Lesson 1.1 Genesis of SEM Copyright © 2014 by Sports Career Consulting, LLC History of SEM Lesson 1.1 What is SEM? Acronym for: Sports and Entertainment Marketing Copyright © 2014 by Sports Career Consulting, LLC History of SEM Lesson 1.1 The Evolution of SEM SEM is a relatively new concept Forms of sports marketing started as early as 1858 (first known athletic event to charge admission took place at a baseball game) Entertainment as we know it today (movies, radio, television, music) exploded from 1900 on, and as technology improved, so did the products being offered Copyright © 2014 by Sports Career Consulting, LLC History of SEM Lesson 1.1 The Evolution of SEM Many events influenced growth Fans willing to spend discretionary income on sports Radio and TV increased exposure to sports. Copyright © 2014 by Sports Career Consulting, LLC History of SEM Lesson 1.1 The Evolution of SEM Corporations began to see the benefit with sports affiliations, resulting in a sponsorship boom Celebrity endorsements and naming rights deals became common industry practice Advancement of technologies making it easier to consume sports and entertainment while more sports and entertainment properties are introduced Copyright © 2014 by Sports Career Consulting, LLC History of SEM Lesson 1.1 Industry Size & Scope Sports business industry is one of the largest and fastest growing industries in the US 2014 Plunkett Research estimate entire sports industry in the U.S. is around $485 billion global, the sports industry is estimated to be around $1.5 trillion Copyright © 2014 by Sports Career Consulting, LLC History of SEM Lesson 1.1 Industry Size & Scope How does the sports industry stack up against other industries? Copyright © 2014 by Sports Career Consulting, LLC History of SEM Lesson 1.1 2014 Sports Industry Revenue Streams Sports goods equipment (retailers) Racetracks, sports teams & other spectator sports “Big 4” U.S. sports leagues Fitness and recreation NCAA sports NASCAR 0 5 10 Source: Plunkett's Sports Industry Almanac Copyright 15 20 25 30 35 40 Overall Spending (In Billions) © 2014 by Sports Career Consulting, LLC 60 80 History of SEM Lesson 1.1 Industry Size & Scope Entertainment industry extends from movies, television and radio, to theatre, home entertainment, amusement/theme parks, gaming and much more Consumers have shown an insatiable appetite for entertainment resulting in an industry boom Copyright © 2014 by Sports Career Consulting, LLC History of SEM Lesson 1.1 Broadly measured, the entertainment and media industry spans multiple sectors There are 9,566 FM radio stations in the United States Over 1.4 billion movie tickets are sold each year in U.S. theaters Copyright © 2014 by Sports Career Consulting, LLC History of SEM Lesson 1.1 Broadly measured, the entertainment and media industry spans multiple sectors Of the 50 billion+ downloads sold in the history of the iTunes store, 15 of the 25 most downloaded apps ever are games Copyright © 2014 by Sports Career Consulting, LLC History of SEM Lesson 1.1 Entertainment Industry Revenue Streams Film/theatrical/DVD TV broadcast and cable Music industry Electronic gaming Amusement/theme park Theatrical productions 0 10 20 30 40 50 60 70 80 Overall Revenue (In Billions) Source: U.S. Census Copyright © 2014 by Sports Career Consulting, LLC 90 Lesson 1.2 Factors Contributing to Industry Growth Copyright © 2014 by Sports Career Consulting, LLC History of SEM LESSON 1.2 Factors Influencing Industry Growth Increase in participation More people following sports and entertainment Increase in sports/entertainment offerings Attendance boom Media coverage Global products Copyright © 2014 by Sports Career Consulting, LLC History of SEM LESSON 1.2 Evidence of Increased Participation Rates U.S. Youth Soccer Association reports • 100,000 registered players in 1974 • Today -- 3.2 million registered players • Over 800,000 coaches and volunteers Copyright © 2014 by Sports Career Consulting, LLC History of SEM LESSON 1.2 Evidence of Increased Participation Rates The number of U.S. golfers has risen to 12.6% of the population vs. 3.5% 50 years ago Copyright © 2014 by Sports Career Consulting, LLC History of SEM LESSON 1.2 Evidence of Increased Participation Rates Lacrosse has seen a 280% increase in participation in the last decade Copyright © 2014 by Sports Career Consulting, LLC History of SEM LESSON 1.2 Evidence