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Volume 20 No. 42

Events and Attractions

Turner Sports President David Levy strolled into the press conference prior to Game 1 of the NBA Finals in Miami with Commissioner David Stern and Deputy Commissioner Adam Silver. On this occasion of the annual pre-Finals state of the league address, Levy peeled off and looked on from the front row while the commissioners present and future took to the podium. But this summer, all three executives figure to be together a lot more, as the league begins preliminary talks on new rights deals with network partners Turner and ESPN/ABC.

Adam Silver (left) and David Stern sat down with the media in Miami; they’ll be sitting down soon for preliminary renewal talks with network partners Turner and ESPN/ABC.
The NBA’s current TV deals run through the 2015-16 season, and no new deals are expected to be reached until next year, when Silver takes over as commissioner. But the talks in pursuit of those deals will begin after the Finals, and the negotiations are likely to bring a substantial increase from the current $930 million annual average the networks are paying the league.

Levy did not say specifically when he will sit down with Stern & Co., but given that Turner has broadcast the NBA since 1988, Levy said he is in constant communication with the league.

Two major items on his agenda: the length of games, and programming opportunities around the major touch points of the NBA season.

“We will have a lot of conversations about the length of the games and what else we can do with the league around opening week, around all-star weekend, around the draft,” Levy said. “The game has never been in better shape, so it is about things on the side. Everyone’s entertainment time is being challenged. Ratings have been a tremendous success, but we can figure out a smarter way to reduce time.”

David Levy: “The game has never been in better shape.”
Levy did not say what the average length of a Turner NBA game broadcast was, but he said he liked the idea of the league considering changes to its replay system as a way to speed up the game.

Levy also offered his take on the recent four-year, $1 billion extension between Verizon and the NFL that will provide for streaming of all games on smartphones. The NBA offers live out-of-market streaming of games through its League Pass broadband product.

“It is great for the NFL,” Levy said. “I don’t have the NFL [at Turner], so I am not threatened by it. Our rights with our leagues and partners include those rights, but my understanding is that it wasn’t a surprise. It was part of the [NFL’s television] renewal process.”

DEALINGS FOR HEAT, SPURS: The Miami Heat is making its third consecutive Finals appearance. The franchise has delivered record regular-season ratings on Sun Sports, signed season-ticket holders to multiyear deals and capped its season-ticket sales because of high demand.

So what more is there the team can do to leverage its success?

The Heat has witnessed a business boom to go along with its Finals appearances.
“There is a lot of [ticket] inventory we have held back,” said Eric Woolworth, president of business operations for the Heat, talking most immediately about the Finals but also looking ahead to next season. “By keeping several thousand tickets back, we can price for Finals games, and the secondary market doesn’t get to capitalize on the market.”

Woolworth also said the Heat is re-engaging all of its team sponsors to see if they can extend or increase their level of spending.

“You are never sold out of sponsorships. That is Rule No. 1 in this business,” he said. “We are constantly trying to build in more robust sponsorship platforms. There are real opportunities in the digital space and social media, and more so in mobile.”

As for San Antonio, the Spurs were using the Finals to sell season tickets for next season, with the team offering priority access to tickets to this year’s Finals games to new full-season-ticket buyers for next season. Unlike the Heat, the Spurs do not cap season-ticket sales or have a season-ticket waiting list. The team is expecting a season-ticket renewal rate of about 85 percent, on par with overall league expectations for next season.

“We have had a real focus on lower-level [arena] inventory and we are working the revenue as hard as we can,” said Frank Miceli, senior vice president of sales and marketing for the Spurs.

On the sponsorship side, the Spurs took representatives from 10 current sponsors to Miami for Games 1 and 2 of the Finals. Like the Heat, the Spurs are looking to use the leverage of the Finals to draw increased sponsorship revenue.

AT&T’s name is on the Spurs’ arena, while Sprint has a sponsorship with the league.
The team recently extended its deal with Anheuser-Busch and is close to a few other extensions with major partners, according to Lawrence Payne, executive vice president of corporate partnerships and broadcasting for the Spurs.

The Spurs also, for the Finals, were navigating a sponsorship conflict of sorts, given that their arena naming-rights partner is AT&T while the NBA counts Sprint as a national partner.

Though the NBA controls the courtside rotational signage during nationally televised broadcasts, there wasn’t an expectation that those highly TV-visible signs would be featuring Sprint.

