Lesson 1.1 Genesis Of

Home , Clipper Darrell, Genesis (tournament)

Lesson 1.1

Genesis of SEM

Lesson 1.1

What is SEM?

Acronym for:

Sports and Entertainment Marketing

Lesson 1.1

The Evolution of SEM

SEM is a relatively new concept

➢ Forms of sports marketing started as early as 1858 (first known athletic event to charge admission took place at a baseball game)

➢ Entertainment as we know it today (movies, radio, television, music) exploded from 1900 on, and as technology improved, so did the products being offered

Lesson 1.1

The Evolution of SEM

SEM is a relatively new concept

➢ The 1900’s also brought the advent of carnivals, amusement parks, and theme parks which evolved from (but did not completely replace) fairs, circuses and festivals

Lesson 1.1

The Evolution of SEM

Many events influenced growth

➢ Evolved as fan support grew with willingness to spend discretionary income on sports

➢ Emergence of radio and television increase exposure to sports.

Lesson 1.1

The Evolution of SEM

➢ Corporations began to see the benefit with sports affiliations, resulting in a sponsorship boom

➢ Celebrity endorsements and naming rights deals became common industry practice

➢ Advancement of technologies making it easier to consume sports and entertainment while more sports and entertainment properties are introduced

Lesson 1.1

Industry Size & Scope

➢ The sports business industry is one of the largest and fastest growing industries in the US

➢Overall size of the entire sports industry in the U.S. is around $485 billion (global, the sports industry is estimated to be around $1.5 trillion)

Lesson 1.1

Industry Size & Scope

How does the sports industry

stack up against other industries?

Lesson 1.1

2014 Sports Industry Revenue Streams

Sports goods equipment (retailers)

Racetracks, sports teams & other spectator sports

“Big 4” U.S. sports leagues

Fitness and recreation

NCAA sports

NASCAR 0 5 10 15 20 25 30 35 40 60 80

Lesson 1.1

Industry Size & Scope

➢ Entertainment industry extends from movies, television and radio, to theatre, home entertainment, amusement/theme parks, gaming and much more

➢ Consumers have shown an insatiable appetite for entertainment resulting in an industry boom

Lesson 1.1 Broadly measured, the entertainment and

media industry spans multiple sectors

➢ 9,566 FM radio stations in the US

➢ Over 1.4 billion movie tickets are sold each year in U.S. theaters

➢U.S. communications and media spending: ● $891.5 billion in 2008 ● $1.12 trillion in 2012 ● $1.416 trillion in 2016 (estimated)

Lesson 1.1 Broadly measured, the entertainment and

media industry spans multiple sectors

➢ Of the 50 billion+ downloads sold in the history of the iTunes store, 15 of the 25 most downloaded apps ever are games

Lesson 1.1

Entertainment Industry Revenue Streams

Film/theatrical/DVD

TV broadcast and cable

Music industry

Electronic gaming

Amusement/theme park

Theatrical productions

0 10 20 30 40 50 60 70 80 90

Industry Growth

LESSON 1.2

Factors Influencing Industry Growth

➢ Increase in participation

➢ More people following sports and entertainment

➢ Increase in sports/entertainment offerings

➢ Attendance boom

➢ Media coverage

➢ Global products

LESSON 1.2

Evidence of Increased Participation Rates

Soccer: 1974 - 100,000 registered players Today - 3.2 million registered players & over 800,000 coaches and volunteers

LESSON 1.2

Evidence of Increased Participation Rates

Golf: 50 years ago - 3.5% of population Today - 12.6% of population

LESSON 1.2

Evidence of Increased Participation Rates

Lacrosse: 280% increase in the last decade

LESSON 1.2

Evidence of Increased Participation Rates

Skateboarding: 74.1% growth in the last decade

Why? X-Games

LESSON 1.2

Evidence of Increased Participation Rates

Hockey: ● 2014 - 519,547 register amateur hockey players in the US ● 8,000 more players than any other year

LESSON 1.2

Factors Influencing Industry Growth

➢ Increase in participation

➢ More people following sports and entertainment

➢ Increase in sports/entertainment offerings

➢ Attendance boom

➢ Media coverage

➢ Global products

➢ Emergence of Internet and new technologies

LESSON 1.2

Increase in Those Following Sports & Entertainment

● 1971 - 800 hours of sports broadcast hours

● 2012 Olympics - 5,535 hours

● 2016 Summer Olympics in Rio, Brazil - 6,000 hours ○ all 130 competitions were streamed online