of Increased Participation Rates Among sports and recreation activities that grew more than 15% the past 10 years, skateboarding led the way with a 74.1% growth, according to the National Sporting Goods Association (NSGA) Copyright © 2014 by Sports Career Consulting, LLC History of SEM LESSON 1.2 Factors Influencing Industry Growth Increase in participation More people following sports and entertainment Increase in sports/entertainment offerings Attendance boom Media coverage Global products Emergence of Internet and new technologies Copyright © 2014 by Sports Career Consulting, LLC History of SEM LESSON 1.2 Increase in Those Following Sports & Entertainment U.S. television broadcast 800 hours of sports in 1971 NBC streamed the entire 2014 Winter Olympics in Sochi, Russia, marking the first time that fans had a chance to watch every Winter Olympic event live (compared with a total of 14 total hours of coverage from the 1964 Tokyo games) Copyright © 2014 by Sports Career Consulting, LLC History of SEM LESSON 1.2 Factors Influencing Industry Growth Increase in participation More people following sports and entertainment Increase in sports/entertainment offerings Attendance boom Media coverage Global products Emergence of Internet and new technologies Copyright © 2014 by Sports Career Consulting, LLC History of SEM LESSON 1.2 Increase in Sports/Entertainment Offerings More options for sports as participants: Disc golf • 560 courses nationwide by 1995 • doubled that number by 2000 • Today-- more than 4,000 courses globally • played in more than 40 countries Copyright © 2014 by Sports Career Consulting, LLC History of SEM LESSON 1.2 Increase in Sports/Entertainment Offerings More options for sports as participants: In 2013, Hawaii became the first state to sanction surfing as an officially recognized high school sport Copyright © 2014 by Sports Career Consulting, LLC History of SEM LESSON 1.2 Increase in Sports/Entertainment Offerings More options for sports as participants: Also in 2013, the state of Missouri bass fishing became an officially sanctioned high school sport (joining the states of Illinois, Kentucky and Tennessee as states sanctioning fishing as a recognized sport) Copyright © 2014 by Sports Career Consulting, LLC History of SEM LESSON 1.2 Increase in Sports/Entertainment Offerings More options for sports as participants: One school in Florida is attempting to legitimize Go Kart racing as an official varsity sport Copyright © 2014 by Sports Career Consulting, LLC History of SEM LESSON 1.2 Increase in Sports/Entertainment Offerings More options for sports as participants: A new sport called Spikeball burst on the scene two years ago • Today- over 125,000 participants, and is the fastest growing sport in the U.S. Copyright © 2014 by Sports Career Consulting, LLC History of SEM LESSON 1.2 Increase in Sports/Entertainment Offerings ESPN’s coverage features more than 65 sports including MLB, NBA, NFL’s Monday Night Football, NASCAR, MLS, FIFA World Cup, WNBA, college football, men's and women's college basketball, golf, Little League World Series, fishing, spelling, billiards, poker, arena football, eating championships, and the X Games Copyright © 2014 by Sports Career Consulting, LLC History of SEM LESSON 1.2 Factors Influencing Industry Growth Increase in participation More people following sports and entertainment Increase in sports/entertainment offerings Attendance boom Media coverage Global products Emergence of Internet and new technologies Copyright © 2014 by Sports Career Consulting, LLC History of SEM LESSON 1.2 Attendance Increases NHL Attendance: 2012-13 NHL season attendance (lockout shortened season) 21,470,155 1978-79 NHL season total attendance 7,758,05 Copyright © 2014 by Sports Career Consulting, LLC History of SEM LESSON 1.2 Attendance Increases Over 75% of movies in the top 50 all-time highestgrossing films (before inflation) were released after the year 2000. The highest grossing film in the 70s was Star Wars, at just under $800 million and in the 80s was E.T., at just $750 million. Copyright © 2014 by Sports Career Consulting, LLC History of SEM LESSON 1.2 Attendance Increases Later in 2013, Disney’s holiday blockbuster Frozen would become the highest grossing animated film of all-time and pass Iron Man 3 as the 5th highest grossing film ever Copyright © 2014 by Sports Career Consulting, LLC History of SEM