Prices for Super Bowl XLIII remain high, but in a recession many people won't shell out thousands to watch the big game
1. Cardinals-Steelers Super Bowl Set—Can Anyone Afford to Go?
Is this an Odd Couple of a Super Bowl match-up, or what?? At the beginning of the 2008 NFL season, even the gutsiest of Vegas sports bettors likely wouldn't have paired the Arizona Cardinals to meet the Pittsburgh Steelers in Tampa Bay on Feb. 1.
The Steelers, sure—the team was an odds-on early season favorite to make the big game. Pittsburgh, after all, already has five Lombardi trophies, and is a perennial powerhouse with a big, rowdy, national following. The Cardinals, the oldest continuously run pro sports franchise in this country, are best known for having the second-longest title drought behind the Chicago Cubs, at 61 years and counting, and for having the coolest stadium of anybody until the Dallas Cowboys knock them off that perch this fall.
But University of Phoenix Stadium likely has a great deal to do with the Cardinals' recent success. In fact, if the Cards go on to win the Super Bowl, their victory will give other franchises seeking new stadiums fresh ammunition on the positive effect a new building, reenergized fan base, and opportunity to host the Super Bowl brings. As team President Mike Bidwill was quoted as saying after Sunday's Conference Championship game, "The stadium has been such a big part of the success."
Turnkey Sports recently ranked the Steelers third in fan loyalty in major professional sports, behind the Green Bay Packers and Boston Red Sox, in their 2008 Team Brand Index. Fans are so passionate that Pittsburgh Mayor Luke Ravenstahl even temporarily changed his name to "Steelerstahl," removing the name of the Steelers' opponent Baltimore Ravens in Sunday's AFC Championship game. The successful Steelers playoff run delivers immediate business impact for restaurants, bars, retailers, and hotels, as well as a less measurable future impact of clients courted, deals done, and partnerships forged.
Even though the Ravens didn't advance to the Super Bowl, businesses in Baltimore still benefited. The team's television home, WJZ-TV Channel 13, was able to charge as high as $15,000 for an ad—nearly 65% more than they would charge for a playoff game not involving the local team.
In Phoenix, the Cardinals are holding a lottery for season ticket holders to buy a portion of that team's allotment of roughly 11,000 Super Bowl seats, at a face value of $800. That ticket allotment also has to satisfy each team's luxury suite holders, sponsors, players, coaches, and team executives, all of whom are guaranteed tickets to the game. The NFL is also offering both the Steelers and the Cardinals 500 tickets per team to sell at a face value of $500 each. Those tickets, according to the Arizona Republic, "must be picked up in Tampa to encourage fans to make the trip and not sell the tickets."
Next week, we'll take an in-depth look at Super Bowl hospitality and sponsorship, including, of course, those famous-on-their-own-merit Super Bowl ads. Early on, it looks as if the down economy is dictating the tone of this year's crop of $3 million ads, as Budweiser (BUD) and other longtime advertisers are taking a more pragmatic approach to their offerings. And while fine dining may be out for the moment, the more economic Denny's is seizing the opportunity for the first time, buying a 30-second commercial spot in the game's third quarter and a 15-second spot during postgame coverage. Just call it a Super Bowl Grand Slam.
2. Tampa Bay Readies
Despite the team's historic season, will Cardinals fans actually make the trek to Tampa en masse, or will this untested fan base bow to the economy and choose to stay at home? Likewise, will Pittsburgh's most recent Super Bowl win just four years ago, and the team's seventh trip overall, create a "been there, done that" mentality among Steelers fans? Those are the questions keeping the Tampa Bay host committee up at night.
"Economic hard times have raised questions about whether projections on fan spending will be met," states the The Wall Street Journal, yet "many hotel owners still are asking premium rates for rooms in the region and require a minimum four-day stay."
The Cardinals' official travel and ticket company, worldeventspackages.com, is selling a Super Bowl package, including a game ticket but not airfare, for $5,650. Slightly lower, PrimeSport.com is selling a $4,200 Super Bowl package and TeamOneTickets.com has a $3,800 offering, both without airfare but including passes to some Super Bowl events and parties. Fans going it alone will encounter inflated hotel room prices in Tampa Bay, and the aforementioned minimum stays. In Clearwater, the 253-room beachfront Sandpearl Resort has one-bedroom suites available for roughly $1,250 a night during Super Bowl week, well above the $500 average published rate from February to July.
