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Navigating the New Economics of Baseball: Inside The Colorado Rockies’ Most Strategic Play Yet

“Tinkers-to-Evers-to-Chance” is the rhythmic phrase describing the legendary double-play troika presented by three Chicago Cubs infielders during the early 1900s.

The players — shortstop Joe Tinker, second baseman Johhny Evers and first baseman Frank Chance — so reliably broke the hearts of opposing teams by dispatching groundballs that the poet Franklin Pierce Adams memorialized their work in a 1910 poem.

In “Baseball’s Sad Lexicon,” Adams told the tale from the vantage point of a fatigued New York Giants fan as he lamented the ruthless predictability of this infield trio.

That was then. But 124 years later, we’re blithely updating the phrase to describe a new formula underlying the modern business of baseball. We’ll call ours “Tickets to Airwaves to Chance.”

READ: Working in Colorado’s Professional Sports Industry is Not as Glamorous as You Think

Clever, huh?

As in: Three key economic pillars that support the ability of baseball stewards like Charlie Monfort, the owner and general partner of the Colorado Rockies, to pay their bills and, ideally at least, make some money.

Tickets

The “tickets” part is what it has always been: revenue flowing from the rental of ballpark seats, along with spillover spending from live attendees on munchies and merchandise. The latest estimate from magazine publisher Forbes (for the 2022 season) is that the Rockies took in $75 million in gate receipts, representing just over one-fourth of the team’s $286 million in total revenue.

The ”tickets” part is vital given the deterioration of a second contributor to baseball’s coffers: airwaves.

Airwaves

For the past two decades or so, teams like the Rockies have been blessed by large sums of money paid by regional sports networks (RSNs) — a once-thriving component of what had been a lucrative pay TV ecosystem. Per Forbes, 2022 RSN rights payments to the Rockies amounted to $57 million.

READ: Altitude Vs. Comcast — The Changing Economy of Sports Media

Now, the RSN kingdom is a withering vestige of what it used to be.

Erosion of traditional pay TV subscriptions has cut these sports networks down to their knees. Pay TV used to present a reliable money stream — basically everybody with a cable or satellite TV subscription kicked in money for sports networks, regardless of whether they wanted to. Now, the RSN category is on life support as millions of Americans cut the pay TV cord, and in doing so, choke off a good share of the money flowing to RSNs.

The tea leaves lately have read so dour that some RSN operators, including longtime area provider AT&T SportsNet Rocky Mountain, have called it quits altogether.

Worry not, Rockies fans: The mothership MLB organization reportedly has been plotting to take over the task of producing and distributing Rockies games this season. But that’s a stopgap.

Over time a new video model is likely to arrive, whereby teams and their media partners put together a mix of old-school pay TV distribution coupled with newfangled streaming packages and arrangements to televise some games the old-fashioned way: via free, over-theair TV.

Right now, however, this is all a work in progress. And it’s this exact same uncertainty over baseball-media economics that leads us to the “Chance” part of our expression.

Chance

Here, the term refers not to Franklin Leroy Chance, the Chicago Cubs infielder whose professional career began in 1898, but to a red-hot sports gambling category. Legalized betting and the fervor surrounding it is seen by many sports industry figures as a salvation for a deteriorating media environment.

To be sure, teams like the Rockies don’t directly benefit from the large sums wagered by sports bettors. (Last July, for example, Coloradans bet close to $105 million on baseball, per the Colorado Department of Revenue, with winners pocketing $98 million in payouts.)

The Rockies don’t operate a casino in Black Hawk or accept bets from the Will Call window. Rather, the proceeds go mainly to sports books like FanDuel and BetMGM Sportsbook, which rake in the bets, dole back winnings, keep some of the spoils, and pay taxes to state governments.

READ: Live from Colorado — The Future of Sports Betting 

But teams benefit in other ways.

For one thing, sportsbooks spend hundreds of millions of dollars on advertising and sponsorships, with a good share going to media partners and TV networks that, in turn, pay teams to license their games. Separately, interest stirred up by betting opportunities further bonds fans to teams and games, contributing to TV viewership, ticket sales, player merchandise, and edge-of-the-seat interest for those wagering whether Rockies shortstop Ezequiel Tovar will ground out during his final at-bat.

There are direct partnerships, too, like the sponsorship alliance the Rockies struck last August with the sports betting company bet365.

The point being: The new mix of economics, and the entrance of gambling as a revenue generator, isn’t happening in a vacuum.

If baseball owners weren’t worried about long-term attendance trends, shifting demographics and the decay of an old-school pay TV model, I’m not sure legalized gambling would cast quite the same spell. But conditions change, and so do business models.

