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Volume 21 No. 6

Opinion

The first notable instance of a professional sports organization providing sponsorship sales and consulting services to a college athletic program occurred in 2001 when Fenway Sports Group agreed to represent Boston College and assume control of the marketing rights related to athletics. Now named Fenway Sports Management (FSM), this group specializes in sponsorship sales, consulting and special events representing some of the most storied properties and brands in sports including the Red Sox, Liverpool FC and LeBron James. This long-standing partnership enabled Boston College to tap into FSM’s experience and network while also presenting unique opportunities to showcase BC athletics via high-profile football and hockey games at iconic Fenway Park. According to a managing director at FSM, “Our experience representing properties of this caliber, coupled with our network of connections within the sponsorship community, particularly in Boston, enables us to strategically connect BC athletics with brands looking to engage its passionate network of alumni and fans in New England and across the country.”

Speed forward 16 years and on April 17 of this year, the University of South Florida announced that it had reached a 10-year agreement for Tampa Bay Entertainment Properties LLC (TBEP) to have full control of their marketing rights for athletics. TBEP was formed in Tampa by Tampa Bay Lightning owner Jeff Vinik in 2017, as a firm specializing in partnership sales, consulting, marketing and operations with a focus on creating world-class experiences. The significance of the move is that for the most part it makes collegiate athletics a local/regional opportunity buy with some national partnership opportunities — represented by a seller who is not only experienced, but heavily connected locally and regionally with an enviable track record of success. The partnership grants TBEP the exclusive rights to all commercial multimedia sports marketing, sponsorship and respective inventory possessed by the athletic department. (Note: The author, a faculty member at USF, has advised on this project but is not compensated nor does he directly benefit from this agreement, and Lightning owner Jeff Vinik supports the USF sport business program and the USF medical school).

Boston College has tapped into Fenway Sports Management’s expertise.
Photo by: GETTY IMAGES

So, exactly what does that mean? When viewing the combined assets and opportunities, it offers a variety of possibilities that could be significantly lucrative for both parties:

Offers a 12-month platform for sponsorship activation and exposure.
Provides a much more experienced and larger group of sellers for athletic assets.
Offers increased compensation opportunities as well as career advancement opportunities for current TBEP staff.
Provides a guaranteed revenue stream for athletics and incentivizes a partnership relationship that could grow the revenue even higher.

USF Athletic Director Mark Harlan describes the partnership as a “unique opportunity to partner with an organization that has been recognized nationwide as one of the best in sports and to utilize their leadership, creativity and relationships to continue to elevate USF athletics.”

In a similar vein, Steve Griggs, president and CEO of both the Tampa Bay Lightning and TBEP, describes the new relationship as “a perfect partnership that allows us to expand our existing relationship with USF and help grow the USF brand while selling and activating future partners and existing partners in an exciting new space.”

While I have been excited abut this possible relationship for some time, I have always focused my attention on the national implications of similar opportunities. First of all, when it comes to college athletics, I have always been a proponent of outsourcing for several reasons:

College athletic programs usually lack adequately trained personnel and lack the number of trained personnel to effectively sell tickets and property assets and marketing rights.
College athletic programs are not equipped to offer sales incentives such as commissions and bonuses to achieve sales and revenue goals.
Outsourcing marketing rights first pioneered by Jim Host has become the norm and athletics departments have become very comfortable accepting guaranteed payment for their marketing rights and focusing their staff and efforts in other areas — primarily development.

That being said, the larger sport marketing agencies are very successful leveraging athletic programs in the power five conferences and somewhat less so at colleges and universities below that — the financial incentives and opportunities aren’t the same. Therefore this model of a local/regional approach might be very enticing to other professional sport organizations looking to expand their impact and revenue streams. In fact, the size of the market and the schools in those markets might be very compatible to organizations in MiLB, the NBA G League, the AHL and several others.

For example, Elon College, a member of the Southern Conference located in North Carolina, is a non-power five school with a wide range of athletic programs and facilities. Located nearby in Burlington, N.C., are the Burlington Royals, a Class A rookie league team owned by Miles Wolff that has been in the market for more than 30 years. This team has experienced ticket sellers and sponsorship sellers and existing relationships in both areas that could be solicited for similar related sales opportunities related to Elon athletics. The sales team has plenty of time to take on projects in the offseason, and the opportunity to make additional compensation would be very attractive to them and at the same time could act as a significant incentive to retain talent for the Burlington Royals.

