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Journalism 380

In: Business and Management

Submitted By svpoddar
Words 4018
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In Los Angeles, Stadiums Battle Heats Up * Threat to move to LA is to crowbar concessions out of government leaders * Once teams gets public financing, it stays put * AEG and Majestic Realty Group, promised to build stadium in Los Angeles County if a team would commit to moving * January, St. Louis Rams owner Stan Kroenke, planned to build an 80,000 seat stadium in Inglewood * Inglewood City Council voted unanimously to give the project the green light * Rams switched to year-to-year least at the Edward Jones Dome in St. Louis * San Diego Chargers and Oakland Raiders last month said they would build own stadium in Carson * Maintain leverage in home cities, or forestall the Rams’ move to Los Angeles * AEG commissioned report by Tom Ridge, former secretary of Department of Homeland Security * Outlined several safety and operational risks of locating a stadium in Inglewood (Few miles away from LAX) * Peril of placing NFL stadium in direct path flight of LAX – layering risk – outweigh many benefits over the decades-long life span of the facility * AEG paid Mark Rosenker, former chairman of the National Transport Safety Board, to write another report on the potential of accidental threats from laser pointers, drones, stadium lights and even equipment falling off planes * Developers are using sharp elbows to nudge out rivals

On Los Angeles, St. Louis Rams and How it all Shakes Out

* The Raiders and The Rams left simultaneous playing in LA and Anaheim. * San Diego and Oakland franchises have announced their intention to bury the hatchet of a 54 year rivalry to initiate $1.7 Billion stadium project in the suburb of Carson * Chargers and Raiders trying to accomplish deals in respective cities * St. Louis Rams are trying to get a better stadium than Edward Jones Dome * Franchises move must be approved by 75% majority of the 32 teams, though no one is sure if Kroenke will abide by the bylaw or just pull up stakes and force league to stop him * Rams in St. Louis have seen the renderings of the proposed $1 Billion, 64,000-seat open air riverfront football stadium on the banks of the Mississippi River * St. Louis far most aggressive plan to keep the Rams, right down to an agreement to clear a 90-acre blighted plot downtown to make way for the stadium. * Missouri Gov. Jay Nixon has an agreement with skilled construction workers in eastern Missouri to work around the clock with 3 8-hour shifts. * Stadium might be finished in 24 months.

Football’s LA Trick Play

* Spanos family, which owns the Chargers, is threatening to move to Los Angeles * Minnesota Vikings did a fantastic job of threatening to move to LA * Vikings got a brand new stadium, filled with revenue-enhancing details like state-of-the-art corporate suites * Owners of the NFL franchises have enormous leverage over the cities in which they play to extract goodies that few other capitalists would dare ask for * Not just run-of-the-mill tax abatements, but egregious benefits like free rent * All professional leagues try to have fewer teams than the number of locations that would like to have them – Contrive scarcity to drive up the price * States and counties have spent at least $10.1 Billion subsidizing sports facilities. A new football stadium with all amenities costs around $1 billion * Why? It has much more to do with civic pride. The sense that your town is truly big-time.

Ticket Challenge: Getting the price right

* Dynamic pricing is associate with airlines and hotel chains to move their prices up and down along with demand. * Cardinals saw a pair of unpredictable turns take a bit from their coffers * Labor Day weekend – Cincinnati Reds came to town. Historically, tough sell, but in this case, the two teams were scuffling atop the division, with Reds in first place and the Cardinals in second * Coming off series in Cincinnati that included bench-clearing brawl where both managers got suspended * Cardinals priced game at lower side of variable pricing – Tickets sold briskly, and for less than they resold on StubHub * Two weeks later, Cubs came in for a weekday series – Historically bitter rivals, and tickets sold well. * But, Cubs were on the back end of awful seasons * Cardinals priced game at high side of variable pricing – Left with unsold seats * San Francisco Giants first team in sports to try dynamic pricing. Last year, Cardinals joined them * This season, 17/30 MLB clubs will make the switch with some, if not all, of their seats. * MLB clients that successfully implemented dynamic pricing last season, ticket pricing software company Qcue found that teams increased revenue by an average of $900,000 for the season by adjusting price in each section of the ball park. * Variable Pricing: Practice of charging different prices for the same seat, depending upon the game. Prices are set before the season. With rare exception do the prices move, and when they do, they movie into pre-established pricing category. * Dynamic Pricing: Fluid movement of ticket prices once the season is under way, typically driven by shifts in demand, the desire to change purchase behavior, or both. * Provides transparent view of prices to all games simultaneously, so that fans can make buying decisions based on price * With dynamic pricing, no downside as such. Teams can drive more revenue * Systematically costs $100,000 to $200,000 per year * Scaled down services can be had for less than $25,000 per year * Initial hesitation was tied to dangers of unfettered market * Tickets priced variably at start of the season, charging more for the games that are expected to sell best, based on variables such as opponent, day of week and month of year. * Analytical tools provided by Qcue, Ticket Master, Startbridge – allow teams to predict market for games at start of the season and react efficiently to shifts in demand. * It’s not pricing around opponents, but also around dates * Initial step is variable pricing – it defines what revenue streams will be for the year, but dynamic pricing makes sure you don’t miss out on any opportunities * Dynamic gives you infrastructure to correct mistakes.


