Sports Business

Sports Business 15 to Watch: Zika virus threatening Rio 2016


Sports Business 15 to Watch: Zika virus threatening Rio 2016

1. In a preemptive effort to reduce potential future domestic violence allegations against its players, the NFL “will no longer allow players with convictions for domestic violence, sexual assault or weapons offenses to attend the annual scouting combine in Indianapolis,” according to USA Today. Background checks will be run well in advance to ensure none of the registered athletes have had related troubles – making the players who fail the background check an example of the league’s zero tolerance policy. In a memo, NFL Executive Vice President/Football Operations Troy Vincent stated that uninvited prospects "would be barred from any league-related event if a background check turns up a felony or misdemeanor conviction," and that players who "refuse to submit to a background check will also be uninvited." Players who fail to comply also will not be invited to the NFL Draft. This is the NFL’s first big move to address sexual assault history among potential rookies and newcomers.

2. Ahead of its season-opening Daytona 500, NASCAR has implemented an all-new charter system, guaranteeing owners starting spots in the grid and higher income. Under the new charter rules, Sprint Cup fields will be reduced from 43 to 40 cars – of which 36 will be chartered. NASCAR will bestow charters on cars that have run full-time since 2013, and owners will be able to secure three or four charters. The system will temporarily leave newer Sprint Cup entries for Stewart-Haas Racing, Joe Gibbs Racing, and Team Penske/Wood Brothers Racing without charters. Owners have discussed charter sales for months; a charter is likely to be sold for $1-10 million. The charter system deal will last for five years with a four-year option, allowing it to run through the duration of NASCAR’s current TV-rights deal, set to end in 2024. With payments significantly lower for non-chartered teams, getting a charter will now be serious business for NASCAR owners.

3. Multiple countries are rumored to be discouraging their athletes from attending the Rio de Janeiro Summer Olympics due to the zika virus. A mosquito-born illness that has caused a spike in Brazilian microcephaly (a birth defect marked by an abnormally small head), zika virus was declared an international health emergency on February 1 by the World Health Organization. While Kenya is the most recent country threatening to pull out of Rio, the USOC is busy refuting a report saying that its athletes “might consider skipping” the games. USOC officials said it is “100% inaccurate” they suggested American athletes do not attend the Rio Games because of fears about the Zika virus, according to the L.A. Times. USOC Chief External Affairs Officer Patrick Sandusky said, "Team USA looks forward to the Games and we did not, would not and will not prevent athletes from competing for their country should they qualify."

4. At market leader Globecast, it’s now full stream ahead. AVIWEST, a global provider of video contribution systems, has announced that Globecast, provider of global content delivery services for broadcasters and content creators, has deployed AVIWEST’s DMNG StreamHub receiver, decoder, and distribution platform at its Paris hub. Shared Globecast and AVIWEST customers now have a more effective way of sharing high-quality live HD video content with other broadcasters around the world. “With 35 points of presence and 12 teleports worldwide, Globecast is dedicated to helping broadcasters deliver content across five continents. In keeping with its technology-agnostic approach, Globecast has extended and enhanced its offering to incorporate IP solutions while continuing to supply the high quality-of-service it is known for,” said Marc Logez, head of marketing, global contribution at Globecast. “Adding AVIWEST technology to Globecast’s arsenal of contribution and delivery services gives our customers access to alternative solutions for streaming superior quality live video.”

5. After finishing with MLB’s worst attendance in 2015, the Tampa Bay Rays are implementing aggressive promotions and discounts this coming season to try and improve on last year’s numbers. According to the Tampa Bay Times, the team is now "offering those in the military and veterans free admission on Mondays, while cutting kids' ticket prices to $2 on Tuesdays and charging just $2 for hot dogs every Wednesday." Seniors can get $15 tickets for games on Thursday, while students get the same deal on Fridays. Meanwhile, season ticket holders will receive exclusive access to the brand new “Draft Room” hangout area on the Tropicana Field club level. Rays Chief Business Officer Jeff Cogen "envisions a marketing scenario that can draw first-timers to the Trop, persuade more casual fans to become more frequent attendees, and more regulars to become season ticket holders." Providing entertainment options for all comers is key to any pro sports franchise’s success today.