“The NBA is very good at avoiding conflicts,” Payne said. “We are allowed to protect a small number of clients, and AT&T is part of that.”

COUNTING TICKETS: The NBA is deep into its 2013-14 selling season, and the league expects to hit a season-ticket renewal rate of around 85 percent and match the 2012-13 season’s full-season-ticket sales mark that helped bring a record gate.

Notable are three teams that are helping to propel the leaguewide sales. The New Orleans Pelicans, Washington Wizards and Charlotte Bobcats all missed the playoffs this year, but all three currently rank in the top five in the 30-team league in new full-season-ticket sales for next year.

Yes, those teams have ample full-season inventory to sell given their respective recent poor on-court performances. But Chris Granger, executive vice president of the NBA’s team marketing and business operations division, said the Pelicans, Wizards and Bobcats are among the best in the league in employing full-season-ticket sales strategies.

The Pelicans have benefited from a rebranding — their name change takes effect next season — but Granger said the Tom Benson-owned club is among the most aggressive in community-based season-ticket sales efforts. He added that the Wizards and Bobcats tout strong 12-month season-ticket membership clubs that are driving sales.

“There is a nice balance with teams you would expect [to have strong full-season-ticket sales] and not expect,” Granger said.

MOVING MERCHANDISE: Upon conclusion of this year’s Finals, the NBA expects to be able to report that the 2012-13 season has brought it a record merchandise sales mark, topping the previous record from the 2010-11 season.

“We haven’t gotten the full-season reports yet, but we will be up between 10 percent and 20 percent [over the lockout-shortened 2011-12 season],” said Sal LaRocca, executive vice president of global merchandising for the NBA. He declined to disclose specific revenue amounts.

The Heat is a far bigger national and global merchandise sell than the Spurs, but LaRocca said the two clubs locally sell about the same amount of merchandise.

Fueling the expected overall increase for the league is the NBA’s growing amount of international commerce. This year, international merchandise sales will make up between 35 percent and 40 percent of all NBA merchandise sales. “Two years ago, it was 25 percent, and five years ago, it was 10 percent,” LaRocca said

SELLING SEASON BEGINS: The NBA goes into this offseason seeking renewals in the payment card, quick-service restaurant and spirits categories. The respective incumbents are American Express, a partner since 2010; Taco Bell, on board since 2009; and Bacardi, which has held its NBA marketing rights since 2010.

As for new sales, the league continues to mine the airline, packaged goods and consumer electronics categories in hopes of finding new sponsors.

On the team side, the focus falls on digital inventory, as clubs look to push more sponsorship revenue through their digital assets.

“We are looking at all of our rules around digital and social media,” Granger said. “It is not about banner ads and pre-roll [on team websites]. It is about creating content where the brand can be embedded. That is the big shift we are seeing now.”

COMINGS AND GOINGS: Carl Manteau has joined the Milwaukee Bucks as director of group sales. He comes over from the Columbus Blue Jackets, where he was group sales director. … The Sacramento Kings are looking to hire a vice president of sponsorships. Jeff David, Kings senior vice president of sales and marketing, has run the sponsorship business for the franchise for the past two years. The new hire would report to him. … The NBA’s team marketing and business operations division is planning to hire two data analysts and an account manager as staff additions. … Mike Maleski left his job as vice president of digital operations for the Cleveland Cavaliers late last month to join

Staff writer Terry Lefton contributed to this report.

In one tent on the sixth hole at Merion Golf Club, IBM hosted hundreds of clients and prospects in the U.S. Open’s corporate partner hospitality village. In two trailers on the other side of the golf course, IBM’s technology team made sure the Open’s official website and apps were working correctly.

That’s the two-faced nature of sponsorships for IBM, which has one of the most enviable positions in golf. In addition to being a U.S. Golf Association sponsor and tech partner, it has a similar relationship with Augusta National for the Masters. IBM has been a USGA corporate partner since 2008. Those deals range from $3.5 million to $5 million a year.

“Our job is to deliver the championship to the world in an innovative way,” said John Kent, a technology manager at IBM. “When we do sponsorships, they’re a little different. Certainly, the advertising and exposure and hospitality is all very important, but the core of it is showing what we can do with our technology.”

Rick Singer, IBM’s vice president of client executive marketing and a former NBA executive, oversees the sponsorships. Kent, who has more of a technology background, reports to Singer.

For this year’s Open, IBM introduced mobile apps for the iPhone, iPad and Android devices, and created products for, the official website of the tournament. A new online feature called “Hole Insights” provides such information as how many players made par out of the rough on a certain hole. IBM also brought out a new video console sponsored by American Express.

