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?
 

MLB Advanced Media President Bob Bowman Podcast

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MLB Advanced Media President Bob Bowman Podcast

This week, "The Sports Professor" Rick Horrow talks with Bob Bowman, President of Business & Media for Major League Baseball. Listen to the podcast below.

Here is the video version of the interview, recorded at Sloan this year.

As always, the top business stories in the sports world for the week, with Jamie Swimmer and Tanner Simkins.

1.    As the NBA post season gets well underway and baseball settles into the new season, E-Poll Market Research takes a look at the metrics surrounding sports’ reigning MVPs, as well as public opinion of Russell Westbrook and James Harden ahead of this year's NBA MVP award. The MVP is a key distinguishing factor in establishing an athlete’s marketability, and MVPs often see an explosion in awareness and appeal from winning the award, like reigning NBA MVP Steph Curry. Using E-Score Celebrity data, the firm found that among reigning MVPs, Curry is the most popular. His 50% “Awareness” score among sports fans is 2.5 times higher than the next MVP, Falcons quarterback Matt Ryan.  And with the 2017 NBA MVP race narrowing to a two-man contest between Russell Westbrook and James Harden, E-Poll found that Westbrook’s 56% “Appeal” is 10 points higher than Harden’s, whose “Awareness” is 13 points higher than Westbrook’s due in part to his earlier relationship with Khloe Kardashian. However, both men fall well short of Curry’s pre-MVP “Appeal” score of 72% during the 2015 season. Curry’s popularity shot up dramatically after his MVP win, increasing by 20 points. This year’s winner will have to wait to see if there is a similar effect – as will their current and would-be sponsors, who will likewise be dramatically affected by the award.


2.    Fnatic has become the latest esports team to see an influx of investment money. The team is receiving a $7 million financing round with a board of investors including the likes of Raptor Group, which owns AS Roma and the Boston Celtics; Hersh Interactive Group, co-owners of the Houston Astros; and Joi Ito, Director of the MIT Media Lab. “There has been strong growth in esports…but the major shift has been in the acceptance and inclusion by sports franchises, media companies and high profile individuals," Fnatic Founder Sam Mathews told Forbes. "We’re incredibly excited by the opportunities available within esports, and having world class investors and advisors only enhances our ability to address these opportunities and continue to innovate.” According to market researcher Newzoo, the esports market now has close to 150 million regular enthusiasts and another 125 million occasional viewers, and is expected to be a $1.1 billion business by 2019. With new permanent venue Esports Arena Las Vegas scheduled to open early next year, and many more to come, those who dismiss esports as a fad or “fake sports” do so at their peril.


3.    The United States, Mexico and Canada are teaming up to submit a joint bid to host the 2026 World Cup. According to SportsBusiness Journal, the North American countries have joined forces and are now looking to fast-track the historically “long, arduous process” of securing World Cup hosting rights. Multiple high-ranking officials said that CONCACAF is planning to make a proposal at May's FIFA Congress that “could accelerate the entire process,” which would normally be expected to last until 2020. In the proposal, the CONCACAF bid “will ask the world governing body's 211 members for a unique, noncompetitive window” in which it would prepare a report that “showcases the technical specifications of its bid, covering everything from stadium capacities and infrastructure to hotels and transportation.” Under the proposed bid, the U.S. would host significantly more games than its neighbors: 60 out of 80 total games and all matches from the quarterfinals on. While the CONCACAF bid looks like it could be a lock, politics and economics could heavily impact the bid and process. Stay tuned.

4.    The Chicago Cubs not only have a new World Series banner to show off, but a newly-renovated Wrigley Field. According to the Chicago Tribune, the Cubs used their home opener against the Dodgers to debut The Park at Wrigley, which is just one piece of the still-under-renovation stadium project. A large video screen on the team's new office building “showed the Cubs' historic 10-inning victory against the Indians” during the Dodgers game and “showed off part of the third phase” of the $750 million Wrigley Field upgrade. There was a ceremony “marking the opening of what the Cubs referred to as Wrigleyville's new town square and a year-round gathering place for neighbors, families, fans and visitors.” Cubs Chair Tom Ricketts and his real estate company designed, built, and financed The Park at Wrigley, which should allow the community to more deeply engage with the team.

