling?

Messick and the World Triathlon Corp. have added eight new races for 2012.
MESSICK: It’s totally different. The business of cycling is about sponsorship, endorsements and media, whereas the business of triathlon is all about athlete registration fees from an event. For cycling, you need to build an online or a broad-based TV platform, otherwise you simply won’t get sponsors to sign up. Fans don’t pay anything to watch, and there is no way to sell tickets to a bike race. Here, the bread and butter is the age-group athletes.

Ironman has long relied on NBC’s two-hour recap show of the Hawaii Ironman to bring in broader viewership. Are you pushing to get more network TV coverage?

MESSICK: NBC has been a fantastic partner, and we’re with them through 2018. We’re also really sensitive to the way people now consume media. A recap show that occurs four weeks after the fact serves a great end from a storytelling aspect, but in terms of a compelling sports product, it’s more important that we are live. We tell that story at right now, but at some point we have to make a decision about how we want our followers to consume our product. Do we want to be online or handheld? Either way, NBC and that type of high production value is going to be part of our future for a long time.

What challenges do you face in selling Ironman to marketers?

MESSICK: There is a perception that is starting to ebb that our sport is super niche — that the ability to swim 2.4 miles, bike 112 and run a marathon is only for extraordinary people. The professionals are extraordinary, but part of the power of our brand is that anybody can do it. You don’t have to be a member of the lucky gene club to be an Ironman. You need commitment and the ability to dream big, but if you look at the people coming across the finish line, you will see all shapes and sizes. That perception isn’t as broadly held as we’d like it to be, and it’s going to be our challenge in the coming years.

What categories are you going to be targeting for sponsorship in the immediate future?

MESSICK: We’re going to focus on health care, telecommunications, airlines and the types of companies that deal with our types of athletes — a super-educated, super-motivated athlete with a household income of $175,000 who is deeply engaged in sport. Sure, our demo is good, but if you’re signed up for one of our races, you spend all year thinking about what products you’re going to use for training, where you’re going to go for a training camp, what types of equipment you will use. What makes an Ironman sponsorship platform attractive is the depth of commitment our athletes have.

So the Ironman brand has been around 35 years, there are 30 global Ironman races and even more 70.3 (half Ironman) races. At what point do you start worrying about saturation?

MESSICK: We don’t have a race in Eastern Europe. We don’t have one in the Middle East. We only have one full Ironman in South America and not a full [one] on continental Asia. There were 56 athletes from Japan [at the world championships] in Kona last year and Japan doesn’t have a full Ironman. When we think about all of the places we are not, we see the potential. Putting a race in a city grows that market, and that’s what we hope happens in New York. We had 66,000 athletes sign up for an Ironman last year. That’s not that many. By and large all of our races in North America are sold out, so I don’t think saturation is a big issue for us.

Fred Dreier is a writer in New York.

The arrival of the Ron Fowler-led ownership group to run the San Diego Padres, taking the reins from John Moores after 18 years, is being eyed as potential salvation for the franchise’s often-rocky fiscal prospects.

Playing in MLB’s fourth-smallest media market and sandwiched between Los Angeles and Mexico, the Padres have always had an uphill economic climb relative to most other clubs. Moores’ bitter divorce saga, a three-year battle that ended last year and prompted him to put the club up for sale, amplified the pressure.

Signs of club fiscal stress over the past four seasons were easy to see. Payroll shrank, several star players departed, losses mounted and attendance sagged, as did fan optimism.

But with the estimated $800 million deal, including a 21 percent stake in the new Fox Sports San Diego, now complete, league and team executives were bullish on the Padres’ outlook. Fowler is a longtime San Diego businessman who has been deeply involved in local sports and philanthropic activities.

After the vote approving the Padres’ sale, MLB Commissioner Bud Selig (second from left) joined owners group members (from left) Ron Fowler, Peter Seidler and Kevin O’Malley.
Photo by: AP IMAGES
“This group knows what it takes to compete,” said MLB Commissioner Bud Selig. “They’re very optimistic there. I’m optimistic. I’ve gone over their projections, gone over everything. I think their projections are optimistic, but realistic. This is a good day for baseball.”