LESSON 1.2

Factors Influencing Industry Growth

➢ Increase in participation

➢ More people following sports and entertainment

➢ Increase in sports/entertainment offerings

➢ Attendance boom

➢ Media coverage

➢ Global products

➢ Emergence of Internet and new technologies

LESSON 1.2

Increase in Sports/Entertainment Offerings

More options for sports as participants:

Disc Golf: ● 1995 - 560 courses in the U.S. ● 2016 - 5,000 courses ● Average yearly growth = 16% (for the past 15 years)

LESSON 1.2

Increase in Sports/Entertainment Offerings

More options for sports as participants:

Spikeball: ● Invented in the 1980's ● Disappeared during the 90's ● 2013 - reappeared ● Today - over 125,00 participants ● has its own governing body ● Self-proclaimed fastest growing sport in the U.S. (300 tournaments last year alone)

LESSON 1.2

Increase in Sports/Entertainment Offerings

More options for sports as participants:

Rugby: ● One of the fastest growing sports in the U.S.A. ● 14% growth annually for the last five years ● Today - boasts a record 1.2 million participants throughout the country. ● Olympic event in 2016 (first time since 1924)

LESSON 1.2

Increase in Sports/Entertainment Offerings

More options for sports

as participants:

In 2013, Hawaii became the first state to sanction surfing as an officially recognized high school sport

LESSON 1.2

Increase in Sports/Entertainment Offerings

More options for sports as

participants:

Also in 2013, the state of Missouri bass fishing became an officially sanctioned high school sport (joining the states of Illinois, Kentucky and Tennessee as states sanctioning fishing as a recognized sport)

LESSON 1.2

Increase in Sports/Entertainment Offerings

More options for sports

as participants:

One school in Florida is attempting to legitimize Go Kart racing as an official varsity sport

LESSON 1.2

Increase in Sports/Entertainment Offerings

ESPN’s coverage features more than 65 sports including MLB, NBA, NFL’s Monday Night Football, NASCAR, MLS, FIFA World Cup, WNBA, college football, men's and women's college basketball, golf, Little League World Series, fishing, spelling, billiards, poker, arena football, eating championships, and the X Games

LESSON 1.2

Increase in Sports/Entertainment Offerings

DirecTV now offers over 285 channels as part of their “premiere” package, including over 50 channels dedicated specifically to sports programming (and that doesn’t include the seventeen “specialty” packages that require an additional subscription like the NBA League Pass, NFL Ticket or NHL Center Ice).

LESSON 1.2

Factors Influencing Industry Growth

➢ Increase in participation

➢ More people following sports and entertainment

➢ Increase in sports/entertainment offerings

➢ Attendance boom

➢ Media coverage

➢ Global products

➢ Emergence of Internet and new technologies

LESSON 1.2

Attendance Increases

The NHL enjoyed its second highest attendance figure in league history during the 2015-16 season with 21,451,041 fans visiting NHL arenas.

LESSON 1.2

Attendance Increases To put the league’s growth into perspective, the NHL’s attendance was 7,758,05 in the

1978-79 season

2012-13 NHL season attendance (lockout shortened season)

21,470,155

1978-79 NHL season total attendance

7,758,05

LESSON 1.2

Attendance Increases

Over 75 percent of movies in the top 50 all-time highest-grossing films (before inflation) were released after the year 2000. Nearly 50 percent of films in the top ten were released in 2015 or later. The highest grossing film in the 70s was Star Wars, at just under $800 million and in the 80s was E.T., at just $750 million.

LESSON 1.2

Attendance Increases

The 2016 release of “ Star Wars: The Force Awakens” barely beat the record held by “Jurassic World” when it took just 12 days to surpass the $1 billion mark.

LESSON 1.2

Discussion Topic

Although Titanic’s box office figures are incredibly impressive, the box office figures do not necessarily tell the whole story.

Ticket prices in 1997 were much higher than they were in 1977, the year Star Wars was released and box office records are not adjusted for inflation.

