It wasn't only golf fans who missed Tiger Woods while he was out recovering from knee surgery. Sponsors, advertisers, and broadcasters missed him, too
1. Tiger Back—Instant Impact on PGA Tour Expected
Much to the delight of tournament sponsors, NBC, and the Golf Channel (which share domestic broadcast responsibilities), Tiger Woods has returned to play at the Feb. 25-Mar. 1 World Golf Championships-Accenture Match Play Championship in Tucson. For Woods, the Match Play tournament represents his first competition since June, when he won the U.S. Open, his 14th major championship, in a grueling 19-hole Monday playoff at Torrey Pines in San Diego, on a bad knee and a broken leg.
In Sports Illustrated, a poll of the Golf Magazine top 100 teachers asked "at which event will Tiger Woods make his return?" Thirty-four percent of respondents answered correctly that Woods would enter the Match Play event; 19% pegged his return at Doral, and almost half (47%) thought he would return at Bay Hill, where he's won five times. (Let's hope the teachers are more accurate when you ask them how to correct your slice.)
Top teachers and the swarm of media expected in Tucson aside, the Tour is grateful and loud in acknowledging the return of its cash cat after an eight-month absence. Woods is universally acknowledged to be an instant balm for seriously sagging ticket sales and ratings, as well as a solid justification for sponsors to plunk down money on a golf tournament in this economy. While it's somewhat suspect that Tiger timed his return to correspond with an event held by Accenture (ACN), one of his biggest sponsors (and did anyone but us notice that Tiger's announcement was orchestrated in the middle of archrival Phil Mickelson's best round of the year to date, at Riviera?), even his match play opponents admit that his presence only improves the game.
Top Woods sponsor Nike (NKE) on Feb. 25 debuted a humorous new 60-second commercial celebrating Woods' return to the tour, a while-the-Tiger's-away-the-mice-will-play send-up starring Anthony Kim, Trevor Immelman, Stewart Cink and other golfers that will air on the Golf Channel and ESPN through Mar. 1. Per rumors heard at the PGA Merchandise Show in Orlando earlier this month, Nike also plans to distribute thousands of Tiger-red T-Shirts proclaiming "Sundays are Back" at the tournament site. Bloomberg News even speculated that the Golf Channel "may include an on-screen icon during programming…that counts down to Woods' return." Along with counting down, the golf world will be watching Woods' knee—and holding its breath.
2. Who Else Can Cause the "Tiger Effect?"
We didn't need the overwhelming worldwide reaction to Woods' return to prove that Tiger has the ability to singlehandedly make or break the business of professional golf. No other athlete in history has enjoyed Woods' ability to bring in the casual fan, elevate ratings and attendance, and sell lots of merchandise.
However, other athletes can singlehandedly move that needle—especially those who showcase their skills in sports that are below the radar compared to the NFL, NBA, and MLB. Here's a comparative case in point.
The "Tiger Effect"
CBS reported a 48% drop in ratings for its coverage of last summer's AT&T National, an event that Woods normally hosts and plays in.
ABC reported a 14.6% drop in its ratings for the 2008 British Open despite Greg Norman's unexpected lead going into the final day of the tournament.
Woods has been credited for helping to make Nike Golf one of the leading golf apparel and equipment companies in the world, with an estimated $600 million in sales.
Ticket sales for this week's WGC-Accenture Match Play were down $400,000 from last year before Woods made his comeback announcement.
In 2007, ESPN2 saw a 68.1% increase in viewers in MLS games featuring David Beckham compared to MLS games contested without him. In 2008, that difference was down to 23.2%.
MLS Galaxy away attendance is up 9,000 people per game on average since 2007, when Beckham joined the team.
Games in which Beckham played last season drew almost twice as many fans as the average MLS game did, according to brandcurve.com.
Additionally, games in which Beckham was scheduled to play but did not drew 75% more fans than the average MLS game.
After Beckham arrived to play with the Galaxy, attendance grew by 49%.
MLS jersey sales are up by 780% (280% if you don't include Beckham's Galaxy shirt).
MLS Internet traffic was up 80% this year.
Bryant leads the NBA in jersey sales, and the Lakers are the only NBA team drawing more than 100% of capacity on the road this season.
However, no metrics exist showing that Bryant singlehandedly has a make-or-break effect on NBA ratings or NBA-centric Web traffic.
3. U.S. Financial Crisis—Stanford Financial Group and the Latest "$8 billion" Hit on Sports
In other golf-centric news, last week the SEC filed a federal complaint against Stanford Financial Group and Texas financier R. Allen Stanford, accusing the company of an $8 billion fraud. SFG has its hand in many sports, including tennis (host sponsor of the 2009 Sony Ericsson Open in Miami), polo (presenting sponsor of the Stanford U.S. Open Championship at International Polo Club Palm Beach), and cricket—where Mr. Stanford has also been accused of subverting the very game through his lack of decorum and promotion of Twenty20 cricket, a shorter, nontraditional version of the game. Additionally, sports stars such as the New York Yankees' Johnny Damon have invested a significant portion of their earnings with SFG—reportedly, all of it now frozen.
