Normally I don’t like to just directly publish press releases that I receive (I’m on several lists now), but this one caught my attention, and I think you will all find it quite interesting. It came from Robert Passikoff, Founder and President of Brand Keys, Inc.

“After years in the #2 spot, Major League Baseball is now tied with the National Football League with the “most loyal fans,” according to the 15th annual 2010 Brand Keys Sports Loyalty Index,® a survey which helps professional sports teams increase broadcast, ticket and merchandise revenues by providing loyalty rankings and fan diagnostics in their home and national markets.

2010 League Rankings

1. NFL/MLB
2. NBA
3. NHL

“The Sports Loyalty Engagement Index gives an apples-to-apples comparison of the intensity with which fans support professional sport leagues and their home team vs. the corresponding values for the fans of other teams in the market,” said Robert Passikoff, president of New York-based Brand Keys, Inc. a leading brand and customer loyalty consultancy.

“These insights allow leagues and teams to identify areas that need strategic reinforcement. Done correctly, an increase in broadcast viewership, merchandise purchase, and ticket revenue will follow, and happier fans. Everybody loves a winner, but it’s important to note that win/loss ratios do not entirely govern fan loyalty,” noted Brand Keys’ Passikoff.

Fan loyalty is driven in four ways:

• Pure Entertainment – How well a team does, but more importantly, how exciting is their play?
• Authenticity – How well they play as a team. New stadia can help on this driver. Oftentimes, so can a new Manager.
• Fan Bonding – Are players respected and admired?
• History and Tradition – Is the game and the team part of a fan’s and a community’s rituals, institutions and beliefs?

The top-5 teams in each league in terms of fan loyalty for 2010:

Top Gainers: Teams with the largest growth in fan loyalty include the Portland Trail Blazers and Oklahoma City Thunder in the NBA (both up five positions), the New Orleans Saints (+6) and the Minnesota Vikings (+5) in the NFL, and the Colorado Rockies and Minnesota Twins in MLB, both up 4 positions. In the National Hockey League no team moved up more than one position, although many moved down as many as 4 rankings. A list of the bottom-5 teams with lowest fan loyalty in each league can be found at www.brandkeys.com/awards/sports.cfm

Methodology:  The Brand Keys Sports Fan Loyalty Index is an outgrowth of Brand Keys’ specialization in measuring customer loyalty that began with work for the National Football League in the mid-90’s. Interviews are conducted by telephone and in-person (to account for cell phone-only fans) includes 150+ local fans for each professional sports team in the four major leagues. Participants self- select a preference for a particular league and then indicate an allegiance to the local team being evaluated. The methodology identifies the four drivers of fan loyalty and rates each team on each of the drivers. The respondents are also asked to rate the sports leagues that they’re interested in on an overall basis.

“Since overall league and team rankings correlate very highly with TV viewership and sales of licensed merchandise, rankings can be influenced depending upon how loyalty drivers are addressed and managed,” said Passikoff. “It’s critical that marketers do accurate scouting regarding the strategic game they intend to play with their fans because today, when it comes to loyalty, there are no free-agent fans!”

The most general principal of sports marketing on the team side is finding a way to promote and sell your brand without being dependent on winning, since the on-field results are outside of your control. It seems like along those lines, Canada may have made a mistake with their “Own the Podium” program. I had this thought while reading a recent ESPN.com article about Canada conceding the Olympic medal race.

To provide a quick background, the “Own the Podium” program was an effort by Canada to commit more money to their Olympic athletes that have the best chance of winning medals, with the overall goal of taking home the most medals of any competing nation. Canada currently sits in 5th place with just ten medals, 15 behind current leader, the United States. Now I’m not saying they shouldn’t have committed the money towards their athletes to help them try and succeed in their respective sports. I applaud their efforts to provide extra support to their athletes leading up to and during their host Olympics. However, I think they mis-branded their efforts, and because they are going to fall short in the overall medal count, the program now appears to have failed.

