UFC 229 to Smash Records for PPV Buys, Attendance and Gate Receipts

UFC229

Conor McGregor will fight (Khabib Nurmagomedov) inside of a UFC Octagon on Saturday night (Oct. 6) for the first time since November ’16 (against Eddie Alvarez), setting up the most anticipated fight night in UFC history; the mixed martial arts promotion expects the card to post 3 million plus PPV buys (at $64.99), which would be a company record (more than $195 million in revenue) and the 3rd biggest event in PPV history (behind Mayweather/Pacquiao and Mayweather/McGregor). Current trends reflect UFC 229 will also post highs for both in-arena attendance (20,000) and gate receipts ($17 million) for the promotion within Las Vegas. While McGregor is the massive draw, UFC President Dana White said Nurmagomedov hits “two huge audiences” (Russians and Muslims) that the UFC has not traditionally drawn from; which explains the record projections.

Howie Long-Short: Back in 2010, Flash Entertainment acquired 10% of the UFC for $200 million. The company maintained their minority stake (as did Dana White with his 9%) when Endeavor bought the mixed martial arts promotion from the Fertitta brothers for $4 billion in 2016. White recently said the UFC’s valuation had risen to $7 billion. If true, the Abu Dhabi government owned sports promotion experienced an astounding 250% return on their investment.

The UFC has not disclosed McGregor’s purse for the fight, but it is reported to be the largest in MMA history. According to White, whatever the number is it’s likely to be far less than what he earns from his whiskey brand (see Fan below); projecting, “the whiskey thing is probably going to make this kid a billion dollars.”

Fan Marino: While most of the headlines leading up to the fight have focused on McGregor, Nurmagomedov is the undefeated (26-0) defending light heavyweight champion and the favorite (-160) on Saturday night.

Must Watch: Just before his 9th birthday, Nurmagomedov’s father brought him into the woods to wrestle a bear cub that he had chained to a tree. There’s video, you need to see it to believe it.

You’ll notice Proper No. Twelve (an Irish whisky label) prominently displaced inside the Octagon on Saturday night. If you’re wondering how a start-up liquor company could afford to advertise on the canvas, the company’s founder, chairman and majority owner is headlining the card. Sold in Ireland and the United States, McGregor created Proper No. Twelve in partnership with the world’s oldest whisky distillery, Eire Born Spirits.

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U.S. Sports Memorabilia Market Estimated to Be Worth $5.4 Billion Annually

Ruthjersey

David Yokun (founder of collectable.com) has estimated that the total value of the U.S. sports memorabilia market is worth an estimated $5.4 billion annually, a figure that includes “the total gross merchandise volume from eBay ($4.7 billion), independent auction houses ($290 million), auction house private sales ($62.5 million), online retail venues and other sources ($400 million).” Fan apparel, products produced in mass and modern trading cards (even the rare ones) were excluded from the calculations. It’s possible (if not likely) that modern trading cards will be included in future estimates (in aggregate their value is significant), but pricing volatility makes it difficult to include them.

Howie Long-Short: Vintage baseball jerseys (pre-1972) are drawing record bids at auction due to their “extreme rarity and demand” (particularly when compared to cards and bats); a 1964 Mickey Mantle World Series jersey recently sold for 3x the previous high ($1.32 million). Curious as to why jerseys worn after the early 70s aren’t as highly sought after? Through the disco era players would receive up to 6 uniforms per season, but by 1980 teams were assigning players additional uniforms with the intention of re-selling them later to collectors (i.e. they were no longer rare).

Fun Fact: The most expensive sports collectible ever sold was a 1920 Babe Ruth game-worn away jersey, selling in ’12 for $4.416 million; it’s now estimated to be worth $10 million.

Fan Marino: The NFLPA Panini trading card index (released quarterly) ranks the top-performing football players in the licensed trading card industry, on factors ranging from secondary-market transactions to collectability based on rookie hype and collector speculation. The newest ranking, released on September 18th, indicates that Saquon Barkley remains the most valued rookie (Darnold was 2nd), while Tom Brady (up from #3) finished ahead of Aaron Rodgers and Patrick Mahomes II to top the veteran list.

Wondering what rare modern trading cards are worth? During the most recent quarter, an autographed 2018 Origins Football Barkley card (limited to 2) sold for $5,500. While that sounds like a lot, it’s just a small fraction of the $40,000 that a 2000 Contenders Football Tom Brady autographed rookie card (limited to 100) went for. $40,000 sounded like a lot for a card with 100 copies floating around, so I checked in with our resident card expert Jason Howarth (VP of Marketing – Panini America) to get his thoughts.

