Ask Wall Street Where King James is Headed

If you want to know where LeBron James will announce he is going to be playing this coming NBA season, all you have to do is ask our friends on Wall Street. Shares of Madison Square Garden Inc (MSG), the parent company of the NBA New York Knicks, have risen sharply in the month of July on the bet that LeBron will join the Knicks to begin the coming season.

Yesterday alone, shares in the company rose $1.30 a share to close at $21.57 and the volume spiked from 254,119 shares on Tuesday to 1,716,345 shares on Wednesday after news that LeBron was making his announcement on ESPN from Greenwich, CT caused traders to speculate that he would be joining the Knicks. the team has a practice facility 11 miles from Greenwich in Westchester County, NY.

This chart below, from CNBC.com, shows the roller coaster ride the stock has been on the past 5 days on LeBron James free agency speculation:



Today, however, the stock has dropped to its previous level on news that it is more likely LeBron James will join the Miami Heat with Dwayne Wade and Chris Bosh. So much for that! We all will know tonight after ESPN airs a self indulgent hour long special on the decision.

New King of Sports Streaming?

How big of a business is streaming live sporting events to the American populace? Ask ESPN and CBS. According to an article in the NY Times, ESPN claimed that the recently played World Cup match between the United States and Algeria was the most watched sporting event over the Internet with about 1.1 million unique visitors during the match.

That sounds like quite a lot right? Not so fast. The first round double OT NCAA Tournament game between Brigham Young University and Florida drew 1.15 million unique visitors over the course of the game says CBS Sports. ESPN appears to have erred. They are now grasping at straws saying "the United States victory over Algeria was seen by an average of 328,000 viewers a minute, while the N.C.A.A. game was seen by just over 200,000."

Semantics. There is a much bigger point to be made here, sports streaming is an expanding market with the proliferation of broadband Internet in the US and can only grow larger. This provides yet another targeted demographic for advertisers to take advantage of in an era where TV advertising becomes less relevant every time someone plucks a Tivo off of Amazon.com or signs up for their cable/sat/tel co provider's DVR service.

As is stated on the website's FAQS, ESPN3.com carries over 3,500 live sporting events a year. They range from NBA, MLB, and college sports to niches like cricket, rugby, soccer and Australian Rules Football. Each event provides an opportunity that allows ESPN to market as an advertising vehicle for companies looking to reach their target demographic.

CBSSports.com, by comparison, streams only specific events like the Masters and the NCAA tournament. Other networks don't have the built up streaming capabilities of ESPN3 and will not for what appears to be a while. The major sports leagues in this country MLB, NFL, NBA and NHL all have their own streaming packages. Select national games are allowed to be streamed by ESPN (MLB, NBA) and NBC (NFL) but their is no rival to ESPN3 in the US.

It reaches over 53 million homes and 20 million college students through agreements with TV providers and free access to every college campus in the nation. Soon it will reach the roughly 20 million Xbox Live Gold subscribers with free access as well. It is unparalleled in terms of reach and offerings.

It's a safe bet that it will soon have the most streamed sporting event even though it has yet to reach that high water mark. It's less a matter of if than it is when. Hopefully that when will be a result of the USA advancing through the World Cup.

The Booming Vuvuzela Business

If you've been watching the World Cup you most likely have noticed that angry swarm of bees present at every match. Unlike at that Padres game, these are actually plastic horns.

The invention of them is disputed as ranging from Mexico to South Africa on the article devoted to the horn from hell on Wikipedia, but official credit is generally given to South African Freddie Maake and the South African company, Masincedane Sport, that first mass produced the current version many love to hate.

The horns have overshadowed the games themselves, being so loud that players, match officials, fans, broadcasters, sportswriters and people watching at home have all complained of them. LG, an electronics manufacturer, has even gone as far as instructing owners of its HDTVs on how to watch the games with a setting that filters out the vuvuzelas in the background. For fans not fortunate enough to have an LG HDTV, broadcasters such as ABC/ESPN, BBC, CANAL+ and Sky Deutschland have begun to completely filter out or tone down the sound of the annoying plastic misery machines.

To be fair, FIFA and many others have defended the horns as well. FIFA has even begun training referees with vuvuzela noise included. The horns have now jumped across the pond and are showing up at baseball games, including Red Sox and Marlins games, and other events around the world. The Yankees have banned the horn from Yankee Stadium after a fan brought one to a game against the Phillies last week.

Amid all the protest and controversy there is a lot of money to be made with these horns. They sell for around $7 or $8 online and come in a variety of colors. The money is not in that they have sold them just to people at the matches, but that they are now selling worldwide. The original company that manufactured them has gone big time, contracting out to many factories in China like all big shots do to manufacture them at a fraction of the cost and ship them to every corner of the earth. Eventually, these people in the vuvuzela business hope, bees will feel emasculated and start mooing like cows. In fact, there were upwards of 200,000 vuvuzelas being produced per factory in some of the factories ran by the Chinese haters of sanity that produce them. Currently, the factories are pushing out about 20,000 a day in larger operations.