By publicly branding their efforts to “Own the Podium” with a goal of winning the most medals of any country, they created a perception that anything less than perfection would be failure. Canada finished third in the medal count four years ago, and before that, they never finished higher than fourth, so this was quite a goal to set. They could have made the same financial commitment to their athletes with a goal of being in the top 3 (which fits with the general theme of the top 3 athletes receiving medals), and this still would have been a huge (and still achievable) accomplishment. They also could have branded their program with something more related to being the host country than with specific results, something like “The Pride of Canada”. This focuses the rallying cry around supporting the local athletes, not just on their results. By conceding that they will not reach their goal, Canadian athletes and fans alike could easily look back to the 2010 Vancouver Games and think about their nation’s failure instead of pride in their country for hosting the Games and in their athletes for their efforts. Not only that, by making this public concession now, they’ve potentially overshadowed any additional medals that Canadian athletes win during the remainder of the Games.

Of course, the other side of this would be if they did achieve their goal, the Canadian Olympic Committee would look absolutely brilliant. In general, tying any branding or marketing platform to the on-field results is a high risk/high reward proposition, and when you’re dealing with a global stage like the Olympics, I don’t think it was worth the risk.

This week I have been busy finishing up trimester number 5 (out of 6) of my MBA, so I’ve only been intermittently paying attention to the Olympics, and I’ve been leaning heavily on those I follow on Twitter to keep me updated on which sponsors are activating in unique ways and which are practically non-existent.

One quick aside before I delve into specific sponsors… I think some Olympic sponsors will be hurt by NBC’s decision to air the competitions in prime time in MST and PST. I personally know that after I’ve seen a result earlier in the day, I’m less likely to watch the entire broadcast,  if I choose to watch at all. Now that we’re in the twitter age, networks will need to re-think their policy of playing everything in prime time. Also, I enjoyed watching uninterrupted footage of the snowboard halfpipe. Other events have been chopped up, competitors cut out, and drama ‘manufactured.’ I’d rather watch the full competition every time.

Ok, now on to the sponsors. Coke includes an environmentally-friendly aspect to their activation by encouraging Canadians to “adopt sustainable environmental practices.” They will purchase carbon offsets to offset the carbon footprint from their operations at the Games as well as the torch run. This means their carbon emissions will have been reduced 100%. (Courtesy of Cokenews.ca). “Every piece of our Olympic marketing has a social and mobile component,” says Katie Bayne, marketing chief for Coca-Cola North America.

Meanwhile, much has been made of Visa‘s decision to put 40% of their activation budget towards digital, quadrupling past spends. Their YouTube channel unveiled their Olympic spots before they were even shown on TV. These spots drive awareness and help reach their objectives, spelled out in this interesting document.

According to a USA Today article, GE is “using the Olympics as a ‘launch pad’ for it’s biggest social media push.” They have created a Twitter hashtag (#GEhealthy) and an account (@gehealthy) with the bio of: A shared commitment to creating better health for more people . Together. With only 184 followers, it remains to be seen if this push will be fruitful for them.

One company who seems to really get it is Red Bull. On Tuesday night, NBC showed a segment about Shaun White and his secret halfpipe. The segment really reinforced why Red Bull is the perfect sponsor for the halfpipe competition. They didn’t just slap their logo on one of White’s boards, they instead found a way to help him achieve his goals, thereby making the partnership valuable from both perspectives.

I thought the remark that best summed up what these Olympic sponsors should strive for was said by Mark Pritchard, CEO of Proctor & Gamble: “So what really makes the difference? The idea. When the idea is good, people flock to it and build on it.”

There is still a significant amount of time left, and many amazing Olympic moments that are sure to occur. What sponsor(s) are you most looking forward to stepping up to the challenge?

I realize that the locations of our sports business networking events (like tomorrow night’s event in New York – there’s still time to RSVP!) don’t work for all of our readers. So when I learn about events in other locations that I think would be just as valuable, I like to share them, and this is a perfect example.

UF Sports Law Symposium to examine legal playbook as Collective Bargaining Agreements expire

On Jan. 29 sports agents, litigators, salary cap analysts and sports law students will huddle up at the University of Florida Levin College of Law to get ready for a whole new ball game.