LESSON 1.2

Discussion Topic

When box office numbers are adjusted

for inflation, the domestic top grossing

film in American history is NOT Titanic.

What is it???

LESSON 1.2

Discussion Topic

Gone with the Wind!

th Titanic slips to just 5 overall…

LESSON 1.2

Factors Influencing Industry Growth

➢ Increase in participation

➢ More people following sports and entertainment

➢ Increase in sports/entertainment offerings

➢ Attendance boom

➢ Media coverage

➢ Global products

➢ Emergence of Internet and new technologies

LESSON 1.2

Media Coverage Media coverage of sports and entertainment has grown significantly in the past 50 years. Athletes and entertainers constantly in the

public eye

LESSON 1.2

Media Coverage

Introduction of Internet makes information

available “on demand”

LESSON 1.2

Media Coverage

● Television and radio instead of newspapers

● Social media instead of TV and radio

● Profit potential for media centers = competition for top stories

LESSON 1.2

Media Coverage “Arnold Palmer…came along at the same time television was exploding in America. Now we’ve got global Internet access. Our sport wasn’t global when I began playing the Tour. Now it is. You can log on anywhere in the world an see what any player did in any tournament or for the year. With that international boom, that international stream of information, golf is getting exposed to parts of the world that it never even thought of getting into.”

- Tiger Woods

LESSON 1.2

Factors Influencing Industry Growth

➢ Increase in participation

➢ More people following sports and entertainment

➢ Increase in sports/entertainment offerings

➢ Attendance boom

➢ Media coverage

➢ Global products

➢ Emergence of Internet and new technologies

LESSON 1.2

Global Marketplace

The international marketplace continues to provide a platform for driving sales of sports

and entertainment products and services

LESSON 1.2

2015-2016 NBA season ● Over 100 international players ● All 30 teams had at least 1 international player ● The 2016 NBA Finals matchup between the Cleveland Cavaliers & the Golden State Warriors featured players from 6 different countries.

LESSON 1.2

Global Marketplace

Global events like Wimbledon, the Tour de France, FIFA World Cup, Olympic Games, the Iditarod and Cannes Film Festival attract world-wide attention, providing an exceptional marketing opportunity for ticket sales, sponsorship sales, licensing and merchandise opportunities and provide a major economic impact for host cities

LESSON 1.2

Global Marketplace

● In 2010, the first Winter X-Games was held outside the US

● 2013 X-Games in Munich demonstrated the growth in global appeal of the event when 47.5 hours of action were broadcast across ESPN’s various platforms, including 26.5 hours on live television

LESSON 1.2

Global Marketplace

Global demand for footwear and sports apparel are competing with American brands (Nike and Under Armour) for market share ● China’s Li Ning ● Germany’s Adidas and Puma

LESSON 1.2

Global Marketplace ● D. Wade left Jordan Brand for Li-Ning (China)

● Klay Thompson has a signature shoe with Anta (China)

● Reebok trying to reach consumers in India ○ Signed Indian cricket captain M. S. Dhoni ○ Plans to sign other yet-to-be-revealed “well-known personalities from different walks of life such as musicians, entertainers and professionals"

LESSON 1.2

Global Marketplace

Prominent American sports are making a push to expand their presence overseas. ● Last season, Mexico City hosted an NBA game (Houston Rockets vs Minnesota Timberwolves) ● The NFL scheduled three games in London for the 2016-17 season.

LESSON 1.2

Global Marketplace

Major League Baseball continued its recent history of internationally hosting season openers when the Arizona Diamondbacks and Los Angeles Dodgers played in Sydney, Australia to kick off the 2014 MLB regular season

LESSON 1.2

Signs of Continued Industry Growth Worldwide video game industry (console, portable, PC, and online video games)

● 2016 - $100 billion industry ● 2019 - $118.6 billion (projected)

LESSON 1.2

Signs of Continued Industry Growth

Recorded music revenue ● 2015 - $15 billion (3.2% growth) ● Explosive growth in subscriptions to streaming services ● 2016 Data ○ SoundCloud - 175 million active users ○ Spotify - 100 million users ○ Pandora - 77 million ○ iHeartRadio - 48 million ○ Apple Music -15 million (in its 1st year)

LESSON 1.2

Signs of Continued Industry Growth

The global theme parks market is projected to reach $31.8 billion by 2017, according to a report by Global Industry Analysts, Inc.

