June 2, 2020

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NBA coaches speak out against injustice, TV ad spending takes a dive, Beats by Dr. Dre has turned to esports to sell product, and top athletes are earning less.

Coaches Unite

Photo Credit: Cary Edmondson-USA TODAY Sports

The National Basketball Coaches Association has established a committee on racial injustice and reform to lead the basketball community’s response against racial discrimination and police brutality.

A statement, signed by 33 current and former head coaches as well as nearly 180 assistant coaches, said that they were “committed to working in our NBA cities with local leaders, officials and law enforcement agencies to create positive change in our communities. We have the power and platform to affect change, and we will use it.”

– 28 of the 30 NBA teams have made public statements following George Floyd’s death. The current exceptions are the San Antonio Spurs, juxtaposing coach Greg Popovich’s involvement on the NBCA committee and being one of the most vocal coaches in sports on social issues, and the New York Knicks.

In an internal email sent to Madison Square Garden employees in response to internal discussion on why the organization had not commented, executive chairman and CEO Jim Dolan said, “as companies in the business of sports and entertainment, however, we are not any more qualified than anyone else to offer our opinion on social matters. What’s important is how we operate.” He further wrote that that the company is committed to “upholding our values,” which include “creating a respectful workplace for all.”

– In its own internal memo, MLB Commissioner Rob Manfred said “baseball wants to be part of the solution. Our clubs, located in many of the cities in which large protests are taking place, have long engaged in community and social efforts…we promise those efforts will continue.” MLB also will launch an effort “to explore how we can improve our existing initiatives and create new ways to bring communities together through the unifying power of baseball.”

– Sports Illustrated’s union, which because of layoffs currently has no black staff writers, said it is “part of the problem,” and will seek to improve the amount of diversity and inclusion, while The Ringer’s union said it “has a lot of work to do.”

TV Ads Sink

Photo Credit: Ken Blaze-USA TODAY Sports

TV ad revenue took a dive in April, dropping 27% to $2.7 billion. Ad spending by travel services, retail, automotive, and restaurant industries all decreased significantly in the face of a “perfect storm” of increasing unemployment and stay-at-home orders.

A lack of live sports was another major factor in the decline. Standard Media Index estimates advertising commitments to sports dropped 72% from April 2019. Industry analysts believe the pandemic is likely to accelerate the ongoing shift of ads from TV to digital. 

Ad Dollars Lost In Sports

  • NBA: $240 million
  • NCAA Tournament: $200 million
  • NHL: $40 million
  • Golf: $30 million
  • MLB: $25 million

April Ad Revenue Numbers:

  • Broadcast TV dropped 33.4% to $907 million
  • Cable TV down 24.8% to $1.66 billion
  • Syndicated TV gained 12.1% to $140.2 million

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Beats Turns To Esports

Photo Credit: Jasen Vinlove-USA TODAY Sports

Apple’s Beats by Dr. Dre have been a staple in the NBA community for years, but with the league sidelined, the headphone brand is making a new push into esports. Rather than using NBA stars to promote a new line of colors in its Powerbeats Pro line, Beats by Dr. Dre has turned to esports organization FaZe Clan.

A drone delivered the headphones to FaZe Clan’s Los Angeles headquarters Monday in an event broadcast by the organization’s Instagram account to its 9 million followers. In comparison, the brand used NBA stars James Harden and Anthony Davis to debut the Powerbeats Pro line last year.

Beats by Dr. Dre Chief Marketing Officer Chris Thorne cited the hiatus of traditional sports and the thriving esports industry as reasons for the move, while noting the market of 2.4 billion global gamers and the interest of Gen Z and millennials should drive continued demand for the headphones.

Beats by Dr. Dre is the latest high-end brand – including Lamborghini and MAC Cosmetics  – to move marketing money to esports, a reflection of the growing influence of video games. In the first quarter of 2020, U.S. consumers spent a record $10.9 billion on video games.

Athletes Earn Less

Photo Credit: Danielle Parhizkaran-USA TODAY Sports

Forbes’ annual 100 top-paid athletes earned a collective $3.6 billion, a 9% drop from 2019. The decline was the first in four years, but it appears the trend will continue through 2020.

Roger Federer took the top spot, earning $106 million – $100 million of which came from endorsements and appearance fees. Basketball players made up the bulk of the list with 35 spots, while 31 football players and 14 soccer stars rounded out the sports with the most athletes. This year was also the first time in four years that two women, tennis stars Naomi Osaka and Serena Williams, have landed on the list.

With sports on a mass hiatus, the 2021 list will likely see a drop in collective earnings. Salaries have been cut alongside the reduced action with some, like boxers Canelo Alvarez and Anthony Joshua, missing out on $30 million paydays. Endorsement money is also expected to take a tumble, with sponsorships expected to drop 41% in 2020.

2020’s Top Five Highest-Paid Athletes: 

  1. Roger Federer – $106 million
  2. Cristiano Ronaldo – $105 million
  3. Lionel Messi – $104 million
  4. Neymar – $95.5 million
  5. LeBron James – $88.2 million

Question of the Day

How are you shopping for groceries?

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Monday’s Answer

42% of respondents have made a purchase to improve their work from home set up in the last 90 days.

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