Hands-On Approach Responsible for Rising CAA, MEAC Football Attendance

As college football programs across both subdivisions have watched in-stadium attendance decline, schools in the Colonial Athletic Association (CAA, +2%) and Mid-Eastern Athletic Conference (MEAC, +10%) have collectively experienced an uptick over the last two seasons. Alabama head coach Nick Saban suggested improving the quality of the schedule to combat the trend, but Ray Katz (co-founder of Collegiate Sports Management Group) says it’s not that simple; it’s not as if the visiting teams are driving the attendance across the two FCS conference outliers mentioned. He points to a singular commonality between the CAA and the MEAC. Both have “commissioners intent on also serving as the conference’s chief business, chief marketing and chief media officers – in addition to being the chief administrator. There is a willingness to be true innovators and to adapt to the rapidly changing media and marketing landscape.”

Howie Long-Short: It’s rare for conference commissioners to “be intimately involved in sponsorship sales calls, to work with sponsors so that they drive ticket sales or for them to take a leadership role in media rights negotiations”, but it’s that hands-on approach that has enabled the two conferences to grow attendance as most everyone else looks for answers. While Dennis Thomas (MEAC) and Joe D’Antonio (CAA) pay attention to the smallest of details within their ‘businesses’, the “power five conferences sell off their media and sponsorship rights to third parties who are naturally not going to be as invested in total success across the entire ecosystem and all revenue streams.”

The reason Thomas and D’Antonio can have their fingerprints on so many facets of the operation is “because [the MEAC and the CAA] are not the monolithic organizations that the power five conferences are. They don’t function as siloed corporate machines.” While it’s not feasible for a P5 conference commissioner to wear all the hats that those guys do, the ability to operate a business has become a skill critical to the job.

Fan Marino: Saban is right, college football programs need to step up the competition “or fans are going to quit coming” – three of Alabama’s seven home games this season come against non-P5 schools (see: New Mexico State, Southern Mississippi, Western Carolina), but simply increasing the strength of schedule isn’t going to result in packed stadiums across the country. While there are dog non-conference games, Katz suggests it may well be conference games (which comprise the bulk of the schedule) that are contributing to the decline. There might be something to that. Alabama fans are excited to host the Iron Bowl every other year, but they’ve likely tired of going to games against Arkansas, Mississippi and Mississippi State. The formation of a strategic alliance between P5 conferences (see: Early Entrants: Vol. XI) would help to solve CFB’s scheduling problem.

The issue with having cupcakes on the home schedule is that fans simply don’t want to pay to attend those games and once a fan decides to pass on season tickets in favor of buying on a single game basis for the few games he/she wants to attend, there are all sorts of variables (think: weather, life, team performance) that could prevent that individual from ultimately purchasing seats.

The cost of attendance is also a problem. Ticket prices have reached “unconscionable levels that are not affordable for the average fan.” Katz says, “the television experience has gotten so good, why would a fan pay $350 to bring a family of four to sit in mediocre seats at a mediocre game?”

Interested in Sports Business? Sign-up for our free daily email newsletter list, here!

Subscription Decline Sends Madison Square Garden Networks on Worst Slide in 4-Year History


Madison Square Garden Networks’ (MSGN) – which includes MSG and MSG+ – share price dropped perceptibly (-12.4% to $14.76) on Wednesday August 21st after the company reported subscriber totals and adjusted operating income declined -6.5% YoY and -11% YoY (to $76.4 million) respectively, during fiscal Q4 2018. Cord cutting and the expiration of promotional offers from two unnamed distributors are to blame for the weaker-than-expected results. Wednesday’s sell-off continues a tough year for the regional sports networks. While the S&P 500 is +17% YTD, MSGN shares are languishing down -38% YTD.

The disappointing earnings report comes on the heels of Madison Square Garden’s (MSG) worst day since the networks were spun off four years ago. Word of significant cost overruns on the MSG Sphere project – perhaps as much as $500 million over the $1.2 billion budget – sent shares tumbling -8.75% on the day. The price dropped another -2.3% on Wednesday (to $261.13).

