The top sports business stories of 2017
“The only certainty is that [Disney] has said, ‘Stop spending money like a drunken sailor. We need to figure this out, we’re losing households and by the way, you better start saving up for 2020 when some of these rights come up.’”
|Anthem protests at NFL games elicited response from all corners, including from fans in the stadium.
It was the most tumultuous year in recent memory for the NFL. In March, owners voted 31-1 to approve the Raiders’ move to Las Vegas beginning with the 2020 season. Only Miami Dolphins owner Stephen Ross dissented, citing concern over the pace of relocations. The vote came three months after the Chargers opted to move to Los Angeles after repeated failed attempts to get a new stadium built in San Diego. The team is playing the first of two seasons at StubHub Center before moving in with the Los Angeles Rams to a new stadium under construction in Inglewood. As the Chargers search for a following in Los Angeles, observers wonder how they’ll fare when they have 70,000 seats to sell.
Before the regular season, the league office faced a new crisis each month. In August, Commissioner Roger Goodell suspended Dallas running back Ezekiel Elliott six games for using physical force against a former girlfriend. Elliott and the NFL Players Association appealed the suspension. Through three months of appeals to numerous federal courts, which put the suspension on hold or back in place, the suspension was eventually reinstated in November and Elliott gave up his fight. In the meantime, Cowboys owner Jerry Jones’ relationship with Goodell was strained.
In September, President Donald Trump called out players and owners for the continuing protests during the national anthem. In October, it became clear that the trend of falling television ratings would not be reversed. Many observers believed that without the presidential election noise, NFL regular-season viewership would rebound, but that hasn’t happened amid myriad issues. CBS and Fox are down big on Sunday afternoons, while NBC and ESPN are also down in prime time.
In November, as the league’s compensation committee moved closer to a contract extension with Goodell, Jones voiced his dissatisfaction and even threatened to sue the league if the full ownership did not have a voice in approving the terms of the contract. The extension — worth a reported $200 million in performance incentives over five years — was signed on Dec. 8 after compensation committee members consulted with their fellow owners and had consensus approval of the deal.
ESPORTS CONTINUES TO CATCH FIRE
The trickle of new money into esports turned into a flood in 2017 as game makers Riot Games and Activision Blizzard sold permanent spots in their top-tier leagues for eight figures each. Stability was the difference-maker, with investors drawn to promises of long-term revenue sharing and no more relegation-and-promotion. Meanwhile, the flurry of investors shored up the best teams, creating a bigger divide between the elites and the also-rans.
|“The Money Fight” between Mayweather and McGregor generated $600 million globally from PPV buys.
It was a resurgent year for big-event boxing, with a pair of bouts that were among the more lucrative in the sport’s history. All-time pay-per-view king Floyd Mayweather returned after a nearly two-year hiatus to defeat UFC superstar Conor McGregor in a crossover aptly known as “The Money Fight.” The Aug. 26 spectacle at T-Mobile Arena generated 4.3 million PPV buys in North America and brought in over $600 million globally, putting it on the cusp of shattering TV sales records set by Mayweather and Manny Pacquiao in 2015. The fight also generated the second-largest gate ever, at $54.4 million. Three weeks later in the same building, Saul “Canelo” Alvarez and Gennady “GGG” Golovkin delivered the third-largest gate ever, at $27.1 million. That fight delivered more than $100 million in PPV revenue from 1.3 million buys.
IOC’S DECISIVE MOVES
When 2017 started, the Olympics faced two very different dilemmas, both with the potential to alter the movement for generations. In one corner, the International Olympic Committee seemed faced with an impossible choice between Los Angeles and Paris, forced to spurn one of the world’s few remaining willing, competent Olympic hosts. Also, there was incontrovertible evidence of a massive Russian doping conspiracy — leaving the IOC with little choice other than to deal harshly with a major member country. In both situations, the IOC found a solution that pleased more people than expected. It chose both L.A. and Paris to host, and then banned the Russian team but left the door open for individual athletes who can prove they’re clean.
|Carla Williams at Virginia was one of nine women hired in 2017 as AD at Division I schools.
Carla Williams was named athletic director of the University of Virginia in October, becoming the first African-American woman to hold such a position among the power five conferences and only the sixth woman overall. Williams’ hiring capped off a year that saw nine women hired as AD at Division I schools, bringing the total to 38 out of 351 schools. Other women hired at D-I schools in 2017 were: Samantha Huge at William & Mary; Heather Lyke, Pitt; Desiree Reed-Francois, UNLV; Marie Tuite, San Jose State; Donna Woodruff, Loyola Maryland; Mary Ellen Gillespie, Hartford; Lisa Campos, UT San Antonio; and Debbie Corum, Southern Utah.
