Sports Business

Sports Business 15 to Watch: Coldplay to headline Super Bowl 50

coldplay-sports-biz.png

Sports Business 15 to Watch: Coldplay to headline Super Bowl 50

1. Army-Navy game; Heisman Trophy presentation. With the regular season concluded and conference championship games put to rest, the college football bowl season is upon us. The selection process usually causes major drama. But the four teams advancing to the College Football Playoff – Clemson, Michigan State, Alabama, and Oklahoma – are the same teams generally assumed to advance as long as they won their conference championships. Forty bowl game slots filled means the following:  11 teams with 6-6 records; and Minnesota and San Jose State are invited with 5-7 record. Interestingly, this mediocrity may create some positive new “standards”:  the 5-7 teams were eligible based on Academic Performance Rates criteria (the first time in history that this leverage could be exerted in the bowl selection process). Hopefully, more of that to come!!

2. With football safety practically a daily part of our conversations, Pop Warner Little Scholars, the leader in national youth sports, explores every avenue to making play safer. This week at its annual Super Bowl in Orlando, Pop Warner, the NFL, and USA Football come together to give parents a first-hand look at the safer approaches to blocking and tackling being taught to children through Heads Up Football.  The parents also heard from representatives of the Pop Warner Medical Advisory Committee, a team of respected physicians and researchers with expertise in neuroscience and sports safety developed in 2010 as part of Pop Warner’s efforts to constantly stay on top of health issues, including concussions. The Medical Committee is focused on prevention, proper identification and treatment of concussions; as well as hydration and proper nutrition guidelines, and general health and safety issues. The overall health, well being, and academic success of its athletes continues to be Pop Warner’s top priority.

3. The NFL and team owners have finally set a hard deadline to end the drama and commotion surrounding the league’s potential L.A. expansion. December 28th is now the deadline to submit a viable stadium proposal for the three cities vying to keep their teams from relocating to America’s second biggest market. St. Louis is the only city that can realistically meet the late December deadline, with Oakland and San Diego far from a solid stadium plan. Coming right off this deadline, the league has scheduled a special meeting in early January in which owners will likely vote on the relocation once and for all. NFL Commissioner Roger Goodell is still weighing the merit of proposals in Southern California as well as progress toward new facilities in St. Louis, San Diego, and Oakland." What Commissioner Goodell doesn’t want: public infighting among his 32 owners and a lame duck situation for one of the three cities in play.

4. NBA Commissioner Adam Silver continues what David Stern started when the former commissioner made a push to expand the NBA beyond U.S. and Canadian borders. This past week, the Sacramento Kings gave up a home game to host the Boston Celtics at Mexico City Arena. The Mexico City contest is another step in the process of placing meaningful, regular-season games in large international markets to help popularize basketball abroad. The NBA has played exhibition and preseason games throughout Europe, and made their first trip to Africa this past year. But Mexico is a particularly rich market for the league, based on proximity, population density, and citizens’ love of sports. According to the league, 13 million NBA fans are in Mexico (population: 122 million), with 2.2 million in Mexico City. If the Celtics-Kings game is well-received, expect Mexico City to become a regular host for NBA regular-season matchups.

5. The first season of a new NASCAR Sprint Cup TV package ended on a high note, but overall viewership for the Chase for the Sprint Cup has dropped off. The Chase moved from ESPN/ABC last year to NBC/NBCSN in 2015, and races in Charlotte and Phoenix saw rain delays that affected broadcast coverage. Looking at 10 Chase races for both years, the Sprint Cup “playoff” viewership dropped 13% (3.8 million viewers this year vs. 4.4 million viewers in 2014). If the two rain-delayed races are excluded, that decline is 6%. Using either average, the Chase was also below the 4.5 million viewers in 2013 and 4.2 million viewers in 2012. The finale to the Sprint Cup season at Homestead-Miami drew 7.6 million viewers on NBC after a short weather delay, the best for a NASCAR finale in a decade, as well as the most-viewed Chase race since 2006.

6. Golf is on MLB’s hot stove this year, and we’re not talking about baseball players hitting the links in the off season. MLB has quietly forged a strong partnership with the PGA Tour. The NFL was the first league to use golfers as a marketing platform, most notably via deals with Payne Stewart, Ben Curtis, and now, Patrick Rodgers. And journeyman Brad Fritsch has a deal with the NHL Ottawa Senators. Why is baseball now on board? Says MLB’s Matt Gould: "We're always looking for ways to expose our brand to other sports fans…You've got a likeminded fan base." According to a 2013 study by sports marketing firm Opendorse, MLB and PGA Tour fan demographics are nearly identical: both fan bases are predominantly male, white, over 55 years old, and making $40,000-$75,000 per year. This crossover opportunity makes good business sense.

7. The decision to expand to add eight more teams to the FIFA World Cup has been deferred by the organization's executive committee. The expansion proposal was "one of many offered" by the 2016 FIFA Reform Committee during a meeting in Zurich, the "latest effort to restructure the scandal-plagued soccer governing body," according to USA Today. Extra World Cup berths mean more exposure for teams, greater access to prize money, more sponsorship deals, and more valuable local TV contracts. A source said that the expansion proposal, which wouldn’t take effect until 2026, was "included at the behest of soccer’s six regional confederations,” and added that it is probably going to happen eventually, given that it “has the full support of FIFA’s two most populated confederations, Africa and Asia.” The FIFA proposal echoes the championship expansions we’ve seen in collegiate basketball, the NBA, and MLB, among others – which have all proved beneficial to their respective sports.