Howie Long-Short: The -6.5% sub decline resulted in $3.3 million worth of lost affiliate revenue. That’s an absurdly high percentage – more than 2x “the broader Pay-TV industry average”, but investors shouldn’t worry about subscribers continuing to flee at that rate. The two companies who reported the expiration of promotional offers during the period experienced subscriber growth over the trailing 12 months.

MSGN is and has been vulnerable since Jim Dolan sold Cablevision to Altice in 2016. As independent networks – as opposed to RSNs backed by Sinclair or Comcast, MSGN lacks the protection needed to ensure widespread carriage. While the networks remain available on that cable system for the time being, it’s worth wondering what happens when their 10-year agreement runs out in 3 months. Altice is a notoriously tough negotiator and has publicly stated a desire to cut programming costs. Failure to come to an agreement with a top 3 cable company in the New York DMA would be a devastating blow to Dolan’s networks. It’s worth mentioning that MSGN has been previously mentioned as a potential acquisition target for Sinclair (SBGI).

Most would assume that having the rights to Knicks and Rangers games would make MSGN a ‘must-have’ for carriers in the tri-state area, but it’s important to remember that RSNs are among the most expensive channels and cable providers have become conscious of keeping costs down with subs on the decline. As for the virtual MVPD’s, with growth in the OTT sector having stalled (most companies were light on sports content, anyway), MSGN has been unable to make up for the legacy MVPD subs lost.

The value of Knicks and Rangers broadcast rights is also relative. New York is a baseball town. The Yankees and Mets draw the highest ratings of the local teams by a wide margin. While the Knicks still have a commanding lead on the Nets, viewership has been on a gradual decline for more than a decade and dropped -42% YoY (to .84 TV HH) in 2018-2019. For some context, the club averaged a 3.31 TV HH rating on MSG in 2011-2012. The Rangers have a passionate fan base, but it doesn’t translate to huge television ratings; there simply aren’t as many hockey fans in the city as there are baseball and basketball fans. The team pulled a .74 TV HH rating (-10% YoY) last season.

Fan Marino: While Howie repeatedly referenced the Knicks and Rangers, it must be noted that MSG+ also carries Devils (.24 TV HH last season), Islanders (.54 TV HH last season) and Sabres games.

Interested in Sports Business? Sign-up for our free daily email newsletter list, here!

Legacy Media Company Short on Resources Aligns with Niche Digital Sports Outlet

La Vida Baseball

Legacy Media Company Short on Resources Aligns with Niche Digital Sports Outlet

La Vida Baseball’ [LVB] recently announced a partnership with the Houston Chronicle that could ignite a larger trend across the media landscape – legacy companies aligning with niche digital properties. As newspapers – and sports departments in particular – find themselves short on resources, upstart digital outlets can serve to fill the void; LVB’s feature-based content (will be predominantly written to start) will complement local beat coverage of the Astros and Rangers. While syndication is a cost-effective solution for understaffed editorial departments, the reach – and credibility – that an independent outlet can gain from a deal with an established media brand is equally as valuable.

Howie Long-Short: LVB founder Jay Sharman explained that “upstart digital media entities can’t rely on inbound traffic. In the social media age, people simply consume content on too many different platforms to assume a single article will stand out in a stream of news.” Instead, the objective should be to “create valuable content and then find ways to get it in front of the right audience” ; ideally in association with an a trusted brand.

The deal was a no brainer from the La Vida Baseball perspective. The Houston Chronicle will drive traffic (i.e. click-throughs) and brand awareness for LVB and an affiliation with the paper “furthers [LVB’s] credibility with the players, the teams and the league – which ultimately leads to more access and betting storytelling.” It’s also the agreement Sharman believes will “help to expedite conversations with some other potential distribution partners.

On the other side of the negotiating table it was the importance of the Latino audience to the Chronicle business that drove the legacy publication to do the deal. Adding some “great storytelling that is relevant to the Latino sports fan” – without adding costs – made for an easy decision on their end.