Also according to Global Industry Analysts, Inc., the global footwear market is expected to reach $211.5 billion by 2018

In 2016 soccer will generate a record $60.2 billion in sponsor dollars –an increase of roughly $14 billion since 2010

LESSON 1.2

Signs of Continued Industry Growth

Adidas reported revenues of nearly $2.78 billion in 2016 in global soccer sales, an increase of a whopping $300 million from the previous year.

LESSON 1.2

Signs of Continued Industry Growth

NFL media fees are projected to double to $8 billion annually by the end of the decade.

According to a Forbes report, the NBA generated a record $5.2 billion in revenue last season, resulting in a record $900 million in profits.

LESSON 1.2

Signs of Continued Industry Growth

Centerplate ● The leading hospitality partner to North America's premier sports, convention and entertainment venues ● The fastest growing restaurant chain in America ● Serves over 115 million guests per year

LESSON 1.2

Signs of Continued Industry Growth

Forbes reports that ESPN is now valued at

over $50 billion

LESSON 1.2

Signs of Continued Industry Growth

● Television audiences continue to grow ○ 2016 NBA Finals – 30.8 million viewers (Game 7) ○ 1998 - averaged 20.2 million viewers per game

● Sports and entertainment properties expand the various means for distributing content (social media, streaming etc)

Copyright © 2016 by Sports Career Consulting, LLC a.The NBA continues to be a leader in embracing social media surpassing 400 million likes and followers combined across all league, team and player pages on Facebook, Twitter, Instagram, Sina and Tencent. The NBA was the first professional sports league to exceed one . History ofbillion SEM videos viewed on its YouTube channel and now has more than 1.3 billion videos viewed overall (according to nba.com).

LESSON 1.2

Signs of Continued Industry Growth

The NBA continues to be a social media leader ● 400 million likes and followers combined across all league, team and player pages on Facebook, Twitter, Instagram, Sina and Tencent. ● The first professional sports league to exceed one billion videos viewed on its YouTube channel ○ Now has more than 1.3 billion videos viewed overall

LESSON 1.2

Signs of Continued Industry Growth The value of major league sport franchises continues to grow at a furious pace. ● 1973 - the late George Steinbrenner bought the New York Yankees for just under $9 million ● 2016, Forbes magazine valued the franchise at $3.4 billion

Last year, Forbes reported that the Dallas Cowboys franchise was the most valuable sports team in the world at a whopping $4 billion.

LESSON 1.2

Signs of Continued Industry Growth

● 2014 - Steve Ballmer purchased the NBA's LA Clippers for a record $2 billion ● The team's previous owner, Donald Sterling, bought the team in 1981 for $12 million.

● The NBA's Milwaukee Bucks were sold in 2015 for $550 million – illustrating the impact market size can have on the value of a franchise.

LESSON 1.2

Signs of Continued Industry Growth

In another example of how market size impacts franchise values, the NFL’s Rams franchise nearly doubled in value (from $1.45 billion to $2.9 billion) as soon as it was announced that they would re-locate from St. Louis to Los Angeles.

LESSON 1.2

Signs of Continued Industry Growth

Fandom is a term used to refer to a subculture composed of fans characterized by a feeling of sympathy and camaraderie

with others who share a common interest

LESSON 1.2

Signs of Continued Industry Growth The term fandom can be used to describe

all types of fan groupings or “subcultures”

LESSON 1.2

Signs of Continued Industry Growth

Beyonce: ● 14.5 million Twitter followers ● 17,000 members of the “BeyHive” fan club

LESSON 1.2

Signs of Continued Industry Growth

● ESPN’s annual “SportsNation Survey” found that a whopping 90% of male respondents claimed to be sports fans on some level ● Over 50% of respondents claimed to more of a sports fan than they were five years ago ● 58% of respondents would prefer to receive free season tickets to their favorite sports team than be promoted at work.

