Tuesday, October 28, 2014

Pick 6: Brands, Stories, and Trends Shaping Sports Business #14

Here is your reserved space for six links to interesting happenings in sports business.

1. Right Guard Sponsorship Activation Takes a Zamboni Ride

Activation is the "fuel" that brings a sponsorship to life, capturing the attention of an audience in ways that signage alone cannot. The Toronto Maple Leafs teamed with Gillette's Right Guard brand to incorporate a replica Right Guard package on the back of a Zamboni. The NHL initially rejected the planned activation but later relented. Creativity is one of the few limitations of activation, and Right Guard's Zamboni "attachment" is further proof of that notion. 

2. Can Wearable Technology Use Sponsorship to Speed Adoption?

Wearable technology is predicted to take off... the question is when will consumers embrace wearables on a large scale. In the market for fitness-related wearables, one strategy for speeding adoption is to associate wearable technology products with athletes via sponsorship. Wearable technology brands including Fitbit and Jawbone are sponsoring sports and music properties to show how their products are used by athletes and musicians to maintain peak physical performance. Is this approach more effective than traditional brand messaging that focuses on features/benefits and persuasive selling?

3. PGA President Ousted for "Lil Girl" Remark

The latest case of foot-in-mouth disease (of  foot-on-keyboard) to hit sports cost PGA of America president Ted Bishop his job. Bishop decided to take to social media to criticize golfer Ian Poulter, referring to him as a "lil girl." Reaction by the PGA of America board was swift, removing Bishop from his position one month before his term was set to expire. From a public relations standpoint, did the PGA have no choice but to dismiss Bishop? Or, were the other ways Bishop's social media missteps could have been dealt with to protect the PGA brand?

4. AutoNation Cure Bowl: New Twist in Saturated Market

Your initial reaction to the news that a new college football bowl game will debut in 2015 may be "just what we need, another bowl game... NOT." But, this new bowl comes with a unique value proposition. The AutoNation Cure Bowl, pitting teams from the American Athletic Conference and Sun Belt Conference, will be held in Orlando. As the bowl name suggests, the game will raise funds for a cause, specifically the Breast Cancer Research Foundation. Projected fundraising from the bowl is expected to hit $1 million over a three-year period. The AutoNation Cure Bowl is not the only college football bowl game that supports causes or charities, but it potentially stands out as existing in order to do so. Would a cause or philanthropic positioning enhance the relevance of other bowl games that are mired in also-ran status?

5. Under Armour Looming as a Threat to Nike?

At first glance, it may be almost laughable that a company one-ninth the size of Nike in revenues should be perceived as a threat. But, when that company is Under Armour, should Nike be concerned? Under Armour reported a 22% increase in net income in the third quarter, and it anticipates 20% growth next year, too. Does Under Armour have the ability to disrupt the athletic apparel and footwear categories (more than it has already), or is it destined to be a niche player? 

Under Armour is Becoming a Viable Threat to Nike, by Hayley Peterson, Business Insider

6. NBA D-League Solidifies Brand Positioning

Yes, the NBA Development League still exists. In fact, it may be stronger than ever. Today, the 18-team D-League has situated itself in markets that are basketball hotbeds or in markets relatively close to NBA markets. In addition to be a proving ground for prospective NBA players, the D-League has been a laboratory for the NBA to test concepts such as jersey sponsorships. Its evolution has raised the D-League's profile as legitimate sports entertainment property.Is the D-League right-sized in its current makeup, or should further market growth be in the plans?

D-League Grows at Tip Off, by Joe Favorito, Sports Marketing & PR Roundup

Picture of the Week

Sports is a form of "social glue." It has a unique property of giving people a common bond around which to rally during times of adversity. The latest example of this characteristic of sports played out last week following the tragic shootings in Ottawa on Parliament Hill. At the first home game following the shootings, the Ottawa Senators and New Jersey Devils broke from the custom of starting players lining up on opposing blue lines for the national anthems. Instead, all players formed a circle at center ice, Ottawa and New Jersey players literally side-by-side, to show their support for something far more significant than anything that would happen on the ice at Canadian Tire Centre that evening. Well played, gentlemen.

