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Volume 21 No. 1

Leagues and Governing Bodies

Much has been made of the Super Bowl Boulevard that will stretch through the heart of Manhattan over four days before the 2014 Super Bowl. Plans are still coming together for the 10-block stretch, but the NFL is ready to disclose some details. First, there’ll be no retail, meaning no food nor merchandise sold — unlike the last two that kicked off the concept of a compact area where fans can congregate during the week. To get New York to shut down 10 blocks, the NFL had to agree to the no-retail provision, which will aid the businesses along the street, said Frank Supovitz, senior vice president of events for the NFL.
The Roman numerals at next year’s Super Bowl Boulevard will get a Broadway-style unveiling.
Another feature of the Boulevard from past years, the giant Roman numerals that mark the annual affair (XLVIII in this case), will get a Broadway-type unveiling for the New York/New Jersey game, Supovitz said, but he declined to say if that would involve a giant curtain. NFL Network, ESPN and Fox (which has the game broadcast next year) will broadcast from the Boulevard, Supovitz said. He also said there would be a “wow” element but was not ready to reveal it. Asked if a report that there’d be a toboggan run on the Boulevard is true, Supovitz said that’s undecided.

SETTLEMENT WORK FOR RETIREES ONGOING: The NFL is assisting retirees in creating a licensing agency as part of a proposed settlement of a lawsuit brought by former players against NFL Films for allegedly using their images without consent. That settlement is by no means a done deal, with the original plaintiffs objecting, but if the licensing agency does become a reality, there are several paths it could take.

First, beyond licensing out retirees’ publicity rights, the league’s hope is that retirees will choose to use the agency to market themselves for appearances and endorsements, said Dan Gustafson, the settlement counsel. Second, the court-approved board that would oversee the creation of the agency could choose to simply subcontract out the job to an existing marketing or licensing firm, Gustafson said.

Decisions like whether there will be a CEO of the agency and how much that person would get paid are all undecided, Gustafson said.

The proposed settlement stems from a case filed in 2009 by a group of retirees who contended NFL Films did not have the rights to use their images. The original seven plaintiffs in the case, led by Fred Dryer (the case is Dryer v NFL), oppose the settlement.

In addition to the agency element, the settlement calls for the league to pay $42 million over eight years into a retirees fund and another $8 million for legal fees and startup costs for the agency. However, the league can deduct up to $13.5 million from the $42 million if there are retirees who opt out of the settlement and refile litigation. In other words, the league can deduct up to $13.5 million in legal expenses in this case.

LOOKING SOUTH: The NFL would like to see a new stadium in Mexico before the league returns to play a game there, said Chris Parsons, senior vice president of international for the league. Mexico has the most avid fans — 4.5 million — of any non-U.S. market, including the United Kingdom, Parsons said, citing an internal league survey. While the main international focus of the NFL is on the U.K. and regular-season games there, the league does market in four other countries: Mexico, Canada, China and Japan.

In Mexico, however, the stadiums that could host the NFL are old and generally bereft of amenities such as suites, making games there uneconomic, Parsons said. The last NFL game played in Mexico was a regular-season contest in 2005.

HEATING UP IN BUFFALO: Owners here approved a new lease for the Buffalo Bills’ stadium and a proposed $130 million of renovations. Jeff Littman, the team’s chief financial officer, said he likes to call it a modernization, because nothing structurally is getting changed. Instead, there will be $25 million to $30 million of new technology in video boards, a new plaza area, improvements to the training center and — get this — for the first time, hot water in the bathrooms for fans. That last item will surely be welcome on those December home games at 40-year-old Ralph Wilson Stadium.

The Falcons’ Rich McKay had a true marathon session during the meetings.
SAFETY STATS: The NFL last year began requiring each of its stadiums to have fans either pass through metal detectors or be subjected to metal wands before entering the venue. According to a league survey of fans conducted recently, only 17 percent of fans prefer the old method of pat-downs to the new measures, said Jeffrey Miller, the league’s head of security. The league also polled fans who either had problems with other fans at games or were deemed the problem themselves whether they felt the team had resolved the matter to their satisfaction. The league average was 44 percent in favor, Miller said, with the best response being for the Carolina Panthers, at 69 percent.