As Rockies President and Chief Operating Officer Greg Feasel told a Colorado Business Roundtable audience recently, “You survive by adapting.”

The new rules of the sports-business road demand just that. It’s like the Chicago Cubs double-play formula of old: A shifting interplay of “tickets, airwaves and chance” represents a new twist on an old ambition: how to get your team out of a jam when trouble’s brewing.

When Voters Say ‘No’ to New Stadiums, What Do Professional Sports Teams Do Next?

JEFFERSON CITY, Mo. (AP) — Like a loss in the playoffs, voter rejection of a stadium tax plan will force the Kansas City Royals and Chiefs to reevaluate their approach.

The defeat Tuesday of a three-eighths cent sales tax to fund a new downtown Royals ballpark and renovate the Chiefs’ Arrowhead Stadium was almost assuredly not the end of the matter. Other teams and cities have faced similar setbacks, and that hasn’t slowed a wave of stadium construction underway across the U.S.

READ: Is the Future of Luxury Sports Suites Less… Luxury? Or Just More Practical?

“The next page in the playbook, if they lose this referendum, would be to threaten to move,” said Brad Humphreys, an economics professor at West Virginia University, who researches sports stadiums.

But that doesn’t mean relocation is imminent, or even likely.

Moving to a new stadium within the same region or another state is just one of several options. Teams could tweak their plans and ask voters again. They could build or renovate stadiums without public funds. Or they could avoid a referendum by seeking approval for public subsidies directly from a legislative body such as a city council, county commission or state legislature.

“Usually, team owners just find a new way to get money, and they’ll go the legislative route,” said Geoffrey Propheter, an associate public finance professor at the University of Colorado Denver. “Rarely do team owners just straight up leave.”

DECADES OF DECISIONS

From 1990 through 2023, voters cast ballots on 57 stadium and arena proposals across the country, approving 35 and rejecting 22, according to data compiled by Propheter.

In December, Oklahoma City voters overwhelmingly approved a 1% sales tax for six years to help fund a new downtown arena for the NBA’s Thunder that is expected to cost at least $900 million.

But last May, voters in the Phoenix suburb of Tempe rejected a proposal for a $2.3 billion entertainment district that would have included a new arena for the NHL’s Arizona Coyotes. The defeat marked the latest seatback for the hockey team, which underwent a 2009 bankruptcy and is currently playing in a 5,000-seat arena shared with Arizona State University.

The Coyotes haven’t given up on the Phoenix area yet. The team is looking into bidding on a 95-acre tract in north Phoenix.

READ: Live from Colorado — The Future of Sports Betting

NO REFERENDUM NEEDED

Public subsidies for stadiums and arenas often get approved by elected officials without going on the ballot.

Last year, the Nashville City Council approved $760 million in local bonds to go along with $500 million in state bonds — all to help finance a new $2.1 billion football stadium for the Tennessee Titans. There was no public referendum.

Construction also began last year on a new football stadium for the Buffalo Bills that is projected to cost more than $1.6 billion. A total of $850 million is coming from New York and Erie County, with no public referendum.

The proposal from the Royals and Chiefs went to voters because the Missouri Constitution requires a public vote on local taxes. Only voters in Jackson County got a say, because the proposed tax applied only to sales in that county.

Voter approval might not be necessary if the teams can finance their stadiums without a tax. One option is privately financed bonds, but those would still need a funding stream for repayments, said Brent Never, associate public affairs professor at the University of Missouri-Kansas City.

Clouds gather over Kauffman Stadium before a baseball game in Kansas City in 2017. (AP File Photo/Charlie Riedel)

MAKING AN END RUN

After losing elections, some teams subsequently sidestep voters to get new stadiums.

In 1997, voters in 11 southwestern Pennsylvania counties rejected a proposed half-cent sales tax to replace a stadium shared by the MLB’s Pirates and NFL’s Steelers with two separate facilities and to fund a convention center expansion. But the next year, a regional development district approved public financing for the new facilities without going back to voters.

Similar scenarios played out elsewhere in the mid-1990s. When voters in King County, Washington, rejected a tax plan for a Seattle Mariners ballpark, owners threatened to put the team up for sale. Within a month, state lawmakers authorized a new financing plan for a new baseball stadium.

After Wisconsin voters rejected a sports lottery for a new Milwaukee Brewers ballpark, the state legislature authorized a regional sales tax to help pay for it. Last year, Wisconsin’s governor signed a law authorizing an additional $500 million of public aid for stadium renovations, again without a voter referendum.

