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BRANDWEEK LOOKS AT SPONSORS' WILLINGNESS TO PAY NFL FEES
Published March 25, 1998
With the NFL "struggling to net an increase in a soft- drink category that has been its cash cow, NFL owners ... may finally be ready to address the question of whether" the league "should fundamentally change the way it sells corporate sponsorships," according to Terry Lefton of BRANDWEEK. Recent "industry buzz" has incumbent Coca-Cola offering $18M and Pepsi $14-15M, "but with little enthusiasm," for the category. And while NFLP Senior Dir of Corporate Sponsorships Steve Phelps said that fast-food negotiations have been "put aside" pending a soda deal, "insiders say Taco Bell balked" at the $10M price tag the league was "hoping to get from incumbent McDonald's." Without being specific, Phelps said that those numbers have changed and added, "we will land a soft-drink deal within a month, and we will get an increase if we grant certain rights." Strike Ten VP/Marketing John Sohigian on the NFL's negotiations: "Rights fees are going down as far as pure cash, so to get an increase, the value has to go up significantly." MLS Exec VP Randy Bernstein: "Sponsors don't care so much about logo exposure, it is their caseload and are you moving that?" (Terry Lefton, BRANDWEEK, 3/23). HOW MUCH IS TOO MUCH? Lefton adds that the "larger issue" is whether the NFL should expect rights fee increases "when sponsors may see as much as a 30% increase in the cost of advertising on NFL games." Sprint VP/Advertising & Sponsorships Tim Kelly, on the $24M annual rights the company pays: "I'm pretty confident in telling you we won't be able to buy much more." The NFL has 17 categories up for renewal, and Phelps said, "We are going to have a record year as far as renewal percentage as well as renewal dollars and activation." Lefton adds that the value of the TV and Sprint deals "may have also convinced ownership that there is similar revenue potential in corporate sponsorship." IMG's Gary Jacobus, a former NFLP Sales Exec, said, "Some owners think they should be getting that (amount) in every big category. It just can't be done" (BRANDWEEK, 3/23).