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Bust, Boom, and Hope: September 12, 2011

By Rick Horrow and Karla Swatek

September 12, 2011

“Bust”: Top Five Reasons the Armageddon is Near

1. Cablevision and Verizon pulled the Tennis Channel from its systems amidst a carriage dispute.  The decision couldn’t have come at a worse time for the Tennis Channel, which was midway through the U.S. Open when the decision was made.

2. The USTA is mad about blatant ambush market by Stella Artois around last week’s U.S. Open.  Stella had 15 prominent ads posted just off the Long Island Rail Road, which services thousands of people daily.  Heineken has been the Open’s official beer sponsor since 1992.

3. The University of Maryland’s new Under Armour football jerseys were met with near universal horror when the team debuted them during last Monday night’s game against Miami.  If there’s any silver lining, it’s that the hideous jerseys kept college football fans talking about Maryland and Under Armour for hours.

4. UPS plans to drop its primary sponsorship of David Ragan’s No. 6 car after this season.  UPS was one of only seven corporate sponsors committed to being on a single car’s hood all season.  The decision to end Ragan’s deal comes days after UPS committed $100 million to college sponsorships.

5. Deutsche Bank is undecided about whether it will extend its PGA Tour event sponsorship beyond 2012.  Deutsche Bank has title sponsored the Boston PGA Tour event since its inception in 2003, but had to add a presenting sponsor this year to absorb some of its costs.


“Boom”: Top Five Reasons that Prosperity is Right Around the Corner

1. The U.S. Open generates $750 million in annual economic impact for New York City, according to a study a commissioned and released by the USTA.  The total dwarfs the projected $550 million the 2014 Super Bowl will bring to the region.  The event’s economic impact was last measured at $420 million in 2001.

2. PepsiCo signed a 10-year extension of its NFL sponsorship reportedly worth a total of $2.3 billion.  The deal, which runs through the 2022 playoffs, includes Pepsi brands Gatorade, Pepsi MAX, Frito Lay, Quaker Oats and Tropicana.  Pepsi also has league-wide deals with MLB, MLS and the NHL.

3. Los Angeles Dodgers owner Frank McCourt was offered $1.2 billion from Bill Burke, founder of the L.A. Marathon, and Chinese investors for the team.  If accepted, the proposed price would set a MLB record for costliest franchise sale.  McCourt has been given less than three weeks to accept or reject the deal.

4. Despite the ongoing NBA lockout, the league signed Sprint Nextel to a four-year, $250 million sponsorship deal.  Sprint reportedly is paying 15-20% more than the league’s previous wireless sponsor T-Mobile did.  Sprint subsidiary Boost Mobile recently signed a big sponsorship with the WNBA.

5. A Portland Oregonian survey of schools in the six BCS conferences plus Notre Dame found that single-game college football tickets have increased 30% in three years, to an average of $65 each.  New swaths of premium seating in college football stadiums are also creating revenue streams for schools.


“Hope”: Top Five Reasons That Creativity is the Key to Economic Survival

1. The NFL signed what’s being called a multiyear “music-branding partnership” with Banshee Music, according to John Ourand of SportsBusiness Journal.  Banshee will produce several songs that can be used in NFL stadiums without teams having to pay rights fees.  On average, teams pay $15-30,000 annually for rights to use music at their stadium.

2. Swimming star Michael Phelps signed a multimillion-dollar endorsement deal with Procter & Gamble’s Head & Shoulders brand.  The one-year deal runs through next summer’s London Olympics.  P&G in 2010 signed a 10-year deal to become a worldwide Olympic sponsor.

3. World Wrestling Entertainment plans to launch its own TV channel sometime next year.  The WWE Network will offer 24/7 programming of its greatest matches, moments and superstars.  WWE’s Monday Night Raw consistently is one of the highest-rated TV shows on cable.

4. The Big Ten and BMW reached a partnership that makes the German brand the conference’s official luxury automobile.  As part of the deal, BMW signage will appear at Big Ten stadiums and arena, and BMW will establish a preferred parking program at the conference’s football championship at Lucas Oil Stadium in December.

5. The NHL and NHLPA are promising to investigate the impact of on-ice fighting because three enforcers have died since May, two by suicide.  The early consensus amongst doctors and people in hockey circles is that the deaths are somewhat connected to the players’ on-ice roles.

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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.

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