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Volume 21 No. 1

Leagues and Governing Bodies

Dominating the talk at All-Star Weekend was the pending sale of the Sacramento Kings, either to a group in Seattle led by Chris Hansen (who would pay a reported $341 million for a 65 percent stake) or to a group of local business leaders expected to emerge in Sacramento.

While the league waits for a counteroffer due Friday from the Sacramento group, Hansen is preparing for a purchase and relocation in his own right, negotiating with Legends Sales and Marketing for a deal to help sell tickets in Seattle five years after the Sonics relocated to Oklahoma City. Sources said Legends also would help the Seattle group identify season-ticket prospects and collect season-ticket deposits should the group win league approval to buy the team and move it to Seattle, where it would play in KeyArena for two seasons while a new facility is built.

Financial details of the deal, which had not been finalized, were not available. Legends officials declined to comment when asked about NBA work in Seattle.

Legends has been working for the San Francisco 49ers to help sell season tickets to the team’s $1.2 billion stadium set to open in 2014 in Santa Clara, Calif. Other Legends clients include The Rose Bowl, the Circuit of the Americas Formula One track in Austin, Texas, and EPL’s Manchester City franchise.

SAP’s stats database made its debut on
COMING OUT STRONG: One of the NBA’s newest sponsors, SAP, made a big splash during All-Star Weekend with the debut of, the new statistical database available free to the public. The site features box scores for every game in league history and allows for advanced statistical analysis of players. Information is updated after each game, and links to video and other social media platforms are provided as well.

As the league’s official business analytics software partner, SAP provides the digital platform for the stats offering. SAP signed as a league partner in July.

With the league-based site now operational, SAP is looking to land team deals as well. The company’s pitch is that SAP software applications could be used for both team business purposes and general fan applications.

“We are talking to several teams and we want to make a big play in the NBA,” said Steve Peck, SAP senior vice president of sports and entertainment.

Peck would not discuss any potential team deals, nor provide any timetable for having deals in place, but he was meeting with team marketers throughout the weekend in Houston.

SAP also has a league-level deal with the NFL as well as deals with MetLife Stadium, the San Francisco 49ers, New York Yankees and San Jose Sharks. But with the NBA becoming increasingly focused on analytics, Peck sees a natural fit there.
“There is data available to teams, but it has been fragmented to date,” Peck said. “We think we can help with the fan experience through analytics.”

Chris Granger, executive vice president of the NBA’s team marketing and business operations division, said the use of data applied against all areas of league business is on the rise.

“Anyone who can help aggregate [data] is in an interesting position,” he said.

PATCH WORK: Circle April 18 and the NBA Board of Governors meetings as a key date in the league’s ongoing effort to finalize a strategy for jersey advertising.

While the issue was not formally addressed during All-Star Weekend, all one had to see was the logos on the jerseys during the NBA’s All-Star Saturday Night activities to see the future.

Patched up: Players wore Adidas patches in game (top), Taco Bell for skills challenge.
Photos: GETTY IMAGES (2)
As in previous years, player jerseys during the Saturday night events featured advertising in the form of event logo patches. Sprite was featured on jerseys for the slam dunk contest, Taco Bell’s logo was on jerseys during the skills challenge, and Foot Locker had its logo on jerseys during the 3-point contest. Placed on the right side of the jerseys, the patches were the same size as the 2.5-by-2.5-inch patches under consideration for game jerseys.

NBA uniform partner Adidas had its logo similarly displayed on the players’ jerseys on Sunday night, for the All-Star Game.

Granger, who is involved in the jersey patch discussions among teams, said talks are ongoing with no answers yet on whether the league or its teams will sell the inventory. Another outstanding issue is how much revenue teams will share from any jersey patch deals. NBA team presidents have discussed a 25 percent share of any deals, but Granger would not confirm any specifics.

“We have discussed everything from zero to 50 percent,” he said of potential shared jersey ad revenue among teams.
The earliest any corporate advertising would appear on NBA game uniforms at this point would be the start of the 2014-15 season.

NEW MERCHANDISE PLAY: The NBA’s partnership with Adidas has become more dynamic this season, first with the creation of the monochromatic “Big” jerseys worn by the 10 teams playing on Christmas Day. Now comes the new short-sleeved jerseys slated to be worn as part of the alternate uniform of the Golden State Warriors.

Adidas first approached the Warriors about the jerseys 18 months ago. The team was scheduled to debut the new uniforms last Friday night.

Ricky Rubio is among Adidas’ new signees.
But don’t look for any other teams to sport the sleeves this year: Adidas’ deal with the Warriors is an exclusive one-year agreement, covering the 2012-13 season, said Lawrence Norman, vice president of global basketball for the company.

Adidas’ NBA retail business in its most recent quarter was up double digits, no doubt helped by the crush of new merchandising business around the rebranding of the Brooklyn Nets. The company also this season has signed Minnesota star Ricky Rubio along with 2012 first-round draft picks Damian Lillard of Portland, Harrison Barnes of Golden State, Andre Drummond of Detroit and Austin Rivers of New Orleans.

While much of the recent buzz around the Adidas merchandising business has been on the Warriors’ new jerseys, look for the company to make another splash later this spring. “There will be a major basketball footwear innovation in May,” said Norman, though he declined to provide details.

Sal LaRocca, executive vice president of global merchandising for the NBA, said he expects more teams to eventually adopt the short-sleeved look.

“Other teams have expressed interest, and it could be something that becomes part of the NBA uniform,” he said.

ROLL OUT THE RENEWALS: The All-Star break traditionally marks the start of the NBA’s season-ticket renewal efforts. Teams for next season are expected to renew at the mid-80 percent range, according to a survey of the NBA’s 30 teams conducted by the league in December.

