7

LICENSED MERCHANDISE

7.1 Market Assessment According to The Licensing Letter, sports-licensed merchandise accounts for 13.5% of the total U.S. licensing market. PricewaterhouseCoopers (www.pwc.com) assesses the market for professional and collegiate sports licensed merchandise as follows: • 2010: $12.57 billion • 2016: $13.97 billion • 2011: $12.48 billion • 2017: $14.20 billion • 2012: $12.77 billion • 2018: $14.42 billion • 2013: $13.14 billion • 2019: $14.62 billion • 2014: $13.49 billion • 2020: $ 9.30 billion • 2015: $13.81 billion

______

“The domestic sports licensing business has been battered this year in a way few industries can relate, besides airlines and live concerts. Sports venues were largely shuttered and only recently permitting fractional crowds.”

SportsBusiness Journal, 11/16/20 ______

7.2 Professional Sports Merchandise The Licensing Business assesses retail sales for merchandise emblazoned with logos of professional sports licensors as follows: • MLB: $3.84 billion • NFL: $3.64 billion • NBA: $2.83 billion • NHL: $1.09 billion • NASCR: $ 863 million

SPORTS MARKETING 2022 • 47 • • Pro Soccer*: $ 780 million • PGA Tour: $ 349 million * Includes European and Latin American teams

7.3 Collegiate Merchandise According to The Licensing Letter, annual retail sales of licensed collegiate merchandise are $4.6 billion in the U.S. and Canada. The market includes sports and general merchandise; the bulk of spending is for sports-related items. Collegiate Licensing Company (CLC, www.clc.com), part of IMG College (www.imgcollege.com), accounts for 75% to 80% of the collegiate licensing market. Licensing Resource Group (www.lrgusa.com) is the second largest agency representing schools. Collegiate Licensing Company estimates the total collegiate licensing business higher than The Licensing Letter, at $5.5 billion, because CLC includes in its assessment non-royalty-bearing merchandise sold through college stores. According to CLC, apparel accounts for 65% of licensed collegiate merchandise. Distribution of licensed apparel merchandise is as follows: • T-shirts: 24% • Women’s fleece: 16% • Men’s/unisex fleece: 14% • Headwear: 13% • Other: 33%

Distribution of non-apparel product categories, which account for 35% of the collegiate licensing market, is as follows: • Videogames: 24% • Domestics: 9% • Housewares: 8% • Gifts/novelties: 6% • Other: 53%

Sales of licensed merchandise are highest for the following university brands (source: Collegiate Licensing Company): • University of Alabama • University of Texas • University of Notre Dame • University of Michigan • University of Georgia • Texas A&M University • University of Florida • Louisiana State University • Florida State University • University of North Carolina

SPORTS MARKETING 20202 • 48 • According to Collegiate Licensing Company, the following are the top collegiate merchandise licensees: Apparel • Knights Apparel • Nike USA • Top of the World • adidas Team • Champion Custom Products • Outerstuff • Gear for Sports • Twins Enterprise • J. America • Colosseum Athletics Corp.

Non-Apparel • EA Sports • Fabrique Innovations • Wilson Sporting Goods • The Northwest • Commemorative Brands • Upper Deck • Herff Jones • Team Beans • Jenkins Enterprises • Tervis Tumbler

7.4 Market Resources The Licensing Letter, Plain Language Media, P.O. Box 509, New London, CT 06320. (604) 210-4580. (www.thelicensingletter.com)

Licensing Industry Merchandisers’ Association, 350 Fifth Avenue, Suite 4019, New York, NY 10118. (212) 244-1944. (www.licensing.org)

SPORTS MARKETING 2022 • 49 • 8

SPORTS BETTING

8.1 Legal Sports Wagering The Professional and Amateur Sports Protection Act (PASPA), enacted by Congress in 1992, prohibited the expansion of sports betting beyond Delaware, Montana, Nevada, and Oregon – the four states that had already conducted or were formally considering legislation on some form of sports betting. Among these states, only Nevada allowed casino sports betting. In May 2018, the Supreme Court struck down PASPA, the federal law that barred gambling on football, basketball, baseball and other sports in most states, giving states the go-ahead to legalize betting on sports. The American Gaming Association (www.americangaming.org) estimated that Americans illegally wagered about $150 billion annually on sports prior to the Supreme Court ruling. As of June 2021, 22 states and jurisdictions had passed legislation enabling sports wagering, as follows: • Arkansas • New Hampshire • Colorado • New Jersey • Delaware • New Mexico • District of Columbia • New York • Illinois • North Carolina • Indiana • Oregon • Iowa • Pennsylvania • Michigan • Rhode Island • Mississippi • Tennessee • Montana • Virginia • Nevada • West Virginia