While this scenario is purely fiction, at least at this point, the opportunities and implications are obvious, and the message is crystal clear: Concentrate on what you do best, and seek help and expertise for your weaknesses. It would require a significant investment by collegiate institutions to hire an adequate sales team and build the sales infrastructure necessary to generate the revenue that could be provided by outsourcing ticket sales, sponsorship sales or both. I’m sure most athletic directors and college presidents could find much better ways to allocate those funds. Outsourcing is here to stay — the question that remains is what type of outsourcing can best assist college athletic departments to grow their revenue.

Bill Sutton (wsutton1@usf.edu) is the founding director of the sport and entertainment business management MBA at the University of South Florida and principal of Bill Sutton & Associates. Follow him on Twitter @Sutton_ImpactU.

N o, I’m not suggesting trading the team or any players. What I am proposing is to use the concept of trade or barter to finally get the Dodgers into the majority of Los Angeles TV households.

As a Dodger diehard who does not have SportsNetLA, owned by Time Warner, which was purchased by Charter and then rebranded Spectrum cable, it frustrates me to no end that I cannot watch the Dodgers on my provider, DirecTV. I am not alone in this sentiment as half of the L.A. market can’t watch their favorite team.

Los Angeles is the second-largest U.S. media market with nearly 5 million pay-TV subscribers. After buying Time Warner Cable, Charter serves almost half of them. The No. 2 provider is AT&T, the owner of DirecTV, at about one third. The rest are divided among Frontier, Dish Network, Cox and other smaller players.

After Time Warner Cable agreed to an $8.35 billion, 25-year deal for Dodger games (or $334 million annually), it has asked other pay-TV companies to pay almost $5 a month per subscriber for the channel. Even a recent one-year, 30 percent discount didn’t sway anyone. For subscribers who are not Dodger fans, why force them to pay this premium? I must believe there is a price threshold that would be deemed acceptable, maybe at the $3 rate?

As a media agency guy, we’re always looking at creative ways to find solutions for our clients, so I’m going out on a limb here. Here’s my proposition: The providers not currently carrying the Dodgers should consider offering free air time inventory on their platform to Spectrum in exchange for a lower sub fee to carry the Dodgers. The value of this inventory should be equivalent to the difference between the $3 and $5 in subscriber fees. Why does the idea of barter work? Cable and satellite providers always have unsold inventory, so by using unsold inventory as part of this trade deal, there isn’t really a hard cost associated with it.

The Dodgers own the best home record in baseball this season.
Photo by: GETTY IMAGES

So, here’s how the numbers might pencil out. Using DirecTV as an example, it has approximately 835,000 subscribers in the Los Angeles market. If they were to pay Charter the $5 price it is asking for, the annual cost would total $4,125,000. If the price is $3, the annual cost increase would be $2,475,000. The differential is $1,650,000. That’s the amount of free inventory DirecTV should offer Spectrum each year as part of this proposed barter deal in exchange for accepting the $3 subscriber increase. The other providers, Dish, Frontier, etc., can structure their own deals based on their percent penetration of the pay-TV subscriber market.

Now I’m sure DirecTV would not want Spectrum promoting its cable business on its platform so, as an option, DirecTV could consider allowing Spectrum to only promote its phone or Internet service, possibly deeming it a bit less competitive.

In this scenario, Spectrum gets free air time worth considerable value, giving it the opportunity to promote its non-cable services. DirecTV can reduce its paid ad budget by $1.6 million, thereby making the economics work. In return, DirecTV pays a more affordable sub fee to carry the Dodgers, one that subscribers would be more willing to accept. Bingo bango, wider distribution. The real winners would be the Dodger fans like me who have been shut out for three seasons and counting.

Let’s think for a moment about the longer-term effect of this holdout and how sports teams need to maximize the value of the team and property by having the games available to everyone. In an age where the younger generation has other choices for their sports and entertainment, baseball must work especially hard, otherwise its fan base will continue to erode. Not to mention the fact that Charter is losing money every year on SportsNetLA. This is further compounded by the proliferation of skinny bundles putting more pressure on providers like Charter. Needless to say, a lot of factors are at play here.

Unless anyone else out there has a better idea, I submit that this barter concept be considered. The bean counters can work out the details, but I don’t want another season to pass where I can’t enjoy my home team in the comfort of my own home. By the way, I hear Los Angeles is getting a soccer expansion team.

