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SBD/July 26, 2012/Marketing and SponsorshipPrint All
Learfield Sports, the multimedia rights holder at Penn State, said it will not immediately seek to restructure its contract with the athletic department in the aftermath of the NCAA’s harsh penalties against the PSU football program. Learfield President & CEO Greg Brown said yesterday he is taking “a wait-and-see approach” on how his company’s business might be impacted by the Jerry Sandusky scandal and the fallout from the sanctions. “Penn State is certainly one of our larger properties and it’s very significant to us,” Brown said. “But I don’t lay awake at night worrying about whether Penn State will treat us fairly. Does this create stress? Yes. Are we worried about it? Yes. But Penn State football is still going to generate a huge audience and we’ll continue to find ways for companies to connect with that audience.” PSU is one of nearly 50 schools that Learfield does business with. The Nittany Lions rank among the crown jewels in Learfield’s stable, along with North Carolina, Alabama, Oklahoma, Stanford, Wisconsin and Missouri. Brown said that if business drops way off in the coming months, then it is conceivable that Learfield might ask to renegotiate the guarantee it pays PSU annually, but he is not convinced that will be the case. PSU is not subject to the typical public disclosure laws, so the terms of its multimedia rights agreement with Learfield are not certain. But industry experts believe Learfield pays an annual guarantee of $5-6M a year, plus a revenue share if sales exceed projections. The guarantee is not as high as other Learfield properties, such as North Carolina and Alabama, which make $8-9M a year, because PSU takes more of a commercially conservative approach to advertising and sponsorship, Brown said. Also, local TV rights for Big Ten schools belong to Big Ten Network, which takes some of the value out of each school’s multimedia rights deal.
STATE FARM SHIFTED INVENTORY: The most immediate fallout from the NCAA’s penalties this week was State Farm’s decision to pull its advertising out of PSU football. Brown said it was incorrect to say that State Farm dropped its sponsorship. Instead, the insurance giant shifted its inventory out of football to other sports. But as long as fans continue to fill Beaver Stadium on Saturdays, Brown said Learfield will have a legitimate product to market. The Nittany Lions’ attendance has dropped over the past three seasons from an average of 107,008 in '09 to 104,234 in '10, and 101,427 last season, none of which can be attributed to the Sandusky scandal. But Brown said he expects fans and alumni to rally around the program now, even as the football team moves into an era of reduced scholarships and bowl bans. “Can they build a team that will be successful and continue to attract a large audience? I don’t know,” Brown said. “That’s just something that can’t be answered right now. But I can tell you that we’re in constant contact with Penn State and we’re always talking. If something needs to change, we’ll figure it out. We’re partners with Penn State and we’ll deal fairly with them, just as they’ve always dealt fairly with us.” Brown said that Learfield’s new ownership group will not impact the way the company handles the situation. L.A.-based Shamrock Capital Advisors bought a majority share of Learfield in December, after the Sandusky scandal already had broken, and has been aware of the developments.
Lenovo yesterday announced a three-year partnership with the NFL, making the company the league's official laptop, desktop and workstation sponsor. The deal will allow Lenovo use of NFL-owned trademarks in marketing and advertising activities. Plans include advertising and promotions in retail outlets, customer events, and case studies showing how the NFL is using Lenovo equipment to meet its technological needs, increase productivity and deliver on its business goals. The first sponsorship activities are set to launch at the '12 NFL Kickoff event in early September (Lenovo). Lenovo Group Senior VP & President of North American Business David Schmoock said that this is the company's "largest U.S. sponsorship deal ever." He said that the NFL deal will "especially help the company with a key demographic: 18- to 35-year-olds." In Raleigh, David Ranii notes Schmoock "pledged that Lenovo will make a 'big investment' in advertising and marketing in and around NFL games and events, but he didn't disclose a dollar figure." Schmoock said that the NFL has been a Lenovo customer since '07, and the sponsorship "grew out of that relationship" (Raleigh NEWS & OBSERVER, 7/26). Lenovo Exec Dir of North American Marketing David Rabin said that the NFL "was an important investment, both to reach target consumers and small to medium-sized businesses, as well as its retailers." Rabin: "When you make a long-term investment in a property the size of the NFL, you are sending a powerful message. We're one of the biggest brands in the tech world that a lot of people still haven't heard of, so we're picking a brand as powerful as the NFL to partner with" (SPORTSBUSINESS JOURNAL, 7/23 issue).