TRYING AGAIN

Teams sometimes bounce back from a stadium election loss to achieve victory with voters.

After Houston voters defeated a new downtown arena for the NBA’s Rockets in 1999, supporters tried again the next year and easily won.

The San Francisco Giants are perhaps the greatest example of electoral persistence.

Voters said “no” to new stadium plans twice in San Francisco, once in Santa Clara County and once in San Jose, before the Giants put forth a privately financed stadium that finally received voter approval for a needed San Francisco zoning change in 1996.

MOVING OUT

The Oakland A’s received MLB approval last year to relocate to Las Vegas, following the path of the NFL’s Oakland Raiders who were similarly lured by a new publicly subsidized stadium. But those deals didn’t involve public votes.

The NFL’s Chargers are the most recent team to move following voter rejection of a stadium referendum. San Diego voters in 2016 defeated a plan to raise hotel taxes for a new football stadium and to expand a convention center. The Chargers then moved to a new privately financed stadium in Los Angeles, sharing it with the Rams, who relocated from St. Louis.

The NBA’s Charlotte Hornets moved to New Orleans in 2002 — later rebranding as the Pelicans — after voters defeated a sweeping plan to fund a new basketball arena, minor league baseball stadium, museums and cultural centers.

But just six months after the team left, the Charlotte City Council approved a plan for a new downtown arena without submitting it to voters. The NBA then awarded Charlotte an expansion team, which later assumed the Hornets name.

The Butterfly Effect: How MLB Rule Changes Are Reshaping Baseball and Businesses in Denver

More action, fewer delays and baserunners scampering like fire ants are welcome contributions of 2023’s MLB rule changes. That, and a clampdown on a moment even hard-core loyalists detested: Watching a light-hitting infielder adjusting his batting gloves between pitches with the determination of a Parisian chef finishing off tonight’s amuse bouche. Ball one. Delay for glove adjustment. Strike one. More glove stuff. Ball two. Glove needs tightening. Next: another ball. Hmmm, wonder who’s posting on Instagram right now?  

Almost universally, the pivot to a faster-paced, shorter-duration game governed by a pitch clock has won praise. “These speeded-up games are working,” ESPN veteran baseball analyst Tim Kurkjian declared to radio host Dan Patrick early in the season.  

Through about one-fourth of the regular season, MLB games at Coors Field and elsewhere were clocking in at a bit under two hours and forty minutes —a big reduction from the three-hour-plus marathons of old. Casual fans at Coors Field are hereby put on notice: Line up to order a Helton Burger and you risk missing the rest of the game.  

READ: Navigating Sports Politics as College Football Evolves — CU Buffs Aim High

At least, that’s the reaction tied to the playing of the game. Outside the ballpark, in the baseball-meets-business realm, nobody’s quite sure what to make of the new rules.  

Remember the Butterfly Effect, the Chinese proverb brought to popular attention in author Michael Crichton’s “Jurassic Park”? It argues that even the most innocent-seeming actions ripple across the universe. “The flapping of the wings of a butterfly can be felt across the world,” goes the saying. Or, as I like to think of it: “Dinger dances atop the third-base dugout and a bus driver in Oslo belches.” Hey, everything’s connected.  

There’s a Butterfly Effect of sorts happening beyond the Coors Field turnstiles, where a mini ecosystem surrounds the game, with players ranging from Homemade Burrito Woman on 20th Street to parking lot owners and restaurant operators. For them, shorter games have spillover consequences. 

“The entrance to Coors Field is 500 feet from my front door,” observed Josh Kritner when I asked him about the MLB rule changes, “You better believe this has an influence on my business.”  

Kritner runs the popular LoDo hangout Viewhouse on behalf of its owner Lotus Concepts. He says shorter games, in the right circumstance, can provoke more spending. On busy Friday or Saturday game nights, Viewhouse’s servers will pour beers and deliver platters of nachos to 2,000 or more patrons. Historically, many of these were one-and-done customers, in the door for a pre-game beverage or meal and then out for the night. Now, with 6:40 p.m. games often ending by 9 p.m., Kritner is seeing many fans return post-game.  

READ: How the Name, Image, Likeness (NIL) Revolution is Changing the World of College Sports

But the yang to this yin is competition from the Rockies directly. The decision to counter truncated game durations by extending the beer-selling window through the eighth inning – it used to be the seventh – cuts into Viewhouse’s own beverage sales. “As a restaurant in LoDo, that hurts,” says Kritner. “Guys have already had two more beers. There’s no point in coming back to get a cocktail.” 