* Makes it easy to get mobile tickets for sports events – raises $4 Million from Accel Partners * No longer need to print tickets for sports events * Android and iOS apps that makes it easier to purchase last minute tickets * SF 49ers allow you to transfer tickets to friends via digital transfers, rather than picking up from window * Fans can buy tickets for 14 participating venues. Tickets for MLB, NBA, NFL, NHL and MLS games. * By prioritizing on the go customer, company is best positioned to build most intuitive and user-friendly ticketing experience. * If problem, 115% of money is refunded * Makes calculations and surface the 50 best tickets that people are selling for it * Takes into account price of the ticket and quality of the view from the seat * User can get image of view from the seat before purchasing Brands on US Sports Jerseys

* Sponsored team apparel could generate more than $370 million in Ad revenue * Sports jerseys are prime real estate for marketers * NFL – least number of detections – or the times a brand or/sponsor can be viewed per game – and shortest season, represents nearly two thirds of untapped potential * Large TV audience and national broadcast * Ad values – * Logo size, cost of 30-second unit in each market, times brand or sponsor can be viewed per game, how long sponsor or brand is visible at each detection

World Surf Leagues – Web-First Approach to Drawing Viewers

* Average 6.2 Million people tuned into watch the Billabong Pipe Masters, where Mr. Medina won his first title * Not a second of surfing competition was shown on traditional live television – streamed on YouTube instead, with 35-40% of viewers on mobile. * Hard to realize direct relationship to linear TV * Global sport, so time zone concern, and we have to wait for swells – suitable wave conditions * Therefore, no start time or end time * Streaming has become important as a way to attract younger fans – people moving online * NHL teamed with GoPro to bring real-time highlights * PGA tour is trying something similar with Skratch TV * NBA YouTube audience – 2.5 Billion videos viewed * Joined team Tencent to stream games in China

Clothes make brand

* Oregon created football brand from nothing – for having 300 uniform combinations from all of its green, yellow, black, gray, and white color schemes * Have become national power largely on strength of marketing and branding * Ducks have created cool factor for themselves that was there before. * Oregon’s ascent into top tier is industry-wide acknowledgement of the importance of brand development * Nike, Under Armour, and Adidas * Arizona State, Washington State, Oklahoma State, Wyoming * Opted for “Oregon” approach with multiple helmets, jerseys, and pants * Traditional looks – Penn State, Auburn, and USC * Cling to tradition and history as core brand attributes * Oregon – being unexpected and edgy – want to be out there, to be purposely controversial. * Sports writers hated it, and that’s actually what we wanted * Purposely trying to stir up nest to increase visibility * Manufactured reputation through design – brand is built on innovation and fun

Fox & ESPN – Partnership

* Started around Big 12 Conference and continued with Catholic 7 announcement * Building relationship is a way to keep NBC and stable of sports channels at bay * CBS, not so much – not aggressive pursuing sports rights * ESPN and Fox are still competitors * Fox – 12 year, $500 Million media rights for Catholic 7, group of basketball schools that is negotiating to break away from Big East * Fox has held talks with sublicensing ESPN package of games * ESPN $130 Million media rights for Big East – spoken to Fox to sublicense package of games * NBC Universal Sports & Olympics has been left out * ESPN and Fox partnered on winning bid for Pac-12 against NBC * Partnered on losing bid for EPL against NBC * Formal relationship to share Big 12 rights * Rights holders are demanding main broadcast partner to sublicense games to other networks, ensuring that more games are televised * Network use warehouse rights, which means channels would opt to simply not show games rather than sell them

