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How Do Penn State Corporate Partners Respond?

November 11, 2011 - 0 comments

We have all been shocked and disgusted by the horrible tragedy that is playing out at Penn State. Now, especially prior to the game on Saturday, all of the corporate supporters of the PSU football program have to ask themselves the following questions: What do we do? What is the appropriate response? How, or is it even possible, to separate our support of the football program from the reprehensible actions of one of its employees?

These are not easy questions and there are no easy answers. Some partners may elect to discontinue their relationship. Others, and it will probably be the majority, will maintain their support, while looking to put that support in perspective. But all corporate partners need to respond in some way. A good starting point might be to revisit the reasons for making such a commitment to Penn State in the first place. Such as aligning their brand with a football program that represented so many positive attributes; that succeeded in a big way by doing things the “right way”. It would also be a good time to listen to their customers: what are they saying through e-mail, website comments, social networks?

But after everything is considered, they have to act.

Each partner needs to acknowledge the recent events and clearly articulate why they have elected to continue or discontinue their support. Either way, they must explain their actions and the reasons behind them. Hopefully, at least some partners will also choose to announce support for groups that assist victims and their families in dealing with the terrible consequences of such unspeakable crimes.

In the end, all Penn State corporate partners need to demonstrate that they consulted their constituencies, carefully weighed all of their options, made a decision, were transparent about the decision-making process and, most importantly, did what they believed to be the right thing.

Collegiate Conference Realignment: What Happens Next? (And Why.)

September 29, 2011 - 0 comments

What seemed to be the inevitable rush to 4 16-member Super Conferences has slowed down recently, but there are still changes coming; and sooner rather than later. And here’s why.
But first let’s review…this is what we know for sure:

With the addition of Syracuse & Pitt, the ACC is going to 14 schools, but is not opposed to adding 2 more.

The SEC, by adding Texas A&M, is going to 13 schools, but may need to add 1 more for short term scheduling purposes, and eventually may prefer another 2 for a total of 16.

The Big 12, which seemed on the verge of extinction 2 weeks ago, apparently has dodged another bullet, but still needs to add at least one school to replace Texas A&M. (And that’s assuming it can keep the other 9 schools happy & committed to the conference.)

Whatever the outcome of the current situation in the Big 12 will determine the next dominoes to fall. And it will happen soon because conference leadership is pressuring each member school to re-commit to the Big 12, including assignment of media rights for 6 years.

So if you are a Big 12 school that is not sold on the long term viability of your conference (like Missouri), and long for the stability and prestige (and did we mention the much higher pay out) of the SEC, you will need to make your move soon. And it becomes even more time sensitive with the fact that other schools may covet the same spot you are angling for (like West Virginia of the Big East). And of course, the SEC knows all this. So, something should happen, and soon. And in either the Missouri or West Virginia scenario, more dominoes will fall.

If Missouri goes to the SEC, the Big 12 still survives (and will as long as Texas and Oklahoma call that conference home), but will now need to add at least 2 more schools. Where will they come from? In every scenario, at least 1 of the new schools would come from the Big East (probably West Virginia). And that will effectively kill the Big East.
If West Virginia goes to the SEC, it obviously results in the same outcome: the end of the Big East.

And to complicate things even more, you have the Big East schools that are unabashedly lobbying for ACC membership: Connecticut and Rutgers. The ACC could add both and be set for the foreseeable future. Result: see above. But the ACC is willing to wait for the really big fish that’s still out there: Notre Dame. And yes, you guessed it, the Irish are also in the Big East, just not for football. If this unlikely scenario were to play out, the ACC would grab Notre Dame without hesitation and also add a 16th member at the same time; probably UConn. This movement would produce yet another set of circumstances that would prove fatal to the Big East.

So, we look for Missouri and West Virginia to push (and hard) for SEC membership before they are forced to commit long-term to their current respective conferences. If the SEC takes either one, the implications will be far-reaching and will most likely result in the demise of the Big East Conference and set off another round of conference musical chairs.

What do you think?

Until next time…

Welcome Winnipeg…Now What?