Jason: Cards numbered to 100 are still very rare. A Brady Autographed Contenders Rookie Ticket is definitely one of the cards you’d want from his rookie year and the value of that card continues to hold and could go up as Brady continues to perform.

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Mayweather Chasing “Another Nine-Figure Payday”, Plans to Fight Pacquiao in Dec.

Mayweather Pacquiao

Floyd Mayweather Jr. recently announced on Instagram that he would come out of retirement to take on WBA welterweight champion Manny Pacquiao in a rematch of their 2015 fight; an event that set the all-time record for PPV buys (4.6 million). The 41-year old fighter, who collected more than $750 million in career earnings, vowed his return would result in “another nine-figure payday” (he made $220 million from the 1st fight). Mayweather-Pacquiao II has been tentatively scheduled for December in Las Vegas.

Howie Long-Short: The September 15th PPV boxing rematch between Saul “Canelo” Alvarez and Gennady “GGG” Golovkin did 200,000 fewer buys (1.1 million) than the 1.3 million reported for their 2017 fight, but Golden Boy (promoter) said in a statement (they aren’t releasing the overall figures) that between “a terrific gate, a very successful linear PPV buy rate and an explosion in digital PPV sales” the 2nd fight “was a more successful event (financially) than its predecessor.” That’s because despite the decline in PPV buys and a $4 million drop in gate receipts (to +/- $23 million), the cost to buy Alvarez-Golovkin II on PPV rose 13% this time around (to $84.99).

While Mayweather and Pacquiao are marquee names, Canelo and GGG are far better fighters at this point in their careers. If their rematch (priced at $84.99) did just 1.1 million buys, it’s unreasonable to expect Mayweather-Pacquiao II to draw bigger numbers at a higher price point. It’s possible that the event could generate 9-figures (the first fight did $400 million in gross sales), but I don’t see how Mayweather is walking away with “another nine-figure payday.” If Mayweather takes home 50% of gross revenues, he’s going to need +/- 1.65 million PPV buys at $100/per (assume: sponsorships are worth +/- $10 million, gate receipts are worth +/- $25 million). You quickly realize there’s no chance the event hits that figure when you consider his last bout (not counting the exhibition against McGregor), against Andre Berto, drew less than 600,000 buys.

Fan Marino: I’d explain you why Mayweather/Pacquiao II is a sham, but Bob Arum (Mayweather’s former promoter) said it perfectly, it’s “two old men fighting for a payday because they think the public is gonna throw ‘em millions of dollars.” Don’t waste your money buying Mayweather/Pacquiao II when you can buy the Dec. 1st PPV card featuring Deontay Wilder vs. Tyson Fury.

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NFL All-Time Greats Demand Health Insurance and Share of League Revenue

Eric Dickerson, Chairman of the Hall of Fame Board (newly created), sent a letter to NFL Commissioner Roger Goodell, NFLPA Executive Director DeMaurice Smith and HOF President David Baker demanding health insurance and an annual salary (i.e. share of league revenue) for the Hall’s living alumni. The group argues they were “integral to the creation of the modern NFL, which in 2017 generated $14 billion in revenue”, but instead of enjoying retirement have been saddled “with severe health and financial problems.” Signed by 20+ of the league’s most accomplished players (including: Jim Brown and Jerry Rice), the letter threatened that failure to comply with the demands would result in many high-profile players abstaining from future Hall of Fame induction ceremonies. It needs to be noted that the league has had a pension plan (which goes up with each CBA negotiation) in place since ’59, a 401K plan (that players can contribute to) since ’93 and an annuity program since ’98.

Howie Long-Short: Simply looking at it from a cost standpoint, to insure every living hall of fame player would cost the league just $4 million/year or the equivalent of $.03 for every $100 generated. While obviously feasible, I’m having a hard time grasping why just a select few retirees should receive benefits. If the argument is that “to build this game, we sacrificed our bodies. In many cases, and despite the fact that we were led to believe otherwise, we sacrificed our minds”, then why shouldn’t every retired player receive medical insurance and a salary? For comparison purposes, MLB players receive lifetime coverage if they are on a MLB roster for just a single day and a life-long pension if they’re in the big leagues for 47 days.

