16 for '16: Rick Horrow's Top Sports/Business Issues of the Year

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16 for '16: Rick Horrow's Top Sports/Business Issues of the Year

With Tanner Simkins

1) After a 108 year wait --what a game, indeed. The Chicago Cubs-Cleveland Indians Game 7 World Series matchup may go down as the best baseball game in history, and the viewer numbers reflect just that. Despite a 17-minute rain delay and a late finish, the drama kept fans around the country glued to the TV. With the Cubs win, Theo Epstein can now be credited for snapping two of baseball’s largest title droughts – in Chicago and Boston. “Give all the credit where it’s deserved,” said Cubs Chair Tom Ricketts. Over 40 million TV sets; millennials glued to mobile devices; over 200 countries; economic impact in Chicago well over $200 million for the eight games at home and nine away games attracting thousands of baseball pilgrims to Wrigleyville. Net impact: great for baseball, great for the Cubs. It’s happened. Cubs fan such as myself can now go in peace. By far, the biggest sports story in the history of the universe. Economic impact corresponds with social and intergalactic benefits – five million people at a downtown parade. In the future, the time capsule on 2016 baseball will be fun to open, indeed.

2) Many maintain that sport and politics do not - or at least should not - mix, yet the result of the 2016 presidential election will surely have an impact on the future of American sport for many years to come. Before the vote, there were widespread concerns that a Donald Trump presidency could harm Los Angeles’ ongoing bid to host the 2024 Olympic Games and any potential push from the U.S. Soccer Federation to stage all or part of the 2026 FIFA World Cup – which some had suggested America might co-host with Mexico.  Other sports industry followers speculate that the prospect of uncertain trade relations with other countries could negatively affect major league growth aspirations abroad. Whether any of that is actually the case remains to be seen. On the plus side, Trump’s experience as a sports league, team, and facility owner could mean that he will forge policies beneficial to the sports industry both at home and abroad. The jury is still out on whether the LPGA and PGA Tour will embrace the Trump properties in years ahead.

3) This was the year of the NFL tricast, digital streaming, shared rights, and more.  While experts claim different reasons why, that mix resulted in a TV ratings downturn for the league. And the problem might not go away anytime soon. Many of the year’s primetime games had the lowest ratings in 10 or so years. Analysts close to the issue argue a change in consumer preferences as the underlying reason. Whether it was the daily fantasy bubble somewhat popping, primetime competition like the presidential debates, content cannibalization with the NFL available more places than ever before, or simply lackluster game storylines – the NFL downturn was a major deal in 2016. The biggest story is really the convergence of all types of new media – with implications for rights holders, “de-couching,” stadiums and arenas, and the entire sports industry.

4) Live events take center stage, for social interaction and gifting in a “experience economy.”  StubHub has just released its annual “Year in Live Events” report. Peyton’s last game. Kobe’s last game. The Cubs’ World Series win. Hamilton. Those are just a few of the major highlights from a year in live events. According to StubHub, the top 10 bestselling events of the year were all sporting events. Led by Super Bowl 50 in Silicon Valley, which outsold the previous Super Bowl by 7%, and the World Series, which was the highest-selling World Series ever on StubHub, other best-selling live events included Adele’s tour, which led all music acts with the No. 1 selling tour spot and the runaway Broadway hit, “Hamilton: An American Musical,” drove at least four times the sales of any other theater production in company history. Fans also flocked to see Peyton and Kobe’s final games, championship appearances for Cleveland in both basketball and baseball, UFC taking its first match to New York City and soccer’s globally popular Copa America Centenario. International NFL games and futbol (soccer) matches led as the top five international events with the highest sales from U.S. ticket buyers. This past year, the live events industry thrived, with a perfect storm of firsts, lasts, and multiple milestone events that were captured only as StubHub can, with a global marketplace that spans sports, music, and theater. It will be interesting to see how events in the new year stack up to an historic 2016. 

