NHL ‘Stadium’ Games

Teams in the National Hockey League (NHL) have competed in 18 outdoor games since the beginning of the 2003-2004 season. The outdoor games were made popular by the ‘Cold War’ ice hockey game between Michigan State University and the University of Michigan in October of 2001. The game was hosted at Spartan Stadium and was attended by 74,544 fans, filling the venue to 103.4% capacity. It was a then-world record for the largest crowd at an ice hockey game. It would be over 9 years until the record would fall at the Big House(Michigan Stadium), a rematch in Ann Arbor that would raise the bar to 104,173 in December of 2010. The NHL would not break the record for the largest attended ice hockey game until 2014, when they would host their own game at the Big House. The NHL have spread these outdoor events out with 16 different teams hosting outdoor games and another 5 participating in these major events in 17 different venues (Yankee Stadium was the only repeat venue hosting two Stadium Series games in 2014) in order to maximize exposure nationwide and to provide different markets the opportunity to participate in this ‘experience’.

The NHL currently has three ‘series’ that take place outdoors. The three series are the Heritage Classic, the Winter Classic and the Coors Light Stadium Series. The first Heritage Classic was hosted on November 22, 2003 at Commonwealth Stadium in Edmonton drew 57,167 even though it was -18 degree Fahrenheit. It was held to commemorate the 25th anniversary of the Oilers joining the NHL and the 20th anniversary of their first Stanley Cup. The success of this game would lead the way towards the planning of an annual game in time for the 2007-2008 season. The Heritage Classic has been hosted in Edmonton, Calgary and Vancouver. The Heritage Classic occurs between two Canadian teams, and the Winnipeg Jets will host the next edition of the game.

The first Winter Classic took place between the Pittsburgh Penguins and the Buffalo Sabres at Ralph Wilson Stadium, home of the Buffalo Bills and drew over 71,000 fans. The game was hosted on January 1st, 2008 and would start a trend for the annual Winter Classic being held on New Years Day each year except for the 2011-2012 season because New Year’s Day fell on a Sunday (the 2012-13 season which was shortened due to the lockout, the game was canceled in November of 2012). This year’s Winter Classic will be the 8th edition of the game, with the Boston Bruins being the first team to host two Winter Classic’s (albeit at a different venue). The Flyers, Capitals, Blackhawks, and Red Wings have all participated in two Winter Classics.

Due to the overwhelming success of the Winter Classic, the NHL decided to expand the playing of outdoors games and introduced the Stadium Series. During the inaugural Stadium Series, four games were played including two at Yankee Stadium (the Rangers were the road team for both games with the Devils & Islanders playing the host in one a piece). In 2015, the NHL hosted one game at Levi’s Stadium in California and in 2016; they will play two games, one in Denver and one in Minneapolis.

The outdoor games provide a unique experience for the players and the fans. There are many variables such as the atmosphere, playing conditions and climate.  The league has taken the opportunity to brand these events and generate additional sponsorship revenues as well. The Winter Classic had a title sponsor for their first event, signing a one-year deal with Amp Energy. Starting with the 2009 game, the Winter Classic started a long-term relationship with Bridgestone that was renewed during the summer of 2015. The 2011 Heritage Classic, the second in the Heritage Classic series after a 6 year hiatus, would set a then-NHL event record for both total sponsorship revenue and activation, with Tim Hortons serving as the title sponsor. The Stadium Series was introduced in order to capitalize off of the demand for these outdoor ice hockey games. In the first year of the Stadium Series, they were able to benefit from a title sponsorship that was part of the Coors Light seven-year, $375 million dollar sponsorship signed in 2011. The four Stadium Series games from 2014 generated revenues totaling $50 million dollars from tickets, sponsorship and other business. The expense to produce the four games was in the neighborhood of $35 million dollars according to Christopher Botta of Sports Business Daily. Within the same article, an executive with the Dodgers revealed that the revenue generated from the game hosted at Dodgers Stadium surpassed previous revenues of any event they had hosted by about 20%.

The NHL has found a niche with the outdoor game that they are able to satisfy in large pre-existing stadiums to bring the experience to tens of thousands of fans at one time. Some concern has been expressed over the frequency that these games have been hosted with, but after the bonanza that was 2014, in which 6 outdoors games were hosted, we have seen the trend slow down. The league continues to manage these events well and brand them within their respective series ensuring that every detail of these major events are managed similar to an all star weekend or Stanley Cup Final. As professional leagues look for external revenue opportunities that they can leverage, the Winter Classic, Stadium Series and Heritage Classic will continue to appear on the calendar with regularity for the NHL.

What is the National Women’s Hockey League?

