The 2013 Question…Worth The Gamble?

There is a battle going on in the State of New Jersey that, if played out in favor of the state, will open up and endless trough of marketing and spending dollars for professional sports going forward, one that could help keep costs down for tickets, ease burden on stadium improvements and in many ways enhance the fan experience. It is sports wagering, especially in the digital space, and like other taboo subjects before it…lottery advertising, events at casinos, advertising for hard liquor, even brands on uniforms…would be a huge boost for clubs and those selling media as they seek to find alternative places for cash other than the traditional means.

Now this is different than all the other topics mentioned above…the biggest reason being Federal Law in the US currently prohibits sports gambling outside of the State of Nevada, and no professional organization is going to buck the Federal Government to challenge or push along sports wagering in the States. The leagues and the NCAA, as has been widely documented, are actually doing all they can to battle New Jersey’s challenge to sports gambling. However if New Jersey does win, and other States follow, the revenue that can be had from LEGAL and Federally regulated wagering can probably dwarf most of the marketing revenue currently brought in by teams and leagues. Why is New Jersey challenging the Federal law? Simple. The State needs the income that a sports book can bring to casinos in places like Atlantic City, or to racetracks that offer various forms of legal wagering. The percentage of tax that could come from legal wagering in the United States, it is said, would go to fund an infrastructure that has been suffering with a down economy and made worse by the dollars lost with problems like Hurricane Sandy. They argue that their casinos and racetracks can operate within the law and be both profitable and innovative with sports gambling, just as their partners  in Nevada have been for years.  It’s not “The Sopranos,” it’s smart, legal and forward-thinking business.

Proponents of legal wagering point to the millions brought in across the world by legal gambling, many times without incident. Premier League teams could betting organizations as their biggest brand supporters, with the revenue share that goes on being some of the largest cash streams coming to clubs. The advances in mobile technology, it is argued, will make fan engagement at games that much stronger as well. with fans being able to legally bet on any number of analytic permutations that can occur in the course of a sporting event. A more engaged fan means more dollars spent on traditional revenue streams like food, and all that helps grow the pie for clubs. The other argument that is made is that whether leagues admit it or not, the gambling transactions are taking place illegally now, and those dollars, and the innovation that could come from a formal gambling play, are being left on the table by leagues and teams.

Now the other side is the spectre of fixing games, scandal and shady dealings that could arise from introducing legal sports gambling into America. The argument by the pro-legal gambling side is that those arguments were made with many other innovations that could bring down sport, and once they were introduced, no one suffered and public opinion was accepting and encouraging.

So where will this all go? New Jersey will continue to force the issue and bring about change, while the leagues and the Federal Government will continue to fight against for the short term. The issues on the horizon…will the NFL condone a legal bet when the Jacksonville Jaguars play in London each year…will soccer clubs playing friendlies in the US be allowed to engage with legal betting organizations in sponsorship when they tour the States…how can the NCAA allow college teams to play IN casinos and take appearance fees when they say that the supporting infrastructure is against the rules…will all be used as fodder for and against as the issue grows in the coming months.

The precedent for legalized gambling abroad is already established. Clubs in the US need to grow revenue streams and for sure there is no way the leagues will go against Federal Law with an issue as touchy as legalized gambling. Either way this goes, it will certainly be one of the bigger issues to watch in 2013 from a sports business perspective.

One Governor Taking A Gamble On The Future Of The Sports Business…

Someday sports fans and team owners may have New Jersey Governor Chris Christie to thank for games that are more engaging and for a revenue source that does not yet exist in the United States. Christie this past week continued his strong push to challenge the Federal Law that does not allow sports betting anywhere other than the five states that were grandfathered into the existing legislation, maintaining that the limit restricts New Jersey’s business growth despite the fact that its casinos have long been regulated and established legal centers for all other forms of gambling. The challenge, Christie believes, will open up new areas of commerce and tourism not just for Atlantic City, but for the horse tracks that are currently struggling to stay afloat throughout the state.