However, it is in golf that the company's forced withdrawal from sponsorship contracts would forge the biggest blow. SFG serves as title sponsor for the PGA Tour's Stanford St. Jude Championship in Memphis in June, as well as the LPGA's season-capping Stanford Financial Tour Championship in Houston. SFG was planning to spend $15 million on golf sponsorships this year, but if the company's assets are frozen, that figure could be in jeopardy. The PGA's Memphis event could be in serious trouble—SFG signed a 10-year deal to title-sponsor the event in 2006, estimated to be worth $6 million-$8 million annually, and fellow Memphis company FedEx (FDX) reportedly agreed to sponsor the FedEx Cup series only if "the Memphis event were protected," according to the Memphis Commercial Appeal. Also on notice are golfers Vijay Singh, Camilo Villegas, and Morgan Pressel, SFG endorsers all.
4. Cisco-AEG Sports and Entertainment Summit Convenes in L.A.
On Tuesday, at Los Angeles' brand new Club Nokia at the L.A. Live complex across the street from Staples, some of the top names in sports and technology will come together to examine the ever-growing role of technology in sports—especially for sports fans.
The first-ever Cisco Sports and Entertainment Summit will feature Cisco (CSCO) Chairman and CEO John Chambers in concert with AEG President and CEO Tim Leiweke, sports commissioners David Stern and Gary Bettman, former NFL Commissioner Paul Tagliabue, and panelists from ESPN, ICON Venue, Harrah's, and some of the top sports marketers in the business. The invitation-only audience comprises sports team owners, sponsors, rights holders, financiers, and architects—major decision-makers affected day-to-day by the indelible imprint that technology has made on sports as a business and the fans who follow the games as a passion and a lifestyle.
We'll be covering the event closely, and present findings and observations next week. Rather than just another mind-numbing industry event featuring the same recycled talking heads, the Cisco Sports and Entertainment Summit promises, like the tech innovations the company is famous for, to be provocative and cutting-edge.
5. NFL Post Combine
It's worth noting that benched Tennessee Titans quarterback Vince Young scored 6 out of 50 on the NFL's kindergarten-easy Wonderlic test—supposedly one of the lowest scores of all time. The Wonderlic, and the physical tests NFL hopefuls endure each February at the NFL Combine, are not a clear beacon of NFL success or failure. But aside from hordes of NFL scouts and the endless analysis of Mel Kiper, they're about all a coach and GM have to go on to prepare for April's NFL draft.
Between now and that April Saturday at Radio City Music Hall, however, NFL executives must busy themselves with the next key milestone of the offseason, the start of free agency on Feb. 27. Despite the league itself cutting 150 employees and at least two-thirds of teams eliminating positions as well, there will be plenty of salary money on the table for top free agents this year. On Monday, New England Patriots quarterback Matt Cassel signed on the dotted line for a guaranteed $14.65 million for 2009-2010 and franchise status; other top guys are close behind.
The second-tier players, however, have good reason to be uneasy in this economy, as their deals are likely to be much smaller and shorter than in previous seasons, due not just to the economy but also to the league's current collective bargaining agreement. The current CBA includes mechanisms meant to keep teams from dumping salaries if the NFL and the NFLPA can't come to agreement before the end of this year and face a 2010 season without a salary cap. Those mechanisms will likely result in smaller mid-tier salaries this year, as well as fewer open roster spots in general since the CBA provisions will keep some players "uncuttable." Another CBA rule that could impact new contracts, according to Sports Illustrated: a maximum 30% base salary increase from 2009 to 2010, and beyond. Teams without a lot of salary cap wiggle room are now sweating before they're dealing.
6. Debate About Dubai Intensifies
Andy Roddick just won his first ATP event of the season, in Memphis. And he alone among his tennis peers is championing the idea that the United Arab Emirates' refusal to grant a visa to Israeli WTA player Shahar Peer is an action that should be boycotted, not tolerated. Roddick is declining to defend his title at the Barclay's Dubai Tennis Championships this week, citing Peer's treatment as reason behind his refusal to attend the event and telling journalists, "I really didn't agree with what went on over there."
No athlete should ever be denied the right to compete because of politics, yet undoubtedly because of continued turmoil in the Gaza Strip the UAE did not grant Peer an entry visa for last week's WTA event in Dubai. The move could have long-term implications, as the WTA will consider dropping the event altogether as early as next year even if the Dubai Tennis Championships pays the record $300,000 fine the WTA levied against it on Friday. Part of that fine will go to compensate Peer, receiving $44,250, and her doubles partner, Anna-Lena Groenefeld of Germany (receiving $7,950), for prize money they could have won at the tournament. Peer will also receive 130 ranking points, equivalent to the points she earned in the same period last year, and will be granted a wild-card entry to next year's Barclays (BCS) event if she doesn't qualify. Additionally, Dubai organizers will be required to post a $2 million performance guarantee for 2010, and must confirm that qualifying Israeli players will get visas at least eight weeks in advance.
