Sports Business

Sports Business '15 to Watch': Nike’s Jordan Brand isn’t just for basketball

michael-jordan-nike-8-17-15.png

Sports Business '15 to Watch': Nike’s Jordan Brand isn’t just for basketball

1. The sports media landscape continues its expansion into the digital marketplace. Sportsmanias, a sports news aggregator site that combines a dynamic mix of professional beat writer news with team and athlete social media content is holding a digital media summit in Miami this Friday. The event will feature several panel discussions with some of the country’s top sports writers and will cover topics ranging from today’s digital landscape to tomorrow’s audience and the social media missteps. The Knight Foundation has always been a critical thought leader in ethical journalistic standards. Now, the organization is associated with Sportsmanias to host a watershed conference on the issues surrounding journalism and social media. I am honored to host and keynote at the event, which should provide significant insight into a rapidly growing concept.

2. Is San Diego the new frontrunner to move to Los Angeles? With the Chargers critical of San Diego’s proposal for a new football stadium, it’s increasingly unlikely that a deal will be reached before a September 11 deadline. The city must have a deal in place by that date in order to qualify for a January vote. The proposal made by the city and county called for 32 percent of the stadium’s cost to be funded by public money. It also includes contributions of $362 million from the Chargers, a $200 million loan from the NFL, and $187 million in PSLs. As expected, incumbents San Diego, Oakland, and St. Louis are gearing up for their “final stages” of respective stadium processes. St. Louis has made progress on its $998 million stadium, and Oakland and San Diego are awaiting their next “battles.” Clearly, the NFL will keep its eyes on the end of the season as an ultimate deadline – with Los Angeles ready for return to football after two generations.

3. Nike’s Jordan Brand isn’t just for basketball. The University of Michigan next year will become the first college football program to be outfitted by Nike’s Jordan Brand subsidiary. The school in July signed a record 15-year, $169 million apparel contract with Nike, the largest apparel deal ever for a college program. The school’s basketball team also will wear Jordan Brand gear, one of five programs nationally to do so. Jordan has become the rarest of athletes/ambassadors: transcending his particular sport (or sports in general). Arnold Palmer, Muhammad Ali, and a few others. Now, if he could just his Charlotte Hornets to play somewhere close to his level!

4. What’s in a name? Apparently a lot of money. NBA legend Michael Jordan is in court, suing now-defunct supermarket chain Dominick’s for illegally using his name in an ad six years ago. Jordan is seeking $10 million in damages, claiming he will not do an endorsement deal unless it’s worth at least that amount. As part of the trial, Jordan’s attorneys said that he made more than $100 million in sponsorships last year, and nearly $540 million from 2000-2012. Jordan’s sponsors include Nike, Gatorade, and HanesBrands. As we described in No. 3 above, Jordan understands the value of his name – and the lengths he must go to perfect it. This lawsuit has implications for all celebrities (in the name, likeness, and permissible use area) far beyond Michael Jordan himself.

5. As the world shrinks, it’s becoming easier and more important to provide domestic audiences with international content. International telecom company Globecast recently won a project to contribute Weekly English Premier League Matches for Time Warner SportsNet. The company is picking feeds up in Europe on fiber and delivering them directly on its fiber network to a facility in L.A. Another example of economic efficiencies transcending global telecasts. As transmission becomes easier and more technically efficient with companies like Globecast, look for more international exposure for all sports throughout the globe.  

6. Sneaker wars between Adidas and Nike are heating up. Adidas formally announced a sponsorship deal with Houston Rockets star James Harden, which takes effect October 1. Terms of the deal have been reported at $200 million over 13 years, a total Harden’s previous sponsor, Nike, declined to match. The long-term deal includes an exclusive signature collection, product design collaboration, and global marketing involvement, particularly in Europe and Asia. Nike is the unquestionable leader; Adidas internationally and more now domestically; and Under Armour the “aggressive upstart.” In all cases, the clear winners are players, teams, leagues, and college conferences who will benefit from increased rights fees as a consequence of this sneaker war competition!

7. The growing value of media rights is having a major impact on English soccer clubs. New valuations indicate that the 20 clubs starting this season’s English Premier League collectively are worth $13 billion. The total represents 460 percent growth in the 16 years since Richard Scudamore became the league’s chief executive. Among the league’s most valuable clubs are Manchester United at $2.7 billion, Arsenal at $1.7 billion, and Manchester City at $1.4 billion. In many respects, Premier League values mirror National Football League economics. The biggest differences are the imbalances between the “haves” and the “have-nots” in the EPL – no significant television or corporate revenue sharing, and no salary cap or restraint to speak of in the EPL. Good for the top clubs, but not necessarily everyone else.

