Players, Teams Strike Hoops Gold As NBA Nearly Triples Prior Media Deal

http://www.forbes.com/sites/prishe/2014/10/06/players-teams-strike-hoops-gold-as-nba-nearly-triples-prior-media-deal/


My last blog (How TV's Sports Addiction Could Destroy Its Business) was about this update, so to recap...

• ESPN and Turner Sports have completed a 9 year deal worth $24 billion to renew their NBA media rights through the 2024-2025 season (starts with 2016-2017 season).
• This happened because of basketball's growth, mega-superstars (LeBron James, Kevin Durant...), and the NBA's global marketability .

This article added that people are more willing to watch commercials during live sporting events and captures the coveted 22-35 year old male demographic.  This could also be good for the players since more players can sign max deals.

This deal is a win-win for the NBA since the players and owners will be making more money.  This is a good thing for the league.  There will be no way for this deal to backfire.  The NBA is too popular.

How TV's Sports Addiction Could Destroy Its Business

http://www.theatlantic.com/business/archive/2014/10/how-televisions-sports-addiction-could-ultimately-destroy-its-business/381147/

 Over the weekend, the NBA signed a deal with ESPN and TNT worth $24 billion between 2016 and the 2024-2025 season.  The association got this deal for a couple of reasons.

1. The decisive leadership of the new commissioner Adam Silver, most known for the handling of the Donald Sterling racism issue, is making the NBA something fans can watch and respect at the same time.
2. The league's superstars (LeBron James, Kevin Durant, Blake Griffin, Chris Paul) are international stars that can make the NBA more marketable globally.
3. The NBA's rating have grown in the last ten years.

 In the new deal, the NBA will make 10% more money from television networks despite of what the averages imply (jumps from $930 million to $2.6 billion, which would nearly be a 3x leap).  This deal comes when the costs of sports rights on television, radio, and digital devices is growing by 19% a year, and the cost of basic cable has been increasing by 6% annually since 1995.

I think this deal is good for the NBA even if expanded basic cable keeps getting more expensive and unaffordable.  ESPN is strong enough to handle any threat to pay-TV's business by directly charging its core fans.  Consumers and potential consumers will purchase TV bundles because of live sporting events.

Can rich countries afford the Olympics?

http://money.cnn.com/2014/10/07/news/olympics-norway-cost/index.html

Norway has pulled out of the race to host the 2022 Winter Games, leaving only Being, China and Almaty, Kazakhstan in the running.
Norway is a wealthy nation and passionate about winter sports.  The logical explanations on why the country declined hosted are...
1) "There's too much wining and dining... It doesn't fit with Norwegian culture," said a government source from Norway.  The fanciness of the Olympics was too much for them.  They rather keep it simple and just hold good events.
2) The Norwegian citizens were not convinced that the money spent would have been too much and decided it was not worth holding the 2022 Winter Games.  Norway is one of the developed nations that is struggling with ballooning debt and voter opposition, that opens the door for more developing nations, who are more likely to gain from showing themselves to the world.
Despite of the trend of developed nations dropping Olympic bids since 2000, rich countries will still participate holding the games.  Salt Lake City (United States) might bid for the 2026 Winter Games.



The more reasonable reason for Norway not holding the games is '2)'.  National debt is limiting developed nations' ability to hold big global events and share their culture and gain revenue.

Women CEOs stand by the NFL

http://money.cnn.com/2014/10/08/news/companies/nfl-women-ceos/index.html

I am surprised by this:  The CEOs (female) of Pepsi, Campbell Soup, and General Motors look like they will be sticking with the NFL amid its domestic violence issues.  None of them said they would pull its sponsorship if the league does not do enough to eliminate or at least greatly reduce the amount and intense levels of violence against women and children.
The NFL gets $150 million per year from those sponsors with Pepsi being the largest at $100 million.  The league needs to be careful about how they deal with this violence epidemic; they could lose a lot of marketing revenue and credibility from just about everyone.
Amheuser-Busch has been the NFL's most critical sponsor saying how unsatisfied they are with the league's handling of this situation, and the league would really go down quickly if they dropped it sponsorship.

I agree with the CEO of the Women's Sports Foundation saying no CEOs should give Goodell a pass!  He needs to be held accountable for his actions (or lack of them) and punished for not properly dealing with the domestic cases (Ray Rice is an example).  If the punishment is dropping him from his commissioning position, then so be it!

Why Kevin Durant chose Nike over Under Armour

http://www.sbnation.com/2014/9/3/6098457/kevin-durant-nike-contract-under-armour

After a summer when Under Armour and Nike were fighting to sign NBA All Star, Kevin Durant, Nike won after they offered a $300 million deal over the next 10 years.  It started when K.D. was in his final months of a 7 year and $60 million contract with Nike.  While that went on, Under Armour dropped him with a massive offer worth $265-$285 million, and it included company ownership and a recreational center that would be named after his mother.  This put a ton of pressure on Nike to match or exceed the big deal.

Under Armour only had 0.35% of the market share on basketball shoes at the end of 2013 while Nike and Brand Jordan held 93%, so there was very little evidence that big names would go to a smaller corporation, but the probability of that occurring was not 0.  They did sign Stephen Curry in 2013, so the company hoped that would help them jump into the NBA.  Signing Durant would have been a huge profitable gain.

Under Armour sold $30 million in basketball shoes last season, whereas K.D.generated $85 million alone in 2013.  They could have blown up Durant and generated enough sales to more than make up for the reported $30 million/year cost of signing him, which would make it a no-brainer to pursue him. 

Despite of the failed signing (for Under Armour), it was still a good move.  The company had a lot of buzz this summer, so they might have sold more shoes because of that.  If U.A. would have been successful in the signing, then they would have been a top name with Nike in the NBA very quickly!

College sports thrive amid downturn

http://espn.go.com/espn/otl/story/_/id/10851446/sports-programs-nation-top-public-colleges-thrived-economic-downturn-earning-record-revenues

Many of the nation's wages and number of jobs have decreased by the Great Recession of 2008; however, sports program at NCAA's Division 1 have actually thrived as the payrolls increased by 40%.  With how successful how NCAA sports are doing,  there has been more light on this:  Should collegiate athletes get paid?
Being paid like professional athletes; no.  Many of the student-athlete on scholarship do not have to pay for any tuition and get free room & board and unlimited meal-plans, so they are not suffering from not getting paid.
Getting paid for cost of living in the cities the colleges are located at; it is still a no.  Even though operating revenues at all schools (from academic year 2007-2008 to 2012-2013) have gone up by 32% with much for that begin attributed from the higher demand for millions of Americans wanting to watch college sports, the students should be going to school to go to class and get a degree instead just going to the professional sports leagues.  Despite of football player Northwestern University success in being able to unionize, students are students, not employees, so college athletes should not get paid.