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Volume 21 No. 2

Events and Attractions

Five years after stepping down as AVP commissioner, Leonard Armato seems to still be the heavily factionalized sport’s best hope for commercial viability.

Starting next week, Armato is again presenting the only beach volleyball tournament in the United States sanctioned by FIVB, the sport’s international governing body. The World Series of Beach Volleyball, a joint venture with NBC Sports, runs July 22-27 in Long Beach, Calif.

The event boasts top players, including the pairing of Kerri Walsh Jennings and April Ross along with fellow Olympians Phil Dalhausser and Sean Rosenthal, playing for a million-dollar purse. There will be 18 hours of coverage on various NBC-owned networks, including 90 minutes of live action on NBC Sports over both days of the final weekend. 

Leonard Armato hopes for a break-even year for the World Series of Beach Volleyball.

Sponsors include Asics (title sponsor), MGM Resorts, Bud Light, Paul Mitchell, Sabra, Quicken Loans, Barefoot Wines, Pop Chips and Uber. 

Fiat is sponsoring an associated music festival, arranged through a partnership with Clear Channel.

Armato expects 50,000 people to attend the event over its run.

“We have scale; now we need to build viewership and sponsorship,” he said. 

The event was unprofitable in its first year, but Armato hopes to break even this time around and get into the black next year.

With its Olympic ties, NBC is a longtime supporter of beach volleyball, but this event marks its only beach volleyball telecasts of the year. 

Rob Simmelkjaer, NBC Sports Ventures senior vice president, said he is anticipating growth in viewership and sponsorship revenue. “When we got into this last year, the opportunity was to create a leadership event and the biggest thing was making it an FIVB event so the best in the world would play,” he said.

Meanwhile, the long-running AVP now has a seven-city tour administered by IMG and is on CBS Sports Network via a time buy.

“There are really only two events left that matter: This one in Long Beach and the Manhattan Beach Open [one of the AVP’s seven events],” said Elevation Group founder and managing partner Steve Lindecke, a longtime promoter of beach volleyball. “We’re not running pro events anymore, because if sponsors were confused before, they are even more confused now. But Leonard has always been a great salesman and he maintained his NBC relationships, so he can still get things done.”

As tennis’ summer tournament swing heats up, talent agencies are scrambling for a major prize: Eugenie Bouchard, this year’s Wimbledon runner-up.

The 20-year-old Canadian is nearing the end of her representation deal with Lagardère Unlimited. While agencies often fight over players early on in their careers (before they turn pro) or after players have been on tour and have had great success, it’s unusual for a player like Bouchard, with Hollywood looks and now results to match, to have a rep choice at this point in her career. 

In the running are Lagardère, which holds her rights through the end of the year; IMG, which represents Maria Sharapova; and Team8, Roger Federer’s agency. Lagardère, which has represented Bouchard since her junior days, recently cut a deal for her as the face of Coca-Cola in Canada (SportsBusiness Journal, June 23-29) and has worked to cement close ties to the family. During the tournament, Bouchard’s younger brother could often be found in the backyard of Lagardère’s rented house in the Wimbledon village playing ping-pong with one of the agents. Additionally, Bouchard is from French-influenced Montreal, and Lagardère is a French company.

Eugenie Bouchard added Wimbledon runner-up to her résumé.

Will that matter?

IMG under new owner William Morris Endeavor is clearly high on the talent business again, and WME co-chief Ari Emanuel was in town for several days. The agency already has the three top-earning female tennis players under its roof: Sharapova, Serena Williams and Li Na. That can cut both ways, though, with WME/IMG using them as case studies in how well it has done for top female tennis players, but the competition contending that the agency already has too many stars and that Bouchard would be just one of many. 

As for Team8, the agency formed by Federer and his agent, Tony Godsick, it counts Wimbledon semifinalist Grigor Dimitrov as a client. It is lacking a high-profile female client, so Bouchard would easily fit that bill. Godsick did recently battle with Nike trying unsuccessfully to move Dimitrov to Adidas, and Bouchard endorses Nike. Whether that could be a factor in any dealings for Bouchard is unknown, but Team8’s competitors could try to make it one.  