June 17, 2011 - 0 comments

The relocation of the Atlanta Thrashers will have repercussions that are felt well beyond Peachtree Street.
Because of the timing of the move, the Winnipeg franchise (Jets? Moose?), will still be members of the Southeast Division for the upcoming season.
All of a sudden, back-to-back divisional games look a little different when you’re flying back from Manitoba instead of Georgia. And Southeast teams will have to play there four times each; that will tend to mess with the travel budget a little.
But the real fireworks will come from the debate over long-term realignment. The first two steps in this process are fairly easy and shouldn’t result in much drama: Winnipeg goes to the Northwest, Minnesota moves from the Northwest to the Central. It’s the next step that will be controversial: who moves from the Central to the Southeast? The discussion has focused on three teams: Detroit, Nashville and Columbus. Let’s look at each candidate:

Detroit – Original Six team with great tradition and enormous drawing power across the league. Team has wanted to return to the Eastern Conference for years (they’re in the eastern time zone) and was supposedly given first dibs on such a move as a condition of the last realignment. While the Southeast teams would love this, it’s unlikely to happen because the Western Conference teams would put up a huge fight to keep their 2 to 4 sell-outs a year.

Nashville – Would seem to be a good geographic fit, especially with Carolina. Wouldn’t create a lot of controversy on either side. Only drawback is Nashville is central time zone.

Columbus – The team that the Western Conference would most easily agree to part with. On the other hand, the Southeast teams would complain that this move is the worst of both worlds for them: no regional rivalry to be built upon and no tradition or displaced fan base to draw on.

Bottom line, this one is too close to call. But you can bet on one thing: if Detroit moves, an overhaul of the scheduling process will be part of any deal.

See you next time.

Who Wins Most by Assuming RBC Center Naming Rights?

May 10, 2011 - 0 comments

More today about the possibility of Royal Bank of Canada selling its U.S. operations: http://www.newsobserver.com/2011/05/10/1187217/what-suitors-could-gain-in-deal.html

Nowhere in this article did it mention the implications for the RBC Center or how that might factor as a “gain” for either of the two rumored suitors. So, why don’t we give it a shot ourselves?

First, BB&T:

Already enjoys strong brand recognition in the region.
Already a major regional sports sponsor; recently became the Official Bank of the ACC.
Already has the naming rights for a major sports facility in the area (Wake Forest Football’s BB&T Field in Winston-Salem).

Now, PNC:

Does not have a presence in the region.
Does have a history of major investments in sports sponsorship including the University of Michigan, Cincinnati Reds, Washington Nationals and Pittsburgh Pirates.
Already has the naming rights for a major sports facility (PNC Park, home of the Pirates)

So based on our list, it would seem that PNC would realize much greater brand building benefits in assuming the naming rights to the RBC Center. How much of a factor this might play in any acquisition scenario remains to be seen, but I think we have a pretty good idea as to which suitor would put the higher premium on the naming rights.

Thanks and see you next time.

Winners and Losers from Pac-10 TV Deal

May 4, 2011 - 0 comments

In our last blog, we used the recent announcement of a new NHL TV agreement as an example of the seemingly insatiable appetite for sports programming. And we tried to give some context as to why this is the case as well as list some of the forces that are driving these prices higher and higher.
Now there’s a new record breaker: the Pac-10′s 12-year, $2.7B deal with FOX and ESPN. This means the Pac-10 is quadrupling the size of its last deal, going from an also-ran to the collegiate leader in TV revenue. If that’s not enough, they also reserve the right to start their own dedicated cable channel, and retain complete ownership. A Pac-10 Network represents another huge revenue stream, worth potentially hundreds of millions of dollars from subscriber fees alone, all of it going directly to the conference. But wait, there’s more; the Pac-10 will also create a digital channel, similar to ESPN 3, that will carry up to 500 events annually. Who knows what upside potential that has in an increasingly digital future.

So, after the dust clears, who are the big winners and losers in all of this? Here are our nominees:

WINNERS

The Pac-10 (duh).

Larry Scott, Pac-10 Commissioner. The new commissioner, who was brought in specifically to increase revenue, got off to a rough start with his unsuccessful attempt to lure Texas, Oklahoma and other Big 12 schools and create a Super Conference with 16 members. At the time, there were reports that he tried to switch out one of the Texas schools for Kansas at the last minute and that blew up the deal. So, instead, the conference had to settle with expanding to 12 schools by adding Colorado and Utah. And many observers thought this might actually result in subtraction by addition, questioning those schools’ ability to offset the need to now split conference revenue 12 ways. With the sheer scope of this deal, Larry Scott (and his vision) have been vindicated; and in a big way.
Colorado and Utah. When the Big 12 recently announced its own new lucrative TV deal, many questioned whether these schools had made a mistake in leaving. As it turns out, each school will be receiving over twice as much in TV revenue as they would have in the Big 12.
ESPN and FOX. They hold serve, protecting a valuable asset. ESPN maintains a major content source in the Pacific Time Zone, thus providing natural fits for those late night time slots over its multiple platforms. FOX maintains a foothold in college football, an area in which they would like to grow their portfolio and holds on to Pac-10 basketball which will help offset the loss of ACC hoops.