LESSON 1.2

Signs of Continued Industry Growth

Fans have, in a limited number of occasions, successfully organized on behalf of a cancelled television series to lobby networks to bring back their favorite show (examples include Chuck in 2010 and Community in 2012 while prompting Netflix to resurrect cult hit series Arrested Development)

LESSON 1.2

Signs of Continued Industry Growth

The intensity levels of fandom vary, ranging from a casual sports fan who might take in one game per year to those fans that put the “fan” in “fanatic” (and otherwise engage in behavior that other fans might otherwise find to be irrational)

LESSON 1.2

Signs of Continued Industry Growth

Fans who go to extremes to show their loyalty to their favorite team, band, actor or other celebrity are often referred to as “superfans”

LESSON 1.2

Signs of Continued Industry Growth

Self-proclaimed Clippers fan “Clipper Darrell” spent $12,000 customizing his BMW to reflect his love for the Los Angeles Clippers (complete with the license plate “CLIPERD”)

Darrell has gone so far as to have his own personal dedicated website Because Clipper Darrell began charging people for public appearances, the Clippers franchise asked that he disassociate himself with the team in 2012. They would later sort the issue out and Darrell returned to his regular seats.

LESSON 1.2

Signs of Continued Industry Growth

A Washington Redskins superfan who goes by the nickname “RG3 Woman” dresses up in a gold bodysuit at home games to cheer on her favorite player

LESSON 1.2

Signs of Continued Industry Growth

Fandom explains why people propose at sporting events or feature a themed wedding centered on their favorite sports team

LESSON 1.2

Signs of Continued Industry Growth ● On opening night, approximately 1.5 million gamers lined up outside 13,000 stores to buy a copy of Modern Warfare 3 at midnight ● The number of people calling in sick to work the day after Call of Duty is released results in a significant increase ● University of Kentucky fans paid between $7,500 to $12,500 for the opportunity to attend a basketball camp (called John Calipari Basketball Fantasy Experience) and “essentially experience what it’s like to be a Kentucky basketball player”

LESSON 1.2

Signs of Continued Industry Growth

While many media pundits publicly chastised LeBron James’ decision to announce which team he would be joining in a one hour ESPN special, the show (aptly named “The Decision”) drew very high ratings as nearly 10 million people tuned in to watch

LESSON 1.2

Signs of Continued Industry Growth

Despite all the scrutiny surrounding singer Chris Brown (including his widely publicized assault of then-girlfriend Rihanna, a disturbance in a nightclub with rapper Drake, and poor album reviews), his 2013 release of “Fortune” managed to debut at the top of the Billboard 200 chart

LESSON 1.2

Signs of Continued Industry Growth

Because of the strong emotional connection fans maintain with their favorite sports teams, wins and losses on the grandest of stages can yield incredible influence (both positive and negative) on a community at large

LESSON 1.2

Signs of Continued Industry Growth

After struggling with one of the worst national disasters in US history (Hurricane Katrina), fans in the New Orleans area often cited the New Orleans Saints Super Bowl win as an inspiration for the city’s resurrection

LESSON 1.2

Signs of Continued Industry Growth

Representing their country just four months after a devastating tsunami rocked Japan, their women’s soccer team pulled off one of the greatest upsets in sports history by defeating the heavily favored Germans in the 2011 World Cup and, ultimately, beating the United States in the championship game. “Our playing is to be an encouragement for the victims of the disaster,” said Coach Norio Sasaki after the monumental victory while the headline in the New York Times the following day read: “A Resilient Team Soothes a Nation.”

LESSON 1.2

Signs of Continued Industry Growth Fandom can, unfortunately, also result in an unhealthy (and potentially dangerous) subculture of fans that become too emotionally invested and obsessive with their favorite sports teams or celebrities.

At the 2016 Euro Cup, Russian fans/hooligans resorted to violence against English fans, dozens were injured and several fans were jailed. CNN reported that the Euro Cup’s governing body fined the Russian team 150,000 euros and threatened to expel them from the tournament due to the fans' actions.

LESSON 1.2

Signs of Continued Industry Growth

During the 2016 NBA Finals, a fan of the Cleveland Cavaliers sent a vulgar tweet to a family member of Golden State’s Steph Curry, and ended up losing his job as a result.

LESSON 1.2

Signs of Continued Industry Growth

Throughout the entire 2015-16 college football season, Goodyear sponsored the “ Fan Index” in partnership with USA Today, polling college football fans around the country to determine winners of categories ranging from the best uniforms (Michigan Wolverines) to the best fans overall (Ohio State Buckeyes).

