How Naming Rights Deals for Sports Arenas Happen

When it comes to naming rights deals, you have several examples just in New York alone. For one, you have MetLife Stadium, which is actually located just over the Hudson River in New Jersey, and it’s the home stadium for both the New York Giants and New York Jets of the NFL. The MetLife corporation has a major presence in New York City, right in the heart of Manhattan, and it has had that presence for decades. So, to see that corporate name associated with major, professional sports franchises certainly serves as a ringing endorsement for both sides in the agreement.

As you continue looking around New York, the New York Mets of MLB have a naming rights deal for their ballpark, Citi Field. That agreement is with Citibank, part of Citicorp, which is another major New York institution. Then, if we move to Brooklyn, there’s the Barclays Center, where the Brooklyn Nets of the NBA play their home games. That naming rights deal is a case of a bank based in the United Kingdom wanting to increase its presence in the United States, and it did so by acquiring the naming rights for a major arena in a major city.

Interestingly enough, when we look at Yankee Stadium in the Bronx, there is no specific naming rights deal for the home of the New York Yankees of MLB. This is a classic example of a stadium being difficult to put another name on, despite the fact that the team has terrific sponsors and gets a large portion of its revenue through sponsorships and naming rights for other parts of the venue. Another similar example is Madison Square Garden. It’s so historic and valued in a very different way that, although there are naming rights opportunities around the venue, it’s still just called Madison Square Garden.

Lastly, there’s Prudential Arena in Newark, New Jersey, which isn’t too far from MetLife Stadium. Prudential purchased the naming rights for the stadium not only to gain a little brand and name recognition but also to signal their presence to the community. It’s important for them that in addition to people recognizing the name of the company, the brand, and what it represents, they also know that the company is physically present in the area.

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How One Broadcasting Slip Up Changed Televised Sports

At one point, there was a football game televised on NBC between the Oakland Raiders and the New York Jets, and the game took place in Oakland. Going into the fourth quarter, it looked like the Jets were going to win. However, fans are obviously very passionate about their teams, and they want to see a game to its conclusion.

Well, the game had gone on for pretty long, and NBC was scheduled to show the children’s film, “Heidi.” So, they cut the game short. They stopped showing the game in order to show this children’s TV movie, and fans who were watching from home were livid about it. They flooded the switchboard at NBC. Some people were even actually calling the police department to report this because they were that angry and wanted to see the end of that game.

NBC didn’t really know what to do as they hadn’t even been in this situation before. So, during the movie, they put a little ticker at the bottom of the screen that told viewers that the Raiders had actually won the game. They had come back and scored 21 points in the fourth quarter to beat the Jets. So at that point, fans at least got to know the outcome. However, they were outraged that they weren’t able to watch the end of the game.

This event was monumental in sports media history because afterward NBC installed what they called “Heidi phones.” Basically, they had additional phone lines so that their staff could communicate with one another if this kind of issue ever were to occur again. They did this because communication was a part of the problem. Because the switchboard had been completely flooded, they weren’t able to communicate with each other.

That was one impact of the event. The second impact was that the NFL then wrote into their TV contracts that every game had to be shown to its full conclusion and that the station could never cut in and do something like that again. After that, other leagues followed suit with their own contracts. This is really an example of the legitimization of sports in society and how important something simple like watching a game on TV during the regular season really is to people.

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How Analytics Are Changing the Way We View Sports

If we look at the two types of analytics that are used in sports today, we’ve got on-field and off-field analytics. The on-field type is often referred to as athlete performance analytics. Whereas the off-field kind is often referred to as sales and marketing analytics, which really helps us understand the revenue streams and the consumer, the sports fan, who’s driving the revenue equation. So, for the off-field analytics, we’re looking at all sorts of demographic data and information about, say, our season-ticket holders, for example.

We’re also looking at the flow of their tickets. Let’s say someone buys a full-season ticket package—41 games, to see an NBA team play. They may only attend 22 of those games. So, what happens with the other 19 games? Do they give those tickets away to friends? Do they sell them? Are they sold, and then resold, and then resold again on the secondary market? If we can follow the trail of these tickets, we get a good sense of how the fan values the sport and values the season-ticket package. And these are important things that we want to know when looking at season-ticket renewals.

We also want to look at the prospects who are buying their tickets as potential season-ticket holders themselves. You can begin to see how this is just one example of a data stream that could really add to the revenue equation for a sports team.

For athlete performance analytics in baseball, for example, there are high-speed cameras and Doppler radar installed within all 30 Major League ballparks. This allows us to capture an enormous volume of data. And we know every movement on the field of a player. But we also have 20 plus metrics on every pitch that is thrown. So we have details on the velocity of the pitch when it leaves the hand of the pitcher and when it crosses the plate.