In Pittsburgh, JetBlue Airways (JBLU), which doesn't normally fly from that city to Tampa Bay, is adding two nonstop flights to Tampa before and after the Super Bowl to make it easier for Steelers fans to get to the game. The Travel Authority, the Steelers' official travel partner, is offering packages ranging from $695 to $1,725 per person that include "charter air transportation, accommodations, transfers, and social functions joined by former 'Steelers Greats'"—but no tickets to the game.
Ticketmaster.com is among those running a legal secondary marketplace for NFL tickets, with the cheapest Super Bowl seats coming in at $1,800 per person for an upper level spot in Tampa as of Monday.
As always, the Super Bowl brings much more than football to the host community. Throughout the week preceding the game, more than 50 Super Bowl XLIII-related charitable activities and community outreach programs, most involving active and/or retired NFL players and executives, will enliven and enrich the community, including:
Playbook for Small Business—Workshops for minority and women-owned businesses on how they can better capitalize on Super Bowl-related and ongoing business opportunities
Environmental Program—Comprises education and awareness on recycling, food recovery, materials donations, greenhouse gas reduction, and urban/community forestry
Stay Cool in School—Creative student essay-writing contest
One World Super Huddle—Diversity awareness for grade-school children
Home Depot NFL Neighborhood MVP All-Star Playground Build and Award Ceremony
Habitat for Humanity Super Build and Champions House
NFL Play 60 Kids' Day at the NFL Experience Presented by Bank of America
NFL Youth Education Town (YET)—Learning centers for at-risk youth. NFL Commissioner Roger Goodell and Hall of Fame quarterback Steve Young will announce a $1 million NFL gift to the two Tampa Bay NFL YET Centers and celebrate the ways that the centers have benefited the surrounding community
3. NFLPA Under Federal Scrutiny
Last Tuesday, a federal judge upheld a $28.1 million jury award to retired NFL players who sued the NFL Players Assn. for allegedly failing to compensate them for marketing their images. In his decision, the judge stated that there was sufficient evidence presented at trial last November that the NFLPA actively sought to cut out retired players from lucrative marketing contracts for the financial benefit of active players.
Under the judgment, the NFLPA owes the retirees $7.1 in actual damages for failing to include them in agreements with Electronic Arts, Inc., maker of the "Madden NFL" videogame franchise, and other sponsorship deals. The federal jury also ordered $21 million in punitive damages.
In the meantime, New York's Representative Gregory Meeks joined three other U.S. congressmen in asking the Labor Dept. to monitor the NFL Players' Assn.'s search for a new executive director. In a letter to former Labor Secretary Elaine Cho, the congressmen asked that a "detailed disclosure and description report" of the search be provided, writing "We would like to ensure the integrity of the search process and that the process is transparent, fair and compliant with all applicable Labor Dept. rules and regulations, and the NFLPA Constitution rules and by-laws."
Eight candidates remain in the running to succeed Gene Upshaw as NFLPA executive director, says a person familiar with the search, including former union presidents Troy Vincent, Mike Kenn, and Trace Armstrong, former union executive vice-president John Spagnola, former NFL players Jim Covert and Ben Utt, sports attorney David Cornwell, and Roderick West, CEO of New Orleans' main utility company. The candidates are scheduled for interviews with the NFLPA executive committee this week; the list will then be trimmed to three or four finalists, who will address the union's 32 player representatives in Hawaii in March.
"It's a sport, but it's a business, and you have to take it seriously," Meeks said in The New York Times. "All of us who know that have that responsibility—not just to cheer for the players when they are on the field, but to look out for their benefits when they are off the field."
