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Bust, Boom, and Hope: Golf, MLB, NBA, NHL, Auto Racing

By Rick Horrow and Karla Swatek

January 25, 2013

Bust, Boom, Hope: Golf

Bust: Rory McIlroy, who recently signed a 10-year, $250 million endorsement deal with Nike, has reverted to using a Titleist putter after struggling with a Nike one. McIlroy’s agent said the golfer will work his new clubs in gradually, but the highly publicized switch isn’t the best way to start a lucrative endorsement deal.

Boom: MasterCard has renewed its longstanding partnership with the PGA Tour in a four-year deal valued at $5-7 million annually. The company also pays $8 million a season to be the presenting sponsor of the Arnold Palmer Invitational, bringing its total golf spend to $13-15 million per year.

Hope: The PGA Tour this season will begin simulcasting most of its tournaments online for free. The Tour made sure to include digital rights in its most recent TV rights deals with CBS and NBC, which begin this season and run through 2021.

What it means: It’s understandable that McIlroy would need some time adjusting to a new set of clubs, which is why he should have gradually worked his way into them before the Nike deal was signed. Temporarily reverting to the Titleist putter makes Nike look inferior.


Bust, Boom, Hope: MLB

Bust: The Milwaukee Brewers this season will reduce their payroll by more than 20% from last year, marking the first time in Mark Attanasio’s nine-year tenure as owner that the payroll has declined. The Brewers attributed the decline to several reasons, including the desire for payroll flexibility.

Boom: Time Warner Cable reportedly has agreed to pay the Los Angeles Dodgers $7-8 billion over the next 20 years for the local TV rights to the team’s games. As part of the deal, the two sides will create a new Dodgers-dedicated TV channel, which will launch in time for the 2014 season. The deal is the richest for local TV rights in MLB history.

Hope: The city of Chicago is considering easing landmark restrictions for Wrigley Field to allow the Cubs to move forward with plans for $300 million in renovations. Because Wrigley Field is a historic landmark, the building has limits on how many advertisements and sponsorships it can have.

What it means: A big reason the Dodgers sold for $2.15 billion last year was the expectation of a large TV rights deal. To put the magnitude of the deal into perspective, the Dodgers’ current TV deal pays them $39 million this year. When the new agreement goes into effect, the team will get $350 million annually before revenue sharing.


Bust, Boom, Hope: NBA

Bust: Brooklyn Nets star Deron Williams called for NBPA Executive Director Billy Hunter to resign or be fired after an independent report unveiled questionable handling of the union’s finances. The report also found that Hunter’s 2010 $18 million contract extension was not approved by the 30 team reps.

Boom: The Maloof family has agreed to sell 65% of the Sacramento Kings to Chris Hansen and Steve Ballmer for $340 million, paving the way for the team to relocate to Seattle. Assuming the purchase is approved by the NBA’s Board of Governors, Seattle will begin construction of a new $490 million arena.

Hope: After months of speculation, the New Orleans Hornets officially announced they’re changing their nickname to the Pelicans. The Hornets have been planning a rebranding since Tom Benson bought the team last April. The pelican is Louisiana’s state bird.

What it means: Penguins co-Owner Ron Burkle and 24-Hour Fitness co-Founder Mark Mastrov are putting together an ownership group interested in keeping the Kings in Sacramento. While it’s not out of the question that the Kings could be saved, at this point, it looks like a move to Seattle is the most likely scenario.


Bust, Boom, Hope: NHL

Bust: Boston Bruins owner Jeremy Jacobs criticized the NHLPA and its Executive Director Donald Fehr for the slow pace of CBA negotiations and for losing half the season to a lockout. Jacobs, who chair’s the NHL’s Board of Governors, characterized the final labor agreement as having no winner and no losers.

Boom: Enterprise Rent-A-Car signed a three-year extension of its sponsorship agreement with the NHL. The original deal expired after last season, but the car rental company was waiting for the lockout to end before renewing. Enterprise this year plans on making a sizable ad buy across the league’s TV partners.

Hope: NHL teams turned to creative promotions to welcome their fans back after the lockout claimed 40% of the regular season. The Chicago Blackhawks gave away 1,000 autographed jerseys, while the Florida Panthers introduced the team’s original season ticket holders along with players on opening night.

What it means: Even though Enterprise knew it was renewing, waiting until after the lockout demonstrates just one way the NHL lost money in missing games. Not only did the league miss out on some sponsorship revenue, but Enterprise also missed out on four months worth of marketing and activation opportunities.


Bust, Boom, Hope: Auto Racing

Bust: Andretti Autosport owner Michael Andretti is concerned about IndyCar’s Toronto doubleheader because he believes it will be too taxing on everyone involved. The doubleheader will feature two full-length races over the July 12-14 weekend.

Boom: NASCAR and ExxonMobil signed a multiyear extension of their partnership, keeping Mobil 1 Synthetic as the Official Motor Oil of NASCAR through 2017. Terms of the deal weren’t disclosed, but Mobil 1’s previous agreement was worth $1.5 million annually.

Hope: Sprint has taken over the naming rights of the season opening NASCAR race formerly known as the Budweiser Shootout at Daytona, and as part of its activation, the company is letting fans determine the race’s format. Fans are being asked to vote on the number of laps, type of pit stop, and how many drivers will be eliminated.

What it means: Speculation is that IndyCar is holding an extra Toronto race to keep two Canadian events on the schedule after Edmonton was dropped. However, Andretti has some valid concerns, as back-to-back days of racing will be taxing for drivers and crew chiefs, costly for team owners, and possibly overwhelming for fans.

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Beyond the Scoreboard
Rick Horrow, America’s leading expert in sport business, and coauthor Karla Swatek give fans an inside look at the multibillion-dollar world of professional sport.
Beyond the Scoreboard eBook
Rick Horrow, America’s leading expert in sport business, and coauthor Karla Swatek give fans an inside look at the multibillion-dollar world of professional sport.
Beyond the Scoreboard: Chapter 1. The Mega-Master Super Series XLXL eBook chapter

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