LOSERS

Comcast/NBC. Fresh off their success at hanging on to the NHL, they fail in securing an additional asset for the new NBC Sports Group. The soon-to-be-rebranded Versus can’t hope to compete with ESPN with a line-up consisting primarily of hockey and fringe sports. Plus, the numbers on this deal will only increase the expectations of the IOC as Comcast/NBC begins negotiations for the ’14 and ’16 Olympics.
Oklahoma and the “other” Texas schools in the Big 12. They stayed largely because Texas did. But Texas stayed because the Big 12 gave them the right to start their own dedicated network. (For which, ESPN will pay UT $15M per year.) So now Oklahoma, Texas A&M, Texas Tech and Baylor will receive significantly less per year than they would have, even in a mega Pac-16.

So that’s our take. Let us know if you agree or disagree. Either way, we’d like to hear your thoughts.

See you next time.

Sports TV Rights Have Never Been Hotter

April 20, 2011 - 0 comments

The NHL just renewed it’s partnership with Comcast NBC, agreeing to a 10 year deal worth a reported $2B. This number would almost triple the current TV revenue the league receives.
This comes shortly after FOX announced a new 13 year agreement with the Big 12 Conference worth $1.17B. This more than quadruples the current TV revenue, even though conference membership has been reduced by two.

Now there is much speculation as to how much the upcoming Pac 12 Conference rights will command.

So what’s behind this incredible run-up in the perceived value of TV sports rights?

Here are a few good reasons:

The rights conveyed by these deals now consist of an array of assets, including mobile and broadband. This provides content for multiple platforms and allows the rightsholder the opportunity to monetize their investment over various channels.
As viewing choices increase exponentially, audiences continue to fragment and DVRs make time shifted viewing more the norm, major sports events are one of the few programming options that still consistently deliver live-view mass audiences.
With media consolidation, the traditional broadcast networks now have access to a second revenue stream via their new cable channels. For example, NBC no longer has to rely purely on advertising revenue to support the acquisition of a sports property. They now have the subscriber revenue that Versus receives from the cable and satellite providers. This advantage is why more and more major events have been going to cable recently. Simply put, the big cable channels have more money to acquire the content. Then the cycle kicks in; as a result of this programming, they get more viewers, which means more advertising revenue and even higher sub fees from the cable and satellite providers. And the cable competitive advantage continues to grow.
With both the NFL and NBA facing potential work stoppages, the current rightsholders for those leagues are looking for additional sports programming that can provide them with lockout “insurance”. This means there are several major players that might not ordinarily be in the market now, but are looking at other properties as a possible replacement for lost sports inventory. And the NFL/NBA seasons line up perfectly with college sports (football and basketball) and the NHL.

There are certainly other factors at work here, but this is a good place to start. Bottom line is, if you are college conference, this is a great time to be shopping for a new TV deal.

See you next time.

Make No Mistake, Football is King in College $port$

April 17, 2011 - 1 comments

Even though it’s not on most sports fans’ radar, there is yet another potential college conference realignment drama brewing.
This one comes from the Big East, and of course, it’s about football (which translates to being about money).
Let’s recap:

This past summer, Villanova, a member of the Big East since 1980, was told that the conference would be interested in adding the Wildcats as a football member if the school chose to upgrade it’s program to the FBS level. The Athletic Director responded that the school needed to evaluate the opportunity and perform due diligence.

During the interim, things started to get a little weird. First, TCU gets invited to become a full-member of the conference (and 9th football school) and immediately accepts. Then in January, with no word yet from ‘Nova, the Big East goes on record as saying the invitation is not open-ended. All the while, other football programs like Central Florida, East Carolina, Memphis, etc., that don’t belong to automatic bid conferences, are vying to be the Big East’s date for the BCS prom.

Which brings us to a few days ago when news leaks that Villanova is ready to accept and will schedule a Board of Trustees vote on the matter pending an official Big East invitation. Except no such invitation is issued. In fact, we start hearing that certain Big East football schools were never very comfortable with the concept of adding Villanova in the first place.