La Vida Baseball is going to be selective in the markets it chooses to replicate the content syndication model in, but Sharman cited potential in “the smile states (Southern California to Maryland), San Diego, Chicago, New York, Boston and Miami.” The Houston Chronicle is owned by Hearst Corporation, so there would seem to be an opportunity to align with other newspapers under their corporate umbrella, but a closer look at company holdings only reflect two papers that would be an obvious fit; the San Francisco Chronicle and the San Antonio Express-News. New Media Investment Group, which owns USA Today and 100+ other daily publications, might be a better fit; the company is looking to scale hyper-local businesses and sports content curation may be able to help them accomplish that.

Moving forward Sharman believes “original content with some curation” is the model that many legacy media companies with brand equity – but limited financial resources – will follow. He suggested that “it’s not too dissimilar to the Associated Press model where you have publishers creating content with some utility for a lot of different outlets.

Fun Fact: LVB believes that there are 16 million Latino baseball fans in the United States.

Interested in Sports Business? Sign-up for our free daily email newsletter list, here!

Early Entrants: Vol. XVI – Report Jay-Z Set to Purchase ‘Significant Ownership Interest’ in NFL Team “Wrong”

Editor Note: ‘Early Entrants’ is a series of sports business ‘rumblings’ before the news breaks.

Jay-Z NFL.jpg

Report Jay-Z Set to Purchase ‘Significant Ownership Interest’ in NFL Team “Wrong”

On Friday afternoon, TMZ dropped what would be a bombshell of a report – if true. The celebrity rag reported that Jay-Z is set to purchase ‘significant ownership interest in an NFL franchise. However, in our search to identify the team, multiple sources questioned the story’s validity. The president of one NFL club told JohnWallStreet that he flat out “thinks the report is wrong.” He said he hadn’t “heard one word about [Jay-Z buying into the league]. Maybe [Jay-Z] agreed [in principle] with someone, but [ownership transactions] get vetted and approved via the league” and that process certainly hasn’t taken place yet.”

He also pointed out that “[league rules] would force [Jay-Z] to give up the [Roc Nation] agency (which doesn’t seem to make sense)” and then there is still the financial aspect to consider. “The Falcons recently sold 10% for $300 million… not sure Jay is writing that kind of check and I don’t think the NFL would have done the deal with Roc Nation if he was ultimately going to be a team owner.” At a minimum, TMZ’s report is “very premature.” If it is true, New England is the club; Robert Kraft brokered the recently announced partnership between the league and Jay-Z’s company.


Executives at NFL League Office “Don’t Love” Alliance with Jay-Z, Roc Nation

Speaking of the controversial (at least among players) deal that makes Jay-Z’s agency the ‘official live music entertainment strategists’ of the NFL, JohnWallStreet has heard that “executives at the league [office] don’t love it”; no surprise considering it was pushed through by Kraft and Commissioner Roger Goodell without a vote “by the broader group [of owners].” Questions remain about “how it will actually work”, if there’s any real “teeth” to a partnership being touted as a social justice initiative and why the league “didn’t turn to LiveNation for content given its relationship with Ticketmaster.” One source with knowledge of negotiations said LiveNation sought out the opportunity, but was rebuffed by the league. Understandably, CEO Michael Rapino “was pissed” to learn of the league’s alliance with Jay-Z.


Celtics Looking to Replace GE on Uniform

The Mavericks have publicly parted ways with patch sponsor 5miles, but Dallas isn’t the only NBA franchise looking to replace a partner logo on their game jersey. Sources tell JohnWallStreet that it’s well-known within agency circles that the Celtics are shopping the real estate General Electric occupied the last two seasons. In fact, they are telling prospective sponsors that it can be had as soon as this upcoming season. JWS founder Corey Leff has more on both of those deals, as part of a deeper dive on the NBA’s patch program, in the newest issue of Sports Business Journal.