NFL player salaries exploded in the 1990s, so there’s really two distinct classes of players; those that played in the 70s and 80s before the television money started rolling in (in ’82 the average salary of the league’s QBs was $160K) and those that started their careers after the ’87 lockout. Guys like Jim Brown, Joe Namath and Carl Eller were an instrumental part of the league’s early success and can likely use the league’s financial assistance, but I’m having a hard time grasping why guys like Kurt Warner ($62 million), Marshall Faulk ($49 million) and Curtis Martin ($47 million) are on the list; those guys were paid as franchise players at a time when the league was already generating billions/year in revenue.

Dickerson’s letter also takes aim at Goodell’s $40 million salary and the construction of a $1 billion Hall of Fame Village in Canton, OH. While I can’t argue that the league needed a $1 billion shrine to honor the league’s past, Goodell’s compensation is in line with CEOs of corporations generating comparable revenue; Les Moonves earned $69.3 million ($13.7 billion in revenue) in ‘17, while Michael Rapino (Live Nation) took in $70.6 million ($10.3 billion in revenue). Those opposed to Goodell’s salary will point to the Ray Rice video, deflate-gate and the anthem protests as reasons why the commissioner is overpaid, but his success in driving revenue in undeniable; the league is generating 50% more revenue than it did in ’10.

Fan Marino: The NFL plans to hold the league’s 100th anniversary celebration during the 2020 season and the Hall of Fame board is looking to use that event as leverage for a payday. Dickerson’s letter talks of “exploiting” player images for marketing purposes, but that statement is more than a bit disingenuous. The reason HOF players show up in Canton every summer is because they are paid (autograph signings, meet & greets etc.) and it strokes their ego. There’s no requirement that inductees attend, the old-timers come because it’s the one weekend/year they can relive their glory days and listen to fans tell them how great they were. If the NFL’s HOF players want to bite off their nose to spite their face, let ‘em.

Speaking of the ’87 lockout, no HOF board member is a bigger pig than Lawrence Taylor. For those too young to remember, Taylor crossed the picket line as his teammates were on strike to secure better working conditions and improved retirement benefits. While it’s worth asking why Sarah White (Reggie White’s widow) is on the list (it’s supposed to be for living players), one can at least argue Reggie’s impact on free agency; there is no argument to be made for scab who has since plead guilty to sexual misconduct with a 16-year-old.

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La Vida Baseball Now Reaching 6 Million English-Preferred Latinos Monthly

La Vida Baseball

Hispanic Heritage Month kicks off on Saturday (September 15th – October 15th) and 18-month old La Vida Baseball (LVB) will celebrate amidst record growth and new partnerships. More than 6 million English-preferred Latino’s (dominating the male 18-45 demo) read La Vida Baseball’s Latino focused baseball storytelling each month and the company’s video content generates more than 1.2 million views/month across digital platforms (think: lifestyle and culture content); MLB.com, Bleacher Report and Apple News have all syndicated their work. JohnWallStreet spoke with TeamWorks Media co-founder and CEO Jay Sharman about their target market, country pride vs. team pride and the 13 revenue streams of a digital media publisher.

JWS: English-preferred Latinos in the U.S. often choose to watch soccer in Spanish. How did TeamWorks Media identify that there was a need to deliver original baseball content in English to the Latino audience?

Jay: We looked at the marketplace and the amount of content available did not align with the statistics as to how many U.S. Latinos consume sports media in English-preferred; especially the younger demographic. There was a lot of sports content translated into Spanish, but we didn’t find any original baseball content with a Latino voice.

JWS: It would seem as if you could replicate this model with other sports. Are there plans to introduce a digital media outlet for English-preferred basketball fans?

Jay: 1 in 4 Americans are Latino, so statistically speaking it’s likely there’s a significant audience for most sports. What makes baseball unique though, is the participants. Just under 33% of Major League Baseball players are Latino. There’s just not nearly as many playing in the NBA. What we’ve also found is that country pride tops team loyalty in many cases (think: a Puerto Rican St. Louis Cardinals fans that still roots for Javy Baez); that’s a phenomenon unique to baseball. So, no we do not have any plans for horizontal expansion.

Howie Long-Short: La Vida Baseball is owned and produced by TeamWorks Media, a privately held entity.

I asked Jay to explain how La Vida Baseball generates its revenue?