Tuesday, October 21, 2014

Pick 6: Brands, Stories, and Trends Shaping Sports Business #13

In my part of the world, summer has finally given way to fall. Leaves are changing colors and it is almost time to break out heavier clothing. All of these changes can mean only one thing: It is peak season for sports fans. Almost every sport is in season, preseason, or postseason. Enjoy!

1. The NFL's Return to Los Angeles is Imminent... or Not.

How can a national brand survive without business operations in the nation's second largest market? That question has been asked of the National Football League for 20 years, which is how long it has been since the Rams and Raiders called L.A. home. The mayor of Los Angeles recently predicted that an NFL franchise would be playing in the city in the next 12-24 months. Which side needs the other more- L.A. needing the NFL, or the NFL needing L.A.? Talk has come up before about the NFL's return to L.A.- is now the time for it to happen?

2. Companies Compete to be Under Armour's Next Big Thing

Under Armour is known for its innovative ways. After all, it is the company that created the industry disruption that is known as performance apparel. Another way in which Under Armour is innovative is reflected in how it seeks out new product ideas. The company held a Future Show event recently in which companies competed to win favor with Under Armour executives. The prevailing idea was Omegawave, a wearable product that won out from a field of more than 1,000 entries. Competitions such as these are not a replacement for a firm's research and development department, but should more businesses follow Under Armour's lead to crowdsource new product ideas? Are there any drawbacks to using this approach?

Under Armour Holds a Game Show to Find Its Future, by Kyle Stock, Bloomberg Businessweek

3. Imitation: Sincerest Form of Flattery versus Stealing IP

In many aspects of life, imitation may be the sincerest form of flattery. However, in business imitation of products is not only frowned upon, it can be illegal. Businesses invest heavily to develop products and build brands and thus are afforded legal protection of their intellectual property through patents and trademarks. Competitors sometimes push the envelope in an effort to make knockoff products that do not cross the line of violating the IP rights another company owns. This issue has arisen for Nike's Converse brand, 31 times to be exact, as it has taken legal action against companies making products that infringe upon the design of the company's iconic Chuck Taylor brand. Converse is a $1.7 billion brand for Nike, so it stands to reason that it would take steps to protect the brand. The case makes for interesting discussion about how vigilant a brand should be in protecting its marketing assets.

4. LeBron James: King of Basketball, Kia Lover?

LeBron James is nicknamed King James. His basketball skills are matched by his prowess as a brand endorser. His latest endorsement is with Kia Motors, being named the brand's first luxury brand ambassador. At first glance, this pairing might draw skeptical responses from consumers, much like the pairing of Buick and Tiger Woods more than a decade ago. However, the James-Kia relationship is interesting because it was LeBron who approached Kia about forming a relationship. This dimension of the story must be told as it breaks from convention of big brand hiring a celebrity to shill on the brand's behalf. LeBron James wanted to be an ambassador for Kia.

5. Does FanDuel Represent the Future of Fantasy Sports?

Daily games, which require less time commitment from players, have quickly gained popularity among fantasy sports players. One of the top vendors in this emerging category is FanDuel. It tripled revenue during the most recent quarter compared to a year ago and has more than 500,000 paid users. Does the popularity of daily games offered by FanDuel and DraftKings suggest that fantasy sports consumption will undergo a radical shift that will threaten traditional season-long games, or are they simply a new product category that appeals to a different customer not served by traditional fantasy games?