Ed O Bannon’s Victory over NCAA + Lifeline for NCAA

* Claudia Wilken – US District Judge – ruled in favor of former UCLA basketball star Ed O Bannon’s case * NCAA and member schools in violation of antitrust law by not letting NCAA members compete compensate Division 1 men’s basketball and football players for name, image and likeness rights (NIL) * Controversial system of amateurism violated anti-trust law * Discarded NCCA claims that college basketball and football players could seek alternate career paths through the Arena Football League and NBA D-League * Evidence shows that elite football and basketball recruits rarely pursue careers in these second-tier leagues immediately after high school and overwhelmingly prefer to play for FBS football teams and Division 1 teams * Injunction allows NCAA to cap compensation to student-athletes at cost of attendance – as that term defined by the NCAA * Cost of attendance is higher dollar figure than grant-in-aid (athletic scholarship), it is nonetheless limited dollar amount that may not lead to significant quality of life changes for players * Offered restrained remedy in regards to NIL rights * Permitted NCAA to cap amount per student to $5000 every student for every year with NCAA eligibility – The amount can be payable after college * NCAA continues to prohibit student athletes from endorsing products. Prevents highly marketable college players from signing endorsement deals without losing eligibility. * Provided de-facto victory for television networks, media companies, and video game publishers that profit from college sports. * Don’t need to negotiate group licenses with student licenses * NCAA could petition to Congress and President Obama * O Bannon vs NCAA case – declared the association’s rule against paying student-athletes for the use of their name, image, and likeness (NIL) rights to be violations of the Sherman Act * Monopolistic (seller’s) and monopsonistic (buyer’s) standpoint * NCAA schools may not make rules capping the amount of a scholarship below the actual cost of attendance * Allow five wealthiest conferences (ACC, Big 12, Big Ten, Pac-12, and SEC) an autonomy provision that essentially allows them to create rules to govern themselves * Athletes may collect payments after eligibility expires * WEIRD – Agreed with NCAA that it must protect athletes against commercial exploitation. This is a federal judge essentially saying that an adult American must be protected from someone giving him/her legal market-driven payment for being good at something market values considerable * Didn’t prove there would be any effect on market for individual NIL rights with regard to television or video games. * Left one lifeline for NCAA – do people feel okay about compensating of college athletes?

TMZ (both articles)

* TMZ – Thirty Mile Zone (Reference to radius around Hollywood within which all studios exist) broke news that Heisman Trophy Candidate Jameis Winston was being investigated by Tallahassee Police Department over an allegation that he had sexually abused a fellow student at Florida State University * Posted clip of Donald Sterling making racist remarks * Ban from NBA * Published video showing Ray Rice knocking out his fiancée in elevator at Atlantic City * Cost NFL contract and career * National conversation about domestic abuse * Former FBI director Robert Mueller tapped into investigation * Built following by exposing celebrity foibles – often paying for tips * Now taking aim at category of prominent people and powerful institutions – sports leagues * Never to titillate at least in part hold rich and powerful accountable * Willing to pay for information, not to mention audio and video recordings, which TMZ does routinely and unapologetically * Founder – Harvey Levin * Legal analyst on The People’s Court * Celebrity Justice * TMZ was for AOL-Time Warner * First scoop in 2006, when it secured a copy of Mel Gibson’s arrest report for drunken driving, complete with outtakes from an obscenity-laced, anti-Semitic tirade * Broke story of Michael Jackson’s death 1 hour before mainstream media * TMZ decided to move beyond Hollywood and into sports after it helped break story of Tiger Wood’s extramarital indiscretions * More money and more resources and very gutsy – compared to Deadspin * Pioneer in sports gossip and hard-nosed reporting owned by Gawker Media * TMZ derives power from aggression * Tactical advantage – TMZ is more than happy to pony up for information that will tilt the field and draw hits * Gossip site – but gossip is news by other name when the subject or actions rise to level of public interest * Owned by Time Warner, yet ill-mannered guerilla outfit taking aim at drawing blood from big, fat targets

Angels to be a team of two cities

* Moreno’s research indicates that name change * Convince national advertisers and broadcasters that Angels appeal to an audience across Southern California * Pay more for reaching that potential audience of 16 million * Increase revenue and fan base even * By including the “of Anaheim” suffix in the new name, Moreno and his lawyers believe the Angeles have satisfied stadium lease that requires * Team name “Include the name Anaheim therein”

Why athletes go broke?

