Sports Business

Sports Business 15 to Watch: LeBron still basketball's business King

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Sports Business 15 to Watch: LeBron still basketball's business King

1. While Stephen Curry may be playing the best basketball on the planet, he is quick to admit that he looks up to LeBron James, but not in a basketball framework. According to the Cleveland Plain Dealer, the Warriors point guard “can’t help but admire” James for his ever-expanding business empire. Curry said, “He’s obviously handled that part of his career very well and he’s a great influence in that regard.” Curry is certainly expanding his business portfolio – he currently has equity in Under Armour as part of his sponsorship deal and is a sponsor of water filtration brand Brita, JBL headphones, Degree deodorant, Muscle Milk, Express, and ankle-brace maker ZAMST. But James’ endorsements include a lifelong partnership with Nike, and deals with Sprite, Kia, Samsung, Beats by Dre, and Blaze Pizza. Combined with his own management firm, LRMR, James’ portfolio sets the standard for all pro athletes.

2. Fresh off their formation of Oak View Group, the entertainment venture of former Maple Leaf Sports & Entertainment CEO Tim Leiweke and Irving Azoff, the co-owners have inked one of their first big deals. Oak View has signed a multiyear partnership with the Los Angeles Dodgers, in order to “attract major bands” to Dodger Stadium annually, according to the L.A. Times. The pair “hope to book two to three concerts this year at Dodger Stadium, and then increase the number in subsequent years if they can work around the scheduling needs of the baseball team and its home games.” Oak View “will not be acting as concert promoter in the venture with the Dodgers, which will enable other promoters to bring their concerts to the stadium.” But with a concert seating capacity of about 50,000 and the stadium’s desirable location, Oak View Group hopes to attract some big names to Dodger Stadium.

3. The Honda Classic, the PGA Tour’s first stop on the Florida Swing this week, has impressive economic and charitable impact. The event kicks off this week at newly renovated PGA National. As of last year, the tournament boasted $48 million in economic impact to local communities, and 30,000 visitors from outside Florida, including 24 states and 25 countries. It also raised a record $2.55 million for local charities. In fact, the Honda Classic’s charitable impact over the last nine years is $13.2 million, supporting 300 charities. Overall, golf is a $70 billion industry in America that impacts nearly two million jobs. Annually, the game has a $4 billion charitable impact through 143,000 events and 12 million participants. Golf raises more for philanthropic causes than MLB, NBA, NFL and NHL combined!

4. Sports Illustrated is offering virtual reality content of its annual swimsuit edition, released last week. According to USA Today, SI’s new Swimsuit app “includes 11 virtual reality clips” shot by California-based content creators Wevr in the Dominican Republic. Viewable on any smartphone, with or without goggles, the subscription 360-degree experience lets users see all video angles of the video and marks a major step toward making VR accessible to the general sports marketplace. Right now, one problem facing virtual reality is scale – it is difficult to get this technology out to masses of people. But SI Creative Director Chris Hercik is optimistic about the initiative, noting that the publication "aims to roll out more VR content this year, and will try to piggyback off of this for years to come.” As we’ve seen time and again, innovation begets new revenue streams.

5. The Red Sox are ditching the rest of baseball to create their own secondary ticketing platform. The Boston franchise is opting out of MLBAM’s league-wide resale partnership with StubHub, and discontinuing a decade-long offline marketing deal with Boston-based Ace Ticket. The new venture, Red Sox Replay, will be offered to the teams’ 22,000-strong season-ticket base, as well as individual ticket holders. The ticketing platform will have full electronic integration between primary and secondary ticket sales, and will be embedded into MLBAM’s Ballpark mobile app. While StubHub and other secondary ticket distributors typically charge a 10% fee for ticket buyers, Red Sox Replay will up their fee to 15% for most users, but will lower that number all the way down to 5% for season ticket holders. In a further attempt to encourage fans to buy season tickets, those holders will now be eligible for Red Sox rewards points when using this new platform.

6. In a fun effort to increase season ticket sales and improve fan participation, the Texas Rangers are giving season ticket holders a chance to get their tickets for free (up to $10,000) by hitting a home run at Globe Life Park. According to the Dallas Morning News, half- and full-season ticket buyers are the only fans who will be given the chance to participate. Fans who “place a 25% deposit on full- or half-season tickets are eligible” and “must be willing to pay the remainder of their accounts – in full – by March 4 if they do not hit a home run.” The Rangers’ effort will hopefully spur potential ticket buyers to take a crack at hitting one over the fence and buy at least half-season tickets. At the very least, this marketing ploy will engage fans, and will reward loyalty to the team – all with the potential for fans to win big.

7. Two of the biggest names in golf are setting up to square off in a celebrity golf match leading up to this year’s U.S. Open. According to the Associated Press, Quicken Loans is finalizing details for a match involving Rickie Fowler and Rory McIlroy, potentially joined by Justin Timberlake and Mark Wahlberg, nine days prior to the Open at Oakmont Country Club just outside of Pittsburgh. Detroit Golf Club (DCG), which has been trying to attract a celebrity golf match for some time, is set to play host to this nighttime golf match, which will be jointly televised Golf Channel and CBS. A DGC source said that no contracts "had yet been approved for golf-course lighting but lighting typically used for night football games at unlighted stadiums could be delivered to DGC." This event is predicted to stir some excitement and lure more viewers to the U.S. Open this June.

