15 TO WATCH/5 SPORTS TECH/POWER OF SPORTS 5: RICK HORROW’S TOP SPORTS/BUSINESS/TECH/PHILANTHROPY ISSUES FOR THE WEEK OF OCT. 23
with Jamie Swimmer, Ron Socash & Tanner Simkins
- A return to the World Series for the Los Angeles Dodgers – their first Fall Classic appearance in 29 years – will likely "erase years of red ink." According to the New York Post, the Dodgers "might be close to break-even” thanks to the increased number of MLB Postseason home games. The team had an Opening Day payroll of $242.2 million -- which increased to $265 million due to in-season trades. The Dodgers "posted an operating loss" of $20.5 million last year after an operating loss of $73.2 million in 2015. The team’s financial picture is "expected to improve next season -- with expected payroll cuts." And within a few seasons, the team "projects" making more than $50 million annually. The Dodgers’ World Series opponents, the Houston Astros, advanced to their second World Series in franchise history on Saturday with a shutout win over the Yankees in ALCS Game 7, a victory that, according to the Houston Chronicle, "lifted up a city that will long be recovering from the devastation of Hurricane Harvey.” But don’t expect the massive economic impact from the World Series that Super Bowl host cities experience: in multiple studies, sports economists peg the impact per World Series home game at around $6.8 million, a far cry from the $300+ million a Super Bowl brings in.
- In Northern California, Sonoma Raceway is ready to re-open in the wake of area wildfires. As firefighters appear to have devastating fires contained in Wine Country, Sonoma Raceway is ready to re-open. The track closed for more than a week after fires broke out in Sonoma and Napa Counties. The fires burned the hillside around the course, but raceway VP/Communications & Marketing Diana Brennan noted that structures came through unscathed, and fortunately so did the staff, none of whom lost their homes. The track will conduct a test day on Monday, with the first race to follow this weekend. Last week, Sonoma Raceway opened its 50-acre campgrounds as a stop-through shelter, offering three meals a day for evacuees. Brennan said at the peak, there were around 75 RVs and campers on the adjacent grounds. “This valley (Sonoma) and the community are amazing on a good day,” she noted, “and, it turns out, even better on a bad day. It’s a long haul, but we need to be a part of the restoration process.” From hurricane relief to wildfire shelter, this is just the latest example of American pro sports stepping up to aid disaster relief in 2017.
- After a meeting between NFL union representatives and players, no changes have been made regarding rules on protesting the National Anthem. According to the New York Times, athletes will still be allowed to kneel or sit during the anthem in coming weeks without penalty. The NFL has flirted with the idea of changing the rules to require players to stand for the playing of the anthem, but no consensus has been reached. After the meeting, the NFL “did promise to help support some of the causes targeted by the protesting players, including reform of the criminal justice system.” Fans across the country have voiced their objections to the anthem protests, saying that they feel players are being “disrespectful to the flag and the military.” One of the chief critics of this movement has been President Trump. “The NFL has decided that it will not force players to stand for the playing of our National Anthem. Total disrespect for our great country,” he tweeted. The NFL and its players' association continue to show unity and resolve in the face of political forces attempting to cast them as dividers, not unifiers. Moving forward, hopefully cooler heads will prevail, and the league can identify more ways to affect positive social change.
- The 2018 NFL Draft is heading to Dallas. According to SportsBusiness Journal, the event, scheduled for April 26-28, will be held at AT&T Stadium in Arlington. Philadelphia held last year’s draft and Chicago hosted the two preceding events. The NFL Draft has become more than just an isolated event – it is now a weekend-long celebration that goes beyond just picking players. Cowboys Executive Vice President & Chief Brand Officer Charlotte Jones Anderson tweeted that she is “so excited” to have won the rights to host the event. In terms of logistics at AT&T Stadium, the NFL plans to utilize the field, stands, and outdoor plazas, “where the NFL Draft Experience festival would take place.” The Cowboys’ state-of-the-art practice facility, The Star at Frisco, will be used in some capacity as well. It’s clear the NFL Draft has cemented itself as a must-attend event and solidified the league’s quest to capture sports fans’ attention year-round.