8.2 Market Assessment The following metrics are commonly used to assess sports wagering: • Handle: Amount wagered • Revenue: Amount of wagered money kept by sportsbooks • Hold: Percentage of handle sportsbooks keep; the rest is paid out to winners • Taxes/state revenue: Taxes collected by state and local jurisdictions

SPORTS MARKETING 20202 • 50 • Sports wagering has been as follows: Year # States Total Handle Total Revenue State Tax Revenue • 2018: 8 $ 4,618,927,032 $ 328,876,857 $ 39,128,263 • 2019: 14 $13,070,894,561 $ 915,172,754 $127,364,114 • 2020: 20 $21,526,970,899 $1,545,524,400 $244,621,474

By state, sports wagering in 2020 was as follows: Handle Revenue Hold Tax Revenue • Arkansas: $ 32,882,808 $ 4,191,640 12.75% $ 583,374 • Colorado: $1,185,754,618 $ 75,841,206 6.40% $ 2,964,672 • Delaware: $ 90,242,755 $ 17,096,405 18.94% $12,043,312 • District of Columbia: $ 80,527,761 $ 13,548,201 16.82% $ 1,008,014 • Illinois: $1,882,363,604 $125,494,792 6.67% $20,191,143 • Indiana: $1,769,270,606 $137,277,099 7.76% $13,041,325 • Iowa: $ 575,239,746 $ 41,629,263 7.24% $ 2,806,655 • Michigan: $ 130,763,498 $ 18,276,857 13.98% $ 1,535,256 • Mississippi: $ 363,775,648 $ 43,741,530 12.02% $ 5,256,453 • Montana: $ 17,779,330 $ 2,450,769 13.78% $ 2,450,769 • Nevada: $4,340,581,339 $263,340,000 6.07% $17,808,056 • New Hampshire: $ 292,594,088 $ 23,637,613 8.08% $11,000,815 • New Jersey: $6,016,968,399 $398,521,093 6.62% $50,891,397 • New York: n/a $ 10,768,736 n/a $ 1,094,832 • Oregon: $ 218,246,357 $ 20,072,367 9.20% n/a • Pennsylvania: $3,580,864,477 $269,902,733 7.54% $81,374,898 • Rhode Island: $ 221,916,076 $ 24,067,477 10.85% $12,274,413 • Tennessee: $ 312,344,523 $ 27,144,908 8.69% $ 5,443,918 • West Virginia: $ 414,855,266 $ 28,521,711 6.88% $ 2,852,172

By month, sports wagering in 2020 was as follows: Handle Revenue Hold Tax Revenue • January: $1,788,260,374 $139,932,628 7.83% $23,016,306 • February: $1,714,626,537 $ 84,206,523 4.91% $24,703,927 • March: $ 607,988,102 $ 35,330,216 5.81% $ 6,280,624 • April: $ 140,244,134 $ 8,384,269 5.98% $ 1,707,752 • May: $ 342,864,090 $ 26,475,596 7.72% $ 4,017,279 • June: $ 447,662,470 $ 29,682,272 6.63% $ 5,126,081 • July: $ 909,758,986 $ 73,011,358 8.03% $ 9,864,777 • August: $2,192,424,918 $126,586,653 5.77% $17,908,518 • September: $2,875,068,662 $154,358,367 5.37% $18,822,193 • October: $3,254,941,875 $281,009,928 8.63% $43,725,136 • November: $3,464,334,989 $310,926,587 8.98% $47,174,614 • December: $3,788,795,762 $275,620,003 7.27% $42,274,267

SPORTS MARKETING 2022 • 51 • 8.3 Betting By Sports Fans Sports Betting In The USA, by GlobalWebIndex (www.globalwebindex.com), asked sports fans on which sports they would make a bet. Responses were as follows (percentage of respondents): Fan Of The Sport Would Make A Bet • NFL: 72% 61% • NBA: 66% 58% • MLB: 65% 53% • Boxing: 47% 42% • NHL: 40% 32% • NASCAR: 38% 28% • Horse racing: 29% 35% • MLS: 29% 21% • Esports: 27% 23% • WNBA: 20% 16%

8.4 Market Opportunities The legalization of sports betting has opened up opportunities in several sectors. , the National Basketball Association, and the National Hockey League have entered into partnership agreements with gaming companies, opening a new revenue stream. Media companies have added sports betting programming to entice advertisers. And online betting sites have expanded their business.