EXTRA POINTS: The NFL in May will choose the locations for Super Bowls L and LI (the 50th and 51st games, to be played in 2016 and 2017, respectively). For Super Bowl LII, bids are due in October, and the winner will be chosen in May 2014, Supovitz said. … The Cleveland Browns have cleaned house in the first year of ownership under Jimmy Haslam. Team CEO Joe Banner said about 20 to 30 employees on the business side were let go and a new marketing and sales team brought in. … Rich McKay, the Atlanta Falcons’ president and CEO and co-chairman of the league’s competition committee, had a busy few days. On Sunday, the day before the meeting began, he ran the LA Marathon (time: 4 hours and 20 minutes). His plan was to fly to Phoenix after, but unexpectedly the Atlanta City Council scheduled a Monday hearing on the team’s proposed new stadium. Team owner Arthur Blank sent his personal jet to ferry McKay back east, where he attended the council meeting. The jet then took McKay to Phoenix, where he arrived in time to brief the media on Tuesday on the raft of competition committee rules change proposals.

The NFL next year, for the first time, will stage a simulation of the electrical power demand of an upcoming Super Bowl, said Frank Supovitz, the league’s senior vice president of events.

After this year’s blackout, the NFL will simulate demand at venues it will use in New Jersey.
The Super Bowl in New Orleans this past February suffered a 34-minute blackout tracked to a faulty relay switch outside the stadium. The switch either malfunctioned or was improperly calibrated, Supovitz said. A third-party electrical forensic examination to determine the cause continues.

But it’s not just the blackout that’s leading the NFL to go beyond what the league has done previously in planning for power demand. It’s also the numerous venues the NFL will use at the Meadowlands Sports Complex next year that’s playing a role. For next year, Izod Center will host parties on Super Bowl Sunday, Feb. 2; Meadowlands Racetrack will host the NFL’s own tailgate party; the New York Giants’ Timex Center training facility will host receptions; and, of course, MetLife Stadium will host the game.

Even the mighty NFL
can laugh at itself

Commissioner Roger Goodell gave his opening remarks to owners last week on a stage designed to look like a stadium. In the middle of those remarks, the lights went out.

It was all planned, but not everyone was in on the joke. Frank Supovitz, the NFL’s senior vice president of events, who recently was profiled on “60 Minutes Sports” where he was seen asking questions in the middle of the Super Bowl blackout, said he was stunned when the lights went off — but then he heard people laughing, including the commissioner, and realized it was a gag.

The lights soon came back on … unlike in New Orleans, where they stayed off for 34 minutes.

— Daniel Kaplan

“We want to understand how the power shifts between venues,” Supovitz said. “We have to figure out how much power we will use, where it goes, and when.”

The NFL is working with the local utility, Public Service Electric and Gas Co., and with the New Jersey Sports & Exposition Authority, which in part oversees the sports complex, to manage the simulation. Supovitz did not specify when the simulation would occur except that it needed to be close to the event.

PSE&G will deploy large trucks carrying massive resistors, electrical equipment that will eat the power, Supovitz said. The idea is to generate an amount of electricity that would approximate what would be used on game day without actually turning the lights on, but that power would then have to flow somewhere. The resistors are tied into the power lines and drain the power.

Mark McGranaghan, vice president of power delivery for the nonprofit group Electric Power Research Institute, said simulations are common for large events but often are only computer-modeled. The fact the NFL will deploy giant resistors suggests the league may be taking it further, to an actual test.

Also for the first time, the NFL plans to budget electrical levels next year. Not budget in a financial sense, but the league wants to know precisely how much power is required for its premier event.

“We are going to account for every amp for the first time,” Supovitz said.

Six NFL teams last week voted against the league’s newly announced strategic investment partnership with Providence Equity Partners, multiple football sources said, a rare sign of discord in a league where most initiatives in recent years have passed with only an occasional nay.

Washington Redskins owner Daniel Snyder spoke out against the deal when it came up for a vote at last week’s NFL annual meeting, the sources said. He stood up several times to criticize it, the sources added, arguing that the league should invest alone.

Daniel Snyder led the charge against Providence.
Asked later about his stance, Snyder, grinning broadly, said, “Who told you that?” He then declined further comment.
The NFL first approved the existence of a venture capital fund in late 2011. The fund, backed by owner money, was intended to invest in startup ventures that could align with NFL interests. But after much fanfare for the fund’s creation, things went quiet, as the process of finding proper investments proved challenging.

