Wednesday, April 29, 2015

Pick 6: Brands, Stories, and Trends Shaping Sports Business #30

This is the 30th and final installment of the Pick 6 format. We will be back for the summer term with a different format but will continue sharing stories that are shaping sports business. 

1. Boxing Gets Up off the Mat

Anticipation of the upcoming Floyd Mayweather-Manny Pacquaio fight has cast the light of attention on boxing in a way it has not experienced in many years. The fight is not only generating interest, but it is also generating cash- and lots of it- for Mayweather in particular. Sports marketing expert Joe Favorito shares his take on the marketing angle taken by Mayweather to promote his brand. 

Is the ability to leverage social media to build a following the future for boxers to cash in for lucrative paydays? Or, does the star power of Floyd Mayweather make him an outlier and that boxing will not experience a sustained bump in interest among sports fans? 

"Boxing is Back and Mayweather is Money," by Joe Favorito, Sports Marketing & PR Roundup

2. IBM Brings Its Game to the Masters

IBM is a sponsor of the Masters golf tournament in more than brand name. The company provided laser technology that enhanced the fan experience of following play, giving viewers more insight into distance traveled, length to hole, and other aspects difficult to gauge without technology assistance. And, IBM used its capabilities to that enabled fans to enjoy a high quality live-streaming experience to follow the tournament.

Brand exposure is no longer the primary asset companies should seek to get out of deals with sports properties. Sponsors should seek opportunities to integrate products and services into event operations whenever feasible. IBM's involvement with the Masters presented opportunities to showcase IBM's capabilities to customers and prospects while giving golf fans a more enjoyable consumption experience. What other brands could adopt the IBM model and create tie-ins between their business and golf?

3. Dedicated Spaces to Fantasy Players a New Reality

One of the benefits of building a new sports venue is that designers can rethink how space is utilized to give patrons a more satisfactory experience. The Minnesota Vikings are spending $1 billion to build a new stadium and taking the opportunity to design a space to appeal to fantasy football participants. Club Purple will be a lounge-type area with sofas, TVs, and ticker displays that will let fans keep tabs on their fantasy teams. 

The Minnesota Vikings are not the first team to design spaces to appeal to fantasy football participants. Is this effort to serve fantasy football players a must for NFL clubs, or do you see the plan as more of an experiment to gauge fans' interest in such spaces? What are other ways fantasy sports consumption can be incorporated into the live sporting event experience? 

4. NBA and Betting: If You Can't Beat Them, Join Them

NBA Commissioner Adam Silver has become an advocate for legalizing sports betting. Silver acknowledges that bets will be placed on NBA games and other sporting events, legally or illegally. With that being the case, should sports properties like the NBA seek opportunities to build interest in their brands through sports betting? Are there risks to the image and reputation of a sports brand if legalized betting becomes the norm?

5. Verizon, ESPN and Customer Choice

Cable TV customers have longed to have more control over the channel lineup they pay to receive. Although the average U.S. home receives 189 channels, the average number watched is 17, according to a 2014 Nielsen study. Yet, customers pay for all channels. Verizon wants to give its customers a break, offering Verizon FiOS subscribers the opportunity to customize channel packages. Under the plan, sports networks like ESPN would be packaged together for an additional fee. 

ESPN does not share Verizon's view of choice being good. Instead, it has sued Verizon to block the customization plan, saying it violates agreements between ESPN and cable operators. Verizon is likely to win support from the public and lawmakers, but is that enough to overcome ESPN's opposition? Does ESPN stand to hurt its brand image in the court of public opinion if it opts to aggressively block Verizon and other cable companies from giving customers choice that did not exist previously?

6. Growing Soccer in the U.S. via International Competition

Although Major League Soccer is gaining momentum as it expands, it is still dwarfed by the popularity of professional clubs in Europe. American soccer seems poised to benefit from the International Champions Cup that will be held this summer across North America and Australia. The 10-team North American field includes three MLS clubs (San Jose, Los Angeles, and New York) with matches scheduled in nine different U.S. markets. The tournament also includes global soccer brand icons Manchester United, Chelsea, and FC Barcelona.

Many strategies have been advocated over the years for growing professional soccer in America. How can MLS maximize the benefits from three of its clubs participating in the International Champions Cup? Do the potential marketing benefits from this tournament compare to gains in popularity soccer might experience from FIFA World Cup?  

Video of the Week

Many college football teams have transformed their annual spring game from a final practice of the off-season to a marketing event. Alumni and fans flock to campus to enjoy watching their favorite team in a casual atmosphere. Some programs have used their spring game to garner publicity that they would not receive otherwise. For example, the University of Kansas invited a former player, Bryan Sperry, to participate in this year's alumni flag football game. Inviting former players is not uncommon; it is more unusual for the player to be 89 years-old, as is Mr. Sperry. Not only did he play in the alumni game, Mr. Sperry scored a touchdown. His romp to the end zone has been viewed almost 200,000 times on YouTube plus covered by media outlets around the country. Great story!

