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Volume 21 No. 17

Opinion

A sampling of the most important and impactful stories through the first three months of 2018, from one person’s point of view.

A TROUBLING END AND OPTIMISTIC START AT ESPN: No story captured the attention of the sports industry more than John Skipper’s sudden departure from ESPN amid revelations of cocaine addiction and an extortion attempt. Skipper’s agonizingly honest interview in The Hollywood Reporter is still a main topic of industry conversations weeks after it published. It took Bob Iger 77 days to find Skipper’s replacement, 48-year-old Jimmy Pitaro, who hails from Disney’s headquarters in Burbank, not Bristol. Pitaro has a full plate, including repairing a fractured relationship with the NFL, overseeing a totally revamped “Monday Night Football” booth and spearheading a much-publicized, critical launch of ESPN+.

THE XFL ADDS TO THE RUSH OF FOOTBALL STARTUPS: Vince McMahon promised a wholesome, family-friendly experience and a political-free zone when he announced plans to personally fund a relaunched XFL that will kick off in 2020. Two months later, Charlie Ebersol detailed plans for the Alliance of American Football to launch next February, along with a deal with CBS Sports. Both leagues will play around the same time and seem to target the same players — those who didn’t make the NFL. Those leagues join the Pacific Pro Football League, which is scheduled to launch next summer, in cluttering the American sports landscape with startups that will test America’s unquenchable thirst for all things football.

A NEW MODEL FOR PLAYERS: With unrest brewing over just how aggressive the NCAA will be in reforming college basketball, one story that shouldn’t be overlooked was the decision by McDonald’s All-American and Syracuse commit Darius Bazley to bypass college and go directly to the pros by signing with the NBA G League. Bazley is the first player to choose the NBA’s developmental league directly out of high school, looking to make money and play in an NBA-type of system. This could be the model others follow, not just in basketball, but for other sports and startup leagues, especially the football leagues detailed above.

THE NFL’S UNPREDICTABLE OFFSEASON: The NFL ended a troubled season on a high after a memorable Super Bowl filled with intrigue and drama — and it wasn’t just around the game! During Super Bowl week, the league announced Fox’s bold five-year deal to take “Thursday Night Football” away from NBC and CBS for a whopping $650 million a year. Later, it signed a lucrative sponsorship deal with Pizza Hut, proving again the power of the NFL as a commercial partner. Owners wanted a leaner league office, and with an exodus of Tod Leiweke, Dawn Hudson and Joe Lockhart, as well as others who took buyouts, the league office has a different feel with far less institutional knowledge. But it’s too early to know what the result will be in terms of league policy and operation. The big issues remain the sale of the Carolina Panthers and, most importantly, a resolution on how to handle player protests during the national anthem.

MLB’s WINTER OF DISCONTENT: Baseball’s depressed free-agent market over the offseason portend major labor issues between players and management. Here’s one takeaway: Many teams, especially some notable big-market clubs, are spending less on payroll than a year ago; veteran free agents are understandably discouraged to have not found the same market for their services as players a few years earlier did, and players and agents are livid at their players association for agreeing to the current collective-bargaining agreement. I’d withhold final judgment until I see how the market responds to next year’s killer class of free agents that includes Bryce Harper, Manny Machado and Clayton Kershaw. If teams don’t spend on that talent, expect major changes at the players association and a nasty labor stalemate when the current CBA expires in 2021.

#METOO IN SPORTS: The sports industry continues to be rocked by workplace misconduct issues. From executive changes amid reports of a boys-club atmosphere at Nike, to a massive culture overhaul at the Dallas Mavericks to changes in sports media (NFL Network/ESPN), culture in the workplace is being analyzed and emphasized more than ever. And the issues are far from over.

THE NASSAR SCANDAL: A slow-footed response to sex-abuse claims against doctor Larry Nassar put escalating pressure on several institutions and executives. After Nassar’s January sentencing, the scandal forced the resignation of veteran leaders at the college level (Michigan State AD Mark Hollis, MSU President Lou Anna Simon) and the Olympic movement (the entire USA Gymnastics board and USOC CEO Scott Blackmun). But that’s just the start. This tragic story will lead to potentially major bureaucratic reforms at both the collegiate and Olympic level as private and government investigators continue to assess what went wrong.

