So, for those of you that aren’t into American sport – you may not be aware that one of the biggest commercial cases in terms of player power VS owner power has been playing out over the last few months.
It’s the NFL lockout, and there are a lot of dollars involved.
(And I’ve put some online marketing thoughts in too towards the end…)
What’s it about?
The NFL players want a bigger share of the $9B pot, and the owners don’t want to give it to them. The owners want to increase the season to 18 games, but don’t want to give up more revenue. The players say that they should get extra revenue from these games, as these extra games mean more injuries, etc. The players also believe that the owners aren’t being straight in terms of the actual total revenues being generated, effectively lowballing the players in terms of cash is available. The players have asked to see 10 years of accounts, and the owners (surprise, surprise!) have said no. So, we’re hitting a mexican standoff again. You can see the player union’s take on things at their aptly named website – nfllockout.com
Owners imposed the lockout after talks broke down in March and the players disbanded their union. A group of players filed the injunction request along with a class-action antitrust lawsuit against the NFL. If the appeals court upholds the injunction, the League will be forced to open its doors for the first time since the lockout began March 12.
The lockout actually means teams may not sign player contracts or make trades. Contact between players and their coaches also is banned.
What’s just happened?
As of yesterday a federal judge ordered an end to the National Football League (NFL) lockout after backing the players’ argument that the work stoppage is causing irreparable harm to their careers
However, the NFL has promised an immediate appeal after US District Judge Susan Richard Nelson’s judgement gave the players an early victory in their fight with the owners over how to divide the competition’s US$9 billion annual turnover.
There’s waaaaay too much money involved for this to go the distance.And I don’t just mean between owners & players.
TV is driving a lot of the negotations, and the NFL ‘s partner brands have a lot invested in terms of upfront TV booking and long term brand partnerships. The Bud Light partnership alone is rumoured to be worth $600M over 6 years to the beer brand. And for good measure, Anheuser Busch’s (Bud Light) biggest rival Coors Light – has individual partnerships with 21 of the 32 NFL franchises. The TV time, media spend, activation costs – for those two brands alone – for a single year, could be will over $250M. There’s not many marketing directors who’d want to have to eat that cost.
It potentially has massive impact on both the on-shore and offshore betting industry too.
In terms of handle (amount bet), player reactivation & acquisition, and money in the bank – the launch of (American) football in August, is a bonanza for operators that are football heavy. There’ll be a significant drop off in active player numbers if football doesn’t kick off when it’s supposed to – or at all. And as every good marketeer knows, a reactivated customer is significantly cheaper than acquiring a new one.
Online marketing for this sport (in particular) goes into high gear during August, with significant time, resources, creative ideas and hard graft being put in. Seasonal themes are rolled out, and the NFL launch week can make or break a football focsued online betting operator.
That means that all the incremental online revenues that these customers generate in terms of betting on other sports, casino revenue, poker revenue, etc – may be lost too. Only time will tell.
A late start to the football season, with both parties (owners & players) waiting to see who will blink first – but the season will go ahead – if possibly a little shortened. Let’s wait and see.
Some other quick online marketing thoughts…
If you want to get a handle on the brand proposition, new season creative, new player offers and reactivation marketing that goes on during NFL launch, it’s not a bad idea to sign up to to some of the big guys out there. That would include Bodog, BetUS, Sports Interaction, Bet365. If you create an account, at least you’ll get to see some of their mailers – as well as the targeted onsite activity for logged-in VS non-logged in. And that won’t cost you a penny.
It’s also worth noting how some of the operators make sign-up bonuses and offers only available to people in certain territories. This makes solid operational and financial sense, even though it can sometimes waste marketing bandwidth. A potential customer may be able to see an on-site offer when they are surfing the site – but when they log in, the offer isn’t available, mainly because historical financials have shown that customers from that territory are unprofitable. It’s slightly unusual in ecommerce terms – but similar to online retailers refusing to sell or ship to certain territories because the risk of chargeback or fraud is high.
Just make sure that you’re not getting marketing offers localised into territories that are going to be blocked from offers. The online marketing dept looks pretty stupid when that happens (cough).
It’ll sure be interesting if the lock-out goes ahead – and also what will be going out from online marketing departments in August. Watch this space…