1. Super Bowl XLIII: Officially a Bunny Burner
Even though there's about a 20% to 25% reduction in Super Bowl events this year in Tampa Bay—even Playboy canceled its über-exclusive annual party—there will always be a significant premium attached to the Super Bowl, and regardless of greater economic conditions, the premier event's host communities will always benefit.
While some Super Bowls can have a $300 million to $400 million economic impact on a city, PricewaterhouseCoopers, in a recent study, is forecasting a financial windfall of roughly $150 million for Tampa. According to the study, hospitality and tourism activities surrounding Super Bowl XLIII will generate approximately $150 million in direct spending, nearly $45 million less than the past two events, held in Glendale, Ariz., last year and Miami in 2007. Super Bowl XXXVII, played in Tampa Bay in 2001, produced slightly more than $140 million in direct spending to the area.
The PricewaterhouseCoopers study predicts that business and personal spending cutbacks will result in fewer overall visitors and media representatives, a shorter average length-of-stay per visitor, and tightly held wallets by those who do visit the region. The study, however, does not factor in such indirect impacts as a concession company's purchase of goods from local suppliers, and an uptick in local employment.
While spending is down 20% from previous years, the ability of Tampa Bay and surrounding communities to nonetheless generate $150 million in direct spending is a testament to the economic might of the Super Bowl.
From a regional sponsorship and entertainment perspective, Super Bowl XLIII still provides an abundance of high-profile activation opportunities. Over 250 Super Bowl XLIII-related events are taking place in the Tampa Bay region, including the announcement of this year's Home Depot Neighborhood MVP program winner, designed to recognize NFL players who are making a positive impact in their local communities through charitable programs and contributions.
Celebrities, as usual, will not be in short supply. Among others, Diddy is hosting his annual "Good Life" party in St. Petersburg, while Pamela Anderson's "Athletes and Angels" party is scheduled to take place near downtown Tampa. Maxim magazine, which will have the hottest Super Bowl party stage all to itself this year in Playboy's absence, is holding its party at the Ritz Ybor club in trendy Ybor City.
Jennifer Hudson, making her first public appearance since the killings of her mother, brother, and nephew, will sing the national anthem on game day, while Bruce Springsteen is taking his turn at the game's halftime show.
As has been widely reported, for the first time this year some Super Bowl tickets come with a face value price of $1,000. About 17,000 of those club and suite section tickets have been distributed; 53,000 more with a face value of $800 have been split up between the participating teams (35%); the Tampa Bay Buccaneers (5%); the other 29 NFL teams (1.2%); and 25.2% to the NFL for sponsors, business partners, charities, and the media. In response to the down economy, the NFL has also set aside 1,000 tickets with a $500 face value.
As of Sunday night, Super Bowl XLIII tickets for sale on StubHub ranged from $1,475 for a nosebleed seat to $4,995 for a club level, 25-50 yard line seat.
2. Super Bowl XLIII—The Ads
Regardless of which teams are in the championship game, the Super Bowl has always been appointment viewing for America and the world, drawing by far the single largest television audience of the year to whatever network has been fortunate enough to land the rights—NBC this year—meaning that between 80 million and 90 million Americans are tuned in to the Super Bowl at any given time, with peaks watched by 140 million or more. By contrast, last week's daytime, workweek inauguration of President Barack Obama was watched by 37.8 million viewers, spread over more than a dozen network and cable outlets.
Even in a recession economy, an audience of this size is too big for advertisers to pass up—never minding the price tag of $3 million for 60 seconds. While normal Super Bowl stalwarts General Motors (GM), FedEx (FDX), Garmin (GRMN), and Salesgenie.com are taking a pass this year, appearing will be are Denny's, the first-ever ad for a sit-down restaurant; Mars-owned Pedigree dog food, promoting pet adoption; Coke Zero, a Troy Polamalu reenactment of the timeless 1979 Coke ad starring Mean Joe Greene; and General Electric (GE), advertising via subsidiary NBC Universal for the first time since 1982.
