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A fascinating first half of 2015, more to come

As we enter the back end of 2015, here are the stories of the year that have stood out to me and why.

> THE MONEY KEEPS POURING IN: Can you recall such a money rush as what is taking place between DraftKings and FanDuel? They continue to draw hundreds of millions in funding from blue-chip sports companies while paying out much of it in marketing expenditures. When they first came on the scene and started throwing massive cash at sponsorship and media buys, I thought of Spongetech, which, of course, infamously flamed out. But these groups are so well-capitalized, and have such a low-cost-of-entry business, that they are formidable. These are high-frequency, low-involvement transactional businesses with data collection and a young male demo playing. Why can’t these companies turn into sponsor vehicles? Gillette as an official sponsor of DraftKings? Carl’s Jr. as a sponsor of FanDuel? Why not? This is going to be a wild, fun race to who becomes the first to have enough revenue and a critical mass of daily players to file an IPO. Buckle up.

> CORD CUTTING, CORD SHAVING: The cable industry’s growth is not coming from video but in broadband — a fact that has to be terrifying for a company like ESPN that has used dual revenue streams to outbid broadcasters for any sports deal that it wants. The numbers of subscribers to pay TV continue to see a slight but steady decline, meaning fewer subscriber fees. New video offerings are being introduced constantly, so watch how ESPN deals with that. Disney’s Bob Iger talked pragmatically on CNBC last week saying, “ESPN could be sold directly to consumers.” He realizes consumer choice, and seems prepared to adapt. It also was telling to me when ESPN’s new affiliate head, Justin Connolly, said he is focused on “whether there are other ways to get content out to consumers and how should we participate with that.”

SIMMONS
OLBERMANN
> THE CHANGING PERSONALITY OF ESPN: Bill Simmons’ departure wasn’t a shock. Neither was Keith Olbermann’s exit. Colin Cowherd’s decision to leave was more of a surprise, but even he had been rumored to be looking around for a while. But all three taken together reflects a significant loss of personality and provocateurs at the network. Simmons had an edge that ESPN President John Skipper was unwilling to live with at his potential asking price, and Olbermann did not develop the audience to match his asking price. Losing talented people always hurts. But one has to wonder if
COWHERD
ESPN’s strategy in dealing with talent has changed back to where it was a decade ago, when ESPN didn’t value talent as much and were more interested in pushing the ESPN and “SportsCenter” brands. That changed as NBC, Fox and CBS developed cable channels and tried to poach ESPN’s talent. Now it seems ESPN is placing an emphasis on live rights, making bold-face talent less important and cost-cutting targets in the face of their increasing rights fees.

> DON’T SELL HBO SHORT: While HBO is as programatically hip as any content provider out there, HBO Sports is certainly not the high-quality brand it used to be, as it cut back on its sports documentaries and reality shows. Will that start to change with Simmons? No matter how you feel about Simmons, his appeal among young audiences, eager to share points of view and experiences, shouldn’t be overlooked. HBO has talent, resources, edge and an open runway to develop some interesting, novel sports programming.

> THE HOME RUN OF THE COLLEGE FOOTBALL PLAYOFF: Sorry to use a baseball term to characterize the overwhelming success — from team selection, to viewership, to logistics, to organization — of this first-year event. A bit of insight from the voting for our Sports Business Awards: This event was the clear and unanimous choice by our judges for Sports Event of the Year. That’s how much of an impact it made across the business.

> U.S. WOMEN CHANGE THE GAME — AGAIN: They were America’s team this summer. The storylines around the U.S. women’s soccer team were compelling, the personalities were engaging and they showcased the changing demographic of U.S. women athletes. Record viewership surprised executives around the industry and confirmed America’s love of big events. But can success this time extend into sustainable audience and corporate support of women’s soccer?