Jay: We’re relatively consistent with any digital media publisher. Marketing partnerships will generate the lion’s share of our revenue, but sponsorships, revenue-sharing deals, licensing deals and events contribute; there are 13 different potential revenue streams. We’ve also created La Vida Baseball Studios as there are several brands, including MLB, that have talked to us about creating content for them; content as a service.

Editor Note: After the call, I asked Jay if he would detail the 13 potential revenue streams. You’ll notice that 3rd party platform revenues are grouped together under #5. LVB does not paywall content (#7).

  1. Marketing Partnerships – Custom, integrated content solutions (ex – branded video series, native content)
  2. Sponsorships – ROS
  3. Content Studio – Consulting, content creation, events for orgs/brands/media companies for their Latino baseball audience needs.
  4. Content Licensing – both existing content as well as commissioned content for networks/digital companies.
  5. Third Party Platform Revenue
    1. YouTube advertising
    2. Twitter advertising
    3. Facebook advertising
    4. Podcasting network advertising
    5. Content partnership revenue (content runs on media company’s platforms and LVB gets split of revenue earned)
  6. Events – Range from sponsor-driven, celebrity private event to potential destination baseball guided trips (Puerto Rico, Mexico, Cuba, etc…)
  7. Memberships (others may choose subscription model – this tends to be an either/or – not a both)
  8. Merchandise

Fan Marino: Major League Baseball (which works in partnership with LVB) is on pace to draw 2.6 million fewer fans in ’18 than it did in ’17. Toronto and Miami have experienced the steepest YoY declines (-10,000 fans/game), but the Kansas City, Detroit, Pittsburgh, Baltimore and Texas are all having bad years at the gate too (all down 4,000+ fans per game). While most of the league has taken a step back, there are 10 teams on pace to outdraw last season’s attendance totals; the Brewers, Yankees and Phillies are all drawing upwards of 4,000 more fans/game this season than last.

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NFL Games to Remain on Linear TV Unless Streaming Technology Significantly Advances

nfl_200x200

Brian Rolapp, NFL Chief Business and Media Officer, has indicated that while the next 5 years will serve as an “inflection point” and it’s possible the league could experience widespread changes if streaming technology were to advance significantly, traditional linear television broadcasters remain well positioned to retain NFL broadcast rights through the next broadcast cycle. Rolapp said the league’s “entire model is about reach” and that he’s “yet to see” a tech or streaming company deliver a “true broadcast-scale event”; a high-quality stream with 25 million+ simultaneous viewers. Until then, the league will continue to experiment with streaming and expand digital/mobile distribution with simulcast agreements.

Howie Long-Short: Yes, NFL TV viewership is down relative to historic performance, but it continues to perform well when compared to everything else on television. The league had 71 of the Top 100 rated shows on the tube in 2017. For comparison purposes, the league had just 22 of the Top 100 rated shows in 2007. Sure, the NFL’s TV audience is in decline, but the league has a stranglehold on its position as the best choice for advertisers looking to reach the masses.

While you shouldn’t expect a tech or streaming company to land exclusive broadcast rights during the next round of negotiations (particularly if the league is going to leave money on the table to reach the widest audience), the value of those rights should continue to rise and provide the league’s teams with a valuable source of supplemental revenue. To be clear, the league is open revamping its distribution strategy if streaming technology were to make significant advancements over the next several years; Rolapp said he’s well aware of the “staggering” amount of time users spend on Facebook, Amazon and YouTube.

Fan Marino: As mentioned, the league’s “new mobile streaming plan is about reaching more people.” For the first time, simulcasts of local market television broadcasts will be available for free on smartphones and tablets across all wireless carriers (used to be limited to just one carrier) and through NFL and Yahoo Sports’ mobile apps. While that approach is certain to result in increased mobile viewership this season, Sports TV Ratings expects television viewership to continue its decline by 5-10% YoY in 2018.

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CFB Programs to Generate $175 Million+ from “Guarantee” Games in ’18

chick-fil-a-kickoff

NCAA college football programs will take in more than $175 million in payouts from one-time “guarantee” games during the non-conference portion of the 2018 season. The +/- 12 schools participating in marquee neutral site showdowns (think: Washington/Auburn, Miami/LSU) will share more than $50 million in appearance fees, while the wealthiest and most dominant programs will spend $1 million+ on each of the 45+ games scheduled against lower quality competition; games designed to pad records (and add extra home dates to the calendar). Colorado State will take home the largest payment for a “guarantee” game this season, $2 million for their Sept. 15th game at Florida; a term negotiated as part of Jim McElwain’s $7.5 million buyout enabling him to join the Gators in ’14.

