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Sports Business Update: February 24, 2014


WWE TV Trouble?
World Wrestling Entertainment shook up the sports business world late last year when the company unveiled plans for the first-ever 24/7 streaming network, which actually launches today. For $9.95 per month, WWE Network subscribers get access to all of the entity’s pay-per-view events and other original content, including series, reality shows, and documentaries. But for as innovative as the network is, WWE has alienated several of its TV partners for launching without their consideration.

WWE pay-per-view events traditionally cost $50 each, with WWE and the TV provider splitting the revenue. By comparison, the new network is offering the same events plus additional unique content for a fifth of the cost. Dish Network announced last week it would stop offering WWE’s PPV events in response to the launch, and DirecTV is considering similar action. It remains to be seen whether the business strategy to offer WWE Network at such a low price point will compensate for the lost opportunities on Dish and possibly DirecTV, but it’s safe to say WWE would rather have these partners on their side.


Daytona Renovation
With the Daytona 500 in the books, International Speedway Corp. and Daytona International Speedway finally can resume a transcendent $400 million renovation of the racetrack. The project, dubbed Daytona Rising, will include expanding the track’s grandstand, widening the concourses, and adding concession stands, all in an effort to enhance the fan experience at races. The upgrades also are expected to boost parent company ISC’s annual revenue at the track by $20 million.

One revenue stream the track expects to tap is sponsorships, and on the eve of the 500, Toyota signed a deal to become the first of four founding sponsors of the renovated track. The 11-year deal is worth $6-7 million annually. Per the agreement, Toyota receives video signage on the track’s exterior entrance and Toyota branding and cars throughout the facility. According to Tripp Mickle of SportsBusiness Daily, Daytona and ISC officials first pitched Toyota on the sponsorship deal in November 2012. With progress being made on the track’s renovation, Toyota wanted to be the first founding partner in order to have a say in the entryway’s design.

NBA & NFL Labor Deals
Both the NFL and NBA in 2011 went through labor lockouts, as owners and players negotiated new labor deals. Nearly three years later, the impact of those negotiations are being seen in both leagues.

For example, keeping or getting below the luxury tax threshold was a critical factor in several NBA trade deadline moves. The league’s new collective bargaining agreement contains a “repeat offender” provision that multiplies the penalty teams are required to pay for reaching the luxury tax in consecutive years. The NBA’s labor deal is doing exactly what it was designed to – enhance parity amongst teams. With such a punitive luxury tax for repeat cap offenders, teams have extra motivation to control spending… and that was the theme at the deadline.
Meanwhile, reports disclosed last week show NFL Commissioner Roger Goodell made $44.2 million for the fiscal year ending March 31, 2013. Prior to the league’s 2011 labor deal, Goodell’s top pay was $11.5 million. Why is that so high? Well, Goodell’s job is to make money for the owners. While his 2013 compensation might seem exorbitant, especially compared to previous years, Goodell is being rewarded for negotiating an owner-friendly collective bargaining agreement.

El Paso Chihuahuas: Job Creators
Aside from lots of land and money, a lot goes into building a stadium. Look no further than El Paso, Texas, where the city is wrapping up construction of a $60 million, 9,500-seat stadium for the PCL Triple-A El Paso Chihuahuas, who make their debut this April. Let’s go Inside the Numbers:

An amazing 940,000 linear feet of electrical wiring and cable were installed in the stadium, the equivalent of about 178 miles. You can’t have a stadium without steel, and 2.6 million pounds of structural steel were used during construction.
What about land? The field encompasses about 2.75 acres, of which 92,430 square feet is turf. 4,000 tons of specially engineered sand is used as the growing medium for hybrid Bermuda grass turf. The field itself is designed just like a professional golf green, and constructed using the same materials right down to the growing medium
Maybe most impressive, it took just 379 days to construct and open the ballpark. During that period, more than 1,400 dedicated workers played roles, putting in over 500,000 hours while making the ballpark a reality for the city. It’s all good in El Paso.

Gary Player Asia
Gary Player Design has designed over 325 courses around the world in 35 countries on 5 continents. The firm continues to be the global leader in golf course design and the most recognized firm internationally. One region the company has paid particularly close attention to is Asia.
Gary Player Design has completed 50 projects across the continent. The company also currently has 14 Open projects in Asia, eight of which are in China. With the continent a key growth region, Gary Player plans on attending the China Golf Show next month.

Perhaps one of the most notable design projects to debut this year will be the Presidential Golf Club in Beijing. The Signature Design located in China’s capital city is being developed By Gary Player Design in conjunction with the Chinese government’s plans to host the Asia-Pacific Economic Cooperation (APEC) in late 2014.




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