Biggest Sports Stories

Two of the biggest stories of the past decade in sports were baseballs performance enhancing drug scandal and Adidas’ buying of Reebok for $3.8 billion. The drug scandal has dominated headlines while the big Reebok deal may have slipped past some consumers. However, both have had a profound impact on sports and the businesses behind them.

According to a 2005 ESPN Article, 52% of fans still believe that Barry Bonds should still deserved to be in the Hall of Fame. The Scandal continues to grab headlines as Barry Bonds’ perjury trial is currently taking place. As mentioned in the above CNBC video, while the game’s biggest names were involved in the scandal and the MLB received a black eye but business continued to thrive.

Unlike the MLB’s scandal, the Reebok/Adidas deal has turned out to be very bad for business. The deal was originally intended to increase the market share of Adidas and better challenge the industry’s biggest competitor. Initially, US shares of the company stock rose 30 percent upon the announcement of the deal. However, since then the deal has been a disaster. According to the CNBC article, both of the brands were made weaker. Before the deal Adidas and Reebok had 10 and 8 percent market share respectively. Since the deal their Adidas market share has dwindled to 6 percent and Reebok’s share is down to about 2 percent.

The situation for Reebok continues to worsen as reports surface that Reebok may lose its contract with the NFL (National Football League). The NFL is rumored to be negotiating a deal with Nike for the 2012 season that may leave Reebok out in the cold. A 2010 Bloomberg article quoted Citigroup analyst Kate McShane who stated in investor notes that, “Reebok’s NFL contract represents about $350 million of its $565 million in U.S. apparel revenues.” Needless to say, this would further devastate the business and slash revenues.

Sports are big business and they are only getting bigger. The behind the scenes business deals of sports will surely continue to affect the sports industry for better or worse.

The BET panel at SXSW

I had the pleasure of visiting Austin, TX for the 25^th anniversary celebration of the SXSW conference.  While at the conference, I was able to attend several very informative panels.   

On Thursday March 17, I attended the BET sponsored “Baby Im A Star!” The panel featured several industry leaders including Stephen Hill (President of Music programming at BET), Troy Carter (Lady Gaga’s manager), L. Londell McMillan (Prominent entertainment lawyer and publisher of The Source Magazine) and artists Melanie Fiona and J. Cole.  The panel, moderated by Kelly Griffin (BET Networks), was an interactive discussion of how to get major exposure in a multi-platform music environment. 

After the panel I was able to talk to a couple of the panelists about negotiating in the current music industry climate.  Here’s what they had to say:

On the topic of affiliation, McMillan says Relationships matter.  In order to negotiate a position as a star, you must understand the value of relationships.  The prevalence of search engine tools on the Internet means that the cream doesn’t always rise to the top.  Forming key relationships will ensure that the product is reaching the target audience.

 

When asked about her role in the industry Melanie Fiona explained that she has had to deal with stereotypes and issues concerning her image in the industry.  She was often prompted to use her sexuality to enhance her career but she remained true to herself.  She cited Sade as an example of being sexy without being sexually overt.  This is also closely related to the issue of autonomy.  She had to negotiate a position where her thoughts and ideas were respected.  This is why she was able to make her own decisions with regard to her image and her career.

 Troy Carter had some interesting things to say about leverage.  He explained that he doesn’t listen to anything and by the time someone surfaces on his radar, they have gained the approval of many fans and industry executives.  Artists are far better off perfecting their crafts and developing their talents to the point where they are ready to be presented to the public.  “Fortunately Gaga came to me with the fishnet stockings and hit singles in hand.” Troy said.  Being a complete artist gives leverage in negotiations between artist and company.

J. Cole also advised that artists not wait for big companies to notice them and make them stars.  Instead he suggests that they should build up their presence until the companies are forced to come talk to you.  It is possible to create interest and a healthy buzz without the backing of a major company.

The Future of Media: Handheld tablet devices and online music services.

This article highlights two significant technology trends that will have a profound impact on the industry. Google’s plans to release new Android tablet that's launching with the Motorola Xoom and a music service are telling of what the future has to hold.

Google music coming with honeycomb

This article shows Apple’s intentions on the manufacture of its signature tablet the iPad. According to the article, they plan to ship over 40 million iPads this year.

Apple buys 60% of the world's touch panel supply

This article denies the notion of Sony withdrawing from Apple’s iTunes distribution channel and possibly becoming a competitor. However, the notion and the rumors are very intriguing. 

 Sony Exec: We Are Not Abandoning iTunes

Steve Stoute: Marketing and Brand Management

INFLUENCERS in-depth Series / STEVE STOUTE from R+I creative on Vimeo.