5.    After seeing all Canadian NHL teams fail to reach the Stanley Cup playoffs last year, Rogers Media is expecting a “reversal of fortune” thanks to five Canadian teams reaching the postseason this season. According to the Globe & Mail, Rogers Media made a “billion-dollar” media bet on the NHL last year, but the company has yet to see the returns it initially expected due to the Canadian teams’ collective slump. The actual deal is set at 12 years and is worth C$5.2 billion over that span. Last year, TV ratings for Rogers fell 61% during the NHL postseason. The Maple Leafs “led a resurgence” along with the Canadiens, Senators, Oilers, and Flames that will “see hockey audiences back in the seven-figure range.” Rogers President of Sportsnet Scott Moore said, “Obviously, team performance drives a lot of it. I feel like there’s a lot of excitement about the sport generally and in some key markets. For us, that’s obviously good.” It’s also good for the NHL, as Canada traditionally represents one of hockey’s most fervent fan bases.

6.    The NFL tries to control what its players do off the field, and that could now include fining players for participating in an arm wrestling tournament. According to USA Today, NFL players who competed in the inaugural “Pro Football Arm Wrestling Championship” in Las Vegas “without pre-approval” violated the league’s rules against gambling. The competition already took place, but is set to air on CBS over two weekends in May. Notable participants include the Steelers’ James Harrison and Maurkice Pouncey, retired running back Marshawn Lynch, the Dolphins’ Kenny Stills, and the Raiders’ Marquette King and Mario Edwards. The first place prize was set at $100,000, with half of that going to charity in the winning players’ name. Some players spoke out against the impending fines, noting the irony of how the NFL just approved a team in Vegas, yet players can’t go there for a “charity event.” The NFL always goes to extreme lengths to protect “The Shield,” and this incident is no different.

7.    While many teams have been reluctant to reveal their inner workings to the public, the Tampa Bay Buccaneers will likely be selected for HBO’s “Hard Knocks,” and are excited about that prospect. According to the Tampa Bay Times, the Bucs “believe they are among the top candidates to be chosen.” Speaking about the prospect, team co-Chair Joel Glazer said, “Our players are at a point in their maturity that they would be able to handle it…We'll always be supportive of the league. Nobody is rushing to the podium for that necessarily. But I do feel I have great confidence in this team.” Team executives firmly believe that “Hard Knocks” would be a good way for Tampa and the surrounding fan base to get to know the team on a more personal level. And after multiple seasons, the NFL generally feels that “Hard Knocks” participation is a plus for its teams – or they would have put a stop to it long ago.

8.    Despite having nine years remaining on their current deal with University of Phoenix, the Arizona Cardinals are in the hunt to find a new stadium naming rights partner. According to SportsBusiness Journal, the team is “shopping naming rights to their stadium, but incumbent sponsor University of Phoenix retains the title unless the team finds a replacement.” Regardless of finding a new partner, the university will remain an official team sponsor. University of Phoenix has been the only naming rights partner since the Cardinals’ stadium opened in 2006; the 20-year deal would be worth $154.5 million if carried through to the end of the term. The team noted that it is handling the sponsorship search internally. Following the trend of other teams in the region, the Cardinals might soon follow the Diamondbacks, Suns, and Coyotes as franchises that have all changed their stadium sponsors in recent years. The Cardinals may want to consider reaching out to the other thriving for-profit university headquartered in the market but growing internationally: Grand Canyon University.

