15 to watch (Week of 1.18.16)
Rick Horrow's "15 to Watch"
CSN Bay Area Sports Business Insider Rick Horrow takes you off the field with his 15 top Biz Ball trends for the week of Jan. 18.
World No. 1 Jordan Spieth has agreed to a new multi-year partnership with Coca-Cola. Fresh off of his impressive win at the 2016 Hyundai Tournament of Champions, the 22-year-old phenom will be a key piece of Coca-Cola’s marketing approach going forward, especially with the 2016 Rio Olympics quickly approaching. Through appearances in TV commercials, digital and social media campaigns, in-store merchandising, outdoor advertising, packaging, and experiential events, Spieth, repped by Lagardere Sports, is poised to be one of Coca-Cola’s leading brand ambassadors. The defending FedExCup Champion is hoping to compete in Rio this summer – golf is back in the Olympics for the first time since 1904 – and will be a member of Coca-Cola’s 6-Pack of Olympic and Paralympic athletes leading up to the games. Financials of Spieth’s partnership with Coca-Cola have not been confirmed, but the multiyear deal is reportedly one of the biggest the company has made with an athlete, on par with Sprite’s deal with LeBron James.
Winning while waiting
As the NFL enters its conference championship week, with the Denver Broncos, New England Patriots, Arizona Cardinals and Carolina Panthers advancing, the St. Louis Rams continue to celebrate their upcoming move to Los Angeles. The Rams will make the nation’s second largest market their home starting this fall, playing in the L.A. Memorial Coliseum until their new stadium opens in 2019. Going forward, the San Diego Chargers have a “one-year option to join” the Rams in Inglewood, according to the league. If the Chargers stay put, the Oakland Raiders will then be given a one-year option on L.A. If either team decides not to move to L.A., the NFL will give that franchise an additional $100 million toward a new home market stadium. The NFL, meanwhile, will rake in $550 million in relocation fees from the Rams and any team that decides to join them.
Corruption on the court?
As the Australian Open gets underway, tennis is rocked by widespread allegations of match fixing among the game’s top players. According to the Sydney Morning Herald, files that allegedly show international crime syndicates orchestrating match fixing at the top level of world tennis have come to light. The BBC revealed details of a joint investigation into match fixing, and claims to have evidence of suspected rigging at major tournaments including Wimbledon. The match fixing was allegedly orchestrated by gambling syndicates in Russia and Italy, which targeted prominent players at major tournaments and offered them $50,000 for each fix. According to the report, authorities have been repeatedly warned about a core group of 16 players, all of whom have been ranked in the top 50. More than half of those players will play in this year's Australian Open. More than 70 players, including Grand-Slam title winners, reportedly appear on nine leaked lists – none have received sanctions to date.
Dream come true
Washington Nationals outfielder Bryce Harper has recently signed a deal with New Era to become the American headwear company’s brand ambassador. Before the upcoming MLB season, Harper will be featured along with the company’s other MLB ambassadors in a wide variety of New Era’s marketing platforms. New Era now has one of the most impressive lineups of brand ambassadors across any sport, as Harper joins Pittsburgh Pirates CF Andrew McCutchen, San Francisco Giants Catcher Buster Posey, and New York Mets Pitcher Jacob deGrom. While financial deals have not been disclosed, Harper has an option to let this deal run though 2018. Discussing his excitement to represent the company, Harper said, “Ever since I was five or six years old, I was wearing snapbacks or beanies, and it was always New Era or nothing else.”
Buying out your top competitor is a great move in any industry, and that is what Wasserman Media Group just did with its acquisition of The Sports Syndicate – a leading independent action sports athlete representation firm. With the acquisition, about 40 new clients will join WMG, including snowboaders Mark McMorris and Torstein Horgmo and motocross legend Ryan Villopoto. By combining forces, Wasserman will now represent over 300 athletes in the action sports, motosports, endurance sports, and Olympics disciplines – clearly making them the top-dog in their respective niche. WMG Managing Partner Steve Astephen spoke about his excitement regarding the announcement. “Your No. 1 competitor, if you can acquire them, that’s a win-win for anybody.” The Sports Syndicate will bring many of its top executives over with long-term deals being signed, and this merger will likely keep WMG at the top of the action sports industry for the foreseeable future.