Scary Crash Likely Ends Pocono’s Run on IndyCar Circuit

Driver Justin Wilson died from injuries suffered racing at Ponoco Raceway in 2015 and a violent crash at the track nearly took the life of Robert Wickens last year (he continues to rehab from spinal injuries and has not raced since), so there were safety concerns surrounding the oval – for open-wheel driving – heading into Sunday’s race. The lack of an agreement between the racing series and the privately held venue beyond 2019 has only added to the speculation about the track’s future – or lack thereof – on the North American circuit. A scary five car wreck (everyone seems to be OK) on first lap of Sunday’s ABCSupply 500 sounds as if it sealed the track’s fate. The owner of one team told JohnWallStreet (shortly after the crash) there is a “high likelihood that IndyCar won’t be back at Pocono.

Interested in Sports Business? Sign-up for our free daily email newsletter list, here!

Diamondbacks Highly Likely to Remain in Arizona


The Diamondbacks gained the freedom to leave the state of Arizona as early as 2022, when it dropped a $187 million lawsuit against Maricopa County claiming funds owed for stadium reparations and improvements. A recent report from the Las Vegas Review Journal indicating that the city of Henderson tried to quietly lure the Major League Baseball franchise to Southern Nevada has only served to increase speculation about its future – or lack thereof – in the Copper State. However, a source with knowledge of ownership’s thoughts tells JohnWallStreet that the construction of a new venue within the state remains the most likely outcome. It is possible that the club will decide to invest in a major renovation of Chase Field, but that is considered a less desirable solution. The franchise will only explore relocation once all other avenues have been exhausted.

Howie Long-Short: Chase Field was built in the mid 1990s. The 2019 MLB season is its 22nd in use, so the building is coming up on the end of its life cycle; most pro sports venues are good for +/- 30 years.

Contrary to reports, the deal the team agreed to with Maricopa County allows it to leave the Phoenix stadium immediately – for another venue within the state. The problem is, there’s no real viable alternative to serve as the Diamondbacks home. The team will continue to invest the funds necessary to keep Chase Field safe and secure while it looks for a long-term stadium solution. Should the building become untenable (think: A/C systems fails), the team can elect to immediately relocate outside the state.

Our source said that there remains a “high likelihood” the Diamondbacks’ future will exist in Arizona. While the litigation settlement referenced allows for the team to move outside the state come ’22, a mixed-use development in suburban Phoenix provides ownership with the greatest growth opportunity (see: Atlanta). The club “has not excluded a future in downtown Phoenix” from its list of potential destinations, either; of course, downtown PHX doesn’t offer the vast real estate desired for a commercial project of that magnitude.

If the Diamondbacks are going to invest in a wholesale makeover of Chase Field reducing the seating capacity would be a good place to start. In fact, it’s probably worth considering even if the team isn’t long for the venue. Creating a more intimate environment and limiting the supply of tickets will only help to increase the value of the remaining seats.

The Diamondbacks did conduct an engineering assessment to explore the viability of retrofitting University of Phoenix Stadium. The building has many of the physical attributes the team desires (see: capacity, climate control), but it was determined that the Cardinals’ home would require an investment of at least $100 million before it could house a baseball team on a temporary basis; the club does not believe the building can play host to both a football team and a baseball team full-time. To be clear, had the price been $25 million the franchise would have at least considered the venue as a temporary home.

Fan Marino: Henderson, NV was among several cities outside of AZ that obtained an RFP from the Diamondbacks in the wake of their settlement with Maricopa County. Discussions never advanced beyond courtesy calls between the team’s operational staff (i.e. not the decision makers) and city officials and the two sides never met in person. 

It’s unclear which cities besides Henderson responded to the RFP, but a source familiar with MLB expansion/relocation discussions cited six locales – in addition to Henderson/Las Vegas – considered capable of supporting a pro baseball team. Montreal, Nashville, Vancouver, Charlotte, San Antonio and the Tidewater region of Virginia were the names given (in no particular order). The ones willing to invest in new stadiums, are the ones that will ultimately land teams.

Interested in Sports Business? Sign-up for our free daily email newsletter list, here!

Geopolitics, Recency Bias and Pending OLE Transaction Force Endeavor to Delay IPO


Endeavor Group Holdings (Endeavor) has announced it plans to delay the company’s IPO until the fall season. September is now the earliest that the public will have the chance to buy into the entertainment and marketing company. Endeavor hopes to finalize the $700 million acquisition of On Location Experiences before going to market at a $7 billion to $8 billion valuation. The Wall Street Journal reported that the company intends on raising more than $500 million.