* Lure of the tangible * Chronic over allocation into real estate and bad private equity is the number 1 problem in terms of financial meltdown * Athletes are uninterested in conservative spending or stock market. Inventions, nightclubs, car dealerships and T-Shirt companies have an advantage * Thrill of tangibility * Misplaced Trust * Two mistakes * Hiring wrong people as advisors * Trusting them far too much * Relatives are foolishly trusted upon to handle financial matters, overlook investments etc. * Hire people not because they are experts, but because they are friends and family. * Family Matters * Divorce, paternity obligations, child support payments * Sign prenuptials bitch as niggers * Great expectations * Important question – How you handle the new people suddenly emerging in your life.

Early Signing Day

* Would eliminate the floppiness of players changing their commitments at the last moment. It would also stop coaches at other schools from continuing to recruit committed players into February * Eliminate the need to continually track each player in a signing class all the way up to February * Players would know which college they are going to * Disadvantage * Player will be pressured – depending on how highly he is regarded as a prospect * Might fall out of favor with coach staff or lose spot to another player if doesn’t formalize commitment * If player signs mid-major school, might miss opportunity from more prominent school

Super Bowl Underscores Big Business Must See – Live TV

* Live events, NFL, Grammy Awards, Oscars and Golden Globes have managed to escape broad loss of audience in network television

Budweiser criticizes NFL

* Anheuser-Busch says it isn’t satisfied with leagues handling of recent events * Increasingly concerned by reports of domestic violence * Incidents go against own company culture and moral code * Will increase pressure on NFL Commissioner * Spent $185 Million during NFL games last season * Sponsors have had to justify relationship with NFL * 6 year deal with Bud-Light $1.2 Billion – Official beer of the NFL * Ray Rice – Ravens running back – video surfaced of him knocking fiancée and dragging her out * Carolina Panthers pass rusher Greg Hardy – convicted for hitting girlfriend but not punished * Adrian Peterson – Minnesota Vikings running back injury to a child * Radisson suspended limited sponsorship with Vikings * However, sponsors can be replaced – competition in all key categories * NFL doesn’t exert leverage, but carry a big stick. Sponsors want to play nice when it comes to renewals

University of Phoenix Naming Rights

* $155 million spent in acquiring naming rights * For profit education institution * Turns out comparatively fewer graduates while saddling enrollees with crushing student loan debt * Reprimanded for taking disproportionately large share of federal aid, not graduating enough students, and not finding jobs for them * US Senate Committee on Health and Education * Findings showed school derived 88.7 percent of its 2010 revenues from federal students loan programs – spent 3 times as much on marketing than regular universities * Prominent veteran organizations angry * School spent so much on marketing deal when it draws millions of dollars from Post-9/11 GI Bill Benefits

How big a deal was Angels name change?

* Team officials maintain the change did increase the team’s reach * Angels officials wanted to tap into greater Los Angeles – Country’s second largest media market that included orange county and 18 million people between San Diego and Santa Barbara * Reach broader fan base * Team value shot up since Moreno bought it for $184 Million in 2003 – Now valued at $775 Million by Forbes and $1 Billion by Bloomberg. * Angels cut a TV deal with Fox Sports - $3 Billion over 20 years * City Impact * Agreed to contribute $30 Million in 1996 for upgrades to city owned stadium with intention to get exposure * Since name change, has lost 28 billion media impressions * Miss opportunities being a suburb of Los Angeles * Fight between city and Angels costly - $4 Million in legal fees * Attendance has increased over the years * Geographical shift from where visitors to stadium have originated from

Regional Sports Networks Show the Money

* Regional Sports networks – MSG network first successful one carrying Knicks and Rangers * Grown big, and are critical in sales of professional teams and financial growth of college conferences * Money printing operations that heavily promote the teams they carry * Inherent values inside a team are its media rights * Prospective buyer looks at a team as if you’re buying regional sports network to get a team * Larry Scott – Pac-12 * Maximize TV revenue by using natural regional rivalries * Found template in Big Ten Conference * ESPN and Fox Sports signed deal worth $3 Billion over 12 years * Yankees Yes Network - $435.2 Million revenue * University of Texas * Longhorn (Owned by ESPN – Will pay University $10.9 Million annually)
Economics of Expensive Trade deal in Baseball – LA Dodgers

