Connecting the Spots

Whenever I talk to aspirants hoping to make a mark in the media and/or sports businesses, I always stress how interconnected the various facets of the industries have become. With video on the internet, radio on TV, and rappers in the sports business, the expertise one gathers and the connections one makes in one place may well pay off somewhere else. Even if they want to work in one certain medium, a job in another can help them get to their preferred career more effectively than ever before.

Last week, the Fort Worth Weekly put a photo of me on their cover. The story inside talked about a documentary project on which I’m working and also covered much of my career. It has resulted in social media attention, a few double takes at restaurants, and, hopefully, added credibility in future endeavors. It has been a positive event.

It also got me to thinking about the path that led to it coming out in print. I realized the events followed one of those unplanned trails of diverse experiences inimical to today’s interconnected world.

Let’s start with the project that got the paper interested. Like many endeavors a long time coming, this one started with my father, whom we’ll call Salvatore. I’ve decided to change the names of the people in this story, partially in case they don’t want to be mentioned and partially because it will amuse those who know them (including me).

Anyway, back in the day when Salvatore was athletic director at a university I’ll call Kruger College of Industrial Smoothing, he recommended me for a job doing announcing with a local cable outfit televising some of the school’s athletic events. That job grew into a regular gig, and when the local pro hockey team won the Wonderful Hockey Association of Texas championship, I got to write and produce a documentary on the season that led to the WHAT title. A few years later, when the local baseball team, the Lagrave Leopards, celebrated its history, I wrote another documentary.

Meanwhile, I had also begun to work full-time for another baseball club. We’re going to call them the Randol Mill Rutabagas. At the Bagas, I worked making commercials with a co-worker ostensibly named Callie Kringle. Callie was exceptionally competent and helped make my work better. She also had a better half. Her husband and I got along well because we both liked the taste of a beverage called whuskey (some varietals are spelled whusky).

Mr. Kringle is an architect and he and I talked about doing a documentary on a project he was working on. We never gained any traction with it, but the work we did on it, plus his knowledge of my creative background, led him to recommend me to a former colleague. The colleague now worked at the architecture firm rebuilding the damaged schools in West, Texas. The company wanted to create a documentary about the process and must have decided the credentials accumulated through my work with the Rutabagas, the previous documentary projects, and the recommendation of my whuskey-drinking friend made me the guy to spearhead the project.

That project got the attention of the newspaper. They assigned their film writer to cover the story, and, consequently, me. But how did they find out about it? That tale has its roots in television, treks through music, has a baseball element, and, once again, involves drinking.

While I was doing sports announcing, I simultaneously held a full-time gig at a local TV station we’re going to pretend is named KOWW. At KOWW, I worked with a colleague named, for our purposes here, Bruno. Bruno and I both liked music, and bonded over it. Many years later, he put together a jam, and some of those musicians and I later got together in a blues band called A Little Cake and Some Icing. We played a lot of fun biker shows and saw some things we’ll never be able to forget. After that band broke, up a couple of the members and I started a band called Loda Dimes. I went ahead and used its real name because nobody’s ever heard of it anyway.

In an attempt to establish a stronger presence for Loda Dimes in the music scene, I joined the local music co-op. There I met and worked with its driving force, an MC whose name we’ll say is Elric Gryffindor. Elric and I both liked music and baseball. He worked at the Fort Worth Weekly. Aha, you just said, I see where this is going! But then, suddenly, he left the Weekly!

But later Elric went back to the paper. At some point after his return, he and I went out to drink a beverage we both liked called “boor.” While we consumed some microboors, I told him about the documentary project. He went to his editor with the idea that a story about a local guy doing a movie related to an important event might interest folks. She agreed, the story got done, and my face got plastered on newsstands across Tarrant County.

The point of this whole blog post you’ve managed to digest is that it wouldn’t have gotten done without the interplay of varied experiences in the entertainment business. From college sports to TV to pro sports to music to documentary films, they all helped lead to a positive career development.

I often tell folks the most important thing for advancement is demonstrating to people that you’re not crummy at what you do. I actually usually use stronger language, but you might be reading this to your kids. Tell them to never miss an opportunity to do show their competence, no matter what the endeavor.