More soccer please
The U.S. is not the only country seeing its sports media rights deals growing exponentially, as European and Asian countries are following a similar trend. This past weekend, Telefónica agreed to pay a whopping $2.6 billion for TV rights to Spanish soccer matches. According to a regulatory filing in Madrid, Telefónica will pay Mediapro for the right to broadcast La Liga, Champions League, and Europa League matches in Spain over three seasons, beginning in 2016-2017. Telefónica, which currently controls around 85 percent of Spain’s pay-TV market, is "catching up with its main rivals in its domestic market, Vodafone Group Plc and Orange SA," both of which have existing Champions League agreements with Mediapro. Spanish Superior Sports Council President Miguel Cardenal is also pleased about the new deal’s reach beyond soccer into social realms including women’s and amateur sports.
In a deal that will nearly double the length of its current structure, Ohio State and Nike have agreed to a 15-year extension worth $252 million. Ohio State’s current 20-year deal was set to end in 2018, but this new development will lock the two together through at least 2033, according to the Columbus Dispatch. OSU Athletic Director Gene Smith made it his goal to expand the contract “beyond the athletic department,” so more than just varsity athletes will benefit. Along with gear and cash for participating NCAA teams, "it means scholarships, internships and Nike swag for students who aren’t athletes," club sports will also receive a uniform and equipment discount. The extension includes $112 million in Nike products, $15 million marketing support, and at least $103 million in cash. This deal is Nike’s biggest to date, beating out the University of Texas, which signed a 15-year, $250 million deal in October.
After a nearly decade-long stalemate in Tampa Bay, the St. Petersburg City Council has agreed to let the hometown Rays look for a new home, according to the Tampa Bay Times. Council members "agreed to give the Rays three years to search for a new stadium site in Pinellas and Hillsborough counties." While the Rays are being given the option to stay and rebuild a newer, more modern stadium, if the franchise elects to move out of Tropicana Field, the current stadium site will be demolished and transformed into prime downtown real estate. Going forward, the Rays now "have 60 days to outline the process the team will use to evaluate sites." The team also has "agreed to take at least six months to do its evaluation so St. Petersburg has a fair chance to make its case that the Rays should stay."
NBA headed for Paris?
While Adam Silver shot down the idea of the league adding a European franchise anytime in the future, the NBA commissioner enthused about Paris being a potential international game host site. According to the Associated Press, AEG executives met with Silver to discuss holding a game in Paris, and Silver emerged from the meeting calling France “a fantastic basketball market.” The NBA played a preseason exhibition game in Mexico City, and last week the Toronto Raptors and Orlando Magic squared off in London’s O2 Arena. It was the NBA’s sixth game in London over the past six years, and was also the “fastest sell-out for a game” there. “I think it is inevitable that at some point we will have franchises outside the United States,” Silver said, “and…London is always going to be at the top of the list." But it is "not something that is going to happen in the next few years."
Growth of MLS
As MLS continues to grow, minor league soccer teams around the country are making grand plans of their own. The latest team hoping to make the leap to MLS is NASL club Minnesota United FC. The franchise is hoping to join MLS for the 2017 season, but would need a place to play its home games for the first year – at least. Club President Nick Rogers said United would “need a place to play” in its inaugural season because its $120 million, 20,000-seat stadium will not be ready on time, according to the Minneapolis Star Tribune. The team is currently weighing its options, and is looking at Target Field and TCF Bank Stadium as potential home game sights. A MLS operation representative visited both venues this past week, primarily to look at infrastructure including data hookups and press boxes. While these stadium concerns are legitimate, Rogers and his partners should focus on winning an expansion bid.