U.K.'s advertising watchdog has banned Virgin Media's multimillion-pound TV campaign featuring Gold Medal-winning Jamaican sprinter Usain Bolt, ruling that the cable firm "could not deliver on a promise relating to superfast broadband," according to Mark Sweney of the GUARDIAN. Virgin Media's "high-profile TV campaign" consists of a series of ads featuring Bolt "mimicking" Virgin founder Richard Branson to promote its US$170M move to double broadband speed for its Internet customers. Rival Internet service provider BT submitted a complaint to the Advertising Standards Authority about one of the TV ads, which featured Bolt promising that customers could say "bye-bye to buffering and hello to a superfast broadband." A Virgin Media spokesperson said, "When one of the world's leading athletes dresses up as a world famous entrepreneur, complete with stuck-on blond beard and space helmet, and says he wants everyone to 'wave bye-bye' to buffering -- this should not be taken as an absolute claim that no Virgin Media customer will ever experience buffering ever again." Clearcast, which screens TV ad scripts for accuracy before they are made and aired, said it believed that the buffering claim was a "statement of intent" by Virgin Media to significantly improve Internet speed. The organization "did not believe that the claim was misleading" (GUARDIAN, 7/26).
MISLEADING AD: MARKETING WEEK's Sebastian Joseph reported that the ASA ruled that the ad "must not appear again in its current form." The ASA said, “Because we understood that users of the service might still experience buffering, we concluded that the claim was misleading.” The ASA warned Virgin Media not to “state or imply” that users of broadband service would not experience buffering in future campaigns (MARKETINGWEEK.co.uk, 7/25). THE REGISTER's Kelly Fiveash wrote that this is "an expensive mistake" for Virgin Media. The company spent US$81.3M on marketing costs in its first quarter. Much of that was spent on TV, print, online and billboard ads "featuring Bolt wearing a fake gingery-blond beard." Also, the ASA slapped Virgin Media for "failing to substantiate claims it made on its website about the company's download speeds" (THEREGISTER.co.uk, 7/25).
Two banks have struck college sponsorship deals that will give them rights on both coasts. Bank of the West has extended its deals to be the official bank at UCLA and Cal-Berkeley, while adding a deal with the Rose Bowl. On the east coast, Webster Bank will be the new official bank of UConn. Both deals were brokered by IMG College. Webster's deal is unique in that it includes standard athletic assets -- media, hospitality, signage -- as well as the alumni association. With branches from Boston to Westchester County, N.Y., Webster found UConn to be in its geographic sweet spot. Bank of the West's five-year deal gives it rights in two major California markets and provides premium signage and naming rights for the suite level at the Rose Bowl. The bank also will have sponsorship on "BearVision," which is Cal's main football scoreboard. In basketball, Bank of the West will sponsor UCLA's "BruinVision" on the Pauley Pavilion scoreboard.
ESPN.com’s Zach McCann wrote Univ. of Kentucky football fans “have been interacting via the Twitter hashtag #WeAreUK for the past several years.” Now Lexington-based Cornett Integrated Marketing Solutions, which handles UK’s marketing, has “decided to take the Twitter trend mainstream, putting some of the most memorable Twitter messages on billboards, team posters and an interactive page” on UK’s website. Cornett Chief Strategic Officer Christy Hiler said, “A lot of agencies build messages through marketing and branding, but this topic was so strong and people loved it so much.” McCann wrote UK fans have embraced the effort “with constant messages and photos.” One fan in the northern part of the state “tweeted to #WeAreUK that most of the advertising was in the southern part of the state, so UK put up a billboard in North Kentucky with that exact tweet, in an ironic sort of way” (ESPN.com, 7/25).
BULL RUN: In Tampa, Greg Auman wrote Authentic Merchandise: It’s Bucs & Bulls Heaven, which serves as the official merchandiser for the Univ. of South Florida athletics, “is going out of business next month, with a sagging economy and online competition spelling the end.” Store Owner Jeffrey Fox said that when USF remodeled the Sun Dome to include a Bulls retail store, “he was disappointed not to get that property, which created a new place for Bulls fans to buy apparel and other USF paraphernalia on campus” (TAMPA BAY TIMES, 7/24).
AS SEEN ON TV: ESPN Consumer Products will bring back the company's “SEC on ESPN” apparel collection this fall. Dick’s Sporting Goods, an official sponsor of the SEC, will sell the collection throughout its stores in the southeast. ESPN teamed with apparel company Weezabi and headwear company Top of the World for the collection (ESPN).