In the next two years, time will expire on the Collective Bargaining Agreements affecting the negotiation of salaries and playing conditions for professional athletes. The 2010 UF Sports Law Symposium, “Discussion: Bargaining Collectively,” presented by UF’s Entertainment & Sports Law Society, will bring together sports law experts and representatives from the National Football League, National Basketball Association and Major League Baseball to discuss why CBA’s exist, how they help players and owners, and to identify contract terms that will likely be argued before the agreement expires. The free event, set to kick off at 11 a.m. at UF Law’s Chesterfield Smith Ceremonial Classroom 180, will offer CLE credits.

“The 2010 UF Sports Law Symposium will be an excellent forum for students, athletes, professors and others interested in sports law to network and learn from the brightest minds in sports law,” said Darren Heitner, president of UF Entertainment & Sports Law Society.

The keynote speaker for this year’s symposium will be Harvey W. Schiller, Ph.D., who has served as president of the International Baseball Federation since 2007 and is also chairman of the board and CEO of GlobalOptions Group, a multidisciplinary international risk management and business solutions company located in New York. Prior to joining GlobalOptions in 1994, Schiller held posts at Turner Broadcasting System, served as the executive director/secretary general of the United States Olympic Committee and was the commissioner of the Southeastern Conference.

“It’s an honor to be able to address future sports-business leaders in Gainesville,” Schiller said. “We live in very challenging times where the changes in the way we conduct business occurs in minutes. Adapting and understanding those changes is critical to our success as professionals. It is my hope that forums like the one being held at the University of Florida, provide the framework for the growth of the industry and to inspire further discussion and opportunity.”

Closing the day-long symposium will be Donald Fehr who served as the general counsel of the Major League Baseball Players Association beginning in 1977, and as its executive director for 26 years from December, 1983. In his role as executive director, Fehr served as the players’ chief negotiator in collective bargaining with major league owners and was responsible for contract administration, grievance arbitration and pension and health care matters. Fehr will address the role of collective bargaining in professional team sports, and discuss his experiences in his role with the players association.

“Interesting things are on the horizon for the four major professional team sports in North America,” Don Fehr said.

To view the symposium agenda, speaker profiles and designated CLE credits, visit http://www.ufsportslaw.com/symposium.html. For more information regarding the symposium, contact Darren Heitner at heitner@gmail.com.

Normally, I don’t like talking about events that take place on the field, but today I’m going to make an exception. On Wednesday night, a World Cup qualifying soccer match was decided by one person who made a mistake that was easily identifiable by a simple video replay. However, because the sport was dependent on an archaic system of in-game governance that was developed decades if not centuries ago, the result of the game and any number of future events has been permanently altered.

This same situation has happened in multiple major sporting events over the past few months, including several prominent errors in the MLB playoffs, but for the most part, the governing bodies for these organizations prefer to stand by and depend on their “traditional” means for making all in-game decisions. This system may have made sense was professional sports was more of a casual pastime, but now it is a multi-billion dollar global industry, and each one of these incorrect decisions can have serious repercussions. A team that misses the next round of playoffs because of a bad call loses out on millions in ticket revenue. A player that is invalidly judged by an official’s decision can lose the chance at significant endorsement money. An entire league can suffer (or benefit) because of an officiating decision that impacts what teams are playing and the television ratings that come with those teams.

Meanwhile, sports organizations have embraced technology in almost every other form, from evaluating the players statistically to refining their business processes. Clearly everyone recognizes the importance of technology as sports have evolved, but yet for some reason, they refuse to let the technology onto the field in the form of instant replay. Would any other industry operate in this manner? Can you imagine if Walmart decided that they needed to use a more “traditional” way to run their checkout lines and made the staff type in each number, because “that’s how they’ve always done it.” The errors that would occur would ultimately have a significant impact on their business, ruining their other technological advantages that they’ve developed in their inventory management processes.