It’s a conservative estimate that teams use as a benchmark in their renewal work.

“We historically outperform the survey,” said Granger, adding that last year the league had its highest renewal average, at 88 percent.

Among other metrics: Teams’ season-ticket average for this season is more than 9,000 per team, and overall team sponsorship revenue as of the All-Star break was up 17 percent from teams’ 2011-12 season total.

In Charlotte, the Bobcats will be tasked with renewing at about 75 percent for next year. That mark follows the team posting a 78 percent renewal rate for this season, well above the 53 percent rate that had been expected for the club.
Bobcats officials, of course, will have to reach the 70s again despite another rough year on the court; the team was 12-40 at the All-Star break.

“We have been transparent with our customers,” said Bobcats President Fred Whitfield, about pursuing renewals and new deals.

Charlotte is holding season-ticket prices steady for next year. And while the Bobcats’ average of 15,549 fans per game at the break was down 10 percent from Feb. 12 in last year’s shortened season, it’s up 5 percent from the team’s full 2011-12 season mark.

JAM SESSION GATE HIKE: This year’s All-Star Jam Session event drew 110,037 fans to the George R. Brown Convention, marking the highest number since the league’s 2009 All-Star Weekend in Phoenix. Good weather in Houston and some new attractions no doubt helped the gate. Tickets ranged in price from $12 to $30, the same as last year, but the league for the first time this year had two practice arenas, one branded as the Sprint Arena. Also new this year was the NBA Digital Village, which served as a social media hub for the weekend, featuring efforts along with a set for NBA TV.

NEW FACES: The NBA has hired three new executives for its team marketing and business operations department. Drew Cloud, formerly with MSG Sports, and John Abbamondi, who worked previously for the San Diego Padres, are now onboard as vice presidents. Jyoti Agarwal, who previously worked for Bain Capital, has been hired as director of analytics for the division. The department now has a staff of 40 employees.

The NFL is moving beyond its talks with the two long-running choices for stadium sites in Los Angeles and is now exploring additional locations. That means the proposed stadiums championed by AEG and by developer Ed Roski could now have company in seeking the favor of the NFL.

Sources said the league has had direct talks with Los Angeles Dodgers owner Guggenheim Partners about the possibility of a football stadium at the baseball team’s Chavez Ravine home. While the talks were only exploratory, they underscore just how re-engaged the league has become in the market.

The NFL and Guggenheim declined to comment.

The talks also come as Anschutz Co., which owns AEG and put it up for sale in August, is in the final stages of reviewing the second round of bids from several potential buyers, sources said.

For the NFL, the latest efforts come after several years of letting AEG and its downtown Los Angeles site, and Roski with his property 20 miles outside of Los Angeles, dominate the spotlight. League approval has never come for either party, as the NFL is not fully comfortable with either site.

The downtown Los Angeles location does not comport to the NFL’s preference that a team control the building. AEG’s approach is to own the building, as it does with Staples Center, where the NBA Lakers and Clippers are tenants. Owning the building also gives AEG control of the sales inventory.

Roski’s site, meanwhile, while only 20 miles outside Los Angeles, is considered by many unglamorous and difficult to access.

Among the two locations, AEG’s downtown Farmers Field site has been the perceived front-runner to land an NFL franchise. But the AEG sales process has not seen bidders willing to place much value on the company’s proposed stadium, according to sources close to the talks. A problem for AEG bidders is that if they are successful in acquiring AEG, they would then bear the burden of luring a team to Los Angeles to play at the venue. Without that deal, the stadium project cannot go forward.

Still, AEG believes Farmers Field has significant value: as much $1 billion, sources said, a good part of the $8 billion owner Phil Anschutz wants for AEG. AEG’s rationale is that the site is planned, has city council and environmental approvals, and would have the “wow” factor of offering a team, or teams, the opportunity to play in downtown Los Angeles.

“The sale process is progressing as planned and is very satisfactory,” said Lyndsey Estin, a spokeswoman for Anschutz Co.

AEG and Roski for years negotiated with individual teams, hoping to lure them to their projects, but without success. Then last year, the NFL told teams they had to notify the league by earlier this month whether they wished to relocate to Los Angeles.

None did so.

That memo was the first outward sign that the league had decided to take a more active role again in getting a team to Los Angeles. The talks with Guggenheim, also one of the final bidders for AEG, are another signal of the league’s more active approach.

The league now is looking at many of the same spots it scoured for years before the Roski-AEG locations dominated discussions, including Chavez Ravine, Hollywood Park, and several other sites, with Roski’s City of Industry and AEG’s Farmers Field still in the mix as well.

It’s unclear if the league would want the Dodgers to leave Chavez Ravine if an NFL team moved in. Guggenheim is planning to spend a low-nine-figure sum renovating Dodger Stadium, so that would seem an odd investment if the stadium were to be torn down to make way for an NFL venue.

And while many observers long have said Chavez Ravine is the NFL’s preferred location, the residential area around the property could make it less than ideal. In fact, Steve Tisch, the New York Giants co-owner and a Los Angeles resident, said he does not prefer the site precisely for that reason.

As for what team might be that franchise to relocate to Los Angeles, there are only a handful of current candidates. The San Diego Chargers make sense geographically and because they have no lease restrictions. Another candidate is the St. Louis Rams, who played in Los Angeles until leaving in 1994 and who could be free of their current lease in St. Louis in 2015. An arbitrator recently ruled for the team’s $700 million renovation plan of the Edward Jones Dome, and the municipal authorities are expected soon to respond. The team’s lease requires the stadium to reside in the top quartile of the NFL, which it is not. If it doesn’t reach that standing by the end of the lease, the team is free to relocate.