The NBA's Growing Global AppealKarla Swatek and Rick Horrow and Karla Swatek
1. NBA Goes (Even More) Global for Playoffs
The NBA, as we've often noted, works hard to maintain global awareness. This week, the league's global ties strengthen once more as the NBA explores a marketing and media rights relationship with the English Premier League, arguably the only sports league more popular around the globe than the NBA. According to the Financial Times, NBA and EPL representatives have met in London to "discuss how they might work together," and also have "compared notes on their respective media rights strategies—particularly in Asia."
Closer to home, the league is working hard to give global media representatives unprecedented access to players and coaches during the NBA Playoffs. More than 250 international journalists were present in Los Angeles, and more are expected in Orlando this week, according to the NBA. A trailer at Staples Center provided television feeds to 215 countries in 42 languages—for the first time, Finals games are available to fans in the Middle East in Arabic on Al Jazeera. In Mexico, they are available on a free TV channel for the first time since 2005.
In the Orlando Magic locker room, reporters from Turkey interview Hedo Turkoglu while French reporters across the room do the same with Mickael Pietrus. Down the hall, Los Angeles Lakers center Pau Gasol routinely does a full session with Spanish language media reps after he completes one in English; in April, the Lakers attracted more than 50,000 Latin fans to an event called Fiesta Lakers at the Los Angeles Convention Center, and are planning a second event next year. In all, roughly 20% of the NBA's current players are foreign-born—and many more are on the way.2. Orlando, and Superman Howard, Set to Soar
The prestige and financial windfall that comes with making the NBA Finals is the obvious desire of every team in the league. Yet, out of all the teams that made this year's Playoffs, no one could be happier about playing for the title than the Magic. Simply put, no team had more to gain this postseason than Orlando did.
Just months after accepting a $15 million loan from the league, and as they continue to build a new arena for the 2010 NBA season, the Magic are in an auspicious position in which each additional home game is a pure bonus to the team's bottom line. However, the one factor that benefits Orlando more than any other is the increase of national exposure—extending to its star player, Dwight Howard.
Like LeBron, Kobe, and D-Wade, Howard is one of the premier endorsers in the NBA, with a sponsor portfolio that includes Adidas (ADSG.DE), McDonalds (MCD), Wrigley, T-Mobile, and Vitaminwater. Yet, Howard lacks the widespread recognition of his counterparts. Howard's jersey was the 12th best seller in the NBA, and a recent E-Score Celebrity Poll claimed only 10% of the public knows who he is. Now that he is in the middle of his coming-out party, the more popular Howard becomes means the more merchandise revenue the Magic receive.
But the ancillary benefits of making the NBA Finals do not stop there. The Magic's new arena, slated for a 2010 opening, is still without a corporate naming rights deal. Despite being in one of the league's smallest markets, if the Magic demonstrate the potential to make future NBA Finals, the increased brand awareness could usher in an above-market-value rights contract.3. Pre-U.S. Open, PGA Tour Plays with a Purpose
As corporate sponsors have pulled out of PGA Tour events in droves this year, and attendance at most Tour events has been down, local organizers and the media alike have raised alarm bells about the disastrous effect on local charities such pullouts could cause. On the eve of the U.S. national golf championship and the second golf major of the year, the 2009 U.S. Open at New York's storied Bethpage Black, the PGA Tour is working overtime to publicize its charitable efforts and reassure communities that despite the economy, the Tour remains committed to giving back hundreds of millions of dollars each year.
In May, the PGA Tour announced plans to promote all of its charity activities under a new umbrella marketing campaign called "Together, Anything's Possible."
Last month, Augusta National announced that it plans to "make charitable donations of around" $3.4 million this year, including $1 million to the First Tee program and $1.5 million to the Community Foundation for the Central Savannah River Area. The majority of those funds, of course, come from profits from the ever-popular Masters.
On June 7, the Tour aired a special on CBS entitled PGA Tour: Playing With a Purpose, Presented by Barclays. The program outlined the Tour's various charitable causes, including the First Tee, golfer Phil Mickelson's efforts to aid the U.S. military, and charities supported by such players as David Toms and Ernie Els. (Barclays is also the title sponsor of the first event of the FedEx Cup playoffs.)
