Published October 11, 2011
Here's our weekly look at the intersection of sports and business:
Sports Marketing Symposium Retrospective
Sports Business Journal last week hosted its 9th annual IMG Sports Marketing Symposium in New York City. If one trend stuck out above all others, it’s that the recent economic downturns have changed the way brands market to sports fans.
The problem is that brands traditionally have spent too much money on rights fees and not enough on activation. According to former Kodak CMO Jeff Hayzlett, who gave the conference’s keynote address, sponsorships work when they increase sales, profit margins, and customer satisfaction. If they don’t hit all three, they shouldn’t be considered. Given the state of the global economy, it’s no surprise that more marketers are taking this approach.
Bottom Line: Gone are the days of needing the biggest sign at a ballpark. Instead, demonstrating a strong ROI on multimillion-dollar sports sponsorships is critical to maintaining a long-term partnership with a property.
Another one of the highlights at the sports marketing symposium was the college football panel featuring Pac-12 Commissioner Larry Scott and IMG College President Ben Sutton. Neither of the college sports power brokers think athletes will ever be paid for playing sports. Sutton called paying players “irrational,” while Scott said there’s no equitable way to do so.
Additionally, Scott and Sutton agreed that we won’t see a football playoff in the foreseeable future. As Scott put it, why give up a 100-year tradition like the Rose Bowl for a playoff, which has uncertain benefits. One reason to consider it strongly is that a majority of college sports’ 172 million fans want to see one. The bowl system has been under fire recently for being too corrupt, generating millions of dollars for executives while giving little back to schools or charities.
Bottom Line: Regardless of what Scott and Sutton think, these are two hot button issues that won’t go away until something changes.
MLB in 2012... And Beyond
As college football teams attempt to jump their respective conference ships, a handful of Grapefruit League MLB teams have likewise been checking out the browner pastures of the Arizona desert. Five Florida-based teams are reportedly showing an interest in the Cactus League, including the Astros, Blue Jays, Cardinals, Nationals, and Twins. While all have long-term Florida leases, Mesa's Hohokam Stadium, currently the preseason home of the Cubs, will become available when the Cubs move to their publicly-funded new $84 million stadium nearby in 2014.
MLB will officially open its 2012 season in Japan, as the Mariners and A’s will play a two-game series March 28-29 at the Tokyo Dome. The teams respectively feature two of Japan’s most beloved athletes, Ichiro Suzuki and Hideki Matsui, both at the end of their careers. The series will allow Nintendo founder Hiroshi Yamauchi, based in Kyoto, to see the Mariners play for the first time since he became majority owner in 1992. Proceeds from the games will also assist Japan Relief in the wake of March’s massive earthquake and tsunami.
Bottom Line: We love the playoffs … but it’s never too early to look to next season! It’s amazing how big of a hit Florida’s Spring Training business has taken over the last several years.
Golf Business Report
Continuing a trend with other recent titles, EA Sports is letting fans vote on which golfer will join Tiger Woods on the cover of Tiger Woods PGA Tour 13. EA Sports is using bracket-style voting, with eight American golfers on one side and eight European golfers on the other. The voting takes place on Facebook through October 23. But that wasn’t the only headline Woods made last week. The struggling golfer signed a five-year, multimillion-dollar endorsement deal with Rolex, his first major endorsement deal since his 2009 sex scandal.
Meanwhile, on the women’s side of the business, LPGA Tour Commissioner Michael Whan approved 16-year-old Lexi Thompson’s petition for membership, effective next season. LPGA policy normally requires members be at least 18 years old. Thompson is expected to play about 20 tournaments in 2012, which could help boost attendance across the LPGA schedule.
Bottom Line: In announcing the deal, Rolex said it’s “convinced that Tiger still has a long career ahead of him.” It’s nice to see someone betting on him.
Sports and Social Media
In today’s world, social media is king. The key to leveraging social media is having a simple platform for people to interact with fellow users. Using sites like Facebook and Twitter provide obvious benefits, including breaking news and linking to articles. Because of this, social media sites essentially have become news aggregators, where fans can receive updates from their favorite players and writers in one convenient location.
One website taking advantage of this new trend by aggregating sources into a single platform is SportsPagez.com. The site is a “Sports News Community,” where sports fans can interact with one another, read tweets from players and writers, read local and national news articles, and listen in to live local sports radio. The website covers teams as well as whole cities.
Bottom Line: We can’t help but wonder what kind of impact dedicated news aggregating sites could have on ad revenue with more traditional media outlets.
Rick Horrow is the "Sports Professor," and is the Sports Business Analyst for Fox Sports. He has been the Visiting Expert on Sports Law at the Harvard Law School, and has authored "When the Game Is on the Line" and "Beyond the Scoreboard: An Insider's Guide to the $750 Billion Business of Sports." His show "Beyond the Box Score" is posted on a weekly basis on FoxSports.com, and the latest emerging trends in sports business can be found at www.horrowsports.com.