* $260 Million trade – included 2 players left with more than $100 million on contracts * $400 million or so will be spent on contracts between now and 2014 * Dodgers poised to strike deal to become cash kings of baseball * Acquiring Boston’s expensive vets are historic prices makes Dodgers instant contenders for National Title * How is it possible? * Negotiating TV deal worth $6 Billion – 20 times the value of the trade

NBC – Super Bowl commercials sold out

* $4.4 Million - $4.5 Million for 30 second spots at Super Bowl * Biggest event of the year * People want to debut new creative and be part of high profile nature that the big game is going to bring * Exposure is really big * Pre-game more popular – reach out to fans, plus lesser scrutiny than ads during the game

NFL – LA used to get better deals in home town

* The Colts were looking to squeeze city for better deal * Colts broke ground on $720 Million Lucas Oil Stadium in downtown Indianapolis * Team paid $100 Million while city paid the rest * More than half of 32 teams have used threat to move to LA to get more lucrative deals in current city

ESPN – College football’s most dominant player

* Games not just televised on TV, they are creations of ESPN – demonstrations of the sports network’s power over college football * ESPN – chief impresario of college football. * Infused sports with billions of dollars it pays for television rights * More than $10 Billion on college football in the last 5 years alone * ESPN – both puppet master and kingmaker, arranging games, setting schedules and bestowing the gift of nationwide exposure on its chosen universities, players, and coaches * Partnerships for colleges provides exposure that college officials say increases recruiting powers, alumni donations, and even quality of applicants * Influence indicated on ticket of college football game – Printed with date, but something is missing * Time of kickoff is missing – ESPN has right to set times and wait until 12 days before game day or even six in some cases to inform universities * Draws revenues from two sources * Advertisements * Subscription fees * Nearly 100 million households pay $5.5 a month for ESPN. Makes about $6 Billion in subscriber fees * Spent $2.2 Billion for SEC rights * $7.3 Billion for college playoff rights for 12 years * Colleges get infused with cash – 3 teams moved to Atlantic Coast Conference * Syracuse, Louisville, and Pittsburg * Will receive $16 million from ACC’s $3.6 Billion contract * Colleges on the losing end too – stuck in conferences diminished by realignment * ESPN College Game Day crystallizes dynamic of exposure * Texas A&M lost to Florida, but exposure was worth $6.5 Million * Athletic departments have been able to pass on revenue to university general funds due to TV wave * Boise State – classic example * Not member of NCAA Division 1 * Joined Western Athletic Conference * Playing style caught ESPN eyes – willingness to play on weekdays won hearts * ESPN provided exposure, revenue, and team became regularly ranked

16 year rocky relationship

* Los Angeles – dis organized, disjointed, and disorderly attempts at attracting NFL team to the city since Raiders and Rams left * Competing groups, competing proposals, none anyone can agree on, thus no stadium in LA * Instead of unified group, endless caucus of talking heads with hollow promises * NLF awarded LA 32nd extension team, however: * Contingent upon meeting league demands: solid financing plan, one ownership group, and one stadium site in six months – LA failed on all counts * Competing ownerships, competing sites, and undercut each other’s proposal * McNair offered staggering expansion fee of $700 Million + Reliant Stadium $350 million state-of-the-art palace – retractable roof, first in league history * LA Counter? * Ovitz and Run Brukle offered expansion fee of $400 million * Proposed stadium on parking lot of Hollywood park * Ed Roski and Eli Broad offered expansion fee of $500 million and redesigned LA Coliseum – venue long dismissed and never considered when presented again * McNair’s plan had financing in place and backing of the city (important public financing LA couldn’t offer) * Ovitz barely familiar with Hollywood Park site. * Coliseum – Hacienda, Carson – Coliseum – Hollywood Park * LA Dodgers failed bid * LA best chance was Dodgers returning to NFL * Peter O’Malley agreed to build NFL stadium and operate expansion team at request of LA Mayor Riordian * Chavez Ravine – Perfect site for stadium – had backing of the city and league * Year later, O’Malley already spent $1 Million on project, when Riordian pulled the plug * Political decision cost LA an NFL team

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