5) From an international sports perspective, Brexit was big news in 2016. With restrictions regarding player’s age and nationality, a shift in the European Union paradigm mixed all this up for EPL clubs. Moving forward, European soccer’s competitive balance should level out if Brexit-caused restrictions prove as tough as many expect. Maybe Britain’s exit means two steps back for UK football or one step forward for the global game such as that in the South America, for example. Maybe policy makers find a way to keep European football strong. Regardless, the issue continues to be something to watch…heads up rugby and cricket fans, too. Uncertainty rules the day, as the European economy evolves to adjust to the unpredicted result.  Look for sports to respond accordingly.

6) This year the world lost golf's patriarch, Arnold Palmer. His stellar playing career aside, Palmer’s biggest achievements stretched well beyond the game. Known today as the originator of sports marketing, Palmer was one of the first athletes to turn his name into a brand. Using his image and business acumen, Palmer's empire was valued at approximately $700 million upon his death. Over the years, he was endorsed by dozens of companies, had his hand in founding IMG and the Golf Channel, even in commercializing his famous ice tea/lemonade blended drink -- effectively founding sports marketing along the way. Through strategic messaging and brand management, Arnold Palmer became the prototype for all of today's sports stars. “The King” as he was known, will be missed. Arnold Palmer was more than a golfer – he defined an evolving, broad sports business in a way no one else could.

7) The Rams stole NFL headlines this season with their return move to Los Angeles.  Since then the balance of power has shifted among NFL owners and the Rams have cemented themselves as LA’s pride once again, despite poor performance throughout the season.  The Ram’s “honeymoon period” in the Coliseum and the construction of their new Inglewood stadium was one of the year’s most closely followed sports business sagas. Now the fun really begins: “franchise musical chairs” should be resolved in the next three months with the San Diego/Los Angeles Chargers and the Oakland/Las Vegas Raiders.  An early chapter in a very long book.

8) 2016 inched a little bit closer to gender equality.  There is much more work to be done, but here are some highlights: we celebrated the 20-year anniversary of the WNBA; “leaning in” is at all-time high; we saw social movements like Girls For STEM, and a push for workplace equality.  The discerning issue of the wage gap was raised in the tennis community, and then pushed further when TEAM USA soccer spoke out.  Another positive development was the summer announcement of the Indy in Tech Championship coordinated, presented, and sponsored by Guggenheim Life. The LPGA event debuts next Labor Day weekend in Indianapolis, and provides unparalleled benefit for workforce training, robotics, STEM, and other positives. More to come on that story over time. Gender equity is far away, but there were many moments in 2016 where it was supported rather than tossed aside, and that's a good thing.

9) 2016 was a blockbuster year for mergers, resulting in over $1.8 trillion in deals made. Some mega-mergers with sports implications include Microsoft and LinkedIn, Verizon and Yahoo, AT&T and Time Warner and Charter.  The phenomenon was fueled by the year’s oddly low interest rates and other reasons making 2016 ripe with blue chip M&As.  When we drill down into the sports industry, examples include WME-IMG acquiring the UFC for $4 billion; the DraftKings and FanDuel merger; and Disney buying a $1 billion stake in MLBamtech. The sports and business worlds are clearly loved by vertically integrated, global, mega corporations that include media, management, events, and properties.  The stage is set for more power moves in 2017.  

10) The year just concluded saw the growth of eSports, virtual reality, 3D printing, big data, drones, IoT, and other tech marvels. Esports was a $892 million market in 2016, making it a major focus for brands and publishers, according to a report from SuperData. In the overall scope, esports is just a small part of what’s now a $91 billion market for digital games and playable media, with consumers spending $41 billion on mobile gaming in 2016. But we also had a handful of tech mishaps in 2016, whether it was Samsung’s exploding phone’s, the FBI being unable to retrieve data off of a locked iPhone, or NFL team staffs’ on-again, off-again love affair with using Microsoft tablets on the sidelines. The most memorable tech failure of 2016 was the downfall of GoPro -- the camera company marketed to thrillseekers had a market value of $12 billion a few short months after its 2014 IPO. Now after one disastrous earnings report after another, GoPro is valued closer to $1 billion.  These days, event properties must be coupled with significant technological advances to have a chance of success in an evolving marketplace.