- The NBA season is underway, and a new report from Wasserman notes that jersey patch sponsorships are worth an average of $9.3 million across the league. According to SportsBusiness Journal, more than half of NBA teams signed jersey patch sponsors ahead of the new season, giving them additional revenue sources. The reigning NBA champion Golden State Warriors lead the way with an NBA-best deal worth $20 million annually with Japanese tech company Rakuten. The $9.3 million marker is “slightly up from projections,” which were initially forecast at $9.0 million annually. The NBA jersey sponsorships are the first for any of the four major sports leagues in the U.S., so selling the “high-priced inventory was proven no easy task given it had never been done” before. The league gave teams an “18-month runway to sell the patches.” Look for the NHL to be the next domino to fall in the uniform patch revenue hunt – the league will test the scheme at hockey’s World Cup next December.
- Nike was sent scrambling just a day into its tenure as the official jersey provider of the NBA after LeBron James’ jersey ripped down the middle on national TV. According to ESPN.com, Nike executives are “extensively reviewing” why James’ jersey split down the back middle on opening night. The James incident marked the second time a Nike NBA jersey was torn during a game; in a preseason game again the Timberwolves, Lakers guard Tyler Ennis’s jersey ripped between the 1 and 0 on his No. 10 uniform. Nike took over as the official outfitter of the NBA from Adidas after signing an eight-year, $1 billion deal with the league. The Oregon-based sportswear company is debating whether or not it is at fault for the recent rips. While “Nike makes the materials and provides blank uniforms to the squads, it is often the team’s responsibility to find a vendor to custom-stitch the names and numbers on the official jerseys.” If Nike is smart, it will avoid the blame game, solve the problem, move on, and sell thousands of NBA replica jerseys to satisfied fans.
- Not news to anyone, but LeBron James is the NBA’s most marketable player. According to a survey of sports business executives and reported by SportsBusiness Daily, James finished “comfortably ahead” of Stephen Curry for the top spot. King James received 38 of the possible 49 first-place votes, while also appearing on 98% of the ballots. Rounding out the top five are Russell Westbrook, Kevin Durant, and James Harden. Four members of the Warriors cracked the top 10 – more than any other team – while rookie Lonzo Ball finished tied for 10th with Draymond Green. The survey was distributed to marketing/branding executives, agencies, sports business professors, and basketball media across the country. “…When you have the NBA Finals and all the exposure of the last few years for the Warriors and Cavs, it’s hard not to have a list dominated by those teams’ players,” commented Bruin Sports Capital Partner David Abrutyn. As the NBA season gets underway for real, it will be interesting to see which new brand stars emerge over the next eight months.
- The Target Center, home of the Minnesota Timberwolves, is now on par with other state-of-the-art arenas across the NBA. According to the St. Paul Pioneer Press, the facility’s $140 million facelift actually saw the total capacity reduced by 400 to 18,798, but the added features give it some flare. Extra windows were placed throughout the concourse, “making Target Center look bigger, even while staying in its same smallish footprint in the heart of downtown Minneapolis.” A new beer garden that overlooks the court was added, along with the new Lexus Club and a second arena entrance. The team’s new locker room is noted to be “spacious and clean, with a circular design that creates more open room.” “This place has actually some life in it,” noted forward Shabazz Muhammad. The Timberwolves have high expectations on the court this year, with the additions of Jimmy Butler and Taj Gibson from Chicago.
- The San Antonio Stars are officially set to become Las Vegas’s newest professional sports franchise. According to the Las Vegas Review-Journal, the WNBA team has been purchased by MGM Resorts and will start playing in Las Vegas beginning with the 2018 season. The WNBA and NBA Board of Governors were quick to approve the relocation, as this transition “has been in the works for several months.” One of the biggest questions leading up to the move was where the team will play its home games; the Mandalay Bay Events Center has been chosen as the team’s arena. “Mandalay Bay is a smaller, more intimate arena with about 12,000 seats,” said MGM Resorts Chief Experience & Marketing Officer Lilian Tomovich. “We feel it’s the absolute right size arena for the fans to have that intimate experience to come watch basketball.” While unrelated, it’s also terrific that Mandalay Bay, currently associated with terror and tragedy, has something much more positive and uplifting in its near future. It’s good for the resort, and for the city.