The Fowler group last week was generally tight-lipped about details on its specific operational plans, preferring to wait until the purchase from Moores closes later this month. But revenue is now on the upswing with the $1.2 billion FS San Diego deal in place. Pro golfer Phil Mickelson, a significant part of the Fowler ownership group, lends credibility and star power. The club also signed contract extensions in the last three weeks or so, after it became apparent that the sale would move forward, with popular players Carlos Quentin, Huston Street and Mark Kotsay, signaling to fans that the frequent fire sales are over.

Also expected is some type of response to a frustrating television situation that has left 42 percent of the San Diego market unable to watch the Padres, since Fox Sports San Diego doesn’t yet have distribution with several major local carriers.

“We want the attention and spotlight to be on a great product on the field,” said Peter Seidler, among the key figures in the Fowler ownership group. “We’re going to be supportive and … run a good organization.”

‘AN OLYMPICS EVERY DAY’: NBC Sports recently broke new ground for live online streaming of the Summer Olympics, distributing more than 3,500 hours of content across 302 events. But MLB Advanced Media executives couldn’t help but notice NBC’s Olympic tonnage remained less than what the company does on a daily basis between live MLB games, live Class AAA minor league games, programming on, political pundit Glenn Beck’s “GBTV” and the other live streaming events MLBAM hosts.

In all, during the July 27-Aug. 12 period of the London Games, MLBAM streamed 1,309 live events, more than triple NBC’s total, and 4,245 hours of live content. The relative scale of the two camps’ streaming efforts was discussed briefly during MLBAM’s board meeting last week.

“I applaud what NBC did. It was really great, and every big thing like this absolutely helps raise the bar for live streaming overall,” said Bob Bowman, MLBAM chief executive. “But you look at it, and we’re basically doing an Olympics every day in terms of that kind of scale.”

Beyond simple programming heft, MLBAM compared closely to NBC Sports on the traffic and engagement fronts. NBC Sports delivered 159.9 million video streams for its London Olympics online programming; MLBAM in the same period generated 120 million video streams for its MLB games alone, a fairly typical in-season number. That figure does not include any of the non-MLB traffic.

The NBA has signed a multiyear ticketing deal with Ticketmaster, which for the first time will consolidate the primary and secondary ticket-selling efforts for all 30 teams.

The deal, in development for several months, will create a centralized online portal for fans that is intended to serve as a one-stop shopping site for all NBA tickets. League and team officials said the new site will add branding power, ease of use, and security to attract more ticket buyers while also delivering additional consumer data collected that will be with the teams.

Financial terms were not disclosed, but the pact calls for ticket buyers to be directed to a new leaguewide landing page featuring logos for all 30 teams. On that site, to be separately branded and co-marketed by both Ticketmaster and the NBA, users will be shown all available ticket options for each team, including secondary listings.

Chief Operating Officer Jared Smith says Ticketmaster has tailored a system to meet the needs of the NBA and its fans.
Ticketmaster’s new deal comes after its leaguewide secondary deal with the NBA expired in 2010.

“The core of it is that all teams will be pushing one site and one brand, which is not the case now,” said Chris Granger, executive vice president of the NBA’s team marketing and business operations department. “To have all the primary and secondary inventory on one site is unique.”

For Ticketmaster, the deal quickly follows the signing last spring of a multiyear contract extension with the NFL. Operationally, the NBA deal will share a fair degree of similarity to the football deal, but include a heightened focus on primary ticketing as NBA teams typically feature much more available primary market inventory than do NFL teams.

“There are subtle differences,” said Jared Smith, Ticketmaster chief operating officer. “But what we’ve done is taken our learnings from elsewhere and really tailored something that’s going to serve the league, the sport, and the basketball fan. In this case, there’s some evidence that the fan is being trained to immediately go to the secondary market. So our goal is to create something where the fan is presented with a complete, overall view of all safe, trusted ticket options.”

