Sports Business

Sports Business 15 to Watch: Spieth will likely log over 125,000 air miles

1-12-jordan-spieth.png

Sports Business 15 to Watch: Spieth will likely log over 125,000 air miles

1. Between now and August, Jordan Spieth will likely log over 125,000 air miles. Including the just-completed Hyundai Tournament of Champions in Maui, the World No. 1 golfer’s 2016 tournament commitments will take him to nine countries in five continents over 11 months. Part of his trans-global motivation is the appearance fee…likely between $1-2 million in Spieth’s case…guaranteed by most tournaments outside the U.S. But Spieth’s agent emphasizes the travel is an important way to maximize brand value for existing and potential sponsors, and for golf. “Jordan enjoys seeing the world, experiencing new cultures and has always thought that it is important to help to grow the game,” his agent, Jay Danzi of Lagardere Sports and Entertainment, recently said. For athletes building a global brand, traveling to key international markets is a must.

2. Johnny Manziel has not had the smoothest ride in his short-lived NFL career. Whether taking an impromptu trip to Las Vegas, skipping a mandatory team meeting, or causing an on-field issue, some new sort of trouble always surrounds “Johnny Football.” Last week, LeBron James’ marketing agency, LRMR, publicly announced that enough is enough; it will no longer work with the maligned Browns quarterback. Manziel, sidelined due to the NFL's concussion protocol, missed a mandatory team meeting Sunday and was not at the stadium for the Browns' season finale against Pittsburgh. He was spotted partying in Las Vegas Saturday night, where he reportedly wore a blond wig, fake mustache, and glasses, and used the alias "Billy." Fenway Sports Management, which assisted LRMR with Manziel’s marketing deals, has also decided to part ways with him. What the future holds for Manziel is unclear but this much isn’t – he needs to get his off-field issues figured out if he ever wants to become a franchise quarterback.

3. As professional sports leagues continue to expand their reach internationally by bringing talent and money back to the domestic market, MLB is trying to further tap into China. Late last week, MLB announced a wide-ranging, three-year deal with Chinese media and technology outfit Le Sports. Under terms of the new agreement, Le Sports will hold exclusive media rights in China to broadcast 125 MLB games per season – including four regular-season games per week, 20 postseason games, all World Series games, and the All-Star Game – along with Mandarin-language MLB programming. MLB Commissioner Rob Manfred discussed the new deal at CES Las Vegas. “We want to weave baseball into the fabric of China’s culture,” Manfred said. “We believe the key to continued internationalization is localization. We need to work with local partners to make it relevant.” Millions of potential fans are gearing up to see their first live-streamed MLB game.

4. This past year was certainly a time of racial struggle for many across the U.S. Has that same conflict spilled over into sports? NASCAR driver Bubba Wallace, an African-American in a predominantly white sport, recently appeared on Bleacher Report’s “Uninterrupted,” questioning whether his skin color is the reason that he and Roush Fenway Racing have had a tough time landing a major sponsor for their No. 6 Xfinity Series Ford. Several companies served as Wallace's race sponsors last season, Ford and Roush Performance among them, but Wallace wants a “big sponsor” like other drivers have. In his “Uninterrupted” segment, Wallace emotionally stated, “I just need to figure out what I and my team need to do to land a big sponsor. I’ve been fighting that for 13 years now…They said to win, and we’ve done that numerous amounts of times. I can run up front with the big dogs. I don’t know. Is it because I look different?” Tellingly, the original video can no longer be found on the Bleacher Report website.

5. With the NFL Playoffs kicking off this past weekend with the Wildcard Round, Dick’s Sporting Goods has taken a March Madness-style approach to predicting the playoffs outcome. The sporting goods company simulated a playoff bracket based on jersey sales season-to-date. What resulted was the New England Patriots, led by Tom Brady’s top-selling jersey, bested sales of Panthers Luke Kuechly’s (No. 2), Cam Newton’s (No. 6), and Greg Olsen’s (No. 19) jerseys. Unlike March Madness, where the wackiest ways of predicting game outcomes can yield the highest results and most unlikely upsets, this model did the opposite. The only so-called “upset” was seen with the Seattle Seahawks topping the Arizona Cardinals in the Divisional Round – though the Seahawks are one of the Wildcard favorites to make a deep playoff run. The Steelers, Bengals, and Seahawks helped round out the top five overall teams in terms of jersey sales amongst playoff teams. Marketing creativity is key to making sales at the end of a long season.