I understand that trying to add instant replay into sports is a complicated process with many potential pitfalls. This is why I give a lot of credit to the NFL for their work in this area. They acknowledged the problem, created a replay system, and constantly work to refine it based on the needs of the sport. I would hope that more sports, like soccer and baseball for example, eventually decide to follow the NFL’s lead and develop their own comparable systems. Putting aside the game for a moment, there is simply too much money riding on what happens on the field for everyone to overlook these issues.

Last week, the International Olympic Committee (IOC) officially announce that Rio de Janeiro, Brazil would host the 2016 Summer Olympics. This will be the first time that the Games will take place in South America, and it has been hailed as a tremendous achievement for Brazilian President Luiz Inacio Lula da Silva. Meanwhile, at the other end of the spectrum, there has been significant disappointment in the United States for Chicago’s failed bid to host 2016, which included the support of President Barack Obama.

I will be honest in that I didn’t follow this story very closely. I let my “U.S. bias” lead me to believe that Chicago was the likely favorite over Rio, Madrid and Tokyo.  However, along that line, Darren Rovell wrote an excellent post on how much additional revenue would be generated through media rights and sponsorships by hosting the games in Chicago.

With that said, my questions to all of you are:

• What city did you except to be named as the 2016 host city and why?
• What do you think hurt Chicago’s bid the most?
• What do you except from Rio as the first South American host city?

This post is completely designed for all of you to provide the content through the comments below. Please share your thoughts and let’s get a nice dialogue going.

Today’s post is courtesy of guest blogger Paulo da Silva, Arizona State Sports Business MBA, Class of 2009.

Major League Soccer (MLS) and its Commissioner Don Garber seem to be committed to take the world of sports by surprise. Since 2006, David Beckham’s transfer to the LA Galaxy and the continuous team-expansion announcements to Seattle and Philadelphia (starting 2009 and 2010, respectively) have given the MLS a year-after-year unprecedented growth not only in retail sales, which has more than doubled from $145 million in 2006 to $300 million in 2007, but also in visibility over the South and Central American leagues worldwide, with an increasing regular season stadium attendance registered at 3.27 million people in 2007. 

Don Garber once said “We don’t know how this is going to work, but I’m excited about it, very much so”. However, Garber seemed to have a very good idea of how he wanted the MLS to proceed and, in order to achieve these results, they decided to implement the following five-point strategy:

1. Raising the level of respect and credibility given to MLS in both North America and around the world: David Beckham made the international community take notice of the league. Most importantly, even though the LA Galaxy haven’t won any competitions since, Beckham’s quality of play on the field has convinced the media and won him the respect of fans across the MLS. At the same time, there is an increasing acknowledgment of the talent generated in North America, as the recent sale of New York Red Bulls youth product and MLS star Jozy Altidore to Spanish club Villarreal confirmed last summer.
2. Get all MLS teams playing in team-owned and operated soccer-only stadiums: Garber said that by 2010, 12 of the league’s 16 teams will be in soccer-specific stadiums, including Real Salt Lake’s new home opening next season, New York in late 2009, Philadelphia in 2010 and new stadium projects underway in San Jose and Kansas City.
3. Continued growth in metrics like TV ratings, attendance and corporate support: 2008 was the first season in which every MLS game was broadcast either locally or nationally on ESPN, ABC, Univision, Fox Soccer Channel, HDNet, and in Canada on Rogers Sportsnet and CBC. These games are shown not just in North America, but also in Mexico, Central America, Europe and parts of Asia. League numbers state that TV ratings are up 20 percent from last season on ESPN, and 10 percent on Univision.
4. Turn North American soccer fans into MLS fans: North American soccer fans, used to watch European and Central and South American soccer, need a solid and attractive league in order to transition to MLS fans. The MLS Designated Player Rule is a step towards better quality and to a better identification with the fans’ sporting culture in the US.
5. Continue to improve the quality of play, and come up with innovative ideas to reaching new levels of quality: The main initiative implemented by the MLS on this matter was the MLS Youth Development Rule that provided a League-wide structure for youth development and positioned the MLS as the leader of the sport that now totals nearly 18 million participants in the United States.

