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Volume 26 No. 202
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SBJ Unpacks: Coronavirus -- NFL Planning For Full Season

The NFL is vigorously moving forward with alternate plans for the April 23-25 draft, providing fans with something to look forward to in the absence of any actual live sporting events.

SBJ’s Ben Fischer has a report on how the NFL intends to structure the picks so that they can be held without gathering too many people in one spot. Large gatherings might not be as commonplace after the pandemic, based on a survey cited in tonight’s newsletter that shows 44% of fans will be less likely to go to a game.

By the time the draft actually arrives, more than three weeks will have passed and we’ll know if the shelter-at-home restrictions are helping to successfully flatten the coronavirus curve.

The draft and its lead-up might serve as a diversion, but it’s the last thing on the mind of L.A. Mayor Eric Garcetti, who said today that his city is on track to be the next New York. That’s not a distinction any Southern Californian wants in this pandemic.

March is finally over. It was a long month. Here’s to better days in April, and the next mock draft.

-- Michael Smith

  

 

NFL "PLANNING" FOR NORMAL SEASON BASED ON MEDICAL INPUT

  • The NFL’s optimistic view of its regular season is based on input from medical experts watching virus trends overseas and domestically, SBJ’s Ben Fischer reports. Today, word came from China that a return to sports normalcy is further off than hoped, but senior NFL execs said they are planning for a normal season starting Sept. 10 -- with fans in the stadiums, international games and no postponements.

  • When asked why the league is optimistic, NFL Exec VP & General Counsel Jeff Pash said: "What the doctors are looking at are models that address the effectiveness of different kinds of interventions, on how the curve has trended down and tailed off in other countries, and what they believe will be the result based on the modeling that’s done in this country.” In short, they believe the current U.S. efforts to stop the virus by closing businesses and banning gatherings will work quickly enough to allow for the NFL to return -- and for the crucial new stadiums in L.A. and Las Vegas to be completed. Owners heard a presentation from NFL Chief Medical Officer Dr. Allen Sills today.

  • League execs gave no deadline for having to decide about the regular season. In the meantime, the NFL is considering plans for virtual offseason programs for players, and has delayed the schedule release from mid-April to early May, though that was already in the works, as SBJ reported in February. “Our expectation is fully directed at playing a full season and starting on schedule. ... Just as we did in 2019,” said Pash. “Am I certain? I’m not certain I’ll be here tomorrow, but I’m planning on it. That’s what we talked about."

 

FANATICS HAS NO PLANS TO LAY OFF ANY WORKERS

  • At a time when layoffs are roiling an already beleaguered sports licensing industry, Fanatics, by far the biggest force in that market, says it has no plans to furlough any of its 2,500 full-time office employees, including corporate warehouses, manufacturing and fulfillment centers, SBJ's Terry Lefton reports. Large sports-licensing concerns including Wincraft, New Era, '47 Brand, Outerstuff and Lids have furloughed hundreds of employees.

  • “You’ve got the worst case imaginable, with this double negative of sports completely stopped and retail shut down, so we’re hurting like everyone,” said Fanatics Exec Chair Michael Rubin. “There’s nothing to drive sales. ... We’ve maintained our corporate work force and we don’t plan on make any changes there. We have no plans to furlough any employees in the corporate work force.”

 

SOURCES: DAZN LIKELY NOT SETTING A RIGHTS FEE TREND IN THE U.S.

  • It is not expected that DAZN’s decision to withhold rights fees from leagues that have suspended games will have any immediate repercussions among bigger media companies in the U.S., several sources told SBJ’s John Ourand. Several execs describe negotiations with leagues over contract language around the pandemic as ongoing with all sides trying to reach agreements that benefit everyone.

  • The streaming service has told leagues that it will not pay for suspended games and defer payments for future games until leagues get specific about when seasons will start. DAZN’s move was a surprise. Though it came after some other European broadcasters have said that they would not pay for suspended games, DAZN is the first media company with U.S. ties to make such a move. It’s not known how leagues will react. Some could sue DAZN and demand they adhere to the letter of the contract. Others could work with DAZN in the hopes that it will continue to be a healthy bidder for sports rights when the outbreak settles.

