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The Business of Sports-Jerseys
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[link widoczny dla zalogowanych] Do you believe Tim Tebow can be a successful NFL QB? In his very limited action (9 games with 3 starts) his 82.1 QB rating actually was best among all rookies. His 227 rushing yards was 7th best among all QBs and his 6 rushing TDs was 2nd.
In the big business of professional athletics, there's a constant battle between tradition and creating new profits. Tonight's "Beyond the Scoreboard," our look at the business of sports,[link widoczny dla zalogowanych], starts with the business of that sacred sports jersey. Rick Horrow of Horrow Sports Ventures. Always nice to see you,[link widoczny dla zalogowanych], welcome back [link widoczny dla zalogowanych] wholsale.
RICK HORROW, CEO, HORROW SPORTS VENTURES: I'm going to start by wishing a happy Valentine's Day [link widoczny dla zalogowanych].
And right back to you sir. Let's talk about the sacred sports jersey. A new study out finds that the major professional leagues in the U.S. are leaving, look at this, $370 million on the table by not taking corporate sponsors on their shirts,[link widoczny dla zalogowanych], so let's talk about this. If it's off limits, does Nike (NYSE: NKE),[link widoczny dla zalogowanych], does Under Armor, do they lose?
Here's the bottom line. Do we understand who it validates that number? The European premier league,[link widoczny dla zalogowanych], the big soccer league, generated over $155 million in those 20 teams and FC Barcelona just signed a deal with Middle Eastern country Qatar for $40 million a year so we understand there is significance dollars over there that ought to be tapped somewhere.
Right now the only logos we see on these big jerseys, the Nike (NYSE: NKE) swish, maybe Adidas could be there. So Nike (NYSE: NKE) in 2012 is due to be the official team jersey maker for the NFL assuming there is a season. Is this a big contract for Nike (NYSE: NKE)?[link widoczny dla zalogowanych]
Well, it is. If they will allow them to go beyond the practice jerseys which the NFL teams currently have. So the numbers we're not sure of. But it certainly is a big contract to keep their dreaded competitor Adidas at bay.
Speaking of which, another supplier, Adidas had said it plans to outgrow Nike (NYSE: NKE) overseas over the next several years and their stock charts look very similar, each up about 35 percent over the past year. So what does Adidas need to do?
Well, the first thing is to perpetuate their Chinese growth. It's at about 10 or 15 percent a year, by that $1.3 billion of revenue in China. So you take a look at a market like that which is a significant emerging nation and grab as much as you can.
These companies are dealing though with higher commodity prices like cotton and rubber, like a number of different consumer-oriented companies. Does that, is that a big risk?
Risk/reward. The bottom line is,[link widoczny dla zalogowanych], China and their 10 percent increase in GDP, the fact that Wal-Mart and Gap (NYSE: GPS) and Adidas and some of those other companies are making a big line in the sand to try to grow as much as they can. So you bring that reward, you're obviously going to take some kind of risk.
There��s way too much size comparisons between the two sides at this point to adequately predict how this is going to play out. I��m pessimistic [link widoczny dla zalogowanych].
Agreed. But,[link widoczny dla zalogowanych], they should also include NBA-type provisions about every round draft picks. Specifically,[link widoczny dla zalogowanych], that every team must be able to pick in a given round at least every other year. So no trading your next 2 1st round picks (unless you��ve got one from another team), or your next 2 2nd round picks,[link widoczny dla zalogowanych], or your next 2 etc. Otherwise, stocking draft picks becomes quite possibly the most desirable thing, even moreso than it already is,[link widoczny dla zalogowanych], and some teams (Bears) will not understand what they��re trading away. Rookie wage scale makes draft picks far more valuable.
[link widoczny dla zalogowanych] I��ll be OK with it (not happy, but OK) if they significantly increase the roster size AND include a second Bye week for every team. I��ve outlined this before. I think the roster size should be increased to 60+ players, the Active Roster to at least 51 (if not more),[link widoczny dla zalogowanych], and every team gets a Bye in weeks 3-10 and a second one from weeks 11-18,[link widoczny dla zalogowanych], with no team having their two Byes within 3 weeks of each other. I��d also like to see a DL-type system implemented, where you can put players onto an Injured list without them having to sit the entire season. Half season? 3 games? Not sure how that��d work, but I��d like to see it happen, for the sake of player safety.
And the growth comes with feeding some of these commodity higher costs that we're seeing. Meantime,[link widoczny dla zalogowanych], the Daytona 500 kicks off the NASCAR season this coming weekend as NASCAR trying to reshape this season,[link widoczny dla zalogowanych], bringing back advertising dollars,[link widoczny dla zalogowanych], bring back an audience, bring back ticket buyers. The international speedway which is the owner of the Daytona track has really seen its stock plateau recently. So what is at stake for NASCAR?
At stake is the momentum that they generated as the fastest growing sport over a previous 10-year period. If you accept the fact that they are trying to grow outside the box, a survey just said that 37 percent of their fans said they were worse off last year. So they have to make sure they translate the reduction of attendance into creativity.
The other big raceway owner which is speedway motor sports has been trending lower. What role do these track owners play with this?
They are the landlords but they also have the event. So they've got to be entertaining. They've got to make sure that they give the fans an experience so they can come back. The story about NASCAR this week at Daytona is they are allowing fans to bring in 36 cans of beer when they only had six last year. So there is a key [link widoczny dla zalogowanych] wholsale.
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