Bust, Boom, Hope – This Week’s Sports Business for Feb 17, 2012

“Bust”: Top Five Reasons the Armageddon is Near

1.           Embroiled in the Bernie Madoff Ponzi scheme and deep in debt, the New York Mets’ Opening Day payroll is expected to be around $87.5 million, down from $142.8 million last season.  According to ESPN’s Buster Olney, the year-over-year payroll decline is the greatest in MLB history.

2.           Rome won’t bid on the 2020 Summer Olympics after Italian Prime Minister Mario Monti refused to provide public financial support.  The Games were expected to cost Italy $13 billion, but the country recently passed $26 billion worth of budget cuts and tax increases.  Rome last held the Olympics in 1960.

3.           West Virginia University and the Big 12 agreed to pay the Big East $20 million to settle a legal dispute over the Mountaineers’ realignment plans.  WVU will pay $11 million to cover the Big East’s $5 million exit fee, Boise State’s $5 million buyout fee, and $1 million to match what each Big 12 school is paying.

4.           The NFL’s plan to add five Thursday night games to NFL Network makes it unlikely the league will sell a new TV package in the near future, according to John Ourand of SportsBusiness Journal.  TV executives had expected to bid on a Thursday night package, valued at $700 million a year.

5.           Snack brand Heluva Good decided not to renew its title sponsorships of NASCAR Sprint Cup Series races at Watkins Glen International and Michigan International Speedway.  The decision came as a surprise to both tracks since the start of the 2012 NASCAR season is a week away.

“Boom”: Top Five Reasons that Prosperity is Right Around the Corner

1.           NBC’s domestic ad sales for this summer’s London Olympics have topped $900 million, according to Tripp Mickle of SportsBusiness Journal.  The network already has surpassed the $850 million in ad sales for the 2008 Beijing Olympics, and still has five more months before the London Games.

2.           Kansas Speedway opened a new $400 million casino overlooking the racetrack.  Project construction created 1,000 new jobs, and the casino could attract 400,000 visitors annually.  Track owner ISC expects the casino to increase Kansas Speedway’s ticket sales and overall revenues.

3.           Multibillion-dollar Red Sox Nation (RSX) rights deals have changed MLB’s revenue structure, according to Bob Nightengale of USA Today.  Nightengale cites new RSN deals for the Los Angeles Angels and the Texas Rangers for the teams’ ability to sign Albert Pujols and Yu Darvish, respectively.

4.           NFL Commissioner Roger Goodell’s salary will reach $20 million per year by 2019, the end of a recently signed five-year contract extension.  The figure is double what he currently makes.  Goodell famously took a $1 salary during the NFL lockout.

5.           Ole Miss and Nike extended their apparel contract for $13.9 million over seven years.  The contract provides Ole Miss with more than $2 million worth of Nike products annually from 2013-2019.  The previous deal had Ole Miss paying Nike $1.1 million per year for additional equipment.

“Hope”: Top Five Reasons That Creativity is the Key to Economic Survival

1.           A clause in the University of Memphis’ deal with the Big East requires the school to “use best effort” to have FedEx spend money on advertising, sponsorships, and other commitments.  FedEx has no agreements with the conference, but a company exec said they would explore potential sponsorships.

2.           The United States Olympic Committee (USOC) signed Chobani as its official packaged yogurt through the 2014 Sochi Winter Olympics.  Though terms of the deal weren’t disclosed, the sponsorship is valued at more than $3 million a year.  Expect to see more Greek yogurt brands invest in sports marketing as the category continues to grow.

3.           Wal-Mart will sponsor former NASCAR champion Bill Elliot for one race this season to celebrate the retail giant’s 50th anniversary.  Elliott will drive a special Wal-Mart-designed No. 50 Chevrolet at the July 7 Coke Zero 400 Sprint Cup event at Daytona.  He’ll also make appearances at Wal-Mart stores throughout the season.

4.           Showtime selected the Miami Marlins to appear on the second season of its series “The Franchise.”  The Marlins hope the show helps with marketing and branding efforts, particularly in Latin America.  The Marlins offer several intriguing story lines, including opening a new ballpark, high-profile free agent signings, and an array of colorful personalities.

5.           The Jacksonville Jaguars hired MetLife Stadium President & CEO Mark Lamping as the team’s new president.  Lamping, who will oversee all of the team’s non-football operations, previously served as an Anheuser-Busch executive and as President of the St. Louis Cardinals.


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