10 TO WATCH WEEK OF 12/12/16

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10 TO WATCH WEEK OF 12/12/16

PUBLIC SECTOR SPORTS ENTERTAINMENT ISSUES OF THE WEEK

  1. The Olympics have historically always brought host cities into an unprecedented global spotlight before and during the Games, but PyeongChang, South Korea, is hoping to use the upcoming Winter Olympics as a platform to boost overall tourism. According to the Korea Herald, the PyeongChang organizing committee is “placing heavy emphasis on highlighting year-round tourism in the rural province.” The city in Gangwon Province is known to attract tourists during the winter months for its skiing and high-end resorts, but it now wants to expand beyond just that. The organizing committee has vowed to not let any of the newly-built venues go unused following the 2018 Olympics, which should help boost visitors. “The biggest challenge at the moment is how to promote the Games around the world, because this is a small place,” said Senior IOC member Gunilla Lindberg. “It’s not Rio de Janeiro and it’s not London.” Meaningful expectations for Olympic legacy must translate into successes for Korea and the Olympic movement. With questionable long-term benefits from Sochi and Rio, the spotlight shines brightly on PyeongChang to put together an appropriate short-term and long-term plan.

 

  1. The San Diego Chargers have been massively unsuccessful in terms of finding a new local stadium to play in over the past year, which has led them to once again contact the Los Angeles Rams regarding a potential move into the L.A. Memorial Coliseum. According to USA Today, the team will not decide until after the New Year whether or not it will move to Los Angeles, but multiple options exist if the Chargers decide to leave San Diego. The NFL offered the team the opportunity to “join the Rams in a new stadium” in the L.A. suburb of Inglewood, but the Chargers may want their own facility, hence floating the idea of playing at the Coliseum. The Rams are currently sharing the stadium with USC, which “operates the facility,” through the 2017 and 2018 seasons. To play at the Coliseum, the Chargers “would need the Coliseum Commission to change its lease terms” with USC, since it “allows only one NFL team to play there temporarily.” The era of NFL “franchise musical chairs” is almost over. Within two months, we should know the final resolution of the San Diego/Los Angeles Dodgers and the Oakland/Las Vegas Raiders. Alternative financial plans are being finalized, alternatives are being meaningful assessed, and deadlines are being realistically created. Once this is done, international NFL development will take center stage again.

 

  1. Coming off of the team’s first championship season in over 100 years, the Chicago Cubs are now set to increase select season tickets by as much as 31%, according to the Chicago Tribune. Overall, the Cubs announced that the “average price for season tickets will rise” 19.5% for next season, with increases “ranging from 6% for upper-deck reserved seats to 31% for infield club box seats.” Team executives have largely pointed to a massive spike in demand for season tickets as the main reason why ticket prices have sky-rocketed. The Cubs said that regular-season tickets during the 2016 season resold on StubHub for an average of 96% “above their face value.” Postseason tickets went for 670% above face value. The Cubs have raised ticket prices following successful seasons over the past few decades, but none of those instances come anywhere close to this year’s rise. After 108 years, I guess management deserves a break for attempting to capitalize and monetize.

 

  1. Ohio State has had tremendous success on the football field this year, which has also resulted in a successful revenue campaign for Ohio Stadium. According to Columbus Business First, Ohio State’s beer sales for this season’s home football games are expected to surpass the $1 million threshold. “Revenue totaled $1.1 million” in Ohio Stadium’s “first year allowing alcohol sales,” a massive success for the move, a hotly-debated topic at the university a year ago. Beer sales at the University of Texas, the most comparable school to OSU, are “not yet available,” though U-T recorded $1.1 million in alcohol sales through “just two home games this year.” Texas’ figures are a bit skewed in comparison to OSU though, since U-T included wine and other liquors in its offering, while Ohio State only sold $8-$9 beers. Money from Ohio Stadium beer sales goes toward “increased security, including four new OSU police officers, and toward an alcohol and substance abuse center.” Ohio State has always been one of the top five revenue producing schools in the sports nation – obviously, this Urban Meyer-run will continue to set the standard. Other schools will undoubtedly follow with creative revenue approaches and other opportunities.

 

  1. The University of Louisville could wind up vacating the downtown KFC Yum! Center and building its own on-campus arena following remarks from university AD Tom Jurich. According to the Louisville Courier-Journal, Jurich noted that the Cardinals feel “unwanted” at the downtown facility. “If they don’t want us in there just tell us – we’ll leave,” said Jurich. Sources close to the deal between UL and the Yum! Center say that the “lease agreement favors the university,” which could be the first step of this budding conflict. The arena is also dealing “with $690 million in outstanding construction bonds” and is looking toward the university to help shoulder some of that debt. The arena has acted as an economic stable and social hub for the downtown Louisville business district since its opening in 2010, and if UL elects to leave it could have severe consequences on the city. Could be leverage for a new economic deal, or is it really an opportunity for a second arena in the region – and could the NBA follow downtown?