Howie Long-Short: Endeavor’s decision to postpone their IPO was a wise one. The market remains in flux with a Chinese trade war (currency war) looming and with the currency exchange rate also in significant flux day-to-day, it’s becoming increasingly difficult to forecast foreign exchange rates relative to currency (i.e. dollars vs. Renminbi vs. Yen). Now is not the right time for a U.S. company – particularly one that has SoftBank as an investor – to introduce an IPO targeting global buyers. There would likely be a recency bias at play here as well. Institutional investors that watched the Wanda Sports Group IPO flop are certainly wondering how Endeavor is any different; in their eyes, they’re both debt laden (will owe $3.1 billion after paying down hundreds of millions in debt post IPO) agency businesses.

Timing aside, Endeavor is a highly leveraged business that needs to find a path to long-term profitability. The company reported just $231 million in 2018 net income (on $3.61 billion in revenue) after four straight years of posting losses. Bumping the IPO into Q3 will allow the company to show its Q2 earnings results. Assuming they’re on an upward swing, it should help the company’s pre-IPO valuation.

The perception that Endeavor is a talent business is inaccurate. Historically speaking, WME-IMG generated much of their revenue from television (think: re-licensing and production). But the emergence of OTT has compromised the licensing business and AI-based production (see: ability to create content with fewer cameras and people) has rapidly cut into profits on that side of the operation. An ongoing battle with the Writers Guild of America over “the future of packaging fees and affiliated production” is indicative of a changing business. As it currently stands, Endeavor generates more money from negotiating media deals than from any other revenue stream.

As long reported, Endeavor would like to acquire the 80% of On Location Experiences that is not owned by the NFL before filing. The price being floated and the prospect of taking on additional debt has scared the company off to date, but the chance to diversify their portfolio with a high-end hospitality and live events company, while increasing revenues remains appealing.

Fan Marino: The UFC is among Endeavor’s most valuable assets, so news that the company plans to introduce Zuffa boxing – a promotion to be led by Dana White – is significant. One high profile boxing insider told JohnWallStreet that if Zuffa is willing to build the next generation of boxers organically – as opposed to buying an established stable of fighters – there’s no reason that they can’t replicate what they’ve done in MMA. There is no single dominant promotion in the boxing space, live sports content remains in demand and “[Endeavor] has tremendously sophisticated marketers. This is an opportunity to reimagine the sport. Drug testing, health insurance, the number of rounds, the size of the gloves; it can be a blank canvas.”

Interested in Sports Business? Sign-up for our free daily email newsletter list, here!

The Ringer Staff Unionizes, Trend Forming Amongst Digital Media Properties


The editorial, video, podcasting and social staff at The Ringer has announced its intent to unionize with the Writers Guild of America (WGA), East – the same organization that supports SB Nation (a subsidiary of Vox) team personnel. Together they’ll work to ensure that every employee receives “necessary support, protection and fair compensation.” Before collective bargaining negotiations can begin, Bill Simmons’ company will need to recognize the union; failure to do so will result in a National Labor Relations Board vote to determine if/when discussions can/will commence. The announcement comes as digital media publishers across the country face increased pressure to “share the wealth” with the “editors, writers, podcasters, producers, fact checkers, copy editors, illustrators, designers, and social media editors” that make up the “foundation of [their] brand.”

Howie Long-Short: Fear is driving the trend of unionization across digital media (see: BuzzFeed, Refinery29, Gimlet Media, Vice and G/O Media). As the industry becomes increasingly more challenging (think: pressure on advertising revenues, amount of competition in marketplace), many feel as if their jobs have become tenuous. The hope is that the strength of a union will secure their future, but it’s formation is more likely to establish a false sense of security in those individuals; a company that is struggling, lays off union employees the same as those working on a part-time or contract basis.