The National Women’s Hockey League is almost at the midway point of their inaugural season. The NWHL is the first professional women’s hockey league, starting their inaugural season with four teams all located in the northeast region of the United States.

The four-teams located in New York City, Buffalo, Connecticut and Boston will each play an 18-game schedule (9 home, 9 away) and participate in two practices per week. The teams are owned by the league and per the league this will not change during year one.

The league does not have a .com domain instead calling NWHL.co their home on the web, which I found very interesting. The .co domain is a rather new domain, debuting in 2010, for ‘companies’. In year one, the NWHL has made an impact by signing their first corporate sponsor, Dunkin Donuts. Accessibility of games is important especially in the infancy of any league, and making their games available for free on YouTube, and providing a free archive provides the league a platform to promote their product to potential new fans.

The Boston Pride was the first team to secure a television deal, striking an agreement with the New England Sports Network (NESN), home of the Boston Bruins and Boston Red Sox, for 8 games. Boston was able to then sign another agreement with ESPN to air games on ESPN3, the ESPN digital platform. The broadcast successes of the Pride can be attributed to the venue, Alexander C. Bright Hockey Center at Harvard. Harvard University has heavily-invested in their athletics broadcasting infrastructure, which allows the Pride to take advantage of the venue they are playing in to maximize their broadcast exposure.

The league has been very transparent by posting their player salaries for public viewing on their website. The salary cap for year one is $270,000, and all teams are within $10,000 of that cap. The maximum player salary is $25,000 and only earned by one player in the league this season,Kelli Stack of Connecticut. The minimum player salary is $10,000 earned by 16 of the 72 reported player salaries is the most common denomination earned by a NWHL player this season. The average salary is just under $15,000 for the year and the median salary is $14,500.

I look forward to continuing to follow the growth of the league and hopefully it is able to provide a stable, professional women’s ice hockey league that spreads the popularity of the sport amongst men and women around the globe.

Naming-Rights Deal, New Standard in Sponsorship

The value of the naming-rights to professional stadiums and arenas plateaued with the economic recession in 2008. With almost 30% of the naming-rights sponsors at professional venues being financial service institutions this makes a lot of sense. Prior to the recession, Citigroup secured the rights to the New York Met’s new stadium, Citi Field, for 20-years and $400 million dollars or $20 million annually. Some naming rights deals came under flak, but none as much as Citigroup, as they ended up receiving a federal bailout. Recently there has been an influx of naming-rights deals for professional stadiums and arenas. In the last two weeks, the Minnesota Vikings and Tennessee Titans have secured partnerships. The value of the naming-rights deals is often dependent upon a number of factors including the market size, frequency of events, and number of impressions the stadium name will garner the company. These impressions typically include television broadcasts, social media, digital, print media and number of spectators. The naming-rights for an NFL venue typically would garner much more than an MLS stadium for the added prestige as well as the increased number of impressions the venue’s sponsor will garner over the life of the contract.

Naming-rights deals are typically lengthy, due to the nature of the agreement. Many naming-rights deals can lead to nicknames for the venues, and lead to the sponsors being synonymous with the venue. An example of this would the ‘The Forum’, which was short for the St. Petersburg Times Forum, home of the Tampa Bay Lightning. It is now known as the Amalie Arena, but many local outlets and fans still call it ‘The Forum’. The average length for the 19 MLB stadiums that I was able to find term lengths for was 22.3 years, the longest of the four major US sports.

Like most marketing agreements, there are multiple facets to these deals. The sponsors are not only paying for the naming-rights and signage there are typically larger strategies within these agreements. Here is a draft of the agreement signed between the San Jose Sharks and SAP. Typically, organizations highly value these agreements for the long-term annual revenue stream they provide. The average annual revenues garnered by the naming-rights for MLB stadiums were $3.5m per year. Some organizations do not sell naming-rights for their venues due to the perceived value of their branding. Examples of these stadiums in Major League Baseball include Yankee Stadium, Fenway Park and Wrigley Field. Occasionally venues struggle to sell their naming-rights, such as the Dallas Cowboys. The Dallas Cowboys called their new venue Cowboys Stadium until they reached an agreement with AT&T in 2013. AT&T Stadium generates the Cowboys $17m per year in revenues or the next 20 years. The Cowboys put this valuation on it and refused to change their asking price until they found a partner that was willing to pay their price.

