How Will President-Elect Donald Trump’s Foreign Policy Decisions Affect Sports?
President-Elect Donald Trump’s sports industry involvement has been well chronicled, especially his golf resort holdings. What’s not as transparent is the impact his foreign policy decisions may have on the global sports industry — and on sporting goods and apparel in particular. Overall, China exported about $482 billion in goods to the United States in 2015, more than any other country exported to the U.S., according to the Office of the United States Trade Representative. It’s no secret that the vast majority of the world’s sneakers are made in China, Indonesia, Korea, and the Philippines. But look at Callaway golf clubs – the leading American club maker designs its sticks in California, but parts come from China, Taiwan, and Vietnam, and many clubs are assembled in Mexico. Likewise Wilson tennis racquets are manufactured in Shanghai, as are Head and Prince. And Spalding basketballs are officially pieced together in Seoul. Within golf, four of the world’s top golf cart companies manufacture their vehicles in China, including No. 1 Marshell Electric Vehicle Co.; No. 10 EVT is in Thailand. If Trump is able to implement his anti-import trade proposals, including a 45% tariff on goods imported from China and a 35% tariff on Mexican goods, it could hit the American sporting goods industry especially hard, and may even curtail sports leagues’ expansion into Asia. Time will tell if the new President’s tough talk on trade will pan out – as a businessman with complex golf resort ties around the world, he may take a step back and reconsider some of the ramifications of his proposed policies, on sports and elsewhere.
How will the Move To Los Angeles Affect The San Diego Chargers and San Diego?
The San Diego Chargers are officially moving to Los Angeles. The Southern California city that had no NFL teams last year will soon boast two teams for the foreseeable future. According to SportsBusiness Journal, Chargers Chain Dean Spanos made the official announcement that his team will be moving to L.A. beginning with the 2017 season. The Chargers will play their home games at Carson’s StubHub Center, which can hold only 30,000 spectators. That marks a massive downgrade in size from Qualcomm Stadium, representing the NFL’s smallest stadium by a longshot even with upgrades. The team passed up on using the Rose Bowl as a home, though they will join the Los Angeles Rams in their new $2.6 billion stadium in Inglewood upon completion. The Chargers “will change its logo to feature the letters L and A, arranged similarly” to the Dodgers’ logo. It also will “have a lightning bolt.” Franchise musical chairs is almost over – at least for now. Chargers economics dictate that a share of a larger pot of revenue in Los Angeles is better than more time and effort chasing stadium projects by themselves. Now, it is the Raiders turn to take center stage.
As the dust settles on the San Diego Chargers announcement that they are moving to Los Angeles, attention now focuses on the market they’re leaving behind. What will the day to day impact be on a Charger-less city? While the game day economic impact will mostly be felt by stadium-adjacent small businesses like bars and restaurants, parking facilities, and Uber drivers, the biggest hits will likely affect the region’s nonprofits, and tourism sales. Despite the knocks it is taking for current franchise relocations, the NFL tries to be a good corporate citizen. The NFL Foundation hands out millions of dollars each year through its Play 60 Challenge, “A Crucial Catch“ American Cancer Society partnership, and individual player foundation grants. In San Diego, the Chargers have contributed or facilitated about $13 million to local charities, including providing 1.3 million meals to the San Diego Food Bank and helping the San Diego Blood Bank save 200,000 lives through blood drives. As for tourism, “I can’t pay for that kind of exposure,” Tourism Authority CEO Joe Terzi told the Union-Tribune, referring to the beauty shots of sparkling beaches and sunny skies during televised Chargers games. Bottom line: the intangible benefits of having an NFL team in your city matter much more than season ticket sales and naming rights deals.
FIFA Expands the World Cup Field From 32 To 48 Teams Starting in 2026
In a unanimous decision, FIFA has voted to expand the World Cup field from 32 to 48 teams starting in 2026. According to the London Independent, the new format will feature 16 groups of three teams “that sees the top two qualify for a knockout round of 32.” This replaces the current format that sees the top two teams from all eight groups advance to the round of 16. The 2026 World Cup is likely to be hosted in North America, with the United States, Canada, and Mexico preparing to submit a joint bid. The plans will see the total number of games “increase from 64 to 80,” and the new format is expected to generate around $1 billion extra for the governing body from the World Cup alone. Critics of this move slam FIFA President Gianna Infantino for making a “selfish move” to deepen his personal pockets as well as those of everyone else in soccer’s main governing body. While any tinkering has its critics, kudos to Infantino for attempting to “shake up” the World Cup format – and also to increase global participation on an unprecedented scale.
Summer Olympics Los Angeles 2024 Could Generate As Much As $11.2 Billion in Economic Impact
A new economic study commissioned by LA 2024 reveals that hosting the Summer Olympics is Los Angeles could generate as much as $11.2 billion in economic output for the city. According to the Orange County Register, the analysis done by Beacon Economics and the UC Riverside School of Business Center for Economic Forecasting & Development shows that the LA 2024 Olympics could create up to “79,307 jobs” and between $152-$167 million in additional tax revenues in the city. The analysis “projected 3.3 million visitors would attend” the Games, with the average visitor “staying in the city 5.5 days and spending an average of $230.07 per day.” While these studies are often a bit exaggerated, a huge selling point for Los Angeles’ hopeful bid to land the Olympics is that the city plans on using existing arenas and stadiums throughout the Southern California area. Some question these “civic studies,” arguing they are self-serving. For the most part, this one reflects the tremendous economic potential that the Games will have for the region. Most studies also ignore the positive branding, public relations, and international awareness benefits that come to a region after hosting a two-week mega event.
