Sports Business

Sports Business 15 to Watch: Brock Osweiler jerseys in short supply


Sports Business 15 to Watch: Brock Osweiler jerseys in short supply

1. The NFL continues to aggressively promote their brand overseas, as is evident in the league’s ever-expanding autumn International Series. This past weekend, ESPN released figures showing a rapid rise in the popularity of football in the United Kingdom. Much to the NFL's satisfaction, the numbers reveal that 16 percent of U.K. sports enthusiasts now follow the NFL, up from a mere nine percent in 2011. This 75-percent increase in fandom is revealed by bi-annual research conducted on behalf of ESPN by Netfluential, which questions more than 1,000 sports fans on their media consumption. These new American football fans are proving to be highly engaged, with total minutes spent consuming NFL content in the U.K. up to 65 percent year on year, ahead of the 55-percent increase in unique visitors. With the NFL continuing to push toward international expansion in the U.K., across Europe and even potentially into Asia and Central America, these numbers signal positive growth for the league.

2. The NFL has announced a brand new, three-game slate of regular-season games set to be played in the United Kingdom next season. Building on their phenomenal success in the UK these past years, in 2016, the St. Louis Rams will play the first game at Twickenham Stadium against a yet-to-be-determined team on Oct. 23. The other two games will be played at Wembley Stadium and will feature the Colts and Jaguars on Oct. 2 and the Redskins and Bengals on Oct. 30. The league also noted that a fourth international game could be added to the schedule in the near future as part of the NFL’s International Series, but this game would be played outside of the U.K.

3. The athletic arms race between colleges is costing America's biggest public universities — and their students — millions of dollars. While some big-time college sports departments are “making more money than ever before,” according to the Washington Post, many also “are losing more money than ever.” A review of financial records from 48 public universities in the Power 5 conferences shows that athletic department income nearly doubled from $2.67 billion in 2004 to $4.49 billion in 2014. But this marker should come with an asterisk. Twenty five athletic departments still ran a deficit, and 12 schools actually lost more money in 2014 than 2004. While ADs at money-losing departments "defend their spending as essential to keeping pace with competition,” many college sports watchers believe that the current spending model is flawed and unsustainable.

4. After Black Friday, novel merchandising awaits. While quarterback Brock Osweiler likely endeared himself to Denver Broncos fans by knocking off the Patriots on Sunday, they’ll still have a hard time finding his jersey. Osweiler’s quick rise to the starting spot caught retailers off guard, as few stores actually had his No. 17 jersey available before Peyton Manning’s recent string of injuries. While consumer demand has far surpassed supply, stores apparently aren’t yet sold on the fourth-year pro. Derek Friedman, owner of Denver-based retailer SportsFan, said that his store “will not stock Osweiler jerseys ‘until he’s officially named the permanent starting quarterback.'" Friedman is worried that if Manning regains his starting spot, it would leave him with an excess of unwanted Osweiler jerseys. If Manning stays injured, expect to see No. 17 jerseys lining Denver stores.

5. The concluding round of the 2015 FIA World Rally Championship (WRC) has just ended in Wales, and Globecast was once again on track. This is Globecast’s third outing in a multi-year contract, supplying 56 people, five satellite trucks, 40 hours of capacity, 45 cameras, six multi camera OB’s and providing live pictures from “dawn till dark” to the WRC’s website. Each day of Globecast’s coverage included a multi-camera “Feature Stage” with on-site commentary. Satellite trucks, bonded GSM, microwave, and internet streamed video content all arrived at the hub, allowing the day’s producer to decide which sources to take to air, while editors produced highlights and newsworthy clips. “Wales Rally GB is a logistical nightmare of an event. It is spread across half of Wales over four days of competition in remote forests in November weather. Globecast are the only operation with the skills, resources and sheer bloody-minded resilience to be able to take this on,” said Ben Taylor of IMS, organizers of Wales Rally GB. “What's more, they never let us down and are always a pleasure to deal with — even when the pressure's on.” Globecast proves that cutting edge technology and laser customer focus always win out, even at a “nightmare of an event.”

6. In what is set to be the largest-ever attended college football game in history, Pilot Flying J has landed naming rights to the Virginia Tech-Tennessee “Battle at Bristol” scheduled for Bristol Motor Speedway next September. The Tennessee-based travel-center chain announced the news to employees this past weekend during a special event at its Knoxville HQ. The deal is for naming rights, not presenting rights, so the game itself will now be known as the Pilot Flying J Battle at Bristol. Other assets include signage and hospitality, both at the game and during next year's NASCAR races. The game, which will air on ESPN or ABC, should shatter the attendance record for a college football game. A longtime loyal NASCAR team sponsor, Pilot Flying J got the first look when Bristol Motor Speedway GM Jerry Caldwell vetted companies to sponsor this historic event.

7. German soccer club Bayern Munich has signed its first global partnership with a major U.S. company, Goodyear. The long-term deal, which will take effect in 2016, will provide Goodyear with perimeter advertising at the club's Bundesliga home games and give the Akron-based auto part company international media rights as a top-tier platinum partner. While financial details have not been disclosed, the highest level of sponsorships the German club offers has an estimated annual value of $5 million, so expect Goodyear’s deal to be near that marker. Initial focus will be on the German-speaking markets of Germany, Austria and Switzerland, but both sides hope to make this a truly international deal.

