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worth pondering: Part II
Panel of gurus musing on what 2002 will bring
By Carl Bialik
Why would anyone make predictions, since they are remembered only when they are egregiously wrong? Because predictions are great fun, especially when it comes to sports. In that spirit, the Bonham Group, a sports and entertainment marketing firm, has dared to make a list of predictions about the sports and entertainment world for 2002, titled "Strange Brew for 2002" and released in early January. Yesterday we ran the five predictions that could be judged against reality, along with comments from some of our resident sports experts. Today we are running the five predictions that have yet to be decided, plus one bonus prediction. Next New Year's Day we'll see just how many of these predictions turned out to be egregiously wrong, and how many forgettably right.
Here's our roster of experts:
Don Hinchey is director of creative services at The Bonham Group (and therefore perhaps slightly biased in favor of these predictions).
Marc Ganis is president of sports consulting firm Sportscorp Ltd.
Lynn Kahle is professor of sports marketing at the University of Oregon.
Matthew Bortz is managing director of the Bortz Media & Sports Group, a media and sports consulting firm.
Here are the predictions:
Prediction Six: Facility-naming-rights agreements will continue to migrate to minor-league venues. Further, naming rights will ride the coattails of an improving U.S. economy and regain marketing prominence while bolstering sagging sponsorship fees.
Hinchey: "The recent objection to buying naming rights is that high-profile companies have had stock market difficulties. But their difficulties had nothing to do with naming rights. They had to do with the economy or the particular economic practices of the company: for example, Enron [namesake of the Houston Astros' field.].
"I believe naming rights are at the top of the sponsorship food chain because they position the sponsors in a way that focused sponsorships cannot rival.
"This explosion in minor-league naming rights has gone relatively unnoticed. The prime opportunities are already picked off for the big four sports. Now companies are grabbing opportunities for minor leagues. The price is right."
Ganis: "We've seen the bottom in terms of naming-rights activity in the last year. As the economy picks up and particularly as the advertising economy picks up, we'll see naming-rights activity pick up.
"However, I don't believe we'll have a return of the go-go days of crazy high-tech spending.
"Absolutely, on minor-league venues, we will still see many named for people. But I do think we're going to see minor-league facilities taking on more often the names of local businesses, as opposed to national corporations."
Kahle: "That's going to happen. I think you'll see more major-league but also more minor-league venues selling naming rights."
Bortz: "I definitely think the minor-league venues are going to continue to increase in naming rights. The jury's still out on whether we're going to see a rebound in major-league naming rights."
Prediction Seven: Rookie New York Mayor Michael Bloomberg’s business savvy will enable him to cobble together corporate and taxpayer support for over a billion dollars worth of new stadiums for the Mets and Yankees.
Hinchey: "Both those franchises are going to need new stadiums. It will be a feather in Bloomberg's cap if he is able to engineer the approval of the two facilities. Also, if New York has the new facilities in place, that will certainly bolster its bid for the summer Olympics in 2012."
Ganis: "This may not happen this calendar year, but I think it'll happen during the first half of Bloomberg's administration."
Kahle: "I am a little skeptical of that prediction."
Bortz: "I think that's unlikely to happen in 2002, but maybe in 2003. New York's having to recover from Sept. 11 is the main reason that I think this'll take a little bit longer than one year."
Prediction Eight: As player-agent relations come under increased scrutiny, more athletes will elect to negotiate their own contracts, à la Milwaukee Bucks guard Ray Allen.
Hinchey "There's been a growing dissatisfaction among players that agents are serving their own best interests. I think as we get a generation of more sophisticated athletes coming out of the colleges and even through the pro ranks, we will see they want to have a greater sense of autonomy in their dealings with their teams."
Ganis "Yes, I think that will happen. I don't think it's because of the scrutiny player-agents are undergoing, but rather a reflection of various collective bargaining agreements that minimize the value that a player-agent brings to a particular player.
"In particular in the NBA, with the maximum salaries that players can earn based on the number of years they've been in the league, if you're going to get paid the maximum salary, why give an agent 2, 3, or 5 percent for what's already dictated by the contract? It's far better going with a first-rate lawyer."