Media Impact on Industry Growth

LESSON 1.3

Media Impact on Industry Growth

Media refers to a means of communicating a message to large

numbers of people

LESSON 1.3

Media Impact on Industry Growth

It was not until the 1936 Olympics (broadcast by ABC radio) that Americans were truly exposed to the amazing talents of Jesse Owens, one of America’s greatest athletes of all time

LESSON 1.3

Media Impact on Industry Growth

Now, fans can follow athlete performances live through television, radio, Internet as well getting information through national papers, local papers, magazines, and industry specific journals

LESSON 1.3

Media Impact on Industry Growth

Media rights (or broadcast rights) are fees paid by broadcast companies to sports or entertainment properties for the opportunity to provide live coverage of the property’s games and events on television, the radio or the Internet

LESSON 1.3

Media Rights Many media rights deals provide exclusive coverage rights

Because of the NFL’s deal with DirecTV, no other television network can broadcast out of market games in their respective geographic markets. In other words, if you are a Green Bay Packers fan living in Virginia, you would need to order DirecTV for the opportunity to watch Packers games in your home each week.

LESSON 1.3

Media Rights

Media rights contracts are not reserved for national broadcasting companies as sports franchises work to maximize revenues by selling regional broadcasting rights to regional partners, in addition to generating revenue through national broadcast deals. Time Warner Cable paid a reported $3 billion for exclusive rights to broadcasts Los Angeles Lakers games in the L.A. market for the next twenty years, starting with the 2012-13 season

LESSON 1.3

Media Rights

Rights fees are growing at a rapid rate

Media rights fees for the Rose Bowl (per year): 1974 - $2 million 2012 - $30 million in 2012,

2015 - $80 million annually (ESPN, 11 year deal)

LESSON 1.3

Media Rights

Today, the NFL generates over $6 billion annually from their contracts with major television stations and providers.

● 1960 - the NFL earned $2.4 million in broadcast rights ● adjusted for inflation that’s $19.4 million today

LESSON 1.3

Media Rights

Why are media rights important to sports and

entertainment properties?

In a word…

REVENUE!

LESSON 1.3

Media Rights

NASCAR generates a reported $820 million annually in media rights for television broadcasts from Fox, a 46% increase from the previous deal.

LESSON 1.3

Media Rights

According to the Chicago Tribune, a dispute over the value of the Chicago Cubs’ broadcast contracts complicated efforts to sell the iconic franchise.

Because media rights are such an important piece to any major league sports organization’s bottom line, negotiations to sell the franchise momentarily fell apart until the issue could be resolved.

LESSON 1.3

Media Rights

According to Nielsen (a company who measures ratings): "Ratings are used like currency in the marketplace of advertiser-supported TV. When advertisers want a commercial to reach an audience, they need to place it in TV programs which deliver an audience. The more audience a program delivers, the more the commercial time is worth to advertisers."

LESSON 1.3

Media Rights

Why are media rights important to

broadcast companies?

Companies want to invest in advertising that will reach as many consumers as possible and sports and entertainment events provide an effective platform for

advertisers to do that

LESSON 1.3

Media Rights

In 2015, the Super Bowl set a record for American television viewing when the Nielsen Co. estimated 114.4 million people watched the New England Patriots’ 28-24 thrilling victory over the Seattle Seahawks.

LESSON 1.3

Media Rights

Super Bowl 50, played in 2016 between the Denver Broncos and Carolina Panthers drew the third largest audience in TV history while setting a new streaming record with an average of 1.4 million viewers per minute.

LESSON 1.3

Media Rights

● According to figures released by FIFA, more than one billion fans tuned in to watch the 2014 World Cup in Brazil ● The games reached 3.2 million in-home television viewers ● 280 million watched matches online or on a mobile device ● a record setting 695 million fans tuned in for the final game, which is a 12% increase from 2010.

LESSON 1.3

Media Rights

According to the research firm Kantar Media, advertisers have spent $4.55B during CBS' coverage of the men's NCAA basketball tournament over the past decade

LESSON 1.3

Media rights examples

Network/Cable TV

The NBA recently extended its deals with TNT, ESPN and ABC through the 2024-25 season, generating over $2.66 billion per year in revenue for television broadcast rights (more than double what the league earned through its previous rights deal).