Howie Long-Short: Neutral site showdowns take place because of financial windfalls available to those who participate (the recruiting exposure doesn’t hurt either), not because they provide an opportunity to add a quality win to the playoff resume; if it were simply about SOS, we’d see more home and home series. Alabama received $5 million for playing in the ’17 Chick-fil-A Kickoff, 12x what the school earned for participating in last season’s Sugar Bowl (playoff) and National Championship games (excluding ancillary benefits). As for this past weekend, Washington and Auburn took home $4.1 million and $4.2 million, respectively; LSU earned $4.75 million. Miami (private) did not disclose any financial information.

While 14 teams will take home payments of at least $1.4 million for a single road game, no Group of 5 school will earn more from their non-conference schedule than Kent State; the Golden Flashes will collect $3.65 million for games at Illinois, Penn State and Mississippi. Of course, those on the receiving end of “guarantee” game payments (like Kent State) use the money to help fund their entire athletic departments.

Fan Marino: The University of Akron was scheduled to take on Nebraska, in Lincoln, on Saturday evening, but lighting forced the game’s postponement; “logistical challenges” prevented the game from being rescheduled, resulting in its cancellation. It’s unclear at this point if either team will add a 12th game (you need 6 wins to be bowl eligible), but perhaps the bigger concern from Akron’s POV is the $1.17 million payment the school was scheduled to receive for playing the game; NU deputy AD Bob Burton said it was “to be determined” if the Ohio school would receive the payment. It’s worth noting that South Dakota State University received its contracted payout ($425,000) for their season opener at Iowa State, another contest that was canceled due to inclement weather.

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Brodeur Says League MVP Hall Has Responsibility to Devils Franchise  

Brodeur holds up the Cup
EAST RUTHERFORD, NJ – JUNE 9: Goalie Martin Brodeur #30 of the New Jersey Devils holds up the Stanley Cup after defeating the Mighty Ducks of Anaheim 3-0 in game seven of the 2003 Stanley Cup Finals at Continental Airlines Arena on June 9, 2003 in East Rutherford, New Jersey. The Devils defeated the Ducks 3-0. (Photo by Elsa/Getty Images/NHLI)

2018 Hall of Fame Inductee Martin Brodeur is returning to the New Jersey Devils as the club’s EVP of Business Development. The 4x Vezina Trophy winner won’t be tasked with player personnel decisions during this homecoming though. He’s back to work under Harris Blitzer Sports & Entertainment and NJ Devils President Hugh Weber on the business side of the organization. JohnWallStreet had the chance to sit down with the 9x All-Star on Wednesday afternoon for an extended interview. In part 2 of 2 (link to part 1), we talked about Taylor Hall’s responsibility to the organization, plans to grow the Devils brand in Europe and comparisons to the New York Rangers. 

JWS: In part 1, you spoke about how social media is critical to growing players’ personal brands, but that not everyone wants to put in the effort. I would imagine at least some of the players choose not to use social media because they shy away from the spotlight off the ice. Does NHL MVP Taylor Hall want the attention?

Martin: I can’t tell you that. I haven’t dug deep enough to know that yet, but he’s important to our franchise so he’s got a responsibility (to do promotional work) towards us just as we do (to promote him) towards him.

JWS: You also hit on the importance of growing the Devils brand internationally. How can the franchise go about doing that?

Martin: I spent some time this summer in Switzerland, Finland, Denmark – places you wouldn’t think that hockey was popular, but seeing the way the players and teams were treated there, you see and appreciate the place hockey has in the hearts of the fans. The knowledge that the European fans have about the game and the NHL players is impressive. Frederik Anderson, the goalie for Toronto Maple Leafs, he’s a God over there; everybody wore Maple Leafs stuff with their Danish stuff. Yes, we’re the Devils, but it’s Nico Hischier in Switzerland. It only takes one or two players from their country to play in the NHL and suddenly the entire country is full of NHL fans. I think there is a big opportunity, a big market to be tapped there. We’re going to play an exhibition game in Switzerland and a regular season game in Sweden, and we’ll work with the NHL to find different avenues to grow our brand in that part of the world.

JWS: The Devils missed 5 straight post-seasons between 2012-2013 and 2016-2017 and the club hasn’t won the Stanley Cup since 2003. How do the Devils build the next generation of fans without the benefit of the 3 Cups the franchise built the previous generation on?  

