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Volume 21 No. 26

Opinion

Iwalked out of the Omni Hotel and onto Andrew Young Boulevard at sunset shortly after I arrived in Atlanta earlier this month. Walking up a block to International Plaza, it hit me: Mercedes-Benz Stadium. It is a jaw-dropper. I literally stopped, stood and stared at the size and scale of the venue. It’s magnificently grand and unlike any structure I have seen before. Everything you have heard and read about it — from the eye-popping halo board to the light, open feeling inside the stadium to the front porch offering a great view of the city’s downtown — is true. And it will only get better once the Georgia Dome is razed, which will free up an entirely new side of access, tailgating and green space. It’s truly remarkable.

I’ve watched the development of the Atlanta sports scene closely over the past few years, so it was gratifying to see the city’s venues up close during our Sports Facilities and Franchises conference earlier this month. Two days after seeing Mercedes-Benz Stadium, we took a quick and easy 25-minute ride up to Cobb County to take in The Battery Atlanta and SunTrust Park. A lot of people talk about mixed-use development, but the Braves organization has done it — in an incredibly swift span of 30 months.

I was blown away walking into The Battery, along a streetscape toward the ballpark, passing by Power Alley and the Yard House restaurant to a green plaza where we were welcomed by Braves Vice Chair John Schuerholz. The Battery presents a positive vibe, with clean and contemporary architecture. SunTrust Park was what you’d expect from any new ballpark, but The Battery is what struck me, from the extraordinary financial risk the Braves took to completing it on a tight schedule to the mix of tenants. The area was hopping on an October Thursday evening, with activity at the apartments overlooking the ballpark, to people mingling on the green, to crowded restaurants, to a concert at the Coca-Cola Roxy Theatre.

Mercedes-Benz Stadium
Photo by: RICH VON BIBERSTEIN

Derek Schiller, Braves president of business, noted that 30 percent of The Battery Atlanta is open. The gleaming Comcast building sits just beyond centerfield and in a few weeks, the company will begin moving in 1,000 employees to the space, while the adjacent Omni Hotel opens Dec. 28. Team officials expect 80 percent occupancy by opening day next year, and there is much more to come, as the Braves are sitting on 25 acres of land that is slated for a $200 million Phase 2 of the development. Even Hawks CEO Steve Koonin tipped his cap to his neighbor sports organization, saying, “Our friends at the Braves crushed it.”

But speaking of the Hawks, the team’s plan for a $200 million renovation of Philips Arena created significant buzz among event attendees, as Koonin and COO Thad Sheely detailed the progressive plans that will be unlike anything I’ve ever seen in an arena, with a Topgolf suite and Swag Shop (Shave, Wash and Groom) concept with locally known actor and rapper Killer Mike. Koonin acknowledged they were forced to think big and bold.

“We have to build a building with multiple things to do and with multiple attractions,” he said. “Our building wasn’t conducive to the social experience of today.” Once fully completed next fall, Koonin expects the demographics to change in the building. “Today, we’re around 82 percent fans and 18 percent business. I think you’ll see the business side rise,” he said. “And more women. We’re currently around 34 percent women, and I’d like to get that to 40 percent.”

The Battery Atlanta at SunTrust Park
Photo by: RICH VON BIBERSTEIN

In conversations later, both St. Louis Blues President of Business Operations Chris Zimmerman and TD Garden President Amy Latimer, who have both been through renovations, were greatly impressed with the Hawks’ plans. “The brand integration looks very smart,” Latimer said. “They highlighted local Atlanta.” She called the special areas like a Topgolf suite and barber shop “healthy distractions.” “You’re supplementing the game and keeping people engaged and keeping them there,” she said. “Coming early and staying late.”

Overall, these three organizations have invested nearly $3 billion in capital and infrastructure into the market over the last three years, and there is more to come. There is also a healthy rivalry between the organizations, and this competitive environment raised the game of each organization, and each stepped up significantly and successfully. You should make a point to visit Atlanta and see all that’s been done, because these buildings are going to be trendsetters for the future.

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Arthur Blank has really found his stride in sports. With his ownership of the Falcons, Atlanta United FC, PGA Tour Superstores and his development of Mercedes-Benz Stadium, you see his different divisions operating with efficiency and success. Blank stresses a value-based organization and principles, and that was evident during a discussion by his group’s leadership. Falcons CEO Rich McKay noted that Blank’s experience leading Home Depot has been key to how he runs his sports organization.