The Rockies’ decision to keep the taps running reflects the economic importance of the concession business. Food and beverage sales, along with parking fees and other on-site sales, account for about 16 percent of revenues for a typical MLB team, per the statistics analysis firm fivethirtyeight.com.  

At the ballpark, time really is money. Cutting down the minutes people spend on site by nearly 10 percent leaves less time to fetch a Rockies dog or a late-game pile of Dippin’ Dots (you know: colorful frozen orbs served in a bowl that’s supposed to resemble a batting helmet). Beer yields high margins per transaction, so it’s an easy target for recovering some of the operating profit, even if the decision flies in the face of a longstanding pledge to discourage overserved fans late in the game.  

Beyond MLB rule changes, Rockies ownership is feeling residual impact from fan sentiment. A moribund start to the season, coupled with malaise tied to the team’s many errors in baseball judgment — third baseman Nolan Arenado is the No. 1 poster child here — have left their mark. Average game-day attendance through early May was 27,000, down about 15 percent from last year’s number, and down to the lowest level since 2005, excepting the 2020 Covid aberration.  

Fewer fans translates to lower gate revenue (a big line-item, accounting for nearly 30 percent of a team’s total take) along with reduced concession and merchandising sales. Add to that a worrisome development on the media side. Warner Bros. Discovery, the parent of Rockies TV carrier AT&T Sportsnet, wants to wriggle out of the regional sports business altogether, raising questions about who, if anyone, will jump into a market that’s deteriorating thanks to unrelenting pay TV cord-cutting. Finally, out of left field, there’s the possibility of an MLB team landing in Salt Lake City — please, please call this team the Mortons — which could carve into regional allegiances.

READ: Altitude Vs. Comcast — The Changing Economy of Sports Media

So: A combination of new rules, shorter games, sagging attendance, an uncertain media landscape and a possible regional interloper is converging to change … something. What that may be, who knows? Despite the new pressures, few business endeavors offer more predictable long-term ROI than owning an MLB team. Forbes estimates the Rox are now worth close to $1.46 billion – nearly five times the amount calculated 20 years ago.  

Knowing the upward valuation trajectory, an outright change of ownership – the hoped-for outcome of many a fed-up fan – seems unlikely. Even so, sometimes the ball bounces in funny ways. Like a September call-up, it’s possible that at some point, the baseball Butterfly Effect will come into play for the Rockies. Maybe in a big way. 

 

Stewart Schley JpegStewart Schley writes about sports, media and technology from Denver. Read this and Schley’s past columns on the Web at cobizmag.com and email him at [email protected]

How the Name, Image, Likeness (NIL) Revolution is Changing the World of College Sports

Thanks to an assist from the U.S. Supreme Court, more than $1.1 billion is expected to flow to college athletes during the current sophomore year of the “Name, Image, Likeness” (NIL) revolution.

Wait: Make that $1.1 billion plus another $13. 

The extra dollars went to Duante Davis, a Colorado State University football player newly enriched by my personal VISA card. You’re welcome, friend. 

I came across Davis’ name within a sprawling digital landscape maintained by Opendorse, a Nebraska company that’s one of the big players in the NIL arena. Scanning a homepage jammed with names of colleges, I drilled down to a smallish rectangle sporting the familiar CSU logo (I’m a proud alum, so…). There, I found hundreds of student-athletes willing to spread a little NIL love, for a fee. 

READ: Navigating Sports Politics as College Football Evolves — CU Buffs Aim High

Opendorse and a handful of like-minded rivals resemble dating sites like Match.com — except they’re for athletes and fans, not aspiring romantics. In my case, what I selected and received a few days later was a personalized, five-second video suitable for showing off both to friends and unwitting strangers. (“Guys! A CSU defensive back knows my name!”) 

“Shoutouts” like this are among the handful of offerings advertised by Opendorse. With an athlete’s agreement, you can receive a personalized social media post, request an autograph, book an athlete to appear at an event, or negotiate a “pitch anything” deal. The proceeds are split: For my order, $13 went to Davis, and $4.33 went for a “marketplace fee,” a fancy way of describing a commission. 

Thirteen dollars is a trifle, of course, in a billion-dollar marketplace that’s populated with high-profile “influencers” who have hit the jackpot. Examples include the likes of Leah Clapper, a University of Florida gymnast who has appeared in TV commercials for the yogurt brand Yasso; and Bijan Robinson, a highly touted recruit for the University of Texas who has reportedly surpassed $1.7 million in NIL earnings. (Parents: Keep that youth sports flame burning.)

