Bust, Boom, and Hope: December 9, 2013

Bust, Boom, Hope: Basketball


Bust: Adidas might need to find a new signature basketball endorser after Chicago Bulls star Derrick Rose was lost for the rest of the season to injury. Since receiving a 13-year, $185 million endorsement deal in February 2012, Rose has missed the better part of two full seasons due to knee surgeries.


Boom: The Miami Heat became the third NBA team to sign a floor apron sponsorship, agreeing to a deal with league partner Samsung. Terms of the deal were not disclosed, but no NBA team is selling the inventory for less than $1 million annually, with bigger market teams seeking $3 million per year.


Hope: The Milwaukee Bucks held a "Black Friday" sale offering a ticket package for the entire second half of the season for just $99. The deal, which sold out, included tickets for 26 games. The Bucks currently rank 27th out of 30 teams in home attendance.


What it means: Aside from two straight NBA titles, how much does LeBron James mean to the Heat’s bottom line? Miami probably never gets its deal with Samsung if not for King James. LeBron is Samsung’s biggest endorser, and a sponsorship deal with the Heat is a natural extension of their partnership with the NBA’s best player.



Bust, Boom, Hope: Hockey


Bust: Current Canadian NHL rights holder TSN could see a significant drop in ad revenue and subscriber fees after the league agreed to an exclusive TV deal with Rogers Communications. TSN had built much of its programming and operations around having NHL rights.


Boom: The NHL’s deal with Rogers is for 12 years and is worth a total of $4.9 billion. This is in addition to the 10-year, $2 billion contract the NHL signed with NBC for U.S. TV rights last year. At $408 million, the deal with Rogers dwarfs the NHL’s expiring TV deal with TSN, which is worth $170 million annually.


Hope: L’Oreal’s men’s brand signed a three-year partnership with the NHL, marking the company’s first foray into sports marketing. Per the agreement, L’Oreal will serve as presenting sponsor of an exclusive video series on NHL.com and will activate the partnership in retail stores.


What it means: The TV deal with Rogers is a testament to how powerful the NHL is in Canada. Despite Canada’s population being one-tenth that of the United States, its national NHL TV deal is worth more than twice as much per year. With how powerful the NHL is, Rogers’ gain is TSN’s loss.



Bust, Boom, Hope: Baseball


Bust: Cable TV providers already are balking at Time Warner Cable’s expected asking price to carry the Los Angeles Dodgers’ new sports network, which doesn’t even launch until next season. TWC is seeking $5 a month per subscriber, a total that could reach a record $8 a month over the next five years.


Boom: The Cobb County Board of Commissioners officially approved $300 million in public money to help fund a new Atlanta Braves stadium. The Braves will privately finance the rest of the proposed $672 million stadium, in addition to an accompanying $400 million mixed-use development.


Hope: The city of Chicago is considering a new proposal allowing sports teams to sell alcohol in plazas next to stadiums. While the ordinance would extend to Soldier Field and U.S. Cellular Field, the focus is on Wrigley Field. Chicago Mayor Rahm Emanuel supports the plan because of the Ricketts family’s commitment to fund Wrigley Field renovations.


What it means: The primary reason the Dodgers got an $8 billion TV deal was TWC’s plan to pass the cost on to consumers. However, as the government seeks to curb rising cable TV prices, its no surprise cable providers are adamantly opposed to such record subscriber fees.



Bust, Boom, Hope: Football


Bust: The Buffalo Bills last weekend drew less than 40,000 fans to their annual Toronto Series game, by far the smallest turnout since the Bills began playing across the border in 2008. Despite rumors that the Bills could relocate to Toronto, a recent survey indicated that a majority of Canadians don’t want a permanent NFL team in Canada.


Boom: At a cost of $70 million, February’s Super Bowl at MetLife Stadium in New Jersey will be the most expensive in league history, according to NFL officials. By comparison, last year’s Super Bowl in New Orleans cost $13 million, while the 2011 Super Bowl in Dallas cost $38 million.


Hope: FOX Deportes will be the first U.S Spanish-language network to broadcast the Super Bowl after reaching an agreement with the NFL. Under the two-year deal, FOX Deportes will broadcast a handful of regular and postseason NFL games that FOX already has rights to.


What it means: Super Bowl host committees make most of their money from sponsors and donations. While the NFL bears the expenses around the game itself, host committees are responsible for supporting costs such as promotional events, security, and guest services. This Super Bowl’s high cost is due to the extravagance of the game being held outside New York City.



Bust, Boom, Hope: Soccer


Bust: A crane collapse at the under construction Brazilian stadium that will host the opening World Cup match will delay the building’s completion until February. Even before the crane’s collapse, World Cup organizers were concerned about finishing all 12 venues by a FIFA-imposed end-of-December deadline.


Boom: The average MLS franchise is worth $103 million, up more than 175% over the last five years, according to an annual study by Forbes. Eight of the league’s 19 teams are worth more than $100 million, with the Seattle Sounders MLS’s most valuable franchise at $175 million.


Hope: David Beckham is eyeing PortMiami as his top location to build a MLS stadium. While Miami-Dade wouldn’t fund construction, the county could lease land at the port to Beckham’s franchise, which would then build a stadium itself. Beckham hopes to announce an expansion team by the New Year.


What it means: FIFA and the Brazilian government has since extended to February 2014 the delivery dates for two World Cup stadiums, including the one where the crane collapsed. Given the issues in Brazil, and concerns about stadium in Qatar for 2022, expect FIFA to award future World Cups to countries with existing facilities.

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