- Chicago Mayor Rahm Emanuel is toying with the idea of raising the city’s amusement tax on large concerts. According to the Chicago Sun-Times, if implemented, the new plan would “eliminate the 5% tax and charge a 9% tax on tickets for venues with a capacity of 1,500 people.” Small venues and concert halls would welcome this change, while larger ones – like the United Center and Wrigley Field – could expect to lose concerts due to the high tax rate. In a statement released by the United Center, venue management noted that “the plan would be the highest amusement tax for fans attending sports and concerts in the United States.” The Cubs issued a similar statement. “World class entertainers like Billy Joel and Lady Gaga who perform at Wrigley Field have their choice of venues and the new proposal puts Chicago venues at a disadvantage,” noted Cubs VP/Communications & Community Affairs Julian Green. As soon as Chicago loses a major concert tour stop to Milwaukee, Indianapolis, or Ann Arbor due to its high amusement tax, look for Mayor Emanuel to negotiate offsetting tax credits or incentives with Wrigley, the United Center, and the like.
- The NHL expects facial recognition software to be implemented in arenas within the next two years. According to TSN.ca, the NHL and some of its 31 teams are now “fielding pitches from companies offering to install high-definition cameras and facial recognition software,” hoping to have the technology adopted in the near future. One of the reasons for this push is that professional sports leagues across the world have come to terms with the fact that they are targets for terrorists. The conversations around facial recognition software are part of league-wide security reviews that could potentially help limit “the league’s financial exposure if terrorists targeted an NHL game.” “They’re looking to keep out the really bad guy and the technology has improved dramatically in the past few years,” said FaceFirst CEO Peter Trepp, whose firm sells this type of software. “We can identify someone literally as they walk through the door.” While some fans might decry the lack of privacy that would accompany putting the software systems into place, in this day and age can we really afford to dismiss them?
- The Las Vegas Knights are looking to provide fans with an unparalleled in-game experience. According to the Las Vegas Sun, the NHL expansion club is trying out different entertainment aspects in its first season. The team plays its games at the brand new, state-of-the-art T-Mobile Arena right off The Strip and is trying to use its location as a selling point for fans. “We are making adjustments with every game,” said Golden Knights VP/Events & Entertainment Jonny Greco. “We listened to what people like and what they don’t like.” One way the team has shown its willingness to try new tactics is when it chose its mascot. Instead of a “Golden Knight,” the team chose a Gila monster, an animal indigenous to the region. The Golden Knights are on their Vegas honeymoon at present, and currently sitting in second place in the NHL Western Conference. If they continue to win, it looks like this marriage will be a lasting one.
- The Columbus Crew could be leaving town for Austin, Texas, as soon as 2019. According to SI.com, Owner Anthony Precourt recently announced that he would move the Ohio-based MLS franchise if a soccer stadium in downtown Columbus is not finalized within the next year. If prompted to move to Austin, the Crew would be forced to play in a “temporary facility in 2019 and 2020” before making the move into a soccer-specific stadium the year later. Mapfre Stadium, where the Crew currently play, became MLS’s first-ever soccer-specific stadium when it was built in 1999, but its amenities are now “far behind those of recently-built stadiums in the MLS.” Precourt bought the team in 2013 and has since rejected numerous offers from other suitors to purchase 100% or 50% of the team. If they move to Austin, the Crew would most likely play home games at the University of Texas in the interim – a move that could help them build a lasting millennial fan base.
- U.S. soccer great Landon Donovan is contemplating running for U.S. Soccer President. According to SI.com, Donovan has been approached by “a number of respected figures in American soccer” to run for the position, citing his qualifications to better handle the soccer aspects of that job than current President Sunil Gulati. Gulati is expected to run for his fourth term, though the USSF presidential campaign seems up for grabs following the USMNT’s failure to qualify for next summer’s World Cup in Russia. The election is set for February, and the American soccer governing body is concerned about Gulati “continuing to control decisions on the technical side – including hiring head coaches.” Donovan does lack experience in governing roles, however, which could pose a potential problem for his candidacy. One big difference between Gulati and Donovan is that the former tended to prioritize money, whereas Donovan is expected to prioritize youth reform and quality.
- Political debates regarding Catalonia’s split from Spain have stalled media rights conversations for La Liga. According to Reuters, La Liga President Javier Tebas commented that the proposed secession has “held up negotiations” regarding the league’s international TV rights deals. The situation in Catalonia has been controversial in Spain, but the split could have severe consequences on La Liga, considering Barcelona is within the region. “La Liga would lose about 20% of its income if Real Madrid or Barcelona left,” said Tebas. “We’re talking about a problem that could have a huge impact on our competition, even though I don’t think [Catalonia splitting from Spain] will occur.” The TV rights are not only being sold in Spain and throughout the European Union, but in India, Singapore, Turkey, and beyond. Talks regarding new La Liga deals are being delayed a few weeks until a final political decision has been reached – the situation became more serious over the weekend, after Madrid announced drastic measures to stop the region from breaking away, and close to half a million people took to the streets in protest.