E-Trade (ETFC) will bring back everybody's favorite talking baby; the company is also complementing its Super Bowl spot with a range of Internet promotions, including some on Facebook, YouTube, and Twitter. Super Bowl XLIII ads for PepsiCo's (PEP) SoBe Lifewater and DreamWorks Animation's (DWA) Monsters vs. Aliens movie will both air in pricey 3-D, causing fans to scramble for the 125 million pairs 3-D glasses being given away at grocers and other retailers nationwide. And in a period when American unemployment is at its highest in decades, online job giant Monster.com is returning to the Big Game after a four-year absence to go head to head with CareerBuilder.com to win the hearts and rÉsumÉs of America's job seekers.
And what of Amy Borkowsky, the fortysomething New York comedienne who in October announced to the world that she was collecting donations to fund a Super Bowl ad to help her find a man? Sadly, as of Monday our Amy had collected only $6,090 on superbowlsinglegirl.com—all of which will be donated to United Way come Sunday, barring a meshuga miracle.
3. Five Players Most Likely to Gain from Super Bowl Appearance
The Super Bowl is the grandest stage in all of professional sports, so with that being the case, which five players from the Cardinals and Steelers are in the best position to gain in terms of sponsorships, merchandise sales, contracts, etc.?
5. Dominique Rodgers-Cromartie, CB, Cardinals. He is a rookie CB from a no-name school (Tennessee State) who start in the Super Bowl for the NFC Champs. Rodgers-Cromartie's meteoric rise to stardom and NFL success is nothing short of implausible. Not only does he already have two picks in the playoffs, but his jersey has been flying off the shelves in Arizona as well.
4. Kurt Warner, QB, Cardinals. You might be asking yourself what a proven vet like Warner has to gain from playing in Super Bowl XVIII. Despite two Super Bowl appearances and one victory prior to this season, many questioned if Warner's legacy would be as the signal caller lucky enough to be surrounded by the "Greatest Show on Turf." Now, as he leads the Cardinals into the Super Bowl, he may be poised to have his bust enshrined in Canton.
3. Santonio Holmes, WR, Steelers. Holmes has made some big plays for the Steelers in this postseason, including his 67-yard punt return in the Divisional Round game against the Chargers. However, when the Steelers' star WR Hines Ward went down in the AFC Championship Game, Holmes emerged from his shadow with a crucial 65-yard touchdown reception.
2. James Harrison, LB, Steelers. Harrison came into the league as an undrafted free agent out of Kent State prior to the 2002 season. Although he was on the Steelers' 2005 Super Bowl winning squad, he did not make an impact until taking over Joey Porter's vacated position last season. Even though he won the Defensive MVP award this season, Harrison is a relatively unknown, underrated star. Super Bowl Sunday will be his chance to shine.
1. Larry Fitzgerald, WR, Cardinals. Without question, Fitzgerald is set to gain the most from his Super Bowl appearance. Going to the Cardinals as the No.3 overall pick in the 2004 Draft, Fitzgerald's skills have never been questioned. Nevertheless, after his spectacular, three-touchdown performance in the NFC Championship Game, the world has finally taken notice to his superstar ability. A lot has been made about Fitzgerald only having three major sponsorship deals (Nike, EAS, and Alltel), but with a stellar off-field reputation, he should become the face of countless products.
4. No Longer Wayne's World: Ross Completes Purchase of Dolphins
On Tuesday, my esteemed friend Stephen Ross completed his deal to become majority owner of the Miami Dolphins, assuming 95% of the franchise for $1 billion, with longtime owner Wayne Huizenga retaining a 5% stake in the team. Now managing general partner as well, Ross has been a 50% owner of the Dolphins since February, and received clearance from the NFL to purchase the additional stake in October. As such, he was able to ride shotgun for the best season the Dolphins have had in a handful of years.
Like me, Ross attended Miami Beach High School, and then went on to earn degrees at the University of Florida, the University of Michigan, and Wayne State law school. He made his fortune as founder and chairman of Related Companies, an international real estate development concern and last year was estimated to have a net worth of $4.5 billion.