LESSON 1.2 Factors Influencing Industry Growth Increase in participation More people following sports and entertainment Increase in sports/entertainment offerings Attendance boom Media coverage Global products Emergence of Internet and new technologies Copyright © 2014 by Sports Career Consulting, LLC History of SEM LESSON 1.2 Media Coverage Introduction of Internet makes information available “on demand” with increased frequency and accessibility Copyright © 2014 by Sports Career Consulting, LLC History of SEM LESSON 1.2 Factors Influencing Industry Growth Increase in participation More people following sports and entertainment Increase in sports/entertainment offerings Attendance boom Media coverage Global products Emergence of Internet and new technologies Copyright © 2014 by Sports Career Consulting, LLC History of SEM LESSON 1.2 Global Marketplace International marketplace = more $$$ Copyright © 2014 by Sports Career Consulting, LLC History of SEM LESSON 1.2 Global Marketplace • Global events like Wimbledon, the Tour de France, FIFA World Cup, Olympic Games, the Iditarod and Cannes Film Festival attract world-wide attention • awesome marketing opportunity • major economic impact for host cities Copyright © 2014 by Sports Career Consulting, LLC History of SEM LESSON 1.2 Global Marketplace Global demand for footwear and sports apparel continues to grow International brands like China’s Li Ning and Germany’s Adidas and Puma fiercely competing with American brands like Nike and Under Armour for market share Copyright © 2014 by Sports Career Consulting, LLC History of SEM LESSON 1.2 Global Marketplace NBA All-Stars left American brands to pursue deals with Chinese sportswear brands: • Dwyane Wade who left Jordan Brand for Li-Ning • Steve Nash who left Nike to sign with Luyou • Kevin Garnett left Adidas to sign with Anta • Kevin Love wears a new Chinese shoe brand, 361 Degrees. Copyright © 2014 by Sports Career Consulting, LLC History of SEM LESSON 1.2 Copyright © 2014 by Sports Career Consulting, LLC History of SEM LESSON 1.2 Global Marketplace Prominent american sport are making a push to expand their presence overseas by hosting regular season games (not exhibition games) outside of the United States Copyright © 2014 by Sports Career Consulting, LLC History of SEM LESSON 1.2 Global Marketplace Major League Baseball continued its recent history of internationally hosting season openers when the Arizona Diamondbacks and Los Angeles Dodgers played in Sydney, Australia to kick off the 2014 MLB regular season Copyright © 2014 by Sports Career Consulting, LLC History of SEM LESSON 1.2 Signs of Continued Industry Growth The worldwide video game industry is poised to reach $70.1 billion by 2015, thanks to the combined growth of console, portable, PC, and online video games, according to market researcher DFC Intelligence Copyright © 2014 by Sports Career Consulting, LLC History of SEM LESSON 1.2 Signs of Continued Industry Growth Global total digital recorded music revenue will exceed physical recorded music revenue for the first time in 2014, according to analysts at PWC Pandora radio now boasts over 250 million users Copyright © 2014 by Sports Career Consulting, LLC History of SEM LESSON 1.2 Signs of Continued Industry Growth The global theme parks market is projected to reach $29.5 billion by 2015, according to a report by Global Industry Analysts, Inc. Also according to Global Industry Analysts, Inc., the global footwear market is expected to reach $195 billion by 2015 For the first time in history, ebook sales generated more revenue than hardcover books in 2012 while overall ebook sales have increased 4,456% since 2008 Copyright © 2014 by Sports Career Consulting, LLC History of SEM LESSON 1.2 Signs of Continued Industry Growth Centerplate, the leading hospitality partner to North America's premier sports, convention and entertainment venues, is now also the fastest growing restaurant chain in America, according to Nation's Restaurant News. Centerplate serves over 115 million guests per year. Copyright © 2014 by Sports Career Consulting, LLC History of SEM LESSON 1.2 Signs of Continued Industry Growth In 2013, Forbes suggested that ESPN had grown to a valuation of $40 billion Copyright © 2014 by Sports Career Consulting, LLC History of SEM LESSON 1.2 Signs of Continued Industry Growth Television audiences continue to grow in size