MARKETING CHALLENGER: The All England Lawn Tennis & Croquet Club plans to formally complain to the local governing authority about New Balance ambush marketing at Wimbledon this year. The Boston-based footwear company leased space in a private home’s yard facing the sidewalk on which likely hundreds of thousands of fans walked during the fortnight from the local Tube stop to the event. In the yard, fans could measure the speed of their serves. The company also employed drivers on motor scooters with mini-New Balance billboards affixed to drive back and forth along Church Road, the narrow thoroughfare that runs from the Tube stop to the grass-court spectacle. 

Mick Desmond, the club’s commercial director, said he would urge Merton Council, which oversees the region where the tournament is played, to investigate whether the home was being used for commercial or private purposes. Clearly such action appears designed at least in part to scare off other homeowners from leasing their yards to companies that rival Wimbledon sponsors. In this case, the affected sponsor company was Babolat, the official footwear of the tournament. 

Babolat did not immediately respond for comment.

The identity of the homeowner was unknown. 

Wimbledon is particularly sensitive to the criticism because it has worked assiduously to commercially clean up the area leading to the tournament grounds, including cutting a deal with the London transit authority to remove FedEx last year as sponsor of the Southfields Tube stop, the main departure hub for Wimbledon fans. Before last year’s tournament, Desmond said, fans arriving at the station understandably would have thought FedEx had a relationship with the event. (The club has no sponsorship in this category.) 

New Balance set up in a front yard near the grounds.

The tournament used the phrase “Wimbledon Awaits” to spotlight the pathway of fans proceeding to the tournament grounds, with branding throughout the Tube station and signs on the sidewalks along Church Road. 

“There is a sense of arrival as much as when you get into the grounds,” Desmond said.

Wimbledon benefited from the 2012 Olympics being in London, which made government agencies aware of the concept of clean zones around venues, Desmond said. While the club paid for the branding in the station, he said, it helped that London transit officials understood why Wimbledon viewed the FedEx deal as a problem.

Ironically, Wimbledon’s newest sponsor, Stella Artois, which signed on this spring, ambush markets the U.S. Open Tennis Championships annually at the local subway and train stations adjacent to the USTA Billie Jean King National Tennis Center.

Desmond said the event has no plans to contact New Balance directly, as he described it as obvious what the All England officials feel about the company’s effort. 

Officially, New Balance counts Milos Raonic, a Wimbledon semifinalist this year, as one of its player endorsers.

A New Balance spokeswoman wrote in an email, “The activation you’re seeing at Wimbledon is the first of its kind for New Balance at this tournament. The concept of the experience is for consumers to test the speed of their serve. The setup allows consumers to try on product and clock their serve speed for a chance to win a Milos bobblehead and New Balance tennis apparel (T-shirts). As far as I know, we have not had any direct contact with Wimbledon/All England Club, as this program is taking place on private property.”

WIMBLEDON’S WELCOME LINE: The Wimbledon queue is one of the great English traditions, and the All England Club has turned it into a marketing platform. Tournament sponsors HSBC and British soft drink Robinsons activated at the queue, which stretches a well-organized mile from the club toward Southfields. HSBC even had a tennis court on site with appearances from endorsers Lindsay Davenport and Goran Ivanisevic (both former Wimbledon champions) and former British Wimbledon hopeful Tim Henman

HSBC had its activation efforts on queue at Wimbledon.

The club leaves aside 8,000 tickets daily for fans in the queue, priced as low as $37. Five hundred of those tickets are for Centre Court. By 6 a.m., thousands of fans can already be lined up, especially on the middle Saturday morning. (Those in the know get there before the first Tube arrives at Southfields.) Like all things British, the queue is highly organized, with stewards directing fans and warning not to let belongings like blankets encroach on preset boundaries. 

NAME GAME: Like most agencies, Lagardère rents a house in the Wimbledon village for its agents and their families. The current one the agency has rented for five years running, but it perhaps took on greater meaning this year. That’s because it sits on Murray Road, and this year’s defending Wimbledon champion Andy Murray became a client of Lagardère’s in November.

COMCAST, TENNIS CHANNEL UPDATE: Settlement talks continue between Comcast and Tennis Channel in their long-running distribution dispute, said Ken Solomon, CEO of Tennis Channel. To recap: The FCC ruled Comcast discriminated against Tennis Channel by placing it on a sports tier, but an appeals court overturned the decision. Tennis Channel has refiled with the FCC using a different standard as laid out in the appeals court decision. 