6. Not exactly unexpected, but Levi Strauss & Co. made it official, announcing that it would become an official founding legacy partner of the San Francisco Bay Area Super Bowl 50 Host Committee. The Levi's team will work with the Host Committee to help bring football fans a variety of “exciting experiences from live music to interactive events throughout Super Bowl Week.” The Levi's brand will release a limited-edition Super Bowl 50 Collection, available for purchase in limited quantities during Super Bowl week. The deal will also see the Levi's brand serve as presenting sponsor of the Host Committee's main entertainment stage. The City Stage presented by Levi's will be one of the featured destinations of Super Bowl City. Fifteen-time Grammy Award winner Alicia Keys will headline and close out the festivities on February 6 with a free concert, with additional performers to be announced in the coming weeks. Premium entertainment – free to the public – has become expected in each Super Bowl host city.

7. A trio of longtime charitable ambassadors have partnered with the USTA Foundation to serve up dreams. Bob and Mike Bryan, the winningest men’s doubles team of all time, and journalist Katie Couric have been appointed to the USTA Foundation’s Celebrity and Player Advisory Council. In this role, they will promote the Foundation’s mission and raise money to support its programs. The Bryans and Couric join the current advisory council comprising its chairman, actor Alec Baldwin, world No. 30 Sloane Stephens, and former players including Jim Courier, Mary Joe Fernandez, and Billie Jean King. In November, the Bryan brothers, repped by Lagardere Sports, were awarded the ATP Arthur Ashe Humanitarian Award for their foundation, which has raised more than $700,000 for youth tennis organizations. Couric co-founded Stand Up To Cancer and the National Colorectal Cancer Research Alliance. She also produced and narrated “Fed Up,” a documentary chronicling the spread of childhood obesity. The new appointees are no strangers to humanitarian work.

8. MLS expansion team Los Angeles Football Club (LAFC) has already made a name for itself, despite being years removed from its first game. The club, which enters a market that already hosts MLS’s most successful franchise – the L.A. Galaxy – just introduced actor Will Ferrell as a part owner. Ferrell joins a 26-member ownership group, comprising stars Magic Johnson, Mia Hamm, Nomar Garciaparra, and Dodgers Co-Owner Peter Guber. LAFC Principal Owner Henry Nguyen spoke of his excitement in welcoming the actor. "Will has an unbelievable fan base and following of his own. He’s going to bring a lot of fan interest to our club." In a city like Los Angeles, attracting an all-star ownership group will help attract a solid fan base and perhaps, pull talent away from the crosstown rival Galaxy. The new club hopes its next major announcement will be the groundbreaking for its new stadium, set to be constructed in Exposition Park.

9. The National Lacrosse League (NLL) has named longtime soccer executive Nick Sakiewicz as its new commissioner. Sakiewicz brings over two decades of experience to his new job. He replaces George Daniel, who resigned to start a new law firm while remaining as counsel to the league, according to the NLL. Sakiewicz quickly confirmed that his first order of business is expansion. The NLL currently fields nine teams, but Sakiewicz hopes to bring that number up to 16 as soon as possible. Potential markets that seem a good fit to host expansion teams have been notified, but have yet to be revealed. Sakiewicz hopes to draw from his MLS expansion experience – in which that league saw a massive increase in attendance, national popularity, and TV revenue. Noting that his non-lacrosse background “might be a valuable asset,” the new commissioner stated, “I'll have an out-of-the-box perspective...and I think we're going to need that…The NLL reminds me so much of where we were in the MLS 20 years ago.”

10. T-Mobile has secured naming rights to Las Vegas’ new $375 million arena. The agreement, the telecom company’s first for a sports and entertainment venue, is reportedly for 15 years at slightly less than $6 million a year, according to the Las Vegas Sun. AEG Global Partnerships brokered the agreement for the 20,000-seat facility, a joint venture between AEG Worldwide and MGM Resorts. The arena is set to open April 6 with a concert by The Killers and Wayne Newton, and it could host an NHL expansion team – if Vegas is granted one. T-Mobile CMO Andrew Sherrard commented, "If the NHL comes, we would obviously love it…but it was not a driver [for the deal]." Special amenities will be offered to T-Mobile customers at the arena, including a fast-track VIP entrance and seat upgrade opportunities. All of these perks are intended to expand the brand’s reach in one of America’s most traveled-to cities.

