Sports Business

Sports Business '15 to Watch': LeBron gets lifetime Nike deal

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Sports Business '15 to Watch': LeBron gets lifetime Nike deal

1. The world premiere of “Star Wars: The Force Awakens” is just hours away. But the latest film in the Star Wars galaxy has already had the sports and entertainment world astir for many months. Several NBA and NHL teams, for example, have gotten in on the film fervor with themed nights at their venues. The 76ers distributed Jedi vs. Dark Side-branded entertainment during their matchup against the Pistons on Friday, while the 76ers dancers unveiled Princess Leia-themed routines and R2-D2 costumes. The Suns partnered with Lucasfilm for their game against the Trail Blazers, including a BB-8 droid basketball promotion. Smoothie King Center had Star Wars-themed photo booths set up all around, and Pelicans fans received team-themed Stormtrooper mugs. In the NHL, the Blues, Devils, and Ducks are getting in on the act with posters and bobbleheads. Finally, Luke Skywalker, aka actor Mark Hamill, will host an ESPN Star Wars special connecting sports with film franchise. The half-hour special, airing December 15, spotlights “the sport and athleticism behind the choreography and training utilized in the making of Star Wars lightsaber duels.

2. Last weekend, college football held the days-long equivalent of its formal awards banquet, culminating in the 81st presentation of the Heisman Trophy on Saturday night in New York – won by Alabama’s star running back Derrick Henry. Besides being one of the most closely-contested Heisman runs in the past few seasons, this year’s contest is the first for which Las Vegas bookmakers could take bets on who would win. And while opinions were split on which of the three suit and tie wearing finalists -- Clemson quarterback Deshaun Watson, Stanford running back Christian McCaffrey, or Alabama running back Derrick Henry – would strike the famous pose with the heavy bronze trophy, there’s no doubt that regardless of subsequent NFL draft pick, winning the Heisman has a lifelong impact not only on the athlete’s brand, but on his alma mater’s as well. And not to be left out of the evening wear competition, ESPN is offering a New Year’s Collection of school-themed tuxedos to fans of Clemson, Alabama, Michigan State, and Oklahoma for the New Year’s Eve games. The collection of tuxedos reflects the “unique attributes and personalities of the playoff teams.” Now looking forward, the 40 bowl games and second annual College Football Playoff coming up within the next few weeks will certainly be something to watch. Multiple sub-0.500 and .500 teams will be competing in these bowl games due to an eligibility crisis, but viewership, sponsorship, and overall entertainment value from Bowl Season should exceed last years.

3. Globecast has announced that Philippe Bernard has been appointed as its new Chairman and Chief Executive Officer, succeeding Olivier Barberot. Bernard brings a wealth of international experience to the global media company, and has a track record for sales and customer relations expertise. “I’m honored and grateful for the opportunity to lead this exceptional company with dedicated, talented and creative professionals,” Bernard said. “Globecast is a leading company in the broadcast and media industry, with multicultural employees passionate about their work and driven by the desire of offering the best quality and bespoke media solutions to its customers. Broadcasters and media companies are having to respond to evolving consumer viewing habits, and Globecast is perfectly positioned to help them take advantage of new market opportunities.” Bernard joins Globecast from the Orange Group, where has served as EVP of Quality, Customer Experience & Sales since July, 2013. Prior to Orange, he served as CEO of Transpac.

4. The Portland Timbers are basking the glow of their MLS Cup win. But the rest of the league is focused on navigating the first-ever MLS free agency period now underway, a new component of the MLS offseason created by the league’s new CBA. As part of soccer’s new world order, MLS is allowing teams to substantially increase payroll through an infusion of newly-available funds designed to sign homegrown prospects and improve the quality of non-marquee players. According to the Washington Post, in each of the next two seasons, clubs "will receive an additional $800,000 in Targeted Allocation Money," or TAM. The funds, which totaled $500,000 per club this year, can be used by teams to offset the impact of larger contracts on the salary cap.” MLS President Mark Abbott said, "We saw immediate dividends this past season with the initial [TAM] investment. Additional spending -- especially for players who will impact the middle of the rosters -- will make MLS even more entertaining and compelling.” MLS also announced each club "will receive $125,000 per season to sign “homegrown” players.