8.5 Market Resources American Gaming Association, 1299 Pennsylvania Avenue NW, Suite 1175, Washington, DC 20004. (202) 552-2675. (www.americangaming.org)

Eilers & Krejcik Gaming, 5 Corporate Park, Suite 110, Irvine, CA 92606. (310) 743-6239. (www.ekgamingllc.com)

Legal Sports Report, 11700 W. Charleston Boulevard, Suite 170, Las Vegas, NV 89135. (www.legalsportsreport.com)

SPORTS MARKETING 20202 • 52 • 9

SPORTS TRAVEL

9.1 Market Assessment SportsBusiness Journal and Tourism Economics (www.tourismeconomics.com) estimate annual spending by travelers, event organizers, and venues on sports-related travel at $45 billion. Up to 75% of this spending was lost in 2020 due to the pandemic.

______

“Covid-19’s impact on tourism of any kind, let alone sports tourism, has been catastrophic. Very few American sporting events are taking place with fans inside venues, and some have been postponed or cancelled altogether.”

SportsBusiness Journal, 9/7/20 ______

The National Association of Sports Commissions (www.sportscommissions.org) assessed direct visitor spending associated with sports events, excluding professional leagues’ regular season games, at $12 billion. Travel by sports teams is estimated as follows: • College teams: $2.0 billion • Professional teams: $1.0 billion

According to the U.S. Travel Association (USTA, www.ustravel.org), over 50 million adults each year attend an organized sports event, competition, or tournament either as a spectator or participant while traveling 50 miles from home. The following are the most popular organized sports events to watch or participate in while traveling: • Baseball or softball: 33.7 million • Football: 30.3 million • Basketball: 18.8 million • Auto racing: 15.0 million • Golf: 11.1 million

SPORTS MARKETING 2022 • 53 • ______

“Hosting amateur and collegiate tournaments and championship events is one of the hottest areas in sports business right now.”

SportsBusiness Journal ______

The National Golf Foundation (www.ngf.org) estimates about $16 billion is spent a year on golf travel, 75% of which goes to the hotel, transportation, and food and beverage industries. SportsBusiness Journal estimates the travel market for youth sports at $7 billion; annual growth is 3% to 5%.

9.2 Favorite Cities For Sports Travel In the America’s Favorite Cities survey, readers of Travel + Leisure voted their favorite cities for sports-related travel as follows*: • Chicago, IL • Denver, CO • Boston, MA • Philadelphia, PA • Dallas/Fort Worth, TX • New Orleans, LA • Kansas City, KS • San Francisco, CA • New York, NY • Houston, TX * Note: Travel + Leisure readers voted among 35 major cities; some sports-oriented destinations including Detroit, Indianapolis, and St. Louis were not on the list.

9.3 Sports Commissions Most cities work to attract and coordinate sports events through their convention and visitor bureaus (CVBs); some have organized sports commissions to focus exclusively on these activities. Most of these organizations are members of the National Association of Sports Commissions, which has about 700 members.

SPORTS MARKETING 20202 • 54 • ______

“High-profile championships, and events showcasing rivers, trails, and parks are high priorities for sports commissions charged with attracting visitors and raising a city’s profile.”

SportsBusiness Journal ______

9.4 Baseball Spring Training Some 1.7 million baseball fans travel to Florida between late February and late March each year to watch spring training games. A study conducted for the Florida Sports Foundation (www.flasports.com) found that spring training brings approximately $500 million a year into the Florida economy. Arizona’s Cactus League Association (www.cactusleague.com) estimates $120 million in spending directly by tourists who come to Arizona for the games. Baseball teams were in the midst of spring training when Major League Baseball (MLB) announced on March 12, 2020, that the remainder of spring training was canceled.

9.5 Sports-Specialist Travel Agencies The popularity of sports travel has spawned niche specialist travel agencies offering packages to major sports events. The following are select travel agencies that specialize in sports travel and tours: • Creative Sports/Travel (www.creativetravelgroup.com) • Destination Management (www.dmitravel.com) • Esoteric Sports Tours (www.esotericsports.com) • Inside Sports & Entertainment Group (www.insideseg.com) • Palms Travel Express (www.palmstravel.com) • Roadtrips (www.roadtrips.com) • Sports Travel and Tours (www.sportstravelandtours.com) • Sports World Tours (www.sportsworldtours.com)

9.6 Market Resources National Association of Sports Commissions, 9916 Carver Road, Suite 100, Cincinnati, OH 45242. (513) 281-3888. (www.sportscommissions.org)

SPORTS MARKETING 2022 • 55 • Sport Tourism: State of the Industry Report, National Association of Sports Commissions, July 2020. (www.sportscommissions.org/research/nasc-reports)

SPORTS MARKETING 20202 • 56 • 10

TICKETING

10.1 Market Assessment Consumers spend roughly $30 billion annually for tickets to sporting events. The primary ticket market is approximately $22 million; the secondary ticket market is estimated at $8 billion.

