Archive for the ‘NFL’ Category

NFL and the history of its TV deals

Sunday, April 27th, 2014

 

The start of professional football can be tracked all the way back to 1869 where modified London football rules were used in a game of college soccer. It wasn’t until 1939 however, that the first NFL game was televised by NBC between the Philadelphia Eagles and the Brooklyn Dodgers. By 1951 the NFL Championship Game was televised coast-to-coast for the first time, December 23. The DuMont Network paid $75,000 for the rights to the game, in which the Rams defeated the Browns 24-17. By 1955, NBC became the television home to the NFL Championship Game, paying $100,000 to the league for the rights to telecast the league finale.

As Pro Football gained in popularity, it rights fees went up causing CBS to pass on NFL Football in the mid 1990’s and allowing the new FOX Television Network to gain a foothold in the broadcast sports realm. Today, the major networks pay upwards of $550 million a year to televise NFL games which can now be seen on cable, satellite and broadcast networks. NFL announced nine-year extensions to its broadcast television packages with Fox, NBC and CBS under which the networks are expected to pay roughly 60% more. The new agreements will run through the 2022 season as the current deals expired after the 2013 season.

The NFL’s new 10-year labor agreement and increased TV rights deals are the reason that NFL teams are worth $1.04 billion on average or twice as much as the average MLB team and three times what NBA teams command. NFL games represent 23 of the 25 most-watched TV programs this fall and they attract twice as many average viewers as broadcast primetime shows. Annually, the NFL redistributes upwards of $4 billion in radio, TV and digital earnings across its 32 teams, roughly $125 million apiece, plus an equal share for the league, and that number shows no sign of declining. The 19 highest-rated fall TV programs (and 28 of the top 30) were NFL games, and this year’s Super Bowl was the most-watched program ever. 5 of the many popular sports networks: ESPN, DirecTV, FOX, NBC, and CBS all have contracts with the NFL of roughly 3.985 billion dollars a season. ESPN pays $1 billion per season (18 games), DirecTV pays $1 billion per season (8 games plus NFL Sunday Ticket), FOX pays $712.5 million per season (102 games), NBC pays $650 million per season (18 games), and CBS pays $622.5 million per season (102 games).

T.V. rights have continued to escalade for the NFL and from what history shows will only continue to keep doing so. A new contract is underway with the NFL and major networks that will keep them under contract till 2022. The fan base is so large for the NFL, do to location in major cities across the U.S. & because of this, the demand for football is high. Households who are unable to see their favorite team live, can sit back in the comfort of their own home and watch the game televised almost anywhere in the U.S. Which is why football is the highest rated fall TV program.

We continue to see an increase in fan base in the NFL which brings in more popularity to the sport. As popularity and demands for the sport increase, more games will be televised, to the point where one day each game will be broadcasted nationwide. However, when that does occur a plateau may occur and profits may stop and just maintain a steady income. If this does occur which will be some time down the road, the NFL being money hungry will expand their horizons and aim for new markets, which is one of the reasons football is trying to spread to other parts of the world; I.E. Canada, Europe. This is also why some games are hosted in London, to help promote football and to expose others about the sport, so during the future it can expand and be broadcasted as a worldwide sport.

 

http://static.nfl.com/static/content/public/image/history/pdfs/History/2013/353-372-Chronology.pdf

 

http://www.nfl.com/history/chronology/1951-1960

 

http://nfl-tv-history.blogspot.com/

 

http://www.forbes.com/sites/kurtbadenhausen/2011/12/14/the-nfl-signs-tv-deals-worth-26-billion/

 

http://sportsillustrated.cnn.com/multimedia/photo_gallery/1103/nfl-inside-money-machine/content.2.html#ixzz308FRNGpe

 

http://www.youtube.com/watch?v=vhOAzRnwpdY

 

ABL vs. USFL

Monday, April 21st, 2014

http://http://www.youtube.com/watch?feature=player_profilepage&v=8v2zT52MZ5w

The American Basketball league was founded in 1996 for women and that was during the time the NBA founded the WNBA. Basketball was booming in the 90’s where U.S Olympic teams both men’s and women’s teams winning gold medals and the NCAA bringing up new talents. The ABL is an independent professional league where women can play the game they love, but the beginning of the season some teams in the league could not maintain their budgets and got cut from the league. The ABL then had to find new basketball teams that could be apart of the league and play other professional teams. The league was struggling to keep teams and declared bankruptcy.