Naturally the NFL continues to publicly back the law in place, continuing, along with other sports leagues, to distance themselves from any form of professional wagering expansion outside of the States where it is current legal (the biggest being Nevada). However the battle will only last as long as the legislation currently in place holds. Cantor Gaming, the company managed by Wall Street giant Cantor Fitzgerald, continues to be more bullish with their Las Vegas-based sports book, pushing out…what else…the betting lines for the opening weekend of September’s NFL season two weeks ago, the earliest ever. Now the lines never appear in NFL properties, but the league certainly won’t fret about the talk generated on places like ESPN’s highly rated “Mike and Mike” radio show the morning the lines came out. A multi-state sports legal book would generate even more interest in the major, and some minor sports, and keep fans even more engaged.

Away from the gambling for dollars, the advances in mobile and hand-held devices can make for lots of fan engagement for virtual betting or other forms of activation in even the biggest blowout. Acceptance of regulated wagering in-arena would have fans more engaged in the action on the floor or the diamond or the ice, and again would create a huge, legal opportunity for teams to bring in increased revenue through new and innovative sponsorship.

Now none of this is unique the world over. Soccer and other sports have had legalized onsite gambling, especially in the mobile space, for years. Have there been issues in places (Italian soccer, Indian cricket, men’s tennis) with match fixing and player issues? Yes. However those issues have happened in North America as well, and with regulation on digital gambling and more sports books the transparency in the industry would make incidences less, not more. While some view regulated gambling as a scourge, the rest of the world seems to be doing all right, and regulating at the Federal level is the key.

As we have said before, the regulation of sports gambling and the establishment of a sports book is becoming more and more a certainty. It fits with the growth of casual and competitive gaming, and is still one of the largest revenue streams not yet tapped by professional sport in North America. Other streams…hard liquor, condoms, even casinos…were once on the banned list that also includes tobacco these days, and all are seen as OK now. Where would sports business be today without ads for Viagra or Cialis ads? The stigma and worry with those categories came and went, and so in all probability will be the issues with regulated gambling at some point down the road. It won’t be the main reason people will flock to games, but it won’t detract either. The industry knows gambling exists and it is an enhancement to viewers and the fan experience. It just cannot acknowledge or engage in the space yet.

When it does happen, all owners should send a thank you note to the current governor of The Garden State, as he will be helping them improve the fan experience and bring in more dollars via sponsorship in one fell swoop.

Free Engagement? Manchester City Takes Another Step To Grow…

The cultural and business differences in how digital sports is offered in Europe and North America is in many ways as wide a divide as well, the ocean that separates the two continents. The early growth of mobile and digital platforms by the sports consumer outside of the United States, as well as the passion and tradition of club followings, gave elite brands like those in the Premier League a decided advantage in fan engagement at an early stage.

Club followers could gain access to all sorts of content, but only for a fee. Followers of Manchester United and Arsenal would buy in for extended content and access, much of which was delivered via a mobile platform to hundreds of thousands of fans around the world. Conversely in the United States, most clubs and properties, faced with a more fickle fan base and a consumer not yet fully in tune to the mobile pace, chose to go the free route to provide content access. Volume of coverage and the ability to engage those fans was the way brands would activate digitally in sport in North America, with digital being less of a hard dollar stream than it is abroad. It was complimentary and a needed addition, but not the hard source of sponsor or fan dollars as it is in the UK and other places.

One club that has looked to buck that trend, one of many ways they are trying to change the view of sports marketing in Europe, is Manchester City. The world’s wealthiest soccer club rolled out a number of new digital initiatives to help drive support and increase fan engagement earlier this year. It was the latest step by the club, purchased by Sheikh Mansour bin Zayed Al Nahyan in 2008, to increase its casual following globally as well as find new ways to engage its traditional followers. The club became one of the first to launch a YouTube channel and cross promote the content posted through all their traditional and non-traditional media, and followed that up with free tweets and chats involving many of the club’s players and staff. While it may seem normal for American sport to do such programs, having an EPL team take that step is a departure from the norm of putting all such top content and access behind a pay wall

The latest step of giving fans a bit more engagement took place this past week, when the club announced it would start implementing tweets and Facebook posts by fans in stadium during the course of matches. The posts would be monitored as to not be offensive, and will come directly from the Manchester City sites, giving fans the ability to engage with the team and those in attendance, an immediate real-time global reaction to performance, support and buzz around one of the world’s premier sport brands. While some may say the giving away of premier content, or providing such a large forum as a stadium message board is counter to the revenue stream that existed, it may actually be the opposite that is true. The EPL teams have done a great job of monetizing content, and are well aware that there are legions of fans around the world who either can’t or won’t pay a price for the added value. Giving away snippets, creating new content platforms and reaching out to those fans to get them more engaged may actually increase the dollars coming in down the road. The casual become more engaged, and their interest grows with the potential for up-sell and engagement. The perceived “loss” is really sweat equity not hard dollars or investment, as all the tools needed for the social media “freebies” already exists, and much of the content is going to be user generated.