Sitting on the set of Tennis Channel’s Wimbledon coverage, Solomon did little to hide his disdain for the court’s ruling, saying it had nothing to do with the case and everything to do with conservative judges hitting at the FCC. He also was quick to note that the court did not rule that Comcast had not discriminated, simply that the standard the FCC used was incorrect. 

Despite his disappointment, he said he will not file a brief with the Justice Department objecting to the proposed Comcast acquisition of Time Warner Cable. He also said there is a new tenor to the settlement talks and remains cautiously hopeful that a deal can be had before the FCC rules again. 

NEW PLAYER REPS: Tennis Channel executive David Egdes won another three years as a player representative on the ATP board of directors. Tennis Channel broadcaster Justin Gimelstob is another player rep. While unusual in other sports, such dual ties have long been commonplace in tennis. Solomon said the channel has the proverbial “Chinese wall” in place to account for any potential conflicts.

SIGNED AND SEEN: Octagon signed Fernando Verdasco. He had been with CAA Sports. … Simona Halep signed with Adidas. … Dimitrov re-signed with Nike after Adidas made a strenuous effort to sign him away (SportsBusiness Journal, April 14-20). … IMG terminated its rep deal with Bernard Tomic, the troubled but talented Aussie. … John Isner and Stan Wawrinka were elected to the ATP Player Council, which votes on the three player reps on the ATP board of directors. … Seen at Wimbledon: New England Patriots owner Robert Kraft. Kraft has a connection to tennis in having owned World TeamTennis’ Boston Lobsters in the 1970s.

The 2014 FIFA World Cup will be remembered as the point where international soccer crossed over into mainstream American culture.

There was U.S. player Clint Dempsey kidding around with David Letterman on “The Late Show.”

DeAndre Yedlin — hardly a household name even in soccer homes — talked it up with “Good Morning America” and “Today.”

Star goalkeeper Tim Howard was the subject of a viral Internet meme after his record-setting 16 saves against Belgium.

And Matt Besler, a central defender with the boyish looks of a first-year accountant, rolled through the “car wash” of appearances at ESPN, quipping with everyone from the radio hosts to “SportsCenter” anchors.

While playing four games in Brazil and advancing to the Round of 16, the U.S. squad regularly merited not just back-page but front-page headlines — 1,523 mentions on the front pages of American newspapers on the four game days and days afterward, to be exact, according to data compiled by U.S. Soccer.

From watch parties to television viewership, U.S. women embraced the World Cup games in record numbers.

The mainstream embrace of the World Cup over the last four weeks was evident not only in coverage of the U.S. national team but also in the thousands of Americans who traveled to Brazil, the eye-opening public turnouts for viewing parties and viewership on both ESPN and Univision, which posted record ratings and viewership for the event.

For U.S. media executives, the sport’s TV ratings this month provide the clearest signal of across-the-board acceptance for a tournament that was not popular enough in the U.S. to even collect a media rights fee through the early 2000s.
The record viewership numbers dominated the talk around the event, as ESPN and Univision saw huge ratings jumps across all demographics for World Cup games.

But network executives cited gains with the female and older male demos as the surest sign yet that the World Cup’s popularity reached new heights.

In fact, more young women than young men watched the Brazil-Mexico game June 17 on the Spanish-language channel Univision. A whopping 1.793 million women ages 18 to 49 watched the match on Univision, compared with 1.714 million men.

“We’ve never seen anything like that,” said Debbie Shinnick, Univision’s senior vice president of network sales and strategy research. “The fact that we kept these women around to watch soccer is incredible.”

ESPN, a TV bastion for American men, saw strong increases in every female demographic throughout the monthlong tournament. ESPN said a record 42 million women watched games in the group stage, a higher number than tuned into female-skewing networks like Lifetime, HGTV and Bravo during that same two-week period.

This wasn’t just patriotism. Research shows big viewership gains even when the U.S. team wasn’t playing. If you strip away the U.S. games, ESPN saw a 43 percent viewership increase over South Africa. With the U.S. games included, ESPN’s viewership is up 41 percent from four years ago.