The rate of charitable giving is not limited to the main PGA Tour. The Birmingham Business Journal recently revealed that the Champions Tour Regions Charity Classic contributes at least 12% of its total revenue to charities—a rate greater than many of its peer tournaments. According to the journal, the 17-year-old golf tournament generated $5.8 million in revenue and dispersed $688,749 to Birmingham (Ala.) area charities in 2007, the most recent data available from the IRS. Other benchmark Champions Tour events across the country distributed 3% or less of their revenues to charitable causes.
The 2009 Regions tournament, according to organizers, generated $3.9 million in revenue and distributed $546,245 in charitable donations. The event cut expenses from $5.4 million in 2007 to $4.3 million this year. Despite lower turnout and the loss of a title sponsor, the event boosted its charitable donations to 14% of its 2009 revenue.
Perhaps nothing illustrates the genuine concern and dedication of the PGA Tour toward worthy causes than the outpouring of love and support for Amy Mickelson, wife of world No. 2 golfer Phil Mickelson, after she was diagnosed with breast cancer last month. At the Colonial tournament, the PGA Tour Wives Assn. worked with title sponsor Crowne Plaza to promote "Pink Out," in which players, their families, officials, fans, and even television crews wore pink in support of the Mickelsons. In addition to doing charitable outreach with the military, the couple works with Barclays (BCS) and Exxon Mobil (XOM), primary sponsors of Phil's, to advance childhood educational causes. It's a safe bet that regardless of the depths of Amy's condition, the Mickelsons will now throw their weight, and that of the Tour, behind breast cancer awareness and prevention. Look for another wave of pink at Bethpage Black.4. U.S. Open Reservations Around Bethpage Down
While the dollars the PGA Tour is able to commit to local charities remains on an upswing, apparently the disposable income of fans willing to shell out top dollar for golf's major events is down. Less than two weeks before the start of the U.S. Open, about 15% of local hotel rooms around Long Island's Bethpage Black Golf Course remained unsold. To attract last-minute golf followers, some of the hotels were removing minimum stays, while others were offering free amenities to spark sales in advance of the June 18-21 tournament.
At the Long Island Marriott in Uniondale, N.Y., Director of Sales and Marketing Tom Gundersen was quoted in Newsday as saying that there has "'just not been an explosion' of room rentals as there was" when the tournament was last held at Bethpage Black in 2002. And local Inn at Fox Hollow General Manager Franklin Manchester has noticed that fans seem to be skipping the practice rounds scheduled for the early part of the week. A key reason for the high vacancy rate? A major decline in corporate sponsorships. Newsday notes that in 2002, "78 white-linen tents housed corporate sponsors" at Bethpage; this year, "there will be 54 tents."
Meanwhile, Golfsmith (GOLF) seems undeterred by the economy. The golf merchandise retailer is running a two-week promotion around two prominent Callaway (ELY) endorsers playing in the U.S. Open: Phil Mickelson and Rocco Mediate. If either wins the tournament, Golfsmith will refund the purchase price for anyone buying "one of three Callaway drivers up until June 17." The company ran a similar promotion with Sergio Garcia and TaylorMade during the Masters earlier this spring.5. International Golf Outlook
As the golf world prepares to turn its attention to Bethpage Black, construction has begun on European Golf Design's first course in Russia. Appointed by OPIN, the Russian real estate investment and development group, the "PGA National Russia" course at Zavidovo Lake Resort will form part of the new exclusive Zavidovo Resort community 130 kilometers northwest of Moscow.
The Zavidovo development is positioned to become one of Russia's top courses, built with the purpose of hosting major golf tournaments and further promoting the game in Russia with the emphasis on juniors, elite amateurs, and future professionals. An 18-hole, 7,400-yard course and a nine-hole course will be built alongside a PGA National Golf Academy comprising an integrated short-game range, practice bays, numerous practice greens, swing studios, and a teaching facility. Five thousand residential units, two marinas, and a town center are also planned.
Zavidovo Lake Resort is the first European Golf Design project in Russia to reach the construction stage, with two other projects currently in detailed design. The first 18 holes are due to open in July 2011.
Meanwhile Down Under, before setting foot on Australian soil for the Australian Masters in November, Tiger Woods will already have cashed a paycheck more than 10 times greater than the first-place check of $270,000 via a whopping $3 million appearance fee. However, ticket sales alone are predicted to cover the cost of convincing him to play at Kingston Heath in Melbourne.