______

“The ticketing industry continues to stand as one of the most actively changing segments of the entire sports business.”

SportsBusiness Journal ______

Increasingly, tickets are sold online, with over 50% of individual game tickets now sold online. Online sales allow teams to gain access to a wealth of data about their customers. The average NBA franchise, for example, has 500,000 names in its database, and some big-market teams have double that number. Once worried that ticket resales would eat into overall sales, major sports leagues have realized these concerns were unfounded, and many teams have begun contracting with secondary ticket resellers, primarily as a service to their season-ticket holders. Surveys show that season-ticket holders – who contribute about 80% of overall ticket revenue – worry about unused tickets, thus the option to resell tickets is one of the best ways of retaining season-ticket holders.

10.2 Secondary Ticketing The online secondary ticketing market is estimated at $6 billion to $8 billion. The amount could be much higher; no one knows for certain because so much of the selling can never be tracked. While re-selling tickets online at face value is legal in all 50 states and the District of Columbia, about 15 states have some restriction on how much tickets can be marked up by sellers. The laws vary widely, depending on the state and type of event and venue,

SPORTS MARKETING 2022 • 57 • and they range in scope. Conversely, several states have relaxed their regulations by removing bans on online individual ticket auctions. Online brokers largely have to rely on sellers to abide by their respective states’ rules, yet there is no way of knowing if they actually do so. And the overall online ticket market is difficult to police given the borderless nature of the business. There is a fine line between ticket brokers and scalpers. The former are generally those who are licensed by their state or are members of an association such as the National Association of Ticket Brokers (www.natb.org). Legitimate brokers work to protect consumers against fraudulent transactions. Unlike some independent scalpers, these resellers guarantee the sale of tickets by checking both the buyer and seller for potential risk of fraud prior to transactions. The following are the largest secondary ticket providers: • AXS (www.axs.com) • Coast to Coast Tickets (www.coasttocoasttickets.com) • eBay (www.ebay.com) • Go Tickets (www.gotickets.com) • RazorGator (www.razorgator.com) • ReplyBuy (www.replybuy.com) • SeatGeek (www.seatgeek.com) • StubHub (www.stubhub.com) • TickCo (www.tickco.com) • Ticket Liquidator (www.ticketliquidator.com) • Tickets.com (www.tickets.com) • Ticketmaster (www.ticketmaster.com) • TicketsNow (www.ticketsnow.com)

As competition in the segment has increased, the main players have created sub-niches for themselves to establish market differentiation. RazorGator, for example, specializes in the corporate travel market; StubHub works primarily through fan-to-fan connections and advertises heavily in mass media; TicketsNow takes sales listings only through prescreened, licensed brokers; and Ticketmaster works in a more traditional vendor capacity, only selling tickets on the secondary market for its own TeamExchange clients. Among companies in the secondary ticketing market, StubHub is the largest. eBay acquired StubHub in 2007 for $310 million.

10.3 Mobile Ticketing A 2021 survey of 96 sports leagues, teams, and events by SportsBusiness Journal found that 70% had shifted their ticketing to fully mobile; 30% were between 90% and 99% mobile.

SPORTS MARKETING 20202 • 58 • ______

“Among the Covid-19 pandemic’s countless impacts on society, the virus created the conditions mobile ticketing needed to reach near-ubiquity.”

SportsBusiness Journal, 3/1/21 ______

Super Bowl LV, in February 2021, used 100% digital tickets, an increase from 12% the prior year.

10.4 Dynamic pricing, also called market-based pricing and variable pricing, adjusts single-game ticket prices based on demand. Using this model, teams can adjust regular ticket prices up or down as late as game day. Software by Digonex Technologies (www.digonex.com), Qcue (www.qcue.com), and Veritix (www.veritix.com) is used by teams to guide variable pricing based on past ticket sales, team matchups, day and time of the game, player injuries, weather, and the going rate on ticket resale websites. Qcue reported that its MLB clients that implemented dynamic pricing for the season increased revenue by an average of $900,000 by adjusting the price in each section of the ballpark for each game. Variable pricing in professional sports dates to 2009, when the began conducting trials with variable pricing. All 30 MLB teams had adopted dynamic pricing by 2015. The NFL did not allow variable pricing until the 2014-2015 season.

