15 to watch (Week of 6.13.16)
Rick Horrow's "15 to watch"
CSN Bay Area Sports Business Insider Rick Horrow takes you off the field with his 15 top Biz Ball trends for the week of June 13.
1. The 116th rendition of the U.S. Open Championship this weekend is expected to bring a significant financial boost to the greater Pittsburgh, Pennsylvania, area. According to the United States Golf Association, Oakmont Country Club’s ninth U.S. Open Championship is estimated to have a $135 million economic impact on the region. USGA predicts tournament attendance to float around 215,000 spectators throughout the weekend, with tickets expecting to sell out for the 29th consecutive year. The 9,877 player entries to this year marks the third-most submissions in U.S. Open history – the 2014 U.S. Open at Pinehurst holding the top spot at 10,127. “Entries were accepted from golfers all 50 states, the District of Columbia and 72 foreign countries.” Golf already has a significant economic impact on the state of Pennsylvania; the state’s nearly 700 courses provides residents with 49,000 jobs, $700 million in annual wage income and close to a $2.3 billion total annual economic boost.
Serena takes down Sharapova
2. Serena Williams’ $29.8 million in earnings over the past 12 months has finally pushed her past Maria Sharapova as the world’s highest-paid female athlete over that span. According to Forbes, Sharapova has ranked atop the standings for the past 11 years. Williams’ on-court success, highlighted by a trio of Gran Slam titles, combined with her addition of JPMorgan Chase to her fold of sponsors and “several million dollars through appearance fees” has landed her in first place. The tennis star’s endorsement portfolio now includes Audemars Piguet, Beats Electronics, Burlei, Delta Air Lines, IBM, Kinder Joy, Mini, Wheels Up and more. She also has “a small stake” in the Miami Dolphins. Williams is ranked fourth in this year’s Horrow Sports Ventures/MVP Index Power 100, but is by far the highest ranked female athlete on the list; Sharapova is the second-highest ranked female athlete on the list at No. 19.
NBA Finals shoe battle
3. This year’s NBA Finals features a matchup between league heavyweights LeBron James and Stephen Curry, but it also shines a spotlight on the quickly intensifying battle between Nike and Under Armour. UA represents Curry, and is rapidly gaining traction on Nike in the sportswear market. Just this past year Under Armour “chalked up a 29% revenue gain,” while Nike is “standing still with 8.3% expected revenue growth” in 2016, according to USA Today. Analysts also think Under Armour will “grow another 25% this year,” an incredible number if proven correct. Nike, which has LeBron inked to a lifelong contract, remains significantly larger than its upstart rival. If revenue "does hit" $5B this year at UA, that "will still be just 15%" of the $33.9B revenue expected to be put up by Nike. USA Today further noted that “Nike generated $2.1B in "free cash flow the past 12 months, while Under Armour burned through" $370.8M.”
4. The ITF has suspended tennis star Maria Sharapova for two years after testing positive for meldonium, a substance that increases exercise capacity in athletes. Sharapova claimed that she has been taking it for 10 years now because of a magnesium deficiency and a family history of diabetes. The two-year suspension by the ITF signifies that she took the drug unintentionally, for a four-year ban would mean that the ITF found her intentionally guilty of breaking the rules. The drug used to be legal, but WADA controversially banned it in January. According to the New York Times, “ITF rules are very rigid and gave it little leeway to take mitigating circumstances into account.” Sharapova immediately said she plans on appealing the suspension, which is set to last until January 25, 2018. On her Facebook page she wrote, “While the tribunal concluded correctly that I did not intentionally violate the anti-doping rules, I cannot accept an unfairly harsh two-year suspension.”
Could Trump hurt World Cup?
5. With Donald Trump officially getting the Republican presidential nomination, U.S. Soccer Federation President Sunil Gulati feels that if Trump were to win the General Election the United States’ chances of landing a World Cup could take a major blow, according to ESPN FC. The next available World Cup is in 2026, which will be decided in 2020. The idea of a joint World Cup between Mexico and the United States is one that is being floated around and discussed, but that idea might be become significantly more difficult to pull off if Trump is elected. Gulati commented, “There are numerous factors that go into winning the hosting rights for a World Cup and…a leader who might be unpopular elsewhere in the world isn't necessarily a deal-breaker.” The USSF leader reaffirmed that the U.S. plans to bid on the next available World Cup regardless of the country’s president.