“Home Depot is a culture-based business, in who the people are and the way they empower people,” McKay said. One of the key values instilled through the organization is called “listen and respond.” Listen to the customer, but don’t filter out what you want to hear, and don’t decide that you know the answer. Do what the customer says. “Listen and respond is something we tell our people all the time. If we just listen to what the customer says, we will be fine,” McKay said.

Meanwhile, stadium General Manager Scott Jenkins relayed a tip that Blank often gives. “Arthur tells stories about not looking for the customer that is happy, but look for the customer that’s not happy,” Jenkins said. “That is where the problem is and that’s where you can make improvement.” McKay also brought up a constant refrain I hear from those close to Blank: “The best or nothing.” “That’s the way Arthur measures us,” McKay said. “We want to be the best we can be at everything we do.” He cited the soccer club as an example. “When we were starting the United, Arthur told us all, ‘We are not in this for fun. We want to win games and we want the fans to have a level of experience unlike anyone at MLS.’ That was his direction from day one.”

It’s worked, as the team has been one of the biggest success stories in sports this year.

Finally, there was a lot of talk about efforts to improve diversity — both gender and ethnic — in the sports business during the conference. McKay gave an example of an internal effort that starts with inclusion. “We don’t want meetings of three people or meetings of 10 people,” he said. “We want meetings of 30 people. Why? Because it lets everyone grow in those meetings. People at the top, they are not the smartest, they don’t have all the answers. The more inclusive you can be, the more you will see success. We are very purposeful in how we are trying to do that from a diversity standpoint. It’s on us to grow those people and let them succeed.”

After the session, a sports executive who I greatly admire commented on the good vibe he got from Blank’s leadership team. “I’ve heard a lot about their culture, but I thought a lot of it was BS,” the executive in his early forties told me. “But I loved what I heard. Especially about being more inclusive with meetings and idea sharing. All of us just want to grow in our jobs, but so many are afraid to bring other voices into the room, maybe feeling threatened. I like how they are allowing people to grow and learn.”

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

The impact and value of game and training data analytics and their application to the sports we love have recently come into question. Kevin Seifert of ESPN wrote an article titled “NFL coaches skeptical on benefits of chip-generated game-day data.” Earlier this year, Greg Haff, president of the National Strength & Conditioning Association, said at a conference that “because there hasn’t been overwhelming success, some of the coaches are growing skeptical of the sports scientist. … I think we’re at a crossroads.” And recently there was a Wall Street Journal article titled “The Downside of Baseball’s Data Revolution.”

All industries experience growing pains, and sports data analytics is no different. Nonetheless, they are here to stay given fans’ desire for data-driven storytelling, and the fact that the data provides insights not only into what just happened, but also into how and why it happened. Instead of Odell Beckham Jr.’s famous one-handed catch being simply described as a spectacular 43-yard touchdown, imagine the story providing insights into Beckham’s speed, his separation from the defensive back, the length and velocity of the throw, and the angle at which the catch was made. Such insights will increasingly enhance the fan experience across a multitude of platforms, improve tactical coaching applications, and allow for greater effectiveness in managing athletes’ performance.

To refute those questioning sports data analytics, the industry needs to restore confidence and generate growth through leadership focused on three initiatives: Integrity, Innovation and Insights.

Data-driven storytelling could provide a wealth of information about spectacular plays.
Photo by: GETTY IMAGES

Integrity:
The marketplace has seen a proliferation of solutions making all sorts of sometimes-empty claims, prohibiting a unified view of the meaning and utility of data. Contributing to this situation have been (1) a “sales-first” approach by some solution providers, and (2) a lack of accuracy and precision in much of the technology currently being offered. Too many vendors are marketing-oriented, focused on convincing clients that their particular product is the “secret sauce” that will lead to ultimate success. In places where vendors over-promise, customers are growing skeptical of the technology and data. In parallel with these outsized claims is the fact that today many solutions just aren’t that accurate. Very few solutions have undergone independent “ground-truth” testing with video validation. Data integrity has thus become one of the central issues in the ongoing league/player debate over whether players should be required to wear devices, how the data is shared and used, and ultimately who owns the data. For the future, the industry needs to push for a greater degree of data integrity, the establishment of independent testing organizations/procedures, and eventually the creation of industry performance standards.