ENDEAVOR BUYS NEULION AND MAKES A STATEMENT: This may surprise some, but Endeavor’s acquisition of NeuLion is significant for a number of reasons. One, it instantly turbocharges Endeavor’s ambitious digital plans by giving it a fully developed direct-to-consumer platform that it can program with its bold concepts. Two, it also adds a major new player to the competitive marketplace for streaming rights, which also includes Disney’s BamTech, NBC’s Playmaker, Turner’s iStreamPlanet, Deltatre, Perform and ViewLift. This is a hot market; the question is if there is enough business for each of them.

THE RISE OF CARLOS CORDEIRO: The election to succeed Sunil Gulati as U.S. Soccer president was surprisingly nasty and combative, showing substantial unrest within the wide soccer community. In the end, the body went with who they knew, as U.S. Soccer VP Carlos Cordeiro bested longtime executive Kathy Carter, who couldn’t win over the voting bloc of the athletes council or local soccer organizers. It’s too early to determine any clear trends, but look for a more bottom-up leadership from Cordeiro than his predecessor. Also, keep an eye on Morocco, which has gained significant ground on the United Bid (Mexico, U.S., Canada) to land the 2026 World Cup. That vote in June is huge, and it’s not hyperbole to suggest it could change the future of soccer in the U.S. if it lands the mega-global event or, on a negative, if it loses out to Morocco.

THE LEGACY OF PYEONGCHANG: It feels terrible to write this, but it really felt like this year’s Games just came and went, and I’m not sure why. These Winter Olympics were the least-watched Games of all time on television, but the story lines coming out of South Korea could have been worse. To the credit of NBC, the Olympic movement and its fans, interest in the Games proved to be resilient despite a mediocre performance from Team USA, no NHL, a lack of star power and a tough time zone. But stories such as Chloe Kim and the U.S. women’s hockey team kept the Olympic flame burning.

OTHER STORIES THAT CAUGHT MY EYE: Another impressive launch by an MLS club — this time LAFC. … The aggressiveness of the Baltimore Orioles and John Angelos in implementing a dramatic program to jump-start attendance by young fans at Camden Yards, instilling a policy that allows kids 9 and under to attend for free. … How Tiger Woods’ return dramatically juiced interest and business around golf. … The Indy 500 going to NBC Sports — the network gets the signature American race, which still has pop culture cachet, while IndyCar gets the partner it is comfortable with and believes will help with scheduling consistency. … Data integrity in the wake of Facebook’s issues and how that affects user privacy going forward. … Anheuser-Busch InBev putting performance clauses and standards in future marketing partnerships with properties. 

The were plenty of other important stories — and we didn’t even mention the U.S. Supreme Court’s pending decision on gambling! The business doesn’t stop, so expect the rest of 2018 to be even more dynamic.

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

Chris McCleary

The Olympic and Paralympic Games are an impressive worldwide endeavor. They are a display of human strength and performance at its pinnacle. They inspire, empower, motivate and instill national pride at the highest degree.

For the United States, participation alone has never been the objective of the Games. As characterized by U.S. short-track speedskater and eight-time medalist Apolo Ohno, “the privilege of representing your country in worldwide competition is profound, but to win for your country … to win is epic. Standing on the medal podium and hearing your anthem play is an experience that can’t be put into words.”

Joel Feldman

Few other countries enjoy our level of performance in both the Summer and Winter Games with such regularity. This has not always been the case, however. The U.S.’s Olympic history is actually quite complex, and its rise toward the top of the medal table was powerfully affected by a piece of federal legislation that passed in 1978. The Ted Stevens Olympic and Amateur Sports Act has had a prolific impact on our athletes’ ability to compete and win at the highest levels.

Incredibly, the United States is one of the only countries whose Olympic program isn’t government funded. Most of the world’s national Olympic committees get their funding directly from national governments, guaranteeing a financial base to attract, train and support athletes. So despite a large talent pool, the U.S. encountered many obstacles on its way to Olympic excellence. In the mid-1970s, the President’s Commission on Olympic Sports assembled an extensive report on why our athletes, particularly in mid- and low-profile sports, were not competing as well as other countries. The report stated, “Against athletes from nations for whom Olympic medals are as precious as moon rocks, U.S. competitors seem to have steadily diminishing chances of success.”  