while sports and entertainment properties expand the various means for distributing content (social media, streaming etc) The 2014 NBA Finals on ABC between the Miami Heat and San Antonio Spurs was broadcast in 215 countries and 47 languages Copyright © 2014 by Sports Career Consulting, LLC History of SEM LESSON 1.2 Signs of Continued Industry Growth The value of major league sport franchises continues to grow at a furious pace. New York Yankees: 1973- $9 million 2014- $2.5 billion Dallas Cowboys franchise was the most valuable in the NFL at $2.3 billion. The average MLS franchise is now worth over $100 million, an increase of more than 175% over the last five years Copyright © 2014 by Sports Career Consulting, LLC History of SEM LESSON 1.2 Signs of Continued Industry Growth Fandom is a term used to refer to a subculture composed of fans characterized by a feeling of sympathy and camaraderie with others who share a common interest Copyright © 2014 by Sports Career Consulting, LLC History of SEM LESSON 1.2 Signs of Continued Industry Growth The term fandom can be used to describe all types of fan groupings or “subcultures” Copyright © 2014 by Sports Career Consulting, LLC History of SEM LESSON 1.2 Signs of Continued Industry Growth --ESPN’s annual “SportsNation Survey” found that a whopping 90% of male respondents claimed to be sports fans on some level --Over 50% of respondents claimed to more of a sports fan than they were five years ago --58% of respondents would prefer to receive free season tickets to their favorite sports team than be promoted at work. --40% of those participating in the 2012 SportsNation Survey said they had traveled 250 miles or more to attend a sporting event Copyright © 2014 by Sports Career Consulting, LLC History of SEM LESSON 1.2 Signs of Continued Industry Growth Fans have, in a limited number of occasions, successfully organized on behalf of a cancelled television series to lobby networks to bring back their favorite show (examples include Chuck in 2010 and Community in 2012 while prompting Netflix to resurrect cult hit series Arrested Development) Copyright © 2014 by Sports Career Consulting, LLC History of SEM LESSON 1.2 Signs of Continued Industry Growth The intensity levels of fandom vary, ranging from a casual sports fan who might take in one NBA game per year to those fans that put the “fan” in “fanatic” (and otherwise engage in behavior that other fans might otherwise find to be irrational) Copyright © 2014 by Sports Career Consulting, LLC History of SEM LESSON 1.2 Signs of Continued Industry Growth Fans who go to extremes to show their loyalty to their favorite team, band, actor or other celebrity are often referred to as “superfans” Copyright © 2014 by Sports Career Consulting, LLC History of SEM LESSON 1.2 Signs of Continued Industry Growth In 2013, an Alabama football superfan passed away at the age of 91 but had attended 781 straight games Also in 2013, a lifelong Cleveland Browns superfan passed away (his family even encouraged everyone attending his funeral wear clothes supporting the team) but requested that the pallbearers be Cleveland Browns players, stating: "He respectfully requests six Cleveland Browns pall bearers so the Browns can let him down one last time." Copyright © 2014 by Sports Career Consulting, LLC History of SEM LESSON 1.2 Signs of Continued Industry Growth On opening night, Activision says that approximately 1.5 million gamers lined up outside 13,000 stores to buy a copy of Modern Warfare 3 at midnight USA Today published a story suggesting the number of people calling in to work sick the day after Call of Duty is released results in a significant increase University of Kentucky fans paid between $7,500 to $12,500 for the opportunity to attend a basketball camp (called John Calipari Basketball Fantasy Experience) and “essentially experience what it’s like to be a Kentucky basketball player” Copyright © 2014 by Sports Career Consulting, LLC History of SEM LESSON 1.2 Signs of Continued Industry Growth While many media pundits publicly chastised LeBron James’ decision to announce which team he would be joining in a one hour ESPN special, the show (aptly named “The Decision”) drew very high ratings as nearly 10 million people tuned in to watch Copyright © 2014 by Sports Career Consulting, LLC History of SEM LESSON 1.2 Signs of Continued Industry Growth Despite all the