10.5 Professional League Sports Tickets Major League Baseball • According to Turnkey Sports (www.turnkeysports.com), non-season-ticket holders purchased Major League Baseball tickets as follows: - Team website: 34% - StubHub: 19% - Team ticket office (walkup/telephone): 16% - Friend/relative: 15% - Ticketmaster: 6% - MLB.com: 3% - Other: 7%

SPORTS MARKETING 2022 • 59 • • Tickets.com, a subsidiary of MLB Advanced Media (MLBAM), has primary ticketing agreements with 21 MLB teams. • StubHub pays MLBAM more than half of the fees and commissions it collects on its baseball secondary ticket sales; MLBAM, in turn, sends a portion of these proceeds to the teams. SportsBusiness Journal estimates that StubHub pays MLBAM about $60 million annually. • Some MLB teams are trying to encourage, even force, customers to use mobile ticketing. The Atlanta Braves, for example, imposes a $250 fee for season ticket holders who elect to use paper tickets. The Cleveland Indians, Tampa Bay Rays, and Washington Nationals, among others, offer discounts or loyalty points for fans who use mobile tickets.

National Basketball Association • NBAtickets.com, a subsidiary of NBA Media Ventures LLC, is the official ticket marketplace for the NBA. It serves as a hub that links to the official team ticketing options for each team.

National Football League • Thirty-one (31) NFL teams have primary ticketing agreements with Ticketmaster; the Detroit Lions uses AXS. • Ticketmaster’s NFL ticket resale volume is estimated by SportsBusiness Journal at roughly $500 million per season in gross sales; growth has been in double-digit percentages in recent years.

National Hockey League • Ticketmaster operates the NHL Ticket Exchange, the official primary ticket marketplace for the National Hockey League.

Major League Soccer • SeatGeek is the official ticketing partner of MLS. • In 2016, MLS and SeatGeek unveiled a ticketing system that allows fans to buy tickets on dozens of e-commerce apps and ticketing sites, and also to securely sell or transfer tickets on any resale platform of their choice.

10.6 Subscription Ticketing With subscription ticketing in sports, fans pay a fixed monthly fee for access to discounted general admission tickets or for a fixed number of games at a deep discount. Seats are generally assigned just prior to a game, allowing teams flexibility in selling inventory. First introduced in 2015 by four MLB clubs – the Atlanta Braves, Chicago White Sox, and Oakland A’s – 22 of MLB’s 30 clubs used the mobile-based

SPORTS MARKETING 20202 • 60 • passes in 2018. Dubbed the Ballpark Pass, 1.3 million subscription-based tickets were sold in 2019.

______

“Buoyed by the success of MLB’s Ballpark Pass, more teams across sports are experimenting with subscription ticketing programs designed to appeal to the Netflix generation of fans.”

SportsBusiness Journal ______

10.7 Moving Unsold Ticket Inventory According to SportsBusiness Journal, between 11% and 39% of primary ticket inventory goes unsold. ScoreBig (www.scorebig.com), dubbed a Priceline.com for sports tickets, launched an online service in 2010 that aids teams in moving unsold tickets. ScoreBig secures inventory from teams, leagues, venues, promoters, or anyone else holding large blocks of unsold seats and sells it based on preference in price, location, and game. The model is loosely based on travel sites that sell hotel rooms or airline tickets at discounted rates.

10.8 Ticketing Through Social Networks Ticketmaster makes tickets to sports events available through Twitter and Facebook. On Facebook, users can see where friends are sitting on an interactive map. According to LiveAnalytics (www.liveanalytics.com), the research arm of Ticketmaster, 14% of those who purchase sports tickets from Ticketmaster are influenced to attend a game by a Facebook post, 20% use social media to invite friends to attend with them, and 47% are interested in seeing where their Facebook friends are sitting. LiveAnalytics also found that 16% of sports ticket buyers use their mobile phone to check in at the game to a location-based platform such as Foursquare.

10.9 Market Resources National Association of Ticket Brokers, 401 W. St. Charles Road, Lombard, IL 60148. (630) 510-4594. (www.natb.org)

SPORTS MARKETING 2022 • 61 •