11. With the NFL’s regular season at an end, the league’s TV partners reflected on their viewership numbers. Across the board, the 2015 season was a massive success for each Sunday partner – NBC, CBS, and Fox. All three networks saw an increase in Sunday viewership from 2014, with CBS/NFL Network also getting a sizeable viewership boost to their “Thursday Night Football” primetime package. According to Sports Business Journal, NBC set new records in 2015 for its NFL package. The net averaged 22.5 million viewers for all games, marking the best NFL primetime package in 19 years. The only network to see a slip in its numbers was ESPN, whose “Monday Night Football” programming saw a decline in popularity for the second straight season, despite a slate of thrilling games. ESPN finished with 12.9 million viewers for its Monday night games, down 3% from last year. The high mark for “MNF” on ESPN remains the 2010 season, when the net drew 14.7 million viewers. Cord-cutting may be starting to erode the World Wide Leader’s market share.

12. The world’s most popular soccer team may have just gained a few more million followers. In a groundbreaking deal, English Premier League side Manchester United has agreed to terms with Sina Sports to broadcast a 24-hour MUTV channel in China, according to the Manchester Evening News. With the inception of the new channel, ManU’s 108 million Chinese followers will be granted “unprecedented, behind-the-scenes access to the club,” and will surely attract new followers throughout China. MUTV programming will include full, live coverage and highlights of all the club's Premier League and UEFA matches, coverage of Manager Louis van Gaal’s weekly press conferences, and pre-match buildup with former players. In addition, MUTV will give fans exclusive interviews with team management, coaches, and first-team players, as well as documentaries and club news. Financial details have not been announced. The development clearly marks China’s dedication to bringing one of the world’s most popular sports brands to its own turf.

13. Continuing the buildup to the 2016 Summer Olympic Games in Rio, more Russian athletic controversy ensues. Two top Russians athletics officials and the son of former IAAF President Lamine Diack were “banned from the sport for life this past weekend for covering up an elite Russian athlete's positive dope test and blackmailing her over it," according to Reuters. Valentin Balakhnichev, the former head of the Russian athletics federation, former head distance coach Aleksey Melnikov, and Papa Massata Diack, a former marketing consultant to the IAAF, were the three indicted. These bans follow last year’s World Anti-Doping Agency independent commission report that found a "state-sponsored culture of doping in Russia and prompted the country's suspension from the sport." These sanctions were applied primarily to the case of Russian marathon runner Liliya Shobukhova, who paid $600,000 to have her positive dope tests “covered up.” The scandal has put Russian athletes under larger scrutiny and has called into question their eligibility in the upcoming Olympics.

14. Despite Attorney General rulings in New York and Illinois, outspoken Dallas Mavericks Owner Mark Cuban recently invested in Daily Fantasy Sports data startup Fantasy Labs. Citing his belief in data-driven business, Cuban “invested an undisclosed sum in the analytics platform,” according to the Denver Post. Differing from actual gameplay, Fantasy Labs "provides high-end statistics and analytics for daily contests run by game sites such as DraftKings and FanDuel." The company has plans to "expand into other areas" such as e-sports. Speaking at CES in Las Vegas, Cuban defended his investment and the industry by opining that DFS does not fall under the category of gambling: “It’s not gambling. It’s not gambling. You have to be an idiot to think it’s gambling.” Despite Cuban’s clear-cut opinion, he is not an Attorney General and ultimately has no say in pending rulings on the legality of DFS gameplay.

15. Days before the second annual College Football Playoff Championship Game, Zebra Technologies struck a deal with the CFP to employ its real-time player-tracking system. Monday’s game in Glendale, Arizona between the Alabama Crimson Tide and Clemson Tigers featured Zebra’s technology, despite the company signing this deal less than a week before the game was played. The company’s advanced technology employs small sensors embedded within player shoulder pads, yielding a wealth of location and motion-performance data. The technology was already used in the Orange and Cotton Bowl semifinals, with Zebra's work for the CFP games building upon prior work the company had done with Ohio State, Tennessee, and Washington during college football’s regular season. Similar data analysis is used by NFL teams, as sensor technology is becoming commonplace across top-tier football teams.

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.