After all, who would have thought that playing blues in biker bars, watching hockey fights, and drinking whuskey with architects would get a guy on the front page of the paper?

Teams Need to Get Out More

In 1995, the New York Times reported that each NFL team took in "about $3 million a year from official sponsorship and merchandise."⁽¹⁾ That year, the Dallas Cowboys made disruptive moves that ultimately led to changes in the way the NFL handled such sales. The ownership group sold Pepsi a $20 million package that included pouring rights and official sponsorship of Texas Stadium. The stadium assignation helped the team work around the league's centralized sales structure, which had sold Coca-Cola a package that included official sponsor designation for all the league's teams.

Dallas owner Jerry Jones felt the league's teams could grow their collective overall revenue if the rules incentivized them to sell more sponsorships individually. Despite a series of lawsuits, the moves helped lead to the current structure that allows franchises substantial autonomy in sponsorship sales. IEG reported last week that sponsorship revenue for the league and its teams added up to $1.07 billion,⁽²⁾ a strong piece of evidence (even when inflation-adjusted) that Jones assessed the market correctly.

The pre-1994 NFL sponsorship landscape has a lot in common with the way U.S. sports leagues currently handle their international business. International marketing and broadcasting initiatives originate at the league level and individual clubs have little incentive to mass market to foreign fan bases.

The question thus becomes : if leagues allowed clubs some leeway to market themselves abroad, would the incentives created result in expanded revenue growth overall?

Would Bulgarian teenagers wear the apparel of U.S. athletic brands when they come here to play their sport?

When I've traveled to Europe, the only American sports brand I've seen consistently worn is that of the Yankees, and I suspect that it had more to do with an identification with New York than a Bulgarian teenager's appreciation for Mariano Rivera's cut fastball. Anecdotal observations are unscientific at best, but we do know for sure that baseball's system pools revenue from most forms of gear sales. A team thus has no reason to invest resources in selling its branded caps or platypus plush dolls outside its local market. Jones' Cowboys' also opted out of the NFL merchandise structure when that option became available and Dallas Cowboys Merchandising, Ltd. has found numerous ways to innovate.⁽³⁾

A key reason to incentivize teams to market themselves and their bobbleheads abroad involves creativity. 30-some teams worth of employees, agencies, and consultants thinking about ways to interact with fans in other countries might result in more good ideas than one league office. Other teams can always copy the good ideas. They do that already when it comes to scoreboard features, ticket sales, advanced defensive metrics, and every other best practice.

Another reason to get teams involved is that people don't get emotionally infatuated with leagues. They get caught up rooting for Cowboys, Warriors, and Vikings. Club marketing personnel specialize in creating fans for their teams. While they wouldn’t be selling, say, group tickets, who knows what other initiatives they might invent? Turning them loose on new markets could end up growing the total revenue pool.

Teams already have started to stretch the envelope. Some leagues allow teams to retain control of internet rights, so they can at least communicate worldwide, but their ability to monetize them is still limited. More centralized setups, like Major League Baseball’s, almost completely remove the motivation for teams to look beyond borders electronically. In fact, the zeal to control content and revenue outside home team territories can impair teams’ abilities to use web tools to market locally over channels that could also be seen by those outside their hometown.

Ironically, clubs do have some autonomy overseas in the area the Cowboys pushed in the nineties : sponsorship sales. When an MLB team signs a prominent player from NPB, expect to see signage with Japanese characters behind home plate at their ballpark. The Sacramento Kings' Indian owner, Vivek Ranadive, just sold a sponsor package in his homeland.⁽⁴⁾ These sponsorships generally involve activation within the U.S., as in stadium signage seen by TV viewers back home or initiatives with domestic customers of an international brand.  But could the league bring in more sponsorship revenue if the teams actively worked to create fan bases in alternative markets and set up team-branded activation within them?

Ranadive seems to want to find out. He said of his Kings, "We strive to become India's home team."⁽⁵⁾ Leagues may want to encourage others to follow his lead.