11) 2016 was the rise of adidas.  Adidas is now banking on signing top rookies, luring them in with multimillion-dollar deals. Just this past year, adidas signed six of the top 10 NBA draft picks.  In addition to adidas’ renewed focus on players, there’s no underestimating the influence of its celebrity partnerships with Kanye West, Pharrell Williams, and Selena Gomez.  Some standout adidas athletes include Lionel Messi, David Beckham, Roger Federer, and James Harden.  However, the sporting goods industry, especially at the retail level, has taken a massive hit.  Once nationwide, brick and mortar chains like Sports Authority, Bob’s Stores, Eastern Mountain Sports, and Sports Chalet have all filed for bankruptcy. Yet, adidas is thriving with new executive leadership, key player signings, powerful brand influencers, and re-commitment to lifestyle marketing.  Adidas shares are up 56% this year. Nike is down 17%, Skechers down 17%, Under Armour down 37%. Retail wars still take center stage – revenues generated will be important for athletes, agents, colleges, teams, and leagues.

12) Athletes at all levels turned to their sport as a vehicle of peaceful issue-raising. Colin Kaepernick kneeled in protest, Dwyane Wade, Kyle Kover, Chris Paul, and Carmelo Anthony pushed for social unity amidst the Black Lives Matter movement, cleats were worn in support of the country by Odell Beckham, Jr. and others. Athletes drove discussion on social media, in our communities, and elsewhere -- whether you agree or disagree with whatever cause, the influence of sport is ever present. Hopefully, all sports fans and non-sports fans alike recognize rights granted under the First Amendment, but also understand the responsibilities of role models as well.

13) LeBron James’ return to Cleveland resulted in the city’s first professional sports championship since 1964. The Cavs did so in stunning fashion, overcoming a 3-1 series deficit and winning in a Game 7 “nothing gets better than this” moment for any sports fan. Now, the Cavaliers a $140 million upgrade of Quicken Loans Arena to be complete by 2020. The upgraded facility will also provide a catalyst for mega-events – like the All-Star Game – which should add additional impact for the city once referred to as “the Mistake by the Lake.” In many ways, the Cavaliers victory was as big a sports story for Cleveland and the basketball world as the Cubs were for baseball – maybe even bigger. Another example of sports as a social and economic catalyst.

14) Pokemon Go was the most googled thing in 2016, according to Google Trends, beating out iPhone and Donald Trump, which placed second and third, respectively. Pokémon Go made more than $600 million in revenue for its developer, Niantic Labs, another $115 million in revenue for Nintendo, and added nearly $7.5 billion to the company’s market value. The Pokemon Go app passed Twitter and Facebook in daily users in less than two weeks. Sports teams everywhere are constantly chasing engagement, and Pokemon Go offered creative contests, giveaways, and social media interactions to those teams and leagues that embraced the hysteria. The future trend clearly focuses on interactive consumer events, fueled by social media.  Look for much more in 2017 and beyond.

15) In a year in which we lost Muhammad Ali and Arnold Palmer, we also saw two “best evers” retire from their sport. 2016 was the year of the Kobe Bryant farewell tour, and the sheriff, Peyton Manning, riding off into the proverbial sunset. For Kobe, the end came in typical Black Mamba fashion -- not only did he receive a standing ovation in each city he played in during the season’s final stretch, but his last playing day, April 13th, was dubbed “Mamba Day” by Nike and backed by their full marketing support. Manning’s exit came after winning Super Bowl 50 following a fitting jersey-number matching “18” year career.  From a performance and sports marketing perspective, these two are some of the best to ever just do it.  The passing and retirement of mega superstars should give us cause to reflect on how important sports becomes to an entire society – especially in the social media age.

