Sports Business

Sports Business '15 to Watch': Golf superstars dominate British Open

lukedonaldsportsbiz.png

Sports Business '15 to Watch': Golf superstars dominate British Open

1. Sports $ across the pond – Part One.

This year’s Open Championship is being held at the birthplace of golf, St. Andrews in Scotland. With the event taking place at such an iconic venue, local economic impact could top £100 million. Last year’s tournament generated £75 million for the Merseyside economy, while the 2013 event at Royal Lytham & St. Annes delivered a £65 million benefit to Lancashire. Scottish tourism promotes the St. Andrews rotation on a five-year cycle, with hotels, restaurants, and other activities booked years ahead. I am staying at the Monarchs House in downtown St. Andrews, providing a perspective of the significant economic impact and unique customs surrounding the “epicenter of golf.”

2. Golf superstars dominate the British Open.

Heading into the Open Championship, no golfer is hotter than Jordan Spieth. Spieth has won the first two majors of the 2015 PGA Tour season, and with Rory McIlroy out with an ankle injury, Spieth is the heavy favorite to capture another victory. While Spieth is on his way to becoming the next big thing, legendary golfer Tom Watson prepares for his 38th, and likely last, British Open. The R&A extended an exemption to Watson to allow him to play one more time in golf’s oldest championship. He’s won the British Open five times in his storied career. ESPN/ABC phase out its coverage of the British Open, with NBC gearing up to take over two years from now. Key is as it always has been: the golf superstar. Tiger and Phil representing the “older guard” as opposed to the newer corporate relationships (the Lagardere-driven Spieth deal with Under Armour).

3. NFL prepares for the 2015 season.

September 10 kickoff just eight weeks away. In training camp news, RC Cola is the new presenting sponsor for the upcoming Chicago Bears training camp in Bourbonnais, Illinois. The brand replaces Chase, which is presenting sponsor of last year’s Bears training camp. On another note, Tottenham Hotspur and the NFL have reached a deal for at least two games a year to be played at the Premier League club’s new stadium starting in 2018. According to the NFL, the Tottenham deal gives the league flexibility in either moving a team to London or simply playing more games overseas. Roger Goodell challenges his staff to produce $25 billion of annual revenue at the end of this labor cycle. Increased training camp and international revenues drive the NFL business toward that goal.

4. Baseball’s All-Star Break and beyond.

Major League Baseball consolidates its business interests in Cincinnati as the Great American Ballpark home for the All-Star Week. Substantial economic impact driven by a 5-6 day celebration (as compared to the previous 1-2 All-Star festival). Additionally, baseball is driven by new and diverse sponsorships. MLB and Beats by Dre unveiled a limited edition line of team branded wireless headphones. The collection includes team-specific sets for the Red Sox, Cubs, Dodgers, Yankees, and Giants. Each set will cost $379.99. This is said to be the first partnership between Beats and a pro sports league. As Commissioner Rob Manfred emphasized in a recent interview with me, MLB demographics are getting younger and more diverse. Clearly, this corporate partnership serves as an example.

5. Sports $ way across the pond – Part Two.

While England and the rest of Europe dominate the $1 trillion sports business headline, Australia is generating its share. Globecast Australia has enhanced its Online Video Platform, to provide media owners with the ability to charge for content, according to Advanced Television Daily News. Globecast earlier this year helped launch the Australia Channel, which is supported by the company’s platform. As Australia’s first global TV service, Australia Channel offers international audiences live news, sports, and business content. Sophisticated companies like Globecast have the international ability to transcend borders, as well as consolidating efficient television distribution from the mega-challenges posed by the Tour de France to geographical challenges posed by the Australian distance factors. Major challenges call for sophisticated solutions!

6. Sports $ across the pond – Part Three.

Wimbledon winners. Kudos to Novak Djokovich and Serena Williams. Wiliams with her 21st major championship heading to an incredible bonanza at the U.S. Open in her chase for the “calendar slam.” Andy Murray, repped by Lagardere Unlimited, has reportedly turned down millions in endorsement offers since his 2013 Wimbledon win, snubbing all products he doesn’t believe in and any deals that would interfere with his training schedule. Murray has deals with Under Armour, Head, and Standard Life Insurance. Lagardere and other companies understand that bigger is not necessarily better – selectivity may be better for the superstar athlete in the long-term (even though the dollars may initially be less).

7. NBA player bounty.

The NBA announced that the salary cap has increased 11% to an all-time high of $70 million for the 2015-16 season. The luxury tax level also increased 10.3% to $84.7 million next year. The cap is expected jump to $90 million for the 2016-17 season as a result of the NBA’s new lucrative TV contracts with ESPN and Turner. Deals with Kevin Love, DeAndre Jordan, and others might have been unexpected, but teams are protecting their long-term stability (even if it means overpaying in the near term).