8. Following NASCAR legend Jeff Gordon’s retirement, 3M has decided to stick with Hendrick Motorsports’ No. 24 Chevy but will reduce the number of times it is primary sponsor. Sources told SportsBusiness Daily that 3M is set to serve as the primary sponsor for five races for new driver Chase Elliott next season, down from 11 races this year. 3M senior media manager Lori Anderson confirmed the move, as brands have the opportunity to reassess their sponsorships when a driver retires. When 3M switched over to Hendrick Motorsports in 2015 after a nearly decade-long relationship with Roush Fenway Racing, it signed on for 11 races for each season from 2015 to 2017. Even for a blue-chip company like 3M, every dollar counts, and flexibility is major key to keeping sponsors happy.

9. The LPGA has announced the creation of a new event to be staged in Green Bay in 2017. Sponsored by Oneida Nation, the umbrella organization for Native Americans based in Wisconsin, the tournament will be known as the Oneida LPGA Classic and will take place at Thornberry Creek at Oneida, a course owned by the consortium. Dates for the 144-player event have not yet been announced. Likewise, financial terms of Oneida Nation’s sponsorship have also not been released — though the event’s $2 million prize purse will make it the richest U.S.-based non-major on the LPGA Tour. The LPGA event will only reinforce Green Bay’s place as one of America’s greatest sports towns.

10. In Miami, the NBA’s area code call is a disconnect with fans. The league has rolled out a new clothing line displaying area codes on some merchandise paying homage to franchise home cities. But the Miami Heat’s clothing got an unexpected twist when the league elected to use the city’s secondary area code, 786, instead of its primary 305 area code. An NBA Store employee confirmed that 786 "was the only area code available" on Heat gear when the Miami Herald placed a call, and the employee was unaware if plans were in place to include more numbers in the future or why 305 was excluded. While the NBA is a shrewd marketer, the league clearly botched this call.

11. Longhorn fans won’t be paying any more for their football tickets next season. After ticket prices for University of Texas football games went up this year amid the team's on-field woes, interim men's AD Mike Perrin announced that ticket increases and donation requirements implemented for the 2015 season "will remain in place" for 2016 and 2017, according to the Austin American-Statesman. By keeping prices flat for two years, Perrin is hoping to win back the hearts of many fans who were put off by the past hike in prices. Prices for some of the best seats inside Royal-Memorial Stadium went up 31 percent for the 2015 season, and UT officials said that all seats "went up by an average" of six percent throughout the stadium. Perrin is acting to correct mistakes made by former AD Steve Patterson; this is a first step in righting many wrongs within the program.

12. Nike President & CEO Mark Parker has been named Fortune’s Businessperson of the Year — a prestigious honor. Adam Lashinsky’s cover story revealed that the decision to honor Parker came because he has “ably carried (Nike co-Founder & Chair Phil Knight’s) baton.” Parker has faced a trickier task than that of Nike’s chief competitors in finding growth in the wildly successful but mature company. His “meticulous approach to product development, known as 'design thinking,' is all the rage,” Lashinsky wrote. Parker also “equates his managerial style with being an editor, with his process focused on helping subordinates hone their ideas.” Editing ideas “is a constant process for Nike,” and has been a key factor in its global domination.

13. Miami Beckham United, David Beckham’s hopeful MLS expansion bid, might not have a home in Miami’s Little Havana neighborhood after all. Beckham’s latest proposal to build a soccer-specific stadium next to Marlins Park appears to be in jeopardy as Miami-Dade schools superintendent Alberto Carvalho said that a school board vote to approve a partnership with the team would be postponed. Now, top stadium negotiator Tim Leiweke has suggested that the team was “going in a whole new direction,” according to the Miami Herald. This upheaval of plans comes only days before Beckham’s group had hoped to present a publicly-backed deal to build a $200 million stadium in Little Havana. Small property owners have been blamed for blocking usage of that site. The team’s “Plan B” site has not been disclosed, but rumors are circulating that Overtown is a possibility to land the stadium. Regardless of where it lands, enough momentum has built up behind the expansion franchise that MLS will inevitably have a beachhead in the Latin America gateway city.

14. Dalian Wanda Group is merging with Infront Sports & Media and the World Triathlon Corporation and its Ironman brand to form a new entity named Wanda Sports Holding Co., Ltd. Infront President and CEO Philippe Blatter will take the lead role as Wanda Sports President and CEO, and the experienced top management of both companies will remain in place. Wanda Sports will be based on three core business pillars: spectator sports (media & marketing business), participation sports (active lifestyle business) and services (production, digital, and service business). Wanda Sports will operate out of Zug, Switzerland, with their holding company based in China.

15. The NBA's Charlotte Hornets are banking on their newest sponsor. As part of their continued effort to increase revenue off the court, the franchise recently signed a multi-year partnership with Bank of America, according to the Charlotte Business Journal. The international bank recently installed ATMs at the Hornets’ arena, marking the first part of what promises to be a “prominent branding” campaign at Time Warner Cable Arena. A “big part of the Bank of America partnership will also be tied to military philanthropy,” according to a team executive, following a successful pilot project last summer. When they were known as the Bobcats, the team had a financial category exclusive sponsorship deal with Wells Fargo, but the two sides agreed not to renew when it expired after last season. Wells Fargo is thought to have spent at least $1 million annually during their tenure, so expect BoA to spend upwards of that marker.

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.