16) Yes, there were socioeconomic concerns, the Zika epidemic, minor crimes, and PR issues like the Lochte scandal, but for the most part, Rio 2016 was a homerun.   The USA took home 121 medals, of which 46 were Gold. Michael Phelps took home five Gold medals during his last Olympics, fellow swimmer Katie Ledecky earned four Gold medals, and gymnast Simone Biles took home Gold. Team USA in the Paralympics took home 115 medals, 40 of which were Gold. How Brazil fulfills its post-Olympic promises defines the international side of the story – golf expansion, infrastructure development, home building, transportation improvements, and the like. Now, the world awaits the IOC’s big decision next September – will it be Paris, Budapest, or LA?
 

Beyond the Scoreboard stories of the week; Jerry Colangelo interview

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Beyond the Scoreboard stories of the week; Jerry Colangelo interview

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.

Top Stories of the Week; NFL Sr. VP Peter O'Reilly on Super Bowl planning

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Top Stories of the Week; NFL Sr. VP Peter O'Reilly on Super Bowl planning

with Jamie Swimmer



1.    Now that Super Bowl 51 is in the books, the NFL will turn its attention to its routine and not so routine challenges. Whether or not you were thrilled with the Patriot’s fifth NFL championship in the 2000s or feel that they have officially now assumed the New York Yankees’ role as the Evil Empire of sports, once the off-season starts, all 32 NFL franchises return to a neutral playing field to hammer out their most pressing business issues. At the top of the 2017 list are two major challenges: resolving the league’s franchise relocation issues out west, and beginning to think about renegotiating the existing CBA, now at the halfway mark of its 10-year term. While five years out may seem like it’s way too premature to plan for the next round of NFL-NFLPA CBA negotiations, NFLPA Executive Director DeMaurice Smith just ruled out renewing the current CBA, pointing to several issues, including the league’s concussion protocol, player discipline, and whether players should continue to give the league stadium credits (which reduce revenue shared with players so teams can invest in stadiums). After he handed the Patriots the Lombardi Trophy, Commissioner Roger Goodell should now be able to put “Deflategate” squarely in the rear view mirror and focus on league business, including relocation, early CBA strategizing, declining ratings, and international expansion.

2.    For thousands of current and former college athletes, a $6,000 check may soon be on the way thanks to the settlement of a far-reaching class action case on Friday. The NCAA and 11 Division I conferences "agreed to create" a nearly $208.7 million fund for the benefit of current and former D-I basketball and FBS student-athletes, settling the "monetary claims portion" of a grant-in-aid class-action lawsuit, according to the association. The settlement, announced in a Friday statement, will be "funded entirely from NCAA reserves, and no conference or member schools will be required to contribute." The settlement is "subject to approval by the court and will award class members money up to, but not exceeding, their full cost of attendance.” Other aspects of the class action suit remain unresolved, including an effort to eliminate all restrictions on compensation for student athletes. While the NCAA has stated it will “vigorously oppose” all portions of the lawsuit seeking “pay for play,” the next stage of the process will focus on changing existing rules so that collegiate athletes receive more compensation. Stay tuned.

3.    After picking up so much momentum in a short period of time, the Oakland Raiders’ hopes of relocating to Las Vegas are beginning to dwindle quickly. According to the L.A. Times, Goldman Sachs, the bank that originally said it “would finance” the Raiders’ new stadium, “pulled away from the project.” The Raiders told the NFL that the bank would fund their planned $1.9 billion stadium despite Las Vegas Sands Chair & CEO Sheldon Adelson withdrawing from the deal last week, but that is no longer the case. Sources close to the deal reported that Goldman Sachs pulled out because Adelson rescinded his support of the stadium. State Senator Aaron Ford suggested that public money for the stadium "could be diverted for other purposes if the situation isn't quickly resolved." Those who know Adelson well confidently stated that there is very little hope of the businessman reentering the deal. Marc Davis, Las Vegas, and Nevada will surely scramble to replace the “missing equity piece.” But NFL Commissioner Goodell’s statement that no investors in a team or facility can have any ownership stake in a casino may be what makes the effort go bust – it’s virtually impossible to find deep-pocketed investors in or around Vegas with no casino ties.

