Extra Innings - Vol. 20

Hi Everyone,

Welcome to this week's edition of Extra Innings. The team at The Sponsorship Space and I have come to an agreement that Extra Innings will be incorporated on their website and within their overall message. This will be a weekly newsletter detailing interesting stories from the sports world with an emphasis on sponsorship.

Big Ten Sets its Return for October

The Big Ten's presidents and chancellors have unanimously voted to resume play in October, leaving the Pac-12 as the only "Power Five" conference not playing this fall. The conference’s fall schedule will start on October 23rd and consist of eight games per team, with a conference championship on December 19th. The access to daily, rapid testing is what led to the reversal for the Big Ten. Another major factor leading to the reversal is the massive revenue loss the conference was facing. Big Ten universities would have realized a $952 million loss had the season not been played due to lost ticket and media revenue. The below graphic, from Sportico, details the percentage of the total money that the Big Ten represents in the college football ecosystem.

There has been considerable criticism directed at the conference on its handling of the cancelation by players, coaches, and parents. To delay the season based on testing was convenient for the Big Ten, but, not surprisingly, the league reversed course. The highest revenue-generating school in the Big Ten is Ohio State University. The State of Ohio had highschool football games this week, the Cleveland Browns hosted the Cincinnati Bengals with 6,000 fans in attendance, and the University of Cincinnati started its season this week. If all of these teams can participate in football games safely, how could Ohio State University be the only team in Ohio that could not play games safely?

It will be interesting to see how poll voters view teams from the Big Ten at the end of the season. The poll voters, in choosing teams for the College Football Playoff, will have a difficult time evaluating the conferences because of the pandemic affected season. Choosing an ACC team that finishes with an 11-1 record over an 8-0 Big Ten team, or vice versa, will be controversial.

Steve Cohen to Purchase New York Mets for $2.42 Billion

New York Mets fans can rejoice as the Katz and Wilpon families have sold the team to Steve Cohen. Cohen will now own 95% of the team, increasing his stake from the 8% he held previously. Even though he was already an owner, Cohen’s purchase is subject to review by the MLB and will need to garner approval from 23 of the 29 owners for the deal to proceed. At $2.42 billion, the purchase of the Mets commanded the highest sale price of a Major League Baseball team in history. Cohen will also be the wealthiest owner in the MLB, with a net worth greater than the next three richest owners combined. This worries some owners because Cohen could have the potential to set the market for player salaries and buy the best players through free agency. Naturally, this excites fans of the team, who have seen the previous owners be exceptionally frugal while the crosstown rival Yankees spend endlessly.

NFL Revenues Set to Decline, Players Still Cash In

NFL owners have been signing their best players this offseason to massive contracts with no regard for the recession caused by the pandemic. For example, both Patrick Mahomes and Deshaun Watson have signed deals worth more than $39 million per year. At the same time, the league is projecting the salary cap to decline from $198.2 million to $175 million next year. Owners seem to be overly optimistic that the new TV deals are going to be exceptional when negotiated in a few years. With these new, potentially favorable TV deals in place, the cap will rise to an estimated $280 million to $300 million. These outlandish player contracts will seem like a bargain with the new caps. Historically, elite quarterbacks have earned between 15% and 20% of the total cap space. The Mahomes’ deal would be consistent with those percentages if the projected salary cap numbers become reality.

Notable Information From the Sports World:

  • MLB: Commissioner Rob Manfred has hinted that there could be fans at the League Championship Series (LCS) and World Series this fall. Baseball recently announced that all postseason games would be in a bubble to eliminate weather concerns and potential Coronavirus exposure. The MLB plans to play the LCS in Texas and California. While Texas allows up to 50% capacity at sporting events, California does not allow fans yet.

  • ESPN x Caesars and DraftKings: ESPN has entered into a multi-year partnership with Caesars and DraftKings for exclusive marketing on the ESPN website and all other aspects of the ESPN ecosystem. This is the latest move into the gambling space for ESPN after it completed a state of the art studio in Las Vegas. ESPN also hosts daily betting shows on its various networks. This deal will be directly compared to the deal between Barstool Sports and Penn National Gaming, which unveiled a new app this week.

  • NFL x 888sport: The NFL has signed its first international sports betting partner, a Gibraltar-based company called 888sport. The agreement begins in 2021 when the league returns to London for regular-season games and 888sport will be the official betting partner for that year's Super Bowl.

  • NBA: To make up for lost revenue, the NBA has decided to allow teams to sell sponsorship deals on practice jerseys. This is a lucrative concept as sponsors pay up to $20 million annually to have their logo on game jerseys. The price will be lower for the practice jersey, but a league source expects the logos to be much larger.

  • Anheuser-Busch: It comes as no surprise that companies like AB-InBev are struggling with no fans in the stands. Due to the lost revenue the company is facing, AB-InBev will be trimming its list of teams and leagues they sponsor from 400 to around 300. This 25% reduction in partners will be more of a consolidation as the company plans to spend the same dollar amount moving forward.

  • NCAA Basketball: The NCAA Division I Council announced Wednesday that Men's and Women's basketball can start on November 25th. The rationale for this start date is that most Division I schools will be finished with the fall semester and students will be away from campus, creating a safer environment for players and coaches to be on campus. Most importantly, the NCAA tournament is scheduled for March 2021, with its usual 68 team tournament.


Nick Goss