> THE CURIOUS CASE OF BOSTON 2024: How will the U.S. Olympic Committee recover from its choice of Boston? Insiders I know feel Los Angeles could quickly take the mantle and be successful. USOC leadership — Larry Probst and Scott Blackmun — need to get the disaster of Boston behind them, because they have done so much right to improve relationships with the International Olympic Committee and alter the view of the U.S. within the international community. But Boston significantly hurts that progress and fuels the debate of the Games as an economic and risk-assessment exercise rather than a global sports celebration. It also extends the narrative that cities and their constituents just don’t want the Games.

> FIFA’S RECKONING: May 27 will remain a pivotal day in sports history, after U.S. and Swiss authorities arrested top FIFA officials on corruption charges, with documents alleging widespread corruption in FIFA over 20 years, involving bids for World Cups and marketing and broadcast deals. It’s led to the welcome end of Sepp Blatter’s reign and will result in more turnover, including longtime marketing executive Jérôme Valcke. Kudos to Visa for showing the fortitude to press for reform even after the media heat died a bit. But make no mistake, this could get sordid and have long tentacles, and speculation remains on who else could be investigated or implicated.

American Pharoah’s Triple Crown journey starts with the Kentucky Derby.
Photo by: GETTY IMAGES
> AN AMERICAN BEAUTY: American Pharoah, the horse the country came to love, crushed it over five weeks and three races, dominating the field to win the Triple Crown. Horse racing was cool again, and the viewership proved it. I will never forget the wild crowd reaction cheering that epic moment while I sat in a Charlotte bar as the amazing horse took the Belmont. I can’t even imagine the din of what it was like at Belmont Park that day. But the opportunity to turn such a spectacular horse into a national marketing platform is hurt because the industry isn’t closely linked or organized. That harms the longevity of the Triple Crown winner and the industry as a whole.

> FOX’S TALE OF TWO EVENTS: Over a few summer weeks, Fox Sports experienced the highs and lows of big event production — being heavily criticized for its U.S. Open coverage while lauded for its broad effort around the Women’s World Cup. Viewer reaction proved again how fickle and particular individual sports audiences — along with the snark of social media — can be.

Deflategate proved to be a low point for NFL.
Photo by: GETTY IMAGES
> JUST DEFLATING: How the NFL let this story continue through August, the poor way it dealt with the issue after the AFC championship game, the false media leaks, the $5 million Wells Report and the ugly Patriots v. NFL confrontation is one of the most disappointing stories of the year. Sure, it’s fun theatre and perfect for the New York tabloids, but the league let this get out of control. Social media changed the news cycle, but under previous leadership, this story wouldn’t have had a news cycle. It would have been pre-empted or handled immediately. End of story.

> WHICH LEADS US TO … : Maybe situations like this get avoided with the NFL’s fantastic new hire, Tod Leiweke, as COO. I’ve felt Commissioner Roger Goodell has long needed to fill the role he so ably manned for more than five years. The league needs a top operator who could handle many of the day-to-day aspects across the league’s various business. No one fits the bill better than the respected and talented leader Leiweke.

> LABOR GAINS FOR MLS: This may seem small to some, but any work stoppage by MLS would have blocked the strong tailwind at its back. Players received increased benefits and salary, but the main win was that it allowed for the successful launches of teams in Orlando and New York City.

Orlando City SC has tapped a resource for soccer enthusiasm in Central Florida, averaging more than 34,000 fans per game.
Photo by: GETTY IMAGES

> AND SPEAKING OF THOSE TEAMS … : I find the launch of Orlando City SC to be one of the most compellingly successful stories of the year. MLS’s history in Florida has been poor. But Orlando operator Phil Rawlins hit all the right buttons in promoting this team. It drew 62,000 for its opener and hasn’t stopped since, averaging almost 34,000 per game. NYCFC has also been a success, drawing just over 29,000 per game while playing at Yankee Stadium. MLS’s recent run of successful franchise launches continues.