The GM of a high-profile sports media outlet assured JohnWallStreet that there is little in the way of profits to be shared at The Ringer, so it’s worth wondering if unionization was the right decision for those that work for Bill Simmons’ three-year-old digital property. If you consider that “a union makes it harder for a media company to service its customers at a time when those in the industry require the most flexibility” – the example cited was a union in opposition of on-air talent editing their own video – then you can certainly argue the formation of one works against everybody’s best interests.

If The Ringer isn’t particularly profitable and the formation of a union provides little in the way of real security, it’s worth wondering why the company’s employees would proceed down that path. Remember, many within the industry are simply happy to have steady work and the chance remains that the formation of a union could backfire on its members; Vox has moved towards hiring more part-time and contract employees since it’s roster aligned with WGA, East, while Joe Rickets decided to shut down DNA Info and The Gothamist after their staffs’ opted to unionize. One industry insider suggested that the formation of The Ringer union is the employees “uprising against Bill.” Considering that the group stated in their letter of intent that they want to be “properly credited for their multimedia work” (Simmons receives much/all the attention associated with the outlet) and that “Bill is making a sh*t ton of money and they’re not”, there may be something to that theory.  

Both of the influential sports media executives that we spoke to agreed that employees at a widely profitable company would likely benefit from the formation of a union, so there was a consensus that it’s just a matter of time before folks at companies like ESPN – that make real money – follow in the footsteps of their brethren at the digital-first outlets cited.

Interested in Sports Business? Sign-up for our free daily email newsletter list, here!

Saudi Arabia Lands Ruiz-Joshua II

Clash on the Dunes

Matchroom Boxing has announced that the rematch between Anthony Joshua and WBA, IBF, WBO and IBO heavyweight champion Andy Ruiz, Jr. will take place in Diriyah, Saudi Arabia on December 7th. The General Sports Authority of Saudi Arabia will pay a site fee north of $50 million to host the ‘Clash on the Dunes’ event. As one might expect, the decision to stage the fight in the middle east as opposed to in Wales (as anticipated) or in Tijuana (as Ruiz preferred) has been heavily criticized.

Howie Long-Short: Some look at the choice to go to Saudi Arabia as Hearn cashing in his chips on Joshua – he certainly knows a 2nd defeat would kill his golden goose. I’m not so sure. As one high ranking DAZN executive said, “if [Hearn] thinks Joshua is going to lose, then it surely makes sense to take the payday now. But if he thinks A.J. is going to win, why not also take the [$50 million+] now?

The counter argument is for Hearn to maximize Joshua’s value, he needs to raise the fighter’s profile in the U.S and a fight that airs at 4p EST/1p PST (Saudi Arabia is +7 hours ahead) will draw less eyeballs than one airing on Saturday night; there’s also going to be significantly less media attending a fight in the KSA, so ‘Clash on the Dunes’ won’t receive the coverage it should stateside. Both are valid points, but neither matters unless A.J. is victorious. The executive we spoke to agreed saying “go win and then you can get back to deciding how to market.

To be clear, DAZN had “no say – zero” in the decision to host the fight in the KSA. Our source within the company explained “the promoter puts on the fight and they choose the venue – we just get to stream it.” While it has not been formally announced that DAZN will carry the fight, Hearn’s relationship with the company makes it all but certain.

DAZN obviously would have preferred the fight be held in the U.S., but our source said “after that, every city is just about the same. London may be some percentage better than Diriyah, but now you’re fighting over details; and you can make the argument that the controversy surrounding Saudi Arabia will bring more attention [to the fight] than had it been held in London.” It’s worth noting that DAZN will end up paying less to stream the fight from the KSA than they would have had it been in the U.S.

The truth is, from the DAZN POV too much is being made about the location of Ruiz-Joshua II. Their marquee attraction is Canelo Alvarez and as we were told “the most important thing to [DAZN’s] U.S. business is his next fight. Canelo is the LeBron of boxing in this country. A.J. is the Durant. Durant is amazing, but he’s not LeBron. There is only one superstar and it is Canelo Alvarez.

