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Volume 21 No. 26

World Congress of Sports

Photo: tony florez photography

Every sector of the sports business — from media to facilities to sponsors — is facing more competitive threats today than they’ve seen in decades. That was the dominant theme to emerge from last week’s CAA World Congress of Sports in Los Angeles, where panelists articulated how they’re coping with and exploiting the constant changes in doing business.

 

Disruption truly proved to be the buzzword of the week, whether industry experts were talking about how digital video services were affecting traditional TV networks or how best to make money from legalized gambling.

Pizza Hut’s Zipporah Allen, Bumble’s Alex Williamson
Photo: tony florez photography

Wendell Brooks, the investment chief at Intel, said more venture capital has been invested into the disruption of sports in the last five years than the 70 years prior, putting the sports industry in the midst of perhaps its greatest period of upheaval.

“The pace of disruption is incredible and it’s accelerating,” said Michael Rubin, a co-owner of the NBA Philadelphia 76ers and NHL New Jersey Devils who also founded ecommerce giant Fanatics. “If we’ve had that much disruption in the past five years, we’ll have that much more in the next five.” 

“Disruption — it’s the word of the moment right now,” said Peter White, partner at the firm DLA Piper.

The San Francisco 49ers’ Jed York and Fanatics’ Michael Rubin.
Photo: tony florez photography

“It’s an explosive time,” said Angela Courtin, YouTube’s global head of TV and originals marketing.

Practically every discussion last week was laced with the volatility of the sports business. 

In some cases, like the PGA Tour’s new, edgy marketing campaign, that disruption is invited and intentional as a means of taking business in a new direction. Under Commissioner Jay Monahan’s leadership, the tour is trying new things, like walk-up songs at the first tee and more liberal use of phones on the course (see one-on-one interview, above).

CAA’s Michelle Kydd Lee
Photo: tony florez photography

In other cases, technology is driving change. 

Brooks led a discussion with Rubin and Jed York, CEO of the San Francisco 49ers, about the power of disruption — both positive and negative. York and Rubin shared their vision for five to 10 years from now, which included most live game broadcasts airing on some form of digital streaming platform instead of, or in addition to, traditional TV.

“If we look five to 10 years down the road, I think the digital companies will be the primary distributors for most sports content,” Rubin said. “A lot of people don’t agree with that, but I think their ability to deal directly with the fan and better customize experiences for the fan, and do it through such great digital companies, is a massive opportunity. It’s one of the reasons why I’m still bullish on the costs of these franchises.”

The Jacksonville Jaguars’ Tony Khan and Shahid Khan at World Congress
Photo: tony florez photography

One of those digital companies that could be competing for live sports rights is Hulu, whose CEO Randy Freer opened up about those prospects during a one-on-one interview at World Congress.

“The challenge we all have is to innovate on how we distribute those rights to consumers,” said Freer, who was a major buyer of live sports during his 20 years at Fox Sports and believes in live sports as a way to add to Hulu’s 17 million subscribers.

This is serious money. Serious business. And you can’t screw it up just because you want your son involved.
Shahid Khan
Jacksonville Jaguars, on working with his son, Tony

What platforms like Hulu will be able to offer in the future, Freer predicted, is the ability to buy a single Saturday’s worth of college football or a single weekend series or game in Major League Baseball. Any development that adds to the personalization for the fan has the potential to change the method of live sports delivery.

Fox Sports President Eric Shanks at World Congress.
Photo: tony florez photography

“Giving on-demand customers the opportunity to participate in live sports will help us grow subscribers over the long term,” Freer said. 

While Rubin sees digital platforms as the primary form of distribution in the next decade, York said he could see some type of hybrid model.

“You don’t want to completely disrupt your model overnight,” York said. “If you look at it, we [NFL] have the entertainment, the new media companies will have the biggest reach and the current broadcast companies have the expertise to produce these games. There’s going to be some partnership between the three. We all know how it’s going to end, we just don’t know how we’re going to get there.” 

York also urged the NFL to look for disruption opportunities, even when business is good and rights fees are generous.