Another league that attempted to go pro was the United States Football League for men who wanted to go professional as well. The owner of the USFL attempted to work and compete with the NFL. Play teams that were in the NFL and find TV deals like the NFL. The owner tried to have a bigger fan base by having the season start when the NFL was off-season. The USFL got into to some legal issues with the NFL and attempted to sue them for anti-trust. The USFL won the case of anti-trust and anti-monopoly of the NFL, but only won $3.00 The USFL lost over $130 million dollars.

I think both of these leagues tried to go big too fast, they did not have enough money to support the teams that were in their league. The owners do not know how to run a business and take care of teams, fields, stadium seating, selling tickets and making a profit.

Now the National Women’s Soccer League is a club league that has gone professional. I think they will have good business by learning from these previous league’s mistakes. the NWSL has corporate sponsors like Nike and sponsor the men’s league. The league both have men’s and women’s teams for every club, so that would bring more business to the league and become a business that will grow.

 

 

USFL & ABL vs. NWSL

Monday, April 21st, 2014

 

The United States Football League (USFL) opened in 82’ and closed in 85’ after only 3 short seasons. Founded by David Dixon, from New Orleans, Louisiana, the USFL announced its formation on May 11, 1982, at the 21 Club in New York City. During 1982-1985, the USFL fought a bitter war with the established National Football League (the NFL) for players, fans, and media attention. In July of 1986, with a month before the league was to begin its first fall campaign, the USFL won its suit against the NFL, but was awarded $3.76. It’s time couldn’t have been better. The USFL was formed in 1982, right when the NFL was headed towards a strike. The first kickoff of the USFL in 1983 came just weeks after the Redskins were crowned Super Bowl champions after a strike-shortened nine-game season and playoff tournament. The USFL started to get into bidding wars for players. Some teams went bankrupt, in Los Angeles, the team was well known for the $40 million contract given to Steve Young. The USFL wanted to extend their success after their first successful season and tried to play games in professional stadiums but were unable to do so because of overlapping schedules with the NFL. Which along with the high salaries were reasons why it failed to exist after three seasons.

ABL or American basketball league was an independent professional basketball league for women in the United States. It only lasted from 96’ to 98’ for only 2 full seasons. On December 22nd, 1998, with almost no warning the ABL declared bankruptcy and suspended all operations. It had a higher quality of play than the WNBA did because it signed majority of its players from the 96’ national team, a possible reason it failed was due to the higher salaries offered compared to that of the WNBA. Financially they could not compete with the WNBA and had to shut down all operations.

What can the new National Women’s Soccer League (NWSL) learn from those leagues in order to stay afloat?

Since there is not a larger women’s soccer league they’re not competing like the USFL had to compete against the NFL, or the ABL trying to compete against the WNBA. If they don’t make the same mistake of spending too much money on salaries like the USFL or the ABL did, and correctly market their league, they should be able to sustain a successful sporting organization.
For a short term marketing strategy:
I would market the individual players. All ten of the highest paid women athletes are from individual sports. However, I think marketing a single player like “Hope Solo” brought a lot of attention to women’ soccer, in my opinion. Probably not the right message, since I think she is a bit of a mess, but she brought awareness to women’s sport.

Long term success:
I would continue working with NIKE and other large corporations for potential sponsors to increase awareness. Possible Women only companies like Lululemon, Athleta, might see more value and give the sport more attention than possibly NIKE, a mega-corporation. Nike is too huge of a corporation to “worry” or spend extra time on such a small market. Women specific entities are more likely to spend more or extra time and effort specific to women’s sporting events.

Bibliography:
http://www.funwhileitlasted.net/basketball/abl-galleries-1996-1998/
https://sites.google.com/site/remembertheusfl/home
http://www.nwslsoccer.com/

http://blogs.nfl.com/2013/01/17/a-brief-history-of-the-usfl/

http://www.forbes.com/fdc/welcome_mjx.shtml

 

Real Madrid & NFL

Friday, March 14th, 2014

When scrolling through the Real Madrid website I found that it offers insite to both soccer fans as well as basketball fans. The first thing you will notice upon entering their website is a list of different videos that are offered for both basketball and basketball. As you open the menu button you will find different links regarding their website. What stuck out to me was the link titled “fan zone.” It allows you to as a fan to view recent news regarding the team, new videos uploaded and photos of the players during games and off the field pictures so you can stay up to date with what each of them are doing. It also has a shop that you can buy clothing for of the team to represent your favorite players from the sport.

