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SBD/November 30, 2011/Marketing and SponsorshipPrint All
The apparent settlement of the NBA lockout looks like it sparked consumer demand for products from league licensees. Speaking for the first time since players and management reached a tentative end to their labor dispute early Saturday morning, NBA Exec VP/Global Merchandising Group Sal LaRocca said that it was too early to assess the impact the five-month lockout had on sales of NBA-licensed consumer products. However, early indications, based on e-commerce sales and sales at the NBA's Fifth Ave. store, which opened in a new location Oct. 28, are that the sales rebound will be quick. The lockout coincided with both the back-to-school and holiday shopping seasons -- the year’s most important seasons for retailers. "We've been a retailer and a licensor for years now, and, as a retailer, I can tell you that you can't replace November sales in March," LaRocca said. Still, the early retail results have been encouraging for league. Across the retail landscape, Black Friday and Cyber Monday sales exceeded even the most optimistic projections. On an annualized sales-per-square-foot basis, sales at the new NBA Store over the Black Friday weekend were up 38% over last year’s record haul, LaRocca said, adding that the league continues to look for a larger and more permanent location for its flagship store. In its first month, NBA Store sales were up 22% on the same annualized sales per square foot metric and that is using last year’s record sales year at the old NBA store as a benchmark. Most analysts said overall retail sales were up 16% during the first weekend of the holiday shopping season. LaRocca said that on Cyber Monday, when NBA.com was offering a 25% discount to shoppers, sales were up 43% from '10. The conversion rate, a measure of site visitors who actually made purchases was almost 10% versus its normal low-single digit rate. Most industry reports pegged U.S. online sales up around 33% on Cyber Monday. “We’re outpacing general retail, so hopefully that says a lot about the resiliency of our brand," LaRocca said. “Once there was certainty of a season, we have seen demand spike and that's encouraging."
PLAYER MOVEMENT A SALES CATALYST: Player movement is always an important catalyst for licensed product sales, and the period between now and the NBA’s projected Dec. 25 season tip-off should be filled with an unprecedented amount of signings. “We had cut back considerably on [NBA] inventory of course, but now we’re seeing a comeback and expecting it to be very strong moving forward," said Modell’s Sporting Goods CEO Mitch Modell. Without player images, NBA card licensee Panini looks like it will be the licensee most damaged by the lockout. Panini will not be able to get any cards to retail before next year, and it has scaled back its NBA card releases from 18 to eight. Panini has three top NBA draft picks under contract.
The NBA and its TV partners "are scrambling to make up for 16 missed games and an estimated $100 million in lost ad revenue as a result of the league’s 149-day lockout," according to Claire Atkinson of the N.Y. POST. Rival networks "that don’t air NBA games were able to poach advertisers that normally would buy time on nets that do carry the NBA." Ad execs said that the league’s broadcasting partners now "are trying to woo back advertisers, including offering them attractive rates if they buy ad packages for the remainder of this season and into next year." United Entertainment Group CEO Jarrod Moses, whose company reps NBA advertisers, said that the NBA's broadcast partners "are dangling 'futures' deals to some advertisers who commit to buying time during this season and the 2012-13 season." Broadcasters are "still waiting for word on the NBA’s revised 2011-12 schedule, which likely won’t be released until next week at the earliest." Turner President of Sales, Distribution & Sports David Levy said, "Fourth quarter, there is not a lot of inventory, there’s not a lot of games. We’re focusing on first-quarter scatter, and we already have a strong base of NBA corporate advertisers" (N.Y. POST, 11/30).