What does this all mean? First, it appears that the Big East football schools are now using their majority (thanks to TCU) to steer the conference in a more “football friendly” direction; even if that means the possibility of kicking a long-time conference member to the curb.

Ultimately, this will likely result in the football schools leaving the Big East to form their own conference. Then, if they want a Philadelphia member, they can go “Back to the Future” and invite Temple for a second shot at the BCS big time. What makes Temple a better fit than Villanova? For one, some recent success at the FBS level. For another (and more important from, what else, a financial standpoint), Temple plays their home games at an NFL stadium (Lincoln Financial Field), while ‘Nova will play at PPL Park, an MLS facility with a current capacity of just over 18,000. Enough said.

And of course the Big East renegades can always fill out the field (12 being the minimum for a conference championship game) with two of those desperate schools listed above. What happens to the remaining (Not So) Big East members? They are left to fend for themselves, but would likely align with the likes of an Atlantic 10 or Conference USA to form a single (and solid) basketball-focused league. Kind of where the Big East started in the first place, before football began determining the future of the college sports landscape.

Texas A&M Not the Only Winner at the Women’s Final Four

April 6, 2011 - 0 comments

A brief follow up to our most recent entry.
Congratulations to our client SignalShare. They are wrapping things up at Conseco Fieldhouse for the Women’s Final Four.
Two observations on their work:
An NCAA representative said that this was the quality of Wi-Fi they would expect for all future championship events.
And even better, from a Sports Illustrated photographer…”I have done 25 Super Bowls and 11 Olympics in 140 countries and this was simply the best,
most consistent wi-fi and connectivity I have ever had”.
Great job, well done!

The Way We Watch Our Games: Getting Better All The Time

March 30, 2011 - 0 comments

A recent article by Chris Conway in sportsnetworker.com reminded us yet again how quickly our sports viewing experience is being enhanced through technology.
The one thing we would add is that, while Chris focused exclusively on sports on TV and the rapidly growing fantasy market , the in-venue experience is also changing; maybe even faster than at home.
And we say that from a unique perspective. We are fortunate to represent not one, but two, clients that are helping us enjoy our sports experience like never before.
Signal, Inc. is a marketing firm that specializes in technology. One of their core strengths is the development of mobile apps. They currently have one on the drawing board that will provide any sports venue the opportunity to provide it’s fans with a true interactive platform at a fraction of the cost of most existing sports-related apps.
SignalShare (no relation), provides the Wi-Fi infrastructure that allows fans to not only get the performance they expect from their smartphones at the game, but to access additional team-generated digital content as well. This not only makes for a better fan experience, it also provides teams and venues with the the ability to learn more about their ticket holders and develop additional revenue streams.

Great stuff, and we know even more enhancements are on the way. We can’t wait.

See you next time.

Been There, Done That (Unfortunately)

March 22, 2011 - 0 comments

I just saw Jonathan Kraft’s comments on why the Patriots are requiring their season ticket holders to be paid in full by March 31.
The Steelers are taking a similar approach, conducting “…business as usual with tickets.” according to team president Art Rooney II.

Well, we hate to break it to everyone, but this year IS NOT business as usual in the NFL. And trying to position it as such with your fans is only going to cause you problems, big problems.
Now we certainly are not trying to tell those teams how to conduct their business; they are among the most highly respected organizations in the entire sports industry. But when it comes to operating the business side of a sports team during a work stoppage, we speak from experience. We actually went through the terrible NHL Lockout of 2004-05 that claimed the entire season.

And if we learned anything during that time, it was this: when you communicate with your fans, especially your season ticket holders, how you communicate is just as important as the message itself. For example, I can assure you that saying you need all of their season ticket money by the usual deadline so that you can meet some arbitrary printing and shipping schedules will not help your position. In fact, you run the risk of being perceived as completely insensitive to the concerns of your best customers.

Especially in the age of social media, when it has never been easier to conduct a true dialogue with the vast majority of your fan base, it is imperative that every communication be considered carefully and should meet the following criteria:

That it supports and further articulates your position on the issue.
That it’s consistent with your overall communication strategy.
Most importantly, that it conveys you understand and can empathize with the special circumstances this situation has created for your fans. Simply, you’re on their side.

So, here’s hoping that the NFL is able to learn from the NHL’s mistakes and that this impasse is resolved sooner rather than later. For everyone’s sake, but most especially the fans.

See you next time.