5. While LeBron James’ lifetime deal with Nike was a big move for both parties, it will likely set a precedent with Nike, and as for LeBron, the Cleveland star doesn’t expect it to be his biggest business deal. James, as pointed out by Brian Windhorst of ESPN.com, has invested in companies both successfully and unsuccessfully. But he’s undaunted by failure, and currently turning his attention from away from sports-related investments and traditional categories to drive straight for the entertainment basket. James’ production company, SpringHill Entertainment, has TV show deals with Starz, Disney, NBC, Showtime and Starz, and he has a development deal with Warner Bros. He got kudos for playing himself in last summer’s “Trainwreck” – but he wants to own a piece of the action, not just act. Philanthropy-wise, James struck an innovative deal earlier this year with Chase and the University of Akron that will potentially guarantee scholarships to thousands of students via his Akron-based “I Promise” initiative. Clearly, James is just as interested in arranging lifetime deals for others as he is for himself.

6. The Toronto Maple Leafs, one of the elite and premier franchises in the NHL, have struggled on the ice so far this season, and their viewership ratings have reflected that downward trend. The Maple Leafs currently sit at 13th in the Eastern Conference with a sub-.500 record, a poor marker for such a historically successful and lucrative club. Off the ice, their viewership numbers are down 30% through this past month, according to David Shoalts of the Globe & Mail. In 16 games carried on the CBC, Sportsnet or City-TV networks, the average audience for Leafs games was 863,825 viewers, down from 1,226,264 in the same period last year, when 14 games were shown. This sharp drop in viewership also means a dip in advertising revenue for Rogers Communications is to be expected. The Leafs are clean up their play and hopefully raise their viewership ratings in the process.

7. Just this past weekend, MLB and Mexican summer league (LMB) officials got together to continue talks on an agreement that would overhaul the player-acquisition system between the two in an effort to enhance the Mexican presence in the MLB. According to Jorge Ortiz of USA Today, Mexican owners have “dropped the onerous practice of blacklisting prospects who signed directly with big-league clubs, preventing them from playing in their home country.” LMB President Plinio Escalante has publicly defended his league and his opposition to the MLB just coming in and plucking Mexico’s best talent, but recent approaches from MLB, capped by Commissioner Rob Manfred’s visit to Culiacan in October, have made Mexican officials open to a partnership. While these recent developments seem promising, Ortiz continued by saying that The parties are “still far from reaching agreement on what kind of financial contribution the Mexican league would receive and how the new system would function, likely through a draft instead of allowing American teams to sign amateurs as free agents the way it’s done in the Dominican Republic and Venezuela.”

8. After signing on last month, Disney Chair & CEO Bob Iger is “ramping up his efforts” to bring both the San Diego Chargers and Oakland Raiders to Los Angeles, according to Sam Farmer of the L.A. Times. Instead of focusing solely on one of the clubs, Iger has been persistent about bringing two teams to the Carson stadium site in Southern California. Speaking publicly for the first time on his involvement since coming on board, Iger spoke this past weekend about how he was visited by Carolina Panthers Owner Jerry Richardson and how "he asked whether I'd be interested in helping very specifically the partnership of the Raiders and Chargers move to L.A., develop a stadium, reposition themselves here.” Iger continued by explaining his rationale for trying to bring both the Raiders and Chargers to L.A. simultaneously: “I'm a big believer in theatricality, so if you're going to bring the NFL back to a market this big, this important, then do it big. And two is much bigger than one and I really think it would create such a level of excitement and interest in the NFL in Los Angeles that it would do a world of good not just to the league but the teams."

9. The Golden State Warriors win-streak has been snapped, but national and local RSNs have seen a massive boost from this incredible run. From the beginning of this run, up until it was snapped on Saturday night against the Milwaukee Bucks, TNT averaged 2.27 million viewers for the four Warriors games it. That figure is up 37% compared to TNT’s average for all NBA games this season to date. ESPN also aired four Warriors games, two of which were added after the season started (and one of those was blacked out locally). Those four games have averaged 1.8 million viewers, up 18% over ESPN’s average for all games this season. Regionally speaking, excitement and buzz from the S.F.-Oakland-San Jose market has produced local ratings on CSN Bay Area for Warriors games that are up 87% compared to last season. The team is averaging a 7.06 local rating in the Bay Area, fueled by eight of the RSN's top 10 best Warriors game audiences ever occurring during the current win streak. While the steak may have ended at 24, expect to see the Warriors, the NBA’s pre-eminent team, still boosting local and national TV ratings as the season continues toward the All-Star Break.

10. After a ruling by the New York Supreme Court this past weekend to ban operation in the state, an emergency appeal filed by FanDuel and DraftKings flipped the decision and will allow the DFS companies to operate until at least January 4. DraftKings and FanDuel, the two biggest DFS companies currently operating in the industry, are now allowed to operate in the state of New York through the New Year. New York represents 10% of the companies’ market, so this news comes as an early Christmas present for both DraftKings and FanDuel. The original ruling – one that banned DraftKings and FanDuel – came from the the conclusion that DFS involve gambling, and that is illegal in New York. Both companies would have had 30 days to comply with the court order, but the emergency appeal that both DraftKings and FanDuel filed for ultimately granted themselves a temporary reprieve. DraftKings' attorney Randy Mastro, a partner at law firm Gibson Dunn, commented on this, saying, “This is a necessary first step on the road to an appeal. We are confident we will prevail in appeal because daily fantasy sports are legal in New York.”