4. Australian Open Opens Tennis Slam Season 2009
If it's January, it's tennis Down Under. As the ATP welcomes its new leader, former Nike's (NKE) Global Sports Marketing Vice-President Adam Helfant, contemplates events in 31 countries, and mourns the loss of Mercedes as a major sponsor, and the WTA contemplates its "Road Map 2009" scheduling overhaul and the bowing-out of a major tournament in Germany, the first Slam of the 2009 tennis season kangaroo kicks off in Melbourne.
For the first time, ESPN holds the broadcast rights to all four of tennis' major tournaments. From Melbourne, ESPN will air over 157 hours of coverage on ESPN2, with Chris Fowler once again serving as studio host (You have to wonder if he ever secretly wants to pop a mascot head on Pam Shriver or Darren Cahill, à la fall broadcasting colleague Lee Corso.) ESPN360.com will add more than 430 additional hours of live coverage, and DirecTV will add its own interactive services, including the six-screens-in-one Mix Channel, which will be integrated with ESPN2 and Tennis Channel broadcasts.
Tennis Australia CEO Steve Wood said that last year's record attendance of 605,000 "could be exceeded" by this year's event, and that the tournament is in terrific financial shape after renewing 9 of its 10 top sponsors. Total prize money has risen U.S.$784,274, to $15.9 million; the men's and women's singles finalists will receive $1.4 million for each winner, with $687,960 going to each runner-up. Tournament organizers are also putting more of an accent on entertainment this year, with 60 bands scheduled to play on site.
5. The Business Rise of the ATP's Andy Murray and the WTA's Jelena Jankovic
Two young players pro tennis tour executives and fans alike will be watching closely this season—and not necessarily for their power forehands and precision volleys—are Scottish sensation Andy Murray and the world's No. 1-ranked woman tennis player, Jelena Jankovic.
Murray, the No. 4-ranked player on the ATP World Tour, is poised this year to challenge Rafael Nadal, Roger Federer, and Novak Djokovic not only on the court but in the race to sign lucrative marketing deals. In December, Murray signed a representation deal with 19 Entertainment, agency of David Beckham and other star athletes. Murray and his brother Jamie, the top doubles player in Britain, have also signed an adjunct agreement with CAA to work with 19 Entertainment to broaden the players' U.S. exposure, beginning Mar. 1. CAA reps No. 3-ranked Djokovic, and reportedly beat out IMG, which reps top-ranked players Nadal and Federer. All told, Murray reportedly expects to rake in $144.6 million from the management companies vying for his attention. He also has endorsement deals with Head racquets, Highland Spring, Royal Bank of Scotland, and later this year, a reported $3 million deal with K-Swiss.
Meanwhile, IMG and its model management firm, IMG Models, has signed Jankovic for exclusive worldwide representation in marketing and management. "IMG is a global company and a leader not only in tennis, but entertainment, fashion, and modeling as well," Jankovic said in a statement. "I'm very excited to partner with IMG and look forward to working with them on a variety of exciting tennis, marketing, and endorsement opportunities."
Jankovic chose to return to IMG after a three-year stint with Octagon; it has been speculated that joining IMG Models was a major draw for the tennis fashionista and off-court clotheshorse. Among Jankovic's current endorsement deals are a new agreement with Chinese apparel and footwear company Anta, Aqua Viva Hydroactive Water, Prince, and Reebok. She is also the face of the Serbian fashion designer Mona, with her own line of clothing.
6. Rendezvous au Canada: NHL Business at the 2009 All-Star Game
The 2009 NHL All-Star break takes place in Montreal this weekend, with a strong midseason business report card but with questions surrounding the NHLPA's collective bargaining agreement, and the fate of the Phoenix Coyotes.
In nearby Toronto, Canada's adored Maple Leafs are hoping for a resurgence under General Manager Brian Burke, recently of the Anaheim Ducks. While the Leafs' 41-year championship drought is beginning to rival that of the Arizona Cardinals, the team, really the national obsession, remains the gold standard of the NHL, with a franchise value of close to $500 million.