8. Not all PR is good, at least in the case of athlete endorsements. EA Sports confirmed that Blackhawks RW Patrick Kane will no longer be on the cover of NHL 16 and that the company has canceled his appearances for the game’s launch next month. Kane, the subject of a rape investigation in his hometown of Buffalo, is the first EA Sports cover athlete to be pulled before a game’s release. The planned cover had Kane and his Blackhawks teammate Jonathan Toews, but now Toews will appear alone. Rush to judgment, or a positive brand protecting itself? In this case, Kane may be a victim of timing, as the 2016 cover must be planned now (potentially before all the facts are known and the investigation is completed).

9. The season doesn’t need to start for ads to be sold. Even with Super Bowl 50 still six months away, CBS has sold a 30-second advertisement during the broadcast for a record $5 million. The amount is up 11 percent on the highest price this year's broadcaster, NBC, earned for its Super Bowl ads. NBC charged as much as $4.5 million for an ad during the most recent Super Bowl. When CBS last aired the Super Bowl three years ago, the average 30-second spot cost $3.8 million. Super Bowl 50 has an extraordinary cachet; first Bay Area Super Bowl in a long while; the technological magic of Levi’s Stadium; and the fact that Super Bowls are a half century old. We can all remember the first one in Los Angeles…

10. Marketing to women represents a huge growth opportunity for sports merchandise manufacturers. Vera Bradley unveiled a new collegiate line featuring 15 different schools. The line will offer a tote, a backpack, a duffel bag, a cross-body bag, and a wristlet for each of the schools through a licensing deal with IMG College and CLC. The schools include Alabama, Ohio State, and Stanford. Vera Bradley joins women’s handbag designer Dooney & Bourke, which launched its own line collegiate line last year. Kudos to the respective athletic departments and the high-end retailer for making a difference in college sports: generating additional revenue for women’s programs (and all programs); and creating a new brand at the time college athletic directors need revenue the most.

11. When the players speak, the league listens. The NBA released its 2015-16 regular-season schedule, which features fewer back-to-back games and four-games-in-five-nights stretches for teams. The changes reflect the league’s desire to improve player health and increase rest days. The 82-game schedule will continue to run from the last week of October to the middle of April, meaning players will still play the same number of games over the same period of time. Good example of players providing appropriate input through NBAPA; and great example of Commissioner Adam Silver and the NBA continuing to develop a unique partnership with all players (not just the superstars). The future key will be the long-term impact on regular season television ratings – expected to be minimal.

12. Profitability isn’t all that matters, at least as it related to EPL media rights. Although NBC renewed its deal for the EPL’s U.S. media rights, network chairman Mark Lazarus acknowledged that the Premier League had not earned a profit through advertising during its current deal and would not in the next one. NBC will spend $1 billion over six years for the rights, which basically doubles the annual cost of NBC’s current, three-year $250 million contract. Value of relationships in international high-stakes negotiations to not be overestimated. NBC strives to hold on to one of their key iconic properties; and EPL awards pioneering royalty. A welcome result given recent “golf majors musical chairs” that has afflicted network television negotiations.

13. One innovative sports owner invests in a league of the future. RSE Ventures, a venture-capital firm co-founded by Miami Dolphins Owner Stephen Ross, is providing $1 million to the first round of funding for the Drone Racing League, which will hold its first public race later this year. The league intends to make money through sponsorships, media and ticket sales. The DRL, which hopes to recreate the success of live videogame competitions, is targeting an audience that includes videogame players and other technology-oriented people. Ross has been the quintessential entrepreneur, real estate developer, and intense sportsman for years. The Miami Dolphins purchase has given him a platform to expand his horizon, and the sporting world has benefited. Now if Suh and Tannehill can propel the Dolphins, he will truly be a happy man.  

14. Scandals know no limits. The University of Minnesota will conduct an investigation into the finances and employment practices of its athletic department after AD Norwood Teague resigned due to sexual harassment allegations. Teague, who was hired by the university in 2012 after six years as Virginia Commonwealth's AD, was paid a base salary of $422,000 annually. Before he resigned, Teague was working on a fundraising campaign for a $190 million Athletes Village project, including new practice facilities for several teams and an academic and nutrition center. College scandals affect the industry at all levels:  players, schools, athletic administrators. As always, the key is speed, transparency, meaningful penalties, and the ability to restructure to reflect the investigation!

15. One network takes a one-time gamble on the important of live streaming. Fox Sports signed a last minute deal to have YouTube live-stream the Bundesliga’s season opening match between Bayern Munich and Hamburg, marking the first time the network live streamed content on the video sharing site. The agreement was described as a one-game-only deal to help build awareness around Fox' commitment to carry the German soccer league for the first time this season. Obviously, look for more of this in the future. As the NFL streams one of the October regular season London games, and as all networks probe to maximize profit, visibility, and reach!

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.