We know the location of the pitch. We know the movement of the pitch across several axes: the vertical axis and the horizontal axis. We even know the spin of the pitch—both the spin axis and the spin rate of the pitch. All of these diagnostics go a long way toward evaluating the effectiveness of a pitcher or a hitter.

We have the same for batted balls, and we also know where fielders are positioned and how they move across the field when a batted ball is put in play. All of these things give us so much more depth and richness, especially when compared to the data that’s on the back of an old baseball card, for example. These analytics really have changed the way we look at every aspect of these sports, and that’s the world that we’re playing in today.

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How Opportunities in the Sports World Are Changing

As global sports become this incredible multibillion-dollar worldwide force industry, it has created all kinds of new careers that weren’t even imaginable 10 years ago. There’s everything from sports analytics, where the fan today is so much more sophisticated of a consumer, and they want to see statistics. They want to know what region of the court a particular guard has the best chances of making a bucket from, and things like that.

There are jobs now where somebody is actually creating algorithms to calculate the percentage chances of shots from each location on the court. When you get into math engineering, it’s the development of new kinds of synthetic fibers or material for creating new pole vaults, or new ballasts for bows in archery, or new kinds of materials for athletic shoes. Chemical engineering is a whole new incredible space for the sporting world.

Of course, sports law is a huge space, and it’s not just traditional career paths like becoming an agent to represent the next multimillion-dollar athlete, but also being the person who can structure a contract correctly for a nonprofit organization that’s using athletics to promote social change and get kids off the street.

How does that type of nonprofit operate? Well, they need sponsors. And those sponsors expect certain kinds of results from that organization, and those results have to be embodied in that contractual agreement and what the price tag will be for that sponsorship. Also, for that kind of relationship, as sports are expected to give back to their communities, they’re now also expected to demonstrate success in those regions.

For example, when the NBA uses its program called NBA Cares to teach kids how to read, or to build houses in Africa, it’s one thing to put up on their website that they went to Africa and built those houses, and demonstrate how great they are.

It’s a very different thing for them to say that 40% of this community in the Philadelphia region lived below the poverty line, largely because of illiteracy and gang violence and kids not having the opportunity to go to college. And that with their new program, these kids are getting the skills they need, and getting the after-school support to actually succeed in school. They’re getting the nutrition they need to actually be able to focus on tests. They have safe spaces to go to so that they can get off the street and go to college. And now, that 40% line has dropped to 15%.

When they say this type of thing, who’s doing that number calculation? It’s researchers. It’s basically an epidemiologist who has the skills in designing a rigorous methodological study to demonstrate the effectiveness of these programs, and that’s a really cool space to get into the sporting world now.

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How Athlete Endorsements Differ From Other Collaborations

When it comes to endorsement deals, they usually tend to involve an individual who is highly sought after by companies. In a sports field, this individual is typically a star athlete, and these athletes are endorsers if they’re endorsing or supporting a particular product. This is different from regular advertising.

With regular advertising, it’s more about the brand speaking directly to the consumer. With endorsements, though, it’s the individual endorser interacting with whatever brand it is they’re partnered with. Granted, certain endorsements can take place within advertisements, but it’s important to differentiate the fact that endorsements are about the athlete interacting with the brand personally. And when it comes to these endorsements, athletes are quite a bit different from typical celebrities.

They come with a lot of fan passion. There are many sports organizations that will put forth certain athletes because they know these athletes have a massive following. Not only do they have a massive following in terms of numbers – that’s quantity — but the fans who follow them also really rely on what the athletes are offering. Cristiano Ronaldo, for example, endorses Nike. Once Cristiano Ronaldo shows off his Nike cleats, you will see a massive following his fans, who are heavily invested in what he does, go out and purchase those cleats for themselves.

With endorsements that particularly have to do with athletes, they’re different from collaborations or sponsorship agreements. With a sponsorship agreement, for example, you might say that the Michigan College football team is sponsored by Jumpman 23 or has a collaboration effort with them, but they aren’t necessarily going out in commercials and endorsing the brand.

With Cristiano Ronaldo and his endorsement of Nike, though, he will often be carrying Nike cleats around his neck or, perhaps, be utilizing Nike cleats and talking about the positive aspects of the brand. The difference with endorsements is that you’ll regularly see a given athlete endorse or talk up a particular brand. A collaboration or sponsorship is more of a partnership in nature. It’s not so interactive with the team and the product.