The world's soccer clubs already engage fans around the world with their brands. In the competition for fan loyalty in developing markets, U.S. sports leagues need to make their team brands viable challengers to the Liverpools and Barcelonas. Already at a disadvantage due to the popularity of the sport of association football, they risk falling further behind. It is not just the big clubs they need worry about. Welsh club Cardiff City controversially changed their kit colors this season⁽⁶⁾ because it felt red would hold more appeal to fans in Asia. With Malaysian ownership, one would expect the Bluebirds to continue to work that market even if they lose their current relegation battle.

Multiple nationalities own English soccer teams and pro sports on every inhabited continent seek to add international on-field talent to their rosters. The world has shrunk since the Dodgers couldn’t make a lot of headway in Asia nearly a decade ago.⁽⁷⁾ Now, thanks to the internet and social media, clubs can create virtual presences in places they couldn’t afford physical ones.

The successful ones may eventually need offices abroad, too, certainly. Initial areas where clubs could realize financial gains from a trans-oceanic presence include merchandise, travel packages, foreign market sponsorship activation, preseason playing tours, online advertising sales, and broadcasting. Currently, leagues generally don’t permit teams to send locally originated TV broadcasts outside of designated home areas so as not to negatively impact ticket sales and ratings in other teams’ markets. But Blue Jackets games shown in old Jersey wouldn’t impact a team in New Jersey. They might, however, give the Devils some ideas for capturing the souls of fans in Columbia.

Plea to teams from someone who has worked for them : if you go all in for some international marketing, give your staff the extra resources they need to do it properly. They’re already putting in massive hours to maximize your local revenue streams.

One would still have to define the areas the leagues would handle and the areas where the teams could do their own thing. There is probably a lot of work for lawyers there. For instance, if you let teams market internationally, do you necessarily have to allow them to market more broadly within North America? Probably not, but, admittedly, determining parameters for letting teams play in the international arena wouldn’t be an exact science. Some league might find a competitive advantage in becoming the first to try it, however.

How about the objection that bigger clubs will be better positioned to take advantage of expanded opportunities than smaller ones, negatively affecting competitive balance? We could note that the New York market teams already enjoy outsized local revenue ratios compare to the rest of their leagues, yet we still have the Knicks and Mets. Revenue sharing plans wouldn’t have to go away and would remedy some of the imbalance. Our point in using the Cowboys as an example earlier wasn’t about how they leveraged their already powerful brand. It was about how their maneuvers allowed all teams to find new, creative ways to build revenue. In fact, the team-independence option gives nimble smaller teams a broader population base from which to even the playing field with good ideas. The “Moneyball” revolution showed how teams with insight could find ways to compete with behemoths on the playing surface. The Cowboys, for all their success off the field, haven’t bought any championships in a while.

However, almost every team in the NFL does have a chance to compete for a title, and the other North American circuits have also achieved an era where most fans can legitimately hope that their team will have a big year next year. This provides a competitive advantage over most European teams, where the current lack of competitive balance often means 75% or more the teams harbor no hope of winning the league. This is big, because, let’s face it, no marketing effort works as well as winning.

Which brings us to a final point. There will come a time where teams who might not have jumped all in with international marketing might eventually change their minds. That moment will happen when an in-demand international free agent chooses a certain team over other comparably priced suitors because he grew up rooting for them – in Jersey or Columbia or Sofia or New Delhi or Kuala Lumpur. When that happens, baseball/basketball/roller derby GMs will walk into their Marketing VPs’ offices and offer their support and their budgets to the international expansion the marketer had wanted all along.

Rush Olson has spent two decades directing creative efforts for sports teams and broadcasters. He currently creates ad campaigns and related creative projects for sports entities through his company, Rush Olson Creative & Sports.