Huizenga assumed ownership in 1990, when he bought 15% of the team and 50% of what was then Joe Robbie Stadium from team founder Joe Robbie's family, at a cost of $168 million. The following year, he made good on his promise to bring major league baseball to South Florida; the Florida Marlins began playing there in 1993. In 1994, Huizenga became sole owner of the Dolphins; one year ago, he announced it was time for someone else to take control.
On Huizenga's watch, the franchise signed a 10-year, $20 million naming rights deal for Joe Robbie Stadium with Pro Player, subsidiary of Berkshire Hathaway's (BRK.A) Fruit of the Loom, only to take back the rights in 2000. In 2005 the building got its current Dolphins Stadium moniker, as well as a $300 million, privately-financed face-lift that helped to land Super Bowl XLI in 2007 and XLIIII in 2010. Huizenga also signed Bill Parcells in 2007 to a four-year contract as Executive Vice-President for Football Operations; Parcells is widely expected to remain with the team at least through 2010.
5. Cubs Get a Case of the Ricketts
Karla's baseball-crazy 10-year-old son, when told that the Chicago Cubs were finally about to get a new owner, immediately asked if the team would heretofore be known as the "Chicago Ricketts." Which, in fact, would go a long way toward explaining their infirmity for the past 100 years.
While that's not terribly likely, Tribune Co. has in fact selected Incapital Holdings Founder and CEO Thomas Ricketts and his family as the "favored bidder" to own the Cubs, Wrigley Field, and a 25% stake in Comcast SportsNet Chicago, all for the sum of $900 million. The family has been cleared to begin what the Chicago Tribune terms "exclusive negotiations;" they must still reach a final agreement with Tribune, guarantee financing, and get approval by at least 23 of Major League Baseball's 30 franchise owners.
While Tribune executives had estimated that the team and other holdings would fetch a purchase price north of $1 billion, that notion was expressed months before the economy tanked. One winning aspect of the Ricketts' bid, according to insiders familiar with the terms of the deal, is that it offered more cash up front that competing bids, promising about half in equity (possibly cash) and the rest financed. The offer is the highest on record for baseball, eclipsing the $700 million John Henry and partners paid for the Boston Red Sox, Fenway Park, and a regional sports network in 2002.
The Ricketts family beat out bids from Clarion Capital Partners Managing Partner Marc Utay and Chicago real estate executive Hersch Klaff; Dallas Mavericks owner Mark Cuban exited the bidding process before the final round.
While the Cubs aren't part of Tribune Co.'s Chapter 11 bankruptcy filing, the federal court overseeing the case will likely review the impending sale. The sale would likely only be held up if creditors ultimately object to the exclusion, or if the court/creditors believe Tribune could still get more than $900 million for the team and other properties.
6. MLB Salary Arbitration
MLB teams had until Tuesday, Jan. 22 to come to terms with arbitration-eligible players before figures were exchanged and the sides prepared for court. While anyone can tell you that the $18 million Ryan Howard is asking for is the third-highest arbitration request of all time, or that Dave Weathers is the longest-tenured player at arbitration this year, we crunched the numbers for the more than 40 arbitration-eligible players to see who was really asking for the largest percentage increase over his salary from last year. (For the record, Howard came in at 38 of 41, requesting a paltry 80% salary increase over his 2008 wages.)
Requested % Increase Player 2008 Salary 2009 Demand
5. 795.17% Paul Maholm, Pirates $424,500 $3,800,000
4. 862.03% Mike Jacobs, Royals $395,000 $3,800,000
3. 929.76% Ervin Santana, Angels $420,000 $4,325,000
2. 934.06% Ryan Ludwick, Cardinals $411,000 $4,250,000
1. 1,182.97% Dan Uggla, Marlins $417,000 $5,350,000
7. AFL Centralizing
After announcing in December that the league would suspend its 2009 season and overhaul its economic model, the 22-year- old Arena Football League is revisiting a common sports-league startup design: centralizing league business to reduce costs and redundancies and increase efficiency. This was the main thread of discussion when AFL owners and player representatives met last week.