Lions DT Ndamukong Suh was suspended two games yesterday for his actions during the Thanksgiving Day game against the Lions, and his image as a product endorser continues to be "under fire," according to Dirk Chatelain of the Omaha WORLD-HERALD. An Omaha Steaks spokesperson Monday said that the company is "taking a 'wait and see approach' regarding Suh." An official statement read in part, "We have never known Suh to be mean-spirited and he has always demonstrated integrity in all our dealings with him. We continue to closely monitor and evaluate the situation and we will take action accordingly, if we deem it necessary. For now, it is business as usual." Nike also released a statement Monday saying the Thanksgiving incident has "no impact on our relationship with Ndamukong Suh." Chatelain noted popularity is not "defined by endorsement contracts, but they are a gauge of public opinion." Univ. of Oregon's Warsaw Sports Marketing Center Managing Dir Paul Swangard "expects current sponsors to 'ratchet down' their marketing of Suh in the short term." Swangard: "When they reach the end of their contracts, they'll take a hard look at Suh's popularity." As for potential sponsors, Swangard "suspects any negotiations are 'probably done for now.'" He noted that sometimes a player "makes a mistake on or off the field that doesn't harm his marketing potential." But he said in Suh's case, "There's a body of work here that certainly raises into question whether brands would want to risk their own equity" (Omaha WORLD-HERALD, 11/29). ESPN’s Mike Greenberg said Suh "is a celebrity on a level that defensive linemen very rarely become." Greenberg: "He’s a pitchman in a major way. This doesn’t work for that. This image is a good image to be a rough, tough defensive tackle, but not when you are trying to sell products to all of America” ("Mike & Mike in the Morning," ESPN Radio, 11/29). Suh's jersey is ranked 12th in the list of NFL jersey sales from April 1-Nov. 29.
TRYING TO BE THE GOOD GUY: Suh reportedly called NFL Commissioner Roger Goodell over the weekend to apologize for his actions, and ESPN's Skip Bayless said, "Whoever his people are, they continue to leak this to the media because they're trying to prop him up for the Chrysler ads and the Subway ads because he's become quite a big national pitchman as the good guy, tough guy. But I think he's more tough guy, over-the-edge than he is the good guy off the field" ("First Take," ESPN2, 11/29).
SPLIT PERSONALITIES: USA TODAY's Jarrett Bell in a sports section cover story notes it is "striking that Suh's reputation on the field is in such contrast to the image he has developed off the field as a model athlete." People at his alma mater, Univ. of Nebraska, "gush about a principled man committed to giving back." Before signing his first pro contract, Suh "pledged to donate $2.6 million to Nebraska, where he earned an engineering degree in four years." He has also "volunteered at food banks and visited hospitals and, since arriving in Detroit, he has donated toys for kids" (USA TODAY, 11/30).
On the heels of winning Super Bowl XLV and in the middle of a quest for a perfect season, the popularity of the Packers cannot be doubted. Packers QB Aaron Rodgers leads all NFL players in jersey sales from April 1 to Nov. 29, with teammate LB Clay Matthews coming in second. Additionally, the Packers also have the highest-selling team merchandise during that time period. Steelers S Troy Polamalu is third on the jersey list, followed by Patriots QB Tom Brady and Saints QB Drew Brees. Riding the successful wave of a 5-1 record as a starter this year, Broncos QB Tim Tebow ranks sixth on the list. The Steelers follow the Packers in team sales, with the Cowboys, Bears and Patriots rounding out the top five (THE DAILY).