8. The NFL’s lengthy L.A. drama ended weeks ago with the Rams’ relocation. Now, David Beckham’s strained bid to bring an MLS team to Miami looks to be sports’ next never-ending relocation saga. Problems, ranging from land ownership to stadium woes, have plagued Beckham ever since undertook bringing an expansion team to Miami. Now in the hunt to sell an equity-stake in Miami Beckham United, Paris Saint-Germain appears to be a leading candidate to invest in the club. Beckham is the main driving force in this deal, as he formed a strong bond with the pre-eminent French club after playing 10 games for them in his final season in 2013. Despite struggling to find an adequate site for a soccer-specific stadium, Miami Beckham United hopes to officially join the league in 2018.

9. Despite Athletic Director Mark Hollis advocating for keeping things in-house, Michigan State University finally agreed to a long-term multimedia rights deal with Fox Sports. Michigan State was one of the last Power 5 schools to manage its multimedia rights in-house. But the new deal – expected to exceed 10 years – will be one of the most lucrative in the country, according to Sports Business Journal. MSU could earn up to $15 million annually from Fox Sports, a number well north of its current $6-7 million a year. Despite Hollis believing that the in-house model provides the university unparalleled flexibility and independence, he has "conceded that Michigan State was leaving guaranteed money on the table by not going with a third party." The deal "is far enough along that Fox already has hired" Gonzaga Associate AD/External Operations Kris Kassel as GM to oversee the MSU property.

10. The University of Illinois has concluded a three-month long search for its next Athletic Director, hiring Illinois football standout Josh Whitman. According to the Champaign News-Gazette. Whitman, a former tight end for the Fighting Illini, is leaving his role as the AD of Division III Washington University in St. Louis. After leading the Bears to a first place finish in the most recent Learfield Sports Division III Directors’ Cup Standings, Whitman will face a long list of tasks to handle in Champaign. The school’s two main revenue sports, football and men’s basketball, have struggled this past decade, and a multitude of athletics facilities are in need of major upgrades. Funding is likely a major challenge for Whitman right off the bat, with few opportunities for new revenue-generating areas. While this hire surprised many – Whitman has no D1 experience – he brings U of I what it "needs most right now: integrity, intelligence, energy, ability and a track record of success."

11. After much anticipation, Los Angeles 2024 officials have submitted the first installment of their bid for the 2024 Summer Olympic Games. According to the L.A. Times, the bid focuses on cost efficiency, noting that past Olympics – such as the Beijing and Sochi games – went well over their respective budgets. Set to use almost two dozen sites all around the metro, a bid venue map shows a "renovated Coliseum serving as the main Olympic stadium, with basketball at Staples Center, soccer at the Rose Bowl and beach volleyball on Santa Monica beach." The bid will cost the city an estimated $40-55 million, but will be broken down into three distinct stages. Stage I and Stage II will each cost between $10-15 million, and Stage III will have a price tag of between $20-25 million. The Stage I submission "outlines a bid divided into four clusters" within L.A. County -- Downtown, Valley, Coastal, and South Bay.

12. In the wake of a global corruption scandal spurred by former body President Sepp Blatter, FIFA is being asked for “more transparency” by media executives. According to Reuters, media execs are "raising questions about the transparency of the bidding process" for U.S. radio broadcasting rights to the World Cup. Pointing to a nearly two-decade long relationship between FIFA and Miami-based broadcaster Futbol de Primera, potentially bidding companies want a fair shot at the World Cup’s radio broadcast rights. Multiple companies, such as GLR Networks and ESPN Deportes have expressed interest in throwing in a bid to win the rights, but "see no way they can take them away from Futbol de Primera.” Blatter gave U.S. radio broadcasting rights to Futbol de Primera co-Founder Andres Cantor – despite other companies bidding higher prices. Despite Cantor claiming that he won the rights in a competitive bidding process vetting by FIFA’s lawyers, outside companies are calling for more transparency.

13. In an open letter published on The Vertical, Brooklyn Nets Owner Mikhail Prokhorov outlined some of the biggest lessons he has learned since taking a major stake in the team six years ago. The first foreign owner of an NBA franchise, the Russian billionaire was quick to admit that his initial strategy of acquiring "high-value star players," was a mistake. He wrote, "We had been told that you can’t buy a championship. Truer words were never spoken." Prokhorov came to the Nets just as they were rebranding and moving into their new Brooklyn home, the Barclays Center. After citing the arena’s positive impact on the surrounding neighborhood, Prokhorov concluded his letter on an optimistic note by saying, “For me as an entrepreneur, the team has been a stellar investment. We must not stop with this, though. The final goal has always been and will always remain a championship.”

14. Paris has officially unveiled its compact Olympics Bid for the 2024 Summer Games. According to Reuters, with Paris submitting its bid in unison with Los Angeles, Rome, and Budapest, the race to host the games is officially underway. Leaders of Paris 2024 said that "almost all of the city's proposed venues for the 2024 Olympics were already built or would be temporary facilities" – revealing plans to utilize 36 venues in two distinct zones across the city, central Paris and Paris-St. Denis. Bid leaders promised that "95 percent of the venues" would be "already existing or temporary to minimize investment." Several events would "take place at prestigious venues" such as the Stade de France (athletics), Roland Garros (tennis) and the Bercy Arena (basketball). The vote for the host city will take place on September 13, 2017, in Lima, Peru.

15. Months after being fired by ESPN, ending a 14-year run with the company, Bill Simmons is up and running again. Simmons, now working with HBO on a weekly show sometime later this year, announced his new website – The Ringer. The site is set to debut later this spring or early summer and will host all of his written material, much like Grantland used to do. CNN notes Simmons has been "assembling a team of editors, writers and podcast producers for several months." Many of the hires "are alums of Grantland, the ESPN-backed site that Simmons headed until last spring." A big personality, Simmons was ousted by ESPN after calling NFL Commissioner Roger Goodell a liar in wake of the Ray Rice spousal abuse case. Like Grantland, The Ringer “will have culture coverage.”

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.