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Bust, Boom, and Hope: November 4, 2013


Bust, Boom, Hope: NBA

Bust: As the Golden State Warriors await approval for their proposed San Francisco waterfront arena, the cost of the project continues to increase. Team owner Joe Lacob said the $170 million it’ll take to rehabilitate S.F. piers is more than expected, and the team faces a shrinking window to open the new building in time for the 2017-18 NBA season.

Boom: Samsung and the NBA announced a multiyear deal making the company the league’s official handset, tablet, and TV provider. The deal is valued at $100 million over three years, and will result in Samsung installing courtside monitors for refs to use during replays.

Hope: Madison Square Garden unveiled the final phase of its $1 billion renovation, the highlight of which is two bridges that hang from the ceiling. The bridges have been called one of the most unique seating options in sports, and a revolutionary way to watch events.

 

What it means: Between the league-wide sponsorship and its endorsement deal with LeBron James, Samsung is investing heavily marketing around the NBA. The timing couldn’t be better. James is the biggest endorser in the NBA, and Samsung needs a strong marketing campaign as it begins selling the new Galaxy Gear smartwatch.

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Bust, Boom, Hope: Golf

Bust: EA Sports is ending its relationship with Tiger Woods, which lasted 15 years and resulted in 16 video game titles. EA’s decision leaves Woods with just two sponsors who have been with him since before his scandal broke in November 2009. The split is being cast as a mutual decision.

Boom: Sports and entertainment conglomerate Lagardere Unlimited has purchased Crown Sports Management to expand its golf representation practice. The acquisition grows Lagardere’s client list to 43 PGA Tour players including Phil Mickelson, Keegan Bradley, and Davis Love III.

Hope: The PGA of America is considering playing the PGA Championship outside of the United States as early as 2020. A committee has been studying what kind of impact the event would have on markets around the world. Australia has expressed interest in hosting the event if it’s moved internationally.

 

What it means: EA Sports isn’t dropping golf altogether. The company is developing a new game for the forthcoming Xbox One and PS4, but no other details are available. In recent years, EA relied on licensing deals with Augusta National and shared covers to boost sales.

 

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Bust, Boom, Hope: Olympics

Bust: Security remains one of the most pressing concerns for the 2014 Sochi Winter Olympics. The U.S. State Department has advised U.S. residents traveling to Russia for the Games that security risks exist just more than 100 miles from some of the venues.

Boom: NBC already has sold 90% of its ad inventory for February’s Sochi Winter Olympics, and the network sees a strong probability of selling out soon. According to NBC execs, sales are pacing far ahead of the 2010 Vancouver Games, which still had 30-35% of ads unsold heading into those Olympics.

Hope: With less than 100 days to go to the Sochi Games, various brands are beginning to unveil their endorsers and marketing plans. Procter & Gamble has signed U.S. skier Lindsey Vonn and Russian hockey player Alex Ovechkin, while Kellogg’s added former figure skater Kristi Yamaguchi.

 

What it means: NBC executives say they’ve never seen this strong of demand around ad sales, and they attribute this year’s success to the strong ratings recent Games have delivered. NBC’s effort to more clearly divide ad categories also has helped sales efforts.

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Bust, Boom, Hope: NFL

Bust: The NFL announced it would end its helmet sponsorship deal with Riddell after the 2013 season. Riddell had rights in perpetuity to be the league’s official helmet, but the two sides earlier this year renegotiated their contract. Approximately one-third of NFL players don’t use a Riddell helmet.

Boom: The Atlanta Falcons say they won’t back off their elaborate stadium design despite the cost of the project increasing. The stadium’s price tag in recent weeks has grown $200 million to $1.2 billion. The increase won’t affect the amount of taxpayer money going into the project.

Hope: The NFL is considering several London options in its quest to grow the game overseas. Among the possibilities are moving a team there permanently, adding an expansion franchise, or an eight-game slate that has all 32 teams playing in London every other year.

 

What it means: At $1.2 billion, the cost of the new Falcons stadium is equivalent to recent and under construction NFL stadiums in Dallas, Minneapolis, and Santa Clara. The Falcons’ stadium funding breakdown is $800 million from the team, $200 million from the NFL, and $200 million from the city backed by a hotel-motel tax.

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Bust, Boom, Hope: Soccer

Bust: Marred by poor play and discrimination claims, MLS club Chivas USA saw its attendance this season fall 36% compared to last year. The team’s average attendance of 8,366 fans per game was the lowest in MLS in a decade. Montreal was the only other club to experience a double-digit percentage drop.

 

Boom: Soccer icon David Beckham reportedly has picked Miami as the market to which he wants to bring a MLS franchise. Beckham, whose MLS contract promised him an expansion team for a discounted $25 million price, currently is looking for investors to help fund a soccer-specific stadium.

Hope: FC Barcelona F Lionel Messi became the first soccer player to make the top ten list of America’s favorite athletes. Messi ranked seventh overall in the ESPN Sports Poll, ahead of NFL stars Drew Brees and Aaron Rodgers. The popularity of EA Sports’ FIFA video game was cited as reason for Messi’s high ranking.

 

What it means: Assuming Beckham is successful finding investors and building a stadium, a Miami MLS team would have an immediate, natural rivalry with an expected MLS club in Orlando. Concentrating teams in a region could help boost interest in the sport & the league, as evidenced by having three MLS clubs in the Pacific Northwest.




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