The commission and its report led to the Ted Stevens Act, championed by Alaska Senator Ted Stevens and signed into effect by President Jimmy Carter in 1978. The act includes a number of important elements, but one of the most important areas this legislation sought to address was an organized and sustainable basis for securing funding to support America’s elite athletes.

Stevens

The commission noted “the system for allowing [our finest athletes] to develop is disorganized and woefully underfunded,” but that “the well-spring of public support for our OIympic athletes and our Olympic team … can be tapped without reliance upon federal funding and the federal strings which would surely follow.” The commission’s suggestion to seek public funding led to a robust sponsorship program, and today the U.S. Olympic Committee harnesses the power of the Olympic and Team USA brands to operate and grow these programs successfully. These funds are used in three primary ways. First, the funds support America’s athletes with direct athlete funding, financial support and technology support. Second, the funds support the national governing bodies (NGBs), which facilitate athlete growth and development. And third, the funds support athlete training, medicine, nutrition, education and safety programs that benefit elite athletes across the country. 

“I’m living proof that the USOC’s ability to generate revenue and direct those funds to athlete support is absolutely critical to the success of elite athletes across the Olympic and Paralympic sport spectrum,” says Steve Mesler, Olympic bobsled gold medalist and CEO of the nonprofit education organization Classroom Champions, who also serves as a member of the USOC board of directors. “My ability to pursue my goals in bobsled flatly would not have been possible without this system, especially given the importance of innovation and technology in my sport.”

Beyond funding, the USOC provides coordination, recognition, dispute resolution and a host of other forms of support to more than 50 NGBs and related sport organizations across the country, allowing these independent, nonprofit entities to train, support and prepare their athletes to join Team USA.

Team USA earned 36 total medals at the Pyeongchang Paralympic Games, topping the charts.
Photo: getty images

“The USOC has traveled light years in its governance and ability to properly lead the U.S. Olympic and Paralympic movement since my own days as an Olympic-level athlete,” says bronze medal-winning rower Anita De Frantz, whose remarkable Olympic career has gone on to include International Olympic Committee membership and vice presidency, as well as service as a member of the USOC board of directors. “I’m proud to have been a part of and a witness to this progress, and so much of it all started with the Ted Stevens Act’s bold and innovative approach. Sen. Stevens’ leadership was instrumental for the USOC’s current success.”

Where does all of this lead? At the most recent Olympic Games in Pyeongchang, Team USA finished fourth in overall medal count out of more than 90 countries competing, while at the Pyeongchang Paralympic Games, Team USA topped the medal table with American athletes earning a historic 36 medals. At the prior Olympics in Rio de Janeiro, the U.S. topped the medal table in every category, leading all nations with 121 medals. Truly great results for a nation and its elite athletes.

So, as we look forward to the Olympic and Paralympic Games and future years of building on the United States’ enviable position as an elite performer on the global sporting scene and to supporting America’s athletes as they strive to achieve their dreams, it’s worthwhile to remember the key building blocks in our progress so far, and that the 40-year-old Ted Stevens Olympic and Amateur Sports Act remains an all-important part of that foundation.

Chris McCleary is general counsel of the United States Olympic Committee. Joel Feldman is a sports and entertainment trademark attorney at Greenberg Traurig LLP.

There is nothing minor about MiLB.

The name is a complete misnomer. How can something be called minor if:
• It draws nearly 42 million fans annually (with a goal of 50 million by 2026).
• Is the second-most-attended pro sports league in North America after MLB.
Had more than 14 million unique attendees in 2017 (second largest among the major U.S. professional sport leagues). 
Has 160 “franchisees” in 43 states — 126 of which are located in the top 100 U.S. DMAs.
Can be accessed (attending games) by more than 76 percent of the U.S. population.
Owns the longest sellout streak in all U.S. professional sports — 18 consecutive years (not games) through 2017: the Dayton Dragons.
Was recognized by SportsBusiness Journal as the league with the most fan-friendly experience (2014-17).
Has a growing base of national corporate partners.

