Group Created with Sketch.
Volume 21 No. 2

Leagues and Governing Bodies

The NBA is rolling out a series of television commercials to promote the coming season that builds on the league’s established “Big” advertising platform.

The spots build on the “Big” advertising platform.
A 30-second spot dubbed “Countdown” began airing last week on ESPN, TNT and NBA TV. The creative features a series of game-related elements moving back and forth, including players in their pregame routines, with the images set to the sound of a ticking clock.

New for the league this season is the integration of the “Big” campaign with ticket, merchandise and other retail efforts. The first of such spots will promote the NBA Store, with other spots to be rolled out after the season begins. The creative for those ticket and retail-related commercials has not yet been completed.

League partner Kia also will use the “Big” theme as part of a 30-second spot promoting its sponsorship of the official NBA season-opening platform: Kia NBA Tip-Off ’12. The spot uses game footage of various players and will debut on opening night, Oct. 30. It will run through the end of November across TNT, ESPN and NBA TV.

This is the NBA’s second season using the “Big” campaign, which was created by the league’s agency of record, Goodby, Silverstein & Partners.

“The campaign serves as a big umbrella and it is seamless,” said Jamie Gallo, executive vice president of marketing for the NBA. “It is not forced even as it is applied to our partners.”

Gallo joined the NBA in June. This is the first campaign under his direction.

“Last year, we did a great job in the adoption of the campaign, and this year, the campaign will focus on storytelling and narrative,” he said.

NBA TV will use “Big” for its “Big Shots” 30-second spot featuring Los Angeles Lakers star Kobe Bryant talking about taking dramatic shots. The spot also will feature footage of Miami’s LeBron James and Oklahoma City’s Kevin Durant, among others. The ads were scheduled to debut this past weekend and run through Dec. 10 on NBA TV. At that point, the league will roll out another series of spots tied to its Christmas Day games.

“We will dial up around the holiday season activity,” Gallo said. “Our thinking this year is that [the NBA’s Christmas Day schedule] is our version of Super Bowl Sunday and that it is another platform to engage our fans.”

The NFL is re-energizing its effort to launch a venture capital fund to invest on behalf of the league’s owners.

The initiative, approved last year, took a hit when the executive in charge of the effort, Neil Glat, left the league this spring to join the New York Jets as president. In the last month, the league placed the project under the guidance of NFL Executive Vice President Eric Grubman. Another league officer, Kevin LaForce, has also been assigned to the fund, which the league now hopes will be investing by next year.

The owners have committed $1 million apiece to invest in the fund, which captured a lot of industry attention when it was first disclosed last October. Originally, the league envisioned an advisory board of investment funds that would bring deals to the league. The league has reshaped that vision to focus on perhaps signing with just one or two firms as partners.

VIEW TO THE WEST: When AEG announced in September it was for sale, Tim Leiweke, the company’s president, forcefully rejected suggestions that the move would hurt the firm’s effort to build a football stadium in downtown Los Angeles. Well, count NFL Commissioner Roger Goodell as one who is unsure. “It is very possible while this may delay an ultimate solution for some period of time,” Goodell told reporters last week, “it may also accelerate an alternate solution because it may create opportunities. The focus is on selling the asset first.”

HGH TESTING ON HOLD: The NFL appears almost certain to go through another season without an agreement to test players for HGH. While the new collective-bargaining agreement put in place last year called for human growth hormone testing, the document left the protocols to be determined by the players and the league, and that is where the hang-up resides. The two sides could not reach agreement in year one of the CBA, and year two looks to go the same way. “We thought we had an agreement; we don’t have an agreement,” Goodell said.

Jeffrey Miller, the league’s lobbyist in Washington, D.C., said he doesn’t expect Congress to get involved any time soon. Congress is not in session until after next month’s election, Miller noted, and even when it returns, its time during the remainder of the 2012 NFL season will be a lame-duck session.

New Orleans is looking to amaze, but won’t use Indianapolis’ zip line idea.
PICTURE PERFECT: This January marks the 40th anniversary of the Miami Dolphins’ undefeated season, the only one in NFL history. To commemorate the occasion, the Dolphins are making a full-length feature movie on the season, said Mike Dee, team CEO. The club has hired sports documentary maker Bombo Sports & Entertainment for the effort. The premiere will be in Miami in December, Dee said, and the club hopes to distribute the movie in theaters across the country.