Organizers predict Woods' visit will generate $19 million in economic benefits to the state. A daily crowd limit of 20,000 has been set to make the event more manageable, allowing 80,000 tickets in total. Mindful of the economy, ticket prices have been set at AU$44 for the first three days of the competition, rising to AU$49 for the Sunday final round. (IMG was keen to avoid a repeat of the fiasco at the New Zealand Open in 2002, when promoters lost millions of dollars after paying a big appearance fee to Woods and hiking the ticket price up to NZ$450 (AU$360) on the final day.) Australia's three commercial television networks, however, have turned their backs on Woods because IMG is also demanding a $3 million fee to cover him. Fans will therefore watch coverage on pay television, most likely Fox Sports.6. Jersey Girls (and Guys) Part II
Add another WNBA team to the list of those with a corporate jersey sponsor. On the eve of a new WNBA season, the Los Angeles Sparks agreed to a multiyear deal with Farmers Insurance to put the company's logo on their jersey and display it around Staples Center. Terms were not disclosed.
In a parallel move, various NFL teams, including the Houston Texans and Green Bay Packers, are trying to sell sponsorship patches on their practice jerseys, a move allowed under a new league rule passed this offseason. And at least two MLB teams are rumored to be considering the same.
Understandably, the Sparks received far less publicity for their deal than their Phoenix counterparts, who ventured into previously uncharted territory with their own jersey deal earlier in the week. Few things have the ability to spread a message like a corporate logo on a top athlete can. Whether it's the Sparks or the Packers, a sponsorship deal will instantly enhance brand awareness. Now the only thing left for the Sparks to do is console recent Candace Parker jersey buyers, who shelled out $50 for the league's best-selling, and now most outdated, jersey in the league.7. Soccer's Biggest Shirt Sponsorship Signed
Manchester United has just signed a new four-year shirt sponsorship deal with Chicago-based insurance firm Aon Corp. (AOC). The deal is worth £80 million, making it the biggest such deal in football history. United will begin wearing the shirts at the start of the 2010-2011 season.
United had been searching for a replacement since the team's current sponsor, American insurance company AIG (AIG), announced it would not renew its £14 million-per-year deal when it expires at the end of the 2009-2010 season. United had also talked with Indian financial-services company Sahara and telecommunications firm Saudi Telecom.
Aon employs 37,000 staff around the world, in 500 offices in 120 countries, and acts as a consultant on pension, employment, and risk management issues in addition to selling insurance. Its 2008 revenues reached $7.6 billion. Although Aon has been less affected by the down economy than many other global financial-service providers, the company defended the deal during a period in which it has cut pension benefits for 5,400 British staff.8. Suite Deal: The Cost of Suites at New York's Newest Stadiums
The New York Red Bulls recently announced luxury box prices for their new soccer stadium, slated to open for the 2010 MLS season. Relative to the four other venues recently built or under construction in the New York metropolitan area, Red Bull Arena is the best deal. Here are the annual prices for the most expensive suites at New York's five new stadiums:
1. New Meadowlands Stadium, $1,000,000
2. Yankee Stadium, $800,000
3. Barclays Center, $540,000
4. Citi Field, $500,000
5. Red Bull Arena, $75,0009. If It's MLB Draft Day, It Must be…Moneyball, the Movie?
As the country's top amateur baseball players prepare to meet their new employers following the June 9 MLB draft, it's appropriate that Brad Pitt and director Steven Soderbergh are busy preparing for the first day of shooting Moneyball, the movie.
The $57 million cinematic version of Michael Lewis' best-selling book, about how Oakland A's General Manager Billy Beane, through sabermetrics, upended the conventional wisdom of how baseball evaluates athletic talent, was green-lighted last year. Sony (SNE) took on the project after virtually every other studio in town had turned it down. Even though it's certainly not a standard Hollywood production—as Los Angeles Times film critic Patrick Goldstein puts it, "the saga has no love story, no real villains, and lots of wonky baseball chatter"—the intriguing storyline and the persona of the rebellious Beane attracted the attention of Soderbergh and Pitt, respectively.
From Goldstein's perspective, the final script stays "amazingly" true to the book—another anomaly in Hollywood. Soderbergh is so adamant about sticking to the tone and texture of the book, Goldstein says, that he has recruited many of the actual characters involved with the 2002-era events—including Oakland A's manager Art Howe, catcher-turned-first baseman Scott Hatteberg, and outfielder David Justice—to play themselves.