Wednesday, April 15, 2015

Pick 6: Brands, Stories, and Trends Shaping Sports Business #29

A new champion was crowned at the Masters Sunday; let's see who has earned green jackets in sports business this week:

1. Live-Streaming as an Asset, not Threat

Live-streaming apps Meerkat and Periscope became instant social media darlings recently, with Periscope's ties to Twitter giving it an early advantage in the space. Sport properties and broadcast rights holders shudder at the thought of fans streaming games on Periscope, sharing with the world for free. While it is true that live-streaming by fans could devalue what TV networks have paid dearly to broadcast, sport properties must consider the possibilities of a service like Periscope. Great potential exists for using Periscope to give fans inside access in real-time and strengthen fan engagement efforts.

2. Sponsors' and Rightsholders' Quest to Boost Fan Engagement

Speaking of fan engagement, apps like Meerkat and Periscope are but one way to pull fans closer to the action and deepen their involvement. But, the quest to incorporate technology to raise engagement is not limited to on-site tactics, nor should it be limited to the property or venue operator. 

Sport properties should make the most of engagement opportunities with customers attending their event but not overlook the value of social media to have meaningful two-way communication when fans are away from the venue. Also, many sponsors would like to build engagement opportunities into their tie-ins with sport properties. New technologies are creating new possibilities and challenge sport marketers and sponsorship managers to think about how they can push the boundaries of engagement.

3. Coca-Cola's New Sponsorship Outlook

Ivan Pollard has been given the keys to one of the most powerful sponsor machines: Coca-Cola. In his position of senior vice president for connections, investment and assets, Pollard is taking an open-minded approach to the company's sports partnerships. He says that Coca-Cola is nearly 130 years-old, and you do not get to that point by doing today what you did yesterday.

Does that sentiment signal change in how Coca-Cola will invest in sports? A piece of evidence in support of this position may be the recent announcement that Pepsico would replace Coca-Cola as the NBA's non-alcoholic beverage partner. Pollard is focused on innovation in the sponsorship space. It will be interesting to see if the Coca-Cola moves in a new direction with sponsorship under Pollard's watch. 

4. And Pepsi's, Too

Is the latest battle in the cola wars moving from store shelves to the playing field? PepsiCo made waves this week when it announced it would be the exclusive food and beverage partner of the NBA beginning next season. The beverage part of the relationship is significant in that means Coca-Cola is out after having a relationship with the NBA since 1986.

Interestingly, the linchpin soft drink brand in Pepsico's sponsorship will be Mountain Dew, not Pepsi. Mountain Dew's target market is a good fit with the younger demographics of the NBA. That fit trumps the sheer audience size of the NBA that would normally make a company's marquee brand the most likely one to be featured.

The deal strengthens Pepsico's hold on top-tier professional sport properties in the U.S. as it already has relationships with the NFL, MLB, and NHL.

"PepsiCo Nabs NBA Sponsorship Rights Away from Coca-Cola," by Beth Kowitt, Fortune

5. Next Round of Apparel Wars Will Be Fought on Campuses

Coca-Cola and Pepsi are not the only companies locked in a heated category battle. Athletic apparel companies are fighting for supremacy, and association with colleges and universities is a key battleground. A 2013 estimate put the combined amount spent by Nike, Adidas, and Under Armour to partner with collegiate athletic programs at $250 million a year. That figure is likely to escalate in 2016 as contracts at major universities with lucrative licensed merchandise sales will be in play including the University of Texas and University of Michigan.

The rising value of apparel rights deals may be a factor in Nike becoming more selective about the investments it makes, opting to not pursue renewal of deals with Arizona State University and the University of Miami, for example. Nike's competitors will likely pursue both of those schools and fight for others, too. The intensified battle raises the question of whether a point will be reached in which the "apparel bubble" will burst and companies realize they have overspent on college apparel contracts? Or, is the return on investment still worth writing the huge checks to get access to loyal fans of top collegiate athletic programs?

"Nike, Adidas, Under Armour Prepare for NCAA Apparel Battle," by Matthew Kish, Portland Business Journal

6. Nike's Play for the Women's Market

Nike has its eyes focused on more than just college campuses. The company is making a significant push toward marketing to women with its #betterforit campaign. The message is to encourage women to push to achieve their fitness goals. The campaign debuted during the 2015 MTV Music Awards (see the video below).

The women's apparel and training market is hot for Nike as it has eclipsed its men's business in sales. It has also stoked competitive efforts by Under Armour and Reebok as well as extended competition from brands like Luluemon and Victoria's Secret. Which company will win the race to be the brand of choice among women?