As a result, teams now have more money than ever to spend on payroll, and player salaries will increase exponentially.

LESSON 1.3

Media rights examples

Network/Cable TV

NBC won a bidding war to retain its rights to broadcast the Olympic Games through 2020 for $4.38 billion.

ESPN signed a deal reportedly worth nearly $500 million for the exclusive broadcast rights of Wimbledon through 2023

LESSON 1.3

Media rights examples

Satellite TV

DirecTV’s exclusive agreement for broadcast rights for out of market NFL games was extended in 2014 for eight years at a reported $1.5 billion per year (a 50% increase on an annual basis over the previous deal).

LESSON 1.3

Media rights examples

Satellite Radio

Reuters suggested in an online news story that Sirius satellite radio has invested “ billions” on rights to the NFL, NBA, NASCAR.

LESSON 1.3

Media rights examples

Network Radio

In 2009, the NFL extended its deal with Westwood One as its exclusive network radio partner in a deal worth over $30 million

LESSON 1.3

Media Impact on Industry Growth

Radio, cable and broadcast television programming measure their effectiveness through ratings, which are expressed as a percentage of the potential TV audience

viewing at any given time

LESSON 1.3

Media Rights

Basically, a rating refers to the number of households or people tuned into a particular radio or television program at a specific time

FOX Sports 1’s telecast of the United States Women’s 2-0 win over Colombia in the 2015 FIFA World Cup was the network’s most-viewed soccer match ever, attracting 4.7 million viewers (also making it the third most-watched in FOX Sports 1 history).

LESSON 1.3

Media Rights

Nielsen can identify peak hours in which the most people are tuned in to watch or listen

Viewing of the US vs. Colombia World Cup match peaked from 9:30 to 9:45 p.m. ET

LESSON 1.3

Media Rights

Nielsen can also identify specific markets in which ratings were the highest

St. Louis led all markets for ESPN’s USA vs. Colombia telecast with a 5.3 rating, followed by Washington, D.C. (5.0), Philadelphia (4.9), Orlando (4.4) and Norfolk (4.3)

LESSON 1.3

Media Rights

Why are ratings important?

Without ratings, broadcast companies would have a difficult time selling advertising and sports/entertainment programs would not be able to command million dollar rights fees

Ratings will fluctuate from year to year, but a ratings increase or decrease will have an impact on the sports property and broadcast company

LESSON 1.3

Media Rights

When NBC renewed its hockey deal (at a cost nearly triple the previous rights deal), the decision was heavily influenced by the fact that overall NHL television ratings in the United States had increased by 84 percent over the last four years.

LESSON 1.3

Media Rights After the previous year’s July 4th telecast of the Nathan’s Famous Fourth of July International Hot Dog Eating Contest set a viewership record with nearly 2 million live viewers, ESPN announced in the summer of 2012 that they extended the broadcast rights deal through 2017

LESSON 1.3

Media Milestones in Sports

1921 - First ever baseball game broadcast on radio

1935 - First full season baseball broadcast on radio (Chicago Cubs)

1946 - First major sports event on TV (Joe Louis Boxing Match)

LESSON 1.3

Media Milestones in Sports

1954 - Sports Illustrated introduced

1970 - First Monday Night Football TV broadcast

LESSON 1.3

Media Milestones in Sports

1995 – DirecTV and the NFL offer first subscriber based pay-per-view programming (NFL Sunday Ticket)

1999 – Major League Baseball broadcasts the World Series on the Internet

2002 – The pay-per-view boxing match between Mike Tyson and Lennox Lewis generates a record $103 million in sales

LESSON 1.3

Media Milestones in Sports

2009 – CBS’ free online broadcast of the 2009 Men’s NCAA Tournament reaches an audience of 7.5 million

LESSON 1.3

Media Milestones in Sports

2012 – NBC provides unprecedented LIVE coverage of EVERY Olympic event by streaming content online in addition to its traditional television coverage

LESSON 1.3

Media Impact on Industry Growth

In the early days of team

sports, revenue came from:

Ticket Sales

Concessions

LESSON 1.3

Media Impact on Industry Growth

Today, media provides alternate revenue sources

National Television Contracts Local Television Contracts Cable Television Contracts Sale of Radio Rights Streaming Internet Audio Online Revenue Team Specific Publications