  • In an internal email this morning, DAZN Group CEO Simon Denyer said the streaming company would furlough an unspecified number of employees in the coming weeks. “We committed to do everything we can to survive this crisis and then revive the business later this year,” Denyer wrote. “However, with revenues dropping and investment not available, we can only survive by making some hard decisions. ... If we can implement this plan and if live sport returns later this year, we can revive this business and we can all make DAZN what we want it to be -- the home and future of live sports. However, we will only get there if we survive the next few months.” 

 

 

PAC-12 CONSIDERING PAY REDUCTIONS FOR TOP EXECS

  • Pac-12 Commissioner Larry Scott tells SBJ's Michael Smith that the conference HQ is discussing executive salary adjustments while competition is at a halt. Temporary pay reductions have been more common among corporate and pro league execs than in college sports. The NCAA’s top leadership, including President Mark Emmert, is taking a 20% cut in salary, while others at the VP level will see a 10% reduction. Those cuts are intended to relieve some financial pressure after the NCAA distributed $225 million to its D-I membership, or just 37.5% of the $600 million that was budgeted after March Madness was canceled. Emmert’s salary was listed at $2.1 million in 2017.

  • The Pac-12 is considering temporary pay reductions even though Scott said the conference’s revenue for the 2019-20 school year is secure. On total annual revenue of roughly $500 million, the Pac-12 will take a hit of around 3-5%. Scott: “We've got several ways to mitigate some of that, that we're going to be working on. We'll be talking to our members about business-interruption insurance that we have and what kind of expense savings we can capture. We're fortunate we've got reserves, we've got other cash-flow cushions if we want to use them.” The conference lost about $4 million after ticket refunds were applied to the Pac-12 Basketball Tournament. Scott received $5.3 million in 2017 salary for his role as commissioner and head of the Pac-12 Networks.

  • With the conference’s wholly-owned networks not producing live events and studio shows, it will look for savings. Scott: “We are trying to tell stories, do PSAs that show what student-athletes and coaches are doing in their communities, things like that.” Without spring championships to put on, Scott said: “We're not going to have some of the same operational expenses in the office. We're looking at everything, top to bottom, to mitigate any shortfall our members might see from this year's revenue.”

 

BERNIE MULLIN DISCUSSES WHY ENGAGEMENT WITH FANS REMAINS PARAMOUNT

  • What happens to the sales force at a pro team or college athletic department when the games stop, and there’s no way of knowing when they’ll start again? Does it keep dialing and emailing and texting? Bernie Mullin, founder & chair of the Atlanta-based Aspire Group, points back to the Great Depression, when Kellogg’s rose from the No. 3 breakfast cereal brand to No. 1 because it continued to market when others stopped, as an example of why sales and fund-raising staffs must remain engaged with customers and donors.

  • “There is an amazing opportunity to come through these terribly tough times if you keep on engaging with your fans, but engaging in a different way,” Mullin tells SBJ’s Bill King on the most recent episode of the SBJ Unpacks podcast.

  • Mullin said about one-third of his firm’s 47 clients in college athletics have maintained sales processes as usual during the outbreak, while another third has pushed back renewal deadlines and shifted to maintenance check-ins rather than traditional sales calls. The remainder have stopped communicating with customers entirely, which he called “really scary and frightening.” “None of our kids are going out there pushing sales hard, whether its premium tickets or season tickets ... or donations,” Mullin said. “But they are having the conversations (saying), ‘How are you, how is your family, where are you, what’s going on?' ... “One of our phrases is ‘Fans for Life,’ and that’s how you build fans for life. When tough times come around you show your compassion, concern and appreciation.”

  • For much more from Mullin, including lessons learned enduring a season-long NHL lockout while CEO of the Thrashers and helping teams open their seasons after 9/11 while at the NBA, check out the latest episode of SBJ Unpacks here.

