June 29, 2020

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The Mississippi lawmakers passed a bill to change the state flag last night. Several Mississippi State University athletes have said they would not play another game for the school until the Confederate emblem was taken off the flag.

See You, UCLA

Photo Credit: Richard Mackson-USA TODAY Sports

Under Armour is attempting to terminate its 15-year, $280 million deal with UCLA. The company cited UCLA’s inability to provide marketing benefits required by the contract. The Under Armour deal was signed in 2016 and was the richest college sports shoe and apparel deal ever at that time, including:

— $15 million upfront.

— $11 million annually in rights and marketing fees.

— $7.4 million clothing, shoes, and equipment each year.

— $2 million annually for facility upgrades.

According to a statement from outgoing athletic director Dan Guerrero, UCLA is “exploring all of our options to resist Under Armour’s actions.” The financial loss would be significant for the school’s athletic department, which took an $18.9 million loan from the university to cover its 2019 budget deficit.

Under Armour is trying to manage its way through its own trying financial times. The company’s last quarter sales were down 53.8% year-over-year, and its stock hit a nine-year low in May. Amid those struggles, Under Armour said it would look to slash annual operating expenses by approximately $325 million, including a shift to digital marketing efforts

Under Armour is reportedly trying to also terminate its deal with the University of California. Cal pushed back like UCLA, saying it did not violate any terms of the agreement. However, the company is continuing to invest – last week it renewed its deal with Texas Tech and will pay the school $12.9 million over four years. It also has deals with Notre Dame, Wisconsin, Auburn, and Utah, among other schools.

Nike Layoffs Expected

Photo Credit: Kirby Lee-USA TODAY Sports

Nike plans on reducing jobs but the layoffs are reportedly not connected to its 38% fourth-quarter revenue drop announced last week. The job reduction would “not be done for cost reasons,” or because of the pandemic, according to an email sent by Nike CEO John Donahoe.

The layoffs would be restructuring moves to help fix the “overburdened matrix,” aiming to simplify how Nike works and increase its speed and responsiveness, according to the memo.

Workers within retail stores, distribution centers, and manufacturing facilities reportedly won’t be affected. Layoffs are expected to begin in July and with phases happening through the fall.

Despite the top-line loss, there were some positives for Nike in the quarter as digital sales increased to 30% of overall revenue. Donahoe expects digital sales to reach 50% in the foreseeable future. Memberships to its digital apps doubled during the pandemic to 25 million, with women making up half the members.

Other notable numbers:

— $6.3 billion quarterly revenue.

— $790 million loss for the quarter, down from last year’s $989 million profit in the quarter.

— 90% of global stores shut down for eight weeks between mid-March and mid-May.

— 85% of U.S. stores are now reopened.

— $12.4 billion FY2020 direct-to-consumer sales.

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David Beckham Becomes Latest Celebrity Esports Investor

Photo Credit: Noah K. Murray-USA TODAY Sports

David Beckham is the latest celebrity to invest in esports, taking a “significant minority stake” in London-based organization Guild Esports as it raises $31 million. The organization will field competitive teams in games like Rocket League, FIFA, and Fortnite. 

Guild Esports will reportedly use Beckham as a way to help draw in sponsorships. Beckham’s investment comes as the industry continues to surge during the coronavirus pandemic. Even prior to the outbreak, PwC forecast that esports revenues would grow from $980 million in 2019 to more than $1.8 billion by 2023.

Other Celebrity Esports Investors

— aXiomatic Gaming – NBA legends Michael Jordan and Magic Johnson, Monumental Sports & Entertainment founder and chairman Ted Leonsis, Peter Guber

— Andbox – Michael B. Jordan

— 100 Thieves – Drake

— Fade 2 Karma – Mike Tyson

— PlayVS – Sean “Diddy” Combs

— Gen. G – Will Smith

— VisionEsports – Kevin Durant & Odell Beckham Jr.

— TSM – Steve Young, Steph Curry & Andre Iguodala

Weekend Wrap

Photo Credit: Ken Blaze-USA TODAY Sports

The National College Players Association sent a letter to Congress to “pursue broad-based reform” as opposed to adopting bills that would preempt any state-level laws around compensation for student-athletes. The letter asks lawmakers to decline legislation that would make competitive equity impossible in college athletics.

A bill introduced in the U.S. Senate earlier this month would require the NCAA to make rule changes regarding athletes’ ability to make money from their name, image and likeness while giving the association protection from legal challenges to the new regulations. That bill, which would set a deadline for the NCAA of June 30, 2021, would supersede the laws previously passed in California, Colorado, and Florida but which have not gone into effect.

The letter addressed other subjects that it said were “much more important than NIL compensation,” like health and safety standards, sexual assault issues, and the rising number of COVID-19 cases on campuses after the NCAA allowed the resumption of team activities.

Other Top Headlines From This Weekend:

— Morehouse College has canceled all fall sports, including football, because of COVID-19. Four games involving historically black colleges have been canceled this fall.

— The NWSL returned to play, and nearly all of the players in the first two games kneeled during the national anthem.

— The NBA said it will have virtual concerts and half-time performances, “tap-to-cheer” programs for fans to light up seats, and new camera angles when the league returns to play. Other ideas include a virtual grandstand as well as branded sponsorship tarps over the empty seats. The league is also working with the NBPA to allow players to wear jerseys with personalized social justice messages on the backs instead of their last names.

— The Indianapolis 500 will welcome a 50% capacity crowd on its rescheduled date of August 23. Seats will be realigned for more space, while masks and hand sanitizer will be provided to fans.

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What We're Covering

What We're Covering

Penn State Assistant AD for Marketing Chris Grosse tweeted out an innocuous question about funny sports photobombs on Father’s Day  – more than 1.5 million impressions later, he birthed a trending Twitter topic.

“It was more surreal than anything because I couldn’t believe that somebody in that position of leadership in our country actually had the time – and actually cared.” Jemele Hill on when she became the target of a Donald Trump tweetstorm.

After selling more than 500,000 cases of its vodka collaboration this year, Barstool is dipping its toe further into the drinks category.

Question of the Day

How many podcasts do you listen to on a weekly basis?

 0-1   2-3   4+ 

Friday’s Answer

67% of respondents said they have watched the English Premier League since its return.

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