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Volume 21 No. 1

Leagues and Governing Bodies

The NBA begins the second half of its season this week. Staff writer John Lombardo takes a look at some key issues facing the league and its teams as the post-All-Star Weekend portion of the schedule starts up.

Under new management: Adam Silver has replaced David Stern as league commissioner, and Mark Tatum has succeeded Silver as deputy commissioner. But those are just the top names on an organizational chart that has seen additional movement in recent weeks. All eyes are on the new executive command and what issues they identify and act on first. One possible push is Silver revisiting the previously tabled effort to put advertising on team jerseys. Another target could be international, considering that Tatum comes to his new job after leading the league’s global sponsorship division.

The future on TV: This is easily the most immediate and impactful issue in play. Silver recently created a seven-member media committee that features owners from big and small markets alike, an early sign of the new commissioner perhaps having a more-inclusive approach in landing a new TV deal than the league has seen in the past. The exclusive negotiating window for the NBA’s current partners, ESPN/ABC and Turner, doesn’t open for another year, but talks are expected to begin during the second half of the season. A substantial windfall is expected for the league and its teams given the current hot market for live TV sports rights, with the new rights fees likely to far outstrip the NBA’s current eight-year, $7.5 billion deal that expires after the 2015-16 season.

The Lakers are one of only two NBA teams now offering live local streaming of games.
Creating local streams: NBA teams were supposed to begin live local streaming of games through their cable partners early this season, and while league executives predicted a gradual rollout after that launch, it’s been a particularly slow go. Only Portland and the Los Angeles Lakers currently have offerings, and theirs are outside the bounds of the larger, TV Everywhere plan. The league continues to try to finalize the necessary TV Everywhere deals with Fox Sports Media Group and NBC Sports Group — the two biggest owners of RSNs — to make the desired deals across the league happen.

The view from the stands: Improving the in-arena fan experience is near the top of the league’s agenda under Amy Brooks, senior vice president of the NBA’s team marketing and business operations department. The league at the start of the season unveiled an expanded partnership with Stats LLC’s SportVU technology that features a series of cameras used to track every on-court movement, and teams are making the information available to fans in-arena (as well as via and on NBA TV) as a way to add value to the games. In addition, one-third of the NBA’s 30 teams are now partnering with the Disney Institute in search of ways to improve the in-arena fan experience, with others expected to follow as the season progresses.

Coming up short: This year’s All-Star squads were slated to sport the same short-sleeved jersey look that the league showcased with its teams on Christmas Day. League uniform partner Adidas introduced the design on a limited basis last season (launching with Golden State), but the design now has ascended to the league’s premier game platforms this season despite generating largely critical reviews from fans, players and media alike. But might the look be here to stay as a way to increase merchandise sales? Could the new look also be a precursor to corporate advertising on uniforms? All talk to date has been about how ads would be featured with a small decal on the front of the league’s traditional jerseys, but the sleeves do provide for more space than usual jerseys when thinking about where ads could be featured.

With a deep draft to come, how will struggling teams like the Sixers and Knicks react?
Tank talk: A check of the standing shows a plethora of sub-.500 teams in the Eastern Conference (including major-market players New York, Boston and Philadelphia) as well as the scuffling Los Angeles Lakers out west. Not only could that affect the league’s playoff fortunes (think TV ratings), but it also could produce increased talk of tanking as winter turns to spring. With an expected deep draft class coming this summer, the question that follows is, Which is better: Make the playoffs as a low seed and face an early exit, or be eligible for the lottery and perhaps get a future franchise player?

NFL teams are expressing concern that the league’s recently announced broadband network, NFL Now, could compete with the clubs’ own efforts by cannibalizing content and siphoning viewers.

NFL Now, which was announced Super Bowl week in a rare appearance by Commissioner Roger Goodell and other league executives, will create customized, team-specific digital content, in many cases by taking what the clubs offer digitally, on the Web and through shoulder TV programming. It’s designed to create a central online hub of news, information and video across the entire league and was presented as another platform for advertisers to be around NFL content.

But early on a few teams have raised concerns about the initiative, and while many of the details are still being worked out, it’s hardly the first time an NFL leaguewide business initiative ostensibly conflicts with individual clubs.

It’s unclear how much content will be required to populate the site, but NFL Media showed several clubs a week before the Super Bowl a list of “expectations” (see chart).

Expectations, according to the slide presented to the teams and obtained by SportsBusiness Journal, include: Four to five press conferences weekly during the season; five player interviews a week; practice footage three to four times a week; specific club TV digital segments up to four times a week; and features such as all-access diaries or cheerleader interviews up to six times a week.

In all, the memo cited 21 to 25 pieces of content weekly during the season, and four to six a week in the offseason.
“I’ve heard that it has caused quite a bit of a hue and cry on the part of clubs, for several reasons,” said Amy Trask, the former Raiders president who keeps in regular touch with her former peers. She cited the apparent competition clubs would face from NFL Now, and whether content produced by clubs has to be handed over.

Trask’s comments were seconded by several teams sources, who requested they not be named for fear of speaking out against the league.

One team official said it is not just the NFL seeking content produced by clubs to lure viewers to their media properties, but NFL Now could draw eyeballs and ad dollars from those efforts.

NFL Media urged anyone concerned to take more of a wait and see approach.

“The product isn’t going to launch for another six to seven months,” said Alex Riethmiller, the spokesman for NFL Media. “A lot of details are getting worked out, like how we are going to get content from the clubs, what type of revenue model.”

In a further statement, he added, “we’re confident NFL Now will prove to be additive in terms of viewership and revenue generation to all our partners, especially the clubs.”

A team source supportive of NFL Now did not agree with critics of the plan, saying only a handful of teams, maybe five, truly have advanced digital and mobile content offerings. Advertisers, this source said, are seeking wide-ranging, valuable content customized to mobile.

Alec Scheiner, Browns team president, said he looked forward to the wider platform NFL Now would offer the Browns, which in the past year invested significantly in digital and Web. “More people will find NFL N[ow] than our team website,” he said.

NFL Now content would be available on a variety of devices, and as a link on Yahoo. There will also be a premium channel that carries a subscriber fee.

If teams do not have to turn over their own content, and choose not to, the league would then rely on NFL Films and NFL Network footage to fill in the gaps.

The issue for the league is balancing what clubs are doing on the local level, with the apparent knowledge that many are not fully reaping the benefits. The league expects to create a much greater platform that will generate proportionately more revenue than the clubs create on their own.

The NFL is clearly throwing its full weight behind the new plan, which was underscored by having Goodell speak at the introductory press conference. The commissioner rarely speaks about league business issues during Super Bowl week outside of his state of the league address.