TOP-SELLING NFL PLAYERS JERSEYS
1 Packers QB Aaron Rodgers 11 Cowboys QB Tony Romo 2 Packers LB Clay Matthews 12 Lions DT Ndamukong Suh 3 Steelers S Troy Polamalu 13 Giants QB Eli Manning 4 Patriots QB Tom Brady 14 Jets QB Mark Sanchez 5 Saints QB Drew Brees 15 Bears LB Brian Urlacher 6 Broncos QB Tim Tebow 16 Raiders QB Darren McFadden 7 Eagles QB Michael Vick 17 Colts QB Peyton Manning 8 Cowboys TE Jason Witten 18 49ers LB Patrick Willis 9 Cowboys WR Miles Austin 19 Eagles WR DeSean Jackson 10 Cowboys WR Dez Bryant 20 Ravens LB Ray LewisTOP 10 SELLING TEAMS MERCHANDISE 1Packers 6Giants 2Steelers 7Saints 3Cowboys 8Eagles 4Bears 949ers 5Patriots 10Ravens
The PGA Tour yesterday announced that RSM McGladrey has signed a three-year extension as title sponsor of the McGladrey Classic through '15. McGladrey originally signed a three-year deal through the '12 tournament, which will be held at the Sea Island Resort in Georgia. Davis Love III will continue to serve as tournament chair and his foundation will serve as the event's host organization (PGA Tour). In Jacksonville, Garry Smits wrote the tournament, by all measures, “has been a huge hit for the Tour and the Golden Isles area.” Ticket sales, corporate hospitality, economic impact and TV ratings on The Golf Channel “have been strong in the first two years of the event and the once financially-troubled Sea Island Club also has received a boost.” Through “Love's influence and the growing number of Tour stars who are either based in St. Simons Island or come there to use the training and playing facilities, the fields have been strong” (JACKSONVILLE.com, 11/29). Golf Channel’s Gary Williams said there is a 2-1 chance the McGladrey Classic will move from the Fall Series and become a FedEx Cup event by '15. Williams: "There’s no way in the world that that sponsorship, where dollars are precious in an economy where – you can call it whatever you want – it’s a cost center. You’re spending money. You need to get return on your investment. Golf Channel’s Erik Kuselias: “If they make the changes to the Fall Series, the McGladrey is a really good bet to end up on the Tour” (“Morning Drive,” Golf Channel, 11/30).
RAISE YOUR GLASS: The BBC reported Diageo "has been named as an official partner" of the '14 Ryder Cup, which will be held at Gleneagles, Scotland. Diageo will "promote the event in conjunction with its brands, such as Johnnie Walker Scotch whisky." As part of its role, the company will "work with Clubgolf -- the Scottish junior golf development agency -- at a corporate level to help promote participation in golf across Scotland" (BBC.co.uk, 11/29).
In Minnesota, Hammerand & Ong report Riedell Shoes Inc. “has ended a bid to trademark its two-stripe skate design after settling a lawsuit brought by Adidas.” Riedell in May '10 “applied for trademark protection.” adidas “contested the application and sued in February, alleging that Riedell infringed on the iconic triple-stripe mark that Adidas has ferociously protected in courts across the globe.” Chief U.S. District Judge Michael Davis “dismissed the case on Nov. 9 at the request of Riedell and Adidas, both of which agreed to cover their own court and attorneys fees in a private settlement.” The next day Riedell “abandoned its two-stripe trademark application, according to filings with the U.S. Patent and Trademark Offices Trademark Trial and Appeal Board” (MINNEAPOLIS/ST. PAUL BUSINESS JOURNAL, 11/25 issue).
CONTINUING EDUCATION: The USOC today announced a five-year sponsorship with DeVry University. The deal, which runs through '16, makes the for-profit higher education company the official education partner of Team USA. Terms of the deal weren't available. The agreement will result in DeVry providing undergraduate and graduate scholarships to members of the U.S. Olympic team. DeVry has more than 95 locations nationwide (Tripp Mickle, SportsBusiness Journal).
PARTY ON: Amscan Holdings, Inc yesterday announced a deal with the NHL to become the official licensee of celebration-based products. As part of the deal, Amscan will design, manufacture, and sell new hockey-themed party supplies including officially licensed tableware, favors and decorations. Fans can find the line at Amscan’s retail partner, Party City, and on PartyCity.com (Amscan).
BEER-LESS PARADE: In St. Louis, Todd Frankel reported Anheuser-Busch has “pulled out of the annual New Year’s Day event in Pasadena, Calif.” The decision ends “a long-running tradition for the brewery just as the Tournament of Roses confronts other financial issues from the economic downturn.” A-B said that it “notified parade organizers in May that it intended to invest ‘in other types of sponsorships and events that reach a higher concentration of beer drinkers, and where [it] can more directly discuss the Budweiser brand’” (ST. LOUIS POST-DISPATCH, 11/29).