In this video Steve Stoute provides us with some important insights on what makes people and things cool as well as some of the strategies that he has used in his business Translation marketing (a company that arranges strategic partnerships between Pop Culture icons - Jay-Z, Gwen Stefani, Lebron James, Justin Timberlake, etc. - and Fortune 500 companies.) He also touches on some successful and unsuccessful marketing strategies and the reasons why they either work or do not work. He goes on to explain the effect that the demise of the record industry has had on the marketing and advertising industries. "We must ultimately identify what success looks like and effectively manage the route to success."

The RIAA and Anti-piracy

The RIAA is an organization committed to helping the music business thrive. The association is working closely with law enforcement to pull pirate products off the street and to demonstrate that the consequences for this illegal activity are real.

TH RIAA is continuing our efforts to educate fans about the value of music and the right ways to acquire it and, when necessary, to enforce our rights through the legal system.

Record companies have licensed hundreds of digital partners that offer a range of legal models to fans: download and subscription services, cable and satellite radio services, Internet radio webcasting, legitimate peer-to-peer services, video-on-demand, podcasts, CD kiosks and digital jukeboxes, mobile products such as ringbacks, ringtunes, wallpapers, audio and video downloads and more.

The Learning Curve: Education and the future of Online Video

After reviewing many of the talks on TED.com I found two videos that opened my eyes and changed my perception quite a bit. These articles were chosen because they both show the role that art and entertainment play in education. They are a great compliment to each other. One lays out the flaws in the current education system and the other gives an optimistic outlook on the future of Internet video and its impact on the evolution of education.



The first is Ken Robinson’s Changing Education Paradigms. In this video Ken uses beautiful dry-erase illustrations to tell a story of how we, as a nation, have become hamstrung by an antiquated public school system.
He built trust with the audience by providing factual information and making some very strong assertions about rising drop-out rates, schools’ dwindling stake in the arts and a fictitious ADHD epidemic.
He makes an interesting point that the current public school system was designed for very different societal needs and how we should be educating children to take their place in the economies of the 21st century. Instead we categorize and separate the “academic” from the “non-academic.” Being judged in this way leads to many brilliant people believing that they are not. Sadly, it’s the kids with creativity and artistic ability that are the victims. Ken call for a move away from standardization and towards divergent thinking.



The next video offers what is the most likely solution to the problems created by an inadequate school system. In Who let this guy on the stage, TED founder Chris Anderson talks about the future of Internet video and the change in the evolution of skills. Anderson introduces the concept of crowd-accelerated participation. The concept is not entirely new. However, Internet video has amplified this effect as there are now more groups and online communities that allow for content to be shared more freely. According to Anderson, viewers collectively watch over 80 million hours of YouTube everyday and estimates that in the next 4 years 90 percent of the web’s data will be video. The proliferation of Internet video has changed not only changed entertainment, it has also changed the way that scientists and other professionals exchange information.

Anderson goes on to describe the new ways in which we learn and respond. Thus, completing the learning cycle in a way that was never previously possible.
Anderson argues that students no longer need to have their potential ruined by lousy teachers; they can now sit in front of the World’s best. And from a talent perspective, we have an opportunity to choose the world’s best from a larger pool. This amazing video shows the power of Internet video from a different perspective. We as a people are on the verge of the biggest learning cycle in the history of the world.

Lupe Fiasco On The Future Of Hip-Hop

In this very interesting interview with Professor Michael Eric Dyson and recording artist Lupe Fiasco some very interesting issues were raised and addressed.

Early in the interview Lupe states his firm opinion opposing 360 deals. The 360 deal format emerged as a result of the decline in record sales. In an attempt increase the profit margin for the major record labels this new deal structure was created and it has polarized the industry. Artists have been largely opposed to this particular deal structure because it allows the record company to tap into revenue generated from performances and merchandise which has traditionally been the main source income for artists. In principal this means less of a percentage for the artist but my question is whether or not this automatically means less money. If the company can help to generate more total revenue by helping with live show productions and the merchandise sales then the deal could potentially be lucrative for the artist. Right?

The deal will only be beneficial for the artist if the record company is ready, willing and able to support the efforts of the artist and expand the artist brand. A lot of artist who experienced success in the era of heavy CD sales have already established and built brands under the old industry format. Also, many artists have experienced independent success and have very profitable businesses. Therefore, many of these artists and companies feel that a 360 deal would take away artist revenue without necessarily contributing to the building of the brand. On the other hand, a new artist without an established brand or fan base may have an extra incentive to do such a deal.

The deal structure in general may be more beneficial to newer less established artists and with the old format being phased out a lot of the artist who were successful in it will ultimately be left out in the cold.

As artists and Major record labels compete and scramble to find the next lucrative business model, many of yesterday’s popular artist will find that without serious adaptation they will not be able to survive. The industry is changing in a way that is forcing artists to be creative not only with their music but with their business strategies also.