Five Top Tech
- MLB’s American League Championship Series was one of the first of its kind in terms of technology. Over 100 microphones were used during the ALCS to capture every sound, along with a high number of cameras. Further, MLB is increasing those numbers for the World Series. As a result, fans will have an unprecedented amount of access to player reactions and emotions after each play. FOX Sports Senior Vice President of Field and Technical Operations Michael Davies noted in a press release: “We will have eight Super Slow Motion and Hypermotion Cameras, including the FOX Phantom Cameras, at either side of the plate to capture at-bats and close plays at a blistering 1,500 frames per second. Quite simply, it’s more Motion Cameras in play than at any other baseball game on any network this season.” For MLB, this is a great way to capitalize on some of the biggest moments the World Series has to offer. Having players “mic’d up” has been a part of sports technology for the last decade, but now MLB has placed microphones along with high-speed cameras right on the field, to fans’ advantage and delight.
- Even though they failed to reach the World Series this year, the New York Yankees are moving forward in the esports arena. The team has entered into an investment partnership with Vision ESports, and will also invest in three other esports companies. The move is the latest example of professional sports franchises recognizing the legitimacy of esports and striking while the proverbial iron is hot. Yankees Co-Chairperson and Managing General Partner Hal Steinbrenner told Fortune, “The New York Yankees are thrilled to partner with Vision Esports and its diverse portfolio of esports companies. Guided by an impressively skilled and sports-savvy leadership team, Vision Esports is transcending the industry with a bold, innovative approach to their business, and we are excited to enter into this dynamic arena as their partner.” The Yankees continue to push the envelope of their global brand in new ways. By investing in esports, they also open the door for the industry to tap into the massive New York market. The impact of an open door into NYC could pay enormous dividends for the entire esports image and brand.
- FIFA will implement Video Assistant Referees in an effort to better aid on-field referees in making crucial calls during the 2018 World Cup in Russia. The technology was used during the most recent Confederations Cup, and now FIFA is reaching out to technology companies in order to better prepare for the World Cup. A FIFA press release described their search for outside help: “It became clear how important it is to make correct decisions regarding the possible offside position of a player in one of the reviewable situations particularly when a goal is scored. Calibrated offside lines are requested to offer support in decision-making. FIFA calls for providers to offer a solution for a calibrated virtual offside line that will be made available to the VAR in order to assist with decision-making for possible offside positions.” If FIFA is able to increase its use of technology in the largest soccer tournament in the world, we could see VAR use expand faster than expected. With more teams and leagues in Europe seeing how the integrity of each game changes for the better, the quality of professional soccer globally could increase.
- The Green Bay Packers and Microsoft are partnering to create a technology facility near Lambeau Field. According to the Green Bay Press-Gazette, the facility, called “Titletown Tech,” is a tech accelerator created in an effort to boost the growth of startup companies and revitalize the local economy and beyond. The project is a significant financial commitment for the team, as they committed $5 million for the next five years to fund Titletown Tech. Packers President and CEO Mark Murphy had this to say about the Microsoft partnership: “Titletown has gained a tremendously impactful partner in Microsoft. Economic development is the key to our region’s future, and Microsoft, with its array of tools and expertise, will help grow new businesses as well as assist our existing companies to use technology to realize greater success.” The Packers are looking to boost their brand through this investment in technology along with aiding their fan base’s local economy. As a publicly-owned entity, the Packers famously have a very close relationship with their fans. As a result, this sort of investment perfectly fits their image and will only help them in the long run.
- Kevin Durant grows his tech investment portfolio with his most recent support of autonomous drone startup Skydio. Skydio is believed to be one of the 30 or more tech investments Durant has made over his playing career. That number is not expected to decrease. Skydio describes their drone product as such: “At Skydio our fundamental goal is to deliver the power and magic of flying cameras without the complexity. Current drones are cool gadgets for enthusiasts but still a curiosity to mainstream consumers. Our belief is that advanced onboard computer vision and artificial intelligence, combined with world-class hardware product design, will yield a breakthrough that makes drones a trusted part of our daily lives.” Durant is no stranger to the tech industry. A marquee NBA player who heavily invests in tech startups, Durant has always shown a willingness to try his hand at new ventures. Durant, Stephen Curry, and Andre Iguodala are notable NBA players that invest in tech companies, and not coincidentally they all play for the Bay Area Golden State Warriors. It’s inspiring to see pro athletes invest in ventures that represent the markets in which they play.