9.    Representing a slight but significant change for the franchise, the Minnesota Timberwolves finally unveiled their new logo. According to the St. Paul Pioneer Press, the team’s evolution “took another step forward” with this change. The color scheme is different – “the palette features a midnight blue, lake blue, aurora green, frost white and moonlight grey” – but the image of the howling wolf remains similar to how it has looked in the past. The team noted that the similarities are “meant to represent an evolution, not a revolution.” The look is “meant to represent the current team and the possibilities for its future, but also to honor the past.” The logo is the “first piece in what will be a new identity” for the T'Wolves. New jersey and court designs will be released to the public later this summer to round out the rebranding of the franchise. The T-Wolves, and indeed all sports franchises, should be closely watching the slow eradication of Chief Wahoo in Cleveland. While there’s nothing outwardly politically incorrect about Minnesota’s “howling at the moon,” unlike Wahoo, fans get attached to their teams’ visuals, and should be consulted every step of the way.

10.    The tarps are finally coming off in Oakland. According to the S.F. Chronicle, A’s President Dave Kaval announced that the outfield bleacher tarps on the third deck at the Coliseum will be taken down and that A’s tickets in the third deck “will be $15 for the remainder of the season, and during the next home stand, half the proceeds will go to Oakland Promise, which helps Oakland students attend college.” This move represents the latest one that is met with an “almost entirely positive” response by the Oakland fan base. The outfield tarps initially went up in 2006 to help improve visuals from games with sparse crowds, since the extra capacity was rarely needed. Without the tarps in place, stadium capacity will increase by 12,103 to 47,170. Ever since the tarps went up, fans have been lobbying to bring them down – their voices have now been heard. And with the Oakland Raiders on their way out, local fan interest in the A’s should intensify.

11.    English Premier League side Everton is trying to build a new stadium, and adding a running track to it could end up making a significant difference. According to the London Times, Everton may consider making a provision for a running track in its proposed $437.3 million stadium to help Liverpool win the bid to host the 2022 Commonwealth Games. The host for the 2022 slot is still up for grabs after Durban, South Africa, failed to meet the host city criteria, giving other cities the chance to rebid for the right to host. During dialogue between the club and Liverpool City Council, Liverpool Mayor Joe Anderson asked the club to “consider including a running track” in its blueprint, which “would allow the arena to host athletics events.” The track would be covered with seats for soccer matches, ensuring fans close proximity to the field, while the track would bring in additional revenue for Everton and the community. As in all modern day sports facilities, both privately and publicly funded, multipurpose use and flexibility remain key to ongoing support.

12.    Seattle is back in the mix for landing a professional sports team now that two groups are “prepared to spend more than $500 million apiece” renovating KeyArena. According to the Seattle Times, Oak View Group and AEG each submitted proposals of more than $500 million and each “involve eventually attracting NBA and NHL teams.” The OVG proposal runs up to $564 million and the AEG bid would involve spending $520 million. Both groups said the arena renovation “could be done” by October 2020 if “no unforeseen delays hit,” with construction beginning before being awarded a professional team in both cases. KeyArena’s iconic roof and general exterior structure are set to be preserved by both AEG and OVG in the renovation process. “We're going to do this and stand on our own two feet,” said OVG CEO Tim Leiweke. “And we believe by doing that we give Seattle its best chance at getting one or two teams.” The OVG-led group also includes Madison Square Garden Co. and Live Nation and is primarily focused on turning the venue into a concert specialist like the Forum in Inglewood. That bid is supported by the band Pearl Jam – ironic since Pearl Jam once sued Live Nation over monopolistic ticketing practices. Want change? Wait 20 years.

13.    St. Louis is officially suing the NFL “over the relocation of the Rams 15 months ago.” According to the St. Louis Post-Dispatch, the 52-page suit filed by St. Louis lists the NFL and all 32 teams as defendants as the city “seeks damages and restitution profits.” The plaintiffs claim the Rams and the NFL “made intentionally false statements, unjustly enriched themselves” and “interfered with business expectations.” The suit further claims that the city has lost around $7.5 million in property taxes, $1.4 million in sales tax revenue, and “millions” in earning taxes since the Rams moved to Los Angeles. The NFL is now getting ready to defend itself and its franchises in this case, which is expected to “remain in the Missouri court system because the Chiefs operate in Missouri.” It is unlikely that this lawsuit will move to the federal court, “where defendants without a clear connection to a given state are more likely to get a more fair shake.” It is also unlikely that this lawsuit will result in compensation to St. Louis, if past history is any guide.