8. Television economics in the new competitive era.

ESPN has lost more than 3 million cable TV subscribers over the last year, leading the company to emphasize cutting expenses. The network in the past few months has opted against resigning high-paid talent Bill Simmons and Keith Olbermann. Cord cutting has especially high implications for ESPN, which has by far the highest monthly subscriber fee at an estimated $6.61. The resounding battle focuses on cable subscribers as well as the rush to Internet/video on demand. Both processes will cause tremendous economic turbulence in the years ahead.

9. College sports economics – a new frontier.

As originally reported by the Detroit News, but in an article found and accessed from the Sportsmanias app, the site that provides fans with real-time information on their favorite teams, the University of Michigan agreed to an apparel deal with Nike that reportedly is the most lucrative in college sports. While terms of the deal have yet to be disclosed, the largest known deal is Under Armour’s 10-year, $90 million pact with Notre Dame. Michigan’s expiring deal with Adidas pays the school $8.2 million annually. Mega schools like Michigan generate unbelievable revenue on the heels of CLC’s $100 million guarantee with Alabama for licensing and merchandising revenue. The issues are the same. How do you restock your athletic war chest facing increasing demands for guaranteed scholarships, stipends, and licensing royalty payments to players in the years ahead!

10. NHL expansion process.

The NHL has received five requests for expansion bid applications, with Las Vegas, Quebec City, the Greater Toronto Area, and two from Seattle expressing interest. The league has set an expansion application fee of $10 million, $2 million of which is non-refundable. The eventual expansion fee for new teams is expected to be $500 million. Commissioner Bettman may be looking at an “offer he can’t refuse,” especially with significant financial interests poised to spend well over $500 million in any one of five or six expansion markets.

11. Could the Redskins become the Pigskins?

As originally reported by CSN Washington, but in an article found and accessed from the Sportsmanias app, the site that provides fans with real-time information on their favorite teams, a federal judge ordered the cancellation of the Washington Redskins’ trademark registrations, which have been opposed for years for being disparaging to Native Americans. The team argued that cancellation of the trademarks could allow for copyright infringement. Owner Dan Snyder admonition that he would NEVER change the name of the Redskins may be revisited (especially if he wants public money for a new stadium, etc.).

12. The highly competitive daily fantasy market.

Yahoo Sports has launched its own daily fantasy games, placing the company in direct competition with market leaders DraftKings and FanDuel. Beginning immediately with MLB contests, Yahoo Sports Daily Fantasy will offer cash prizes for one-day and one-week competitions. Yahoo already has significant market share for traditional fantasy sports games. Daily fantasy sports has become the fastest growing sports-related business in entrepreneurial history! Look for more companies to break in to “smaller niches,” expecting to capture some significant market share.

13. NBA franchise musical chairs?

The Milwaukee Bucks are threatening to relocate to Seattle or Las Vegas if a deal for a proposed $500 million arena can’t be reached. The Bucks need to start construction on a new arena this fall in order to have the building ready by 2017, when the team’s current BMO Harris Bradley Center lease expires. Owner Marc Lasry counted on political support from Governor Scott Walker when he bought the team. Walker’s presidential aspirations may shift priorities, and Lasry may be in a race against NHL expansion in either Seattle or Las Vegas. While previous owner Herb Kohl would not use the relocation threat, current ownership may have no choice.

14. NHL in the Valley of the Sun – time running out?

NHL Commissioner Gary Bettman is denying reports that the Arizona Coyotes will relocate to Las Vegas beginning with the 2016-17 season. The Coyotes face uncertainty with the upcoming season as the city of Glendale recently terminated the team’s lease at Gila River Arena. Commissioner Bettman has been an avid supporter of hockey in the region, but time may be running out in this case as well. Time for the politicians to step up and make the next move. Leadership in Houston, St. Louis, Baltimore, and Cleveland all understand how difficult and expensive it is to recapture a franchise once a team initially leaves!

15. Women’s soccer, the next step!

Fox Sports generated $40 million in ad revenue from the FIFA Women’s World Cup, far surpassing the $17 million the network was expecting to bring in. The large total is attributed to the performance of the U.S. team, which boosted interest and viewership. ESPN drew $6 million in ad revenue for its 2011 World Cup coverage. Just like 1999, time is of the essence to evolve the ticker tape parades into tangible corporate commitments – both for superstar endorsements and long-term league stability!

Kelly Crull talks about covering the Bulls with Laurence Holmes

crull.png
NBC Sports Chicago

Kelly Crull talks about covering the Bulls with Laurence Holmes

Laurence Holmes hosts the "House of L Podcast" in addition to his role on radio and as host of the Football After Show for NBC Sports Chicago.  On the podcast, Holmes provides a more in-depth look at media and how it works.

The most recent episode is an interview with our own Kelly Crull, who in addition to covering the Chicago Cubs during games will be working as a sideline reporter during Bulls games this NBA season.