Business of Rio
While ad sales have been lagging for the upcoming 2016 Rio de Janeiro Summer Olympics compared to the 2012 London Games, a recent surge of big-dollar deals has NBC feeling confident about the finish line. NBC Sports executive Seth Winter boasted that his company is well on its way to break $1 billion in national ad sales for Rio, stating, “We will break revenue records here, there’s no doubt about that.” With market demand and pace of sales much higher than they were four years ago in London, NBC has relied heavily on a few significant business developments. “In the Olympics, we are not talking about frankly $3, 4, 5 million pieces of business,” Winter said. “We're talking $25, $30, $50 million pieces of business.” NBC needs $1.2 billion in ad sales to break even this summer, for that’s what it agreed to pay for the Games when it won the TV rights in 2011.
Pens looking for buyers
Pittsburgh Penguins co-owners Mario Lemieux and Rob Burkle are still looking for a buyer for their NHL franchise, and a recently reported rift between the two has not helped their cause. While the initial development was thought to have been potentially sale-crippling, the two partners issued a joint statement earlier this week to refute that report, according to the Pittsburgh Tribune-Review. The initial price tag for the Penguins was $750 million, which, if sold at that price, “would set a record for a U.S.-based NHL team.” Debates ensue regarding the team’s value, most centered on the value of development rights to the 28-acre property where the Civic Arena once stood and whether those rights can be included in the sale. The ownership group hired Morgan Stanley in June to help “explore their options” regarding the sale of some or all of the franchise.
Finalizing their list of 10 global sponsors for the upcoming Euro 2016 games, UEFA announced that Chinese electronics firm Hisense Group has signed on to become a partner of this summer’s tournament. This marks the first sponsorship deal with a Chinese company in the championship’s 56-year history. While financial details have not yet been disclosed, Hisense’s deal is set to go beyond just the Euro 2016 games; they will sponsor other UEFA national team competitions until the end of 2017, including the European Qualifiers for the 2018 FIFA World Cup, UEFA Futsal Euro 2016, the 2017 UEFA European U21 Championship and UEFA Women's Euro 2017. Hisense joins Adidas, Carlsberg, Coca-Cola, Continental, Hyundai-Kia, McDonald's, Orange, SOCAR and Turkish Airlines. This completes the UEFA Euro 2016 sponsorship program, along with the six national sponsors.
Golf on the rise
Jordan Spieth brings a big following wherever he goes, and his trip to Maui for last week’s Hyundai Tournament of Champions was no exception. Spieth won the tournament by eight strokes, one of the biggest factors helping Golf Channel/NBC to its best audience yet for the Maui event. When combining all live and replay telecasts, Golf Channel and NBC averaged 905,000 viewers for last week’s PGA Tour event, marking a record for the tournament on the net – Golf Channel began airing part of the tournament back in 2007. Golf Channel saw an astounding 91 percent increase in viewership compared to last year, and the tournament’s live coverage saw a 70 percent bump from last year’s marker. Online, GolfChannel.com’s PGA Tour scoring page saw a 34 percent increase in page views, while Golf Channel’s mobile PGA Tour scoring page was up 108 percent. If Spieth’s success continues in 2016, expect a similar trend to follow across the year’s events.
New year, new money
The New Year is well underway, and businesses have wasted no time inking record-breaking sponsorship deals in sports business so far. 2016's global sponsorship spending is projected to grow nearly five percent to $60.2 billion, according to a new forecast from sponsorship specialist IEG, part of WPP’s ESP Properties. The growth is projected to be driven by corporate interest in sponsorships as a means to support international expansion. In the United States, sports sponsorships are expected to reach $15.7 billion during this year alone, a five percent increase from last year. Overseas, strong international and domestic spending by companies based in China, India, South Korea, Japan, and other countries is expected to make Asia-Pacific sponsorship spending the fastest-growing of any region in 2016, at five percent.