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How Social Media Has Changed Athlete Interactions

Athletes and media have historically had a very interesting relationship. In the past, before we had social media and so many digital devices, the relationship between athletes and media was typically quite a bit friendlier, as athletes and journalists tended to know each other pretty well and have good relationships. In some cases, perhaps, journalists would see athletes in negative situations or acts, and simply not report on it. In a sense, it was understood that what an athlete did off the field was their own business, and only what they did on the field would be reported on.

That has all changed over time, and due to the fact that so many things athletes do off the field these days become news, the relationship between them and the media in society has really changed. Even if they’re at the grocery store buying this and that, that might end up on the evening news, or in someone’s video being posted to social media. As a result, the evolution of media has also changed the way that athletes interact with stakeholders, especially in public places.

When it comes to athletes and their relationships with the fans, social media has changed it in the sense that now, it’s so easy in public for people to be taking pictures of videos of the athletes and posting them to social media. However, on social media, athletes and fans are able to develop a much greater relationship than they’ve ever been able to in the past.

Social media allows athletes to share as much or as little as they want about their personal lives, and some of them take that opportunity to share quite a bit about themselves in an effort to build their personal brand. They might choose to show that they have a dog who they take on walks every morning, or show what they like to eat for breakfast. This helps the fans feel like they have a better insight into who that athlete is as a person, rather than only seeing what they’re doing out on the field of play.

Social media also allows for more interaction between athletes and fans. If a fan tweets something at an athlete, the athlete now has the option to respond to it, or even just like or retweet it. In a way, if an athlete responds to you or interacts with you on social media now, it’s almost the electronic version of getting an autograph from them. For many people, it can be worn as a badge of pride if a sports star has responded to one of their tweets or interacted with them.

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How Athletes and Venues Earn Revenue

When talking about both national and global sports, the players make money first by playing their sport. Whether it’s a team sport or an individual sport, the better the performance, usually, the more money they earn. But on top of playing their game, there’s also money to be made in terms of endorsements, and products, and services, and programs that they represent and that they sell to consumers.

One of the all-time great endorsement deals is for Michael Jordan, “the air man”. He and Nike came out with Air Jordans at a time when the NBA had restricted what colors players could wear on their shoes. But Jordan’s statement with those first Air Jordans was so powerful that it led the NBA to change its policy. And now, of course, we’ve got all sorts of shoe deals with players.

Stadiums, arenas, and any sports venues earn money certainly by people coming through its gates, and the money they spend once they’re inside, but owners also earn money and generate revenue in all sorts of different ways. It used to be mostly from tickets, gate receipts, and concessions that fans had purchased once they were in the stadium, the merchandise they purchased in the stadium or merchandise that they’d purchased in a local store.

However, over time, that certainly grew in a number of different ways. Revenue for owners comes in the form of television deals. It comes in the form of basically any kind of business that the club or the franchise conducts anywhere in the ecosystem. So, we also see owners investing in areas that are sometimes indirectly related to sports, or in other areas in and around the venue.

Local real estate has certainly been one of the new things, over time, that owners have gotten involved in. And really, when you think about and look at it, what are sports venues really but nice-sized real estate deals?

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How Social Media Has Changed How Athletes Interact With Fans

In the past, to try to understand what certain athletes were trying to say, individuals had to rely on mass media outlets. One example of this was a tweet that came out, which had to do with a story about LeBron James apparently wanting his teammate Kyrie Irving to be traded away. If this had happened when traditional media was still prominent, consumers would have been relying on the mass media and would have assumed that LeBron really did want Kyrie out of there.

However, in this case, LeBron actually re-tweeted the story and disputed the facts of it. It was fortunate that social media allowed LeBron to have a direct voice with consumers so that he could communicate what the truth of the situation was. This is a great example of how social media’s advent has allowed athletes to communicate directly with certain consumers.

You no longer need a specific medium to get in touch with your audience members when it comes to consumers. But it also works to create this back and forth with professional athletes, as a lot of athletes are very interactive on Twitter and other social media.

Another interesting story occurred involving LeBron James. In this case, going back to the first time that LeBron, as a member of the Miami Heat, came back to visit the Cleveland Cavaliers, there was a fan that went out on the court and completely disrupted the game. The fan was ejected immediately, but from the video of the incident, you could see that he had said something to LeBron, and a lot of people were wondering what had been said.

Afterward, though, the fan actually went online and tweeted at LeBron James, thanking him for showing him some love on the court. And LeBron was actually able to tweet back at him and give him props. So, it’s not only that consumers can now get information unfiltered, but it’s also an interesting way that athletes can now interact directly with fans and consumers, in a way that they had never been able to before. This is a pretty cool thing because it’s an easy way for fans to get in touch with their favorite sports stars, which can really mean a lot to both parties.