These individuals are the headliners. More common are small-money deals like the one I made with Davis, a Poudre High School graduate who redshirted last year for the Rams. Most start in the sub-$20 range for a brief video message, although players who have risen to the big time charge more. A shoutout from Shaq Barrett, the former CSU lineman who played this past season for the NFL’s Buccaneers, will cost you $1,000. 

Other lower-end NIL endorsement models are out there, too. At University of Denver, a business student named Carlos Fuentes is working with a handful of DU athletes to broker NIL arrangements with merchants like Saucy’s Southern BBQ & Cuisine on South University Boulevard. In exchange for mentioning the restaurant on Instagram and other social media platforms, a trio of guards for the DU men’s basketball team — Ben Bowen, Tommy Bruner and Tevin Smith — get something almost every college student aspires to: the occasional platter of smoked ribs, on the house. 

READ: Live from Colorado — The Future of Sports Betting 

In-kind deals like the Saucy’s alliance and a separate arrangement Fuentes has brokered between a DU athlete and a local clothing company are door-opening preludes to cash deals that Fuentes hopes will follow. “I’m starting small,” Fuentes told me.

Fuentes, a walk-on guard for the Pioneers men’s basketball team, is studying marketing and business analytics. He sees the combination of social media presence and the NIL ecosystem opening up new possibilities for athletes in the metro area and beyond. While it’s not exactly Scott Boras territory just yet, what he’s doing is emblematic of the widening playing field for athletes who used to be blocked from cashing in at any level.

Colorado is among the 32 states (through January) that have passed laws empowering student-athletes to make money via NIL dealmaking. These authorizations happened more or less in synch with the June 2021 U.S. Supreme Court decision that found decades-old NCAA restrictions violated U.S. antitrust law. Since the NCAA adopted interim NIL rules in the wake of the ruling, the floodgates have opened, with spending believed likely to crest the $1 billion mark in the second year (June 2022 to June 2023) of NIL activity. 

Not everybody loves the new reality. To some critics, NIL is little more than a wink-wink sanitizing of backdoor payoffs from title-hungry alums. That almost surely happens — donors gotta donate — but the cynicism may be overstated. Opendorse calculates that only 15% of spending in the first year of NIL activity came from donors, while 74%, came from brand deals. 

Regardless of the source, the more common application is what I test-drove with my new CSU acquaintance Duante Davis: small-dollar deals, not life-changing injections of cash. Opendorse says the average Division I NIL participant earned about $3,000 in the first year of accepting NIL money, with Division II athletes netting $328. 

But it’s the policy, not the price, that matters. In his concurring 2021 opinion, Justice Brett Kavanaugh pointed reverently to the grand traditions of college sports — game days in South Bend, Indiana (Notre Dame football), packed gyms in Durham and North Carolina (Duke University basketball). But tradition alone, Kavanaugh wrote, “cannot justify the NCAA’s decision to build a massive money-raising enterprise on the backs of student-athletes who are not fairly compensated.” It’s the word “massive” that carries the weight here. With more than $1 billion now flowing across the NIL transom, the $17.33 I spent on a personalized video greeting is starting to look like a bargain. 

 

Stewart Schley JpegStewart Schley writes about sports, media and technology from Denver. Read this and Schley’s past columns on the Web at cobizmag.com and email him at [email protected]

The Power of eClub Membership in the Colorado Golfing World: Reviving the Colorado Golf Association

When Colorado Golf Association membership growth landed in a bunker around about 2000, it couldn’t climb out. Ho, hum, 18 years of stagnation. Then came the 2020 pandemic and the golf explosion. By then, the CGA was ready to roll into high gear with its high-tech tool, the eClub membership.

“It used to be, you’d have to go into a golf shop, ask a grumpy pro shop employee, ‘How do I establish a handicap?’” says CGA Executive Director Ed Mate. “You’d get a very surly, not simple answer like, ‘See that box over there? There are forms there, I think.’ And you’d fill out a form and hope it stuck. Now, it’s so simple.”

You could join the CGA in those days, but most members joined the CGA by joining a golf club, either a private club or the men’s or women’s club at their local public course. CGA Chief Marketing Officer Erin Gangloff says it wasn’t until 2019 that the CGA began promoting eClub, which allows players to go online and assign themselves to one of five Regional eClubs for a membership fee of $59.95. 

READ: Inside Colorado’s Post-Pandemic Golf Goldrush

Through 2022, eClub enrollment had reached nearly 10,000. It’s the prime driver in overall CGA growth, from 59,000 in 2018 to 76,000 heading into this year.