“The broad interest in the sport is a little surprising,” said Artie Bulgrin, ESPN’s senior vice president of research and analytics. “These are all significant numbers that speak to the growth of international soccer in the United States.”

The World Cup also showed surprising growth among older viewers, which shouldn’t be altogether surprising considering it was played in time zones more attractive to the United States. As of last Wednesday, TV ratings in the men 65-and-older demo on ESPN were up 103 percent and ratings in the men 50-to-64 demo were up 50 percent from the 2010 World Cup in South Africa.

Growth in these demos generally means nothing for TV networks — advertisers aren’t clamoring to get in front of older men. But this type of growth among the oldest male demos is as good an indicator of mainstream acceptance as any other statistic since older men generally have been slower to adopt soccer.

While all of this is encouraging for FIFA and its World Cup, the big question being asked in sports circles is whether the event’s broad popularity will translate to more general acceptance for soccer.

U.S. Soccer already is trying to capitalize on the momentum it gained in Brazil. It is planning to bid for the next available World Cup in 2026 in hopes of returning it to the U.S. for the first time since 1994.

“My expectation is that we will bid for the 2026 World Cup at some point,” said Sunil Gulati, the president of the U.S. Soccer Federation and a member of the FIFA executive committee. “We want to bring the FIFA World Cup back to the United States.”

ESPN and NBC Sports Group already have developed marketing campaigns for Major League Soccer and the English Premier League using World Cup stars such as Besler and Howard, respectively.

Early MLS television results have been strong since the U.S. national team finished playing. A Kansas City-Chicago game on July 6 drew 495,000 viewers to ESPN, more than double last season’s average audience on the network (220,000).

U.S. soccer certainly has been down this road before. The 2010 World Cup in South Africa set ratings records, but ensuing MLS games on ESPN did not see a significant jump. Network executives say people should manage their expectations as it relates to the sport’s growth in the United States.

Matt Besler (with Linda Cohn) visited ESPN as the team drew unprecedented media coverage.

“I would caution that we have seen this before,” Univision’s Shinnick said. “It’s going to be a testament whether we actually see an overall growth beyond the World Cup in soccer numbers.”

Marketers will be looking for the same thing.

“Is football as a business platform more sustainable moving forward? That’s what we’re all going to be asking,” said Derek Aframe, Octagon, executive vice president. “I think you’re going to continue to see positive momentum moving forward.”

FIFA sponsors and partners anticipated there would be a surge in World Cup interest among Americans and devoted more marketing dollars to promotions in the United States than previous World Cup events. Coca-Cola’s program in the U.S. was comparable to what it does for a Summer Olympics, and McDonald’s for the first time sent 25 American children to participate in its player-escort program before World Cup matches.

Those bets and others were rewarded by the record ratings, viewing parties and coverage of the tournament in the U.S.

Sponsor executives said the results not only affirmed their bet on soccer but also confirm their companies’ plans to continue to support the sport in the coming years by activating around the 2015 Women’s World Cup in Canada. They also anticipate it changing how they make decisions about what percentage of global marketing dollars should be spent in the U.S. during the 2018 World Cup in Russia.

“All signs were tracking toward [a strong World Cup] based on attendance growth with MLS, but we were overwhelmed by the support,” said Ernesto Bruce, Adidas’ director of soccer. “With Europe, with South America, [in the past] we had to defend ourselves and explain that soccer is relevant in the U.S. We have great ammunition now. Really, no one outside the U.S. can say soccer is not relevant in this country. The facts don’t lie.”

Others are confident that what took place this summer around the World Cup is bigger than what happened around the event four years ago in South Africa.

“This time it felt different to me. It feels like we crossed a threshold,” said Scott Blackmun, CEO of the U.S. Olympic Committee, who played soccer at Dartmouth. “All of my friends that I played with and all of the people I know who watch soccer watched [this World Cup], but I don’t remember seeing people packed in bars to watch games before and we saw that. There has been a sea change in how soccer has been perceived.”

Scott Guglielmino, ESPN’s senior vice president of programming, says that in just four years, the networks have become savvier about how to use the World Cup’s popularity to market the sport in the U.S.

