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Volume 21 No. 1

Leagues and Governing Bodies

The NFL is planning to loosen most of its market restrictions for mobile apps, beginning with tablet apps, becoming the first sports league to do so. The league will begin bringing its app policy more in line with its Internet policy, which allows clubs to offer a wide array of content.

NFL teams currently offer apps on mobile phones and tablets, but what they can offer is significantly limited. For example, under current rules, teams aren’t allowed to use highlights, but that will change when the league’s tablet guidelines are revised.

Mobile applications are defined as national, but team content and marketing had been restricted geographically.
Because apps are by definition national, managing team offerings against the geographic restrictions, generally 75 miles, that the league places on club marketing has limited the content. But the NFL, which already has a more decentralized system for the Web than other leagues, will now allow the team apps to offer a broad range of content that they normally would have been denied.

Like other leagues, the NFL allows apps on mobile phones, though what those applications can offer is restricted, in part by the league’s deal with Verizon. But on tablets, once the model is refined in coming months, the league will loosen the restrictions, which, for example, did not allow teams to show other clubs’ marks. That prohibition ruled out apps that offered highlights.

The NFL expects that, once the Verizon deal expires in 2014, the new model will translate to mobile phones.

Owners were briefed on the plan last week in Irving, Texas, by Brian Rolapp, the chief operating officer of NFL Media.
An NFL spokesman said, “Tablet apps will largely mirror their club websites as far as model.”

Sports leagues have long struggled to balance their pre-Internet model of limiting team marketing territories to the realities of the quicker pace and reach of technology and globalization. The NFL has gone further than most in ceding rights to clubs to bring their content to a national audience through team websites, and now apps.

Tom Richardson, president and founder of Convergence Sports & Media, said the default for most leagues has been to define tablets as mobile devices, which commonly are restricted by telecommunications sponsorship deals.

The NFL’s move is a natural evolution, he said, and a necessary one, because “if fans don’t get satisfaction directly from their favorite teams, they will find and sometimes embrace alternatives.”

Can the NFL solve its concussion crisis by looking overseas?

While it is not that simple, the league has begun learning from sports as disparate as Australian Rules Football and horse racing to glean ways to combat the crisis.

“Concussions are not a football issue,” said Richard Ellenbogen, chairman of the league’s head, neck and spine committee, to reporters last week. “This is an international problem. Not a national one.”

Ellenbogen and San Francisco 49ers owner John York, chairman of the player health and safety committee, attended FIFA’s concussion symposium in Zurich in October, calling the findings “eye opening” because they learned that many other sports are also trying to cope with the problem. For example, said Ellenbogen, nine out of 10 British jockeys suffer concussions. The symposium, held every three or four years, brings together leaders from sports whose players suffer concussions and experts in the field to share ideas and best practices.

Ellenbogen’s and York’s committees shared their findings last week with the competition committee in a first-time meeting of the three groups. Rich McKay, co-chairman of the competition committee, said it was helpful to have this kind of input in deciding new rules. The committee is considering everything from eliminating low blocks to eliminating kickoffs, though the latter was not discussed much last week.

Ellenbogen said that what he and York emphasized from what they learned in Zurich is the importance of rules designed to enhance safety. While technology can help — and the NFL spent millions of dollars just this year testing helmet sensors — rules that limit the hits that are most likely to cause concussions are extremely important, he said.

Indeed, McKay said game officials have been instructed to lean toward penalizing such hits, even if they are unsure whether a hit was clean or against the rules.

“We will err on the side of safety,” he said.

> BAFFLED OVER BOUNTIES: On the day after Paul Tagliabue’s decision to lift the suspensions of the bounty players while reinforcing the NFL’s findings that the program existed, owners interviewed here expressed everything from puzzlement to guarded anger over the decision. One key owner questioned how the former commissioner could find that the program existed, but then lift the discipline on the theory that it was management’s fault. This owner did not disagree with an analogy that it was akin to soldiers whose excuse for a massacre was that they just followed orders.

Art Rooney, the owner of the Steelers, said he was surprised at the decision, which for the reserved Rooney could count almost as a scream of protest.

The Colts’ Jim Irsay said Paul Tagliabue’s decision on the bounty case shows the difficulty of trying to protect players.
Jim Irsay, the Indianapolis Colts owner, said, “Sometimes you are stuck between a rock and a hard place. People say you have to protect the players, protect the players, and when you try you get the fight back … you can’t win.”
Goodell himself seemed puzzled, telling reporters, “[Tagliabue’s] report made it quite clear that he holds the management and the coaches responsible. My personal view is I hold everyone responsible. We have to have a personal responsibility here. Player health and safety is an important issue in this league.”

Perhaps Jacksonville’s Shahid Khan, one of the newest owners, said it best: “You accept it and move on.”

Khan said the team has sold several thousand tickets on its website to its first “home” game in London next season. The team will play one game annually in London during each of the next three seasons.