scrutiny surrounding singer Chris Brown (including his widely publicized assault of then-girlfriend Rihanna, a disturbance in a nightclub with rapper Drake, and poor album reviews), his 2013 release of “Fortune” managed to debut at the top of the Billboard 200 chart Copyright © 2014 by Sports Career Consulting, LLC History of SEM LESSON 1.2 Signs of Continued Industry Growth Because of the strong emotional connection fans maintain with their favorite sports teams, wins and losses on the grandest of stages can yield incredible influence (both positive and negative) on a community at large Copyright © 2014 by Sports Career Consulting, LLC Lesson 1.3 Media Impact on Industry Growth Copyright © 2014 by Sports Career Consulting, LLC History of SEM LESSON 1.3 Media Impact on Industry Growth Media refers to a means of communicating a message to large numbers of people Copyright © 2014 by Sports Career Consulting, LLC History of SEM LESSON 1.3 Media Impact on Industry Growth It was not until the 1936 Olympics (broadcast by ABC radio) that Americans were truly exposed to the amazing talents of Jesse Owens, one of America’s greatest athletes of all time Copyright © 2014 by Sports Career Consulting, LLC History of SEM LESSON 1.3 Media Impact on Industry Growth Now, fans can follow athlete performances live through television, radio, Internet as well getting information through national papers, local papers, magazines, and industry specific journals Copyright © 2014 by Sports Career Consulting, LLC History of SEM LESSON 1.3 Media Impact on Industry Growth Media rights (or broadcast rights) are fees paid by broadcast companies to sports or entertainment properties for the opportunity to provide live coverage of the property’s games and events on television, the radio or the Internet Copyright © 2014 by Sports Career Consulting, LLC History of SEM LESSON 1.3 Media Rights Many media rights deals provide exclusive coverage rights Because of the NFL’s deal with DirecTV, no other television network can broadcast out of market games in their respective geographic markets. In other words, if you are a Green Bay Packers fan living in Virginia, you would need to order DirecTV for the opportunity to watch Packers games in your home each week. Copyright © 2014 by Sports Career Consulting, LLC History of SEM LESSON 1.3 Media Rights According to ESPN.com, Time Warner Cable (which operates SportsNet LA, the team-owned all-Dodgers station that launched in February of 2014), has not come to agreements with many of the area broadcast companies, making televised games available to less than 40% of Los Angeles residents. Copyright © 2014 by Sports Career Consulting, LLC History of SEM LESSON 1.3 Media Rights Media rights contracts are not reserved for national broadcasting companies as sports franchises work to maximize revenues by selling regional broadcasting rights Time Warner Cable paid a reported $3 billion for exclusive rights to broadcasts Los Angeles Lakers games in the L.A. market for the next twenty years, starting with the 2012-13 season Copyright © 2014 by Sports Career Consulting, LLC History of SEM LESSON 1.3 Media Rights Rights fees are growing at a rapid rate Media rights fees for the Rose Bowl (per year) were $2 million in 1974. By 2015, they are expected command $80 million per year. Copyright © 2014 by Sports Career Consulting, LLC History of SEM LESSON 1.3 Media Rights Why are media rights important to sports and entertainment properties? In a word… REVENUE! Copyright © 2014 by Sports Career Consulting, LLC History of SEM LESSON 1.3 Media Rights NASCAR generates a reported $820 million annually in media rights for television broadcasts from Fox, a 46% increase from the previous deal. Copyright © 2014 by Sports Career Consulting, LLC History of SEM LESSON 1.3 Media Rights According to the Chicago Tribune, a dispute over the value of the Chicago Cubs’ broadcast contracts complicated efforts to sell the iconic franchise. Because media rights are such an important piece to any major league sports organization’s bottom line, negotiations to sell the franchise momentarily fell apart until the issue could be resolved. Copyright © 2014 by Sports Career Consulting, LLC History of SEM LESSON 1.3 Media Rights According to Nielsen (a company who measures ratings): "Ratings are used like currency in the marketplace of advertiser-supported TV. When advertisers