“We’re more buttoned up,” he said. “We are better at doing it in an organic way. Several of the players who are featured on the World Cup team are MLS guys. One of the things we’re doing is making sure that all of our editorial folks realize that there’s that connection.”

Two months ago, International Olympic Committee Vice President John Coates derided preparations for Rio 2016 as the “worst” he’d ever seen. The IOC, Olympic sponsors, federations and national Olympic committees were all concerned about the next Summer Games.

But as the World Cup progressed, attitudes shifted.

Olympic sponsors see Brazil’s ability to deliver the World Cup as positive for Rio 2016.

Security in Brazil was strong enough to stifle protests and limit crime; transportation had its challenges but was better than expected; and the festive atmosphere and warmth of the Brazilian population exceeded expectations.

All of that has relieved some of the anxiety across the Olympic industry and instilled some confidence in Brazil’s ability to host a successful Summer Games.

“One of the concerns was: Would Brazil be able to manage cities in terms of security, mobility and hospitality?” said Ricardo Fort, Visa’s senior vice president of global sponsorship. “We are confident now they will be able to do it [in Rio].”

John Lewicki, head of global alliances for McDonald’s, agreed. “Regardless of whether it’s the World Cup or Olympics, there are going to be logistical challenges,” he said. “Traffic [was] an issue. Weather [was] an issue. But they have been able to execute the games on a timely basis. Our programs [ran] smoothly.”

Brazil is the first country to host the World Cup and Olympics since the U.S. (1994 World Cup and 1996 Atlanta Games). As a result, the World Cup was seen as a test event for Rio 2016.

There were concerns ahead of the World Cup about Brazil’s ability to provide enough security to limit and manage the type of protests that overwhelmed the 2013 Confederations Cup. But protests through the majority of the tournament were muted and the police presence was strong.

There were some complaints that the police presence was too great. In contrast to the recent Sochi Olympics where police often didn’t carry firearms, Brazilian security personnel carried automatic weapons. But the presence didn’t stifle the celebratory atmosphere around the World Cup.

“What everyone is hoping for in terms of atmosphere was on display during the World Cup and that means a lot to sponsors looking to bring down important guests for Rio 2016,” said Dave Mingey, president of GlideSlope, which works with IOC sponsor Dow Chemical. “The atmosphere created by the people of Brazil should be energizing and a lot of fun.”

Brazil’s execution of the World Cup wasn’t without its flaws. World Cup organizers were still finishing several venues in the days leading up to the first matches. That made it impossible for hospitality companies to visit the venues and make final plans for taking guests to games. They may face similar challenges at the Summer Olympics.

Rio 2016 organizers are still behind most host cities in construction and facility preparation for a Summer Games. They’re also working to construct 80 new hotels, and doing so will be critical to providing enough rooms for the influx of tourists during the Games.

There also is the logistical challenge of organizing and hosting 36 sports in a single city, which is different from hosting soccer games in separate cities. That will be the key to Rio 2016’s success, said Jan Katzoff, GMR Marketing’s head of global sports and entertainment.

“They did a good job delivering the World Cup but still have a lot to do to be prepared for all the moving parts of an Olympics,” Katzoff said. “While we’re encouraged, we want to continue to be diligent because there will be a higher stress level for Rio 2016 than there was for the World Cup.”

“The short-term burst we saw around the men’s national team in Brazil has to be looked at with the longer-term view of how MLS will or won’t grow. Looking at both together will give marketers a better line of sight as to how to place bets on soccer moving forward in the domestic market.”

— Dave Mingey, president, GlideSlope

“This is a shot in the arm. If you look at the way MLS has grown, and the franchise values and growth in professional soccer in the U.S., it’s remarkable. MLS has taken a long-term strategic view and it’s beginning to pay dividends.”

— Scott Blackmun, CEO, USOC

“People in the U.S. are not just familiar with U.S. players and the U.S. team; soccer fans in the United States know most players participating. The mere fact that we’ve had that much more exposure to the European games and Latin American games has helped draw more hard-core and casual fans.” 

— John Lewicki, head of global alliances, McDonald’s

“Just because the World Cup is up 40 percent, you’re not going to see 40 percent growth in any soccer league no matter who does what to it. A broad audience tunes in and sees Messi score a goal. I believe a certain number of people will want to check him out and watch Barcelona in Champions League. There’s a halo, but it’s not a one-to-one correlation.”