Riddell has been the official helmet sponsor of the NFL since 1989, but the company may not like what McKay has to say. “I don’t think any teams get caught up in the deal,” he said. “I don’t think anyone pays attention to it.” He was responding to a question about whether it was appropriate for the league to have an official helmet, which would seem to imply an endorsement of the safety features of Riddell products. Helmets are fine at preventing catastrophic injuries like skull fractures, but are hardly foolproof at preventing concussions. McKay called the Riddell contract a “sponsorship deal from way back when,” and said players choose their helmets often based on what they wore in college. If a player wears a non-Riddell helmet, the logo must be obscured. 2013 is the last year of the Riddell contract.

Owners got the forecast for the 2013 salary cap. A key NFL executive said it would be slightly more than this year’s $120.6 million, but certainly not as high as $122 million. Benefits usually come in between $20 million and $22 million, though their growth has accelerated in recent years and the figure could be higher. The NFLPA has promoted a different figure, total cash spend, which can vary widely year to year based on bonus spending and worker compensation payouts.
n Goodell said that the league is considering expanding the playoffs from 12 teams to 14, or even 16. Discussions have not yet begun with the league’s TV partners, though.

Joe Banner, the new Cleveland Browns president, is living in team housing near the club’s headquarters in Berea, Ohio. His family will join him next spring, by which time he should be living in a new home.

This week the Steelers will get an important addition — Dan Rooney. His son, Art, said the elder Rooney’s tenure as ambassador to Ireland had come to an end, and that he would be returning to Pittsburgh.

Where will fans of the New York Yankees, Los Angeles Angels and Chicago Cubs go to buy and sell tickets on the secondary market next year?

That question emerged as a major one after the clubs elected to opt out of the new five-year contract extension between StubHub and MLB Advanced Media. The Yankees, Angels and Cubs are each expected to pursue ticket resale marketplaces with price floors. But StubHub plans to remain an active marketplace for tickets to all three teams, setting up a powerful consumer battle next season.

The three clubs each have yet to disclose their specific plans for secondary ticketing after electing to not participate in the new MLBAM-StubHub deal, formally announced last week. But industry sources said the Yankees and Angels in particular are developing resale marketplaces with rival outfit Ticketmaster, which allows for minimum resale listing prices that have long been anathema to StubHub and parent company eBay Inc.

Each club said it expected to make formal announcements on secondary ticketing in the coming weeks.

“We are actively working on an alternate relationship that we feel will be more beneficial for Angel fans in our local market,” said Robert Alvarado, Angels vice president of marketing and ticket sales.

Officials for Ticketmaster, already the primary ticketing provider for the Yankees and Angels, declined to comment.

Such a scenario will create a vigorous scrum for fan dollars and mindshare next season in MLB’s three largest media markets, with secondary ticket inventory available at both StubHub and the team-sanctioned resale markets. The three clubs will have formally blessed their own resale options in the name of preserving ticket price integrity and their season-ticket bases. But StubHub remains a highly powerful brand in secondary ticketing, one that has been burnished further in recent months by its aggressive “Ticket Oak” national marketing campaign on TV.

Company officials said that even without a formal relationship with the NFL, as Ticketmaster has, StubHub remains by far the largest resale marketplace for football tickets. To that end, StubHub plans to establish last-minute ticket pickup locations near Yankee Stadium, Angel Stadium of Anaheim and Wrigley Field, and will market their continued availability to fans in those markets, even without formal integration or support from the clubs.

“We will still provide an excellent experience to buyers and sellers in every market,” said StubHub CEO Chris Tsakalakis.

New York in particular will serve as a crucible in the StubHub-versus-Ticketmaster battle. With the Yankees remaining a highly popular brand and the club second in attendance in baseball last year, ticket inventories will likely be large in both resale spots, and marketing across all media in the tri-state area to capture fan attention will be intense.

The effective minimum for an MLB ticket on StubHub next season will be $6 when including all fees and delivery charges, which will now be disclosed at the start of the purchasing process. Low-end thresholds on the new, official resale marketplaces for the Yankees, Angels and Cubs are expected to be higher, likely much closer to face value, raising a big question of how much fans will chase low prices.

For the other 27 MLB clubs, the StubHub deal creates some much-desired certainty on what has been called by some baseball executives the biggest issue facing the game. The new contract term establishes the $6 effective minimum price through the all-in prices disclosed up front, anchor tagging in which the cheapest tickets are not necessarily the first listings shown, greater club flexibility around offline marketing, and more revenue for baseball. Clubs can opt in or out of the deal on an annual basis.

“We were very supportive of this extension getting done and were pleased it did,” said Russ Stanley, San Francisco Giants managing vice president of ticket sales and services. “I don’t think we get back to a season-ticket base of more than 29,000 [full-season equivalents] like we have without StubHub. We’ve had a good relationship with them, they’re our neighbors with the headquarters right down the street from us. I do understand some of the concerns some of the other clubs have had. We still have softer [demand] games here, too. But we see this as a net positive.”