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How Athletes Take Risks to Impact Social Change

One topic within sports management education is how sports affect social change. You’ll see sports used oftentimes in political agendas, and where this is most visible is with the Olympics. Now, the Olympics movement will say that it’s not about politics and that it’s about bringing people together to compete at the highest level and support one another in that endeavor.

However, we have seen that this isn’t the case. We’ve seen political posturing, if you will, throughout the Olympic games in many different ways. For example, in the 1960s, our country was going through quite a change socially, and we had a lot of racial injustice happening. It was much like what’s happening today, but in a different way. And the U.S. team had a lot of African American athletes who were treated poorly at home. But on the stage, they’re treated very differently, and so we had two amazing sprinters stand up against that social injustice.

Tommie Smith and John Carlos took the gold and the bronze, and when the American national anthem was played, they raised their fists in the black power salute, and it was extremely powerful at that moment. So, when we talk about sport and the challenges of social change, these two athletes quietly protested on a very big stage to demonstrate what was actually going on at home and the hypocrisy that was happening at that time.

What they did get was a lot of backlash. They were vilified for what they did, and it was seen as a political stunt. The IOC basically shamed them for what they did, and they were even stripped of their medals. This was a very unfortunate outcome for something that was really important to say quietly. Obviously, they hadn’t said anything, but what they did spoke volumes. So, when we talk about social change and how sports can play a role, we see a lot of backlash when athletes quietly do that.

We’re even seeing it right now with athletes who are becoming activists and standing up for what’s happening and what’s going wrong. They’re using their celebrity to have a stronger voice, and there’s a lot of backlash that comes along with that.

That’s where the challenge lies. We’re pushing the borders of what’s uncomfortable, and it’s very difficult to talk about these things. However, we have these athletes who are in the spotlight and who can stand up and say “you know what? Something’s going wrong here, and we need to have a conversation about it.”

But unfortunately, doing so causes backlash, and that’s where the challenge is. Yes, sports can be used as a vehicle for social change, and it can be incredibly powerful, but it can also hit a lot of barriers along the way because people tend to not agree on everything. Because global sports and the sporting world have such extraordinary platforms to communicate messages to the biggest audiences in the world, it becomes an opportunity to get a really important conversation started.

When Colin Kaepernick decided to take a knee during the national anthem in protest of police brutality, he started something that we are still seeing the effects of today—not just for him as a player but also for how our country views and understands things like patriotism.

Questions of things like how our police force should be conducting itself and how people of color are treated by the majority are now being asked. And they’re being asked because this one individual, who had a fair bit of power and popularity, was willing to do something controversial, and I would argue, pretty brave as well.

You might think that the forum he chose wasn’t appropriate or that the way he chose to express himself wasn’t the best way to do it. However, whether you think these things or not, he got the conversation started, and that’s a pretty powerful and important thing.

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How Social Media Has Changed the Media Landscape

When talking about social media, it’s really important to talk about the things that were going on before its advent. Social media, when it came along, allowed us to do several things. Prior to this, there were many more cases of an athlete or athletic organization or any given event going directly to a media entity, who would then deliver it directly to the consumers.

Before the advent of social media, there wasn’t much direct communication to the consumer from the organization, the athlete or the event. There was always an entity in the middle. This caused a number of different issues. Consumers did not understand what was actually going on from the point of view of the athlete or the sports organization. It also created inauthentic news stories, especially involving athletic teams.

Often, consumers were left wondering what was really going on. Additionally, the content providers were receiving publicity from the mass media entities. So it’s interesting to note that before the advent of social media, the audience members themselves weren’t the ones giving publicity to organizations, or athletes, or events. The publicity was actually coming from places like ESPN, Fox or a newspaper or radio station.

Prior to social media, there were three main entities involved in sports publicity. This includes the content providers, the mass media organizations and a mass audience. The content providers were either the sports organizations, the athletes, or the events. It could be the Dallas Cowboys. It could be Michael Jordan. Or it could be the New York City Marathon.

At the time, content providers couldn’t reach out to the audience directly. Instead, they had to go through some type of mass media entity. Any given sports entity, whether it be Michael Jordan or the Cowboys or the NYC Marathon, had to distribute their message. To do so, they would first go to a television station like a Fox Sports, an ESPN, an NBC or a CBS. They would repeat this message in additional media, including local radio entities, newspapers or magazines. It was then up to that newspaper or magazine or TV channel to pass that information on to the mass audience.

Unfortunately, this created a thirdhand message. The issue was that these athletes and organizations and events weren’t actually giving their information directly to the consumers. Instead, they were getting it to them through a medium. So once social media started to be implemented, there was this whole new understanding and wealth of information that came from direct-to-consumer communication. There was no longer any sort of middleman that the consumers had to rely on and trust to know what they wanted to know.

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