“They’re predominantly men over the age of 50 who do not have loyalty to a club or a facility,” says Mate. “And they’re golfers who have no interest in joining a men’s club, a women’s club or any other type of club. They just play golf with their friends. Historically, that type of golfer was on the outside looking in. They really were not welcome, because they didn’t fit. That’s now changed.”

Mate says the USGA, the national governing body of golf, jump-started the CGA’s efforts by abandoning its long-held marketing strategy of imploring golfers to “join a club” and instead promoting a link on its website that said, “GET A HANDICAP.” A Colorado resident is then directed to the CGA website.

So far, the main benefits of eClub are an official handicap, reduced green fees at CommonGround, CGA tournament eligibility and access to CGA member play days, which have consisted of recreational rounds at some otherwise private courses. With research showing the state has 250,000 core and avid golfers, the CGA is continuing to look at adding member benefits to attract the 174,000 outsiders.

Says Mate, “If we’re smart and we continue to build reasons to join and tell our story, I don’t see any reason why we can’t be at at least 120,000 members in the next 10 years.”

 

Susan Fornoff has covered golf for the San Francisco Chronicle, regional golf associations and her own GottaGoGolf.com. She is a member of the Overland Park Golf Course and Links at Highlands Ranch women’s clubs. This is her seventh Executive Golf Guide for ColoradoBiz.

A Token of Their Appreciation

The question of the day for sports memorabilia collectors: To funge or not to funge?

OK, that’s not even a word. Still, you know what we’re talking about: The explosion of interest in “non-fungible tokens,” or NFTs, has turned the sports world into a giant breeding ground for the selling and trading of digital creations: still photos, snippets of video, images of admission tickets. Basically anything you can store on a computer or mobile smartphone or somewhere in the cloud.

If you grew up as a baseball card devotee, swapping your prized Willie McCovey for your neighbor’s Brooks Robinson on the sidewalk outside your house, this whole NFT thing probably reads like an alien landscape. I mean, physical memorabilia we could get our heads around. It was … physical. With baseball cards, for example, an elaborate mechanism exists to “grade” the things according to numerous corporeal indicators: how well-centered the printed images are on the card surface, the condition of the card itself, whether the corners are scuffed or frayed.

These considerations vanish in the world of NFTs, which cannot degrade: They’re digital representations of color and light that can be replicated perfectly, computer to computer, mobile device to mobile device, even as possession changes hands. Instead, what supports the value here is the blockchain digital identification system. This shared database imposes an unimpeachable assurance about the provenance of digital content. Meaning: Although you and I may have the same digital image of a Nikola Jokic moment stored in our Apple Cloud account, yours is merely a copy, whereas I uniquely own the blockchain-verified original, never mind that THEY LOOK EXACTLY ALIKE.

The point is that the owner of the blockchain-verified NFT is assured they possess an original. It’s like having an expert validate that a baseball signed by Todd Helton was signed by the real Todd Helton, not your cousin Derek.

Knowing this, the only remaining question is: What the hell?

It’s … complicated. Because for all the NFT buzz, there remains this mystery: What do you actually DO with the things? Showcase them in digital photo frames in your man cave to wow your drinking buddies? Tuck them inside your iPhone in order to gaze at them to derive comfort when your spouse is being mean? Brag to your dinner date that you possess an original video of Antonio Brown disrobing on the sideline of MetLife Stadium in early January? (Not joking: A fan-originated video of the infamous moment was recently offered at auction by a Montana NFT company.)

Somehow NFTs seem to have resolved (or perhaps dodged) these existential questions, as evidenced by the truckloads of money being spent on them. Deloitte, the market research and consulting firm, projects collectors will spend $2 billion on sports NFTs in 2022. Much of this money will revolve not so much around the visual splendor of NFTs as much as the bragging rights: If I own the original, you don’t. Plus, there’s a modernist allure. Like cryptocurrencies, NFTs are a hipper version of your father’s bygone world. Or so some believe.

The expanding field of NFT play includes the Denver Broncos. Close to 16,000 season ticket holders took up the Broncos on the complimentary offer of a blockchain-verified NFT ticket image from the Dec. 19 Cincinnati Bengals game. Ted Santiago, senior director of marketing for the Broncos, acknowledges NFL teams haven’t entirely figured out the whole NFT riddle, but are interested in learning more. Santiago’s own hunch is that it’s an age thing: “I personally believe the younger generation will ultimately determine the success of this technology,” he said in an email to ColoradoBiz.