14.    Brooklyn Sports & Entertainment wants the Islanders back in the Nassau Coliseum, and it is ready to make further “adjustments” to the facility in order to pull the move off. According to Newsday, BS&E is “preparing to pitch to bring” them back to the recently renovated area. The Islanders moved to the Barclays Center in Brooklyn after the Nassau Coliseum closed to undergo a $165 million modernization. Still, BS&E is ready to invest further in the arena to satisfy any of the Islanders’ remaining concerns – such as having too few of seats. Long Island Association President & CEO Kevin Law said that the presentation will be made to Islanders co-Owners Jon Ledecky and Scott Malkin when they “meet soon to talk about renegotiating the 25-year license agreement with Barclays Center.” Both the Islanders and Barclays Center can “opt out of the deal.” Returning the Islanders to their core fan base should boost the franchise; winning enough games to not miss the Stanley Cup playoffs by one point would help, too.

15.    The NFL Draft has migrated around multiple cities over the past few years, but New York thinks it is time to bring it back to the Big Apple. According to the N.Y. Daily News, New York has “expressed interest” in hosting the NFL Draft in 2019 “and beyond.” This year’s draft is scheduled to take place outdoors in Philadelphia, while the last two years’ drafts took place in downtown Chicago. New York is set to be just one of the multiple cities vying to land to rights to host. Other cities in contact with the league noting their interest in hosting the 2019 draft include “Philadelphia, Canton, Dallas, Denver, Kansas City, Green Bay, Jacksonville and Los Angeles. Radio City Music Hall appears to be the likely location to host the draft if it does wind up being held in New York City. To the general onlooker, it may not seem that hosting the NFL Draft is a big deal, but it has actually “become as competitive as hosting the Super Bowl” thanks to the positive economic impact it generates. It’s also the second most important tent pole event on the now-year-round NFL calendar, and the league doesn’t take its locale lightly. Expect the draft circus to continue to travel for the foreseeable future.
 

Top stories of the week; I.O.C. member and former Olympian Angela Ruggiero

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Top stories of the week; I.O.C. member and former Olympian Angela Ruggiero

With Jamie Swimmer & Tanner Simkins

1.    After seemingly the longest drought in sports next to the Chicago Cubs’, Spaniard Sergio Garcia won his first Masters, and his first Major. After 18 years of coming up short at golf’s Majors – a record of 0 for 73 – Garcia bested Ryder Cup teammate Justin Rose in a dramatic final round and sudden-death playoff that likely thrilled broadcaster CBS and sponsors IBM, AT&T, and Mercedes-Benz, whose ads benefitted from the additional airtime. Also undoubtedly delighted was Garcia’s primary sponsor TaylorMade, which parent adidas put on the market last year but has struggled to find a buyer; Garcia’s marquee victory may sweeten the pot for a suitor. Masters participants played for $11 million this past week, a $1 million increase from 2016. Garcia, previously a nine-time PGA Tour winner and 13-time European Tour champion, received $1.98 million for his Masters win, up from the $1.8 million paid to Danny Willett last year. A happy ending to a Masters that conquered horrible weather to provide a terrific platform for corporate hospitality and commerce to companies like StubHub…and a nice sum to tuck away in a green jacket pocket.




2.    The Greatest Spectacle in Racing will serve as the IndyCar debut for 22-year-old driver Zach Veach. Veach will drive the No. 40 at the Indianapolis 500 with financial backing from the Indy Women in Tech Championship presented by Guggenheim – the LPGA tournament scheduled for September at the Indianapolis Motor Speedway’s infield golf course. Veach has six wins and six poles in three Indy Light seasons and was the third-place finisher in 2016. He joins Carlos Muñoz and Conor Daly at Texas-based AJ Foyt Racing; his car number pays homage to Foyt’s fourth Indy 500 triumph in 1977. "The Indy Women in Tech foundation, along with AJ Foyt Racing and Zach Veach, is committed to making positive changes to the communities where we work and live. This sponsorship allows us to shine a global spotlight on meaningful robotics and career transition programs that will develop our workforce through education and job training to support Indy's growing resume for tech innovation,” said Daniel Towriss, President and CEO of Guggenheim Life. A terrific example of cross-promotion between the Indianapolis 500 and the new LPGA tournament in that city, and more importantly, innovative community investment through sport.