6. While the NFL recently signed a deal with CBS and NBC for the rights to broadcast Thursday Night Football (TNF) for the next few years, the league is still searching for a streaming rights partner for its TNF package. The NFL has discussed the digital package with Apple, Amazon, Yahoo, Facebook, Verizon, and AT&T, according to Bloomberg News. Despite some companies being scared away by the streaming rights’ high price tag, AT&T, Yahoo, and Verizon are all expected to bid. Sources confirmed that the NFL “isn’t looking for a long-term relationship;” the league wants to use the next few years to experiment with different kinds of media, distribution models and technologies.” The NFL’s first trial with live steaming went well this past season, when Yahoo live-streamed the Jaguars-Bills game from London. Capitalizing on a growth market for “TV everywhere” access, expect streaming rights to grow rapidly in coming years.

7. Futsal, a five-per-side indoor game, may not be popular with the average soccer fan, but that is about to change. The upstart 16-team Pro Futsal League, set to debut in the U.S. in 2017, is attracting big-time names to ownership stakes. According to the Dallas Morning News, Brooklyn Nets Owner Mikhail Prokhorov and the Buss family, owners of the Los Angeles Lakers, have each committed to owning a PFL franchise. Additionally, La Liga clubs FC Barcelona and Atletico Madrid, along with Argentinian club Boca Juniors and Brazilian club Corinthians, are among the “world-power soccer clubs that have committed to full or partial franchise stakes.” Futsal is currently played in 198 of 207 FIFA member associations, and owners are expecting top talent to flock to the U.S. Details concerning roster sizes and salary cap will be covered in upcoming meetings between prospective owners and futsal officials. Cities pegged to host franchises include Boston, Chicago, Dallas, L.A., Miami, N.Y. and Seattle/Vancouver.

8. As technology rapidly advances, so does the streaming quality of sporting events. NeuLion – in a partnership with Univision Deportes and Sony – just broadcast the Mexico-Senegal soccer friendly from Marlins Park live in 4K resolution. The match was produced by Univision and NEP.This marked only the third live 4K streaming trial for NeuLion. The past two streams were NBA games made available to users with Sony 4K Ultra HD TV sets. Along with 8K, 4K is one of two ultra high definition TV resolutions targeted toward consumer television. NeuLion CEO Kanaan Jemili spoke about the expanding usage of this technology. “Coming on the heels of our successful 4K live streaming trial with the NBA and BT Sport,” he said, “this event further demonstrates that live 4K live sporting events are the wave of the very near future.”

9. The English Premier League is going in a new sponsorship direction starting next season. Longtime title sponsor Barclays opted not to renew its contract with the league going forward, forcing the EPL to rebrand itself. Now to be known as the “Premier League,” instead of “Barclays Premier League,” the EPL unveiled a new logo this past week. League announcements characterized the logo is a “bold and vibrant identity that includes a modern take on the lion icon -- a symbol that is part of the competition’s heritage -- which is flexible in digital and broadcast formats.” The Premier League has also elected not to sign another title sponsor; it will continue forward with an elite list of secondary sponsors including Nike and EA Sports. The secondary sponsor mix is expected to bring a diverse, international mix to the Premier League.

10. After seeing its basketball attendance drop 16% this season, the University of Memphis is looking to renegotiate its FedExForum lease with the Memphis Grizzlies. The university is taking a huge financial hit because of the basketball dropoff, according to the Memphis Commercial Appeal. Under the school’s current agreement with the Grizzlies, UM receives “an $800,000 annual payment if certain attendance criteria are met,” and the annual payment is “reduced if the average turnstile count falls below 10,000 – which appears to be the case this season.” After seven straight seasons of averaging over 16,000 fans per game – highlighted by Derrick Rose and former coach John Calapari’s run to the NCAA Championship – the past two seasons have averaged 13,915 and 11,721 fans, respectively. The Memphis Tigers are currently halfway through their 20-year lease agreement, and believe now is the right time to renegotiate.