Zach Rosenberg is president of Milner Butcher Media Group (MBMG), an independent media services agency.

S port is a unifier; it gives us stunning victories, agonizing defeats and awesome examples of human performance. Sport transcends borders, race, social class and language — it brings people together across all cultures and walks of life.

But it’s not all fun and games. A quick look at recent headlines, and fans from across the globe see allegations of corruption, scandals and conduct that falls well short of the “sportsmanship award.”

The fact is that sport is a global, multibillion-dollar business, which passionate fans and big brands invest heavily in. Mastercard, as a long-term investor, believes that through partnership we can drive out corruption and unethical behavior. This is why we teamed up with the Sport Integrity Global Alliance to support urgent and transformative change in sport, and to better guarantee integrity and “fair-play” to hundreds of millions of sport participants and fans globally.

Our commitment to financial integrity, good governance and transparency that makes us one of the world’s most valued and ethical brands should translate to our sport partnerships. We expect each organization that we associate with to share our values for the benefit of athletes, participants and fans. The more than 360 million viewers and attendees that support our partners, including UEFA Champions League, Rugby World Cup, Roland-Garros, the PGA Tour, The Open Championship, and Major League Baseball wouldn’t expect anything less.

SIGA is the first organization to bring together governing bodies and properties, brands and businesses for the betterment of sport — to help drive out unethical and illicit activity in order to implement positive, structural change. We stand united with SIGA and our fellow members to show that integrity in sport is vital to safeguard the dreams that inspire millions, and to defend the universal values that we instill in our children to play fair.

Mastercard has already added specific language into sponsorship agreements to ensure our partners operate under the same code of integrity and transparency as we do. And as a known proponent of diversity and inclusion, we only encourage and support progressive change concerning access for all fans and athletes, regardless of sex, religion, race or sexual orientation.

The time has come for positive, cultural change. Last month in Lisbon, we participated in the SIGA Sport Integrity Forum and the General Assembly and continue to take action toward its goal. I ask the readers of SportsBusiness Journal, and all sport stakeholders, to join the Sport Integrity Global Alliance alongside representatives from the European Professional Football Leagues, World Bank, Dow Jones, ICSS, Deloitte, PwC, Commonwealth Games Federation, Special Olympics, United States President’s Council on Fitness, Sport & Nutrition, Turkish Airlines and 80-plus world-leading organizations that have come together to demonstrate that the business of sport is sportsmanship.

Michael Robichaud is senior vice president of global sponsorships for Mastercard.

I read with great interest your piece on “Reimagining Atlanta” (July 10 issue), a terrific and comprehensive look at our city’s thriving sports culture through its world-class venues, major events and professional and collegiate sports teams.
 

I was surprised, however, the coverage failed to include mention of the winningest sports franchise in the Atlanta area — the Harlem Globetrotters. In 2015, shortly after being acquired by Atlanta-based Herschend Enterprises, we moved the Globetrotters’ corporate headquarters and global business operations to Atlanta from Phoenix. Being co-located with the parent company clearly weighed heavily in our decision, but we also recognized the many strategic advantages that Atlanta provides for the organization: Home to many Fortune 500 companies, a passionate sports community, a thriving entertainment industry, a skilled talent pool and the best airport in the world — which comes in handy for us Globetrotters. Last year, we also made the decision to relocate the annual Globetrotters training camp to nearby LakePoint Sporting Community, which is one of the best new basketball facilities in the U.S.

The historic franchise always has fun.
Photo by: GETTY IMAGES
The Harlem Globetrotters are one of the most storied and beloved sports franchises in the world. Every year we play nearly 500 games in over 30 countries and entertain millions of fans in markets large and small throughout the world. Known as the “Ambassadors of Goodwill,” our stars take great pride in knowing they are inspiring generations of kids and athletes to pick up the game of basketball. So, no matter where we play (whether it’s MSG, Staples, or Wembley Arena) the Globetrotters are every city’s home team, but we are proud that Atlanta is home to our global operations and we always look forward to playing in front of our local fans at Philips Arena and Infinite Energy Arena.

Atlanta is on a roll and we would like to think we are contributing to its momentum — we haven’t lost a game since we moved here!

Howard Smith
Atlanta

Smith is president of the Harlem Globetrotters

The social causes adopted by a sports organization provide a window into its institutional soul. When it comes to the environment, three main drivers motivate leagues and teams to adopt sustainability as a cause: 1. Financial gain; 2. Brand enhancement, and 3. An authentic desire to promote ecological healing.

