Moag & Company Sports Notes (10 Sep 2021)

Date: Sep 2021

Trivia

Which company owns the blimps which are mainstays at major football games?

Last Week’s Answer: The longest point in tennis history was 29 minutes

Football:

Verizon has signed a new 10-year technology marketing agreement with the NFL that sources said was worth more than $1B. Verizon, the biggest buyer of sports media and one of America’s biggest sponsorship spenders, has been an NFL sponsor since '10. However, where the previous deal had content elements, this one is centered on tech development and the wide-reaching impact of 5G. “This moves us largely out of the content business with the NFL and into a technology and innovation-driven deal," said Verizon Exec VP & CMO Diego Scotti. “We want to use 5G and our technology to transform the game.’’ Verizon will now be designated as the NFL’s official 5G network. This is the latest of a series of gigantic bets Verizon is placing on the fifth-generation cellular technology; earlier this year, the company spent $53B purchasing additional 5G spectrum space from the federal government. Verizon said its 5G Ultra-Wideband will be available in parts of 25 NFL stadiums this year. The hope is for a broad-based integration of 5G across the league, which the company said "could have the ability to impact management, scouting, training, health and safety, and gameday operations."

Stadium seat license revenue for the Los Angeles Rams at SoFi Stadium has eclipsed an internal goal of $600M, according to a source familiar with the sales process. While projections and expectations fluctuated during the planning and building of the $5.5B facility, those final goals called for about $850M total in license revenue between the Rams and Chargers. Current Chargers sales figures are not known. Sales have apparently surged as the '21 season -- the first without pandemic-capacity restrictions -- approached. In May '20, NFL owners approved an additional $500M loan to the Rams for the project, reportedly necessary in part due to slower-than-expected SSL sales at the venue. For context, the Las Vegas Raiders recently hit $549M in seat license sales at Allegiant Stadium in Las Vegas, and the San Francisco 49ers booked $530M for Levi’s Stadium, which opened in '14. The Cowboys’ AT&T Stadium, which opened in '09, hit $600M. With sales still ongoing, the Rams and Legends are poised to eclipse AT&T’s previous high-water mark (in non-inflation adjusted dollars).

Baseball:

The "sad tale of Tropicana Field attendance ... might go unnoticed in the spring or in a season that’s bound for nowhere," but it is "hard to ignore four consecutive crowds of fewer than 8,000 against the Boston Red Sox while the Tampa Bay Rays are surging toward a 100-win season and the calendar is turning to September," according to the Tampa Bay Times. The attendance issues "might be construed as a game-changer," one that "will not be shrugged off so easily" in MLB’s executive suites in the coming discussions about the Rays' future. Some may "blame the stadium, the location, the lack of corporate support or the demographics of the market," but the Rays are "among the most interesting teams in baseball no matter who they are playing." As a possible solution to the attendance issue, the Rays for the final 10 games of the regular season "should slash ticket prices at Tropicana Field," with "deep, serious, park-wide cuts." This is "not going to immediately change anyone’s opinion about the level of support in Tampa Bay," as "that ship has already sailed." But it will instead be "a gesture to a dugout filled with players who deserve to have a loud, enthusiastic crowd cheering them on in the final weeks of a glorious season" It "might convince a few more fans to pay full price for postseason tickets in October".

Basketball:

 Monumental Sports & Entertainment Chair & CEO Ted Leonsis's first sports betting play "appears to have found the right ingredients," according to the Boston Globe. Leonsis said that the Caesars Sportsbook by William Hill inside DC's Capital One Arena "is expected to take in $250 million in bets" in its first 12 months. Leonsis said, "It's the fastest-growing new business in Washington, D.C." Leonsis said after he presented the DC sportsbook concept at the NBA owners’ meetings, “Nine owners said, ‘Thank you, we were scared, we wanted someone else to go first. Can we come down and understand and see what you’ve done?’" Even if the Wizards or Capitals are playing on weekend nights, Leonsis "wants to use the arena’s empty seats in the daytime for patrons to watch the NFL, Premier League soccer, or cricket games broadcast on the arena’s main video screen, with betting kiosks nearby." Meanwhile, Leonsis still believes casual bettors "need an Apple Genius Bar-type of resource to help them understand the process and make it friendlier." He also concedes that sports books, as well as esports, "need to be more welcoming to families, especially women." Leonsis also emphasizes that resources "need to be used to provide help and hotlines for problem gamblers and that leagues have to place a priority on technological and human integrity safeguards to prevent a calamitous scandal." Leonsis believes that the "more leagues can keep up with the times and think of themselves as technology companies that produce content and embrace sports betting partnerships, the better".

Soccer:

Serie A side Inter Milan announced a multi-year, €85M ($101M) partnership with Zytara Labs, whose DigitalBits blockchain will become the club’s new sleeve sponsor. As part of the agreement, DigitalBits will serve as Inter Milan's official global cryptocurrency, with Zytara becoming the club's official global digital banking partner. The DigitalBits logo will appear on Inter’s men’s and women’s shirt's, as well as on the club’s U19 and youth team kits. Inter previously had a sleeve deal with forex broker IC Markets but canceled the contract not long after it was signed. Zytara will be working with Inter to integrate its banking technology within the club’s official app to create an immersive branded purchasing experience for users. As a result, the Inter app, which will enable access to crypto-based products, will become the primary way for fans to purchase tickets to the team’s home game at the San Siro stadium.

Other:

Rutgers athletics "expected to be on firm financial ground" by this year, but instead it has racked up "$265 million in outstanding debt," according to an analysis of school financial documents by the Bergen Record. That debt has been "used to cover the ever-rising operating costs associated with joining the Big Ten." The university has "stepped in," loaning athletics $84M "over the last six years to cover expenses." Still, the university loans have "not been enough to paper over the athletic department’s spending gaps." Rutgers has been "reporting those loans as revenue -- contrary to NCAA guidelines -- artificially inflating the athletic department’s earnings and concealing the true budget deficit." Rutgers athletics also has taken $48M in "loans from the Big Ten Conference." In all, more than $430M in "loans and other support has been sunk into Rutgers’ athletics -- just since it began playing in the Big Ten." Rutgers President Jonathan Holloway said, “It's unsustainable, but I don't have an answer as to what is the sustainable piece going forward." Rutgers was "dead last among 52 public universities" in the Power Five in donations to athletics for operations in '19-20 and ticket sales have "declined by 53% since 2015 and other revenues have bottomed out." Still, coaching and administrative salaries have "more than doubled since Rutgers joined the Big Ten." Rutgers AD Patt Hobbs said, "We have a revenue issue, and to grow revenue, you have to be successful".

Sources: SportsBusiness Journal, USA Today, Tampa Bay Times; Boston Globe; Bergen Record 

 
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