AMARRIAGE OF COLLEGE MARKETERS
IMG College and Learfield agreed to merge in the most dramatic consolidation of the fragmented collegiate industry. If approved by the Justice Department, the merger would bring together multimedia rights to 200 schools under one banner for the first time, creating an enterprise worth $2 billion. Learfield President and CEO Greg Brown would run the merged business, which would be a 50-50 split between the two companies.
|A botched football coach search led to an early exit for Athletic Director John Currie at Tennessee.
AROCKY END AT TENNESSEE
The University of Tennessee’s disastrous search was a case study on how not to find a football coach. In its trail it left Athletic Director John Currie out of a job and Greg Schiano out of a head coaching position, while Phillip Fulmer usurped control of the department in a scene straight out of “Game of Thrones.”
PROBE EXPOSES COLLEGE BASKETBALL CORRUPTION
A nearly three-year FBI investigation resulted in bribery, money laundering and fraud indictments of assistant college basketball coaches, Adidas representatives and others associated with agents, financial advisers and youth basketball leagues. The scandal also led to the firing of Louisville coach Rick Pitino and AD Tom Jurich. The charges allege that money from Adidas was funneled to top recruits, with financial planners and agents acting as middle men. The money, according to the indictments, was given to recruits and their families with the understanding that those recruits would attend specific schools.
|The Astros’ commitment to building their roster paid off with a World Series win.
ASTROS WIN FIRST WORLD SERIES
The Houston Astros’ dedication to general manager Jeff Luhnow’s analytics-driven, long-term plan delivered in a big way as the franchise won its first World Series title in its 56-year history by defeating the Los Angeles Dodgers in seven games. The title was especially impressive considering the three consecutive 100-loss seasons the team suffered through from 2011 through 2013. The Astros roster featured a blend of home-grown talent and free agent additions, including pitcher Justin Verlander, who joined the team just seconds before this year’s trade deadline.
Falling subscriber numbers and rising rights fees caused ESPN to have two rounds of layoffs in seven months — one in April and one in November. The cuts eliminated more than 250 jobs and affected nearly every department — on-air reporters, analysts and hosts, studio production, digital content and technology. The public pink slips have cast ESPN as the poster child for traditional media companies trying to figure out how to maneuver in the digital future.
Nineteen NBA teams have jersey patch sponsorships, with the Golden State Warriors’ deal with Rakuten pulling in a reported $20 million annually over the three-year term. The deals represented perfect matches between teams and sponsors — Orlando Magic and Walt Disney World; New Orleans Pelicans and Zatarain’s — as well as high-tech companies looking for higher profiles (Heat-Ultimate Software, Jazz-Qualtrics, Knicks-Squarespace; Nets-Infor) and well-known sponsors deepening their relationships (76ers-StubHub; Bucks-Harley-Davidson; Cavaliers-Goodyear; Celtics-GE).
|U.S. Soccer President Sunil Gulati chose not to run for re-election after the U.S. men failed to qualify for the World Cup.
After the U.S. men’s team failed in October to qualify for the World Cup for the first time since 1986, Sunil Gulati announced he would not seek re-election when his term as president of U.S. Soccer ends next year. Gulati oversaw huge growth in the sport in the U.S. during his 12 years leading the sport’s national governing body, but calls for his resignation came immediately after the men’s loss to Trinidad and Tobago, which also led to coach Bruce Arena’s departure. At press time, as many as nine people had expressed interest in the post, including Gulati’s vice president, Carlos Cordeiro; Soccer United Marketing President Kathy Carter; and former U.S. women’s goaltender Hope Solo.
FANATICS ON A ROLL
Fanatics, America’s biggest online sports retailer, continued its upward trajectory in 2017. Joining Major League Soccer, Major League Baseball and the NFL Players Association, the NFL purchased a 3 percent stake in Fanatics, which valued the company at $3.19 billion. Fanatics bought VF’s Licensed Sports Group for $225 million and created a college division with the acquisition of Fermata Partners. In September, it closed on a $1 billion funding round led by SoftBank, allowing for international expansion.
WARRIORS SET GOLD STANDARD
On the heels of their second NBA title in three years, the Golden State Warriors are reveling in the victor’s spoils. The team’s jersey patch deal with Rakuten hit pay dirt, and courtside lounge suites at the Warriors’ new $1 billion Chase Center in San Francisco, set to open in 2019, are priced at a stunning $2.25 million a year. The team also announced a membership plan unique to sports that requires season-ticket buyers to pay a one-time fee that will enable them to buy their seats for 30 years, after which the team would repay the fee. Warriors President and COO Rick Welts said half of the expected 11,000 to 12,000 season-ticket memberships would be priced under $15,000, and the other half much higher.