Kahle: "I don't think that's going to be a huge trend. In general it's a very good thing to have a buffer between you and the person you're negotiating with. Having somebody with a little business savvy making the decisions is a good idea. If you're a great home run hitter, you wouldn't get your agent to go in and hit a home run for you.
"Maybe some players will look more critically at what their agents are doing, but, No. 1, I think it would be a big mistake if players started abandoning agents, and No. 2, I just don't see it happening."
Bortz: "I actually think the trend will level off. The agents have begun to provide services that go well beyond negotiating contracts. Those services can be difficult for athletes to replace."
Prediction Nine: To combat the loss of NFL and NBA programming, NBC will expand its internet sports presence via a partnership with a premier streaming sports provider and through enlargement of its online sports news coverage.
Hinchey: "NBC will try to leverage its Olympic content. Lycos and Fox did a deal recently. It seems to be the direction these networks are going, in order to try to enhance their overall presence in the marketplace."
Ganis: "NBC may do so, but I think it'll have a minimal impact. I do not believe the internet is going to be the panacea that many, as recently as one-and-a-half years ago, expected it to be for professional sports. It's a supplement, not a primary source for sports programming and information."
Kahle: "If I were coaching NBC, that would be a piece of advice I would give them. The cable and internet partners that NBC has, namely CNBC and MSNBC, have more restrictions on what they can broadcast, in terms of sports, than the ESPN-ABC partnership does.
"For a sporting broadcasting venture to be optimally successful these days, it needs to have a strong presence in broadcast, cable and internet. The people at NBC are smart, and they can see they need to improve their presence in other arms of communications media."
Bortz: "I think NBC will continue to look for ways to expand its sports presence. Whether that's through the internet or through other means is hard for me to guess."
Prediction Ten: "Need-based" ticket prices (to cover exploding player salaries) will create further sticker shock among core fans, causing them to retreat into their cocoons and causing teams to become even more reliant on corporate ticket plans.
Hinchey: "Ticket prices, especially for the big four sports, are turning fans off. This has created an opportunity for second-tier sports, especially those of minor leagues, to showcase their wares. I think ticket prices have hit the wall. Team executives should be worried about it. The NBA and NHL have to be most concerned about losing their core fans to higher prices."
Ganis: "That's the trend we've seen over the last decade, and I expect in general it will continue. If teams continue to sell out, we will continue to see increased ticket pricing.
"Fans are cocooning more, in part because of ticket prices, in part because broadcasts of games are more widespread, but in large measure because of increasing inconvenience for fans to attend sporting events, from things like additional security, parking further away from the facility, and the increasing length of games."
Kahle: "I think that's true. It's a good thing to have a certain percentage of fans who paid for their tickets with their own money and brought their families.
"But I think some people underrate the value of watching sports on TV. No one spills beer on you, unless it's a family member, and you get to see more replays. It's a good thing to complain about, but I doubt that it's going to destroy sports as we know them.
"There's a real balance between extracting as much money as you can from sports and getting excessively commercial. I'm not sure exactly where that balance is, but I am sure consumers will tell us as time goes on."
Bortz: "I see the exact opposite. I see continued slowing in the growth rate of ticket prices. Overall ticket pricing for general reserve tickets will see minimal increases among all four major professional sports leagues next year.
"More attention will be placed on addressing the no-show issue and upgrading the quality of experience of fans to make sure all tickets are fully utilized.
"That's the major trend. Ticket prices have reached such a level that it is difficult to raise prices. Teams need to be more creative and find ancillary revenues."
Bonus prediction, from Ganis: The NFL will expand its Sunday Ticket, either by doing another deal with Echostar, if Echostar does not take over DirecTV this year, or by having select cable technologies carry the Sunday Ticket.
Ganis: "The NFL Sunday Ticket has proven to be the most valuable marketing tool that DirecTV has. It gets more new business by having the NFL Sunday Ticket than from any other programming or marketing techniques.
"This proves once again that the NFL has enough drawing power that it can create a delivery system in and of itself. Fox was a joke. Then it got the NFL and all of a sudden that changed."
February 14, 2002 © 2002 Media Life
-Carl Bialik is a New York writer and a regular contributor to Media Life.
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