Power of Sports 5
- Eagles DE Chris Long to donate year’s salary to education equality efforts. This week, Philadelphia Eagles defensive end Chris Long announced that he will donate the remainder of his salary this year to help improve educational equality. Long had already donated his first six game checks from this season to provide scholarships for students in his hometown of Charlottesville, Virginia. Now, over the next ten weeks, each game check will go towards launching the Pledge 10 for Tomorrow campaign. The Pledge 10 for Tomorrow campaign aims to encourage people to make donations to help improve equal education opportunities. The foundation has selected four organizations that focus on making education easily accessible for underprivileged youth while providing the support and resources they need to help them develop a strong social identity. The four selected organizations are located in the three cities in which Long has spent time during his NFL career: St. Louis, Boston, and Philadelphia. Each foundation will receive donations throughout the season, and the organization that raises the most money by the end of the season will receive an additional $50,000 donation.
- Premier League players pledge a share of their earnings toward Common Goal Foundation. Premier League footballers Charlie Daniels and Alfie Mawson have pledged a share of their earnings towards Juan Mata’s Common Goal charity, becoming the first English players to do so. Mata, the star midfielder for Manchester United, believes that the support from Daniels and Mawson will help the foundation take a step forward in its international growth, and could help the foundation attract support from athletes around the world. Common Goal was started by Mata less than three months ago, with the goal of uniting the football community behind a shared commitment to give back. The idea is that each player will pledge a minimum of 1% of their annual salary to a collective fund. From there, the money will be distributed to various football charities around the world that provide underprivileged children with the opportunity to play and learn the game. To date, 12 players from various European clubs have committed to participate with Common Goal.
- NCAA schools scheduling exhibition games to raise money for hurricane victims. Several major college basketball programs have added exhibition games to their schedule in an attempt to raise money for the victims of the recent hurricanes that impacted Texas, Florida, and the Caribbean. The University of Oklahoma will host a charity scrimmage against UT Arlington on October 28 before their homecoming football game against Texas Tech. The basketball game will be free to attend and will have open seating, but fans will be encouraged to make a donation. All money raised at the game will go towards the United Way Harvey Relief Fund. Mississippi State University will also host a charity basketball game against the University of Nebraska next weekend. The game will be held on Sunday, October 22 at the Humphrey Coliseum in Starkville, Mississippi. Admission to the game will be free, but the schools will be partnering with the American Red Cross to collect monetary donations at the gates. All of the money collected will go towards helping the victims of Hurricane Irma throughout Florida and the Caribbean islands.
- Saudi Arabia appoints first female head of sports. Last week, Saudi Arabia appointed the country’s first-ever female president of the Saudi Federation for Community Sports. Princess Reema bint Bandar was named the head of the organization, which manages sports and sports-related activities for both men and women throughout the country after she led the effort to license female-only gyms and sports clubs in her previous role with the national General Sports Authority. In a country where women are not allowed to exercise or participate in sports with men, the hope is that the new appointment will create more opportunities for women to exercise and will help them gain access to proper health and wellness facilities. According to a recent study done by the country, only 13% of the population exercises weekly. The hope is that by changing the way people view fitness, the country will be able to raise this number to 40% by the year 2030.
- U.S. women’s hockey team given Wilma Rudolph Courage Award. On Wednesday night, the U.S. women’s national hockey team received the Wilma Rudolph Courage Award. The team was presented with the award at the Salute to Women in Sports event in New York City, an annual event hosted by the Women's Sports Foundation. The players were given the award for their courage and leadership both on and off the ice. Earlier this year, the team announced it would boycott the upcoming International Ice Hockey Federation Women’s World Championship. The boycott was promoted as a way to advocate for equality in their sport. Just two weeks after the boycott was announced, the dispute was successfully resolved and the team was able to participate in the IIHF World Championship, in which they emerged victorious after beating Canada 3-2 in overtime during the championship game. Now ranked number one in the world, the U.S women are training for the 2018 PyeongChang Olympic Games, where the team hopes to medal for the sixth time since the sport was introduced to the Olympics in 1998.