want a commercial to reach an audience, they need to place it in TV programs which deliver an audience. The more audience a program delivers, the more the commercial time is worth to advertisers." Copyright © 2014 by Sports Career Consulting, LLC History of SEM LESSON 1.3 Media Rights Why are media rights important to broadcast companies? Companies want to invest in advertising that will reach as many consumers as possible and sports and entertainment events provide an effective platform for advertisers to do that Copyright © 2014 by Sports Career Consulting, LLC History of SEM LESSON 1.3 Media Rights In 2014, the Super Bowl set a record for American television viewing when the Nielsen Co. estimated 111.5 million people watched the Seattle Seahawks’ 43-8 blowout of the Denver Broncos (the 2013 Super Bowl between the Baltimore Ravens and San Francisco 49ers clocks in as the third most watched program in US history) Copyright © 2014 by Sports Career Consulting, LLC History of SEM LESSON 1.3 Media Rights According to figures released by FIFA in 2011, the 2010 FIFA Men’s World Cup Final in South Africa was broadcast in every single country and territory on Earth, including Antarctica and the Arctic Circle, generating record-breaking viewing figures in many TV markets around the world. The in-home television coverage of the competition reached over 3.2 billion people around the world, or an astonishing 46.4 percent of the global population. Copyright © 2014 by Sports Career Consulting, LLC History of SEM LESSON 1.3 Media Rights According to the research firm Kantar Media, advertisers have spent $4.55B during CBS' coverage of the men's NCAA basketball tournament over the past decade Copyright © 2014 by Sports Career Consulting, LLC History of SEM LESSON 1.3 Media rights examples Network/Cable TV In 2007 the NBA extended its deals with TNT, ESPN and ABC through the 2015-16 season, generating over $930 million per year in revenue for television broadcast rights Copyright © 2014 by Sports Career Consulting, LLC History of SEM LESSON 1.3 Media rights examples Network/Cable TV In 2011, NBC won a bidding war to retain its rights to broadcast the Olympic Games through 2020 for $4.38 billion Also in 2011, ESPN signed a deal reportedly worth nearly $500 million over the next 12 years for the exclusive broadcast rights of Wimbledon Copyright © 2014 by Sports Career Consulting, LLC History of SEM LESSON 1.3 Media rights examples Satellite TV DirecTV’s exclusive agreement for broadcast rights for out of market NFL games was extended in 2010 for four years at a reported $1 billion per year (a 43% increase on an annual basis over the previous deal) Copyright © 2014 by Sports Career Consulting, LLC History of SEM LESSON 1.3 Media rights examples Satellite Radio XM radio’s deal for MLB broadcast rights was signed in 2005 for $650 million Copyright © 2014 by Sports Career Consulting, LLC History of SEM LESSON 1.3 Media rights examples Network Radio In 2009, the NFL extended its deal with Westwood One as its exclusive network radio partner in a deal worth over $30 million Copyright © 2014 by Sports Career Consulting, LLC History of SEM LESSON 1.3 Media rights examples Multimedia rights Within the 17 months of acquiring Host Communications and folding it into its college division, IMG invested more than $700 million in multimedia rights fees Copyright © 2014 by Sports Career Consulting, LLC History of SEM LESSON 1.3 Media Impact on Industry Growth Radio, cable and broadcast television programming measure their effectiveness through ratings, which are expressed as a percentage of the potential TV audience viewing at any given time Copyright © 2014 by Sports Career Consulting, LLC History of SEM LESSON 1.3 Media Rights Basically, a rating refers to the number of households or people tuned into a particular radio or television program at a specific time ESPN’s telecast of the United States’ 2-2 tie against Portugal in the 2014 FIFA World Cup on Sunday, June 22, was the most-viewed soccer match in the United States ever, across all networks, averaging 18,220,000 viewers based on a 9.6 HH US rating. It surpassed the previous high of 17,975,000 viewers for the 1999 Women’s World Cup final (USA vs. China) on ABC (according to espnmediazone.com). Copyright © 2014 by Sports Career Consulting, LLC History of SEM LESSON 1.3 Media Rights Nielsen can identify peak hours