6. French telecommunications company Orange, which recently kicked-off a massive social media campaign activated around the Euro 2016 soccer tournament, has acquired the naming rights to French soccer club Olympique Marseille’s stadium. The ten-year, $30.7 million agreement between the two sides will see Stade Velodrome renamed as the Orange Velodrome starting in September, ahead of next year’s season. The stadium underwent a series of major renovations back in 2011 and has been looking for a naming rights sponsor ever since. As part of the deal, Orange is also set to equip the stadium with new Wi-Fi and 4G systems. The city of Marseille initially hoped to bring in around $9 million annually from the deal, but ultimately dropped its expectations down to about $4.5 million per year; Orange got a bargain here since it is paying a mere $3.07 million annually to have its name on the front of the stadium.
7. Projected No. 1 NBA Draft pick Ben Simmons has agreed to a shoe and apparel deal with Nike, according to The Vertical. The five-year deal is worth $12 million, “right in line” with the $11 million deal top pick Andrew Wiggins signed with Adidas when he was drafted by the Timberwolves in 2014. Back in May, Adidas pitched the former LSU Tiger forward saying: “Come to adidas and build your own personal brand. Deliver on court and possibly even get your own signature shoe.” Adidas supposedly offered Simmons $17 million for five years, including a $2 million signing bonus and a $1 million bonus for winning Rookie of the Year. Nike initially gave Simmons a five year, $7.5 million offer, but increased its offer to $12 million after the 76ers and Lakers were awarded the top two picks in the upcoming NBA Draft. Sources said that Simmons' family "was torn throughout the process."
8. While Zika will keep numerous potential Olympians from taking the trip to Rio in August, multiple top U.S. basketball players are pulling out due to lingering injuries. San Antonio Spurs forward LaMarcus Aldridge “won’t bid for a spot” on the U.S. Men’s National Team because of a finger injury, and 2016 NBA MVP Stephen Curry will "skip the Olympics due to health," according to of ESPN.com. Blake Griffin, Chris Paul, Anthony Davis and John Wall have already declared their planned absences, but none have cited “Brazil-related concerns” as their reason for not competing. Golden State Warriors forward Andre Iguodala “could opt out” due to Zika, but teammate Draymond Green said that if he is “invited to play, he will.” Team training camp is scheduled to begin in mid-July on UNLV’s campus in Nevada. USA Basketball Chair Jerry Colangelo plans to announce the 12-man American roster in late June, after the NBA Finals and NBA Draft are both finished.
9. Conference USA has seen its TV revenue decline in the past amidst the whirlwind of university realignment, but that problem is only expected to worsen over the next few years, according to the Norfolk Virginian-Pilot. This year the league is set to distribute $15.4 million in TV-related revenue, resulting in about $1.1 million per member school. But next year C-USA’s TV-related revenue is expected to “steeply decline” all the way to about $2.8 million in 2016-2017, amounting in “about $200,000 for each school.” The conference plans to redistribute the $6.15 million received in exit fees paid by recently departed schools, such as Memphis and East Carolina. League Commissioner Judy MacLeod spoke about this decline, saying, “Did the money go down? There’s no question. Are we frustrated? There’s no question. That’s why we signed two-year deals, so we could get back out into the market and hopefully things improve and do some other work.”
Taking advantage of their success
10. Unlikely EPL Champions Leicester City are looking to capitalize on this year’s triumphant season by signing as many new sponsors as possible before the new season begins. According to the Financial Times, companies have been “quick to link themselves to the club,” and the club “has to be nimble.” Without the massive bank accounts of fellow EPL members Manchester United, Chelsea, Manchester City and Arsenal, tiny Leicester City cannot necessarily guarantee sustained on-field success going forward. Its star "could fade if it suffers a loss of form when the new season begins, giving it a matter of months to reach as many agreements as possible." Leicester’s social media presence has more than doubled over the past year, growing from 2 million followers on Facebook, Instagram and Twitter to 5.6 million, with many of the new fans coming from outside England and overseas. Marking executives believe the club’s prime time to add sponsors will last “six to eight months.”