RushOlson.com

Linkedin.com/company/rush-olson-creative-&-sports

Facebook.com/RushOlsonCreativeandSports

Footnotes

(1) David Barboza, “THE MEDIA BUSINESS: ADVERTISING; Dallas Cowboys' stadium ousts Coke, despite N.F.L. deal, and gives Pepsi 'pouring rights.',” New York Times. http://www.nytimes.com/1995/08/07/business/media-business-advertising-dallas-cowboys-stadium-ousts-coke-despite-nfl-deal.html (accessed February 3, 2014)

(2) “IEG: NFL Sponsorship Revenue Totals $1.07 Billion in 2013 Season,” IEG.

http://www.prweb.com/releases/2014/02/prweb11541990.htm (accessed February 3, 2014)

(3) Alicia Jessop, “Jerry Jones' 1995 Risk Allows The Dallas Cowboys To Become Leaders In The Growing Women's Sports Apparel Market,” Forbes. http://www.forbes.com/sites/aliciajessop/2013/11/29/jerry-jones-1995-risk-allows-the-dallas-cowboys-to-become-leaders-in-the-growing-womens-sports-apparel-market/ (accessed February 3, 2014)

(4) “Sacramento Kings begin Indian push with Krrish Group,” SportBusiness. http://www.sportbusiness.com/sponsorship-insider/sacramento-kings-begin-indian-push-krrish-group (accessed February 5, 2014)

(5) IBID.

(6) “Cardiff City to change kit from blue to red amid financial investment,” BBC.

http://www.bbc.com/sport/0/football/18324804 (accessed February 3, 2014)

(7) Daniel Kaplan, “Are the Dodgers scaling back efforts in Asia?” Street and Smith’s Sports Business Journal. http://www.sportsbusinessdaily.com/Journal/Issues/2005/04/20050411/Marketingsponsorship/Are-The-Dodgers-Scaling-Back-Efforts-In-Asia.aspx?hl=MLB%20International&sc=0 (accessed February 4, 2014)

Expanding the NBA

The National Basketball Association turns 68 this year. For most guys that age, expansion in all the wrong places seems inevitable. But the league has kept its trim, 30-team figure throughout its sixties, with the last new franchise having arrived in 2004. A recent discussion on the Phil Naessens Radio Show got us thinking about whether the NBA should add teams again, and, if so, where.

This summer, David Stern said : “I keep a little green book with a list of all the cities interested in NBA teams and could respond pretty quickly. There’s all kinds of stuff going on in Pittsburgh, Columbus, Louisville, Virginia Beach, Las Vegas, Vancouver, Mexico City, Kansas City.”⁽¹⁾

Of course, there were also rumors of contraction around the last labor negotiations ⁽²⁾ and the decision on what teams are in the league soon won't be Stern's. But the commissioner's list was specific enough that we can safely assume the league has not ruled out adding more members.

G. Scott Thomas wrote an article a couple years back at bizjournals.com where he cited On Numbers’ analysis of viable NBA expansion markets.⁽³⁾ The research used income available (factoring in money already conceivably spent on existing major pro teams in the market) to determine viability. It's a helpful, though not comprehensive, tool to use when evaluating cities.

Let's create some categories for cities that might be set up to host a franchise more successful than the Fort Wayne Pistons or Kansas City-Omaha Kings.

Big Media Market

Number one TV market New York City has the population base to sustain two teams even with competition from multiple franchises in every other sport and Kinky Boots on Broadway. National TV partners love big U.S. metro areas and the NBA has teams in 20 of the top 25.

Seattle is the clear front-runner for a team. It's the biggest market (#13) without a team, its NBA tradition runs from Jack Sikma through Shawn Kemp through Kevin Durant, and it has potential ownership in place. It faces competition for sponsorship dollars from three big teams (including the ultra-buzzworthy Sounders), but has only Major Junior hockey to compete with through a quarter of the year. Ok, this year it's a sixth of the year, but the Seahawks don't make the Super Bowl every season.

Tampa- St. Pete is the 14th biggest TV market, but On Numbers ranked it only 56th in available income due to competition. Top-30 competitive markets St. Louis, Pittsburgh, Baltimore, San Diego, Raleigh, and Kansas City also fared poorly on the available income index. Most of those markets do have suitable arenas available, but other than in Kansas City, the NBA team likely wouldn’t control important sponsorship revenue streams associated with them.