in which the most people are tuned in to watch or listen Nielsen can identify peak hours in which the most people are tuned in to watch or listen; viewing of the US vs. Portugal World Cup match peaked from 7:30 to 8 p.m. ET with an average of 22,961,000 viewers and an 11.9 HH US rating. Copyright © 2014 by Sports Career Consulting, LLC History of SEM LESSON 1.3 Media Rights Nielsen can also identify specific markets in which ratings were the highest Nielsen can also identify specific markets in which ratings were the highest; Washington, D.C., led all markets for ESPN’s USA vs. Portugal telecast with a 13.3 rating, followed by Columbus (12.6), New York (12.5), Boston (11.5), Hartford/New Haven (11.3), Providence (11.2), Atlanta (11.1), Baltimore (11.0), Norfolk (10.5), Orlando (10.5) and Sacramento (10.5). Copyright © 2014 by Sports Career Consulting, LLC History of SEM LESSON 1.3 Media Rights Why are ratings important? Without ratings, broadcast companies would have a difficult time selling advertising and sports/entertainment programs would not be able to command million dollar rights fees Ratings will fluctuate from year to year, but a ratings increase or decrease will have an impact on the sports property and broadcast company Copyright © 2014 by Sports Career Consulting, LLC History of SEM LESSON 1.3 Media Rights NBC renewed hockey deal in 2011 (worth nearly triple the previous rights deal) largely because overall NHL television ratings in the United States increased by 84 percent over the last four years (the 2011 Winter Classic was the most-watched regular season hockey game in the U.S. in 36 years) Copyright © 2014 by Sports Career Consulting, LLC History of SEM LESSON 1.3 Media Rights According to Nielsen, the 2014 FIFA Men’s World Cup match between the United States and Portugal was the most-watched and highest-rated soccer telecast on an ESPN network and was seen by an estimated 23 million viewers, providing more incentive for ESPN to spend more on World Cup rights when it is time to negotiate a new deal Copyright © 2014 by Sports Career Consulting, LLC History of SEM LESSON 1.3 Media Rights After the previous year’s July 4th telecast of the Nathan’s Famous Fourth of July International Hot Dog Eating Contest set a viewership record with nearly 2 million live viewers, ESPN announced in the summer of 2012 that they extended the broadcast rights deal through 2017 Copyright © 2014 by Sports Career Consulting, LLC History of SEM LESSON 1.3 Media Impact on Industry Growth In the early days of team sports, revenue came from: Ticket Sales Concessions Copyright © 2014 by Sports Career Consulting, LLC History of SEM LESSON 1.3 Media Impact on Industry Growth Today, media provides alternate revenue sources National Television Contracts Local Television Contracts Cable Television Contracts Sale of Radio Rights Streaming Internet Audio Online Revenue Team Specific Publications Copyright © 2014 by Sports Career Consulting, LLC Lesson 1.4 Industry Pioneers Copyright © 2014 by Sports Career Consulting, LLC Lesson 1.5 Important Milestones in SEM History Copyright © 2014 by Sports Career Consulting, LLC Lesson 1.6 Where Are We Now? Copyright © 2014 by Sports Career Consulting, LLC History of SEM LESSON 1.6 Where Are We Now? 200 million Americans, or 7 of every 8 adults, consider themselves sports fans American fans spend an average of 8 hours per week consuming sports content According to Sports Business Daily, in the month of January alone (in 2014), the Yahoo Sports website had 55 million visitors, while 38.6 million visited the Fox Sports website and 38.2 million visitors to espn.com. Copyright © 2014 by Sports Career Consulting, LLC History of SEM LESSON 1.6 Where Are We Now? The fantasy sports industry has an estimated total market impact of $4.48 billion dollars annually Fantasy sports have grown to include everything from Premier League soccer to fantasy bass fishing leagues Copyright © 2014 by Sports Career Consulting, LLC History of SEM LESSON 1.6 Where Are We Now? An estimated 3 million American workers spent one to three hours a day during work watching the 2013 NCAA men’s basketball championship tournament, according to a study from outplacement firm Challenger, Gray & Christmas. American companies lost an estimated $134 million in “lost wages” in the first two days of the tournament alone. At $122 billion, the amount of spending