All of this is in addition to IBM’s original assignment, which is to maintain and operate the scoring system.
The USGA’s other partners — American Express, Chevron, Lexus and Rolex — have consumer-facing products, while IBM is a business-to-business company. So you won’t see IBM activating in the fan pavilion, but it does take advantage of its advertising units on the ESPN and NBC broadcasts. Ogilvy is IBM’s ad agency.

IBM also has partnerships with the four grand slam events in tennis.

“We like the audience of decision-makers that golf and tennis deliver,” Kent said.

OPEN EXPERIENCE: Not all of the U.S. Open action happened at Merion last week. In downtown Philadelphia, about 30 minutes away, the USGA set up its first off-site activation.

The inaugural U.S. Open Experience in Philadelphia gave sponsors a new way to activate.
The inaugural U.S. Open Experience opened last Monday at Independence Mall and ran through the week. Early in the week, it was integrated into the mall’s visitors’ center. By the weekend, it was a full-fledged fan fest with a merchandise tent, large video boards that carried live action and highlights, putting greens, historical exhibits and swing simulators.

Wasserman Media Group ran the space for the USGA. Officials would not reveal the cost of the U.S. Open Experience, only saying its sponsors covered the cost.

Not only was it the USGA’s first off-site effort, it also represented a new form of activation for corporate partners. American Express, Lexus and Chevron sponsored the U.S. Open Experience and set up their own interactive areas.

The AmEx exhibit area included a swing simulator that allowed visitors the chance to hit shots into replicas of Merion’s greens. Lexus offered driving experiences and had its cars on display. Chevron featured its Stem Zone, a mobile unit for its science, technology, engineering and math program.

“Given that we’re so close to a large metro market, and that we just couldn’t satisfy all of the demand for tickets, we went back to our corporate partners and worked with them to create a downtown experience in Philadelphia,” said Sarah Hirshland, the USGA’s senior managing director of business affairs.

Hirshland said anywhere from 6,000 to 10,000 visitors make their way through Independence Mall each day on the weekends.

“It’s not something we’ve done before, so we want to see how it goes,” Hirshland said, “but I think it’s something we’ll do when it makes sense.”

The reason it made sense in Philly was the proximity to a large metro area and the limited number of U.S. Open tickets available. Only 25,000 spectators were on the course at Merion each day. Pinehurst, the site of next year’s Open, will be able to accommodate 45,000 fans per day.

2014 HOSPITALITY: Hospitality sales for next year’s Open at Pinehurst already are under way and the USGA is packaging deals that include the men’s and women’s Open for the first time.

Beer trucks in driveways and tents on lawns were the norm as Merion’s small footprint forced a new approach to hospitality.
Photos by: MICHAEL SMITH / STAFF (2)
The 2014 women’s Open at Pinehurst No. 2 will be played the week after the men’s championship, marking the first time they’ve been held back-to-back on the same course.

The most exclusive deal — the Legends Package — sells for $385,000 and provides access to the Members Club dining room with views of the 18th green and first tee from the clubhouse. Those come with 75 daily passes to the men’s tournament and 30 to the women’s championship. All but one of those packages have been sold.

The Ross Package with a 40-by-40-foot hospitality tent is selling for $215,000 and includes 100 daily passes to the men’s tournament and another 40 daily passes to the women’s tournament.

For $135,000, buyers can have the Olmsted Package, which includes a 30-by-30-foot tent, 50 daily passes to the men’s tournament and 20 daily passes to the women’s tournament.

Prices for a 40-by-40 tent at Merion last week were as high as $275,000, which also included 100 daily passes.

CHIP-INS: Luke Donald, whose deal with IMG expires in the fall, is expected to begin talking to other agencies later this summer. Another Englishman, Justin Rose, is thought to be looking for new representation as well. He’s with London-based 4sports & Entertainment. … Diversity and global growth of golf were themes last week during the University of Pennsylvania’s Wharton Sports Business Initiative. The USGA’s Hirshland, Wasserman’s Malcolm Turner, Golf Channel’s Mike McCarley and SI Golf’s Dick Raskopf were on a panel discussion moderated by Jon Last of Sports and Leisure Research Group. Of Merion’s cozy 110-acre footprint, which limited ticket and related revenue, Hirshland said with a laugh, “The reality is that I’d like NOT to do it this way every year.”