3.    Much to the chagrin of many of its top stars, the NHL has officially announced that it will not be sending its players to PyeongChang for the 2018 Winter Olympics. According to the Boston Globe, this means that the NHL’s streak of participating in five consecutive Olympic cycles, dating back to 1998, is set to be snapped. The NHL made the final decision without coordinating with the IOC or the NHLPA. Washington Capitals star Alexander Ovechkin insisted that he will still represent Russia next winter, regardless of the NHL’s stance. Players from all other professional hockey leagues around the world are still allowed to participate as of now, making the NHL the only one to have withdrawn thus far. In a statement following the decision, the IOC wrote, “This must be a huge disappointment for the players who definitely wanted to play. The decision is even more regrettable, as the [IIHF] had offered the same conditions to the NHL as at previous Olympic Games.” Tough decision for Gary Bettman and the NHL, but the right one. Unlike the NBA, the NHL would have to suspend its season for a long period of time; the NHL has made major commitments to the Olympic movement and as a positive experience from the World Cup to grow the game.

4.    With new NFL stadiums set to be built in Los Angeles and Las Vegas in the coming years, naming rights records could be rewritten. According to SportsBusiness Journal, Gemini Sports Group believes that the Raiders’ stadium “could fetch between $15-$18 million a year over 20 years” from a corporate partner. In Los Angeles, the Rams-Chargers stadium is expected to bring in up to $20 million annually, but could potentially reach $30 million a year driven by hosting two teams and “its location in the country’s second-biggest market.” The Rams have already hired Legends Global Sales to sell the naming rights for their Inglewood stadium, which is set to open for the 2019 NFL season. The biggest naming rights deal in North American sports currently is MetLife’s contract with the New York Giants and Jets, which pays out $16-$25 million a year. With the economy improving, digital media values increasing, and corporate hospitality becoming more significant, look for a major deal in L.A. to then be emulated in Vegas.

5.    Despite claiming to be a historic “soccer city,” St. Louis will not be awarded an MLS team anytime in the foreseeable future after voters rejected public stadium funding. According to the St. Louis Post-Dispatch, city voters voted against funding a 22,000-seat MLS stadium in downtown, yet voted in favor of “imposing a half-cent sales tax increase for expanding the city's MetroLink light rail system.” About 53% of voters were opposed to the MLS bid, while 60% approved of the MetroLink ballot; both propositions “needed to pass in order to fund the stadium.” MLS Commissioner Don Garber noted the other week that without funding and concrete plans for a new stadium, St. Louis “would not get a team.” SC STL, the club that was set to be promoted to the MLS pending approval, spent over $1 million to date through a PAC on both propositions, “promising jobs for the city, massive private investment and a big return on public investment.” A set back for MLS, and a public/private partnership that requires restructuring or starting over. Clearly, the St. Louis region is reassessing the economics of the sports business.

6.    With plans to officially relocate to Las Vegas, Oakland Raiders Owner Mark Davis spoke about his “frustration and sadness” over the issue. According to the San Jose Mercury News, Davis said, “I’m not celebrating anything like I would like to be…I still have a feeling for the fans in the Bay Area. And I’ve met with a number of them. And anything I say to them isn’t going to soothe them, and it makes this whole thing bittersweet.” Davis noted that he spoke with the MLB Oakland A’s about doing a joint stadium deal with them and selling them 20% of his franchise as part of the transaction, but ultimately “Oakland never presented a viable plan to keep the team.” Back in 2013, the Raiders began talks about trying to find a new stadium in Oakland with the A’s, but those talks failed when the A’s signed a 10-year lease to stay in the Coliseum. Now it is Oakland’s turn to “save” its last remaining professional franchise. The Oakland A’s stadium process takes on new political, economic, and psychological significance.