Andy Ruiz Jr. is contractually obligated to take the rematch and the $9 million he’s guaranteed, but that doesn’t mean he’s showing up in Saudi Arabia under those terms. The Athletic is reporting that Ruiz has refused to sign-off on the fight unless he receives “a significantly higher purse.” There’s certainly a case to be made that he deserves more, but I don’t believe he has much leverage. Ruiz loses much of his marketability without those four belts.

Fan Marino: The DAZN executive we spoke to was uncomfortable with the idea of attending an event where female colleagues may be uncomfortable or unwelcome. Others oppose going out of concern the Saudi authorities are using the event to “sportswash’ their severely tarnished image.” When asked if I would be willing to attend if invited, I said yes; that as a sports business processional and sports fan, it’s a once in a lifetime opportunity to attend a heavyweight championship fight outdoors in the middle east.

Interested in Sports Business? Sign-up for our free daily email newsletter list, here!

NBA “Thinking Like Other Business Enterprises”, Plans African Expansion


The NBA has announced the seven African cities – Cairo (Egypt), Dakar (Senegal), Lagos (Nigeria), Luanda (Angola), Rabat (Morocco) and either Monastir or Tunis (Tunisia) – that will play host to the Basketball Africa League’s (BAL) 30-game regular season schedule; the BAL Final Four and BAL Final will be held in Kigali, Rwanda. Twelve teams will participate in the league’s inaugural season, which is set to tip-off in March of 2020. Each team is scheduled to play five games. The three teams in each conference with the best records (aka the “Super Six”) at the completion of those games will move on to a round robin playoff to determine the Final Four participants.

Howie Long-Short: The NBA has long tried to grow the game of basketball abroad, so the formation of the BAL furthers that mission. The timing is also right to introduce a pro hoops league on the continent. Bryant McBride, who sits on the board of Ubumwe (a grassroots basketball initiative operating in Rwanda), said “the dollars being spent in Africa aren’t commensurate with eyeballs over there, but people want – and need – ways to spend their increasing disposable incomes.

Partnering with FIBA on the venture was a wise decision. The international basketball federation has experience working with national governing bodies and has proven deft at facilitating competition between teams from multiple countries – each of which present unique political challenges. McBride asserts that “corruption is [also] a problem in many of these markets.” Theoretically, FIBA should be able help the NBA navigate some of these issues; Obama’s involvement certainly won’t hurt.

The NBA has been investing in African grassroots programs for +/- 10 years. To this point, participants never had more than a long-shot chance at being discovered and earning an NBA tryout. That changes with the formation of a viable pro league on the continent, so expect more African-born players on NBA rosters over the next decade (13 made opening night rosters last season). Ken Shropshire, CEO of Global Sport Institute at Arizona State University, said that theories suggest “there should always be a tip to the pyramid. People aren’t [willing to invest the time into being great at something] if there’s no real chance at success. The BAL will give young players something to aspire for.

McBride agreed. He said, “look at Pascal Siakam (plays for Raptors). There’s 50 or 100 other guys like him over there that just haven’t had the opportunity. When professional opportunities are provided regularly, when there is training available on a regular basis, when people can be sure that they are going to get paid – participation rises.

While the BAL provides the NBA with an opportunity to discover talent, Shropshire reminds that the league has Basketball without Borders and camps in francophone Africa and South Africa for that purpose; it doesn’t need to invest in another pro league to find guys who can play. He says that the league’s African expansion is simply a case of the NBA “thinking like other business enterprises. The first-place big business looks to for international growth is China, the next is India and then third is Africa. There’s been all sorts of speculation about Africa’s economic potential and how much is going to be spent there.

It’s unclear exactly what the NBA’s financial upside is on the continent, as Shropshire noted “all of the projections are based on forecasted revenues, not current numbers.” But it’s reasonable to assume that the ceiling is lower than it is in China; the population is smaller and much of the continent remains under-developed.

Speaking of China, the NBA’s investment in the country has yet to really pay off in terms of on-court production, but a 5-year media rights extension with Tencent – worth +/- 3x the value of the expiring deal (up to $1.5 billion) – means the league’s Chinese investment is starting to pay off financially.