 

NFL DRAFT MOVING FORWARD; TEAMS COULD GET MORE PICK TIME

  • The NFL Draft from April 23-25 will operate with a "hub and spoke” system of remote connections to allow the event to occur under coronavirus mitigation rules, with Commissioner Roger Goodell or other announcers at the center and 32 teams and likely draftees plugged in from home, SBJ’s Ben Fischer reports. Current players, retirees and fans may also join the show from home, but the primary focus will be on guaranteeing the integrity of the core business at hand, said NFL Exec VP/Club Business & League Events Peter O’Reilly.

  • Two league execs -- Chief Medical Officer Dr. Allen Sills and Exec VP/Health & Safety Jeff Miller -- will ensure that all draft activities are compliant with CDC guidelines and social distancing procedures. That means no more than 10 people in any one place, all six feet from each other. Hand-washing rules will be strictly enforced, and nobody who’s sick is allowed. More broadcast details are still being worked out with ESPN and NFL Network.

  • There is at least one substantive change to draft rules under consideration: The competition committee will debate a possible 1-2 minute extension to allow teams to execute trades remotely, Exec VP/Football Operations Troy Vincent said. Also today, the NFL said it is working with officials from Las Vegas and the Raiders to give that city hosting rights to a future draft. Vegas had been slated as the 2020 host before public gatherings were banned. The 2022 event is still without a host, but 2021 has been awarded to Cleveland and 2023 is going to Kansas City.

 

SURVEY: SPORTS FANS MAY NOT FLOCK BACK TO VENUES

  • Nearly half of sports fans surveyed say they are likely to attend fewer events after the pandemic passes, according to Rhode Island-based Performance Research. Those results suggest tough days are ahead for event operators and ticket sellers. Not surprisingly, fans view health safety as a higher concern than years past, SBJ's Karn Dhingra writes.

  • A majority of fans of various sports -- 66% in pro, 68% in college and 64% in Olympics -- believe the move to postpone or cancel games has been “about right.”

  • Performance Research’s survey found that fans expect more of corporate sponsors of sports and live events. Only 30% of fans agreed that sponsors should “conduct business as usual,” while 56% said they expect brands and corporations should to be “socially good.” The survey shows that sports and entertainment properties have an opportunity to take a leadership role in setting new standards for protecting public health, said Performance Research VP Bill Doyle.

      

    NASCAR iRACING VIEWERSHIP JUMPS 47% FROM FIRST RACE

    • Fresh sports content remains hard to come by during the pandemic, and Fox and FS1 took full advantage on Sunday, combining to average 1.34 million viewers for the second NASCAR iRacing telecast. That marks the most-watched esports event yet on linear TV in the U.S., SBJ’s Austin Karp reports. FS1 accounted for 823,000 of those viewers. The telecast from 1:00-2:51pm ET, which was set around Texas Motor Speedway, tops the previous record set by the first NASCAR Pro Invitational Series telecast last weekend by 47%. That telecast averaged 903,000 viewers on FS1 alone around a race from Homestead-Miami Speedway.

    • Some comps on Sunday? In the same window, CBS was airing the 1985 NCAA Basketball Championship (Villanova-Georgetown), which drew 750,000 viewers. NBC was carrying the 2018 Women’s Hockey Gold Medal Game from the PyeongChang Olympics, and that drew 722,000 viewers. Cable news still dominated the window. Fox News averaged 2.47 million viewers from 1:00-3:00pm, while CNN averaged 1.96 million.

    • Looking at some recent sports events prior to the pandemic shutdown in the U.S., the 1.34 million viewers is identical to what NBC drew for the Manchester City-Manchester United match on March 8. The iRacing telecast is just below what FS1 drew for the XFL St. Louis BattleHawks-Houston Roughnecks game on Feb 16 (1.36 million), and above what ESPN drew for a Kentucky-LSU college hoops game on Feb. 18 (1.31 million).