The basketball link offers the same thing, a link to recent news and a photo and video gallery of updated pictures so you can stay in the loop with your team and their daily lives.

the website is very informative for any person, whether you are a fan or not. it allows easy access to the history of the sports, clothing, and news about the teams.

http://www.realmadrid.com/en

http://www.realmadrid.com/aficion/videos/2014/02/0-2-triunfo-en-el-calderon-y-a-la-final-de-copa?pid=1387570276487

this link shows the highlights of Real Madrids soccer team, allowing fans to insight on Christiano Ronaldo career thus far with Real Madrid. This website allows you to view each player and see highlights and news regarding them.

from what I found, Real Madrid only uses a one way model.

comparison of two sports:

nfl.com offers you access to each one of your favorite teams and news about recent changes that have occurred in the organizations. It allows you to stay up to date about trades, potential draft picks, and an updated roster for each of the 32 teams. On the home page it offers you the 2014 schedule and videos regarding all the news presented by sportscenter.

It also allows you to shop, not just for one team but for all 32 teams, and offers you different styles of clothing, authentic jerseys with players names, for their most recent team. So that you can support your favorite player regardless of the team he is on.

It also gives a link of the history of each team, allowing you to go further in to depth and gain further knowledge on your favorite football team.

http://www.newyorkjets.com/videos/videos/Barnwell-Decker-Can-Create-Opportunities-/db436e26-bfe4-4a01-a00d-572954de7b68

this is a news feed regarding the recent trade of Eric Decker to the jets. It shows highlights of his career with the Broncos and shows what he will bring to the jets offense.

http://www.nfl.com/

Through social media, each individual can find exactly what they are looking for regarding their favorite organization. It is another way to stay up to date on games, and news regarding teams. it also allows for a good sales tactic by offering brand clothing, if you are not located in the state or country who sells the specific brand of team you are looking for, these sites offer you easy access when it comes to purchasing different team labels.

NFL offers a two way model using forums, fantasy football, and emails you can send to the team page. You can also use Facebook, and twitter to  tag someone and state your request or observation.

North America and Europe sports communication: the differences and similarities

Thursday, March 13th, 2014

The English version of Real Madrid’s website offers many different features. It of course offers news and insight on the football team, but it also offers information on the Real Madrid basketball team. General information about Real Madrid is presented such as their schedule, as well as a Fan Zone where fans can connect with Madrid’s teams with videos, social media, and exclusive interviews. Fans can also share stories with friends via the popular social media platforms such as twitter, googleplus and facebook. The interesting thing about Madrid’s website is that it allows fans to subscribe to a membership service which gives the fans an inside track to services such as season tickets and discounts on merchandise. The audience for Madrid’s website is for the hardcore fan of Real Madrid. Statistics, interviews, insight on philosophy, and links to buy merchandise are presented. In addition, there is a counter on the different championships they have won as well as how the club is structured with who the board members and the president are, This type of information is not meant for the casual fan yet casual fans can still enjoy some of the content the website offers with. However, the website doesn’t offer many avenues for two-way communication. It offers links for things like social media and it offers support services on ticket and merchandise orders, but that’s about the only way the fan can interact with the organization. For a comparison between a major U.S. sport organization and the Real Madrid soccer club, www.denverbroncos.com is the website examined which is the official site of the Denver Broncos. Many of the same type of services are offered. Roster information, recent news are some of the similarities as well offering social media outlets for fans to connect with and featuring exclusive interviews with players. The main difference between the two websites is that the Broncos offer more way for fans to engage with the Broncos. For example, fans can participate in forums with other fans and enter into contests that are geared for different ages. Other differences from the Real Madrid webpage include the ability to look up cheerleaders, and watch old games. The Broncos site also offers little fans their own section to explore. Additionally, the Broncos website offers stadium and ticket information that is a little more in depth than Real Madrid’s website. To wrap up, both of these teams communicate to their audiences in a similar manner. However, there are stark differences in presenting different information to reach and engage with their audience base.

By Opie Wilson and Kalen Dear

Who benefits the most from a stadium?