Meanwhile, the old-school sports collectibles marketplace seems to be surviving the NFT frenzy just fine. Last November, the Castle Rock-based memorabilia auctioneer Mile Hi Card Co. raked in a record $2.46 million for the sale of a well-preserved Babe Ruth rookie baseball card. And in February, CEO Brian Drent was prepping for an even more lucrative auction involving another Ruth rookie card and an early-era Honus Wagner card, projecting proceeds to the sellers of more than $13 million. Drent doesn’t see NFTs as a head-on competitor for his market, although he’s intrigued by NFTs in general. “It’s not that I don’t find it interesting,” Drent told us. “It’s: Does it have long-term hold?”

Therein lies the question: Are NFTs the CB Radio of the day, destined to fizzle out fast? Or will the next-gen sports collector regard them as an essential component of the hobby? For now, Drent thinks the two categories are worlds apart, with “that guy buying the NFT being a different guy from the one buying the Babe Ruth rookie card.”

Meantime, for those whose heads may be spinning, a traditionalist’s respite awaits within the shelves at Bill’s Sports Collectibles, the venerable (physical) memorabilia shop on South Broadway Street, run by proprietor Bill Vizas since 1981. There, you can still coo at early-era Colorado Rockies cards, or wonder if that Broncos helmet signed by John Elway might look sweet nestled atop the bar in the basement. As opposed to, you know, on the screen of your iPhone 12.

 

Stewart Schley JpegStewart Schley writes about sports, media, and technology from Denver. Read this, and Schley’s past columns at ColoradoBiz online. He can be reached by email at: [email protected]

THIS ARTICLE ORIGINALLY APPEARED IN SPORTZBIZ, COLORADOBIZ PRINT MAGAZINE SPRING EDITION, PUBLISHED MARCH 2, 2022

Sports teams are cranking up the volume on the digital experience

In the late 1980s, NFL bosses grew so concerned about crowd noise that they empowered referees to delay games if players couldn’t hear the quarterback barking out signals. Just when the big moment was at hand, a ref would stop the action to demand quietude from 75,000 or so revved-up fans. Failure to pipe down meant your team could lose timeouts, and ultimately might result in a five-yard penalty.

It went over about as well as instructing your 10-year-old to close Minecraft and set the dinner table. Crowds did what crowds do, which was to stomp on surfaces and slap hands and elevate the yelling so that conditions for the next play were even louder. The league gave up the whole nonsense before the 1990 season, and NFL crowds have been liberated to bring the noise ever since.

Crowds matter. A 2014 study published by the Encyclopedia of Sport and Exercise Psychology found the winning percentage for NFL home teams over a five-year span was 58.2 percent. In the NBA, it was 61 percent. For players, the ability to sleep at home helps, of course, but c’mon: If you don’t think the din created by rabid fans makes an impact, then you haven’t high-fived that guy who sits in front of me in Section 113 when both of us know, and I mean know, we basically just caused that fumble.

Thus, a fascinating experiment is unfolding as games are played in the absence of a live crowd. During 2020 Colorado Rockies games, what would have been live shouts and strident booing of inept umpires has yielded the stage to canned audio. Technicians are making noise the digital way, by pressing buttons on tablet computers to evoke any of 50 pre-recorded crowd sounds. It’s their job to adroitly and with minimal latency match the sound to the moment, digging into a tool chest of audio files that originally were produced to add realism to MLB: The Show, a videogame from Sony Interactive Entertainment. Thus, our loop has now been closed: Sounds originally recorded from a live crowd and imported into a videogame are now exported back into an empty ballpark from the same videogame. Marshall McLuhan lives.

Applying fake noise to a live game demands careful calibration. An issue for the NFL, for example, is that loudspeaker arrays are pointed toward the crowd, not the field. That’s good for revving up the faithful with AC DC’s “You Shook Me All Night Long” (a Broncos Sunday afternoon standby), but it doesn’t do much to replicate the celebration from the crowd that players rely on to get pumped up. “Mimicking fan noise could require reorienting (speakers) or adding a secondary sound system,” points out the environmental design firm Arup, which is devising ways to enhance the aural experience both in stadiums and via electronic media.

Behind the curtain, here is a fascinating existential question: Do you really need a live audience to stage a game? (I lived in Los Angeles during the early 1980s when the Raiders played at the Coliseum and basically nobody came or cared, so I’d say the answer is “no.”)

It’s a question rooted in economics, with football the easy example. The NFL gets most of its $16 billion in annual revenue not from season-ticket holders and game-day concessions but from TV rights deals. True, the equation is different in baseball, hockey and basketball, where there are far more sellable seats per season, but the broader point remains: Presenting a professional sporting event is an activity dedicated to an electronic audience in equal or greater measure than a live crowd. If you want to get really carried away, you can conjure the next step: Why rely on human players at all to carry the action (and the ball)? The explosive growth of e-sports, a realm in which fans devote rapt attention to watching digital avatars do battle on the screen, tells us this fairly disturbing idea isn’t purely speculative.