     

    Veteran driver Timmy Hill on Sunday claimed the O'Reilly Auto Parts 125 at a virtual Texas Motor Speedway
    Veteran driver Timmy Hill on Sunday claimed the O'Reilly Auto Parts 125 at a virtual Texas Motor Speedway
    Veteran driver Timmy Hill on Sunday claimed the O'Reilly Auto Parts 125 at a virtual Texas Motor Speedway

     

    DECISION ON WTT SEASON LIKELY DECIDED BY JUNE 15

    • The World TeamTennis season is set to begin July 12, but the league’s annual three-week run is far from a certainty due to the pandemic. WTT CEO Carlos Silva tells SBJ’s Bret McCormick that the league has a deadline for deciding whether to play or not. “Right around June 15 you have to make those final decisions,” Silva said. “That’s probably the drop-dead so we can have everything in place.” Silva said the league’s next status update will most likely be released the first week of May. If WTT does go forward, it should be able to benefit from the Olympics’ postponement. Silva said that WTT Head of Player Operations Matt Elefant has fielded numerous calls during the last week from agents whose players were headed to Tokyo, but now have a gap in their competitive calendars. 

    • WTT’s mostly impermanent stadiums -- which have an average capacity of around 3,000 fans -- lend the nine-team league more flexibility compared to other tennis events. Most WTT venues are rented and built out a week before play begins. The intimate nature has been a strength for the WTT. That begs the question: would the league play without fans? “The fans, the kind of feeling you get on the court, the music, the cheering, all goes into the entire package of what makes World TeamTennis great,” said Silva. “Having said that, I have to look at it. It’s probably down the list quite a ways. Right now the main decision is do we play on July 12 or do we not play on July 12?”

    • League sponsors also need clarity. Barefoot Hard Seltzer and jeweler John Hardy are new this season, while GEICO is among those returning. But the economic reality makes it hard to predict how sponsors’ individual businesses will look by mid-June. “All those sponsors are going to need to kick start their lives and their businesses and live sports is the greatest way to do it,” said Silva.

    • WTT also has some fresh TV content coming this weekend. The league held an all-star exhibition on March 1 that was taped and edited into a one-hour broadcast that will air on CBS on Saturday at 1:30pm ET. The dearth of new sports could mean a boost for WTT ratings. “Our partners at CBS, they need content, everyone needs some fresh content,” said Silva.

     

    TWO TOP COYOTES EXECS DONATING 20% OF SALARIES

    • Two top Coyotes execs -- President of Hockey Operations & GM John Chayka and President & CEO Ahron Cohen -- will each donate 20% of their salaries over the next few months, reports SBJ’s Mark J. Burns. The money will be directed toward supporting the Arizona Coronavirus Relief Fund and other state non-profits. Cohen, an SBJ "Forty Under 40" honoree this year, said that two weeks ago, he and Chayka received a phone call from Gov. Doug Ducey to assist in volunteering at a Phoenix food bank. Cohen said it was an “eye-opening” experience to see both financial and food demand increasing while donations were heading in the opposite direction.

    • The Coyotes execs had a short phone conversation this past Saturday evening around additional ways that they could support local efforts. “It was important to step up as leaders in the sports community in Arizona but also as leaders in the business community to help serve this state," Cohen said. "Quite frankly, we don’t exist as a hockey team if we don’t have the support of our fans here in Arizona. It’s incumbent on us to return the support."

       

      OPENDORSE SEES UPTICK IN ATHLETE USE DURING SPORTS HIATUS

      • Teams across U.S. pro sports have leaned into using social media marketing platform Opendorse as athletes reside more at home during the coronavirus, Founder & CEO Blake Lawrence tells SBJ's Mark J. Burns. Lawrence pointed toward the Sharks in particular as one club whose players -- like Logan CoutureKevin Labanc and Stefan Noesen -- have been issued content directly via Opendorse to post on Twitter. “It’s been cool to see partners leverage the platform to keep players active on social media as a way to keep the fans connected and humanize the athlete-fan relationship,” Lawrence said.

      • A few notable stats that Lawrence shared: in the week before March 12 when the sports world seemed to stop, athletes from various leagues, including the NBAWNBAMLBNASCARNFLNHLMLS and PGA Tour, among others, shared 23,000 tweets. During the following week, that number increased to 30,000 while the number of engagements with athletes’ tweets spiked from 15 million to 23 million.

