With Jamie Swimmer
1. The Daytona 500, just ahead on February 26, is one of motorsports’ biggest races of the year, and this year’s hotel prices reflect just that. According to USA Today, the Daytona 500 is set to become the most expensive sporting event of 2017; “more expensive than the 2017 College Football National Championship in Tampa, more expensive than the Super Bowl in Houston.” Peak hotel price across the Daytona area, which includes 160 hotels, is sitting at $521 per night. Comparatively, the average Super Bowl LI hotel price was $379 per night, and $287 for the College Football National Championship; in racing, high end hotels range from $101-$429 for the Coca-Cola 600 in Charlotte and hover around the $200-range for the GEICO 500 at Talladega. While this spike in hotel prices may reflect the interest in this event, many fans that want to attend it cannot afford the steep prices to stay in the area. Following on the success of International Speedway Corp’s massive “Daytona Rising” renovation project in Florida, ISC announced in November a similar $178 million to Phoenix International Raceway in Arizona. The move reflects the racing circuit’s commitment to its fans, race teams, and communities, and confidence in its future.
2. As the PGA Tour exits California for its Florida “Spring Swing,” golf has a brand new World No. One – Dustin Johnson, who decisively won the Genesis Open in Los Angeles on Sunday. The spotlight now turns to the Honda Classic, now the only PGA Tour event in South Florida after the Doral event departed for Mexico. While the Palm Beach Gardens-based Honda is now receiving heightened regional advertising and sponsorship attention as the only South Florida event, the Honda is nonetheless anticipating much lower attendance and ratings than it was only weeks ago, before Tiger Woods pulled out of the event due to ongoing back spasms. “Tiger is the needle. Anyone who argues that is crazy. But it’s almost like seeing Bigfoot now. You don’t know when you’ll see him," said Golfer Pat Perez, on the attention Woods still attracts.
3. MLS business continues to boom across the country, as DC United signed on Audi for the naming rights to the team’s new stadium. According to SportsBusiness Journal, Audi, owned by German-based Volkswagen, reached an agreement valued at $4 million annually for between 10-15 years for DC United’s new $300 million stadium. The deal is “the second biggest deal in MLS behind Banc of California’s reported 15-year, $100 million deal for LAFC's new stadium. Most naming-rights agreements in MLS are in the range of $2 million a year.” The new facility, which will be named Audi Field, is set to break ground this month and is being designed by Populous – it will have 19,400 seats and 60 suites. MLS has more leverage than ever before: new corporate sponsors, increased awareness, new stadium deals. They will now attempt to maneuver through at least 12-15 interested cities to find four expansion commitments over the next few years. Well done!
4. The Pittsburgh Pirates have made massive on-field strides since Bob Nutting became the team’s principal owner 10 years ago, but fans still want more out of the club. According to the Pittsburgh Post-Gazette, Nutting’s “ardent competitiveness” still contradicts with the “caution and restraint with which he has run the franchise.” The Pirates have increased their payroll “from $44.1 million to $99.9 million, but only rose from 29th in MLB to 23rd,” reflecting the league’s overall influx in money. The team’s strict budget and reluctance to spend big on free agents is creating backlash for the front office. Nutting is said to be “fine with fan frustration,” since it is he who has led the Pirates back to winning ways – the team has made the playoffs three times in 2003, though they never got further than the NLDS and lost two consecutive wild-card games. Enhanced branding, public support, PNC Park, and other factors make the Pirates much more valuable than ever before. On-field performance is improving as well.
5. Expanding their digital presence, NASCAR is now the first company to partner with digital video company DeskSite. According to SportsBusiness Journal, DeskSite is known for its automatically downloadable content across all devices – the company’s product is based around the notion of “DVR for the Internet.” “With NASCAR, DeskSite will offer news, interviews and driver spotlights. It also will have highlights of races, though they will only go up after a certain period of time after a race, usually the day after.” This new partnership for NASCAR does not breach any of the racing league’s media-rights deals with Fox and NBC, but actually builds on top of those deals. As it currently stands, NASCAR and DeskSite are looking at a soft launch date this coming November. “DeskSite, whose backers include prominent NFL agent Leigh Steinberg, has numerous team deals in the NFL, MLS and NHL.” Getting ready for Daytona and the start of the 2017 season, look for NASCAR to explore virtual reality, other vertical media integration, and more newfangled technology in the future.