While those accomplishments might not be termed major in our sports vernacular, they are in marketing terms along with words like important, unprecedented and impressive. Why is it so successful? As a marketer, my interpretation is that it is so successful because it is the only professional sport in North America where team performance and player performance/roster composition is not a key ingredient to how they define success. Success is solely based upon the quality of the experience. Success isn’t winning on the field in MiLB — success is fan satisfaction, producing a memory-making experience and capturing everything outside the white lines.

When I think of MiLB, I think of the McDonald’s tag line that was a core message during its 1990 ad campaign “Back to the Basics.” That tag line was “Food, Folks and Fun” and is really at the core of the MiLB experience.

MiLB is really about everything that happens off the field. Fans are not concerned with pace of play, free agency and cost of attendance. They are focused on enjoying themselves with the other people with whom they are attending — and consuming the baseball game in a way that best fits that group. That might mean watching while floating in a Lazy River in Frisco (see last month’s SBJ Sutton Impact), dinner with a mascot, stopping by after work for a few innings and a few beers with co-workers, attending a pregame clinic with a Little League team, or simply an affordable evening of communal entertainment and bonding. The point is, as cost is not an impediment, and the experience is the driver, it is up to the fan to create what is most meaningful for them with the full support of the team hosting your event.

“Our clubs have been industry leaders in authentic fan engagement for generations,” said David Wright, chief marketing and commercial officer for MiLB. “As we look forward and focus on next-gen fandom, we are keenly focused on how we best leverage technology, content and strategic partnerships to drive year-round engagement.”

As MiLB teams continue to innovate and enhance the fan experience, it has drawn the interest from dynamic owners with successful pedigrees across myriad industries (Procter & Gamble, Blackstone, Chiquita, other Fortune 500 companies) to invest and make a significant impact on the business. In the 2017 SBJ Reader Survey, MiLB was ranked as the second-wisest investment five years from now, speaking to the exponential growth for the league and teams. The influx of influential, innovative ownership continues to elevate the fan experience throughout the country. One prime example of a leading fan-first approach can be found in Dayton, Ohio. 

Year after year, and without a championship title, the Dayton Dragons are solving the mysteries of marketing to families and fans.
Photo: getty images

Dayton is 53 miles from Cincinnati, home of the Reds. In other words, Dayton is part of the Reds’ target market, and the Dragons are the Class A minor league affiliate of the Reds. The Dragons, as previously documented, have sold out every game for 18 consecutive years. During that time they have never won a Class A championship, and in fact have had two years where they lost 90 games in a 140-game season. While they have had players who are highly recognizable now in the major leagues — Joey Votto, Billy Hamilton, Justin Turner and Didi Gregorius — they played in Dayton very early in their careers before they had any name recognition. What is the draw?

According to Dragons President Rob Murphy, “The Dragons sell entertainment much more than they sell baseball. They sell a family atmosphere and a night out, and while every minor league team likely has that as a plan, in Dayton it has worked and keeps working. Until people come here and experience it, they don’t understand it. It’s why I always hear people saying, ‘My wife hates sports, but she loves coming to Dragons games.’ People drive home thinking, ‘I’m not sure whether we won 3-2 or lost 3-2, but I know we had a good time.’”

Dragons mascot Heater is one part of Dayton’s game-day recipe at Fifth Third Field.
Photo: getty images

So the secret sauce is a combination of value/worth, innovation, accessibility (MiLB players are excited when asked for autographs, pose for a selfie or volunteer in the community), fireworks, giveaways, mascots, creative concessions items and theme nights. Why is all of this important? Because as the late Bill Veeck once said: “If I was dependent upon baseball fans to generate attendance, I would be out of business by Memorial Day.”

MiLB has created an entertainment opportunity where the type of experience provided is dictated and in large part controlled by the fan. In 2018 this might be viewed as customization because what every fan experiences is completely subjective and all they leave the ballpark with is a memory. So, the more they can experience, the better the memory and the likelihood of a return visit. And isn’t that the true key to a successful brick-and-mortar business in 2018?

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.