the NCAA's annual basketball tournament generates is equal to Iceland's GDP. A study conducted by the European Central Bank suggests that the soccer World Cup (played every four years) significantly slows down activity in the world’s stock exchanges Copyright © 2014 by Sports Career Consulting, LLC History of SEM LESSON 1.6 Where Are We Now? MOVIES The top 10 biggest combined grossing movies in a single weekend at the box office ever were movies released within the last five years. Actors and actresses are being paid more now than ever, particularly those with proven “star power” who can draw a crowd (Robert Downey Jr. earned a reported $75 million between June 2012 and June 2013) Copyright © 2014 by Sports Career Consulting, LLC History of SEM LESSON 1.6 Where Are We Now? MUSIC Over 25 billion songs have been downloaded from Apple’s iTunes store By contrast, 2006 was the first year to see over 1 billion digital download tracks sold Streaming music is the fastest-growing segment of the recordedmusic industry according to the Recording Industry Association of America with companies like Spotify reaching 40 million active users each month while Beats Music already had 525,000 paying subscribers within five months of the service launch date Copyright © 2014 by Sports Career Consulting, LLC History of SEM LESSON 1.6 Where Are We Now? BOOKS The wild popularity of Author Veronica Roth’s Divergent series of books shows the crossover appeal books have with other forms of entertainment, spawning a box office smash and successful soundtrack sales Amazon reported that the final book in the trilogy, Allegiant, surpassed sales of The Hunger Games book three, Mockingjay at a pace of nearly five to one First-day sales for Allegiant surpassed 455,000 — a company record for publisher HarperCollins Copyright © 2014 by Sports Career Consulting, LLC History of SEM LESSON 1.6 Where Are We Now? BOOKS Divergent opened with a $54 million weekend at the box office and took just 14 days to surpass $100 million in sales The film soundtrack debuted in the top 30 on the Billboard charts in its first week despite being release well before the film hit the theaters As of August of 2014 (at the time this text was published), Divergent has crossed the $250 million plateau globally Copyright © 2014 by Sports Career Consulting, LLC History of SEM LESSON 1.6 Where Are We Now? BOOKS In 2011, author John Locke became the first self published writer to sell over one million copies of books in Amazon’s kindle digital bookstore Copyright © 2014 by Sports Career Consulting, LLC History of SEM LESSON 1.6 Where Are We Now? VIDEO GAMES According to guinessworldrecords.com, last year’s launch of the video game Grand Theft Auto V broke six world records, including the highest revenue generated by an entertainment product in 24 hours and the fastest entertainment property to gross $1 billion. Copyright © 2014 by Sports Career Consulting, LLC History of SEM LESSON 1.6 Where Are We Now? VIDEO GAMES Following the success of Nintendo’s wildly popular “motion sensor” technology introduced with its Wii platform, Microsoft launched a controller-free gaming system to rave reviews. The Kinect system sold 1 million units in its first ten days in the marketplace. Copyright © 2014 by Sports Career Consulting, LLC History of SEM LESSON 1.6 Where Are We Now? VIDEO GAMES EA Sports announced that its popular college football video game NCAA Football 12 sold 700,000 copies during its first two weeks on store shelves, a franchise record (sales were up 17% compared with last year's NCAA Football 11) Copyright © 2014 by Sports Career Consulting, LLC History of SEM LESSON 1.6 Where Are We Now? VIDEO GAMES In 2012, it took just 2.5 hours for Angry Birds Star Wars to hit No. 1 in the iTunes App Store. Copyright © 2014 by Sports Career Consulting, LLC History of SEM LESSON 1.6 Where Are We Now? THEATRE By the summer of 2012, Broadway smash Wicked had already grossed over $2 million in ticket sales while The Book of Mormon, which has been on Broadway for over three years, is still performing to crowds of 103% capacity Copyright © 2014 by Sports Career Consulting, LLC History of SEM LESSON 1.6 Where Are We Now? THEATRE Broadway raked in nearly $1.3 billion during its 2013-2014, 53-week season, making it the highest grossing season in Broadway's history Copyright © 2014 by Sports Career Consulting, LLC