4.    The Baltimore Ravens are planning on investing $120 million as part of a three-year project to renovate M&T Bank Stadium. According to the Baltimore Sun, the project will become the team’s biggest investment in facility upgrades to date; it will add “elevators and escalators, enlarge the end zone video boards and improve the sound system and kitchen facilities.” On top of the Ravens’ investment, the Maryland Stadium Authority also pledged $24 million to the project. "We need to keep making improvements,” said team President Dick Cass. “You can’t ever stop. You have to keep putting money into your stadium.” The 19-year-old stadium had its Wi-Fi improved in 2013 as part of a $45 million investment that saw concourses and concessions upgraded as well. In today’s NFL landscape, teams continually open new mega stadiums and renovate older ones; the Ravens are playing catch-up. The M&T Bank Stadium renovation is the next in a long line of major upgrades around the league – as leases with stadiums built in the 1990s come up for renewal or renegotiation and technological standards and fan comfort coalesce in new improvements.

5.    Twelve cities have formally applied for MLS expansion bids, but only four of these hopeful markets will eventually land a team. According to Soccer America, Charlotte, Cincinnati, Detroit, Indianapolis, Nashville, Phoenix, Raleigh, Sacramento, St. Louis, San Antonio, San Diego, and Tampa are all vying to join the growing domestic soccer league. The bid groups "include owners with interests in the NFL, NBA and MLB," while eight "have had interests in teams" in NASL and the USL. A MLS expansion committee is expected to begin reviewing applications later this month focusing on three areas: “Ownership, stadium details; and financial projections, corporate and soccer support.” Two of the selected franchises will hopefully begin play in 2020, with the other two to follow. Speaking of the 12 applicant cities, MLS Commissioner Don Garber said, “All great cities, support of proven leaders, and passionate fans.” MLS now faces the standard tradeoff that all leagues analyze:  significant expansion revenue and higher franchise values vs. the long-term harm of overexpansion. 

6.    In a push to make the game safer and more popular for kids, USA Football “intends to introduce a drastically altered youth football game.” According to the N.Y. Times, there has been a sharp decline in youth football participation over the past few years in response to the concussion crisis sweeping through the sport. The organization has “created a new format that brings the game closer to flag football and tries to avoid much of the violence in the current version.” Teams will now play with between six and nine players on the field instead of the traditional 11, the field will be smaller, and all kickoffs and punts will be eliminated. "There are, legitimately, concerns among parents about allowing their kids to play tackle football at a young age,” said Packers President & CEO Mark Murphy, who is on the USA Football Board of Directors. “So they can look at this and say they’ll be more comfortable that it is a safer alternative.” All youth football organizations (including Pop Warner and USA Football) are experimenting with various safety measures, format changes, and contact restrictions in order to “stay ahead of the concussion science.”

7.    Pittsburgh Penguins Center Sidney Crosby finished atop the list of best-selling NHL jerseys during the first half of the 2016-2017 season. According to Yahoo Sports, Crosby’s sensational 2016 campaign, one that included a Stanley Cup title last season and a spot in the top three on the total points list this season, resulted in him having the highest-selling jersey for all of 2016. Meanwhile, jersey sales for Toronto Maple Leafs Center Auston Matthews through the first three months of the 2016-2017 season reflect his status as a "rookie sensation," as his sweater was the "second-highest-selling jersey" on Shop.NHL.com. Chicago Blackhawks winger Patrick Kane finished third on this year’s list; he led the NHL in jersey sales back in 2014 but slipped after sexual assault allegations last season. Rounding out the top five are Blackhawks Center Jonathan Toews, who “led the NHL in jersey sales” in 2015, and Edmonton Oilers Center Connor McDavid. The NHL is in astronomical health in many ways. Their “superstars” represent the younger demographic (Auston Matthews and Connor McDavid) combined with the “old guard” of Crosby, Kane, and others. A good mix for the future.