While each of the league's current 16 teams will likely continue to negotiate its own player contracts if/when the league returns in 2010, the centralized AFL management would pay all salaries. The league would also consolidate sponsorship agreements, as well as merchandising sales, ticket distribution, and marketing.
Despite an average attendance of 12,957 per game in 2008, and over 25 games televised on ESPN, the AFL was losing money, hamstrung by bad leases, down corporate sponsorship no TV rights fees, since ESPN takes an equity stake instead, and too-high player salaries. The salary cap per AFL team in 2008 was $2 million—that number will drop to $1.4 million or possibly lower in 2010. To increase revenue, the current 16-game schedule will likely be expanded to 18 games, and after last week's meetings, look for a complete restructuring of the CBA.
8. The Economy's So Bad, the EPL to go Topless?
Industry analysts quoted in The Times of London are saying that EPL club Manchester United will have "no problems" finding a new jersey sponsor "willing to bid high" after United's deal with AIG expires at the end of the 2009-2010 English Premier League season. BrandRapport Arena Director Nigel Currie stated United is "global name that most big companies would want to be associated with and, in spite of the recession, there are still businesses out there with money and who want to get their names known." The bigger question, perhaps, is what major sponsor category will attempt to pull out of a big money deal next? The City, home to London's financial institutions, is being watched carefully to see whether Barclays, Lloyds, or the like decide that sport sponsorships in the current economic climate are too rich for their oh-so-blue blood.
The EPL is also attempting to protect income streams that come from media and intellectual property rights, including pub owners who show football matches via foreign satellite feeds and Web sites that pirate the feed and/or don't charge a subscription fee that will make its way back to the teams. According to the Manchester Guardian, EPL barristers have asked the Secretary of State for Culture, Media & Sport and the Secretary of State for Business, Enterprise & Regulatory Reform to "crack down on copyright infringement by making internet service providers responsible for the actions of their subscribers, and appoint an "IP tsar" to coordinate action across government." While the barristers quoted claim an 87% success rate with cease and desist demands sent, they also noted that the ISP owners themselves need to "take on a stronger role." In the U.S., a class action suit against YouTube "is expected to be heard" later this year.
9. EPL Fans Also Feel Pinch of the Times
Virgin's authoritative Football Fans' Inflation Index, which has tracked English football match day costs since January 2006, now shows that nearly 1 in 4 season ticket holders are considering canceling their tickets and 1 in 10 are planning to share the cost with friends in the clearest sign yet that recession fears are biting EPL football. The cost of a match day for an individual is currently at Â£95.60 (approximately $136); 22.6% higher than three years ago.
The most recent findings for season ticket holders:
24% are considering canceling
3% are considering giving up going to all games
21% are considering canceling and buying tickets when it suits
9% are considering sharing the cost of a season ticket with friends and family
The research was conducted among 3,887 fans and shows that while the cost squeeze is hitting all levels of the game, it is particularly acute in the Premiership. Clubs most at risk include West Ham United, Blackburn, and Newcastle United, where as many as 37% of season ticket holders are having second thoughts.
10. We're Not Sure This Passes the Sniff Test
On a related top note, purchasers of "Football Manager 2009" will get a bonus with this year's version of the wildly popular video game: a bottle of aftershave. Called "Scent of Success" the cologne combines the scents of the locker room—grass, sweat, shoe leather, and heat spray. A spokesman for the game's manufacturer, Sports Interactive, claims "Our scent will bring the dressing room into the homes of Football Manager 2009 players, inspiring them for pre-match team talks, preparing them to direct their team from the sidelines, and prime them for a tricky press conference."
Damp towels, yards and yards of used tape, and game-worn stinky socks will be offered with the "Deluxe" version of the 2009 game.
Rick Horrow is a leading expert in the business of sports. As CEO of Horrow Sports Ventures, he has been the architect of 103 deals worth more than $13 billion in sports and other urban infrastructure projects. He is also the sports business analyst for CNN, Fox Sports, and the Fox Business Channel.