6. The NBA D-League signed a new sponsor, and it will now have a new name. According to SportsBusiness Journal, the D-League will become the NBA Gatorade League – the G-League – next season after signing an entitlement deal with Gatorade. “The entitlement deal will include on-court signage of the new logo, which also will appear on the league’s digital platforms.” The official league ball will feature the new G-League logo, marking a total rebranding for the NBA’s sub-division. A key component of the deal will be Gatorade’s access to players to test new products and equipment. Financial terms of the deal have not yet been disclosed, but this marks the extension of Gatorade’s NBA league wide sponsorship, which dates back more than 30 years. As USA Today notes, this is the first time that a major professional “stick-and-ball league in the United States has named an entitlement sponsor” for one of its properties. This is the latest step in NBA creative “corporate partnering” under Adam Silver’s leadership, following Jersey patch deals pioneered by StubHub in Philadelphia, then Blue Diamond in Sacramento, then GE in Boston, then Infor in Brooklyn.
7. The Olympics are truly the most global sporting event in the world, and the Olympic Channel is finally reflecting just that. According to SportsBusiness Journal, the Olympic Channel, which used to be available only in English, is now available “in Chinese, French, German, Italian, Portuguese and Spanish.” The addition of these languages marks the first time that the platform has expanded beyond its English roots since its inception. These seven languages are available immediately, with subtitled original programming offered in 10 languages as well. Olympic Channel GM Mark Parkman said, “Language and localization features are a high priority for us in 2017. The availability of six additional languages on the global digital platform is a significant step in the Olympic Channel’s evolution as we look to create more personalized user experiences for Olympic fans around the world.” The channel has plans to add Arabic, Japanese, Korean, and Russian in the near future. The U.S. will certainly be a major factor over time as well; and the IOC looking to emphasize the young demographic, digital technology, and the year-round storytelling about Olympic athletes.
8. Naming rights deals have become a significant source of added income for professional sports teams, and some of the EPL’s top clubs are finally coming around to that. According to the London Times, Tottenham Hotspur is “planning to drop the name White Hart Lane” on their new stadium, while Chelsea is looking to make a similar move. The two clubs are “adopting very different strategies as they seek a naming-rights partner in a competitive and crowded marketplace in the capital.” Tottenham is reportedly looking to “raise more than $498 million” from the naming rights sale for its new 61,000-seat stadium; the club is said to have already spoken to more than 300 potential partners. Chelsea, on the other hand, is planning on building a new 60,000-seat stadium on the site of Stamford Bridge and is looking for a naming rights partner that will accompany a reference “to its historic home.” Consistent with other international trends, all sports will continue to maximize creative opportunities to generate corporate partnerships – kit deals, stadium naming rights, league naming opportunities, and other long-term creative corporate revenue streams.
9. A busy first half of the NBA season has come and gone, but not without notable happenings. Teams continue to sign lucrative jersey patch deals, and the D-League will rename itself the G-League after Gatorade signed on as entitlement sponsor, and the NBA will officially become the first U.S. major league to move into the eSports space with the planned launch of the NBA 2K eLeague next year. Commissioner Adam Silver had a lot on his plate these past few months, and a competitive and interesting playoff race is shaping up in both conferences. Drama has swirled in New York with the Knicks as of late, with new rumors around Phil Jackson and Carmelo Anthony arising seemingly every day. Despite that, NBA business has been booming, marking a healthy start to calendar year 2017 for the league. NBA values continue to increase. Of the 31 franchises, Forbes says that 13 are worth over one billion dollars. Not surprisingly, New York, Los Angeles, Chicago, and Boston lead the way, and are now hoping that on-court performance will catch up as well, at least for the sake of the $24 billion per year television annuity.
10. Los Angeles Lakers legend Magic Johnson is not content being a team advisor – he wants to be the “face of the team’s front office and to be in charge of basketball operations.” According to the L.A. Times, Johnson has been adamant about his intent to be the President of Basketball Operations for his former team, noting that he would “definitely give 150%” to the job. Johnson currently serves as an “advisor” to the team alongside Executive Vice President/Basketball Operations Jim Buss. The team does not “have a president of basketball operations,” which creates a void that Magic hopes to fill. Johnson's pitch for being the voice of the Lakers’ front office "included a declaration that his first call would be to Kobe Bryant to get him involved in the organization again.” He also said that though the Lakers have “struggled to attract free agents in the past, his presence would change that.” As (and if) the Lakers get better, a “superstar reunion” of Magic, Kobe and others would clearly be good for the Lakers and the NBA.