FanDuel's Fantasy Sports Games are Generating Tangible Revenue, by Kurt Wagner, re/code

6. NBA's New TV Deal: End of an Era?

The National Basketball Association recently announced a new TV contract with Turner and ESPN worth $24 billion. The deal falls in line with escalating rights fees paid by media companies to acquire precious sports content. Live programming like sporting events generate good ratings, which translates into potentially more advertising revenue. But, is there a danger of a sports media bubble burst, just as we saw with Internet companies in 2000 and the banking industry in 2008? Sports economist Andrew Zimbalist thinks so, pointing out that the supply of sports programming available to consumers is greater than ever. At what point will audiences becoming fragmented, lowering ratings and making future massive TV contracts less likely?

NBA's Big-Money TV Deal Could Be a Vanishing Breed, Analysts Say, by Steve Ginsburg, Reuters

Video of the Week

The walk-off home run is one of the most exciting moments in baseball. That moment is even more special when it propels a team to the World Series. We saw this dramatic event when Travis Ishikawa's three-run blast ended the Giants-Cardinals NLCS.

Tuesday, October 14, 2014

Pick 6: Brands, Stories, and Trends Shaping Sports Business #12

This is the "I should be outside raking leaves during fall break" installment of Pick 6- What's been happening in sports business?

1. Branded Content Makes Its Way to Sports Media Apps

Annoyed by ads and video pre-roll when you are using mobile apps? A workaround to that issue is to integrate brands into app content. Dick's Sporting Goods is doing just that in collaboration with ESPN's WatchESPN app. Is advertising still perceived  as advertising by the audience when it is presented as entertainment as part of an app interaction?

2. Make Twitter an Indispensable Professional Development Tool

Students- Let your classmates be the ones using Twitter to tell their friends how bored they are in class or how wasted they got last night. Take another approach to using Twitter: Key professional development tool. Use Twitter to identify "persons of interest," keep tabs on current events, and build a network. In addition, use two powerful Twitter features- chats and hashtags- to benefit your professional preparation.

3. Beacons Signal New Fan Experience at College Football Games

Beacon technology holds great promise for digital marketing. The ability to communicate with people in the context of their current physical location can add value by enhancing the relevance of communications with them. Ole Miss is incorporating beacon technology at football games to create a more memorable game day experience. What are other ways that beacon technology could be used to add value for fans? Are there any risks or concerns to introducing this technology to live sporting events?

4. Social Media Takes Prominent Role in Athletics Marketing at Big Ten Schools

You have likely heard the saying "define your brand or it will be defined for you." This thought is especially relevant to social media. As a brand owner, you can be a passive spectator to what others are saying about you (please don't), or you can proactively monitor, promote, and participate in the conversation. Some college football programs are following in the footsteps of their professional tea counterparts by establishing social media hubs or command centers. 

5. Hall of Fame Coach Says Nike Too Influential in College Basketball

Perhaps you did a double take when reading the headline. A college coach whose program benefits from a $2.6 million per year investment from an athletic shoe company thinks shoe companies are too influential? In this case, University of Louisville coach Rick Pitino singled out Nike (Louisville's partner is Adidas). Pitino lamented that shoe companies have too much influence among high school players, to the point they can sway which school a prized recruit decides to attend. Perhaps Pitino's primary complaint has merit: Does the money and product shoe companies spend with college athletic programs give them a disproportionate voice in decision making within an athletic department?

6. Are Live Sports a Blessing or Curse for Cable TV Industry?

We are in the Golden Age of sports consumption. If you are a sports fan, you can gorge on more live events, shows, archived content, and sports entertainment in general than ever before. It is not only our appetite for sports that has created this content glut; TV networks have driven up rights fees by realizing the value of sports to attract audiences. But, the lure of sports comes at a cost- first to the TV networks paying rights fees and second to the viewers in the form of higher monthly bills. Are we close to a tipping point beyond which higher fees damage the profitability of networks and customers are turned off by ever rising rates?

