Sports Business '15 to Watch': NFL, taxes and troops


1. NFL teams reportedly received millions of tax dollars to hold military tributes at games. From 2011 to 2014, the government paid $5.4 million to 14 NFL teams for what it termed advertising and recruiting tactics. Senator John McCain called the teams disgraceful for taking military money. Probably since the Ray Rice incident, NFL has almost morphed into “perception becoming reality.” Image issues regarding domestic abuse and other off-field issues expand into Deflategate on the field; expanding further into NFL tax exempt status and military sponsorships off the field again. Despite that, NFL continues on track to reach its $25 billion annual goal that Roger Goodell had set as a target before the end of the labor agreement.

2. Online retailers are seeing a major spike in sales of Tom Brady’s number 12 jerseys since the New England Patriots QB was suspended for his role in Deflategate. Brady merchandise on has increased 100% following the release of the Wells Report. Clear unintended consequence of Deflategate. Surely, Tom Brady and the Patriots would trade increased merchandise sales for an uneventful off-season!

3. Major news on the international front. FedEx signed a three-year deal to become the main sponsor of the Europa League starting with the 2015-16 season. Valued in the high-seven figures annually, the deal is among the company’s biggest sports sponsorships after the PGA Tour’s FedEx Cup, and is its biggest global soccer partnership. With the FBI investigating FIFA for corruption issues related to the 2018 and 2022 World Cup bidding process, FIFA President Sepp Blatter reportedly is too afraid to enter the U.S. According to ESPN’s Jeremy Schaap, the last time Blatter stepped foot on American soil was in 2011. One clear lesson: international futbol is an incredibly valuable property (my week-long trip to Germany last week validates that in all contexts). The controversy, uncertainty, and turbulence just adds to the dramatic impact of the world’s most valuable international sport.

4. Fans, television, and marketers getting ready for the year’s second major – the French Open. The economics of tennis will take center stage for four of the next seven weeks. Another big event for the mega agencies. Lagardere Unlimited: Andy Murray is the 3-seed in Paris, and will likely only have to face one other “Big Four” player at Roland Garros. On the women's tennis front, Lagardere boasts 2 of the world's current Top Ten players headed into the second major of the year at Roland Garros, world no. 7 Caroline Wozniacki and no. 9 Ekaterina Makarova. As tennis season hits its stride, major corporate marketers and executives use Paris/London as the epicenter of the tennis business world from May through early July. Nearly 75 percent of all major deals are discussed and negotiated during this period on an annual basis.

5. Banner week heading into the Indy 500 at Indianapolis Motor Speedway and the Charlotte NASCAR race. Sponsors identify this week as a major “activation period” tied to the three-day Memorial Day weekend. Economic impact for Central Indiana and the Carolinas approaches nearly $1 billion – fans with multiple hotel day stays; major corporate meetings; unprecedented television awareness – all adds up to banner weeks for two racing hotbeds.

6. MLB Advanced Media has reached an agreement with Snapchat to create regular, curated content on the popular mobile app. The deal does not involve any money changing hands, but does help put MLB content in front of younger fans. Snapchat has also worked on initiatives with the NBA, NFL, and ESPN. MLBAM continues to blaze an entrepreneurial social media trail – one of the reasons it is the most valuable of all Internet properties in any of the leagues.

7. Average attendance at FBS college football games in 2014 was 44,603 fans, down 2.3%, or more than 1,000 fans per game from the previous season. The total marks the worst average attendance for FBS schools since 2003. A poor season resulted in Michigan losing the attendance title for only the second time since 1974. Attendance might have been down, but excitement, awareness, and viewership surely increased thanks to the first year of the College Football Playoff. With 42 bowls scheduled next year, have we reached the saturation point? Of course not.

8. As originally reported by The Coloradoan, but in an article found and accessed from the Sportsmanias app, the site that provides fans with real-time information on their favorite teams, Colorado State is using the $7 million buyout it received when the University of Florida hired Jim McElwain to fund cost of attendance scholarships of student-athletes. The buyout will cover the cost of attendance stipends for the next three-to-five years. As the Five Power Conferences identify their respective governance structures, schools begin the process of using economics as a recruiting advantage – complete scholarships, stipends, etc. in the hopes of luring high school superstars. Just the tip of the iceberg.

9. New York Giants WR Odell Beckham was named the winner of the cover vote for EA Sports’ upcoming “Madden NFL 16” video game. Beckham garnered 52.5% of the final vote against New England Patriots TE Rob Gronkowski, becoming the first Giants player and the youngest player ever to appear on the cover of Madden. Freakish receiver, major media market, young superstar – all elements incredibly important to EA and NFL demographics.

10. As originally reported by The Tacoma News Tribune, but in an article found and accessed from the Sportsmanias app, the site that provides fans with real-time information on their favorite teams, the Pac-12 Conference announced plans to play a second basketball game in Shanghai in 2016. The conference also has agreed to a two-year deal with Chinese e-commerce giant Alibaba Group to sponsor the Pac-12 China Games in Shanghai in 2015 and 2016. Commissioner Larry Scott undertakes original groundwork in China two years ahead of his college counterparts. The homework clearly paying off – even if the games get fairly little market share. Places the Pac-12 ahead in the “race for new revenue.”

11. Former baseball star Barry Bonds plans on suing MLB, claiming collusion by team owners ended his playing career in 2007. Bonds has long considered taking action against MLB, but postponed filing a lawsuit until his legal issues related to the BALCO case were resolved. Apparently, Bonds feels he is cleared in the “court of public opinion” in order to file this type of lawsuit at this time. Another example of how difficult it will ultimately be to completely remove the “steroid era” from all aspects of the Manfred administration.

12. Michael Jordan is taking his trademark dispute with a Chinese sports firm to China's supreme court. Jordan sued Qiaodan Sports in 2012, saying the sportswear firm built its business around his Chinese name and “23” jersey number without his permission. Just as the Pac-12 seeks revenue in China (see above), Jordan is “lawyering up” to protect his rights in the uncharted waters of Chinese trademark infringement. The “Wild West” meets the Far East.

13. Hot starts for the New York Mets, New York Yankees, and Chicago Cubs have resulted in good TV ratings and profitable broadcasts for Tribune Co. The media conglomerate has a positive outlook for this year's second and third quarters, when the full impact of baseball will hit the bottom line of stations in New York and Chicago. Baseball values up nearly 30 percent, television ratings increase, major market teams performing, games shortening, weather improving – Rob Manfred should sleep well at night.

14. Golden State Warriors make a dynamic run to the NBA Western Conference Finals. At the same time, California Governor Jerry Brown has granted a fast-track environmental review for the Golden State Warriors’ proposed arena. If approved, the $500 million, 18,000-seat arena would be entirely privately financed, and would open in time for the 2018-19 NBA season. Any San Francisco Bay-based waterfront development borders on politically impossible. However, the Warriors performance, coupled with an enlightened plan developed by key industry professionals, may actually merit final approval as rapidly as possible.

15. Turner Sports has signed multi-year contract extensions with “Inside The NBA” studio talent Ernie Johnson, Charles Barkley, Kenny Smith and Shaquille O'Neal. The extensions are for eight to ten years each and are designed to line up with Turner's NBA rights that last through the 2025 season. Probably among the most identified “brand announcers” in the history of all sports television – much of the NBA increase in television value comes from the dynamic interplay between these television professionals (assuming Charles Barkley can be referred to as a “television professional”).

Contact Us