Friday, November 22nd, 2013

No one can argue that America loves her sporting events. It is a natural tendency for humans to glorify athletics in some manner. The Roman Colosseum was very similar to the stadiums and arenas that we have today. Who should pay for these stadiums of ours though? Well the public is often the provider. Tax payers pay for a stadium that they might never go to, or ever support. This might seem fair to a fan of the said stadium’s team, but to someone who could care less this could be viewed as highly unfair.

http://www.psmag.com/business-economics/america-has-a-stadium-problem-62665/

All the while, American cities, counties, and states continue to struggle. Glendale, Arizona, may actually sell City Hall so they can afford to keep subsidizing a hockey team that few people actually pay to see.

Pacific Standard’s article illuminates several other issues concerning public funding of stadiums. The following link shows some exact costs of stadiums, as well as the percentage that the tax paying public contributed.

http://blogs.mprnews.org/newscut/2010/05/cleveland_browns_1999_stadium/

The mainstream excuse for stadiums is that they create jobs. Well these jobs are limited, and not as glamorous as they make out to be. No one aspires to work at a concession stand. More private donors should take charge in building and upgrading stadiums. An economy that is already suffering enough shouldn’t have to pay for frivolous improvements that don’t have an impact on the majority of the city. I know sports are a huge part of the American tradition, but not at the expense of the public who receives no real benefit.

High Salaries of Players – the Good, the Bad and the Ugly

Thursday, November 21st, 2013

Sport became a fundamental part in people’s life and created an enormous profitable business environment. A study of the sport industry indicated that the industry revenue generation exceeds $213B. Furthermore corporate sponsorship of sports properties in 2005 estimated to be in excess of $7.7B. The NFL franchise was worth of $755M which showed a 17% increase over 2003) (http://www.slideserve.com/osmond/sport-the-economy). All these indicators suggest that the sport industry is on the raise and in fact through this lucrative business job opportunities are developed.

In this blog I discuss mainly the high salaries of professional athletes and the positive and negative outcomes of these salaries to the sport teams. There are lots of different businesses and companies involved in the sport industry; therefore in order to be specific, I will concentrate on the sport teams which are an essential part of the sport performance segment.

 “The industry also contributes 456,000 jobs with an average salary of $39,000 per job.”

http://www.economicmodeling.com/2013/07/09/not-just-a-game-the-impact-of-sports-on-u-s-economy/

Two major winners of this profitable business are the athletes and the owners. Through the action of the rise in NFL salaries, player salaries continuing to rise, and therefore sport managers are “facing the challenges of generating sufficient revenue to match those increased costs” (Pedersen et al, 2011). Certain NFL teams, which are a part of the sport performance industry, are concerned with the high salaries of athletes in order to maintain their goal of being a profitable organization.

     “I’ve got partners out there right now whose teams are making less money than their linebackers,” Bisciotti said. ” I think we’ve got an acute problem here with the general profitability of the teams. We always knew this was not a big cash-flow business, but when you’ve got guys like Jacksonville tarping up 10,000 seats to stop blackouts, when you’ve got teams that are voluntarily staying at the minimum of what they have to spend on the salary cap in order to not go upside down financially, then we already have a structural problem.”

http://www.nfl.com/news/story/09000d5d8162e7da/article/bisciotti-many-nfl-teams-struggling-financially-lockout-possible

These words of Ravens owner Scott Bisciotti in 2010 indicate that NFL teams are facing the lack of having no significant cash flow. Thus teams have problems of generating a profit and long-term problems are created in order to have a healthy and stable business. Tremendously high salaries of professional athletes are not helping to create a cash-flow business. Furthermore the heightened power of the players unions in the professional sport leagues plays a significant role in increasing the salaries and raising the salary caps. Furthermore the players unions contributed to an increase in labor stoppages, which also effects negatively the financial situation of the teams.

Screen shot 2011-04-24 at 8_31_42 PM

 

Nevertheless there are also positive economic results for teams regarding giving professional athletes a high salary. For example the Los Angeles Lakers has a 5-year average profit of $38M (http://www.forbes.com/pictures/emdm45hle/2-los-angeles-lakers/). Kobe Bryant probably has a major influence as a player and a brand in the profit of the Lakers. He is by far on the top of the Lakers’ salary list with $30.45M in 2013-2014; the second one is Pau Gasol with $19M (http://www.hoopsworld.com/los-angeles-lakers-team-salary). In my opinion one cause of the high salaries of professional athletes is that clubs and their owners are dependent on these athletes. The thought of “we need you more than you need us” is a reason why owners pay their players so much money. As mentioned in the YouTube video below, which discusses reasons of the inequality of salaries between people. It is discussed that capital used to keep talent in place, because capital was scarce. Now a day’s talent keeps capital/money, the reason for that is that talent is what scarce, and thereby athletes demand a higher salary from their employers’ because they realize their unique and in demand talent.