These naming-rights deals do not always run their course. Early exit agreements can be negotiated when venues or the sponsor no longer value the partnership. Often, sponsors continue their relationship with the organization through different marketing capacities. There are a number of naming-rights deals that are nearing expiration including BMO Field, M&T Bank Stadium, O.Co Coliseum, Qualcomm Stadium, Toyota Park and the Verizon Center. O.Co Coliseum and Qualcomm Stadium, both serving as homes to NFL teams in California, are nearing the end of their usefulness and in dire need of replacement or renovation. The Verizon Center, home to the Washington Capitals and Wizards, as well as the Georgetown Hoyas, will be seeking a new sponsor, as Verizon has announced that they will not renew the partnership. New venues for the Detroit Red Wings and the Atlanta Falcons are in the market competing against existing venues without a naming-rights deal such as the Palace at Auburn Hills (home to the Detroit Pistons).

These sponsorships appeal to a large group of global, international and local companies. They can be viewed as high risk – high reward because of the high cost associated with the sponsorship. Due to the long-term status of these deals, they are not always available. There is a limited inventory and as with all sponsorships, it must make sense for both parties and be a part of an overarching theme or strategy. These deals are important in order to fund the improvements and renovations at many stadiums and are becoming more common at colleges and for stadiums in minor leagues across the country. As organizations around the world see the success and mutual benefits experienced by the teams and sponsors, these deals become more commonplace overseas as well. Overseas it is common for the naming-rights to be grouped in with their kit (jersey) sponsors such as for Manchester City (Ethiad Stadium) or Arsenal (Emirate Stadium). Recently, Real Madrid of La Liga secured a naming-rights deal in order to finance repairs of their stadium. This practice will only continue to grow as teams see the opportunity for a new revenue stream.

College Athletics Websites And The People Behind Them

In society today, you don’t see many thriving businesses that are not represented on the Internet with easy-to-use, aesthetic website. When fans look for information, they often look for the official website of the team or league. This is no different from any college athletic department, which must keep their websites updated in order to keep their fan base privy of the most current information. Information found on college athletic websites includes rosters, statistics, schedules, history, staff directories, and facility information, in addition to press releases, photographs and supplemental video.

Often the individuals that manage these websites are the same people that are writing and distributing press materials to the media. Taking a look at NCAA Division I institutions, these individuals usually work in communications offices, or sports information departments. These departments can have anywhere from one to 15 (University of Texas has 15 Communications employees) staff members, as well as countless graduate assistants, interns, student-workers and volunteers. The responsibilities of these departments can range depending on the structure of the athletic department to include public relations, community affairs, marketing, social media, video content, creative services, statistics, website management amongst other responsibilities.

With their website aggregating not only the majority of their work but also serving as the first place their fan base goes for information it is imperative to stay cutting edge. There are four major ‘players’ in the digital platform space that host these websites, they are CBS Interactive, Neulion, Presto Sports and SIDEARM Sports. At the Division I level, SIDEARM Sports is currently the leader in the industry hosting 123 websites (as of July 1, 2015). This takes in to account the 19 schools that SIDEARM Sports will add as partners due to joining Learfield Sports.

According to SIDEARM Sports’ President and CEO Jeff Rubin, one of the reasons his company was attracted to Learfield was for the potential upside in growth, by gaining entry to other programs in the major conferences. “We believe strongly in our expertise and our points of difference and knew that if we were able to initiate conversations with Learfield partner schools we would be in a position to hopefully win over their business.”

Learfield’s university multimedia rights partners transitioning to SIDEARM Sports’ platform include Army, Illinois, Indiana, Iowa State, Louisville, Memphis, Missouri, Montana, N.C. State, Northern Iowa, Northwestern, Oklahoma State, SMU, South Dakota, Texas A&M and Tulsa.

Most of the schools that SIDEARM Sports is adding to their portfolio are coming to them from CBS Interactive, which has the second-largest portfolio with 94 clients at the moment. Not all Learfield Sports properties have joined the SIDEARM Sports portfolio due to multi-year commitments with prior hosts. 58 Learfield Sports schools are currently under contract with SIDEARM Sports competitors, Presto Sports, CBS Interactive and Neulion. There is not one conference with a uniform host for all of their member schools.

Conferences must also decide whom to allow to host their website. They are looking for different content management tools than a typical school would be looking for. The value for a conference comes from the ability of a host to aggregate. Some of the more notable conference website deals include the Big 12 Conference and their deal with Neulion. Neulion and their base of clients has grown substantially in the last 5 years, based on the success of the Neulion College Platform. Outside of the college landscape, Neulion has made waves in the sports industry for their video platforms, including the Tennis Channel Plus, which is the digital component for the Tennis Channel.

CBS Interactive (CBSI) has been a competitor in the space since the .com boom in the late 90’s. Last year, CBSI saw the need to rebrand their video platform, formerly known as LiveU. Now one subscription to a member school will grant access to all of the schools, establishing a digital network for all of the college rights that CBS controls. This mainly covers the Olympic sports, which are streamed by the schools themselves. They’ve rebranded this all-access subscription service as College Sports Live featuring live streaming and on-demand audio and video coverage.