The top three areas on the On Numbers index don't add big markets for ESPN and TNT. Riverside-San Bernardino (1) and Bridgeport-Stamford, Connecticut (3) already occupy parts of the LA and NYC TV markets respectively.  Montreal (2) isn't a US TV market at all, being located in Canada, at least until the next Quebec independence referendum. Montreal could fit into category number three on this list, but how much might its francophonic hassles and frigid weather doom it as a destination for both free agents and league officials?

One-Team Cities

"Look at us, we've got a big league team which boosts our self-image!" say San Antonio/Portland/Oklahoma City. They may not be top-20 TV markets, but they love and support their lone big-league team, perhaps in part because it makes many residents of their city feel significant. With most large markets already in the league or out of the equation, most of the hopefuls probably need to convince the league that they're the next Spurs, sans the conspiracy theories about market-size-related playoff favoritism.

Louisville actually already has a hoops team that draws 20,000 fans a night⁽⁴⁾ and might beat the Bucks. In fact, the prospect of an NBA arrival has created controversy about a potential negative impact on the local scholar-athletes.⁽⁵⁾ When you're only the 49th biggest TV market, you might need to be more of a slam dunk.

The 42nd market ranked fourth on the income survey, but has, as Phil Naessens pointed out recently, a high population turnover. That perhaps mutes the one-team effect. Oh, and then there's the gambling. As long as the U.S. retains its schizophrenic wagering laws and its leagues maintain their healthy skepticisms of sports books, it's hard to imagine that what stays in Las Vegas could possibly be a major-league pro sports franchise.

Hartford made the income availability top ten and ranks as the biggest TV market (30) with no major league sports team. Connecticut has good college basketball tradition, but the market has a bit of an albatross. Or, to be more specific, a whale. The NHL's Hartford Whalers never averaged as many as 15,000 fans in a season.

Virginia Beach-Norfolk, ranking as the 45th TV market, has long been considered a potential target for pro leagues. With the closest teams in Washington (200 miles) and Charlotte (300 miles), it had the potential for regional rivalries without cannibalizing fans. It has ACC basketball tradition, and the closest franchise in the four top leagues is the NHL Hurricanes 185 miles away in Raleigh. Neither the International League's Tides nor the American Hockey League's Admirals have set any attendance records (like Oklahoma City did for CHL hockey pre-Thunder), so backers would have to show basketball would be different.

Austin, Texas placed well in income availability, has the 40th TV market, and profiles as a young, growing city. On the other hand, it's Spurs country, a UT Longhorn town, and the D-League doesn’t draw especially well there. There are no other major pro teams, though, so maybe the NBA would work in a northern suburb like Round Rock or Cedar Park. Those municipalities host, and built stadiums for, Triple-A baseball and hockey respectively. It's no sure thing, however.

Sexy Geography Market

This means somewhere the league wants to go to expand its marketing footprint. Another way to phrase it would be "a country whose initials are not "U" followed by "S" followed by "A."

Mexico City is a huge city that fits into this category. There's a lot to like, including an accessible time zone and some of the features of category 2. Smog, perceived crime, and language differences might make it tough to attract free agents. The failure to stage one game there this year might also be held as a negative when the league considers whether to award the market 41+.

Europe/Asia/Other Continents/Arctic Circle/Guam and any other non-North American aspirants would have to figure out how to deal with scheduling, travel, and a host of other issues. We opined on what the league should do in those markets in a whole nother blog post (spoiler alert : not promising in the near term).

Really Rich Dude Market

Mark Cuban said in November : “I just think the price of the expansion fee has to be so high that the NBA owners think, ‘OK, we’re crazy not to do it.' What that number is, I don’t know. But I’m open to it."⁽⁶⁾

Being open to receiving a large influx of cash has proven a sound financial strategy for Mr. Cuban. While we don't have a specific municipality in mind for this strategy, a buyer who leads with his wallet could overcome a lot of resistance. The structure of the deal matters as much as the dollar amount, however. You don't want to take crazy money upfront only to give it back through revenue-sharing because the Bentonville Walleyes couldn't draw or add to the value of the national TV and radio packages.