How TV's Sports Addiction Could Kill Its Business, by Derek Thompson, The Atlantic

Video of the Week

A new feature beginning with this post is sharing an interesting clip from the sports world. As a Nashville Predators fan, I had to pick this clip. Ottawa Senators forward David Legwand spent the first 14 seasons of his NHL career in Nashville, so when he played his first game in Nashville as a visitor he reverted to an old habit: Going to the Nashville penalty box when he got a penalty. The penalty box attendant gave him directions to the appropriate destination. It reinforces the notion that we are indeed creatures of habit!

Monday, October 6, 2014

Pick 6: Brands, Stories, and Trends Shaping Sports Business #11

This week's Pick 6 image is in honor of my niece, Olivia, who just had her 6th birthday! Here are some other noteworthy events that have taken place recently.

1. Club sport teams represent University of Alabama... or not

The University of Alabama is a powerhouse on the football field and at the cash register. Alabama trails on the University of Texas in licensed merchandise sales. A brand that has value of such magnitude must be dogged in protecting its identity and image. At the University of Alabama, brand management now includes forbidding club teams from using the same brand marks used by the intercollegiate programs. The University is developing separate branding for club sports teams. Although this policy seems to devalue the participation of students in club sports, it may be a needed step to protect the brand assets of the institution.

University Restricts Club Sports Uniforms, by Shelby Akin, The Crimson White

2. Michael Phelps' next comeback: Regain favor with sponsors?

Michael Phelps is an Olympic legend. Unfortunately, his speed in the pool was overshadowed recently by his speed in a Baltimore tunnel (clocked going 84 MPH in a 45 zone). A DUI charge (his second) and uncertainty whether he has what it takes to compete at an elite level in the 2016 Olympics may put his endorsement future at risk. Phelps earns an estimated $10 million annually from brands including Omega, Subway, and HP, but will his latest legal issue cause brands to reconsider their association with him?

3. The next dynamic pro sport brand - The Los Angeles Clippers?

New Los Angeles Clippers owner Steve Ballmer is known for displaying fire and passion from his days as Microsoft's CEO. He has brought the same enthusiasm to the Clippers, a franchise desperately in need of a new leadership face following the Donald Sterling debacle. All signs point to Ballmer being an engaged owner concerned with fan and sponsor relationships with his team brand. He even proclaimed that he wants to make the Clippers the next "America's team." We'll see about that, but in the meantime it is refreshing to see the positive energy surrounding this franchise.

4. Media becomes more influential customer for sport properties

If you are a sports fan that feels you have less of a voice or are not as important to your favorite team, you might have good reason for feeling that way. The proportion of revenue a sport organization derives from ticket sales continues to slowly drop relative to media and sponsorship rights fees. As the value of media contracts continues to rise, the gap between ticket revenue and media rights revenues is becoming smaller than ever. And, sponsorship revenue is growing at higher rates than ticket sales. Going forward, how will sport properties preserve the value of the live event attendance for ticket buyers?

5. Speaking of the growing influence of media...

The National Basketball Association has renewed its broadcast deal with ESPN and TNT, a nine-year extension worth a reported $24 billion. The value is triple the amount of the last deal. Has the value of the NBA as an entertainment platform tripled in recent years? Is the amount paid a power play to keep upstart Fox Sports One out of the NBA? What is the ceiling for rights fees, and are we anywhere close to hitting it? Finally, how does this deal affect fans (a higher cable bill is one outcome that comes to mind)?

NBA agrees to enormous 9-year TV deal, by Sam Amick, USA Today

6. Coming to a Concession Stand Near You: Bitcoin?

Many sports venues have wrestled with how to incorporate more technology into payment systems for merchandise and foodservice operations. Georgia Tech is introducing a different technology into its business: Bitcoin. The university is partnering with BitPay to accept Bitcoin as payment for concessions at Bobby Dodd Stadium. Is this a novelty or a forerunner of payment systems at sport venues?

Ga. Tech to allow Bitcoin at games, by David M. Hale, ESPN.com