11. Representing a significant shift toward digital media, Skiing Magazine is “shutting its print publication.” According to the Denver Post, the Boulder-based magazine will merge its adventure-focused content with its sister, Ski Magazine. Together, the two magazines will publish their stylistically-different content together under one name. For years, Skiing has been the “winter-adventure magazine, with a focus on younger skiers who live for the sport.” Ski Magazine has been “more family friendly, with an eye toward the aging baby boomers who grew the ski industry and seek a little more luxe in their ski vacation.” Commenting on the merger, Active Interest Media President & CEO Andy Clurman, whose company publishes Ski Magazine, said, “We are going for the bigger tent approach.” Skiing Magazine will keep its staff, and renew its “focus on digital video, television and online storytelling, which will carry the Skiing brand.” The company’s “skiingmag.com website will remain intact.” Is it a move away from skiing as a popular winter sport, or a move from print media to digital? Probably the latter. But every niche publication and mainstream media outlet should take note.
12. Similar to the NBA’s dealing with the controversial HB2 bathroom law in North Carolina in 2016, the NFL has taken a hard stance on Texas’ “bathroom bill.” According to the Texas Tribune, Texas Governor Greg Abbott is “blasting the NFL for raising the prospect” that this bill could impact future events in the state. The NFL has warned Texas that “passage of a measure it deems ‘discriminatory or inconsistent with our values’ would discourage the league from awarding any future Super Bowl opportunities” to the state. “The NFL is walking on thin ice right here. The NFL needs to concentrate on playing football and get the heck out of politics,” said Abbott. “We don’t care what the NFL thinks and certainly what their political policies are because they are not a political arm of the state of Texas or the United States of America.” These comments come mere weeks after Houston successfully hosted Super Bowl LI. Both Arizona and North Carolina have seen the impact of challenging the NFL and NBA, respectively, with their biggest games and economic impact, and the leagues attempt to create social statements whenever they think they need to.
13. The Phoenix Coyotes’ hope of building a new arena is still alive after receiving some good news. According to the Arizona Republic, the Arizona hockey franchise “could receive $225 million in public financing for a new arena” in downtown Phoenix or the East Valley. The news comes on the heels of a state Senate committee approving local legislation. While the legislation is intended to help the Coyotes, the runoff could ultimately assist the Suns and Diamondbacks, both of whom are “unhappy about playing in older facilities in downtown Phoenix.” The current plan for the Coyotes facility “envisions public funding covering” 57% of a new arena's cost, with new sales taxes covering $170 million and the host city contributing $55 million. If the plan goes through, the franchise would end up covering the remaining 43% of costs, equating to approximately $395 million. Look for an ongoing fight in the Valley of the Sun over the next round of public facility funding. Years ago, the four major franchises fought the first battle – now comes the next set of facilities/renovations/financings. No different than other communities – economic impact vs. public subsidy.
14. With the college basketball regular season coming to an end in a few weeks, fans are having a tough time getting their hands on tickets to see top-ranked Gonzaga at home. According to the Spokane Spokesman-Review, demand to see the undefeated Gonzaga Bulldogs is off the charts, especially given the size of the team’s home arena. With only three home games left to be played at the 6,000-seat McCarthey Athletic Center, “all tickets for remaining home games are already accounted for.” Tickets to Gonzaga’s last home games were “either sold out or substantially marked up in value on several secondary markets.” Reselling tickets in secondary markets for a “higher price than the face value – which never exceeds $40 per ticket, regardless of the Zags’ opponent or the date of the game – is against Gonzaga’s policy.” The majority of seats at “The Kennel” are reserved for students and season-ticket holders, making it tough for outside fans to get a seat. Ready for March Madness and the Final Four. Over $300 million of cumulative economic impact will begin just after the respective conference tournaments. Stay tuned.
15. Mere months after “successfully” pulling off the 2016 Summer Olympics, Rio de Janeiro has sadly slipped back to its depressing ways. According to the N.Y. Times, the host city is “decaying rapidly,” as once-vibrant facilities around the city are now “puncturing any uplifting buzz from the competitions.” The 31 towers which comprised the athletes’ village were “supposed to be sold as luxury condominiums after the Games, but fewer than 10 percent of the units have been sold.” Maracanã Stadium – the site of the opening and closing ceremonies as well as the soccer matches – now has a brown field and the electricity “has been shut off.” The decay of Olympic sites is “happening as a financial crisis engulfs federal, state and municipal governments.” Sadly, the state of Rio is not a foreign one for past Olympic sites. Sochi, which played host to the 2014 Winter Olympics, is now a depressing, hardly-used city; what makes that even worse is the fact that it cost more than $50 billion to put on. It looks like Rio will resemble Olympics in Beijing, Athens, and Sochi – rather than successes in London, Los Angeles, Atlanta, and Sydney.