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Bust, Boom, and Hope: NBA, College Football, NFL, Olympics, MLB


By Rick Horrow and Karla Swatek

January 14, 2013

Bust, Boom, Hope: NBA

Bust: Plans to build a $400 million arena in Virginia Beach have fallen through after the city’s mayor said there was no clear opportunity to lure a NBA team. Virginia Beach had hoped to have an arena built and a team in place in time for the 2015-16 NBA season.

Boom: Sacramento Kings owner the Maloof family is close to selling the team to hedge-fund manager Chris Hanson and Microsoft CEO Steve Ballmer for $500 million. Once the deal is finalized, Hanson and Ballmer are expected to relocate the team to Seattle and build a new $500 million arena.

Hope: San Antonio Spurs star Tony Parker is leaving Nike for a three-year, $1.2 million endorsement deal with Peak, which is planning a branded product line around the guard. Parker’s the latest NBA star to sign with a Chinese shoe brand, joining Dwyane Wade who recently signed with Peak rival Li Ning.

What it means: Virginia Beach and Seattle essentially were competing over the right to relocate the Kings. The difference is Virginia Beach only wanted to move the team, whereas the Seattle group wanted to buy. The Maloofs have been reluctant to sell, which makes the likelihood of a Seattle deal all the more surprising.

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Bust, Boom, Hope: College Football

Bust: The 2012-13 college football bowl season posted its lowest average attendance in more than 30 years. This season’s 35 games averaged 49,224 fans, down 2% from last year and the worst average since 1978-79. It marked the third straight season bowl attendance has decreased.

Boom: Though the game was a blowout, the BCS National Championship showdown between Alabama and Notre Dame proved to be a financial windfall for host Sun Life Stadium. The building generated a food and retail per cap of $62, up 40% from sales totals during last year’s title game in New Orleans.

Hope: BCS commissioners released the dates and rotation for the new college football playoff games that will begin in 2014. Each of the six “playoff bowls” will host four semifinal games over the 12-year cycle. The Rose and Sugar Bowls will host the first national semis, with the first title game host yet to be determined.

What it means: It’s easy to attribute the drop in average attendance to the abundance of bowls, as now more than ever teams barely above .500 play in the postseason. What matters more than attendance, however, is the positive impact games have on local communities and the opportunities they provide for players.

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Bust, Boom, Hope: NFL

Bust: New York Jets season-ticket holders upset with the team’s poor season are trying to sell their PSLs on secondary market for far less than face value. More than 1,100 PSLs are available for purchase on seasonticketrights.com, while some holders are threatening to default on remaining PSL payments to the team.

Boom: CBS has officially sold out its advertisement inventory for next month’s Super Bowl. Ads during the game went for a record average of $3.8 million per 30 seconds, with some spots selling for more than $4 million. CBSSports.com is close to selling out of its digital ad inventory as well.

Hope: Anheuser-Busch is using one of its Super Bowl commercials to promote its new beer brand, Budweiser Black Crown. The company last Super Bowl used ad time to tout the unveiling of its Bud Light Premium brand. A-B still hasn’t decided which other brands it will promote during the broadcast.

What it means: According to a recent survey by the Retail Advertising and Marketing Association, only 8% of consumers say Super Bowl commercials affect their buying habits. Additionally, it’s not enough just to advertise during the game; companies need an activation plan to capitalize on the large audience. Hopefully, this year’s flock of advertisers will make their multimillion-dollar investments pay off.

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Bust, Boom, Hope: Olympics

Bust: One issue not settled in the NHL’s new collective bargaining agreement is whether players will be allowed to participate in the 2014 Sochi Olympics. The Olympic question had been included in the previous labor deal. The league and union hope to negotiate a separate agreement in the coming months.

Boom: Audi signed a four-year deal to replace Mercedes as the official vehicle supplier of the International Olympic Committee. As part of the deal, Audi will supply 40 cars to the IOC’s Switzerland headquarters, as well as provide support at international events. Financial terms of the deal weren’t disclosed.

Hope: Olympic gold medalist Ryan Lochte beginning in April will debut his own reality show on E! Network. “What Would Ryan Lochte Do?” will follow the swimmer as he trains for the 2016 Rio Olympics, while simultaneously looking for a girlfriend.

What it means: The NHL over the next decade hopes to boost its international popularity, and having its players participate on the Olympic stage clearly would help that initiative. With the Sochi Games 13 months away, the league and union have limited time to reach an Olympics deal – and we know how ineffectively they negotiate with one another.

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Bust, Boom, Hope: MLB

Bust: For the first time since 1996, and only the second time in 42 years, no MLB players were voted into the Baseball Hall of Fame. This was the first year on the ballot for alleged steroid users Barry Bonds, Roger Clemens, and Sammy Sosa, who now have up to 14 more years to be elected to Cooperstown.

Boom: T-Mobile signed a major sponsorship deal with MLB to become the league’s official wireless partner. The three-year deal is worth an estimated $125 million. As part of the deal, T-Mobile is replacing dugout and bullpen phones with branded cell phones.

Hope: 2K Sports renewed its MLB license despite the deal reportedly being responsible for $30 million in annual losses to the company. Industry insiders were surprised by 2K’s extension, having expected the company to not renew the five-year deal after it expired in 2012.

What it means: Not electing anyone to the Hall of Fame is more than just an indictment on the Steroid Era, it’s real bad for business in Cooperstown. Hall induction weekend usually accounts for 10-15% of some local businesses’ annual revenue. An uncharacteristically small tourist turnout could significantly hurt local merchants.




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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.
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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.
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