ZIP IT: Don’t look for a zip line in New Orleans at the Super Bowl this season. The zip line setup in downtown Indianapolis for this year’s Super Bowl festivities became one of the defining features of the event, ushering in suggestions that no future Super Bowl would be complete without having a similar “wow” factor. New Orleans Saints President Dennis Lauscha talked here about the Super Bowl Village his city was undertaking for this season’s game, Feb. 3, but he said there would be no major spectacle like a zip line. One source did say the city was working on something that would “amaze” but added that it would not be interactive.

New Browns owner Jimmy Haslam may keep a higher profile than his predecessor.
OWNER OBSERVATIONS: It’s obvious Jimmy Haslam will be a very different owner than his predecessor, Randy Lerner. Haslam, who is slated to take control of the Cleveland Browns on Thursday upon the closing of his $1.05 billion purchase of the club, had his PR person hand out a 38-page binder of stories and information about the new owner here. Lerner, who did not attend, was one of the more reclusive NFL owners,
The Bears’ Virginia McCaskey, a rare sight at meetings, attended Monday’s reception.
rivaled only by Seattle ’s Paul Allen. … Speaking of owners rarely seen, Chicago Bears owner Virginia McCaskey attended the “Monday Night Football” viewing reception the evening before the meeting. The elderly daughter of Bears founder George Halas rarely attends meetings but made it to the hometown reception. … Dallas Cowboys owner Jerry Jones almost never misses an owners meeting, but he did miss this one. No formal reason was given for Jones’ absence, but maybe it was a giveaway that Dallas would be shut out of bidding for the 2016 and 2017 Super Bowls, with Houston, South Florida and Santa Clara, Calif., receiving the right to bid. Hard feelings from last year’s Super Bowl fiasco in North Texas remain widely evident, as well.

Wealthy NFL teams shared significantly less money in 2011 with financially challenged clubs than in previous years, the league told owners at their fall meeting in Chicago last week.

Previously, upward of $100 million was transferred annually to solve a financial disparity issue that the NFL wrestled with for well over a decade. In 2011, that figure plummeted to between $10 million and $15 million, multiple sources said.

The amount is a fraction of the billions of pooled national revenue that underpin the league’s success, but the reduction signifies that the angry debate between “high-revenue” and “low-revenue” teams may be over and, further, that the league got what it wanted from the newly enacted collective-bargaining agreement.

The steep financial concessions the league won from the players in labor negotiations last year has served in part to significantly diminish the need for robust revenue sharing among the clubs outside the money that is traditionally pooled, like national media and sponsorship dollars. By keeping a greater percentage of overall revenue beginning in 2011, the NFL was able to pad the bottom lines of teams that previously needed extra assistance, enabling owners of higher-revenue clubs to keep more of the money they brought in from their own sales successes.

Several NFL sources confirmed the lower figures but did not wish to be identified. The NFL declined to comment.

“This seems to be indicative that, at this early stage, this CBA is working as the owners intended it to work,” said Scott Rosner, a sports business professor at Wharton School.

The shift puts the NFL in stark contrast to other major U.S. sports leagues, especially the NBA and NHL, which recently have moved to increase revenue sharing among clubs to help struggling teams.

When the NFL signed the new CBA 14 months ago, the league had hoped toward the end of the 10-year deal that it might be able to phase out this form of sharing, which it terms “supplemental revenue sharing.” It might reach that goal far quicker if the 2011 figure is any indication, especially given the increased media money set to start flowing into the league from the latest round of TV deals, which take effect in 2014.

By the end of the old CBA, players were getting a low 50 percent share of all revenue. That ratio, in the current deal, is now in the mid 40 percent range.

In addition to the owners keeping that larger share of revenue, one team source pointed to another critical change in the new CBA as a factor in reducing the need for supplemental revenue sharing. While the players end up getting a mid 40 percent amount, how the NFL derives this money has changed, with percentages now being different based on source. The players, for example, get 55 percent of national TV money. By contrast, revenue deemed locally generated (coming largely from within its marketing radius) is shared with the players at a 40 percent rate.