Politicians With Panache Market

If you can find a group of elected officials who either believe they're doing something civic-minded or just want free tickets, they can redistribute their way into becoming a viable choice for you. Free arenas, free development, free parades when you win the 2045 Dave Stern Trophy : who wouldn't want that? Maybe someday one of the other former NBA Johnsons (Ervin, Earvin, or one of the Eddies) gets elected mayor of Anderson, Indiana and makes a push for the return of the Packers, following Kevin's lead in Sacramento.

As with the previous category, you still have study the market. The NHL's Coyotes gladly accepted stacks of taxpayer cash to move to Glendale without remembering that their fan base lived and worked at the other end of Phoenix's traffic jams. If you expand and the team declares bankruptcy, you've done it wrong.

Does the Association need to expand? It's hard to say that it does. Unlike the NFL the NBA's national TV carrier have plenty of product to air.

The perfect storm might be a combination of an owner with the crazy money Cuban wants in a big market. Maybe it happens right about the time the league is negotiating a new national TV deal and needs that market to justify rate increases. Maybe it happens during a labor negotiation when the league can trade another team or two worth of jobs for player concessions on testing for the latest drug scare. Or maybe it happens because Amir, Vinnie, or Avery Johnson got elected to the Rochester city council and restarted the Royals. In any case, the NBA can afford to wait for its preferred scenario.

Like any business, a sports league wants to grow. That doesn't necessarily mean it has to add more teams. It can also mean adding more revenue streams from other sources. New media and international outreach might provide those without having to dilute the product, because while the world produces a lot of good ballplayers, adding roster spots can't help but thin the talent base.

Which brings us to a final potential market : Harrisburg, Pennsylvania. It ranks as TV market number 43, higher than Louisville or Hampton Roads. We mention it not so much because we consider it a viable candidate for a team, but rather because of what happened in a town in its DMA on March 2, 1962. On that night, playing for the Philadelphia Warriors before they moved to California, Wilt Chamberlain scored 100 points in a game in Hershey.  If expansion adds two or more teams worth of D-league and Euroleague defenders to the NBA, that record will drop like a 68-year-old's hairline.

Rush Olson has spent two decades directing creative efforts for sports teams and broadcasters. He currently creates ad campaigns and related creative projects for sports entities through his company, Rush Olson Creative & Sports.

RushOlson.com

Linkedin.com/company/rush-olson-creative-&-sports

Facebook.com/RushOlsonCreativeandSports

Footnotes

(1) “Stern includes Pittsburgh on short list of possible NBA expansion cities,” Pittsburgh Sporting News. http://www.pittsburghsportingnews.com/stern-include-pittsburgh-on-short-list-of-possible-nba-expansion-cities/ (accessed January 22, 2014).

(2) David Steele, “Is NBA contraction a legitimate possibility?” Sporting News. http://www.sportingnews.com/nba/story/2011-08-15/is-nba-contraction-a-legitimate-possibility (accessed January 25, 2014).

(3) G. Scott Thomas, “22 markets meet the NBA’s financial threshold,” The Business Journals. http://www.bizjournals.com/bizjournals/on-numbers/scott-thomas/2011/08/22-markets-have-nba-potential.html?appSession=300822721061063&RecordID=&PageID=2&PrevPageID (accessed January 22, 2014).

(4) Mike Rutherford, “Louisville Leads The Nation In Overall Basketball Attendance,” Card Chronicle. http://www.cardchronicle.com/2012/5/11/3014634/louisville-leads-the-nation-in-overall-basketball-attendance-cardinals (accessed January 25, 2014).

(5) Darren Heitner, “Why Louisville Should Top The List For An NBA Franchise,” Forbes. http://www.forbes.com/sites/darrenheitner/2012/12/18/why-louisville-should-top-the-list-for-an-nba-franchise/ (accessed January 22, 2014).

(6) Eddie Sefko, “Mark Cuban: NBA expansion will happen before relocation, if the price is right,” Dallas Morning News. http://mavsblog.dallasnews.com/2013/11/mark-cuban-nba-expansion-will-happen-before-relocation-if-the-price-is-right.html/?utm_source=twitterfeed&utm_medium=twitter&nclick_check=1 (accessed January 25, 2014).