Fan Marino: Last season, 108 foreign born players (22% of the league) made an NBA team’s opening night roster. Those players came from 42 unique countries showing how diverse the league truly is. For comparison purposes, MLB – the second most diverse of the big four sports leagues – has players from just 20 unique countries.

Interested in Sports Business? Sign-up for our free daily email newsletter list, here!

Increased Focus on Media Engagement, Promotion Within Core Markets Sparks NASCAR Turnaround


After several years of sharp ratings declines, NASCAR television viewership is on rise again. Nielsen reported that the 2019 Monster Energy NASCAR Cup Series averaged 4,076,000 viewers/race through the first half of this season (+2% YoY, excluding weather-impacted races). JohnWallStreet spent last weekend at Watkins Glen trying to find out what the drivers think the catalyst for the turnaround has been. The common theme among them was the belief that NASCAR president Steve Phelps’ increased focus on promoting the sport was driving it back in the right direction.

Howie Long-Short: It’s reasonable to wonder if a series of tight races (see Fan below) is responsible for stopping the ratings slide, but 7x Cup Series champion Jimmie Johnson and Landon Cassill, driver of the #00 Chevrolet, don’t believe the ratings uptick is related to the competition on the track. Johnson pointed out that “stage racing isn’t new [instituted in 2017] and Cup Series racing has been highly competitive for a long time.” Cassill agreed saying there’s been “good and bad racing throughout [his] career, with every package” [and yet ratings have always declined].

Cassill believes the ratings increase is the product of the series’ renewed focus on marketing. He said, “like most businesses, everything starts at the top and NASCAR leadership – from Steve on down – has gotten serious about promoting the sport.” Aric Almirola (driver of the #10 Ford) agreed adding that “for a long-time, NASCAR just assumed the fans knew the race was on TV and that they would tune in to watch; but, fans have a lot of other entertainment options on Sunday afternoons. Steve has done a great job of making sure we all understand the targeted mission (see: growing the sport’s popularity) and what our role is [off the track].”

That role includes regular interviews with the media. Drivers say their media obligations have increased this season (see: new requirement forcing Sunday’s top ten finishers to speak post-race and a mandate that every driver meets with the media either before or after qualifying), but none that we spoke to balked at the responsibility. In fact, Cassill suggested television viewership is impacted – if not driven – by the media’s narrative – or lack thereof – and that regular driver interactions with reporters help to keep a sport that has just one race a week, in the news throughout the seven-day cycle.

Perhaps no strategic marketing initiative has given a greater boost to NASCAR ratings than the identification of the markets with the most rabid racing fans (see: Atlanta, Charlotte, Dallas, Nashville, Raleigh, Greenville SC, Greensboro NC, Cleveland, Kansas City, Tampa) and a subsequent increase in promotional efforts – and spend – in those cities. Almirola said he’s noticed the sport making a concerted effort to increase driver activations in those core markets. It seems to be working. Through the FOX portion of the season schedule, television ratings are up +7% YoY in those targeted markets.

Johnson agreed with Almirola’s assessment that NASCAR has “been more strategic with marketing the product” and pointed out that “the start times of races” have changed. He might be onto something. Sunday afternoon races are indeed starting consistently later this season than years past. The green flag now typically drops between 2-3:30p EST. It’s certainly possible that the new window draws more viewers.

2018 Daytona 500 winner Austin Dillon didn’t challenge what any of the other drivers had to say, but wanted to add that the sport’s budding group of young charismatic drivers (see: Chase Elliott, Ryan Blaney, Bubba Wallace and Dillon himself) also likely have had something to do with the increase in viewership.

Fan Marino: While the drivers didn’t want to attribute the ratings uptick to on-track performance, there is a strong argument to be made that this season’s new package has enhanced the racing product. The first 22 races of the season produced 704 green flag passes for the lead, compared to just 504 at this point last year (+39.7% YoY) and 14 of the 22 races (63.6%) this season finished with a margin of victory of less than one second – the most since 1994 (also with 14 of the first 22 races).

Interested in Sports Business? Sign-up for our free daily email newsletter list, here!