http://www.youtube.com/watch?v=EZ83YOptIZ8

All in all high salaries of professional athletes definitely help to keep talented and high skilled players, who generate profits for their teams because of their unique performances. Never the less high salaries can be a burden for club owners in order to generate profit and to create cash flow. The players unions are a major issue of clubs because of their constant demand of higher salaries. Fact is that not every single team has a Kobe Bryant who generates a ton of money. Smaller clubs are facing major problems in order to keep up with the payment of high salaries.

21 is the new old..

Thursday, November 21st, 2013

The Atlanta Falcons’ came out with a plan back in April of 2013 to build a brand new $1 billion retractable-roof stadium by 2017 in downtown Atlanta.  After over two years of negotiations, the city’s economic development armed voted 8-1 in approving the issue of over $200 million in bonds from Atlanta city’s hotel-motel taxes to help with the funding of the new stadium.  Since the current Georgia Dome stadium was built only 21 years ago in 1992, this raised a lot of questions and concerns.  The questions are exemplified by something along the lines of why now, why is this necessary, the stadium just turned old enough to drink! Falcons owner says

We’re not simply swapping one stadium for another. We’re building a best-in-class facility that will help us attract new events and retain the Falcons.

http://www.cbssports.com/nfl/eye-on-football/22007606/falcons-1b-retractableroof-stadium-gets-public-funds-green-light

The remaining money to support the costs of the stadium will come from other private funds as well as the Atlanta Falcons.

In another Q&A article found at: http://www.sbnation.com/2013/3/7/4076234/new-falcons-stadium-deal-atlanta it is asked “Since this is an NFL stadium deal, how much blatant robbery of public money occurred here?” Following the response:

A bit, but that’s money long since stolen via the hotel tax, which by law must go towards ‘Promoting tourism, conventions, and trade shows.’ There are local costs to it, as there are with any tax, but the direct amount of money in theory is coming from tourism taxes levied on hapless conventioneers breezing through town.

When it comes to using public funding, it seems like something that is rather hard to swallow.  If after 21 years, the Falcons for some reason need a new stadium that is still relatively new, shouldn’t we be asking more questions?  It seems as though this hotel-motel tax could be used for a cause beneficial for more people as well as a better cause.  $200 million is no small fee, which yes, gives the new stadium a good step in the financial direction that they need but it could be better used for other things within Atlanta.  Using this $200 could be used towards education, construction in the city, or many other aspects that could be beneficial to many people around the city, rather than just the team and the people surrounding the sport.

Socail Media, NFL’s New Marketing Technique

Tuesday, November 12th, 2013

We all know that the NFL is a huge organization which makes billions of dollars a year. While the NFL can be spending big money on traditional communications, they chose to go the other route using non-traditional ie. facebook, twitter, and instagram. The reason they are going in this direction is not because they don’t want to spend the money, but instead because it reaches a wider audience. The NFL decided to hype the release of the 2013-2014 football schedule  earlier than usual and started creating hype by posting it to social media websites for people to see.

The NFL is trying to get people excited about the season before the schedule comes out so that people will stay tuned. Once people are tuned in and the schedule is released, people will be so excited that they will start to buy tickets right away. An example would be by letting a video out similar to this, http://www.youtube.com/watch?v=aXZNs1PVPlY . It gets fans who miss football going and ready for their team which may increase sales in every aspect. The NFL knows that many people are now on social media and the circulation of ads, videos, or whatever they are trying to get across will reach a wider audience. This article show an example of  how teams and organizations are turning to social media to get the word out, http://sportsbusinessnow.com/nfl-uses-social-media-to-create-hype-for-schedule-release-2013/ .

Some form of non traditional communication that teams or the NFL may do is by having emails sent out to an older group of people. Social media is used by many but if there were a group who would not receive the message, it would be older people. However, older people have emails and check them quite frequently. They are also a group with not as much to do (if they are retired) and enjoy events such as football games.

The NFL is increasing their usage of social media for marketing purposes. It seems that the hype got to a large audience and I do Believe they will continue to communicate through social media because of the effectiveness both financially and physically.