Sports Business

Sports Business 15 to Watch: Phoenix Open draws huge numbers

wastemanagementphoenixopen.png

Sports Business 15 to Watch: Phoenix Open draws huge numbers

1. The Super Bowl has some of the year’s best new advertisements packed into a three-hour window, but savvy advertisers are continually expanding beyond just TV spots. A recent Google survey found that 84% of millennials and half of people aged 35 to 50 use their mobile phones while watching the Super Bowl. With that, companies like Facebook and YouTube are competing for the top online advertisements to be featured on their sites. As a 30-second in-game Super Bowl ad now costs north of $5 million, digital content distributors are becoming ever-so-appealing to brands looking to market during the Big Game. YouTube launched its annual AdBlitz program a few weeks ago to encourage brands to post their ads early for maximum views and social network shares. Facebook Marketing Executive Matthew Idema commented on this trend and its increasing popularity. “Campaigns that run on television and Facebook and Instagram,” he said, “do better than campaigns that run on TV alone or on Facebook and Instagram alone.”

2. The Super Bowl halftime show is more popular every year, and that chain-moving trend is backed up by the numbers. With recent halftime acts seeing more than a 100% increase in music sales leading up to and following the game, Super Bowl viewers have taken a particular interest in featured artists, regardless of their genre. According to data provided to SportsBusiness Daily by Nielsen, all acts over the past six years have seen a massive spike in digital download sales and actual album/CD sales. The biggest spike occurred in 2012, when Madonna saw a 482% increase in sales in the two weeks leading up to the Big Game and a 591% jump in the three weeks after Super Bowl Sunday. This year, the featured halftime act of Coldplay (with Beyoncé and Bruno Mars as special guests) was a unique combination. All three performers are expected to extend this trend of a massive spike in sales.

3. In December, Globecast introduced Ultra HD to the Vatican. The media management leader was one of the official partners of the Vatican TV for the production and transmission of the Holy Door Opening Ceremony in Saint Peter. Last week, Pope Francis in turn announced that he is making sports “a focus of his papacy’s third global initiative on education,” according to SportsBusiness Journal. The Vatican is holding a multi-faith sports conference October 5-7 called “Sports at the Service of Humanity." The three-day event will "examine the role sports can play in society;" including sports "represents the first time such a high-profile global institution has focused on the topic as a driver of social change." The invitation-only event will include 150 of the world’s sports, religious, and government leaders. To cover costs, the Aspire Group is working with the Vatican to sell three presenting sponsorships at about $1.8 million each. It’s clear: all 21st century initiatives require sophisticated 21st century media and marketing techniques.

4. The U.S. has been working hard to land a premier international athletics competition, such as the Olympics or the World Cup. The country’s best chance comes out West, where Los Angeles is one of four cities in the running to host the 2024 Summer Olympics. International Olympic Committee President Thomas Bach visited Los Angeles last week to check out the city and proposed venues for himself, calling the visit “very special,” and noting the city’s Olympic plans are “most impressive.” One big boost to L.A.’s bid was last month’s decision to house athletes in UCLA dormitories rather than building an all-new Athletes Village. The move would shave nearly $2 billion off of the current Olympic budget. Bach is currently touring all four candidate cities, stopping in Rome, Paris, and Budapest before he visited Los Angeles. The itinerary might be a subtle sign that the IOC was saving the best for last.

5. Frat parties and golf tournaments don’t usually go together – except at the PGA Tour’s Waste Management Phoenix Open. Arizona’s “most distinctive annual sporting event,” the Waste Management Open has long had a frat-house vibe, centered on its rowdy, enclosed 16th hole. With that reputation, you might think that the tournament’s revenue and attendance numbers would suffer. The opposite is true – the Waste Management Open is actually the best-attended event on the PGA Tour, according to the Arizona Republic. The Phoenix Thunderbirds, the event’s organizing committee, are responsible for delivering the large and enthusiastic galleries year after year. Even as the Tour has tried to tone down the 16th hole by banning caddie races and forbidding golfers from tossing items into the crowd, the 30th edition of the event this week boasts "25 more skyboxes and two additional loge sections” around it. Also front and center in Phoenix is Lagardere Sports and Entertainment’s golf division, headquartered there under the eagle eye of “Coach” Steve Loy.

6. University of Tennessee, home to the all-time winningest Division I women’s basketball program, reached a compromise with Tennessee state lawmakers to allow a commemorative Lady Vols patch to be added to uniforms in all women’s sports. Last July, UT officially dropped the Lady Vols nickname for all sports outside of basketball, citing its licensing deal with Nike and a desire to streamline the school’s athletic branding. An uproar over the move went all the way to the Tennessee statehouse, where lawmakers filed a bill to force the university to reinstate the name. Supporters claim that the Lady Vols nickname is "important because it represents the tradition and pride cultivated by legendary women's basketball coach Pat Summitt and other successful Tennessee athletics teams,” according to the Tennessean. Honor, tradition, and excellence are solid keystones for any brand.

7. Dunkin’ Donuts has signed a deal to become the official coffee shop of USA Hockey and the U.S. women’s national team, piggybacking on the sponsorship it signed with the National Women’s Hockey League in December. The new deal is set to last through the 2018 PyeongChang Olympic Games, and will help cement Dunkin’s relationship with women’s hockey in the U.S. The company will begin social and digital marketing during the current hockey season with plans to launch a more fully fleshed out campaign this fall, according to Tom Manchester, Dunkin’ Vice President, Field Marketing. While the sponsorship Dunkin’ signed with the NWHL will help them reach four core markets – franchises currently exist in Buffalo, Boston, New York, and Connecticut – the national extension will only deepen that reach.