8.    The 2020 Tokyo Olympics will have a weirdly unique feature: the medals that will be awarded to athletes will be made from recycled materials. According to Reuters, organizes in Tokyo said that the medals will be “forged from recycled metal from old mobile phones and appliances donated by the general public to give them a sense of direct involvement in the Games.” On top of keeping the general public involved, this move will also save costs after the initial budget “ballooned” to more than $26.4 billion at one point. The Tokyo 2020 organizing committee hopes to gather as much as eight tons of metal – 40kg of gold, 2,920kg of silver and 2,994kg of bronze – to meet the required amount of materials needed to properly make the Olympic medals. Several million units of mobile phones will be required to meet the "eight-ton target," the organizing committee said. A national recycling effort will officially begin in April. A symbolic but important effort to focus on environmental concerns – that will be one of the Tokyo Olympic legacies going forward.

9.    Sports have recently acted as a popular medium for athletes and teams to express themselves politically and socially, and “The Bridge Tournament” is set to become another example of just that. According to Xinhua, border-region Mexican and American soccer teams are planning to “play a tournament to protest the wall U.S. President Donald Trump plans to build along the two countries’ shared border.” The new president drew a significant amount of criticism during his campaign for his proposal of a wall and how to fund it, and the criticism has only escalated since he announced his intention on following through with the initial plan. No date has been set for The Bridge Tournament yet, but invitations have already been sent out to potential participants. “The event will pit three teams from each country, including Ascenso MX side Correcaminos, Tampico Madero and Reynosa from Mexico, against U.S sides Houston Dynamo, FC Dallas and Rio Grande Valley FC Toros.” A welcome symbolic and practical attempt to maximize “hands across the border” given the obvious political concerns. In this case, sports may help show the way for better regional cooperation.

10.    San Diego State’s impressive 80-game regular-season sellout streak is over and the university is now struggling to keep its students interested in the team. According to the San Diego Union-Tribune, last season saw a 10-15% no-show rate for students at basketball games at Viejas Arena, with the trend escalating this season. Around 700 students “failed to collect free tickets” to SDSU’s game against Wyoming, equating to around 30% of the 2,500-person student section remaining empty. It has been “seven seasons since all student tickets were not claimed for a conference home game with school in session.” The university has begun to float the idea of converting 500 of the student section seats into season tickets for paying fans, but no move has been made yet. The “cash-strapped athletic department” seems likely to make this switch in the near future because these additional season tickets “could generate an additional $500,000” for the university. The team has been consistently successful both and off the court. Long-term marketing techniques are sometimes necessary to sustain interest between championship caliber teams. 

11.    The NWSL will now have its games streamed on Lifetime after A+E Networks “purchased an equity stake” in the league. According to the K.C. Star, weekly matches will be streamed on the network and there are plans to launch NWSL Media, “which will oversee live streaming of all matches.” NWSL Media will "serve as the commercial branch for the league, overseeing its broadcast and sponsorship rights." It will also "administer a new website and phone app." The TV deal with the NWSL and Lifetime is set for three years, marking the “top broadcast arrangement in the league’s history.” Another part of the deal will see Lifetime’s logo placed on all official league jerseys with a patch on the right sleeve. Due to the 4:00pm ET slot that NWSL games will have on Lifetime, NWSL games and MLS games will “go head-to-head at least 10 times this year” when men’s games air on ESPN. Lifetime may have provided a “life line” to the league – with the hopes that the product and demographic appeal can carry the day and reenergize momentum.