When, under the prior deal, all revenue was shared equally, that sharing caused problems for lower-revenue teams. If, for example, the Dallas Cowboys were to sign a lucrative sponsorship, the Cowboys would keep their share of the revenue, but the players’ share had to be paid equally by the 32 clubs. So if the deal was worth $15 million, and for the sake of argument, half went to the players and the club kept half. But while the club kept $7.5 million, the other $7.5 million, the part that went to the players, was paid by all 32 teams

Now, the players’ local-revenue share is lower, so there’s less that other clubs need to pay on the players’ side of the shared-revenue deal. In that $15 million example, instead of $7.5 million shared with the players, it’s $6 million. That difference is having an appreciable impact reducing the need for extra assistance for some clubs.

Teams also did not have a minimum salary cap in 2011, nor for that matter do they have one this year. The league had to spend 99 percent to the cap on average, but individual teams had no requirement. That means teams that might have needed extra funds in the past to meet minimum salary cap requirements were not as stressed these past two years.

Minimum spending requirements for the salary cap return next year, though teams only have to average a minimum mark over a four-year span. In addition, local revenue is likely to grow more this year and next with full offseasons compared to the lockout-shortened 2011 offseason. That in turn could affect the current trajectory on the system of sharing revenue between clubs.

The Professional Bull Riders is marking 20 years in business in 2012 and next year will celebrate its 20th year of competition. On the eve of the PBR’s Built Ford Tough World Finals, to be held Wednesday-Sunday at the Thomas & Mack Center in Las Vegas, PBR Chairman and CEO Jim Haworth spoke with correspondent Bruce Goldberg. He discussed those milestones, what to expect at the finals, how new sponsor relationships are working out, and how the PBR is trying to grow.

What will fans see that’s different at this year’s finals?

HAWORTH: This will probably be our closest final we’ve had in history. Mathematically, 14 of our top riders are in the running to win the world championship. It’s going to be one heck of a race. Silvano Alves was the world champion last year. If he wins this year, he will be the first back-to-back champion.
We have [for the second year] a TV screen, 26 by 46 feet. … It has changed the way fans watch bull riding. They watch it live, then their eyes go to the big screen to watch the replay, and a lot of times the reaction comes to the replay, rather than the actual event in the dirt.

Haworth made the rounds in New York in January, including a stop by the New York Stock Exchange.
Two of your newest sponsors are Pabst Blue Ribbon and Kawasaki. How are they activating their deals?

HAWORTH: Pabst is up and coming. It’s an old brand, but it’s becoming kind of hip to drink Pabst beer. They do party zones at most of our events across the U.S. and also do activation in their properties, where they have affiliations with specific bars in those markets.

When you look at our fan segmentation, we over-index with outdoors and camping. The propensity for people using ATVs was very high, so we’re very excited to get Kawasaki on board for this year, and they’re renewing for next year. They bring a younger demographic. [At events] they’ll take an ATV and drive it on the dirt at different points in the show. … We also have “text to win,” where fans can send a text and have a chance to win a Kawasaki.

Any other new sponsors to talk about?

HAWORTH: Montana Silversmiths is a new sponsor, a belt buckle manufacturer, the largest in the U.S. They have a long history with the Western lifestyle.

Any special plans for the PBR’s 20th anniversary?

HAWORTH: This is the 20th-year anniversary of the original founders signing checks for $1,000. We’re excited about the opportunities of working with our sponsors. They’re looking at different things they might do to support us in our celebration.

We have some special events we’ll do throughout the year [in 2013]. We’ll be in Las Vegas in May for a special event tied in with the 20th. … We’ll do the top 20 most interesting moments of the PBR’s history and will be releasing different segments throughout the year. We’ll also have a special logo and special merchandise.

How are you trying to grow your fan base?

HAWORTH: There’s a couple of things we’ve gone back and looked at. We did a specific fan segmentation to understand the demographics of our fans even better. We applied that to this year’s TV and ticket sales. We also used it to enhance our relationships with current sponsors and used it to continue to grow our sponsorship.

We’ve enhanced our TV. We have David Neal [34-time Emmy winner] as the producer of our TV show. He did nine Olympic Games. He has looked at the property, gotten excited about the sport, and looked at ways to enhance our sport. We’re seeing some ratings improvements. We had 16 nationally broadcast events in 2012, the most in the history of the PBR.

What keeps you up at night regarding the PBR?

HAWORTH: I think any business today, a live-event business, we’re continuing to look for sponsorships. I think any live-event business that is depending on it for revenue [also] will continue to work at ticket sales.

Bruce Goldberg writes for the Denver Business Journal, an affiliated publication.