Sports Business

Sports Business '15 to Watch': Spieth benefits from Masters win

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Sports Business '15 to Watch': Spieth benefits from Masters win

  1. Augusta National filed for two trademarks for CBS broadcaster Jim Nantz’ “A Tradition Unlike Any Other” phrase. While ESPN and CBS televise The Masters, Augusta National actually owns the broadcast, and by extension, the phrase. Nantz is believed to have first used the phrase before the 1986 Masters. Amazing Masters all around: $35 million in tournament revenue (that the Masters admits); Spieth validates his Under Armour, Rolex, NetJets, Amazon endorsement deals; Phil Mickelson does more business with his sponsors Barclays, AT&T, Callaway, and Rolex; television celebrates 60th anniversary of one-year deals with CBS. It only gets better!

  2. The NCAA Tournament finished with an average of 11.3 million viewers across CBS, TBS, TNT and truTV this year, marking the best average for the event since 1993, when 12.7 million viewers watched. The average in 2015 also is up 8 percent from 10.5 million viewers last year. More leverage for next set of astronomical television rights fee negotiations with new bounty for the NCAA long-term — stipend payment of student-athletes is sure to follow.

  3. NFL owners will not vote on which L.A. stadium plan to support at their May meeting despite the significant progress in recent months in both Carson and Inglewood. It could be a minimum of six months before the league decides which plan it will support. Vote postponement means two things: more time to percolate the various Southern California options coupled with more time to “shake out” the politics involved in the St. Louis stadium situation “referendum or not.” In any event, both types of situations should be resolved before the NFL votes on any/all of the three teams final moves.

  4. MLB Advanced Media delivered a record 60 million video streams to fans on Opening Day across its digital platform, a 60 percent increase over last year. Baseball fans also accessed MLBAM’s At Bat mobile app 9.1 million times on Opening Day, up 40 percent from the previous single day record. Baseball will undoubtedly break its $9 billion revenue standard from last year; 48 percent asset appreciation based on last year’s numbers probably a major improvement at the end of this season and beyond.

  5. The NFL said it would likely contribute $200 million toward a new Chargers stadium in Mission Valley. With all parties trying to come up with a financing plan, the city of San Diego and San Diego County have agreed to jointly pay for experts to help negotiate a stadium deal with the team. A subset of comments from No. 3 above. The NFL should be able to contribute at least $200 million per team on any stadium project (thanks to the G3 funding process created years ago as part of the last round of stadium public/private partnership funding). NFL makes this process a top priority by the end of this season.

  6. Milwaukee Bucks co-owner Wes Edens said that he plans to personally invest in some of the ancillary development around his team’s proposed $500 million arena. Between the arena and a mixed-use entertainment district, the total cost of the plan is $1 billion. Bucks public/private partnership arena process now should generate more private investment than projects in comparable economic markets — thanks to the Bucks new investment group. Hopefully, Governor Scott Walker can maneuver the public investment for the sake of the NBA in Wisconsin.

  7. MLB and the MLBPA have agreed to a deal that forbids players from playing in daily fantasy baseball games that involve a prize, but still allows them to endorse these companies. The deal does not preclude players from partaking in fantasy baseball when something of value is not involved. Pete Rose monitoring the “gambling/fantasy distinctions” very closely. Players can reap benefits from fantasy sites, but cannot use them for their own financial benefit. Sounds like a distinction that will be “cleverly applied” in the future.

  8. Miami Heat officials are angry that the NBA did not inform the team about its plans to develop a relationship with Cuba before the news was made public. The NBA will become the first U.S. pro sports league to visit the island now that diplomatic relations has been re-established.  Look for more “frayed emotions” as the NBA ventures into Cuba; Peter Angelos-led “pioneering trips” should mean baseball will follow shortly. Economic goldmine, but considerable controversy in Florida.

  9. Shake Shack abruptly had to end a Baltimore Orioles promotion due to copyright objections from MLB. The restaurant was offering free custard to anyone dressed in Orioles gear on Friday, the team’s home opener. MLB contacted the eatery that use of the word “Orioles” was prohibited.  Note to Shake Shack: give away custard, but don’t call it an “Orioles promotion”; and work out the specifics of the deal in a better defined way beforehand.

  10. The NCAA by 2016 is expected to pass legislation allowing for the deregulation of college football conference championship games. The move would directly impact the Big 12, which is the only Power Five conference without a championship game. Current NCAA rules state that a conference must have at least 12 teams in order to play a title game. Big 12 may not have the immediate ability to expand, but certainly wants to be able to generate the substantial revenue involved in an annual championship game. Also important in the future for “committee credibility” as long as the playoff remains limited to four teams.

  11. NBPA Executive Director Michele Roberts issued an internal memo announcing the “2015 Players Choice Awards.” The program was created at the request of players who wanted a say in year-end award voting. The media has voted on NBA awards since 1981. More opportunities for the NBA Players Association to generate merchandise, licensing, and endorsement revenues heading into their next collective bargaining negotiations with the owners. Good choice to try to identify additional revenues, rather than create turbulence and distress over those revenues already created.

  12. Seattle Seahawks RB Marshawn Lynch has begun selling “I’m just here so I won’t get fined” T-shirts on his website. Lynch in February sought to trademark the phrase, which he unintentionally made famous during Super Bowl XLIX Media Day. Interesting to see how many of these shirts he sells beyond his “immediate family.” Maybe he will generate more revenue if he actually speaks to each buyer as part of the sale promotion. Don’t hold your breath!

  13. Golfer Rickie Fowler has signed a long-term partnership with Quicken Loans in which he will serve as a spokesperson for the company. The Quicken Loans logo began appearing on Fowler's golf bag beginning with the opening round of The Masters. Another example of completed commerce around the Augusta National Oak Tree during Masters weekend. Billions of dollars change hands following handshakes done during meals at the revered “epicenter of Masters commerce.”

  14. The University of Oregon is dropping ticket prices for men’s basketball games by an average of 34 percent after posting its worst home attendance in 20 years. Oregon averaged just more than 6,200 fans per home game this season, which barely is half of Matthew Knight Arena’s capacity. Good example of the market dictating demand in either direction; the Knight family is less than excited about the basketball team progress — though their involvement in all aspects of Oregon sports should be respected.

  15. Caddies’ contentiousness with the PGA Tour continues to grow due to a perceived inconsistent dress code. More than 160 caddies have filed a class-action lawsuit against the Tour wanting a piece of the sponsorship revenue derived from the bibs they are required to wear. 
    Players Championship in early May at the PGA Tour headquarters may be “ground zero” for this business standoff. Both sides would be wise to reach a reasonable settlement before the fight elevates even further.

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.