The move by Manchester City is also the latest by clubs to find ways to use social media even more in their real time fan engagement platforms. Hashtags have started showing up in college football stadia. Now of course most of this has to do with experimentation, building critical mass and presenting a new avenue engagement that can in turn be packaged and monetized. Broadcasters have used live feeds of fan comments to try and enhance and not distract television audiences for years to mixed reviews. Whether bringing the comments to the huge screens in stadia as an addition will be welcomed remains to be seen. Regardless it is an interesting move by one of the world’s richest clubs, who realizes that the next step of engagement needs to be to a wider audience, and hopes that the dollars that flow from that free step will far offset the gamble they will take.

A great example of best practices from both sides of the Atlantic coming together.

Healthy Mind, Healthy Building

In professional sport in North America you usually don’t think of the facility driving awareness programs, it is usually more the teams or the athletes. The stadiums and facilities do promote programs specific to the event, “Don’t Drank and Drive” etc., but it is really not incumbent on the building for wide reaching programs for the community.

However across Europe, the platform is different, and the stadia, many times are at the center of the the hub of city life. That gives the facility itself more of a factor in community itself, and a unique program was spawned to help those stadia, as well as the players and clubs who use them, work together for joint awareness. The European Healthy Stadia Network enables facilities, not just clubs, to work together on wide-reaching initiatives throughout their community, with programs ranging from smoking and tobacco control to hooliganism and healthy living and eating. The programs give facilities a chance to build loyalty in the communities where they reside for those who live and work in the area, and are much more apt to partake in messaging programs when events are not filling the facilities. The stadia share best practices as to what programs get the best response in their communities, and are able to see a direct tie to better working and living conditions in and around the facility. The fact that so many facilities are in urban settings throughout Europe makes the program more efficient than in the States, where often times mega stadiums are set off from the area where most fans live and work. By being a central hub of activity in cities, the facilities themselves take on a larger role of leadership, and this program helps make that leadership position flourish. Well executed, well thought out and a great platform to help those around.

The Social Media Game On A Global Scale…

The social landscape in sports across North America is growing exponentially every day. Teams, athletes, events, brands, media companies, are all scrambling to add followers, build alliances, grow traffic and scream louder than anyone else to draw critical mass for whatever reason, from selling tickets and growing brand loyalty to giving consumers the unfettered access they crave. Yet for all the scrambling and the theories of what is brand success…is it millions of followers or the right few thousand for your audience for example…a great piece by Eric Fisher in this week’s Sports Business Journal shows that American teams are still lagging in the social media footprint to the soccer clubs of Europe, and that the recently completed cricket World Cup had more of an impact in the digital space than almost any other North American sporting event, save the Super Bowl…and that impact was not on non-American servers, it was on a well known platform in the States…ESPN digital.

This type of news may create some consternation amongst the sports social media elite in the United States, and may send some “experts” heading for cover as they advise brands. However in reality the news is a great example again of how the sports landscape is far more global than we sometimes care to admit, and taking a look at best practices of some of the world’s largest soccer clubs can continue to give North American brands insight into social media. Often what is also overlooked is the advanced use of the handheld outside of the States and in emerging companies, where landlines are not useful. Telecom companies have been using the digital space for years…the French Open and Formula One were among the first events ever, as early as the 1990’s…to use digital technology to bring fans multiple images and export data to as wide an audience as possible who were following events in their handheld devices.

The list also serves as a reminder to the tribal nature of soccer as a global brand. The largest clubs in the world have truly global followings…loyal groups who consume all things about their home club win or lose…and while American sports are king here, the amount of team-specific fans outside of this country (vs. fans of the league like the NBA or NHL) is far less than the amount of club-specific fans around the world.

This is also certainly not an indictment of the great innovation and brand activation programs American sport has pioneered in the digital space, and those programs are growing exponentially each day. What it is, is a great look and reminder into the potential of the global brand and the appeal of effective social media programs that are based on both content and support. Passion drives interest no matter what the platform.