8. The Toronto Maple Leafs have unveiled a new logo to honor their upcoming centennial season. The new design is a throwback to the glory years of a franchise that hasn’t won a Stanley Cup in nearly half a century, according to the Toronto Star. Along with the new logo, the Leafs will wear throwback jerseys next season resembling the designs the team wore between 1939 and 1967, the last year they won a championship. The new logo leaf "has 31 points, a reference to 1931, the first year the club played at Maple Leaf Gardens." And because the club was founded in 1917, the leaf’s body "features 17 veins, with 13 veins above the Maple Leafs crest to represent the club’s 13 Stanley Cups." The new look is expected to boost retail revenue and strengthen brand equity.

9. Camp Randall Stadium, home of the Wisconsin Badgers and their rowdy student section, is facing major renovations. The last time the stadium underwent a major renovation was 2001-2005, when new suites were added. To determine what needs a makeover this time around, the University sent out an email to boosters last week to solicit fan interest and input, according to the Madison Capital Times. Field-level club seats are among new concepts under consideration, and the survey gauges fan interest in buying those seats at various price points. The survey also "asked for opinions on how a potential Kohl Center renovation to include new premium seating options there would impact the user's decision to purchase similar seating at Camp Randall." Small market cities generally have a much tougher time filling all the premium seats than their big city counterparts.

10. The NFL has new broadcasting deals in place for its “Thursday Night Football” games. According to multiple sources, CBS and NBC have agreed to each pay $225 million for the right to broadcast five of the league’s Thursday games over the next two seasons. This marks a massive boost in revenue for the NFL, as CBS only paid $300 million for the right to broadcast eight games last season. While specific broadcast schedules have not yet been released, terms indicate that CBS will carry five early-season games, with NBC carrying later ones. NFL Network will simulcast all of those games, plus carry eight games exclusively. The league is still looking to sign a steaming partner for its TNF primetime package, especially after Yahoo’s trial streaming of an NFL International Series game this past season was a resounding success.

11. A rough patch of storms at San Diego’s Torrey Pines Golf Course may have altered the famous landscape for the foreseeable future. More than 20 trees fell on Torrey’s North and South courses, forcing a final round delay at the PGA Tour Farmers Insurance Open. At least two prized Torrey pines came down in the storm, but "most troublesome was a 75-foot tall eucalyptus that fell into the fairway at the par-4 15th," according to the San Diego Union-Tribune – the tree was a major factor in the playability of the hole. After the Sunday storm, fans were not allowed on the course for the delayed final round. While gate and ratings are important to the Tour, fan safety is paramount.

12. Despite revamping its roster selection format to better engage fans, this year’s Pro Bowl drew only 7.99 million viewers – the event’s lowest audience since 2007. While this number is well above what it was a decade ago, it’s also the smallest audience to tune in since the game was moved to the weekend before the Super Bowl in 2010. Not helping the Pro Bowl’s viewership was the NHL All-Star Game, airing opposite on NBCSN and drawing that network’s best audience yet. NBCSN finished with 1.6 million viewers for the game from 5:03-8:27 pm ET, up 34% from 1.19 million viewers last year. While the disparate fates of the NFL Pro Bowl and NHL All-Star Game mean different things to their respective broadcast partners, they are in no way an accurate portrayal of the health of both leagues

13. While Atlanta is completing the Falcons’ new $1.4 billion facility, Mercedes-Benz Stadium, that is not stopping the city from renovating Philips Arena – home of the Hawks. Atlanta Mayor Kasim Reed affirms that the Philips Arena renovations are “key to keeping” the Hawks downtown, and could be a $200-$300 million project. However, public money is a planned part of the tab, and taxpayers’ portion “could be as high as” $150 million, according to the Atlanta Journal-Constitution. Accordingly, the city is looking into other means of funding, such as rental car taxes. The deal will not necessarily involve a tax increase, but will draw from the pot on money that rental car taxes have brought in thus far. Philips Arena, which opened in 1999, "hasn’t kept up with other arenas and its configuration, including a wall of suites on one side, is not in fashion with newer NBA venues." The Hawks' future at Philips Arena "has been in question since June" when Tony Ressler acquired the team and "did not rule out moving it out of downtown."

14. After a tough couple of months trying to navigate U.S. legal loopholes, DraftKings has made the leap overseas. The Daily Fantasy Sports giant just secured partnerships with English Premier League teams Arsenal, Liverpool, and Watford as part of its global expansion into the U.K, according to The Drum. This marks the first international deal that DraftKings has signed, with hopes of launching a long and successful international campaign. The deal will see the DraftKings’ brand presence "visible throughout the grounds during domestic fixtures as well as marketing activities being promoted through each of the club’s digital and social media channels." Once it becomes operational in Europe, DraftKings will feature online games based on the EPL and UEFA Champions League. The move is sure to be embraced by European fans who are much more accustomed to “games of chance” being an integral part of their sports landscape.

15. The Minnesota Vikings are less than a year away from moving into their new, state-of-the-art U.S. Bank Stadium, and the franchise continues to rush toward their goal of selling $125 million in PSLs. The Vikings just announced that they are only $10 million short of that goal, having “sold 90% of the available 'stadium builder’s licenses'" for the venue’s inaugural 2016 NFL season, according to the Minneapolis Star Tribune. This marks the first time that PSLs have been sold in Minnesota. Remaining are licenses for $2,000, $2,250, and $2,550. The fewer than 5,000 remaining PSLs to be sold "are for seats in the lower level corner and in the end zone." CMO Steve LaCroix reports that sales picked up after the Vikings playoff loss to the Seahawks, with the team "selling 1,000 licenses in the past three weeks."

Jamie Swimmer contributed to this story.

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.