Martin: I haven’t been here for four years, so it’s something I need to look at, but when I played in New Jersey three of my kids played minor hockey; you don’t understand how many rinks I went to. There was never anything Devils-branded anywhere, it was Rangers stuff. There’s a commitment to be made if you want to these young players to be brought up as Devils fans and not fans of our rivals.

JWS: Speaking of the Rangers, when the Devils measure growth or success, is it relative to the Rangers? Team history? The league average?

Martin: You can’t compare yourself to your rivals. Their level of success is hard to achieve. You’d love to get there, but the New York Rangers, they’ve been here forever; you must understand that. I think you focus on growing from within rather than thinking we need to bypass another team to be successful.

Howie Long-Short: NHL teams will experience a boost in revenue next season as the league has permitted the sale of 4 new in-ice advertising positions, located in the corners. The addition is particularly noteworthy considering it’s the first time the league has added inventory, inside the rink, this millennium. It’s been estimated that each of the advertisers can expect to receive 20-25 minutes of exposure per game. I checked in with the Devils and was told the new in-ice advertising positions are being sold in packages and partnerships that cost “in seven figures.”

Fan Marino: Will you have any input whatsoever on scouting, free agency, player personnel?

Martin: No, not as of now. That’s not the plan. That’s not what I was brought in for. Ray (Shero) and the front office has done such a great job over the last four years. They have their team and they’re rolling. I don’t see the need for me to be part of it. Of course, I’m part of the organization now and they’re friends of mine – I’m sure we’ll have some conversations. Harris Blitzer Sports & Entertainment is a massive organization, and growing really fast, I have plenty of sports properties to learn about, and plenty of strong executives to learn from.

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Looking for More than Wins and Losses Martin Brodeur Takes on New Challenge

Boston Bruins v New Jersey Devils
NEWARK, NJ – APRIL 13: Martin Brodeur #30 of the New Jersey Devils salutes the fan while leaving the ice following a 3-2 victory over the Boston Bruins at the Prudential Center on April 13, 2014 in Newark, New Jersey. There has been speculation that this could be Brodeur’s final game with the team. (Photo by Bruce Bennett/Getty Images)

2018 Hall of Fame Inductee Martin Brodeur is returning to the New Jersey Devils as the club’s EVP of Business Development. The 4x Vezina Trophy winner won’t be tasked with player personnel decisions during this homecoming though, he’s back to work under Harris Blitzer Sports & Entertainment and NJ Devils President Hugh Weber on the business side of the organization. JohnWallStreet had the chance to sit down with the 9x All-Star Wednesday on afternoon for an extended interview. In part 1 of a 2 (part 2 will run tomorrow Friday 8.31), I asked why retired athletes are taking business roles, where he’s prepared to help the organization and what he can do to raise NHL MVP Taylor Hall’s profile.

JWS: Having spent the last 2 seasons as the AGM in St Louis, I think most hockey fans just assumed your next stop was to become a General Manager. Why the pivot?

Martin: I think it’s hard to get a job as a General Manager. There’s only 31, soon to be 32 of them within the league. I enjoyed my time in the front-office, but the time-consuming part of the job was something that I was a little reluctant to commit to; not because I don’t want to work, but because I just retired and have an eight-year-old at home. 

The role with the Devils is not straying away from what hockey’s all about. You’re (franchise business executives are) still part of the hockey team, just in a different kind of role; you still care about the organization that you work for. I’m not sure I would have done it (take a business-side role) somewhere else, but with ownership, the team on the ice and the team in the front office all moving in the right direction now in New Jersey, it’s a good place for me to get my feet wet.

JWS: It’s not uncommon to find retired athletes in talent evaluation roles, but several (think: Jeter, Luc Robitaille) have taken business development or operational jobs over the last couple of years. What’s driving more guys towards the business side of sports?

Martin: The winning and losing gets old after a little bit. The business side is about looking forward – looking two, maybe three years down the road – trying to put the club in the best position to be successful. The people (on the business side) aren’t worried about winning and losing. We played at such a high level, for so long, that it’s nice to take a step back and not worry about what happened last night. You still do because that’s just the nature of things, but when they’re on the road you don’t really feel it (a loss) as much (laughing).

JWS: You’ve said this role isn’t about shaking hands and taking pictures. Where do you feel you’re prepared to help the club on Day 1?