This plan was designed following the strong and determined leadership of Don Garber, who has been League Commissioner since 1999. As a senior vice president/managing director of National Football League International (NFL International), Garber was well aware of the needs and challenges regarding the internationalization of the American sports business’s model and, throughout the years, he has been able to build a strong basis for the league to grow and think as global as the sport of soccer itself.

The outstanding measure undertaken by Garber happened in 2001 when he re-structured the MLS and led the formation of Soccer United Marketing (SUM), a company owned by MLS investors that stands as the preeminent commercial soccer entity in North America. SUM represents several prominent soccer properties, including the U.S. Soccer Federation, the CONCACAF Gold Cup and the Mexican Soccer Federation for all sponsorship, marketing and game promotion in the United States. In addition, SUM manages American tours for some of the world’s most powerful soccer clubs, including Real Madrid, FC Barcelona and Chivas de Guadalajara.

Most recently, Garber was instrumental in the creation of the SuperLiga, the innovative professional tournament between MLS and Mexico’s First Division club that has both helped Central American clubs and audience to change their perception of MLS soccer and improve its teams’ quality of play by interacting with better teams in a consistent basis.

These outcomes were not but the result of the hard work developed by Don Garber, the MLS and its partners and the benefits from it are starting to show in an unquestionable fashion. Nonetheless, some challenges still lie ahead: Are all league partners and members up to the quality of play and business Garber wants to ultimately implement? Can the competition for the US sports fan market smother MLS’s growth? Is this growth sustainable? If so, when is it going to stop? Hopefully not soon, I’d say.

It’s been a busy week in sports business, which is a little unexpected since things tend to die down a bit after the Super Bowl.  I’ve already written about the potential Ticketmaster/Live Nation merger, but here are some quick thoughts on other news items from the past few days:

- Michael Phelps:  So the golden one was caught on film with a bong, not exactly a good PR move.  If this was his first “offense,” then I think it would be less of a story, but he also had a DUI incident a couple of years back.  Some people are sticking by him, most notably the USOC and Speedo, while others like Kellogg are ending their relationship with Phelps.  USA Swimming is withholding their training money, which for some Olympic athletes would be significant, but this will have little impact on Phelps. 

To me, this story is pretty straight-forward.  Some brands are much more sensitive about any potential negative PR, so they will decide to stray away from Phelps.  He’ll still make plenty of money from other partnerships.  The best thing for him to do is simply stay out of the news for a while and concentrate on a strong performance in July’s world championships.  Nothing helps blow away bad PR like championship performances.

- Spurs Sit Their Stars:  Imagine being a Spurs fan living in Colorado, and buying tickets to see your team when they come to town to face the Nuggets.  The game starts without Duncan, Ginobli, Parker or Finley in the lineup.  No big deal at first, maybe Popovich is trying something out.  But then the quarter, half, and entire game ends without them ever stepping on the floor.  I know this was a strategic decision by the team, but those fans have to be ticked off.  This is an example of a unique conflict between the business side and the team side.  Since the game took place away from San Antonio, the implications are not as significant, but what if “Pop” wanted to do this at a home game against a weak opponent?  What do you tell your fans that expect to see the stars play?  I don’t have the answer to this, but it is an interesting dilemma. 

Also, a friend of mine asked me about the gambling implications of this event.  Think about how much money was wagered on this game in advance, and then the best players for one team just don’t play.  Clearly Popovich is a well-respected and ethical coach, so no one is questioning him along these lines  But imagine if this was a Pete Rose type of character making this decision.  Then what would you think?

- Who Needs $25M?  Apparently Manny doesn’t need it, or at least feels he’s worth more.  For the public, it is hard to imagine someone turning down $20-25 million per year in this economy.  I believe that Boras is overestimating what the teams are willing to commit to, considering the teams don’t know how the recession is really going to impact ticket sales and other revenue streams.  I would not be surprised for Manny to come back to the original two years, $45M offer that the Dodgers started with (or something close to it).  Boras has caved before when deadlines get close (Matsuzaka’s negotiation comes to mind).