The back-to back successes of the NHL Winter Classic on New Year's Day have provided a much-needed marketing boost and have other cities vying to host the game's next installation. Commissioner Gary Bettman has stated that 2008-09 revenues will likely be up by 2% or more. And the NHL's $56.7 million salary cap, according to The Boston Globe, "carries a guarantee of at least $1.2 billion in total player payroll, and potential maximum of some $1.7 billion across the 30 teams." For the players, although a salary cap isn't ideal, the average salary has risen from $1.8 million before the 2004 lockout to $2.23 million this season. On Thursday, the NHLPA executive board will vote on whether to reopen the current collective bargaining agreement, but player reps from all 30 teams have already indicated that they will continue to play under the current deal.
The NHL and the NHLPA also recently reached an agreement on how revenues from international games including early season trips to Europe and the 2011 World Cup of Hockey will be divided—with the NHL likely sending six teams to three European cities to open the 2009 season, and possibly more in 2010. Without the changes that were made, the future of international events would have been at risk.
In Phoenix, it's looking as if the Coyotes' future there is what's truly at risk. Faced with poor attendance and unpaid bills, the team has laid off nearly 10% of its staff, and rumors abound that the NHL is helping the team make payroll. Stay tuned.
7. NBA Execs—Ticketing by the Seats of their Pants
NBA executives met in Phoenix last week to address the most pressing issue facing the league: universally dwindling ticket sales, affecting all but the NBA's top two or three teams and markets. While the league holds sales and marketing meetings annually, this year's powwow—held just before teams begin their season-ticket renewal push in February—is urgent, given the intense pressure on ticket sales. While most teams will likely hold the line on season-ticket prices, the deep discounts currently being offered by teams to keep bottoms in seats will, long term, drastically affect the league's bottom line.
"The majority of our teams are discounting and adding value to tickets," says Chris Granger, senior vice-president for team marketing and business operations at the NBA. "There are now more than 2 million tickets being sold at $10 or less. The difference this year from others is that it's more of a buyers' market, and people are looking for deals." Last year, the NBA had 1.7 million tickets priced at $10 or less.
Ticket discounting and linked promotions so far this season have helped maintain an NBA-wide average attendance of 17,151 fans per game at the end of December, up 0.9% compared with last season.
On the weak attendance end of the league, the Charlotte Bobcats, who ranked 28th out of the 30-team NBA with an average attendance of 13,567 through the end of December, are getting aggressive, offering single-game tickets ranging from 10% to 50% off through mid-January. In Dallas, 4,000 Mavericks seats at American Airlines Center are now priced at $19 or less—including some selling for $10, $5, and $2. The team has ticket prices in three of the last four years. Down the road in San Antonio, where attendance has never been an issue, the Spurs are selling $25 upper-bowl seats in mini-plan packages for $10 per game—the first time the team has discounted individual game tickets.
8. From the MLB Owners Meetings
Also convening in the greater Phoenix area last week were Major League Baseball's owners, who held their quarterly meeting in Paradise Valley. At the top of the agenda presented by MLB President and COO Bob DuPuy was a blackout policy, by which teams would need to service a market with local television coverage in order to claim it as part of their "protected market territory." The issue had been tabled at the last two owners' meetings to give DuPuy and executive committee members time to examine MLB clubs' local TV contracts.
Also on the agenda was another examination of industry economics, following a November discussion in which the league's operating budget for 2009 was frozen at 2008 levels. The meetings were rounded out by two potential changes on baseball's operations side. In the wake of the confusion surrounding last October's rained-out World Series Game 5, Commissioner Bud Selig and MLB owners formalized a mandate that all postseason and play-in games be played to a minimum of nine innings, as well as eliminating coin flips to determine home field for single-game tiebreakers in favor of head-to-head and intra-divisional records.
In Chicago, Tribune Co. reportedly is set to name a candidate to purchase the Chicago Cubs this week, for real this time (they swear)! MLB executives are hoping the new ownership group can be in place before Opening Day, depending on the length of the approval process.
And in California's Bay Area, Selig cleared the way for Oakland A's owner Lew Wolff to look at potential new stadium sites in San Jose should ongoing efforts to build Cisco Field fall through in Fremont—even though San Jose is technically the protected market territory of the San Francisco Giants. Wolff, however, remains committed to Fremont, even as the city council there has yet to approve the deal.
9. Funds Needed for British Grand Prix Improvemen