Innovation:
Too often today we see companies pushing technology solutions in search of a problem, rather than designing solutions to meet specific customer needs. This has led to many of the Integrity issues noted above and the attempt to use solutions ill-equipped to provide the most relevant types of data. For example, the common claim to provide “player tracking” data is poorly understood. It’s merely a catch-all term that needs to be segmented as follows:

Location Data Solutions: These solutions are geared specifically to commercial/fan engagement initiatives and do not provide insights into micro-movements. These positioning systems must evolve from one-dimensional systems (strictly optical or RFID) to hybrid systems in the future.

Player-Performance Data Solutions: Commonly referred to as “wearables,” these solutions provide keen insight into micro-movements and are the basis for player performance analysis. Companies in this space need to focus on accuracy and precision improvements, and the development of summary metrics providing deeper insights.

Health-Wellness Data Solutions: Solutions focused on providing insights into sleep, nutrition, and general overall fitness. This category includes heart-rate monitoring devices, and strives to answer many questions related to human performance and seeks to transform data into actionable intelligence.

In elite sports, we are still in our infancy when it comes to understanding each of these areas and their impact on performance, while at the same time solutions geared to answering these questions are proliferating. As a result, in the future it will be incumbent on leagues, clubs and players to segment their data needs among commercial/fan engagement products, coaching and player-performance products, and health-wellness products, and choose the right partners that are going to invest in technological advancements over time.

To date, much focus has been placed on gathering and creating “big data.” However, without the proper evaluation tools, the richness of the data is not being exploited and is leading to customer frustration. The focus should be on agile data versus big data, providing digestible data to the customer that features “snackable” insights and allows one to see how the data can be used effectively. In concert, there needs to be a movement from descriptive data to predictive analytics and the use of artificial intelligence, machine learning and deep learning to glean richer insights from the data. Finally, sports organizations need to work more closely with the research community to bring in-depth science to the process of developing successful products and creating actionable data.

We are at the dawn of the data revolution in sports. In order to propel the value of the data from a fan, coach and player standpoint, there needs to be a push for greater Integrity, Innovation and Insights. This will in turn lead to the creation of new content for fan engagement; the development of tools allowing for increased use of analytics by coaches as they seek competitive advantages; and a deeper understanding of peak player performance.

Remember, the ubiquitous “first-and-ten line” we know today was actually conceived in 1978. It wasn’t introduced until 1998. Good things take time, and thoughtful innovation.

Eric Petrosinelli is a sports industry executive with more than 20 years of experience across media, sponsorships, consumer products, technology and analytics.

President Trump’s recent call to boycott the NFL triggered more than just defiant football players taking knees and outraging fans appalled at the players’ disrespect of the flag. Outside the media spotlight, something else has been going on.

Company executives across America with sponsorship relationships with the NFL are busy assessing the potential damage the NFL is now inflicting on their brands. Specifically, sponsors are evaluating whether the NFL and its employees have triggered a violation of the “morals clause” now common in sports sponsorship contracts. The implications of this assessment could be enormous over time for the NFL, its players, and other sports.

While the players may not appreciate the economics of a fan boycott, clearly NFL owners do. This fact may explain why “NFL Owners Clashed in Private Over Protests,” as reported by the Wall Street Journal recently.

The business of sports sponsorships has evolved over the past decade and will change even more in the immediate future.

There are two financial motivations behind sponsorships. The first is simple math: Companies sponsor their clients, earning decent returns on the overall relationship that often includes marketing assets (e.g. signs), value-in-kind assets (e.g. suites, seats) and business revenue (products or services sold as a result of the sponsorship). This first set of reasons is highly calculable and critical to the health of the overall relationship. The second reason companies do sponsorships is to capture the “halo effect” enjoyed by many teams. In practice this means a team’s most avid fans often carry their goodwill for the team to its sponsors’ services and products. This halo effect can work both ways, as we are now witnessing at the team and league level.

Significant changes are afoot in the economic structure of sports marketing and sponsorship.
Photo by: GETTY IMAGES

At one time sports sponsorships seemed innocuous. When Tiger Woods, Lance Armstrong, and others proved only human, two profound changes took place in the sponsorship world.

First, sponsor interest in individual athlete-celebrities waned as sponsors realized the risk of brand-damaging behaviors outweighed perceived benefits. In fact, the concept of individual sponsorships has always represented significant modal risk. With the larger organizations, a sponsor essentially achieved portfolio risk diversification. For example, an NFL team main roster of players numbers over 50 players in a season. If one of those players becomes a risk outlier, the other 50-plus players compensated, or diluted that singular effect.

