Here's our look at the intersection of sports and business this week:
One of the main reasons college athletic conferences are pursuing expansion is money – in particular, TV money. The Pac-12 Conference a couple months ago announced it will create a national TV network plus six regional affiliates. The networks, which will generate millions of dollars for member schools, will carry about 850 conference events annually.
To see how a TV network can positively affect Pac-12 schools, look no further than Washington State Univeristy. The Cougars have the second-smallest budget in the conference at just $39 million. That’s well below the Pac-12 average of more than $60 million per school. However, once the new TV revenue starts flowing in, WSU could use the a significant portion of the money to fund an $80 million renovation to its football stadium, which is the smallest in the conference.
Bottom Line: While realignment has gotten crazy, at least Washington State University proves there’s a method to the madness.
TV Rights Trade
And you thought only investors and sports teams made big trades. In one of the more unusual sports business moves of the year, CBS, ESPN and NBC made a “three-network” TV rights trade. The driving force behind for the deal was CBS, who wanted to show next weekend’s big Alabama-LSU showdown in prime time. The problem was that CBS only has the right to one SEC prime time game per year, and the network already aired Alabama-Florida at night. ESPN holds the conference’s remaining prime time rights.
Per the deal, ESPN is allowing CBS to show the game in prime time in exchange for “future considerations,” the TV equivalent of a player to be named later. However, with the Alabama-LSU game moving from the 3 p.m. time slot, CBS needed to find a new game. So it dealt rights to the November 19 game between TCU and Colorado to NBC’s Versus channel for rights to Saturday’s Army-Air Force game.
Bottom Line: The deal might be complicated, but the takeaway is that rivals can always find a way to work together.
Two noteworthy sponsorship deals were signed last week, and how the respective companies are activating them show how you can be creative, or how you can be lost in the clutter.
MetroPCS signed a sponsorship deal to become the official wireless service provider of USA Basketball through 2012. Activation for the deal will include a nationwide mobile tour, courtside signage at USA Basketball games and features in USA Basketball promotional materials. While the nationwide tour has potential, the other benefits won’t generate much buzz.
Meanwhile, the Tampa Bay Buccaneers signed Community Bank & Co. to a five-year sponsorship deal. To activate the sponsorship, Community Bank will add $5 to all new checking accounts whenever the Bucs win a game over the next two seasons.
Bottom Line: Part of the reason companies sponsor sports properties is to increase sales. Even though we’re comparing a national campaign to a local one, which sponsorship are you more inclined to act on? That’s what we thought.
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.