The Business of Sports

Let There Be Metta World Peace on Earth


Most people who celebrate the holiday like to dream of a White Christmas. In the NBA, the color of choice, come Sunday’s 2011 Tip Off, is definitely Green.

From National Basketball Players Association Commissioner Billy Hunter’s $1 million bonus for shepherding his flock through a tense work stoppage to Chicago Bull Derrick Rose’s five-year, $94.8 million contract extension, and on to the NBA’s slew of new league-level marketing deals, it’s beginning to look a lot like the five-month NBA lockout was just a stutter-step on the road to ever-expanding basketball riches.

In the short term, NBA fans are looking forward to a slate of five marquee matchups on Christmas Day, as well as game-changing roster realignments at the Los Angeles Clippers and New York Knicks (also playing in a newly renovated Madison Square Garden), among other teams. In the long term, NBA Commissioner David Stern and his staff are focused on continued labor stability and expanding their digital and global footprint.

Let there be hoops on earth.

Aftermath of the NBA Labor Deal

As if the entire NBA lockout wasn’t controversial enough, players and fans in key NBA markets were reeling as the league formally opened its shortened training camps last Friday. NBA Commissioner David Stern nixed a three-team trade that would have sent New Orleans Hornets guard Chris Paul to the Los Angeles Lakers and moved Lakers power forward Pau Gasol to the Houston Rockets, among other roster changes.

Stern killed the deal after several owners complained that, in their view, the new collective bargaining agreement that was supposed to stop big-market teams from plundering small-market teams for star free agents didn’t seem effective. The move was also perceived as a power grab by Stern, who—after LeBron James’s and Chris Bosh’s migration to Miami last season, as well as Carmelo Anthony’s move to New York—had made it clear that he didn’t like players dictating where they wanted to go. Insiders maintain he wasn’t going to let Paul do it.

Players expressed their displeasure with Stern’s veto via Twitter and other channels. The atmosphere was a little cold, even for December, at practice courts in Houston, New Orleans, and L.A.

A compressed schedule also has many players and coaches griping. Some NBA teams will be forced to play on three consecutive nights, while some teams will play five games in six nights. The last time NBA teams had to endure such a grind was in 1999—the league’s last lockout-shortened season.

“Avid NBA Fans” Are Fired Up

On the spectator side, as training camps opened, a study released last week by Scarborough Sports Marketing examines the fans and cities that should be most excited about the NBA’s return. “With the league coming back, advertisers and sponsors regain their ability to interact with millions of Americans who love the sport,” said Bill Nielsen, vice-president, Scarborough Sports Marketing. “Similarly, the draw of NBA events and the enthusiasm surrounding the teams is imperative to the economic growth of the local markets in terms of bars, restaurants, and arenas.”

Avid NBA Fans make up 9 percent (22 million) of all American adults aged 18 and up. (Scarborough defines “avid fans” as American adults who say they are “very interested” in a given sport.)

According to the study, the top three local markets for Avid NBA Fans are cities in which the NBA is the only major professional league in town: San Antonio (26 percent), Memphis (19 percent), and Salt Lake City (18 percent). Similarly, five of the top seven local markets are home to teams that made the NBA Playoffs last year.

The Scarborough study also indicated that NBA fans are willing to return to arenas. Fifteen percent of Avid Fans and 18 percent of event attendees are interested in buying partial or full-season tickets, while 13 percent of Avid Fans claim they are willing to pay $75 or more for a NBA single game ticket. What’s more, 21 percent of Avid Fans and 24 percent of event attendees purchased NBA apparel in the past 12 months.

For fans planning on attending holiday season games, ticket reseller StubHub has identified the top five most popular events, ranked by total ticket sales through Dec. 22:

1)  Boston Celtics at New York Knicks

2)  Chicago Bulls at Los Angeles Lakers*

3)  Miami Heat at Dallas Mavericks

4)  Los Angeles Clippers at Golden State Warriors*

5)  Orlando Magic at Oklahoma City Thunder

* According to StubHub data, for the first time in company history, demand for Clippers tickets has surpassed that for Lakers tickets by more than 40 percent

A Blizzard of NBA Marketing Deals

Maybe it’s just the compressed nature of the NBA’s 2011 preseason—a mere 29 days from the Nov. 26 handshake agreement that effectively ended the lockout to the Christmas Day tip-off games—but we can’t remember when the league has ever announced so many new and extended sponsorship deals in such a short period of time.

Car swap site AutoTrader.com and the NBA have extended the marketing partnership they established in 2006. As part of the new multi-year agreement, AutoTrader.com will continue to serve as the presenting partner of the NBA Tip-Off show on TNT, as well as presenting partner of all pregame shows on NBA TV. NBA Tip-Off presented by AutoTrader.com on TNT features two-time Emmy award-winning host Ernie Johnson, along with analysts Charles Barkley, two-time NBA Champion Kenny Smith, and newly-added four-time NBA Champion Shaquille O’Neal. The season-long involvement with the popular NBA pregame show gives AutoTrader.com brand exposure in up to 45 regular-season games on TNT.