7.    Highlighting a continued shift in the dynamic of live sports steaming, Amazon is set to take over the streaming of “Thursday Night Football” as part of a one-year deal with the NFL. According to SportsBusiness Journal, Amazon’s one-year deal is worth $50 million – a massive spike from the $10 million Twitter paid this past season. Amazon will livestream 10 “TNF” games carried by CBS and NBC after beating out Facebook, Twitter, and YouTube for the rights. “Amazon has wanted to put sports rights on its Amazon Prime video service, and the NFL deal will allow the company to do that, essentially putting the streams behind a paywall where they will only be available to Amazon Prime subscribers.” Twitter’s one-year deal with the league is considered to be a success, as games averaged 265,000 viewers on an average minute basis during the season, but Amazon is expected to have a wider reach. New media companies are all positioning themselves to assess their role as major media players in subsequent bidding cycles for major league rights in the future.

8.    After months of swirling rumors and questions regarding what jersey Tony Romo will wear next season, it turns out that the now-former-quarterback will be wearing a suit and tie on Sundays for the foreseeable future. According to SportsBusiness Journal, CBS Sports formally announced Romo as their lead NFL game analyst, meaning that he will hang up the cleats and pads going forward to assume a reporting role. Romo will take the place of Phil Simms beginning in the 2017 season despite having no prior on-air experience; Simms’ position with CBS Sports is up in the air after spending nearly 20 years with the network. When asked if he ever plans on returning to football, Romo said, “You never say never. I'll just say it's about 99 percent.” He also noted that he “doesn't envision coming back but expects to get calls from teams.” Another professional athlete goes to the broadcast booth. Salaries for “athletes turned broadcasters” continue to increase as the names become more significant.

9.    Sitting right in the heart of Chicago, DePaul University’s new Wintrust Arena is set to open this fall “with a pair of gala fundraisers.” According to the Chicago Sun-Times, the 10,000-seat, $164 million arena that will host both DePaul men’s and women’s basketball teams is expected to attract nearly triple the number of fans who have become accustomed to making the trek to All-State Arena in Rosemont. Wintrust Arena Assistant General Manager/Entertainment David Kennedy is excited about the facility’s ability to attract events to McCormick Place. “We’re not really competing with the United Center, Soldier Field or Wrigley Field that have tens of thousands of folks,” said Kennedy. “We have the flexibility to shrink the venue down a little bit to what they call a half-concert for a few thousand people or to go to the larger number of 7,000 to 9,000.” The goal is to book 50 events in the first year – Kennedy noted they are more than halfway there. Chicago becomes the next city to complement its major league professional arena with another economically viable facility.

10.    With the state of North Carolina deciding to repeal HB2, the NCAA has officially lifted its championship ban on North Carolina. According to the Charlotte Observer, the state has faced sharp criticism ever since it passed HB2, a bill that nullified a Charlotte LGBT nondiscrimination ordinance that, “among other things, allowed transgender people to use bathrooms based on their gender identity.” The NCAA is currently picking future championship sites for 2018-2022; Charlotte is “bidding to host men’s basketball tournament games” at Spectrum Center for three years – 2020-2022. The championship sites awarded for next year are final, meaning that Charlotte is still set to host “the first and second rounds of the men’s basketball tournament at the Spectrum Center in March 2018.” Meanwhile, Texas is still facing similar bans to North Carolina after passing an HB2-like legislation of its own earlier this year. From a political perspective, sports should be viewed as big business. Cities and states have lost conventions, concerts, and major sporting events because of the unpopular political stances they have taken. Just like Arizona and its Martin Luther King holiday, communities receive the benefits of the events after they change their political positions.