— Scott Guglielmino, senior vice president of programming, ESPN

“I know numerous brands that shied away in the past who are now taking a closer look at U.S. Soccer — the men’s and women’s teams — along with MLS. It’s been 10 years in the making, maybe more, to get to this point. The investment in soccer from sponsors is going to keep climbing to extremely high numbers.”

— Rob Lampman, managing partner, Eiger Marketing Group

“As an agent, the goal is to line up as many on-the-field or commercial options as you can for your clients. Coming off this World Cup, that has not been a problem. Every four years, you’re going to see the game’s popularity and interest in U.S. players take off after a World Cup. But this time, it has been an explosion.”

— Lyle Yorks, group director for soccer, James Grant Group Ltd.

“It just goes to show that this is a sport that is finally being appreciated by people no matter what kind of a sports fan you are. It proves our axiom that people want to watch the best of the best … We thought the numbers were going to be strong. They had a number of things going for them. The time zone certainly helped a lot.”

— Jon Miller, president of programming, NBC Sports and NBCSN

“The stats keep on surprising us each and every day. When you’re talking about the highest-rated opening round, quarterfinals, semifinals and overall tournament, that’s surprising to just about everybody.”

— Debbie Shinnick, senior vice president, network sales and strategy research, Univision

“The way the [Brazilian national] team plays is close to the way that Brazil organized the event. There’s this optimism that everything will be fine. This optimism makes them think that everything will be covered. The [World Cup] is great. Everything operationally works well, but any incident could have changed the story. The same is with the team. Just because they were playing at home and the fans were there, [they thought] things would be OK. They forgot about the opponent [Germany].”

— Ricardo Fort, vice president, global sponsorships, Visa

— Compiled by SportsBusiness Journal staff

FIFA sponsors and partners are encouraged by early results from their activation efforts in Brazil and around the world. 

The return of the world’s most popular sport to Brazil, which has fielded one of the most accomplished national teams in history, resulted in a captivating event that helped partners Adidas, Coca-Cola and Visa and sponsor McDonald’s outperform results from the 2010 World Cup in South Africa. 

Adidas saw significant increase in sales of national team jerseys and the official 2014 World Cup soccer ball, the Brazuca. Jersey sales were up by double digits as of last week, and it sold twice as many jerseys for the Colombian national team, which it added to its portfolio of teams, as it did in 2010 for France, which shifted to Nike this year. It also sold more than 14 million soccer balls. 

“We’re exceeding all of our projections, especially on Brazuca,” said Ernesto Bruce, Adidas’ director of soccer. “The ball has been a huge success for the brand [based] on how it’s showed up on the field and how it’s been used in even other companies’ commercials.” 

Coca-Cola took the World Cup Trophy Tour to a record 90 countries and 1 million consumers. It partnered with FIFA on fan fests around the country that drew more than 4.5 million fans, an increase from 2010. The song it released from Aloe Blacc and David Correy, a remix of “The World Is Ours,” hit the top-10 charts in 40 countries. 

Visa, which sponsored its second World Cup, saw its metrics increase considerably. The company averaged more than 10,000 transactions a game with Visa cards, which is more than it had in South Africa and more than an Olympics. It also developed prepaid cards that could be customized at stadiums so that fans could take away a memento with their names, the date and information about a game they attended. 

“There were long lines to buy them at most stadiums,” said Ricardo Fort, Visa’s vice president of global sponsorship. “We did something similar in South Africa and [at the London Olympics], but this is the first time it was customizable and fans were taking it along with [souvenir] cups.”

McDonald’s, a World Cup sponsor, promoted the World Cup in 119 countries, making it the largest global activation of a sponsorship in the company’s history. It had 200 million submissions worldwide for its “Ultimate Fan” sweepstakes, which took 184 young adults to the semifinals and finals. The company offered another sweepstakes with peel-off awards on drinks at its restaurants called “Peel. Play. Ole, Ole.” It awarded gift certificates, soccer gear, free food and trips to Brazil. The promotion helped attract people to its restaurants over the last four weeks, said John Lewicki, McDonald’s head of global alliances.

“We’re up on sales targets in the U.S. and other countries are seeing success,” Lewicki said.