The following audio interview (MP3) is with Mike Dee, the president of Fenway Sports Group. (play the interview below)
Dee was also named as Red Sox Chief Operating Officer March 7, 2004, less than 2 years after he joined the club as Executive Vice President/Business Affairs on July 15, 2002. The nine-year baseball veteran manages the club's business operations.
Below are excerpts from the interview, courtesy of Sports Business Radio
On the arrival of Daisuke Matsuzaka and the plan to promote the Red Sox brand in Japan:
"I don't think we've seen anything that rivals this in terms of fan interest and just attention. You know what we're hoping to do obviously is convert that (fan interest and attention) eventually in to business. And I say 'eventually' because you know, this was not an investment that we made with an eye on a quick hit. The longer term goal is to lay the ground work and foundation in Japan for Japanese corporations to invest in Fenway Park and invest in the Red Sox and obviously that is driven by expanding our fan base in Japan and throughout Asia."
On the impact of Daisuke Matsuzaka on Tokyo to Boston travel:
"When we announced we signed Daisuke, there weren't direct flights, believe it or not, from Tokyo to Boston. Now I know two or three airlines are in the process of adding direct flights during the baseball season. That's a clear and measurable impact of what we'll see."
On the intense media interest in Daisuke Matsuzaka:
"We think this is only the tip of the iceberg. As we get in to the season, we're expanding the press box at Fenway Park to accommodate all of the new interest. Hopefully we'll find ourselves in a playoff/postseason situation where I think we're going to have to lease space across the street to handle all of the international media that would have an interest. We're in a standing room only situation and I think we've roughly doubled the size of the press box by annexing some space that was previously back of the house space and I think we're up to 226 positions in the media area."
On the new Fenway Roush Racing venture:
"We love racing. We love the fundamentals of NASCAR. The business, the extraordinary growth that's taken place over the last decade is unparalleled. Viewership levels are second only to the NFL. We just think its a great compliment to our core business and we're excited to be in the sport.
UPDATE: According to several sources, the naming rights deal has an AAV of approx. $5 million. That would place total value at approx. $50 million
Today, the Texas Rangers announced that they had reached a 10-year naming rights agreement with Globe Life And Accident Insurance Company to rename “Rangers Ballpark in Arlington” to “Globe Life Park in Arlington”. The change is effective immediately.
Under the agreement, Globe Life will be the Official Life Insurance Partner of the Texas Rangers, add community initiatives and serve as the sponsor of Elvis Andrus Kids Jersey Day on Friday, June 27 when the Rangers host Minnesota.
With the naming rights deal comes a new logo, which will be displayed throughout the park, including on the tops of both dugouts. Globe Life will also receive other permanent and digital signage throughout Globe Life Park in Arlington as well as a presence on texasrangers.com and the Texas Rangers Radio Network.
The larger question centers on what the deal is worth as financial terms were not released. This would be the second naming rights agreement that the ballpark has been under. The now defunct Ameriquest had a 30-year rights deal, but just three years after the agreement was inked in 2004, the Rangers ended the deal and renamed it Rangers Ballpark in Arlington, which it has remained till today.
The naming rights market was hit heavily due to the deep recession that started in December of 2007. In November of 2006, Citigroup entered into what is still the largest MLB naming rights deal in history with the Mets for 20 years, $400 million with an average annual value (AAV) of $20 million for what is now “Citi Field”. It was a staggering sum, and well above the norm at the time, and with the recession, still is to date. Far down the list, the Houston Astros agreed to a 28 year, $178 million naming rights deal with Coca-Cola Co. to name their ballpark Minute Maid Park. That agreement has an AAV is $6.63 million. Other MLB naming rights deals include the Phillies and Citizens Bank (25 years, $95 million, AVV of $3.8 million), the Reds and Great American Insurance (30 years, $75 million, AAV of $2.5 million), the White Sox and U.S. Cellular (23 years, $68 million, AAV of $2.96 million), the Diamondbacks and JPMorgan Chase (30 years, $66 million, AAV of $2.2 million).
With the naming rights market slowly unthawing, and the 10 year duration, the question is where the Globe Life deal stacks compared to others. Globe Life is a subsidiary of Torchmark Corporation (NYSE: TMK), headquartered in McKinney, TX. Globe Life has 3.9 million policyholders and more than $60 billion dollars of life insurance in force. They’re not small, but certainly not on the scale of Citigroup or Coca-Cola Co. Based on prior naming deals, the value could in the $40 million (AAV of $4 million). That wouldn’t be out of line for MLB naming rights, especially in light of the Portland Trail Blazers recently inking a 10-year deal with Moda Health to rename the Rose Garden the “Moda Center” for $40 million. By now, the naming rights game has thawed, and the Rangers play to a larger market and a brand that has seen recent showings in the World Series.