“We’re seeing fans are consuming more than just one school’s content,” says Hirsch. “That’s our goal and so far we’re seeing that and we’ll continue to add content to make it richer and continue to reduce any fragmentation we may find.”

The services that each of the four major competitors offer are similar, but their differences come in their live in-game statistics, creative services, content management tools and how they integrate different aspects of their experience such as video, social media and statistics.

College Athletics, Big Business: High Pressure for Athletic Directors

College athletics fall under the large umbrella of education due to their affiliation with universities and colleges. College athletics are also big business. Thanks in large part to the explosion of college football, the value of their television rights along with the donations that the programs are able to generate benefit the university as a whole. According to the NCAA report released in April, the 39 postseason FBS games distributed $505.9m to participants. This is an increase of almost $200m from the $309.9m generated during the 2013-14 bowl games under the Bowl Championship Series. Not all athletic departments sponsor football. It’s tough to understand the funding the financing that athletic departments report because there is no standard and different accounting standards are applied to their financial reports.

Private universities keep their financials private, but public university must honor open-records requests and open their financial books. USA Today does a great job of compiling these findings in to an interactive table. The most interesting thing that can be gleaned from this table is the total subsidy the athletic departments receive from their respective universities. Out of the 230 public universities that reported their financial records, only 7 schools reported not accepting any subsidies during the 2013-14 fiscal year. Subsidies at schools that are in the highly competitive football offering SEC, Big Ten and Big 12 typically received lower subsidies due to high valued media rights deals. Schools from the Group of Five (Mountain West, MAC, C-USA, AAC and Sun Belt) had average subsidies of between $15-25m per school.

The top of the athletic departments on college campuses are typically the athletic director. Athletic directors may be “in charge” but they are not usually the highest paid figures on campus, typically trailing high profile college basketball and college football coaches. The average salary for a FBS D1 athletic director in 2013 was $515,000 per year, a 14 percent increase from 2011. These high profile, often underpaid administrators manage the multi-million dollar media rights deals, conference affiliations, head coaches, budgets, capital expenditures fundraising and athletic department employees. Often held accountable for the on-field progress of individual programs, the position is difficult to compare to anything. To get a better idea of the roles of the modern day athletic director, check out Jason Belzer’s piece for Forbes.com

Recently, Street & Smith’s SportsBusinessJournal conducted a study looking at Division I athletic directors. I’d like to highlight a few of my key takeaways from this study, that I found intriguing considering all the facts presented in this post. Only 10 Division I Ads have been on the job for at least 22 years. They’ve served at Wagner College, Utah, Saint Joseph’s (Pa.), Lehigh, UNC-Charlotte, Bethune-Cookman, Florida, Wake Forest, Purdue and Siena College. Four of the ten are currently in the Power Five Conferences. At the time of the student 17 schools including Syracuse and Michigan were operating with interim athletic directors, an alarming high number considering the study looked at all 351 Division I Athletic Departments.

Athletic Directors had a number of common experiences in their past, including similar schools or past work experiences. I thought that it was interesting that the most common former employers for athletic directors were collegiate conference offices, government or municipalities and NFL teams which speak to the fact that college athletics are big business. The tenure of these top dogs at major universities also seems to be impacted by the conference that the school belongs too. The Power Five schools all have average AD tenures between 6.8 and 7.2 years long. Since the study was conducted, two athletic directors in the BIG EAST will have their tenure ended. While conferences that do not sponsor football including the MAAC, Big East, West Coast Conference, Atlantic 10 all have tenures over 8 years in length.

At some point in the future, I will do another post discussing the scarcity of female and minority administrators in collegiate athletics, but at the DI level this is even a larger problem. There are 26 out of 334 are females, while 39 are a minority male. Only three of the 65 athletic directors in the Power Five conferences are female.

The final takeaway from their study was the overwhelming amount of DI college athletic directors that have experience as a former student-athlete or coach. 201 of current athletic directors were student-athletes prior to their appointment, while 122 served as coaches. 258 ADs have at least one master’s degree while 13 have at least two master’s degrees. 48 of these degrees were in education while 38 were in business administration, the majority by far. 48 ADs have at least one PhD, 27 of which were focused on education.

While college athletics are definitely big business dealing with potentially billions of dollars, it definitely comes full circle back to the importance of education. Having a deep understanding of how the education industry works, and being able to juggle the multitude of responsibilities associated with the position. For all those interested in college athletics, or with any aspirations to become a college athletic director or to understand the underlying of college athletics, I suggest subscribing to Street & Smith’s SportsBusinessJournal for access to their report along with their insight and breaking of big stories directly relating to the industry.