Over a million of these horns have been sold already, according to the AP. Expect many more millions to be sold and expect many more people to begin hating sports because of them. If they end up at Yankee-Red Sox games, Sox fans will long for the days of the "1918" chant because at least it had some humorous value. The only purpose vuvuzelas serve, aside from annoying humans and bees, is to make money.

According to this report, there is even a church trying to muscle in on the vuvuzela cash flow. Hopefully this scourge will end sooner than later.

World Cup 2010 in the States

In watching most of the World Cup matches in bars in Manhattan so far a few conclusions have been made by your editor: Soccer fans do exist in this country, not all of them are rooting for other countries and drinking at 10am is fun!

Let's start with that first point. People assuming that Americans could care less about the beautiful game have a point, but they also miss a huge one according to ratings released so far. For the UEFA Final, there were 1.6 million viewers according to this NY Times soccer blog post. The blog goes on to say that FOX had hoped for at least double that number, but also notes that it was more than the 1.4 million people who watched the last UEFA Final on ESPN.

Next, the ratings for the USA vs England match which aired live on a Saturday afternoon on the east coast averaged 14.5 million viewers between the English language broadcast on ABC and the Spanish broadcast on Univision, according to the LA Times. Which, according to Sporting Intelligence, is almost the same number of people who watched the match in England and, more importantly, more than the number of people who watched the first four games of the NBA Finals between the two most storied franchises in that NBA.

That more people are watching soccer is clear, how many will grow to is not. Strictly based on population, if only 10% of the US population becomes a regular soccer watching audience, this country could rival any audience in Europe or South America. Advertisers are keenly aware that soccer here is akin to mobile phones in China, there has not been total market penetration and there is room for growth. They want to cash in on what could be a bonanza in the coming years. With DVRs lessening the significance of live TV outside of sporting events, advertisers crave another outlet to reach a specific target audience, even if it is only a niche group like the US soccer fan. Of course, with the US currently down 2-0 to Slovenia at the half, soccer could be a bigger bust than Ryan Leaf.

Another thing is clear in bouncing from bar to bar, blog to blog and friend to friend; not everyone is rooting for teams of their ancestry or where they immigrated from. The one problem, which is the only way to look at it in terms of soccer, is that people in this country tend to think of themselves as Irish, Italian, German, Mexican, etc-American. They are foreign first and American second. This leads them to root for European or Latin American teams before they root for Team USA. This applies not only to soccer, but to other international sports as well.

This year that tide has changed. Many people that formerly would laugh at the US soccer team are now taking them seriously and rooting for them as they would the Yankees, Aresnal or the Lakers. People from other countries that did not qualify (Ireland, Peru, to name a few) are rooting for the US and some are even wearing team USA jerseys with regularity. For this to continue, the Americans will need more goals like the one just netted by Landon Donovan to start the second half. Absolutely brilliant. Should they flame out, that support will also dwindle.

Less than a year ago I had to search all over the channel guide for the USA vs Mexico World Cup qualifying match in Mexico City. It should have been on ABC, NBC, FOX, ESPN or Univision. Anything that is a national network. It was on Mun2, which happened to be as high on the channel guide on Comcast as the music and PPV channels at the time. That game would be on national TV in any other country, it is a disgrace it was not here. How are you supposed to build up support for a national team if no one is able to see them play?

Now we have UEFA Finals, EPL matches and all team USA matches on ESPN/ABC. This is a marvelous trend that hopefully continues. Anyone who has seen an MLS game knows that the quality of players in that league just isn't quite there yet. Having that be the only option to soccer starved fans in this country for nationally televised games will not work long term. Access to European soccer is a must and is coming slowly but surely.

Not only are Americans now able to watch European matches live on ESPN, but we are now able, via ESPN 3, to watch just about any major soccer event live on our PCs and TVs after a recently announced deal between ESPN and Microsoft that will bring the service to 23 million Xbox Live subscribers here in the US. That service should, according to the WSJ, hit the consoles in November 2010.

Now on to the most important point of this whole exercise, morning drinking! Many bars in Manhattan have been opening at 7am for the World Cup matches. Turn out has been great at the bars I have visited. There have been some great drink specials as well, including $3 Carlsberg drafts for every match at one of my favorite bars in midtown.

The foundation is there, the momentum in building. Let's hope it can keep moving in the right direction, without those vuvuzelas crossing the pond. Michael Bradley just scored the tying goal, we may have hope yet. If the team can have a few recognizable stars that's all it will need in order to make it a brand name, especially after the brilliant come from behind win that this could end up being.