UAE officials granted a visa to ATP player and Israeli citizen Andy Ram to play in this week's $2.2 million men's tournament, and the event will be televised by the Tennis Channel as scheduled (the broadcast outlet rightfully refused to televise the women's event). But as more and more global sporting events are lured to the wealthy region, the situation needs to be monitored very closely. One event to watch: the European golf tour's Race to Dubai/Dubai World Championship right before Thanksgiving, at which one top-ranked player can earn a staggering $3,666,660 out of a total prize money pot of $10 million.
7. EPL: Shareholder Gaining on Arsenal Takeover; Liverpool Still on the Block
Red and White Holdings, the investment company owned by the Russian billionaire Alisher Usmanov, has increased its shareholding in Arsenal to more than 25%, raising the possibility of a formal takeover.
Usmanov, with an estimated fortune of $4.5 billion, already owned a 24% share in the club and can make a formal approach to takeover at the Emirates should his share reach 29.9%. Red and White Holdings first invested in Arsenal two years ago when it bought the 14.65% holding of former vice-chairman David Dein. The Arsenal board, led by Danny Fiszman, who owns a 24.11% stake, has yet to offer Usmanov a seat but may be forced to soften its stance.
Meanwhile, American owners of Liverpool FC George Gillett and Tom Hicks still actively seek a buyer for that EPL club before the $500 million loan they took out to build a new stadium for the club comes due in July. The pair paid $310 million in 2007 to buy the team, one of England's richest and most promising soccer clubs. Gillett and Hicks—temporarily distracted by Alex Rodriguez's admission that he used steroids while a member of Hicks' Texas Rangers MLB team—are asking $700 million for Liverpool FC and are hoping to lure a wealthy Middle Eastern buyer. Liverpool FC 2008 revenues topped $270 million.
8. NASCAR Outlook Post Daytona
On Sunday, NASCAR completed its first down-to-business race of the season after the annual spectacle of Daytona, and the results were not nearly as bad as some industry analysts thought they were going to be. While the Auto Club 500 at NASCAR's Los Angeles-area Auto Club Speedway in Fontana, Calif., has never sold out the track's ambitious 92,000-seat grandstand, this year's crowd was estimated at 78,000 including infield, with the grandstand about two-thirds full, a total of about 8,000 more attendees than the track's August race. Auto Club 500 track execs in Fontana had braced for a potential shortfall by cutting some premium seats to $35 per ticket from $55, and bumping up marketing Hollywood-style, with celebrity appearances including Hugh Laurie of House serving as grand marshal and Reggie Jackson driving the pace car.
International Speedway Corp., which owns the Fontana track, said on Jan. 29 that combined advance ticket sales for all races at that point were down about 17% from last year, while racing sponsorship spending by North American companies is expected to drop 6% this year, according to IEG Sponsorship Report. Sponsorship renewals overall are coming in at around 90%; big-name companies that have dropped out of the NASCAR picture this season include Bass Pro Shops, Wrigley's, and Texaco, a unit of Chevron (CVX) since 2001.
The Auto Club 500 was also the top-rated sports program for Sunday, Feb. 22, drawing a 5.3 household rating/8 share for FOX and beating out the cross-town PGA Northern Trust Open for both viewers and spectators. The Academy Awards, opposite the race and an annual justification for the low track turnout, averaged a 23.3/35 according to overnight data from Nielsen Media Research, a modest 6% increase over last year's all-time low of 32 million viewers.
Daytona 500: Sponsor Value per Lap Led
Companies sponsor NASCAR drivers primarily because their brand will be seen on TV during races. Of the 10 drivers who had the highest monetary value from TV exposure during the Daytona 500, these five represent the best bargain, based on the number of laps that they led:
5. $1,975,578, Mark Martin ($1,975,578/1 lap)
4. $555,899, Matt Kenseth ($3,891,293/7 laps)
3. $227,272, Jeff Gordon ($3,181,804/14 laps)
2. $137,676, Tony Stewart ($2,065,133/15 laps)
1. $40,543, Kyle Busch ($3,567,796/88 laps)
9. ING Backs Out of Formula One
Last week, Dutch bank and insurance company ING Groep NV (IDG) announced it is pulling out of Formula One at the end of the 2009 season. ING, the second-largest sponsor in the sport, is currently the title sponsor of the Renault (RENA.PA) team, has been heavily involved in trackside advertising, and is the official sponsor of the season-opening Grand Prix in Australia as well as races in Belgium, Hungary, and Turkey. In 2008, it was estimated that ING was paying about $86 million annually into the sport, with around $65 million of that going to Renault. After announcing last month that it would cut operating expenses by €1 billion in 2009 and claiming it needed to eliminate 7,000 jobs to save £949m, the company confirmed that it would not renew its three-year (2007-09) contract with Renault F1.
BMW Sauber also lost one of its main backers last month when Credit Suisse (CS) opted not to renew their deal. But the impact of the global credit crunch claimed its biggest F1 victim at the end of last year, when Japanese car manufacturer Honda (HMC) withdrew its team. Honda spent an estimated £210 million in a 2008 season where they scored just 14 points from 18 races and finished ninth overall. A buyer for the team remains to be found ahead of the season-opening Grand Prix in Australia on Mar. 29. FIA President Max Mosley has urged al