Sports Business

Sports Business '15 to Watch': Jordan Spieth loses British Open, wins social media


Sports Business '15 to Watch': Jordan Spieth loses British Open, wins social media

1. Riveting British Open across the pond concludes Monday. Jordan Spieth has taken the golf world by storm this season, which has translated into thousands of new followers across social platforms. Spieth’s follow count across Twitter, Facebook and Instagram crossed the 1 million threshold following his playoff win at the PGA Tour John Deere Classic, according to data from analytics firm MVPindex. Spieth had around 500,000 followers when he won the Masters this April, seeing a 76 percent jump after capturing the green jacket. He then saw a 13 percent increase after winning the U.S. Open in June. He also significantly benefits his sponsors, and generates substantial interest that Lagardere Unlimited can capitalize on. Incidentally, MVPindex was co-founded by Spieth’s father Shawn.

2. Milwaukee Bucks arena opportunity. Originally reported by the Milwaukee Journal Sentinel, but found in an article and accessed from the Sportsmanias app, the site that provides fans with real-time information on their favorite teams, the Wisconsin State Senate approved a $250 million funding plan for a new Milwaukee Bucks arena. The State Assembly must still approve the measure, but for the first time in months, the arena proposal has momentum. The NBA has given the Bucks until Fall 2017 to vastly improve or replace their existing arena. Governor Scott Walker may have had a false start, but the Fall 2017 deadline may stir significant progress; Las Vegas and Seattle are anxiously waiting.

3. Finally, soccer in Miami? David Beckham has reached a deal with the city of Miami to build a $250 million soccer-specific stadium on land next to Marlins Park. The location provides for the opportunity to create a thriving sports and entertainment district in Miami’s Little Havana neighborhood. The stadium itself will be privately financed. While all sides trumpet a victory, facility development in South Florida is a long and tedious process.

4. More money for student athletes. A U.S. district judge orally approved a combined $60 million settlement against video-game manufacturer Electronic Arts, Collegiate Licensing Company, and the NCAA over the use of players' names, images, and likenesses in video games. About 400 to 450 current athletes – along with more than 20,000 former athletes made claims against EA, CLC, and the NCAA. Note the significant victories may mean small dollars for all 20,000 former athletes, but significant revenues ahead for future players in all sports.

5. NFL training camps set to open: significant process in St. Louis and Los Angeles. NFL executives met with Missouri Governor Jay Nixon to discuss financing for a proposed St. Louis Rams stadium. The NFL reps received a comprehensive update on the status of the proposed $998 million stadium planned for the city's riverfront. The state’s stadium task force is counting on the city to provide a portion of the stadium funding. Nothing has changed regarding process; incumbents have an opportunity to create a definitive plan in St. Louis, San Diego, and Oakland before the NFL begins the next round of “franchise musical chairs.” 

6. NBA labor peace up for grabs? The NBPA wants teams to open their books after NBA Commissioner Adam Silver indicated that several franchises are operating at a loss. NBPA Executive Director Michele Roberts in the past has challenged the principle of a salary cap and mocked the suggestion of NBA owners losing money. The union can opt out of the current CBA in 2017. New free agency has set all records, and a $90 million+ salary cap in the next two years should hopefully spur a settlement.

7. The retail juggernaut continues in college sports. The University of Michigan’s new apparel deal with Nike is worth a reported $169 million over 11 years, with an option to extend for an additional four years. The pact tops Under Armour's 10-year, $90 million deal with Notre Dame as the most lucrative in college sports. Michigan is one of those top priority branded schools, but others will clearly follow suit given the numbers and financial precedent.

8. The FIFA backlash. A U.S. Senate subcommittee last week held a hearing into the corruption scandal surrounding FIFA. The hearing covered what involvement or knowledge U.S. Soccer officials had of the possible criminal activity at FIFA, as well as questions about worker rights at Qatar stadium sites. U.S. Justice Department indictments lead to political hearings at the U.S. Senate level, ultimately leading to a new election and potential unseating of Qatar in 2022.

9. Major League Baseball newest multipurpose facility: Atlanta Braves. As originally reported by the Atlanta Journal Constitution, 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 Atlanta Braves and Live Nation have struck a deal to develop and manage an entertainment venue adjacent to SunTrust Park. The venue will have standing room-only capacity for 4,000 and feature about 40 music and comic shows annually. The theater is designed to help drive activity to the site on non-gamedays. Latest example of a well done master development plan spurring economic activity around a suburban ballpark.

10. NFL economic issues: more legal uncertainty. DirecTV and the NFL are facing a class-action lawsuit alleging that their exclusive agreement for NFL Sunday Ticket is anticompetitive and harms commercial entities. The suit seeks to recover damages for the overcharges and an injunction against the enforcement of the exclusivity provision of the NFL's agreement with DirecTV. DirecTV attempting to solidify its case as one of the “major players” in the NFL media industry.

11. NBA media grab. ESPN next season is expanding its NBA coverage by televising Saturday night games on ABC. Starting on January 23, ABC will air games beginning at 8:30pm ET, preceded by "NBA Countdown." With the addition of the Saturday night games, ESPN will offer NBA telecasts on four days a week from January to April. NBA coverage has expanded based on league popularity, superstar identification, and major corporate sponsorship.

12. Real meaningful FIFA change: corporate unrest. Coca-Cola has told FIFA that it wants an independent third-party commission to oversee the organization’s reform amid several reports of corruption. Coke wrote to FIFA that it believes establishing an independent commission is the most credible way for FIFA to approach its reform process. Best way to cause massive FIFA reform is intense and universal sponsor angst. Coke is the next in line to make that case. 

13. MLB All-Star troubles. Fox had 10.9 million viewers for the MLB All-Star Game, just above the event’s record-low audience in 2012. The 2015 All-Star Game viewership is down 4% from 11.3 million viewers last year, and down 25% from 14.6 million viewers in 2009. Ratings continue to decrease, even though all networks should receive kudos for their attempted creative restructuring of the Home Run Derby.

14. NFL off-season economic issues: Part Two. As Apple prepares to launch an over-the-top TV service, there’s some speculation that the tech giant could offer a special NFL package. Apple CEO Tim Cook at a recent media conference was spotted chatting with NFL Commissioner Roger Goodell and New England Patriots owner Bob Kraft. NFL attempts to create other media partners to put pressure on traditional media bidding processes – DirecTV is a good example, and Apple may be next.

15. MLB positive attendance trends. At the midway point of the MLB season, league-wide attendance is up 0.4% compared to the same period last year. Coming off their World Series appearance, the Kansas City Royals are seeing the league’s biggest year-over-year attendance gain of 47.8%. The Los Angeles Dodgers lead the league in per game attendance at 46,279. A tale of two other cities: Chicago Cubs average 34,785 attendance after 45 home games; 7.1 percent increase; 89.2 percent capacity; 1.57 million total attendance. Chicago White Sox averaging 21,937 attendance at 39 home games; 6.7 percent increase; 54 percent capacity; 855,000 total attendance. In the Bay Area, San Francisco Giants average 41,670 attendance after 47 home games; 0.2 percent increase; 99.4 percent capacity; 1.96 million attendance. Oakland A’s average 22,369 attendance over 44 games; 63.8 percent capacity; 7.3 percent decrease; 984,000 attendance.

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.