However, with the current Twitter wars controversy, we are witnessing the transference of individual sponsorship risk to team sponsorship. When an entire team in the NBA, NFL, MLB, or any other sport decides to embark on political statements, risk diversification evaporates overnight. Suddenly, you are facing the same issues you would if you sponsored only an individual.

Second, some companies introduced “morals clauses” into team and league sponsorship agreements beginning in the mid-2000s. Morals clauses do not necessarily demand or even allow for immediate termination of the relationship and deal. Instead, it provides a contractual obligation for both parties to meet and discuss the implications of the developments and ways to jointly address the risk and concern — but with the pressure of the termination driving the action. And of course, the ultimate ability to terminate if an amicable solution should not be able to be reached.

It should not be lost on the NFL and its players that AT&T, Anheuser-Busch, and Dannon Yogurt have all taken action to distance themselves from football controversy.

The first to act was AT&T’s DirecTV, which allows for subscribers to its Sunday Ticket of NFL games to get refunds if offended by the players’ flag protest. The next big company to act was Anheuser-Busch. Bud Light currently serves as the official beer of the NFL. The company has gone so far as to set up a hotline for fans to call and give their thoughts about the protests and Anheuser-Busch’s sponsorship of the NFL. Dannon Yogurt’s decision on Oct. 5 to pull advertising with NFL quarterback Cam Newton serves as a strong reminder to the NFL that player actions have consequences.

Just as the Woods and Armstrong controversies ushered in a new generation of sports sponsorships, the current NFL controversy will lead to significant changes in the business of sports sponsorships. The economics of sponsorship can be difficult to discern at times. In the absence of clear return on investment, corporations will take an even harder look at brand value. Do not be surprised if the NFL will see a substantial hit to its bottom line in the years ahead as sponsors re-evaluate the economics of sports sponsorships. MLB and the NBA will face similar scrutiny from its current and potential sponsors.

Make no mistake: The NFL controversy is unwelcome news for all sponsors, but especially to companies that hold themselves to a higher standard of reputational risk management.

Raymond Bednar (raymondbednar@hyperion-marketing.com) specializes in advising and implementing optimization strategies for investments in marketing channels at Hyperion Marketing Returns — Rockefeller Consulting.

W hen the New England Patriots play, Callum Sheppard huddles in front of a television screen with his friends in his college dorm room.

And if the Pats play the Denver Broncos, he sends smack talk to his brother, Connor, who doesn’t care much for Tom Brady.

A typical Sunday for National Football League fans in the United States? Maybe so, but the Sheppard brothers live in England. For them, this is normal, too. And in the eyes of the NFL, they are part of a perfect scenario.

The league is targeting “young millennials” in the United Kingdom as its next big fan base, said Sarah Swanson, head of British marketing for the NFL. The league wants to reach ages 18 to 25 primarily, she said, because many people over that age have already decided whether they like American football.

The scene at the NFL’s games in London this fall suggest they are making some progress. Hours before kickoff, the shopping-restaurant district outside Wembley Stadium gets packed with thousands of fans, checking out a league-sponsored tailgate scene, watching highlight videos on a big screen and sipping a beer or two. Many are happy to talk about their passion for the U.S. sport with me, a student reporter visiting for the game.

Fans play catch before the Ravens-Jaguars game at Wembley Stadium on Sept. 24.
Photo by: JOHN CURLEY CENTER

There’s no real comparison to the nationwide love of soccer, what the English call football, and the next day it’ll take some effort to find the score in a newspaper, but football American-style is more than a curiosity.

By the time this season ends, 21 regular-season NFL games will have been played in London — 18 at Wembley and three at Twickenham.

This year, two games will be held in each stadium for the first time. Jacksonville got things started with a 44-7 thumping of Baltimore on Sept. 24. NFL games in Wembley average 83,195 spectators, selling out almost every time. The Jaguars’ win marked a new attendance high for the NFL at Wembley, with 84,592.

At the Jaguars-Ravens game, it looked as though every NFL jersey was represented among fans, who came not only from England but also continental Europe (Germany, mostly), in addition to some Americans traveling with their teams. Some went all out, wearing purple wigs and tutus to represent the Ravens. A group of friends that calls itself the “NFL Lads” came decked out in leopard-print tuxedos to support Jacksonville.

While enthusiastic, the crowd’s intensity didn’t compare to that of a game in America, or even an Arsenal-West Brom match in the English Premier League the following night.

