By BOB TEDESCHI
Sports Leagues Hope Athletic Feats Spark Impulse Buys
t last, electronic commerce has made the big leagues -- literally.
While the four biggest sports organizations -- Major League Baseball, the National Basketball Association, the National Hockey League, and the National Football League -- have developed modest Internet retail operations over the past two years, each is planning to invest heavily in e-commerce ventures this summer.
In doing so, the leagues are hoping to rejuvenate a sluggish sports-merchandise market by serving fans who are increasingly watching the game with a remote in one hand and a mouse in the other.
"The leagues have been getting very aggressive on this front," said Christopher McEvoy, editor-in-chief of Sporting Goods Business, an industry trade magazine. "It's become a huge priority for all of them."
The e-commerce push comes amid a stagnant market for sports apparel and merchandise, which brought in $8.5 billion in sales for the four leagues last year. When sports jerseys, hats and footwear became the de facto uniforms of hip-hop oriented teenagers in the early '90s, team apparel sales flourished. Then came the rock groups Nirvana and Pearl Jam, ushering in an era of grunge fashion and sending teens scrambling for brown boots, flannel shirts and ski caps.
Meanwhile, the NHL, NBA and Major League Baseball further quieted the cash registers by indulging in protracted labor disputes and alienating their core audience. Now, with the disputes settled and grunge fashion getting long in the tooth, sporting apparel seems poised for a comeback, executives said. E-commerce will bolster that effort, they said, in part by catering to fans who have moved away from their hometown teams.
"One of the biggest factors in this growth is the phenomenon of the displaced fan," said Howard Handler, the NFL's senior vice president of marketing and fan development. Handler said fans who grew up in Miami, for instance, and developed an affinity for Dan Marino, the Dolphins' quarterback, would have difficulty finding Marino-related apparel if they moved to another city. But with the Internet, he said, that problem is solved.
Perhaps more important, Internet sales allow leagues to capitalize on so-called "hot market opportunities" that arise when a player's popularity suddenly surges. Traditional retailers, who typically require months of lead time to stock their shelves with player-related merchandise, will always have enough jerseys bearing the names of stars like Wayne Gretzky, Troy Aikman, Barry Bonds and Kobe Bryant, for instance. But retailers were no doubt unable to meet the late-season demand for the jersey of Latrell Sprewell, the Knicks guard who was vilified by fans before he regained superstar status in the playoffs.
"With the Internet you can have items on sale in about a week if you need to," said McEvoy of Sporting Goods Business. "That instant repose opportunity is large."
Surely the biggest weapon in the leagues' e-commerce arsenal is that other box, the television. With networks increasingly using the Internet to sell goods featured on the air, leagues can envision a future in which broadcasters direct viewers to a Web page where they can buy a Mark McGwire bat even as he rounds the bases for the two-thousandth time in his career.
The goods worn and used by players during game broadcasts "have always been a source of motivation for fans to buy products," said Handler of the NFL, which sold an estimated $3.1 billion in merchandise last year, far more than any other sports league. "We're going to be able to draw a straight line between the fans and those things."
And when the leagues point fans to their Web sites, they are likely to encounter a more sophisticated shopping experience than was previously available. For instance, Handler said the NFL will relaunch its NFL.com site in early August in partnership with Venator, the retailing and catalogue company that owns the Champs Sports and Foot Locker chains. "Our vision is to have the largest centralized inventory of team merchandise and a number of different avenues to sell that," Handler said.
The NBA and WNBA, meanwhile, are rebuilding their online stores in partnership with IBM. They plan to relaunch the sites in the fall. According to Stefanie Scheer, director of Internet services for the NBA, IBM will promote the league's site with a series of "e-business" television advertisements.
"It'll be state-of-the-art," Scheer said. "I would not use that term to characterize the current state of our store, even though it has been profitable. But with these changes, we will see a huge jump in revenue."
The NHL is also involved in a "major overhaul" of its online store, according to Tom Richardson, general manager of NHL Interactive CyberEnterprises. "We're looking into rewards programs, sweepstakes, hot market opportunities, auctions, you name it."
Richardson said the site would feature more non-apparel goods like video games, software and collectibles, "to reflect our audience demographic, which is young men."
Major League Baseball, which has rebounded from a 1997 strike, also relaunched its Web site recently in partnership with CBS Sportsline. The relaunched site features more products and a more strategic merchandising effort than the previous incarnation, according to Alex Kam, the league's director of new media.
"We want to change the rotation of products to respond to events, so if Ken Griffey Jr. has two home runs in a game, we could put up more Seattle Mariners merchandise," he said.
In addition, Kam said the league is considering an auction feature, as well as subscription areas for more specialized content. "We're looking at a whole host of things," he said. "But we've just gotten our feet wet."
In one sense, the leagues' efforts to sell merchandise directly to fans represent yet another blow to the bottom line of traditional sporting goods retailers, which are also facing competition from the Web sites of sports apparel makers like Nike and Fila. The leagues speak of the retailers as partners, but in all the talk there is little acknowledgement of the fact that retailing is ultimately a zero-sum game, where one person's sale is another's lost sale.
For now, at least, the biggest retailers are hopeful that the Internet won't represent a death by a thousand blows. "There definitely is some potential for the leagues to have their own sales," said Anthony Crudele, chief financial officer of The Sports Authority, a sporting goods retail chain. "But the market is large enough for everyone, and the vendors and leagues still need to have the traditional storefront exposure and channels of distribution to do business in volume. It's all volume driven."
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