Ski Resorts Are Seeing Visitor Numbers 5-10% Higher than 2016 Season
While our recent spate of bad winter weather has caused millions of dollars in damage and travel nightmares for the general public and stranded sports teams alike, it’s a ray of profit sunshine for the winter sports industry. The mounds of fresh powder piling up in California and Nevada ski resorts – more than 20 feet of new snow in some areas – ski resorts are seeing visitor numbers 5-10% higher than the same time last season. And those prime ski conditions are extending across the country, according to the National Ski Area Association, a trade group for the $3 billion industry. Ski resorts in California and Nevada reported 7.25 million skier and snowboarder visits during the 2015-2016 season, a huge jump over the 4.4 million the previous season. This year will see even more visitors, but they’ll be paying higher prices: Vail Resorts Epic Pass, which offers full season access to Vail resorts nationwide, will cost you $809 this season, a 5% increase over last year. While every snow cloud has a silver lining, resort operators wouldn’t stand to profit as much on Mother Nature’s bounty if they hadn’t focused on “the fan experience” every bit as much as their more mainstream sports peers.
San Francisco 49ers Are Suing Santa Clara for Contract Violation
The San Francisco 49ers are suing Santa Clara after the city claimed that the team violated its contract. According to the San Jose Mercury News, the 49ers have invited auditors to Levi’s Stadium to review documents with the intention of proving the accusations to be false. The “team wants a judge to settle the score by requiring the city to sign documents verifying no breaches occurred.” The legal battle between the 49ers and Santa Clara has been going on for months now, but this lawsuit marks an escalation in tensions between both sides. The lawsuit states the Stadium Authority has “embarked on a scheme to concoct and fabricate false accusations of breach or nonperformance…to create a pretext for terminating the Stadium Management Agreement.” This dispute originally started when Santa Clara Mayor Lisa Gillmor “suspected taxpayer dollars were being spent on the venue in violation of the voter-approved Measure J.” While the stadium continues to bring in significant international events such as the Super Bowl and major soccer festivals, the parties continue to litigate over emotional “performance” issues. Hopefully, they can be resolved quickly in order to focus on the bigger picture.
Search Continues for Soccer Home Stadium for New England Revolution
The New England Revolution have been in search of a soccer-specific home stadium in Boston for years now, but a final plan stills appears to be out of sight. According to the Boston Globe, Revolution Owner Robert Kraft’s effort to settle down and build in Rochester is “all but dead,” as the Boston Teachers Union will not budge on their land. The union is reluctant to give up the 2.7 acres that their headquarters has called home for four decades, which has stunted Kraft’s plans. The union is “asking for a deal that Kraft…thinks is too rich.” Kraft “needs about 10 acres for his stadium, and much of that would come from UMass.” But the stadium “doesn’t work without Kraft taking over the adjacent property, too.” The union is asking for at least $15.7 million in cash to settle the issue. Kraft “wants a soccer stadium in Boston, but not if it feels like he’s being ripped off.” The Kraft family has looked long and hard for appropriate stadium solutions, using the successful model of Foxborough/Gillette Stadium/Patriot Place as a guide. Hopefully, something can be done quickly.
South Korea Will Spend $780 Million for 2018 Winter Olympics and Paralympics
South Korea has announced that it will spend approximately $780 million to prepare for next year’s PyeongChang Winter Olympics and Paralympics. According to the Korea Times, this number comes from the country’s Ministry of Culture, Sports & Tourism, as the governing body is setting up for South Korea’s first-ever Winter Olympics. Most of these expenses will be used to support “operational preparations, national team athletes’ training and facility construction.” South Korea is heavily investing in its athletes for the 2018 Olympics, as “it will pay for overseas training for athletes, recruit more foreign coaches and help secure more time for the athletes to train in the Olympic facilities.” The largest portion of the budget, approximately $608.3 million, has been allocated for construction of facilities. The overall spending budget for the Ministry of Culture, Sports & Tourism has been reduced “following the revision of laws that allow the organizers to pursue various business activities and receive tax benefits.” All Olympic cities are acutely aware that they will be evaluated on budget performance, as well as overall legacy. Will the South Korea Games be more like the successes of London, Atlanta, Los Angeles, and Sydney; or will they be evaluated in a lesser light like Sochi, Athens, and Beijing?
New Option For High School Football Players Pacific Pro Football
Budding high school football players now have an alternative to attending college for three years before turning pro: Pacific Pro Football. According to the Washington Post, this upstart league offers players “a salary and instruction they feel is lacking in the college game.” NFL agent Don Yee, who serves as Pac Pro CEO, said that the goal is to “give young prospects a professional outlet to prepare for the NFL.” The league launches in the “midst of a growing debate about amateurism and a college model that rewards student-athletes with scholarships but not salaries.” While the NFL has shown interest in starting a developmental league, Pacific Pro is not affiliated with the NFL at all. Games will take place in smaller stadiums, “perhaps at a community college or a Division III college campus.” If the first season goes according to plan, the league hopes to expand into Northern California and potentially, the Midwest. Interesting concept that identifies an underutilized niche in the market. The league has been in the planning stages for a while, reflecting the deliberate business approach of its founders. After the WFL, USFL, and World League of American Football, the sporting public may be looking forward to another fresh alternative. It has certainly been a long time since the last one.