It was rare to see fans high-fiving or rivals arguing. The league organized tailgates, but there weren’t the miles of RVs or ubiquitous smell of grilling, as typical in the United States.

Inside the stadium, it was obvious that, while the NFL has developed a following, it is still educating newcomers to the game. Whenever there was a penalty or a play with a rules wrinkle, such as a fair catch, a definition of the ruling appeared on the stadium’s video screens.

It was just one small example of how the NFL is using technology to reach fans, particularly younger ones.
“We often say we don’t compete against other sports for fans,” Swanson said. “What we compete against is people’s time. And when you’re younger, you kind of haven’t decided yet what all your passions are going to be.”

The league has UK-specific handles for its social media accounts. On its Instagram account (@nfluk), which has 147,000 followers and posts several times per day, fans can find scores, photos and clips of big plays.

Even though the NFL’s Facebook page is global, it also posts UK-specific content, such as news about ticket sales for the London games. The league also is launching a Facebook Live highlight show to get more traffic.

One way the league has tried to reach fans is through a promotional video featuring the Miami Dolphins’ Jay Ajayi, a British-born player. In the video, Ajayi tours his hometown of London and attends an amateur American football practice.

“We’re trying to give people who may not know as much about the sport ways to get excited about it,” Swanson said.

When it comes to games like fantasy football and Madden NFL, Britain isn’t all that far behind the United States. This year, the NFL released a simplified version of fantasy football called the “NFL Challenge,” which requires fewer players and allows easier scoring.

The 21-year-old Callum Sheppard, who attends Manchester Metropolitan University, became an NFL fan at age 12 after playing Madden NFL on Xbox. One of the first teams he played was the Patriots.

“I get quite a lot of [flak] because nobody really likes the Patriots that much, which is quite funny,” Callum said.
At English universities and colleges, some students are trying out the game for real. American football is played at more than 90 schools, according to Swanson. To put the number in perspective, there are 130 schools in the United Kingdom, which also includes Wales, Scotland and Northern Ireland. However, the level of competition is similar to that of intramural sports in America.

Jacksonville Jaguars fans take photos at the game. The Jaguars won 44-7.
Photo by: JOHN CURLEY CENTER

Matt Jesus Sheppard, the older brother of Callum and Connor, plays flag football in Edinburgh, Scotland, as part of BAFA, the British American Football Association.

Flag football is seen everywhere as a less dangerous version of the full-contact game, though concerns about safety, such as the long-term effects of concussions, have yet to become an issue in Great Britain.

Matt, 28, is aware of the risks because he seeks out NFL news. He compared it to the dangers of rugby, a sport that has recently revised its contact rules.

Meanwhile, when Premier League fans watching Arsenal beat West Brom 2-0 were asked whether they like the NFL, their responses were just about unanimous.

“No,” said 17- and 18-year-old boys, giving dirty looks at the mention of the idea.

“No,” said a group of Arsenal fans leaning against the floor-to-ceiling windows near the concession stands.

Some young men even cringed, calling American football “rubbish” and “weird.”

If they did want to watch, they could on BBC and Sky Sports, networks that televise the NFL. But Matt Sheppard, who’s been an NFL fan for 16 years, said the only times he’s seen NFL coverage on BBC were highlight shows in the middle of the night.

Sky Sports airs more than 100 games per year. However, some fans complain that the sports package is expensive and without it, they say, NFL coverage is hard to find.

Eighteen-year-old James Johnson, who attended the Jags-Ravens game, pays £100 (about $135) per month for Sky Sports, which is similar to ESPN. Another group at the Jaguars-Ravens game said they split the cost of the package because it’s one of their only windows into the sport.

“Sky Sports dominates all sports in the UK completely,” Johnson said. “If you don’t have Sky Sports, you absolutely have nothing whatsoever.”

But technology and social media are making the sport more accessible than it’s ever been. According to Swanson, 24 million unique viewers from the United Kingdom saw some NFL content on television last year, a 50 percent increase from the previous year, which had 16 million viewers.

Matt Sheppard admits his two younger brothers are more avid social media users than he is, but he appreciates the NFL attempting to make the American game more accessible for UK fans.

“It’s a lot easier than it was growing up trying to follow this sport,” Matt said.

And now he can’t get enough. The interest even has led to him watching college football on ESPN.

“Football is football,” Matt said. “I have no stake in other teams. Sometimes you just want to watch a game of football.”

Jill Beckman is a student in the John Curley Center for Sports Journalism at Penn State.