TNT itself has launched a major marketing campaign ahead of the Christmas Day tip-off with new TV spots featuring O’Neal and heavier emphasis on digital and social media than in previous years—fueled, as Ad Age notes, “in no small part by Shaq’s 4.6 million Twitter followers” and his larger-than-life persona.

Barkley, meanwhile, is attempting to go smaller. The outspoken Hall of Famer known as the “Round Mound of Rebound” will appear in the new “Lose Like a Man” campaign from Weight Watchers (WTW) in broadcast and print ads rolling out on Christmas Day.

Gatorade, the NBA’s longest-standing marketing partner dating back to 1984, will continue to fuel the NBA’s best with proper hydration and nutrition. In a multi-year extension, Gatorade, a division of Pepsico (PEP), will continue as the Official Sports Drink Partner of the NBA and become the league’s Official Sports Performance Nutrition Partner. As part of the new agreement, the partnership expands further internationally, to Brazil, Italy, and the U.K. Gatorade also has endorsement relationships with Kevin Durant of the Oklahoma City Thunder, Dwight Howard of the Orlando Magic, and Dwyane Wade of the Miami Heat.

Sprint (S), meanwhile, becomes the Official Wireless Service Partner of the NBA. A key element of this new agreement is a new app called “Sprint NBA Mobile” that will be the most comprehensive app in the marketplace for NBA fans, granting them access to in-game and post-game video highlights, news, stats, live home and away radio broadcasts, and direct access to live ESPN NBA Games via Sprint TV’s ESPN Channel. Sprint will serve as the presenting partner of digital promotion for Christmas Day games, as well as for the NBA All-Star Balloting program and other NBA All-Star Game initiatives.

The NBA, finally, has also announced a new multi-year partnership with Under Armour (UA). As part of this partnership, Under Armour will be able to feature its endorsers—including DeAndre Jordan of the high-flying Clippers, Brandon Jennings of the Bucks, the T-Wolves’ Derrick Williams, Kemba Walker of the Bobcats, and Greivis Vasquez of the Grizzlies—in official NBA uniforms to promote its basketball footwear. Under Armour and the NBA will also team up to refurbish community basketball courts throughout the U.S.

Chinese Passion Dancers to Miami

The Miami Heat, never a franchise to stay out of the spotlight for long, has just publicized what might well be the most forward-thinking deal of the new NBA season. On Tuesday, the Heat announced a multi-year marketing partnership with Chinese beer company Tsingtao (600600:CH) that goes well beyond slapping a name on signage at AmericanAirlines Arena. According to the South Florida Sun-Sentinel, Tsingtao, as part of the agreement, “will send several members of their Passion Dancers to perform with the Heat dance team this season.” The Tsingtao Passion Dancers Competition is “the highest-rated TV show in China, drawing more than 100,000 aspirants,” the paper reports.

The Heat has already established a growing presence in China. The franchise’s “Big Three” of Wade, LeBron James, and Chris Bosh were prominent during the 2008 Olympic Games in Beijing, and have since returned to China on multiple promotional tours. Heat forward Shane Battier also has an endorsement deal with Chinese sportswear company Peak; he previously played alongside Chinese national hero Yao Ming in Houston. Industry experts speculate that the Tsingtao-Heat deal “could be a prelude to a Heat exhibition tour as soon as next year.”

Whether a frosty Tsingtao or a frothy cup of eggnog is your holiday beverage of choice, settle in and enjoy the NBA Tip Off this weekend. Happy Holidays.

Rick Horrow is a leading expert in the business of sports. As chief executive officer of Horrow Sports Ventures, he has been the architect of 103 deals worth more than $13 billion in sports and urban infrastructure projects. He is also the sports business analyst for CNN, Fox Sports, and the Fox Business Channel. Karla Swatek is vice-president of Horrow Sports Ventures and co-author of Beyond the Box Score: An Insider’s Guide to the $750 Billion Business of Sports (2010). Horrow is also the host of Sportfolio, a new program on Bloomberg TV that airs Wednesday nights at 9 pm ET.

Rick_horrow
Rick Horrow is a leading expert in the business of sports. As chief executive officer of Horrow Sports Ventures, he has been the architect of 103 deals worth more than $13 billion in sports and urban infrastructure projects. He is also the sports business analyst for CNN, Fox Sports, and the Fox Business Channel. Karla Swatek is vice-president of Horrow Sports Ventures and co-author of Beyond the Box Score: An Insider's Guide to the $750 Billion Business of Sports (2010). Horrow is also the host of Sportfolio, a new program on Bloomberg TV that airs Wednesday nights at 9 pm ET.

Best LBO Ever
LIMITED-TIME OFFER SUBSCRIBE NOW

Companies Mentioned

  • WTW
    (Weight Watchers International Inc)
    • $24.27 USD
    • 1.19
    • 4.9%
  • PEP
    (PepsiCo Inc)
    • $92.85 USD
    • 0.28
    • 0.3%
Market data is delayed at least 15 minutes.

Sponsored Links

Buy a link now!

 
blog comments powered by Disqus