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Bust, Boom, and Hope: NFL, NASCAR, MLB, Soccer, NBA


By Rick Horrow and Karla Swatek

February 1, 2013

NFL

Winner: New Orleans is expected to generate $185 million in direct spending from hosting Super Bowl XLVII, according to research conducted by PwC. The total is a 23% increase over last year’s game in Indianapolis, and a 17% increase over the last time the game was held in New Orleans in 2002.

Loser: 61% of NFL players disapprove of the job done by Commissioner Roger Goodell, according to a survey of 300 players conducted by USA Today. The players primarily cited the increased fines for dangerous hits and Goodell’s handling of the Bountygate scandal as reasons for their disapproval.

What it means: Since the start of 2012, New Orleans has hosted the BCS National Championship, the NCAA men’s Final Four, and two Sugar Bowls. This year, in addition to the Super Bowl, it also hosts the women’s Final Four. Next year it has the NBA All-Star Game. The economic impact of all these events will far exceed $1 billion, a tremendous turnaround from the devastation of Hurricane Katrina.

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NASCAR

Winner: Speedway Motorsports is creating a high-end ticket package that gives buyers a premium experience at the 13 NASCAR race weekends at the company’s eight tracks. The “Chairman’s Club,” which sells for $10,000, provides access to suites, garage tours, pit access, and victory lane.

Loser: Several NASCAR stars still have significant unsold primary sponsorships for races this season, according to Tripp Mickle of SportsBusiness Journal. Among the drivers still looking for sponsors are Dale Earnhardt Jr. and Tony Stewart, who recent lost major deals with Mountain Dew and Office Depot, respectively.

What it means: The Chairman’s Club package is a unique way to generate revenue from wealthy, avid NASCAR fans. Assuming SMI is able to sell all 100 packages, that represents $1 million in found revenue for the company. Meanwhile, the cost to provide pit row and victory lane access… nothing.

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MLB

Winner: The Los Angeles Dodgers and Time Warner Cable officially agreed to a 25-year deal worth nearly $8 billion for local TV rights to the team’s games. The deal includes plans to launch a new regional sports network, SportsNet L.A., in 2014. The team will own the channel.

Loser: The New York Yankees are looking into voiding Alex Rodriguez’s contract after his latest link to performance-enhancing drug use. The Yankees can’t take any action until MLB completes an investigation, but there’s no precedent of a team voiding a contract over steroids. Rodriguez has five years and $114 million remaining on his deal.

What it means: The Dodgers’ new TV deal helps justify the $2.15 billion purchase price paid by Mark Walter, Magic Johnson & co for the team. However, MLB has major revenue-sharing concerns about the deal, and if the two sides can’t settle differences over the next few months, the issue could end up in federal court.

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Soccer

Winner: EPL club Manchester United earns $204 million annually from deals with at least 32 corporate sponsors. The total value of those partnerships is expected to increase as early as 2014 when Chevrolet’s $69 million per year jersey deal goes into effect.

Loser: A respected French soccer magazine is the latest to report that Qatar bought its 2022 World Cup bid, claiming then-French President Nicolas Sarkozy pressured UEFA President Michel Platini to change his vote. Platini denied the allegation, but the Qatar bid has been under suspicion since the country was named host.

What it means: There’s a reason ManU recently became the first sports team in the world to top a $3 billion valuation. ManU’s brand is so valuable internationally, that major corporations like Chevrolet are willing to spend nearly $70 million annually just to align with it.

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NBA

Winner: The average NBA franchise is worth $509 million, a 30% increase over last year’s valuations, according to an annual study done by Forbes. The increase in values is attributed to the league’s new labor deal, higher national TV revenues, and new and renovated arenas.

Loser: NBPA Executive Director Billy Hunter fired all his family members with union jobs after a report charged him with nepotism and violating NBPA bylaws. In addition to laying off family members, Hunter has proposed a series of reforms as he attempts to keep his job.

What it means: It’s a good time to be a NBA owner, as the new labor deal lowered the players’ share of a $5 billion revenue pie and nearly every team is playing in an arena less than 20 years old. It’s an even better time to be James Dolan and Jerry Buss, whose Knicks and Lakers teams are worth more than $1 billion.




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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.
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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.
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Beyond the Scoreboard: Chapter 1. The Mega-Master Super Series XLXL eBook chapter
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