Crull talks to Holmes about the challenge of covering two beats, one beginning immediately after the start of the season. . Crull talks about returning to her first love, basketball, and also sheds light on what drives her in her career. The pair also discuss locker room and clubhouse etiquette

The Daily Line: Week 7 Football Picks

the_daily_line_logo.jpg
NBC Sports Chicago

The Daily Line: Week 7 Football Picks

The Supreme Court opened the door for sports betting legalization with its May ruling that struck down a 1992 law that banned commercial sports betting in most states. Sports betting is not yet legal in Illinois, but with football season underway, former Northwestern offensive lineman Eric Olson will take a weekly look at the odds surrounding the action on the field.

YTD record: 21-7 against the spread (11-1 in last 12)

New England Patriots vs. Chicago Bears 10/21 12:00pm CT

Line: Pats -3
Betting Percentages Split: 76% of the tickets on the Pats
The play: Bears +3

Listen here. I am not being a homer. In fact, I am from the Boston area and have been rooting for the Patriots my entire life. This is simply a great spot for the Bears. You have a Patriots team that is coming off the biggest win any team has had this season, beating the seemingly unbeatable Kansas City Chiefs in primetime. On the other side, you have a Bears team that just turned in one of the most disappointing performances of the season, losing outright to the Miami Dolphins and Brock Osweiler as a 7 point favorite. The Pats have been terrible outside of Foxboro and this is probably the best team they have faced on the road thus far this season. Additionally, this line has stayed firm at 3 and has even moved to 2.5 in some places despite the massive bet discrepancy favoring the Pats. What does that tell us? That the Pros are all over the Bears and refuse to move the line despite the public being all over New England. Ride the home town team catching points at Soldier Field.

Buffalo Bills vs Indianapolis Colts 10/7 1:00pm CT

Line: Colts -7
Betting Percentages Split: 55% of tickets on Colts
The play: Bills +7

If you have been reading my column throughout this NFL season you know I love bad NFL games. Go where nobody wants to go, get dirty and pick gross teams. I also have been pretty successful picking my spots betting on the Bills this year and I love going back to the well here. Simply put, the Colts should not be laying 7 points to ANYBODY at this point of the season. Sean McDermott decided to go with Derek Anderson this week and according to reports, this was to the delight of the locker room as they do not have to endure another Peterman Pix-Six Bonanza. I think this could give the Bills a little spark and anything that Anderson has left in the tank will be on display Sunday against the worst defense in the NFL. Circle those wagons, take the Bills and the points.

Cincinnati Bengals vs. Kansas City Chiefs 10/21 7:20pm CT

Line: Chiefs -6
Betting Percentages Split: 75% of tickets on the Chiefs
The play: Bengals +6

Good loses are a real thing in the NFL when it comes to betting perception. Not a single person is knocking the Chiefs for their primetime loss to the Pats in Foxboro. I think Vegas could have set this line at a touchdown and the public would still jump all over the Chiefs. What does that tell you? I think this a questions bettors need to ask themselves more often. What it probably tells you is that Vegas values the Bengals more than the general public does and they aren't as bought into the Chiefs hype. Side with the house, fade the public and take a very solid Bengals team getting 6 points playing a Chiefs team having to get up for two straight primetime games.

New York Giants vs. Atlanta Falcons 10/22 7:20pm CT

Line: Falcons -5.5
Betting Percentages Split: 75% of tickets on the Falcons
The play: Giants +5.5

I said that week of 10/7 was my grossest set of picks to date. What happened that week you ask? I went 5-0. Pick your spots and bet bad teams in the NFL. It works. This league does not operate the way you want it to and you have to be willing to make picks that feel ‘off’. Here is another example of that. By any eye test, this makes no sense. The Giants are in the running for the worst team in the NFL and the Falcons, while overall disappointing, still have shown flashes of their talented roster that brought them to Super Bowl two years ago. However, when you move past the surface, you see a matchup that actually really favors the Giants. The Falcons are ravaged by injuries on both sides of the ball and the Falcons have one of the worst defenses in the league and will not be able to exploit the Giants porous O-Line like other teams have. I think these matchups are why Vegas set this line so low and why it has even moved in the Giants direction despite heavy public Atlanta action. Hold your nose and bet the G-men. 

Bonus College Game

Mississippi State vs. LSU 10/20 6:00pm CT

Line: LSU -6.5
Betting Percentages Split: 60% of tickets on LSU
The play: Mississippi State +6.5 (get 7 if you can)

LSU is the most overvalued team in the country. They have actually been out-gained in 4 of their 6 wins. That is an ABSURD statistic that just screams regression as the year carries on. Mississippi State has a really, really good defense and should be able to fluster Joe Burrow all day long. The Bulldogs put it to LSU last year and I expect them to show up again. Take Miss State and the points. Sprinkle the moneyline while you’re at it.