 

  1. Continuing the saga of rapid MLS growth, more cities are now joining an ever-growing list of hopeful candidates to land an MLS team in the coming years. According to the Tampa Bay Business Journal, the USL Tampa Bay Rowdies are “officially launching a campaign” to bring a team to the region, while NASL Carolina RailHawks Owner and Chairman Stephen Malik boldly stated his goal of turning his club “into an MLS franchise, and quickly, in the next 12-18 months.” Both clubs have working plans to build new stadiums and rebrand. Beyond expanding the stadium in St. Petersburg from its current capacity of 7,227 to about 18,000, Rowdies Owner Bill Edwards said that his next steps will be “demonstrating to the league that there’s enough fan interest and potential corporate sponsorships to support a MLS team.” As it currently stands, the MLS has 20 teams, with four more joining in 2018, and a possible “four more beyond that.” MLS franchise values continue to skyrocket, and expansion fees will no doubt follow. Successful USL cities like Oklahoma City, Louisville, and others will continue to raise their expectations.

 

  1. New Oakland A’s President Dave Kaval is taking a unique approach to earning the Bay Area’s trust: hosting weekly fan “office hours.” According to the East Bay Times, Kaval recently held his first office hours at the Oakland Coliseum for more than 100 A’s fans, “who gave their opinions on things that could improve the franchise.” Each appointment lasted at least 10 minutes. The inaugural session was meant to last only two hours, but Kaval pledged that he would stay and talk to everyone who showed up, stretching the session to just over 5.5 hours. It was an “open session, available to anyone who showed up.” Subsequent office hours “will be by appointment, but still open to anyone.” “It’s important to hear from the stakeholders. You need to get that feedback. If it’s big things or little things like the lack of light bulbs, they can talk to someone who can get things done and cut through the clutter if he knows about them,” said Kaval. The Oakland A’s are taking advantage of Commissioner Rob Manfred’s new year-long deadline/timetable. Stadium development history teaches us that deals only get done with significant deadlines – and meaningful relocation alternatives. Look for the Oakland Stadium efforts to realistically intensify.

 

  1. FIFA President Gianni Infantino may not have a clear plan at present, but he wants to bring significant change to the Club World Cup. According to Reuters, one of the leading ideas is to expand the tournament field to 32 teams from the current format of only seven teams. European teams have historically dominated this tournament, having “not conceded a goal between them since Corinthians beat Chelsea 1-0 in the final of the 2012 tournament – the only time since 2006 that the tournament has produced a non-European winner.” The tournament, which is held annually, has largely lacked the prestige of the UEFA Champions League in Europe, although it is hailed as the preeminent club tournament in South America. “The world has changed and that’s why we need to make the Club World Cup more interesting,” said Infantino. “That’s what we’re trying to do, by creating a tournament that is much more attractive, with more quality among participants and more clubs. That will attract more sponsors and television companies from around the world.” Meaningful transparency will generate significant benefits both on and off the soccer pitch. International sports continue to take a hit – ongoing IOC doping allegations for example – all the more reason why Gianni must be tough, ethical, and consistent.

 

  1. The Bay Area is known as the technology hub of the world, but thanks to the Warriors it is now becoming known as the basketball media hub of the world as well. According to The Ringer, national NBA writers are now abandoning New York and Los Angeles and moving to the Bay Area to “embed with the Warriors.” With multiple All-Star players who regularly make national headlines, top columnists from national newspapers have been drawn to Golden State. This fall, Tim Bontemps, who covers the NBA for the Washington Post, moved to San Francisco to use Oracle Arena as a “forward operating base.” Warriors Executive Board Member Jerry West said that the media crush is “far larger than the one that congregated” around the Lakers of the early 2,000s. With the Warriors poised to remain as one of the NBA’s top teams for the foreseeable future and a new arena planned in San Francisco, this trend will continue to escalate.

 

  1. Coming off of the team’s first championship season in over 100 years, the Chicago Cubs are now set to increase select season tickets by as much as 31%, according to the Chicago Tribune. Overall, the Cubs announced that the “average price for season tickets will rise” 19.5% for next season, with increases “ranging from 6% for upper-deck reserved seats to 31% for infield club box seats.” Team executives have largely pointed to a massive spike in demand for season tickets as the main reason why ticket prices have sky-rocketed. The Cubs said that regular-season tickets during the 2016 season resold on StubHub for an average of 96% “above their face value.” Postseason tickets went for 670% above face value. The Cubs have raised ticket prices following successful seasons over the past few decades, but none of those instances come anywhere close to this year’s rise. After 108 years, I guess management deserves a break for attempting to capitalize and monetize.

 

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