12.    The NFL is looking to expand its International Series in Canada. According to the Toronto Sun, the NFL scouted four Canadian stadiums in 2016 as “candidate sites for possible future regular-season games.” Rogers Centre and Olympic Stadium in Montreal, Commonwealth Stadium in Edmonton, and B.C. Place Stadium in Vancouver were the four venues considered, as confirmed by NFL Executive Vice President/International Mark Waller. The league was primarily evaluating the locker rooms and whether or not the venues met the NFL’s technological standards. Waller noted that the NFL has "not yet reached a conclusion on a Canadian venue," nor does it "disclose findings of such information missions," but the league will be heading back to Mexico next year regardless of what happens north of the border. The NFL recently confirmed a game between the Raiders and Patriots will be played at Estadio Azteca in Mexico City next season. Inevitable and positive news by the NFL to expand its reach north of the border while continuing to work with the CFL.

13.    The Tennessee Titans and the NFL are at odds about the team’s ownership structure and whether or not it “complies with league rules.” According to the Nashville Tennessean, Controlling Owner Amy Adams Strunk took over for her sister, Susie Adams Smith, in March 2015 and each owns 33% of the team; the remaining ownership stake is “split among three other family members.” NFL Commissioner Roger Goodell addressed the ownership situation in Tennessee by saying, “The fundamental aspect of our policy is to make sure that we have an individual who has the ultimate authority over the franchise, and to make those decisions, including league-vote decisions, as well as locally, and it’s clear – it’s clear to the ownership group and it’s also clear to the membership.” When Amy Adams Strunk took over in 2015, the league levied a six-figure fine on the franchise, but that did not ultimately change the situation. Look for these ownership and transition issues to be resolved as soon as possible, especially with the evolving estate tax laws and the need for stability and clarity in the Nashville market.

14.    The departure of star player Elena Delle Donne to the Washington Mystics is almost surely going to negatively affect the business of the Chicago Sky. According to Crain’s Chicago Business, the WNBA franchise is losing “not only one of the faces of the WNBA, but one of the most marketable female athletes in the country.” Since being drafted by the franchise in 2013, the Sky’s ticket sales have risen by 27% to a “franchise record of 7,009 per game at Allstate Arena last season.” The Sky also “signed a landmark five-year local TV deal with Weigel Broadcasting shortly after drafting Delle Donne,” putting the team in 8 million local TV homes. The Sky said that they also “ranked in the top three of the WNBA's 12 teams in sponsorship revenue last year.” When she joined the team four years ago, the Sky immediately launched a “Delle Donne deal” on season tickets, helping to boost sales. Without their star player to build their business around, the on-court and off-court success of the Chicago Sky remains uncertain. As always, a team and league depends on the stability of its superstars. As a result, they continue to look for stability and “sizzle” at the box office and on television.

15.    Broadcasting legend Brent Musburger has officially retired, and the sports world will miss his on-air presence. Musburger capped his 50-year broadcasting career by calling the Georgia-Kentucky men’s basketball game at Rupp Arena in Lexington, Kentucky. Following the overtime game, “a video aired of some of Musburger’s best broadcasting moments, followed by his closing remarks,” according to ESPN. “What a road we’ve traveled together,” reminisced Musburger. “Thanks so much to you for sharing your time with me, (what) great memories we had over the last almost 50 years.” The former broadcaster will be remembered for his “unique ability to tell a story and paint a picture for the fans,” as longtime broadcasting partner Dick Vitale noted. He is set to retire to his new home in Las Vegas, where he will take his first break from broadcasting since he began decades ago. The torch is passing from many of the media icons – Dick Enberg, Verne Lundquist, Vince Scully, now Brent Musburger. From a business perspective, the older viewing demographic will lose some of its reason to watch.