11. Dutch oil company Shell is set to drop its sponsorship of the Shell Houston Open after the 2017 tournament, according to the Houston Chronicle. Shell has been the title sponsor of the PGA Tour even since 1992, the “third-longest running association” on the Tour, as this move is just the "latest sign of financial distress in the oil industry." The tournament has donated more than $60 million over the past 26 years to a range of local charities and youth organizations, making a significant impact on the Houston community and MSA. Shell President & U.S. Country Chair Bruce Culpepper wrote an email to company employees about the decision to drop its title sponsorship, commenting, “This was a very difficult decision, driven in large part by the need to adjust our cost structure in response to the challenging business environment in which we operate...” The Houston Golf Association and PGA Tour will try to replace Shell immediately.
Best of the best?
12. The Basketball Tournament, a $2 million, winner-take-all event, is wrapping up its field of 64 teams in advance of the opening round of action. According to ESPN.com, more than 50 former NBA players have already signed on the play, and many “high-profile D-I colleges all have teams laden with alums.” Syracuse, Kentucky, Michigan State, Gonzaga and Pitt have all entered teams, as well as the core of Villanova’s 2009 Final Four team and VCU’s 2011 Final Four team. The regional rounds are set to take place in Chicago, Los Angeles, Charlotte and Philadelphia, with the Super 16 in Philly and the semifinals and finals in NYC. TBT Founder & CEO Jonathan Mugar decided to shrink the playing field down from its 97 teams last year “in an effort to make it more competitive and also eliminate bye rounds.” Defending champions Boeheim’s Army will feature former Syracuse players like Eric Devendorf, Brandon Triche and C.J. Fair.
Fresh water first
13. For the first time in the 135-year history of the America’s Cup World Series, the sailing championship hosted an event in the fresh water of Lake Michigan. With Chicago’s skyline playing the role as backdrop, Navy Pier was the epicenter of elite sailing competition. The four-mile race marked one of the events for the 2017 America’s Cup in Bermuda, as six teams competing in the races: Oracle Team USA, Artemis Racing (Sweden), Land Rover Bar (Great Britain), Softbank Team Japan, Groupama Team France and Emirates Team New Zealand. All six boats competed in the three races on Saturday, with the course getting changed after each race to adjust for wind conditions. The fresh water of Lake Michigan provided competitors a temporary relief from ocean tides and river currents, two factors they are used to accounting for. The AC 45 foiling catamarans reached up to 40mph, a big difference from the casual boaters Lake Michigan is used to accommodating.
'The world is going to notice'
14. Dutch brewer Heineken formally announced a new multi-year partnership signed with Formula 1, ranking alongside its long-standing sponsorship of the Champions League, according to Reuters. Financial terms to the deal have not disclosed, but Heineken’s deal with the Champions League is worth more than $70 million annually. The F1 deal is set to start in September with Heineken’s title sponsorship of the Italian Grand Prix in Monza. Additionally, the brewing company will act as the title sponsor of two other grand prix events and will be given significant signage at six more races. Heineken currently ranks as the world’s third largest brewer, and Global Heineken Brand Senior Director Gianluca Di Tondo said, "F1 is going to be one of our biggest ever partnerships. The world is going to notice that we are in F1." This marks Heineken’s first major investment in motorsports, using this deal to promote its “If You Drive, Never Drink” campaign.
Win The Day
15. The University of Oregon renewed its licensing deal with IMG College for at least six years and $57 million, according to the Eugene Register-Guard. This marks a 40% “boost from the old contract” between the two sides that was signed back in 2008 for 10 years and $76 million; the 2008 contract “more than doubled the university’s previous contract.” The Ducks’ athletic success prompted IMG’s lucrative offering. The college marketing company will continue to sell sponsorships on "everything from the Autzen Stadium scoreboard, to radio play-by-play broadcasts, to one half of the GoDucks.com website, to game tickets, ticket envelopes and parking passes." IMG will also “manage radio broadcasts, coaches’ shows, publications, corporate partnerships and venue signage. Oregon Athletic Director surprised many with the relatively short-term deal, since most universities are signing licensing deals for up to 15 years in length.