11. David Beckham has been pushing for months to bring an MLS team to Miami, and after a rocky start, his plans are starting to take shape there. As one of the final steps in securing a stadium for his proposed club, Beckham has been looking for a credible, deep-pocketed equity partner. Sources including the Miami Herald confirm that Beckham has draw “vast interest” from serious investors, including EPL club Chelsea Owner Roman Abramovich, Chinese and American candidates, and Qatar Sports Investments, which owns Ligue 1 club Paris Saint-Germain. With a deal expected to be finalized within the next few weeks, Beckham confirmed he would “prefer a partner who understands professional sports – particularly soccer – and would have the background and financial ability to help acquire elite players who will excite the discerning soccer-savvy South Florida audience." The estimated $300 million necessary to build the Miami stadium will also “establish a front office and acquire high-quality players.”

12. Amid mounting legal costs, DraftKings requested an early exit from an exclusive advertising deal it signed with ESPN in June. ESPN agreed to let the daily fantasy sports concern off the hook, according to Yahoo Finance. The exclusive ad relationship gave DraftKings deep placement within several ESPN shows, and vaulted DraftKings among ESPN’s top 10 advertisers. The deal was revolutionary in that it marked the first-ever, large scale integration between a DFS operator (DraftKings) and a season-long fantasy operator (ESPN). DraftKings and the DFS industry as a whole took major blows in New York and Illinois when those Attorneys General ruled the games illegal for state residents. Now, the industry is reportedly under investigation by the FBI and a Florida grand jury. News of the Draft Kings-ESPN split came on the same day that Fox Sports reported its $160 million DraftKings investment, including an estimated 11% equity stake, has declined in value by about 60%, to $65 million.

13. The WNBA has appointed Coca-Cola executive Lisa Borders as WNBA President, effective March 21. With Laurel Richie stepping down as WNBA President in November, the league has worked hard to find the right person to succeed her. Borders comes to the WNBA after working as chair of the Coca-Cola Foundation and as vice president, Global Community Affairs, since 2013. She will report directly to NBA Commissioner Adam Silver. Despite her lack of basketball experience, Borders proved instrumental in bringing the WNBA’s Atlanta Dream franchise to Atlanta in 2008, when she was Atlanta City Council President and Vice Mayor. The WNBA, a subsidiary of the NBA, is set to kick off its 20th season on May 14. Borders’ blend of sponsor savvy and big market leadership is a brilliant move for the ever-struggling women’s league.

14. While he wasn’t technically in the celebrity field at this weekend’s AT&T Pebble Beach Pro Am, the Bobblehead version of World #1 Jordan Spieth was the hottest face in the crowd on Saturday. AT&T gave away 8,000 Bobble Jordans on Moving Day, in a move sure to push the telecom giant up the awareness charts. Besides sponsoring Spieth, AT&T has underwritten the Pebble Beach event for 31 years, titles the AT&T Byron Nelson Classic, and is in year three of their $17 million plus annual naming rights deal for AT&T Stadium. For their efforts, the Dallas-based company won SportsBusiness Journal’s 2015 Sports Sponsor of the Year award. What’s more, with additional support from such sponsors as Chevron, 3M, and Facebook, the AT&T Pebble Beach Pro Am contributed over $10 million to the Monterey Peninsula Foundation. In this exciting post Tiger Woods era, Corporate America continues to see the benefit of its allegiance to golf.

15. Lagardère Active TV and DreamWorks Animation (DWA) have agreed to a carriage deal which gives Lagardère free-to-air and basic pay-tv rights for its family and kids channels to broadcast DreamWorks Animation’s many television series. Offerings include “Dragons: Race to the Edge,” “The Adventures of Puss in Boots,” “All Hail King Julien,” “Turbo FAST,” “The Mr. Peabody & Sherman Show,” and “Dawn of the Croods.” The collaboration will launch on Gulli in September with Dinotrux, DWA’s first original series. Eric Ellenbogen, Co-Head, International TV and DreamWorks Classics, said that families would be able to enjoy its beloved characters and amazing stories on not only on Gulli, the leading children’s network in France, but also on their kids’ pay-TV channels Tiji and Canal J. Today’s savvy sports and entertainment companies continue to find ways of attracting tomorrow’s customers.

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.