Sports Business

Sports Business '15 to Watch': Beijing to host 2022 Winter Olympics

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Sports Business '15 to Watch': Beijing to host 2022 Winter Olympics

1. Beijing was selected to host the 2022 Winter Olympics, becoming the first city awarded both the Winter and Summer Games. Beijing narrowly defeated Almaty, Kazakhstan, in a vote of the International Olympic Committee. The Chinese capital, which hosted the 2008 Summer Olympics, came in to the vote as the strong favorite, despite its lack of natural snow. IOC chose the more “certain” candidate – even with prior cost overruns and empty facilities – over an “emerging” region. Trend, or not?

2. The Seattle Seahawks and QB Russell Wilson agreed to a four-year deal worth $87.6 million with $60 million guaranteed. The deal puts Wilson on par with Green Bay Packers QB Aaron Rodgers as the NFL's highest-paid player with a deal worth an average of $22 million annually. It validates the spending pattern that contenders have used to guarantee the “franchise QB,” even with a high guaranteed number. Seahawks remain a stable cornerstone of the NFL.

3. More money for free agency. As originally reported by MLB.com, but in an article found and accessed from the Sportsmanias app, the site that provides fans with real-time information on their favorite teams, the St. Louis Cardinals signed a 15-year media-rights deal with Fox Sports that gives the team an equity stake in FS Midwest. Financial terms were not disclosed, but Fox reportedly will pay the team around $50 million in the first year of the new deal, which starts with the 2018 season. Ironic that the Cardinals made fewer moves in free agency, they’ll now have a “war chest” bigger than most. Regional cable TV deals will be the biggest differentiator between the “haves” and “have nots” in the future.

4. International media revenue exceeds $455 billion. A good example of an international global media company is Globecast. The global solutions provider for media again was contracted to bring one of the world’s great sporting spectacles to screens around the globe: the 2015 Tour de France. From the Grand Départ in Utrecht to the final iconic sprint on the Champs Élysées, Globecast successfully rose to both the technical and logistical challenges posed by this year’s event. Look for the major media players to continue to take advantage of incredible growth and entrepreneurialism in the worldwide industry.

5. Six weeks until the U.S. Open, U.S. hard court tennis season is upon us with an event in Washington. When Lagardère Unlimited’s corporate consulting group scored an impressive win earlier this year, landing the Citigroup global sports and entertainment business, the agency had already established an excellent relationship with the financial service brand due to its longtime stewardship of the Washington, D.C. pro tennis tournament now known as the Citi Open. Serena Williams and her quest for the Grand Slam will continue to maintain significant interest in tennis over the summer; the Washington event is a critical component of that momentum on the men’s side.

6. Deflategate now in federal court. New England Patriots Owner Robert Kraft called the NFL's decision to uphold Tom Brady's four-game suspension “unfathomable” and said the league's handling of the entire Deflategate situation has been “extremely frustrating and disconcerting.” Kraft still stands behind Brady, calling him a great ambassador for the NFL. This is clearly the No. 1 issue – but it will evolve daily. Look for mounting pressure to settle the case under judge Berman’s watch – either before the Aug. 12 first hearing or the Aug. 19 calendar call.

7. An Associated Press investigation found dangerously high levels of viruses and bacteria from sewage in venues where athletes will compete in the 2016 Olympic water sports. Nearly 1,400 athletes competing in the Summer Games will come into contact with waters that have suffered from rampant sewage pollution. Infrastructure controversies are always major news items a year before any major event. Environmental, health, and safety concerns are another matter – incredibly important to see how the Brazil executives respond in the next couple months.

8. The NHL has signed a five-year North American renewal with Bridgestone, which will keep the tire maker as the title sponsor of the Winter Classic as well as the official tire of the NHL. In addition to the continuation of its Winter Classic deal, Bridgestone will also make a significant media commitment to the NHL. NHL continues to satisfy their core sponsor partners. Look for even more corporate relationships in the years ahead considering the higher TV ratings, World Cup, and potential expansion.

9. Adidas has agreed to a three-year marketing and media deal that will make it the official athletic apparel and footwear partner of the Pac-12 Conference. The agreement, gives Adidas rights at all Pac-12 championship events and the Pac-12 Networks. The category was not previously filled. Race to generate as much revenue as possible at the collegiate level – both with conferences and individual programs!

10. As originally reported by the Arizona Republic, but in an article found and accessed from the Sportsmanias app, the site that provides fans with real-time information on their favorite teams, preliminary discussions have already taken place about the possibility that the Coyotes will become anchor tenants along with the Suns in a new arena in downtown Phoenix. There is also preliminary interest in building a new facility for the two teams in Scottsdale that would be part of an existing gaming resort. The NHL process should move in tandem with the Las Vegas and Quebec application process. Other arena locations in the Valley of the Sun, Seattle interest, and the like.

11. The Los Angeles Angels unveiled a life-size bobblehead in the image of CF Mike Trout outside Angel Stadium. The six-foot-six bobblehead doll has Trout in a home uniform holding his 2014 AL MVP award. The team erected the statue after noting the popularity of bobblehead giveaways with fans. Mike Trout, Bryce Harper, Kris Bryant, and other young superstars are rapidly becoming the marketing face of MLB. More to come in this area.

12. The Pittsburgh Steelers filed a formal application to bring Super Bowl LVII to Heinz Field in 2023. The application is the first step toward securing approval from the league to submit a formal bid to host the game. Steelers owner Art Rooney said Pittsburgh would benefit from adding a few more full-service hotels. Cold weather NFL cities waiting in line after New York – Boston, Philadelphia, Chicago, Denver, Charlotte, and others. Now, Pittsburgh.