Other teams that voted against the Providence deal, which will allow the equity fund to search for investments with the NFL, include the New York Jets, New Orleans Saints and Oakland Raiders, sources said. The identity of the other two teams that voted against the deal could not be determined.

New England Patriots owner Robert Kraft, who voted yes, said, “Certain owners feel we shouldn’t be venturing off our main focus.”

Saints owner Tom Benson, who declined to disclose his vote, said, “We are in the football business, not the ice cream business.”

New York Jets owner Woody Johnson also declined to disclose his vote but said he preferred the model the league agreed to in 2011, in which the league alone would invest in small startup companies. “Now we are going through Providence,” he said.

While six “no” votes out of 32 might not seem like much, an additional three “no” votes would have killed the deal under the league’s super-majority voting procedures.

The league has committed the same amount, $32 million, as it did with the first fund project. Providence now is committing $250 million with its involvement, a source said. If, however, the newly created fund were to buy any companies, Providence and the NFL would have equal say in the operations, the source said.

The league is expected to create a three-member owners advisory panel to oversee the NFL/Providence fund, this source said. NFL Commissioner Roger Goodell will appoint the panel members.

The rationale for no longer handling the fund in-house with outside advisers is that the league did not feel it had the expertise to manage it. Providence can scour the globe for sports and entertainment investment opportunities and bring them to the league.

“They have an infrastructure we can leverage,” Kraft said.

The U.S. Tennis Association is in early talks to renew its broadcast agreement with CBS Sports for the U.S. Open and has communicated that the group expects a hefty increase from the current $20 million annually, sources said. The current deal runs through the 2014 event.

The USTA also has indicated in the early talks that its goal is to have a roof on Arthur Ashe Stadium by 2017, these sources said. The event has been plagued by rain in recent years, with five consecutive men’s finals having been forced to Monday from Sunday.

The expectation of a higher rights fee in the future may explain why the USTA last week announced it had agreed to player demands of paying out a significant increase in prize money.

“We have begun discussions with CBS,” USTA spokesman Chris Widmaier said. “We are exploring a roof and want to have a roof, but I can’t say by 2017 we will have one.”

CBS, which has broadcast the U.S. Open since 1968, declined to comment.

Whether the U.S. Open can get a higher rights fee is uncertain. The group is banking on a healthy rights fee environment, the sources said, with sports like college football enjoying tremendous growth. Additionally, the proliferation of sports channels and the demand for DVR-proof programming like live sports has the USTA convinced it can do better than $20 million a year.

Of course, the ratings for tennis are not healthy. The sport in the United States also is in need of some major American contenders, and while some young players have emerged, like Sloane Stephens, these players are not yet at the top of the sport.

Last year’s Andy Murray-Novak Djokovic men’s Open final drew a 2.4 rating, tied with the Juan Martin del Potro-Roger Federer final in 2009 for the best final rating over the past five years, but those figures are well below the ratings drawn when an American player has been in the final. Andy Roddick’s loss to Federer in 2006 drew a 4.1 rating, and Federer’s win over Andre Agassi in 2005 drew a 4.8 rating. Even those ratings are well below the 6.2 rating earned by the Pete Sampras-Agassi final in 2002 or the 6.3 rating for the Agassi-Todd Martin final of 1999.

“If it is just broadcast, it is not such a super-heated market,” said sports TV consultant Mike Trager. “Any increase would be nominal.”

As Trager noted, while rights fees are exploding with the launch of new sports channels, most of the increases are on the cable side. The Open is signed with ESPN through 2014, so the USTA might be able to negotiate a better package across the board when their current deals expire.

The Open also has not been defined just by ratings, especially because it is almost always up against the NFL and college football. CBS has long favored the event for its New York location, allowing the network to entertain clients at the event. And the high-end demographic that watches tennis is another lure.

While the USTA wants to build a roof, certainly before that can happen, the event will remain vulnerable to the type of rainouts that have plagued the Open broadcasts in recent years. The USTA also is eliminating the CBS-favored Super Saturday format of two men’s semifinals and the women’s final on the same day, effective in 2015. At that point, the men’s semifinals will be on Friday, making the weekend window less appealing.

The Open has at the least headed off any chances of players sitting out the tournament this year over prize money, a prospect that some within the ATP ranks did not dismiss as far fetched not so long ago. The players have been agitating for a significant increase in prize money, and after resisting that call for some time, the USTA last week relented and said it would double the purse by 2017.