       

       

      SPEED READS

      • USA Wrestling has announced that the Olympic Trials will be postponed until 2021, SBJ's Chris Smith notes. The event was initially scheduled for April 4-5 on Penn State's campus. Tickets for the event will be rolled over for the 2021 trials, with refunds available by request through June 1.

      • The “NBA 2K Players Tournament” is coming to ESPN airwaves. Kevin Durant and Trae Young headline a group of 16 current players who will compete in a single-elimination tournament on Xbox One. Coverage begins this Friday night, with the eventual semifinals and finals airing on April 11. The eventual winner will select a charity beneficiary to receive a $100,000 donation from 2K Sports, the NBA and NBPA in support of ongoing coronavirus relief efforts.

      • Golf Channel’s Rex Hoggard reports that should next month’s Charles Schwab Challenge take place in Ft. Worth, the PGA Tour field “will be expanded from 120 players to 144.” The plan represents the tour’s effort to “make up for lost playing opportunities” amid the shutdown. Hoggard also cites sources as saying that the tour is “considering expanding field sizes in other events,” and also “plans to play as many opposite-field tournaments as possible” should the season resume.

      • Esports Observer’s Graham Rushton writes the esports industry will “inevitably take a hit from COVID-19 in terms of lost event revenue and momentum, but the medium of live gaming entertainment could emerge from this blackout brighter than ever.” Even once the entertainment industry “goes live again, it will have felt the power of digital, of OTT media, and reaching an audience directly.” 

      • The Colorado Sun’s Jason Blevins reports the ski resort industry is “already slashing capital spending for next year by half as the nation's 460 ski hills in 37 states line up for small business assistance.” This comes a week after the National Ski Areas Association estimated those ski hills “could suffer $2 billion in losses stemming from the shutdown.” Beyond the lost retail, lessons, dining and lift ticket revenue, the industry “typically launches next season’s season pass sales in March and many in the industry fear the pandemic could weaken demand.” 

      • Brooks Running CEO Jim Weber told Footwear News his company has to be “very careful with our brand and our voice right now.” Weber: “Running has become an important part of people’s day because of this environment we’re in. They’re finding us and we’re finding them -- but it’s not a megaphone right now.” Weber’s entire interview is worth a click

      • ESPN’s Andrea Adelson checked in with several Division I spring-sport athletes to gauge their reaction to receiving an extra year of eligibility. “A lot of them didn’t know what they were going to do. A lot of them are set to graduate and were ready to move on and find jobs. Some even had jobs in place, but maybe those don’t even exist anymore. … I don’t necessarily think this means that every single player who played a spring sport is going to come back, but the fact that they now have this option -- that it won’t count against the scholarship limit -- it gives them another opportunity to play if they want it.”

       

      NEWS YOU NEED FROM SPORTS BUSINESS DAILY

      • During this crisis impacting the sports business, we want everyone to be up-to-date on the latest news and information. SBD's "Coronavirus & Sports" section is free, outside the paywall, for the foreseeable future. Below are today's headlines:

        • Sources: NBA Execs Still Bullish On One-Site, Fan-Less Playoff Event
        • China Delays Restart Of Pro Hoops; NBA Likely Keeping Watch
        • AAC Preps Contingencies To Address College Football Unknowns
        • FlamesOilers Temporarily Cutting Some Employees Amid COVID-19
        • Florida's New Stay-At-Home Orders Could Complicate MLB Start Date
        • WTA Looking To Extend Season To Help Tourneys, Players
        • NFLPA Medical Official Talks Virus Impact On NFL, Season Outlook
        • NHL Kings Among Several Teams Staging Video Game Simulations
        • Athletes, Other Personalities Launch Fund To Combat Coronavirus
        • 76ers' Ben Simmons Pledges To Help Out Local Nonprofits

       

      SBJ UNPACKS -- WEATHERING COVID-19

       

       

       

      Something related to coronavirus and sports business catch your eye? Tell us about it. Reach out to Austin Karp (akarp@sportsbusinessjournal.com) and we'll share the best of it.