For now, however, I say we insist on the real deal. When they finally open the turnstiles back up (please tell me they are going to open the turnstiles back up), let’s return to our seats, watch the action with our own eyes, and maybe burn those cardboard cutouts in a roaring bonfire on Market Street.

Let’s yell and murmur and applaud, and let’s do it better and more extemporaneously and with more verve and less latency than what some guy with an iPad and a killer sound system can pull off. Let’s put MLB: The Show back where it belongs, in the Xbox in the basement. Let’s make us some real noise, fans.

Stewart Schley writes about sports, media and technology from Denver. Read this and Schley’s past columns on the web at cobizmag.com and email him at [email protected].

Without sports, how do we even recognize our seasons?

Now and then a car passes by on Blake Street. Sometimes a bicyclist’s silhouette materializes behind the green screen of a temporary fence. But mostly it looks like a painting, this view of Coors Field. I’m not here, of course. I’m watching a live stream delivered by a webcam. Low in the frame there’s a rooftop patio with orange barstools tucked neatly underneath gray tables. But nobody’s there.

Damn, though, it’s a beautiful day for a ballgame. April 5, a Sunday. Rockies were supposed to be hosting San Diego. First pitch right about now. Might have been Gray or Freeland, who knows. It’d be interesting to see how Kyle’s looking, whether he’s rediscovered whatever it was that eluded him during a tortuous 2019 season. Great to get a first look at Nolan, too, doing Nolan things; bare-handing a shot down the line like he’s done a million times. And Blackmon, of course. Digging in at the plate, guy on second, that hushed moment just before the pitch.

Actually, forget all that. Right now I’d take a meaningless curveball in the top of the second. I’d happily settle for hearing a baseball smack a catcher’s mitt during warmups.

Like Joni Mitchell sang: Don’t it always seem to go.

The thing is the park looks great: sturdy and unaware. Lazy clouds with nowhere to go drift above the oversized clock that decorates the columned arch at the home plate entrance. The sun is diffused just enough to bathe these few city blocks in a midday copper gloss, a gentle come-hither glow.

Signposts from a world of sport we thought were immutable – March Madness drifting into Opening Day, the prime-time theater that is the NFL’s draft, the gallery ringing the 17th at Augusta – are gone.  So are the crowds, the announcers, the buzz outside Pepsi Center as Avs fans file in.

The disappearance of sports is even more crushing than we thought. It’s not just about scoreboard: What has vanished are the steady beats of a life’s rhythm. If you’re a fan, your seasons aren’t so much winter and spring as they are NBA and MLB. A new year doesn’t start in January but in September, when your football team kicks off the regular season.

For now, that’s gone. And the unsettling thing is we don’t know when or how it comes back. Leagues are talking about cancelling seasons, or playing double-headers all summer to reclaim time, or hosting playoff games in empty stadiums. Or not playing at all. We’re in sports limbo. We presume stadiums will reopen and TV screens will flicker back to life and LoDo bartenders will again slosh beer into idled glasses. Except right now, we don’t know what that will look like. Will we return to our seats and reignite our allegiances? Are we still game to gather by the tens of thousands, shoulder to shoulder, ordering stadium food and high-fiving neighbors?

What we do know is that the economics of sports will change, and that will change the character of sports. Fans may be flummoxed by the idea of games played in empty stadia, but the reality of the industry is that media rights, much more than ticket and concession sales, pay the bills. Only $80 million of the $446 million in revenue vacuumed up by the Denver Broncos in the 2019 season came from gate receipts, according to the latest Forbes analysis. For the Rockies, ticket sales made up $78 million of a $291 million total. The inverse relationship holds for Colorado’s minor league teams, like Loveland’s Colorado Eagles, but for the big guys, one scenario is to keep the engines running on media rights alone, leaving the fans at home – and legions of ushers and food service workers out of jobs.

That would be weird and unwelcome, and not just because of the economic carnage. The idea that sports would devolve into a pattern of moving pixels on a glass screen is so impersonal as to be odious. What we want is to reclaim the ability to invest something of ourselves in the game. This is, after all, what sports do. Being a fan delivers us from the everyday, invites us to believe, serves up something that looks and feels a bit like religion. America is starved for that right now. For faith. For familiarity. For something to grab onto. Across Blake Street, on a Sunday afternoon, a perfectly fine ballpark sits empty, and that seems wrong. We want our opening day. We want it bad.