11. The Florida Panthers have not seen much change since joining the league in 1993: they have not changed their logo and have continued to lose money at an exponentially increasing rate. In an attempt to flip the switch, the Panthers are going to completely rebrand themselves for next season. New jerseys, a new logo, and a possible new color scheme all highlight this rebranding and new commitment to the future of the franchise. According to MiamiHerald.com, fans can “expect a horizontal logo (like the Blackhawks, although perhaps in a circle crest) on a horizontal striped sweater (like the Canadiens). The alternate palm tree/hockey stick logo will likely be lost in the transition" as well. The Panthers’ original “leaping cat” logo, which has remained constant since 1993, will be seen this year for the last time; that is, until it becomes the potential centerpiece of a “throwback” uniform years from now.

12. The MLS has seen rapid growth these past few years and is set to welcome new clubs to the ever-expanding league in years to come. Most notably of these expansion clubs, though, is Los Angeles Football Club (LAFC) – the second MLS club set to call the Southern Californian city its home. LAFC President and co-Owner Tom Penn and his crew of executives are currently in the process of creating a foundation for the franchise ahead of its 2018 launch date from scratch. Penn commented on this exciting, yet daunting, task of branding his team from a blank canvas, “The whole thing is so unusual. This will be the last major sports club or franchise launched in Los Angeles from scratch -- maybe ever.” Creating a franchise from nothing and launching it is tough enough, but preparing the enter the same market as MLS’s most successful franchise – the LA Galaxy – and attempting to take a decent market share in the city is even tougher. LAFC Senior VP/Marketing Joanna Wong commented on this issue with a sense of optimism and excitement, saying, “There's definitely room for both of our teams in L.A. But I think to have that rivalry element will be really exciting for soccer in the area -- it will attract not only core soccer fans, but all sports folk. I think that will only bolster both of our teams.”

13. The 2016 UEFA European Championship pools just came out this past weekend, and to go along with them the tournament has signed a new sponsor: Turkish Airlines. Joining eight others as an official Euro 2016 global sponsor – Adidas, Coca-Cola, McDonald’s, Kia-Hyundai, Continental, Orange, Socar, and Carlsberg – Turkish Airlines marks the first airline that has ever become a sponsor of UEFA. The tournament, which is set to be hosted by France from June 10-July 10, agreed to terms to this deal back when there were two group matches left at the qualifying stage of competition. Along with this new sponsorship, Turkish Airlines Board Chair İlker Aycı said that preparations to sponsor the NFL’s Super Bowl are at the “final stage,” according to the AFP. Both of these sponsorships, when officially completed, will mark a massive global marketing effort for Turkish Airlines with the hopes of increasing brand awareness and popularity amongst travelers.

14. Unlike what is happening across the river at the University of Texas, University of Oklahoma football season-ticket holders received the surprising news that the “minimum required annual donation for each of their tickets will progressively increase over the next three years,” according to Jason Kersey of the Oklahoman. The per-seat contribution expected from these individuals does not include the cost of the tickets themselves – making season tickets an even more expensive luxury than it already is. While this change does not affect all season-ticket holders in Memorial Stadium, OU officials decided to implement this rule as they are "grappling with skyrocketing costs after the NCAA's recent approval of full cost of attendance scholarships and unlimited restrictions on food for both scholarship and walk-on athletes.” The University of Oklahoma is unique in the way it prides itself on being one of the few self-sustained athletic departments and is increasing the minimum level of donations to help cover its rising costs.

15. After switching over to Adidas from Nike this past year, Arizona State University is taking the next step in becoming a more elite athletics program: facilities. The university is set to hire a design team in the near future to update its athletic facilities master plan, including a new arena for one or more sports, according to Jeff Metcalfe of the Arizona Republic. Design plans from interested firms are due on December 18th, a selection decision scheduled to be made in January, and work plans are set to begin in February. The renovation of Wells Fargo Arena – home to the school’s basketball, hockey, volleyball, wrestling, and gymnastics teams – is of top priority for Arizona State. Any master plan is "intended to address needs for all 25 ASU sports plus any future sports expansion; potential facility uses for revenue-generating events as well as for community access and youth sports; and options for hosting Pac-12 and NCAA events." This plan "is separate from" the $256M reconstruction of Sun Devil Stadium.”

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.