Video of the Week

They say practice makes perfect. Watch Golden State Warriors guard Stephen Curry prove that to be almost a literal statement. He made a stunning 77 3-point shot attempts in a row and 94 out of 100. We can learn from Curry that practicing our craft might not make us perfect, but we will likely see improvement that will not occur without investing in the effort to get better.

Wednesday, April 8, 2015

Pick 6: Brands, Stories, and Trends Shaping Sports Business #28

What's going on in sports business? Quite a lot of activity, as usual, but here are six stories that stood out over the past week:

1. DraftKings Had a Royal Week

To say the past week has been a good one for DraftKings would be an understatement. The daily fantasy sports game provider scored two major wins. First, the company announced it had become the official daily fantasy game of Major League Baseball. DraftKings will develop co-branded MLB games as well as work with individual MLB clubs to create experiential products. Then, DraftKings announced a $250 million investment by Disney. As part of the deal, DraftKings will spend $500 million across Disney's ESPN platform. The Disney investment raised DraftKings' market value to $900 million.

Has DraftKings positioned itself as the company to beat in the daily games sector of the fantasy sports category? Big bets are being made on the daily-game format. Is it poised to overtake the traditional season-long formats, or is the growth in daily games more of an expansion of the fantasy games category overall?

2. Stadiums Need to Connect with Millennials

Sports stadiums are challenged to meet the connectivity demands of their patrons. We are accustomed to Internet and social media access anytime, but that expectation is often unfulfilled when attending a sporting event. 

Meeting the technology needs of sports fans goes beyond appeasing them. Three business-driven reasons are behind the push to increase bandwidth in sport venues:
- Necessary in order to appeal to younger customers
- Make the live event more compelling to attend versus watching at home
- Generate revenue streams from mobile commerce 

Enhancing the technology infrastructure has moved from "nice to have" to "must have" to manage fan satisfaction and repatronage intentions.

3. Texting for Tickets

The process of buying sporting event tickets online may be an improvement over having to stand in line at a stadium ticket office, but it is still cumbersome as buyers often spend a great deal of time online looking for tickets. A company called ReplyBuy is out to make ticket buying more convenient than ever before. ReplyBuy's text messaging format alerts users when tickets are available. Users enter account and payment method one time upon registering. ReplyBuy notifies users of ticket availability via text message. A reply to the message by entering a short code with number of tickets desired confirms the buyer's order. Tickets are delivered electronically.

Approximately two dozen professional and collegiate properties are ReplyBuy clients currently. ReplyBuy not only offers fans unprecedented convenience, but teams are routing buyers to the primary ticket market and away from ticket resale websites. The ticket buying experience will continue to evolve, and it appears likely that text messaging will take on a more prominent role in ticket sales programs.

Celtics are Seventth NBA Team to Join New Ticketing Trend, by Darren Rovell,

4. NBA Winning Race to Court Younger Fans

The NFL may be America's most popular sport, but among many marketers the NBA may the most admired sport. Why? The NBA has succeeded in doing what virtually all sport properties (and many brands outside of sports) strive to achieve: Interest among younger consumers. The median age of NBA fans has remained constant over the past decade at around 37 years-old while the median age has risen for the NFL and MLB. A secret to the NBA's success is the level of integration the league and its players have with the lifestyle and cultural interests of younger people.

What can other sport properties learn from the NBA to make their brands more appealing to younger consumers? Is there a downside to a focus on attracting a younger fan base? For example, could such an emphasis alienate older fans who may feel they are not the target market?

What Basketball is Doing Right, by Roberto A. Ferdman, The Washington Post

5. Let Your Brand Show a Humorous Side

MLB's Opening Day was Monday, giving marketers a chance to do some marketing in the moment. One brand that took advantage was Hostess, the snack cake maker famous for Twinkies and Ding Dongs. Hostess posted a series of tweets using the hashtag #OpeningDay and a photo featuring baseball themed cupcakes with an obvious mixing of sports in the caption.

Twitter users were quick to point out that Hostess had gotten its sports terminology mixed up... which was exactly the plan. The tweets about the "erroneous" Hostess tweet generated 763 retweets and 463 favorites in 4 1/2 hours. Both numbers represented dramatic gains over typical engagement numbers for the brand. Hostess let its guard down and showed humor in the tweet. What is surprising is that so many people thought whoever was running the Hostess Twitter account was clueless. Quite the contrary, I would say.

6. Leave Your Periscope at Home if Going to an MLB Game

Periscope, Twitter's live-streaming app, is taking social media by storm. The ability to live-stream events via social networking site opens up many possibilities. It also could create a dilemma that sport properties receiving billions of dollars for broadcast rights will inevitably have to face. MLB is already taking a stand, saying that teams will be monitoring streaming activity in stadiums so that they can identify fans using excessive bandwidth (probably streaming a game) and block their activity. At the same time, MLB clubs are trying to figure out how to walk a fine line and use Periscope and Meerkat, another live-streaming app, to their advantage without angering broadcast rights holders.