11.    Billionaire entrepreneur Richard Branson has owned companies in industries such as aerospace and technology, but his newest venture is in sports. According to CNBC, Virgin Sport, a two-year-old company that is set to run its first event in the coming months, is officially ready to pursue sponsors. “Sponsors [often] get involved in something that already fully exists, so [our] partners have a great chance to start out,” said Virgin Sport Global CEO Mary Wittenberg. “We will go fewer rather than more partners and try and integrate partners across our events, our content and eventually our community.” “Festival-style events” will be run in the United Kingdom and United States, with the first event coming in London. The aim of Branson’s new company is to “reach the sweet spot” between extreme events such as Tough Mudder and lighter events such as a “fun run.” This marks the first of many new entries into the entertainment/festival space by companies expanding their consumer reach. 

12.    After receiving a large amount of criticism, the Big Ten has decided to cut back its Friday night broadcast schedule for this upcoming football season. According to ESPN.com, “a long list of parties” have been complaining to the conference ever since it announced that its TV partners “would start to broadcast games on Friday nights, including six contests after the opening Labor Day weekend of the 2017 season.” Of those six games originally intended on being played on a Friday, two of them have already been rescheduled for a Saturday timeslot. Friday night games traditionally draw lower ratings than their Saturday counterparts due to a general lack of interest, along with conflicts with primetime high school games and other sporting events. Many mid-major conferences have historically played games on Friday nights because they are often overshadowed by the Power Five conferences on Saturdays. No doubt a trend reversal. Many leagues and conferences attempt to identify “open times in their schedules.” In this case, it may be the pushback is more than was anticipated.

13.    Some big names are emerging as potential bidders to purchase the Miami Marlins. According to Fox Business, among those who have expressed interest in buying the team are former MLBer Derek Jeter and former Florida Governor Jeb Bush. Jeter is “being represented in talks” with Marlins President David Samson by former Morgan Stanley Wealth Management President Gregory Fleming. Conversely, Bush has teamed up with Citigroup to finance his possible bid. The third group that could potentially submit a bid is reportedly being back by Goldman Sachs. While the Marlins’ ownership group has made it clear they are willing to sell the franchise, they also noted that they may ultimately decide “not to sell the team if they can’t get an offer close to $1.6 billion.” Both Jeter and Bush are big names, but financing remains the key element in this potential transaction. The Marlins “auction process” might yield significant numbers, especially with the publicly-funded stadium and the World Series legacy.

14.    The deteriorating condition of the iconic Aloha Stadium in Halawa, Hawaii, has “led consultants to suggest building a smaller, more modern” facility to replace the current structure. According to KGMB-CBS, the 50,000-seat stadium originally opened up in 1975 and has required significant upkeep costs since then. While Aloha Stadium only cost $37 million to build at the time, nearly $100 million has been spent since 1990 on facility upgrades. The suggested replacement facility has a recommended capacity of 30,000 to 35,000 seats and would be built adjacent to the current stadium. The new stadium could “expand to 40,000 seats for special events, and would have a hotel, housing and retail space.” The consulting report added that the new stadium would cost $324.5 million and require 36% “less square footage, reducing operating expenses.” Hawaii has experienced tremendous economic impact through this historical venue. Seemingly, it is time to move on.

15.    Merely weeks before Kentucky Derby race weekend, Churchill Downs unveiled a new $16 million clubhouse renovation. According to the Louisville Courier-Journal, the renovation has turned the second-level Clubhouse area at the park from “a large somewhat shabby space into vibrant, welcoming quarters.” A few finishing touches still need to be made before the area will be ready to welcome thousands of visitors on May 5 and 6, but it has opened for local track-goers to pass through. Renovations to the Clubhouse area include more wagering locations, additional concessions stands meant to shorten the lines, and doubling the number of bathrooms. Track officials said that the modernization has “encompassed most of the 95,000-square-foot Clubhouse area and was designed to improve the track experience for the roughly 13,000 guests that typically enter the space on Oaks or Derby Day.” Facility renovation and modernization is critical in all sports – even ones whose primary athletes have four legs. Look for increased economic impact and long-term stability as a result.