8. La Liga has sold a package of domestic media rights for the 2016/17 to 2018/19 cycle to Telefonica and Mediapro for a combined US$2.8 billion. Telefonica, which snapped up the first batch of collective rights for the top tier of Spanish soccer for this current season, has signed a deal worth US$264.5 million per season over the next three-year cycle. Mediapro, meanwhile, has committed to US$669.6 million per season for rights to eight La Liga games each weekend. The remaining lots, which include free-to-air packages, more pay-TV games, and a Copa del Rey package, are yet to be awarded. Mediapro has been marketing La Liga's newly collective international rights across 2015 and combined broadcast revenues have now risen from around €800 million per season, to nearer €1.5 billion a season with more deals to come.

9. British rock band Coldplay, known for such hits as “Clocks,” “Yellow,” and “Viva la Vida,” has been chosen to headline the Super Bowl 50 halftime show. The NFL confirmed the selection on Thursday night, on the eve of the release of Coldplay’s latest album, A Headful of Dreams. The NFL, however, added the Super Bowl 50 halftime show is still being planned and there will be multiple acts. According to a press release from Pepsi, which sponsors the halftime show, Coldplay front man Chris Martin "is designing a show that will echo elements of the NFL's On the Fifty campaign -- honoring the past, recognizing the present and looking ahead to the next 50 years, including other special artists." Bruno Mars and Beyonce are rumored to be among the other artists appearing at the Super Bowl halftime show  – part of the league’s ongoing effort to ensure that the Super Bowl has near universal appeal.

10. 50 Fund – the legacy fund of the Super Bowl 50 Host Committee – on GivingTuesday announced that it has made grants totaling $5.2 million to 101 Bay Area nonprofits serving more than 324,000 youth. The fund also announced that the application period is now open for the next round of its Game Changer grant program which will provide an additional $2 million grants to Bay Area nonprofits. The 50 Fund’s flagship competitive grants program, Game Changer awards grants $250,000-$500,000 to well-run nonprofits with effective programs that have the potential for even greater impact. Since its inception a year ago, 50 Fund has focused on helping close the opportunity gap for low-income children, youth, and young adults through both competitive grant programs and signature initiatives\

11. MLS is "planning to expand to 28 clubs over time," with the league's Board of Governors giving its approval, according to the Portland Oregonian. The league "plans to have 24 teams" by 2020, as Atlanta United FC, LAFC, and Minnesota United FC are scheduled to join the league within the next three years. David Beckham's in-development Miami franchise is also expected to become the league's 24th club. During the MLS Cup, won by the Portland Timbers, the league gave a strong endorsement to the latest stadium plan by Beckham's group. After previous efforts in Miami failed, there was some speculation that Sacramento jump ahead of Miami in the line to get a MLS club. From Portland to Miami, the MLS brand has never been stronger.

12. Adidas has released its first commercial featuring new basketball brand ambassador, James Harden of the Houston Rockets. The commercial marks a shift in the sportswear company’s overall marketing approach. Signing Harden this past summer was a massive step for adidas, which had recently lost traction in the domestic basketball market. Adidas signed Harden for $200 million, outbidding Nike as “part of an overall reboot of the company’s basketball division. Harden’s new spotlight advertisement encourages athletes and fans to define their own path and to be unique. Harden’s “Creators Never Follow” commercial “is part of a series that hopes to motivate athletes to trust themselves and challenge the establishment in the game,” according to Footwear News. Historically more brand-centric in its marketing style, adidas is slowly shift towards promoting specific athletes

13. Although he didn’t add any Grand Slam wins, 2015 was a banner year for tennis’ World No. 2 Andy Murray. After advancing to the Australian Open finals in January, Murray married longtime girlfriend Kim Sears in April, and the couple are expecting their first child two months from now. Murray, who credits Sears for keeping him grounded and his agents at Lagardere Sports and Entertainment for contributing to his off-court success, surpassed $40 million in on-court winnings in 2015, making him tennis’ fifth all time prize money winner. Most recently, Murray led Britain to its first Davis Cup title since 1936, with a defining singles win over Belgium at Flanders Expo. The event helped the spirits of European sports fans in the wake of the Paris terrorist attacks. 

14. As the world championships in Summer Olympic sports wind down, it looks like when Team U.S.A. reaches Rio, American women are once again likely to bring home more medals than their male counterparts. As the Wall Street Journal points out, behind the rise of American women is Title IX, the 43-year-old federal law that generally prohibits gender discrimination in any educational programs receiving government funding. Few other countries offer girls – regular ones, not just elite athletes – so many sports options. So far, the women’s wave peaked in London in 2012, when U.S. women won 58 medals compared with 45 for the men, including 29 of the country’s 44 gold medals. Based on the results from this year’s world championships, the U.S. should amass the equivalent of 36 gold medals, and more than 80 medals overall, by year’s end. 

15. After meeting with player groups, MLBPA Executive Director Tony Clark has "disputed the notion that players were getting a lesser share of the revenue pie" than the owners, according to the Los Angeles Times. Clark said, "Despite what you may have read or heard at any given time, the quote-unquote ‘player share’ is as close to 50-50 as it has been in a long time." Baseball’s current CBA expires in December 2016, and Clark said that he "expects negotiations on a new one to start" during Spring Training. Players are expected to discuss a wide range of issues during the contract talks, from how owners share revenue to security, international play, and compressing the MLB schedule from 162 games to 154. MLB Commissioner Rob Manfred clearly doesn’t want a work stoppage during his first CBA negotiating at bat.

 

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.