- How About $18M?  Bud Selig might not hit like Manny, but he gets paid almost as well.  News came out about Bud’s salary from last year, which I don’t feel is inappropriate considering he’s the senior leader for a company that generated over $6 billion in revenue last year.  The unfortunate thing is the timing – it looks bad for MLB for this salary to come out when others are losing their jobs.  I think this story blows over pretty quickly, and maybe Bud could generate some good PR by donating a part of his salary next year to charity.  Maybe he could start a league-wide initiative that other owners and players could support.  That would make for some positive PR.

Jason Peck also has a good weekly recap on his sports business and social media blog.  His site is a great resource for social media content in sports.

With 2008 winding to a close, I want to countdown the top sports business stories of the year.

#2 – The Summer Olympics in Beijing

Since the Olympics only happens once every four years, they are naturally a huge story. But this year in particularly, the Olympic Games in Beijing had a tremendous impact in sports business across the globe. Here are some of the notable impacts:

- The Political Climate:  Many people were upset that Beijing was allowed to host the Olympics.  There are accusations of human rights violations, protests over possession of Tibet, concerns about air pollution, and questions about media access.  There was also the banning and subsequent unbanning of Iraq from participating.  How would a major international event like the Olympics be able to proceed in this type of environment?  Surprisingly well, it turns out.  The city seemed to manage the various protests and keep the distraction to a minimum once the Games began.

- The Global Business Landscape:  China’s government makes it difficult for non-Chinese companies to develop a foothold within China, which poses many challenges for sponsor companies.  So some companies needed to find local partners to truly leverage their Olympic partnership.  For others like Coca-Cola and McDonald’s who were already in China (and every other country in the world), having the Olympics in Beijing  provided the largest global stage for them to leverage. 

- Michael Phelps:  Not since Tiger Woods has an individual male athlete captured the attention of a nation, and quite possibly the world.  Because of his historic performance in this year’s swimming events, Phelps instantly became the most marketable athlete of the year and for years to come.  From his athletic ability to his charming smile, he is a natural target for almost any company looking to align themselves with a successful and engaging athlete.

- The Stories:  There were many great story-lines to this year’s Games, many of which were also significant on a business and marketing level.  The “Redeem Team” was a huge success and was a wonderful platform for Nike.  Usain Bolt became the fastest man ever, which also comes with a great deal of marketability.  The battle between the Chinese and American female gymnasts was heightened by the age controversies.  The opening ceremony was generally considered one of the most magnificent ever, even in light of the lip-syncing and fireworks controversies.

- The Business:  Over seven million tickets to the various events were sold.  Over 5,000 different Olympic product were available for sale, generating millions in revenue.  On the media side, the entire event was broadcast in HD, over 2,000 hours of online content were created by NBC, and for the first time, some content was streamed live on the Internet.

Clearly, the 2008 Beijing Olympics was one of the biggest sports business stories of the year, and this was just a very brief summary.  The coverage of the games was tremendous, as was the exposure for the corporate partners.  I am excited to see what Vancouver and London have in store for 2010 and 2012!

Football Hits the Economic Wall – The NFL announced a 10-15% reduction in their staffing earlier this week, showing that even the most powerful league in sports is vulnerable to the economy.  They’ve also implemented salary/hiring freezes and are trying to slash expenses. Meanwhile, the AFL announced they may suspend operations for the 2009 season, although now it looks like they may be able to avoid this.

I’ve written several times about how the economy is hurting sports, but most of the time, I’ve referred to specific events or smaller organizations.  While the AFL is still a smaller league, the NFL seemed to be the league most likely to stave off these types of cuts.  Ultimately, it comes back to the drop in corporate dollars.  The automotive and financial industries have always been two of the biggest players in the sponsorship arena, and they are all making significant cuts, which is finally trickling back to the NFL.  But the NFL is still arguably the number one sports brand in the U.S., so they should have the ability to identify new categories that can benefit from aligning themselves with the league, even if they’re not as high-value as cars and banks.