Stephen Curry gives Under Armour a lift.
Photo by: GETTY IMAGES
> THE RUN OF UNDER ARMOUR: There is no hotter brand in sport, and few companies have had such a successful run with their talent. Between having Tom Brady win the Super Bowl in February, Stephen Curry tear it up all season and win the NBA title, Misty Copeland become the first black principal female dancer for the American Ballet Theatre, and Jordan Spieth’s name being affixed at the top of golf’s leaderboard all year, it’s been a very good seven months for the brand in Baltimore.

> THE MANFRED ERA’S SUCCESSFUL START: Rob Manfred has brought refreshing new energy to MLB, showing a willingness to experiment. While the initiative to speed up pace of play was started prior to his watch, I give him a lot of the credit for implementation. MLB has cut about nine minutes off game time during the first half of this season. Isn’t this how progressive change is supposed to work? A league has a growing problem, addresses it, implements changes while fighting through long-held agendas and habits, and, alas, the move works and the game is better for it. Well done.

> SPEAKING OF TAKING CHANCES: Showcasing new thinking, the NFL moved its draft out of New York for the first time in 51 years and the result was an overwhelming success. The league dominated the nation’s No. 3 media market all while the Chicago Blackhawks were in the midst of the Stanley Cup playoffs and the Cubs and White Sox were in action. More than 200,000 fans attended league activities over three days, which opened eyes to future growth of this event and the power of experiential marketing.

> IN THE COURTS: The smartest people I know in sports tell me to watch this story, so I listen. StubHub’s antitrust lawsuit against Ticketmaster and the Golden State Warriors could redefine sports ticketing. It could determine how far a team controls resale options for a ticket, and define the relationship between team and ticket buyer and the difference between a fan and sales broker. Far-reaching ramifications worth watching.

> RIDING A HOT HAND: Labor issues are definitely on the horizon, but one can’t deny the hot run of the NBA. The game’s stars deliver at the biggest moments, the Finals verified Curry as a national brand, offseason free agency drama captured headlines, LeBron and Amar’e star in “Trainwreck” and Samsung NBA Summer League play registered record attendance and ratings on ESPN and NBA TV. The summer league???!! The engagement metrics and positive buzz around this league continue to impress me.

> GENERATIONAL SHIFT IN NASCAR? While NASCAR has had a ho-hum year, the behind-the-scenes progress of the Race Team Alliance and its ability to push NASCAR to open up certain financial information is historic and demonstrates the power of the collective teams. That combined with Denny Hamlin forming a drivers council to push for change in the sport portends the dawn of a new era and possible power shift in NASCAR.

Tom Benson with Saints coach Sean Payton
Photo by: GETTY IMAGES
> TOM BENSON V. FAMILY: Possibly the most unfortunate story of the year is the battle over the health of New Orleans Saints and Pelicans owner Tom Benson, as this dispute has shown the unfortunate and ugly side of family splits and how they affect sports franchises.

> WALK AWAY, WALK AWAY, I WILL FOLLOW: In second-half action, I’ll keep my eyes on: Will Pac-12 Commissioner Larry Scott’s bold plan to have the conference take back each school’s marketing and media rights come to fruition or will some of the top schools push back and continue to outsource their own deals? … How will IP rights holders counter the threat of Periscope and Meerkat? …

Just what will be the NFL’s plan to fill the open Los Angeles market? Also, the NFL’s streaming of the Bills-Jaguars on Yahoo. Don’t underestimate the significance of the effort, which marks the first major test of a live stream around the NFL. Keep an eye on discovery, engagement and functionality. If it works well, expectations will rise for an OTT bidder for major sports rights. … How the World Cup of Hockey develops and its opportunity to grow hockey globally. I’m also interested in how ESPN treats its return to the sport, which must raise the ire of NHL partner NBC. … When could we see mainstream consumption and a business model around the promise of virtual reality and sports viewing? … HBO’s “Ballers” – it’s better than I thought and Dwayne Johnson is really good as adviser Spencer Strasmore.

Those issues caught my eye. Let me know yours and what you’re watching.

Abraham D. Madkour can be reached at amadkour@sportsbusinessjournal.com.

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