SBD/Issue 36/Sponsorships, Advertising & Marketing

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  • Sports Direct Raises Stake In Umbro Following Nike Bid

    Sports Direct nearly doubled its stake in Umbro to 29.9%, buying the “maximum number of shares possible without launching a full bid” for the brand, according to Sarah Butler of the LONDON TIMES. The move follows Nike’s $582M takeover bid for Umbro last week. Sources said that Sports Direct Deputy Exec Chair & Founder Mike Ashley is “acting to protect suppliers of Umbro merchandise to his stores, particularly replica England [soccer jerseys], on which he has a very lucrative deal" with Umbro.  A Sports Direct bid for Umbro would “face several barriers, particularly in gaining approval from the Football Association, which oversees the England shirt contract.” Nike has already reached a deal with the FA. Nike’s takeover “already looked complicated, even before yesterday, because Sports Direct and its rival retailer JJB Sports," held 15% and 10% of Umbro, respectively.  A Nike takeover requires approval from shareholders holding 75% of Umbro’s stock, but the company “could easily switch its bid to a straight offer," which would require approval from just 50% of shareholders (LONDON TIMES, 10/31). A Nike spokesperson said, “We’ve made a very good offer and have no further comment to make. We will be considering all our options” (Manchester GUARDIAN, 10/31). In London, Richard Fletcher reports Sports Direct’s move comes “amid speculation of deteriorating relations" between Sports Direct and Nike. Nike is reported to have “threatened to blacklist Sports Direct,” even though Ashley has “traditionally had a close relationship” with the company. Sources said that Nike was “‘spooked’ by Sports Direct’s overseas expansion plans” (London TELEGRAPH, 10/31). Sources said that Ashley “did not necessarily want to scupper any deal;  rather he wanted to have a say in Umbro’s future.” One source said Ashley “wants to maintain a strategic stake, and the level of that strategic stake has gone up” (FINANCIAL TIMES, 10/31).

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  • Commercial Development: Fox Nearly Sold Out Of Super Bowl Ads

    Fox has five-seven spots remaining for the '08 Super Bowl and expects to sell the game out by the middle of November, according to a senior network exec. With its broadcast more than 90% sold, Fox expects to sell the remaining units for about $2.7M per 30-second spot. Fox' pace would mark the fastest Super Bowl ad sellout in years. Last year, CBS did not sell out the game until just two days before the event. CBS' most expensive units sold for $2.6M per 30-second spot. Fox credits the increased demand on renewed interest from movie companies, which are slated to take 10 spots this year compared to two last year. Autos also has been a strong category for this year's Super Bowl. A-B, Pepsi and Cars.com have all made significant buys. Though the game is sandwiched around the BCS Championship and Daytona 500, Fox execs say they are selling each event separately and not bundling them.

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  • Tom Brady Signs Endorsement Deal With Glaceau's Smartwater

    Brady Inks Three-Year Deal
    To Endorse Glaceau's Smartwater
    Coca-Cola's newly acquired Glaceau has signed Patriots QB Tom Brady to a three-year deal worth $3-5M to endorse its Smartwater brand, according to Theresa Howard of USA TODAY. The contract also includes a bonus based on sales, and an ad campaign with print, outdoor and Web ads will begin in November, with a TV spot to follow. Brady said that he drinks Smartwater, which is distilled water with electrolytes, as "an alternative to 'sugary' drinks." Brady, who was shooting a Smartwater ad in Boston yesterday, said, "It's a replacement product that's better for you, whether I'm working out or for the morning when I wake up."  Deep Alliance Marketing President Dave Paro called Brady "a strong endorser for that kind of product." Howard notes Brady, who also endorses watchmaker Movado, Nike and Stetson cologne, joins actress Jennifer Aniston as a Smartwater endorser. Glaceau Senior VP/Marketing Rohan Oza said, "We continue to pursue partners and relationships with celebrities and fans. Credit has to go to ... Coca-Cola to allow Glaceau to do what we do best: hire passionate people to grow this brand" (USA TODAY, 10/31).

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  • Strip Search: Enlyten Suing Gatorade, PepsiCo Over Bills Deal

    Enlyten Suing PepsiCo,
    Gatorade Over Bills Deal
    Enlyten has sued Gatorade and parent company PepsiCo, accusing Gatorade, an  NFL sponsor, of “pressuring the league and the Bills to dump Enlyten” as a sponsor, according to Fred Williams of the BUFFALO NEWS. Enlyten, which produces electrolyte strips for athletes, signed a three-year sponsorship with the Bills in March, but Enlyten attorney Michael Powers said that the company’s name “was wiped from the Jumbotron and painted over on a sign at Ralph Wilson Stadium” before the Cowboys-Bills “MNF” game on October 8.  The filing does not name the NFL or the Bills.  Powers said of Gatorade, “They’re trying to seal off the market and keep any competitors from getting any traction.” NFL VP/Corporate Communications Brian McCarthy said that Gatorade’s deal “covers sports beverages and ‘electrolyte replacement products.’” However, the suit “contends that Gatorade’s sponsorship deal is narrower than that, only covering sports drinks, bars and gels.” Bills QB J.P. Losman in an Enlyten ad said the strips elevate his performance “without weighing me down with a lot of fluid intake.” Enlyten President Dan Kelly is the brother of former Bills QB and Pro Football HOFer Jim Kelly (BUFFALO NEWS, 10/31).

    Read the full lawsuit. To read the full lawsuit, visit SportsBusinessDaily.com.

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  • Marketplace Round-Up

    SPORTSBUSINESS JOURNAL’s Tripp Mickle reports Eastman Kodak will “step down as a [USOC] partner after the ’08 Beijing Games” when it also ends its partnership with the IOC. Kodak had been the official imaging sponsor of the IOC since the TOP program began in ’86 and its partnership with the USOC was an “extension of that relationship.” Sources valued the deal at “more than $5[M] over four years” (SPORTSBUSINESS JOURNAL, 10/29 issue). 

    GAME DAY: September sales released by research firm NPD Group show that EA’s “Madden 08” and “NCAA 08” are both “underperforming compared with the same month last year.” Sales of “Madden 08” were down 48% from last year with 619,000 copies sold, while “NCAA 08” was down 23% with 113,000 copies sold. Electronic Gaming Monthly Editor-In-Chief Dan Hsu said, “EA is a strong brand, but a predictable one. Gamers know what they’re getting into: something with high production value and solid but not spectacular gameplay” (BUSINESSWEEK.com, 10/29).

    FOR WHOM THE BELL TOLLS: Red Sox CF Jacoby Ellsbury’s agent, Octagon's Joe Urbon, said that a Taco Bell affiliation "is just one of the endorsement deals that Ellsbury expects to ink before the glow of the Red Sox series victory fades.” Ellsbury, who triggered the company’s free taco promotion by stealing a base during Game Two of the World Series, appeared yesterday at a Boston-area Taco Bell to sign autographs for fans waiting for their free tacos (BOSTON GLOBE, 10/31).

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