13. Revenue from fans attending concerts at Gila River Arena is about $1 million short of projections. IceArizona, the Coyotes ownership group, projected two years ago it could book at least 23 shows annually with 15,000 fans per show, but the city of Glendale reports show that attendance at 14 non-hockey events over the past year never topped 14,000 per event. See the items above – all of these processes will be linked together in an entrepreneurial NHL expansion process.

14. The Lexington Center BOD voted unanimously to approve a $15 million renovation of Rupp Arena. The upgrades include a new center-hung scoreboard, wireless Internet for fans, and changes to the roof infrastructure so the arena can attract more concerts and major events. Look for the arena to host a number of other events; and potentially expand its horizons for major league professional franchises as well.

15. With Boston out of the running, Los Angeles now is the clear favorite to be the U.S. candidate to host the 2024 Olympics. The L.A. Memorial Coliseum could potentially serve as an Olympic venue in 2024 should a new NFL stadium not be built in time. The relatively quick decision by the USOC should allow significant analysis of L.A. before September 15 – good for the US process overall.

Why Cirque du Soleil, NFL experience could come to Chicago

Why Cirque du Soleil, NFL experience could come to Chicago

With the success of the NFL Draft going mobile, the league may eventually decide to take another NFL experience on the road.

The NFL has partnered up with Cirque du Soleil to launch an interactive exhibit in New York City this fall.

The attraction, titled NFL Experience Times Square, will include interactive screens, an auditorium for 4D shows, coaches clinics, autograph sessions and much more.

[BEARS TICKETS: Get your seats right here]

CSN Sports Business Insider Rick Horrow explains why taking the experience on the move could be a good thing for the franchise value of the Bears.

"This is an example of a $25 billion NFL business joint-venturing with another pioneer in the entertainment industry Cirque du Soleil to make it better," Horrow explained. "Here's the case, because the NFL Draft has become mobile with Chicago leading the way, then Philadelphia, the Pro Bowl, the Super Bowl, you can't believe it's not an opportunity for potentially doing this NFL experience along the streets of Madison Avenue, along State Street, as well as Michigan Avenue.

"How about downtown Chicago on the way to other places."

Watch the video above to see what else Horrow had to say about the NFL Experience possibly coming to Chicago.

Sports business: Using targeted promotions to earn more dollars

Sports business: Using targeted promotions to earn more dollars

In Monday's episode of National Public Radio’s (NPR) Fresh Air Joseph Turow, professor of communications and associate dean for graduate studies at the Annenberg School for Communication at the University of Pennsylvania, ominously "Warns That Brick-And-Mortar Stores Are Watching You."

While this may seem a bit like the real-life equivalent of "Big Brother" from George Orwell's book 1984, Turow is describing the reality that the tracking companies do in e-commerce has moved more fully into the offline stores. Using technology including mobile applications, iBeacons, loyalty cards, geo-targeting, and geo-fencing companies have more information about customers in-store buying and behavioral patterns. This enables companies to design targeted adds and promotions specifically tailored to customers that can increase the likelihood of them making a purchase.

While the ethical implications of this activity would require and entirely separate blog post, Turow and host Terry Gross discussed an important idea that comes from having this technology. In the past, companies have focused on rewarding and retaining loyal customers. Those are the customers that keep coming back and buying a company's products or service offerings. Because the cost of keeping a customer has been much lower than attracting a customer it would seem to make sense that companies would want to focus on keeping the customer's they have.

However, this may no longer be the optimal strategy for maximizing revenue growth. Instead, companies should be focused on the marginal customer rather than the most loyal customer. A loyal customer is loyal for a reason – he / she likes the company's service offerings. Why spend money on advertising and promotions if that person is already likely going to buy the product anyway?

Instead, targeted promotions should be focused on customers that will only make a purchase if they are influenced in the right way. For example, let's say a customer is indecisive about buying a pair of jeans. In the past, this customer may have tried a pair of jeans on and then left the store without purchasing them. Now, a customer can download a company's app to access additional content, deals, and other helpful information. In return for delivering these benefits the company can receive information from the app that shows the location of the person while he/she is in a store. It can then use a geo-fence, a virtual fence that surrounds a geographic area, to determine when a customer leaves a specific geographic area. If this customer leaves the store without making purchase after spending a certain amount of time (i.e. the time to try on the jeans) then the company could send a targeted ad saying that the customer has 15 minutes to come back to purchase the jeans at a 15 percent discount. Essentially, companies now can identify "disloyal" customers and then attempt to bring them back to stores to make purchases.

Using technology to reward "disloyal" customers is something that sports organizations need to increasingly focus on given the demands of the business. More specifically, there are loyal fans that are going to buy tickets, watch games, and purchase merchandise even if they do not see any advertising from a team. These customers add significant value and should not be ignored. However, sports organizations want to focus on targeting the marginal customer using new technology to encourage ticket sales, in-venue purchases and increase game viewership.

The added benefit of using technology and customer outreach in this way is that it should increase sponsorship revenue as well. Not only can sports organizations use targeted promotions to help their current sponsors expand reach, but organizations can also show how these targeted marketing efforts cause lifts in purchasing. For sports teams, clearly communicating how sponsorship/marketing assets are used to create a lift in sales provides powerful evidence of how similar tactics can drive new revenue for partners. Rewarding "disloyalty" seems counter-intuitive, but there are many ways that targeting marginal customers should lead to substantial revenue growth.

Adam is the CEO and Founder of Block Six Analytics. He is also a lecturer for Northwestern University's Masters of Sports Administration and the co-author of The Sports Strategist: Developing Leaders For A High-Performance Industry.