By the numbers at World Congress


7

Percent of Dallas Cowboys fans who have been inside AT&T Stadium for a Cowboys game, said Dallas’ Charlotte Jones Anderson

50

Percent of every Jacksonville Jaguars decision that is based on analytics, according to Jacksonville’s Tony Khan

$1.5 billion 

Amount of venture capital invested in sports-related businesses in 2017, according to Wendell Brooks of Intel Capital

2

Percent of total gaming revenue, including slots and all table games, that’s bet on sports, said Sara Slane of the American Gaming Association

4.6

Handicap of PGA Tour Commissioner Jay Monahan

18

Percent of attendees at English soccer matches who place a bet in-venue, according to Scott Secord of Gaming Nation

207 

Countries in which Coca-Cola operates, said Andrew Davis, the company’s global chief diversity and inclusion officer

— Compiled by Michael Smith

“That’s the blessing and curse of the NFL,” he said. “We get so much revenue from traditional broadcasts, we’re not incentivized to be disruptive. I’d prefer to be more disruptive — that might mean giving up some revenue and EBITDA today to build your business of the future. … But there’s more money to be made if you’re willing to take that leap.”

There’s almost certainly disruption coming on the issue of legalized gambling, another topic that was pervasive throughout the two-day conference.

“Casinos for many years have led the way, in terms of data and analytics,” said IBM’s Shannon Miller on a panel about forecasting the future. “If you want something that’s going to pull the sports world forward, gambling will accelerate it faster than anything we’ve talked about.”

“You can’t have the conversation about fan engagement without at least talking about legal gaming,” said Dan Beckerman, CEO at AEG. “There’s a relationship between the two, and I think the leagues and the teams have a decision to make about what role they want to play in that ecosystem.”

The forecasting didn’t end there. Esports predictably garnered its share of love as an activity to watch, but panelists debated whether fans will pay to attend an esports competition. And several industry experts went deep into the in-venue experience for fans, wondering what the next evolution of that will be.

No matter the topic, that buzzword kept popping up.

“I think you have to look at the fan experiences separately, inside the stadium and outside the stadium, and figure out how to disrupt each one to make them better,” Rubin said. “I think it’s OK to keep innovating to make the experience outside the stadium better. A lot of people worry that’s going to keep fans from coming to the game, but it also puts pressure on us to make the in-stadium experience better. If one experience gets better, it pushes the other experience to get better. You can never sit still or you become antiquated.”

A lot of people have gotten scared straight.
Larry Scott
Commissioner, Pac-12, on the FBI investigation into college basketball

Jay Monahan sometimes signs his emails “Keep attacking,” so it’s no surprise that the PGA Tour commissioner is guiding golf into a new era where golfers will approach the first tee with walk-up music and fans don’t have to turn off their phones on the course.

 

Monahan, who succeeded Tim Finchem as commissioner 16 months ago, already has his fingerprints all over the tour, as evidenced by a new brand campaign intended to replace the long-running “These guys are good” and appeal to a younger audience.

Jay Monahan has brought progressive ideas to the PGA Tour in 16 months as commissioner.
Photo: tony florez photography

The 46-year-old Boston native and former Fenway Sports Group executive talked about this edgier, more modern tour last week at the CAA World Congress of Sports, making one of his first major appearances in front of the broader sports industry since taking over for Finchem. In an interview with SportsBusiness Journal’s Abe Madkour, Monahan addressed a number of key topics facing golf, including repositioning the sport’s marketing, its schedule, and learning from his predecessor.

What follows are excerpts from that conversation in Los Angeles at the JW Marriott in L.A. Live.

• On the PGA Tour’s new brand marketing campaign, “Live Under Par”: We’re a new tour. We’re a modern tour. We feel like the energy of “Live Under Par” takes the sport to another level. It celebrates the interaction our players have with fans. In today’s day and age, it gave us an opportunity to pivot and move in a different direction. … We don’t have to stage a photo shoot for this. It’s real. It’s authentic. It’s what our players are doing, day in and day out. And we’re excited to see it develop naturally.

• On the new master schedule planned for 2019 that will shift the PGA Championship to May from its traditional August date and the Players Championship from May to March: Back in 2015, we began this process and we tried to look at the overall schedule through the eyes of the fan, and asked what is the optimal schedule? And part of what we’re looking to do is end our FedEx Cup playoffs before the start of college and pro football, and really own the month of August. This gives us big events every month from March through July, and then in August a run of playoffs we think will now have more significance.

On the presence of golf in the Olympics, which saw numerous player defections for the 2016 Rio Games but still generated strong TV viewership in several key territories: When we talked to the IOC and talked to our partners, it was seen as a resounding success. And looking ahead, I think golf’s contributions to the Olympics are going to be significant.

• On lessons taken from Finchem: I learned so much from him. But I will say, without him saying it, you watch him operate and it’s never about him. It’s always about the players. And the glory should always be focused on the players. And he has such a deep passion for the history of the game.

 On his own golf game: My current handicap index is 4.6. But it’s trending higher. One of the things I’ve been fortunate to do over the last 16 months is play in pro-ams with our sponsors, and I haven’t won. It’s hard to win a pro-am, just like it’s hard to win on the tour.