Even if we’re conservative, the idea of $3-$4 million annually seems a safe bet. How much would that be worth to the club? It would barely dent the $24 million Prince Fielder will get this season, and cover a little under a fourth of Adrian Beltre’s $17 million salary for 2014. Still, it’s new revenues that were not their prior so it’s not like the Rangers are walking away unhappy.
As for fans, many will likely stick with “The Ballpark” and that was bound to be factored in by Global Life. A snazzy acronym doesn’t seem to work well. Going to the “GLP” or “GLPIA” doesn’t exactly roll off the tongue, but then few could have seen OPACY or GABP becoming common place with baseball fans, but it is. As to the deals value, whether it's our estimate or other reporting, details should leak out soon.
When it came time to select an interview subject for our One-Year Anniversary Celebration, it was really no contest. There may be more powerful figures in sports (Bud Selig, I’m still awaiting your call). There may be more controversial subjects (Ditto for you, Barry), but Rob Neyer seemed a perfect fit for a number of reasons.
For one, while I really dislike how some view the word “blog” (look, I don’t live in my mother’s basement and don’t post dribble like, “Who’s the Hottest Wife in MLB?”), the fact is, for now, The Biz of Baseball is an alternative electronic media outlet (read: blog). Neyer has been the one guy who was able to bridge the gap between mainstream and alternative media during his long career (11 years and running) as a senior baseball writer for ESPN.com. Rob is arguably the “crossover guy” – the man able to take the heady world of objective analysis and make it cool to all in the mainstream. Bill James may have been his mentor, but Rob was able to present it in a way that everyone could easily digest.
Neyer is also accessible. This isn’t something being said because the guy was willing to an interview, it’s that in the years I've known him, he’s been one of the nicest and easily approachable people in the media. That, and rarely do most allow you to rifle through their personal research library.
So, on the one-year anniversary of The Biz of Baseball, we present, “5 Questions with… Rob Neyer. - Maury Brown
Earlier this winter I listened to a sports radio segment where 2 Toronto sports pundits attempted to explain the seemingly counter - intuitive news that MLB annual revenues have climbed to upwards of $8 billion.
On the one hand, they noted, steadily diminishing national TV ratings (including ASG and WS), reveal that baseball is clearly less popular. And hasn’t the NFL, long ago, and by a wide margin, supplanted MLB as the dominant pro sports league? And wasn’t it, after all, inevitable? Isn’t baseball anachronistic? From a slower, analogue, monolithic popular culture?
On the other hand, they understood why MLB revenues have skyrocketed. The biggest factor being the enormous increase in TV $$ from both national, and especially, local deals. Plus, attendance is stable, at near-record levels. And yes, almost ironically, slow, staid MLB has better exploited the internet than any of the other so-called Big 4.
They’re right, on both counts. Yes, baseball is dying. And the evidence is not found in the diminished national TV ratings (TV ratings are down for all programming except the NFL) but in who, and who isn’t, watching. Old guys, not young guys, like baseball. Jonathan Mahler was amongst those who reported this fall that the median age of the 2012 WS TV viewer was 53.4. Perhaps more telling is the steady, long-term decline in the number of kids playing baseball.
But it is precisely because MLB fans are old that business is booming. The huge boost in MLB TV $$ comes from us old guys who subscribe to Pay TV. We are footing the bill for the recent spate of MLB mega deals with local RSNs. We aren’t the cord-cutting, digital natives who have never paid for content. They believe that paying $100/month to watch video is stupid. Earlier in the year Joe Flint reported that, “By 2015, almost half of all television viewing will be done by folks over the age of 50…” The migration of local MLB broadcasts from free over-the-air TV to Pay TV was inevitable. Why? Because MLB fans can afford Pay TV. We are baby boomers, the most affluent generation in history. And baseball fans are the most affluent of sports fans. We complain about our cable bills, we’re old, so we’re allowed. But we’ll still pay for the nightly, pleasant, familiar, tribal, ritualistic pleasures of watching our team on our big TVs, in our comfortable basements. It feels good.
While there is debate about the future prospects for the Pay TV industry, under pressure from OTT, potentially one, or some of, Google, Apple and Aereo, and politicians and regulators sabre-rattling over channel bundling…. in the present, it’s still thriving. And as long as MLB continues to aggregate large TV audiences of purchasers of financial services, luxury autos and ED remedies , there’ll be plenty of money in it for them.