Martin: Well, that’s part of it (laughing). I think I can help with the promotion of the game, not just in New Jersey but helping to grow our brand on the international level (editor note: more on this tomorrow).

JWS: I’m glad you brought up promotion. Devils star Taylor Hall won the Hart Trophy but even the biggest sports fans would have difficulty picking him out of a lineup. What can you do to help raise his profile?

Martin: The social media aspect of it is going to be really important for him. I know it’s all cute and games when you send tweets, but he’s really going to have to get involved in the community. There’s such a big opportunity for the players to connect with the fans on that platform (Twitter) and they don’t always want to do it, so I think teams need to place more emphasis on player brand development. You don’t want them (the players) to be overwhelmed by it (social media), but as I told a player earlier, the reporters or the at-large media are talking about x’s and o’s; they don’t talk about you personally. I think it’s such an easy thing for players to do to increase their profile. The league obviously needs to do more to promote their players, but it’s going to get easier and easier to promote Taylor because he’s a spectacular hockey player. He’s a highlight reel every time he touches the puck.

Howie Long-Short: While Marty is tasked with growing the Devils brand, the team doesn’t lack for a fan base locally. The Devils are “Top 10” in both NHL season ticket memberships sold and season ticket membership renewals, with 90%+ of season ticket holders renewing on an annual basis.

It’s too early to tell if Marty will be involved with sponsorship sales, but several existing Devils’ corporate sponsors are publicly traded. Anheuser Busch (BUD), Investors Bank (ISBC) and Infinity (a subsidiary of Nissan Motor Co., OTC: NSANY).Fan Marino: The Devils shouldn’t have much trouble moving merchandise this year. In addition to having marketable stars in Hall and former #1 overall pick Nico Nischier, the club is bringing back its original red and green uniform for the 1st time in 26 years. They’ll wear the “heritage” uniform for 4 home games during the ’18-’19 season. I’ll certainly be buying a white sweater; the only question is can they fit 14 characters (JohnWallStreet) on the back?

Here’s a fun fact for you, though Brodeur hasn’t played for the franchise since ’14, his jersey remains one of Fanatics Top 5 selling jerseys for the NJ Devils.

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DraftKings Projects Sports Betting Business Surpasses DFS by ‘21

Draft Kings

DraftKings CEO Jason Robbins is projecting that in 2-3 years the company will generate more revenue from sports betting than its daily fantasy sports (DFS) business, dependent upon “how quickly the states (the other +/- 25 states expected to pass legislation legalizing sports betting) roll it out”. Once it does happen though, Robbins believes it becomes feasible for the company to grow revenue by 5-10x. Interestingly, the excitement created from the pending legalization in those +/- 25 states has created a “halo effect” in new DFS sign-ups; sports bettors with the urge to wager but no existing legal outlet to do so.

Howie Long-Short: Just 5 states will have legalized sports betting when the NFL season kicks off on Sunday September 9th and the company currently only operates in NJ, so it’s unreasonable to expect sports betting revenues would surpass DFS in the short-term. Longer-term, I would suspect that would be the case and increasing revenue by 5-10x sounds feasible, when you consider the company only generated $192 million in ’17. Robbins also isn’t content just pursuing “the traditional sportsbook stuff”, he wants to capture the underground gambling business (think: survivor pools, Super Bowl squares, March Madness brackets). There’s a lot of money to be made there, just 3% of the $10 billion bet on March Madness is said to be done legally.

There’s one point Robbins made that I don’t agree with. It’s his belief once 30+ states have legalized sports betting, DraftKings’ U.S. sports betting business would hold a $10 billion valuation; I wouldn’t think so. While U.S. gaming companies can trade upwards of +/- 13x EBITDA, DraftKings would still need to generate $770 million in earnings on $1.6 billion in revenue. That’s probably not going to happen considering the company managed to lose $92 million on $160 million in ‘16 revenue and they’ll need to continue to spend to acquire customers as they roll into new markets.

Fan Marino: DraftKings only offers mobile and online products in New Jersey, but that won’t be the case when sports betting gets legalized within the state of New York. The company has partnered with del Lago Resort and Casino (Waterloo, NY) and intends on opening a DraftKings branded sports book on site; the pact also enables the company to launch mobile and online products within the state. Oddly, the State of New York is expected to include an integrity fee (a fifth of a percent) for the pro sports leagues within the bill they’ll put forth in ’19; none of the 4 states currently offering sports betting cut the leagues in.

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