Related story: NBA teams gather to trade ideas on digital operations

The secondary market inventory will also derive from Ticketmaster-controlled outlets, such as TeamExchange and TicketsNow, meaning tickets sold on StubHub and other major venues will still exist outside the new structure.

The deal will allow the six NBA teams that do not have local Ticketmaster deals to also be part of the larger structure. Houston, Utah, Denver and Cleveland currently work with Veritix, owned by Cavaliers owner Dan Gilbert. Philadelphia and Portland are aligned with Comcast-owned Paciolan. But the logos for those teams on the new ticketing landing page will direct purchasers to their respective online ticket-selling locations.

The new system will be partially implemented by the late October start of the upcoming NBA season, with full operational capability projected for the 2013-14 season. Yet to be established is any specific team marketing spend in promoting the site.

“The deal provides access to every team on both the primary and secondary market with the intent to get everyone on the site, even teams that are not using Ticketmaster,” said Orlando Magic CEO Alex Martins. “It is an aggregator to utilize the total branding power of the league.”

An issue already of keen interest to the NBA and nearly every other sports property is the league and individual team access to ticketing data and analytics collected from the new site.

“It is more convenient and more secure,” said Steve Schanwald, executive vice president of business operations for the Chicago Bulls. “We will receive more marketing support from the league and Ticketmaster, which should help us sell more tickets in both the primary and secondary markets. This also will give us great data and analytic support, which should result in better real-time data to support pricing decisions.”

MLB offers a similar, logo-driven ticketing landing page for all 30 baseball clubs from And from that page, users can also link directly to StubHub, since 2007 the league’s official secondary ticketing partner. The NFL and NHL also offer centralized ticketing hubs from their official websites including primary links to every club and direct links to Ticketmaster TeamExchange, the resale hub operated by the ticketing giant.

“This is a very significant step forward for the NBA,” said Bernie Mullin, chief executive of industry consultancy The Aspire Group and a former NBA marketing executive. “It impacts the league on multiple levels. The growth of the secondary market has hurt some teams, and controlling both the primary and secondary market is essential. It also brings the ability to market and collect more data on ticket buyers.

The NBA held its first stand-alone digital meeting over two days in New York last week, as teams look to increase digital content and revenue opportunities for the coming season.

The league has held sessions related to digital business at its annual league marketing meetings each January, but last week marked the first time the NBA brought together digital staff from all 30 teams along with members of the league’s team marketing and business operations department to focus solely on digital operations. NBA Deputy Commissioner Adam Silver spoke at the gathering. Executives from Turner Sports, which runs the NBA’s digital operations, also attended the sessions, which were held at the NBA’s Fifth Avenue headquarters. No outside speakers were brought in.

About 50 people attended and worked through an agenda of eight sessions, including panels focusing on digital content, the use of mobile applications, advertising sales execution, video and social media. There were no specific leaguewide digital business mandates issued to teams at the meeting.

“The entire theme was the exchange of best practices and a chance to tell each other what works and what doesn’t,” said Mike Allen, vice president of interactive services for the NBA, whose department spearheaded the meetings. “We are focusing on ways to better the [digital] experience for fans with the understanding that they could lead to sponsorship opportunities.”

About half of the NBA’s 30 teams offer mobile applications to fans — an increasing area of emphasis for the league. One panel was made up of representatives from the Phoenix Suns, New York Knicks and Charlotte Bobcats addressing the topic.

“We launched our first mobile application right before the NBA draft and we had a lot of teams asking how we built it and what the results are,” said Jeramie McPeek, vice president of digital operations for the Suns. “There are so many digital channels available to us, so the meeting was about how to figure out which are the ones for us to focus on and what are the biggest returns.”

Another area of emphasis was how to improve game-day content on their respective websites to increase traffic.

“We discussed what is the typical game-day content cycle and how to engage fans from the morning of the game through the postgame,” Allen said.

For McPeek and other team executives, having the meeting in the offseason allowed for the exchange of digital business strategies while also providing time for any initiatives to be implemented.

“As a Suns employee and fan, I hate the Lakers and the Spurs — but love getting together with my counterparts, and we learn a lot from each other,” he said.