The sports community last week saw just how far the #MeToo and Time’s Up movements have entered into its businesses, as conversations about gender and racial diversity peppered nearly every presentation at the CAA World Congress of Sports in Los Angeles.

 

It’s not unusual for sports business conferences to touch on these issues — for years executives have promised that they were focused on improving diversity in their workplaces, only to turn around and make the same promises the following year. But conversations on diversity and inclusion seemed to have more of an urgency at last week’s event due to several instances of sexual harassment that have affected sports companies such as ESPN, the Dallas Mavericks, Major League Baseball and NFL Network.

“We focus on a small number of people who do these bad things, but all of us can do something in the places we’re in,” said CAA agent Christy Haubegger, one of the architects behind the Time’s Up campaign. “A big part of inclusion is not saying we need a woman of color or a woman at the table. It’s about putting the right people at the table. I never feel like I’m at the table because a box has been checked.”

CAA’s Lisa Joseph Metelus, Michelle Kydd Lee and Christy Haubegger led the Time’s Up discussion.
Photo: tony florez photography

The focus on diversity started with the conference’s first panel, where established executives such as the Dallas Cowboys’ Charlotte Jones Anderson, the NBA’s Amy Brooks and CBS Sports Network’s Amy Trask described what they say is a bolder focus on establishing more diverse workforces.

“It started a conversation,” Anderson said. “We need to make sure we protect that, so that men in the workplace are comfortable hiring women and not push them the other direction because now [they] don’t want to deal with them.”

The theme included more than just gender diversity and expanded well beyond the #MeToo movement. John Wooten, chairman of the Fritz Pollard Alliance, was honored with a Champions award, largely for his role in implementing the Rooney Rule, which mandates that NFL teams interview at least one minority candidate for every open position.

It’s not always as easy as it sounds, even if it makes business sense. Coca-Cola’s Andrew Davis spoke about some of the difficulties companies have in achieving workplace diversity. He outlined the business case for why workplace diversity is a good idea, citing Coke as a company that operates in 207 countries. Coke tries to assemble workforces that mirror those markets.

“We better be diverse,” he said. “We’re a 132-year-old company trying to reinvent ourselves. … This truly is the next evolution for the business case for diversity and inclusion. With this tipping point in our country, you have to have a new mandate, a new normal with strategy and culture if you want to survive and grow.”

Not surprisingly, panelists pointed to the hiring process as the most important place for establishing more diverse workplaces.

“We can decide on who’s hired, who gets to come to the meeting. Use your power in the things you can influence,” said CAA Sports executive Lisa Joseph Metelus.“Each of us has a role to play, whether having a brunch or in hiring decisions.”

The NBA’s Brooks referenced the power of sports to help women, in particular, succeed in business. She referenced a statistic that 80 percent of the female executives in the Fortune 500 played sports.

“It teaches you how to overcome gender barriers in addition to teamwork and grit and everything else,” she said.

Trask agreed. She said that she gives the same advice to young girls that she gives to young boys: Do your job and work as hard as you can.

“I didn’t spend one moment during my career thinking about my gender,” she said. “It never made sense to me to walk into a meeting or a boardroom thinking about my gender. My expectation is that no one else in the meeting is thinking about my gender, either.”

Photo: all photos by tony florez photography
Jared Smith

“We see a massive youth movement on the music side of our business that doesn’t exist on the sports side.”

Jared Smith, president, Ticketmaster

Charlotte Jones Anderson

“If everybody goes out and expresses their individual opinion all at one time, it’s chaos.”

Charlotte Jones Anderson, chief brand officer, Dallas Cowboys, on player protests

Randy Freer

“Ultimately, over time, sports rights will continue to prove their value. The challenge we all have is to innovate on how we distribute those rights to consumers.”

Randy Freer, CEO, Hulu

Ben Sutton

“Either sports will have to reinvent themselves or game-day experiences will have to be reinvented. Millennials aren’t interested.”

Ben Sutton, chairman, Teall Capital

More images from World Congress

 

It was a night of celebration as more than 400 gathered to honor the 2018 class of Forty Under 40 on April 18 at the JW Marriott Los Angeles, L.A. Live. Sponsors for the awards gala were Turnkey and Winstead Attorneys.                    

ALL PHOTOS BY TONY FLOREZ PHOTOGRAPHY
 

Forty Under 40 slide show

In this week’s First Look podcast, SBJ’s Bill King, Michael Smith and SBD’s Austin Karp discuss this week’s edition, including an in-depth discussion on World Congress 2018.