Financially, sustainability programs in sports are proven winners. Cutting costs and increasing revenue — by operating venues more efficiently, enhancing measurement, and broadening sponsor opportunities — have been the most forceful drivers of the sports sustainability movement. Sustainability initiatives have collectively reduced operating costs by tens of millions of dollars across hundreds of sports venues throughout the world.

As for brand enhancement, how can you go wrong supporting a policy that the pope has made one of his top priorities? Sustainability programs enhance brand morale with fans, staff, sponsors, and host communities, confirming opinion polls that consistently show consumer support for environmentally responsible companies. A survey performed a number of years ago by Turnkey found that 81 percent of sports fans express concern about the environment and 58 percent expect teams and leagues to be environmentally responsible. And according to a consumer trends survey published by Sustainable Brands, “Near-universal in their demands for companies to act responsibly, nine in 10 consumers expect companies to do more than make a profit, but also operate responsibly to address social and environmental issues … 84 percent of consumers globally say they seek out responsible products whenever possible.”

It is widely known that branding and marketing a sustainability program requires ecologically meaningful content in order to authentically satisfy fan expectations. A sustainability program is judged by the issues it addresses and how effectively it does so. To avoid charges of greenwashing, sustainability programs need to provide authentic biological value. As I wrote in my previous column, sustainability programs should include tangible efforts to minimize climate change and biodiversity impacts. Our current political situation, combined with worsening biological realities, makes it essential that all sports organizations commit to addressing climate change and biodiversity loss, the two greatest ecological threats to ever confront humanity. Deferring work on these worsening issues is no longer a responsible option.

The 2015 Men’s Final Four floor in Indianapolis was sourced from FSC-certified forests.
Photo by: GETTY IMAGES

Our planet is in the midst of the “sixth extinction.” This is not something a sustainability program can ignore. Earth has experienced five major extinctions since life first appeared almost 4 billion years ago. Unlike previous mass extinctions, the sixth extinction, the extinction event now taking place during the present Holocene epoch, is caused overwhelmingly by human activity. The current extinction rate is between 100 and 1,000 times greater than what it was before 1800. It is affecting diverse families of plants and animals, including mammals, birds, amphibians, reptiles, and arthropods. Among all causes of terrestrial species extinction, it is the mismanagement of forests that is arguably the most consequential: Forests are home to around 90 percent of the world’s land-based animals, plants, insects and birds. Forests are essential to all forms of life on Earth, contribute to the food security of hundred of millions of people, and absorb and store billion of tons of carbon dioxide each year.

The good news is that it is easy to help protect forest-based biodiversity. How? By assuring that the forest-based products one buys — paper products, cardboard, and solid wood — are certified by the Forest Stewardship Council.

According to Debbie Hammel, director of the Land Markets Initiative at the Natural Resources Defense Council: “Buyers of wood products should look for the Forest Stewardship Council label when making their procurement decisions. FSC certification is the most rigorous standard available in the marketplace, ensuring that critical forest ecosystem values — and the workers and communities that depend upon them — are protected. There are a lot of ‘pretenders’ in the world of certification standards, and buyers should beware, as none of them measure up to FSC’s credible requirements for performance, auditing and verification.”

Through FSC certification, companies are making a commitment to acquire and sell wood-based products that come from sources that are environmentally responsible, socially beneficial, and economically viable. FSC certification also advances core elements of the U.N.’s Sustainable Development Goals agreed to by 193 countries in 2015 and supported by sports organizations internationally.

Media guides, game-day programs, yearbooks, concession napkins, toilet paper, paper towels — all of these paper products are purchased by sports organizations. Is your home team supporting deforestation or other inferior forest management practices? Shouldn’t you know?

Prioritizing the purchase of FSC certified wood is already an institutional priority for many sports organizations. For example, all products acquired by the organizing committee of the Rio 2016 Olympic and Paralympic Games were FSC certified, from structures to stationery; London’s Olympic Park was FSC certified; UEFA’s official Euro 2016 tournament tickets were made of FSC-certified paper; and the 2015 NCAA Men’s Final Four flooring was sourced from FSC-certified forests.

If protecting life on Earth is the goal of sustainability programs, as it must be, then better management of forests is essential. Giving priority to paper and wood products with the FSC label helps provide market support for forests managed in an ecologically better way.

Allen Hershkowitz is a founding director of Sport and Sustainability International.

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