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SBD/May 16, 2013/Marketing and SponsorshipPrint All
NBC Sports has sold 75% of its advertising inventory for the '14 Sochi Games and hopes to top $800M in sales, which would set a record for a Winter Games. A major driver of the increase stems from a change in NBC’s approach to selling advertising on NBCOlympics.com. For the first time, NBC is limiting the number of companies it will feature on its website to its 16 biggest TV advertisers, and it has already sold out all 16 of those digital advertising positions. The early sale results are a major improvement from sales ahead of the '10 Vancouver Games, when NBC Sports sold just 74-76% of its inventory and lost $200M on the Olympics. Its goal was to sell more than $650M in advertising for Vancouver. NBC Sports Group Exec VP/Sales & Marketing Seth Winter said his team expects to sell more than 80% of its advertising inventory for Sochi. The last time the group sold more than 80% of its advertising for an Olympics was Beijing in '08. “The story is nothing short of fantastic,” Winter said. “To think we could come close to what we did for Beijing is nothing short of miraculous.” Winter credited strong demand from USOC and IOC sponsors with driving sales. USOC sponsors such as BP, Kellogg’s, BMW, Chobani, Citi, TD Ameritrade, Liberty Mutual and Smucker’s have all committed to advertising. IOC sponsors such as P&G, Visa, McDonald’s, Coca-Cola and GE have all signed on to advertise, as well (Tripp Mickle, Staff Writer). AD AGE's Michael McCarthy notes there were "concerns the six-hour time difference between the U.S. and Russia would hurt demand." But "brisk sales for Sochi are 'handily eclipsing' those" last two North American Olympics -- Vancouver in '10 and the '02 Salt Lake Games. NBC thinks it is "possible to sell out ad time for Sochi, which is difficult for an Olympic broadcaster given the time and inventory of the multi-week games" (ADAGE.com, 5/16).
A-B, HILTON NOT BUYING AD TIME: Of the USOC’s 15 largest sponsors, only Anheuser-Busch and Hilton have opted not to buy advertising. This will be the first time in a decade that A-B has not advertised during an Olympics. By comparison, it had 103 spots in the '06 Turin Games. Hilton chose not to advertise during last summer's London Games as well. A-B VP/Marketing Paul Chibe said the company is focused on its official sponsorship of Team USA. He added, “With respect to advertising, TV media is not the only game in town. We will activate in new, creative ways.” Among IOC sponsors, Winter said NBC is still in talks with Samsung, Dow and Panasonic. NBC Sports also had success in selling advertising beyond Olympic sponsors. It has closed a deal with Carnival Cruises, GM, several movie studios, retailers and technology companies, Winter said. NBC’s new approach to digital sales also boosted its advertising sales total. Winter said NBC decided to limit the number of digital advertisers it will have to 16 in large part because it has less video content available online for Sochi, which has just eight sports, than it did for London, which featured 28 sports. But having less inventory helped boost demand for digital advertising, and NBC was able to sell out of those 16 positions quickly. Only TV buyers who hit a “certain threshold” made the list of 16 advertisers, Winter said, and as a result, they will benefit from less advertising clutter on NBCOlympics.com (Mickle). The WALL STREET JOURNAL's Matthew Futterman notes Winter "described the move by Anheuser Busch InBev as 'a shock' since sports has played such a central role in the company's marketing strategy." Meanwhile, NBC could face "record production costs for the Sochi production, offsetting the strong ad sales" (WALL STREET JOURNAL, 5/16).
Boxer Floyd Mayweather Jr. tops SI's Fortunate 50 list for the second consecutive year, as he will earn at least $90M after “just two bouts this year, one earlier this month and the other scheduled for September," according to Daniel Roberts of SI. The $90M figure is also "conservative," as he could make as much as $128M. The May 4 welterweight title bout against Robert Guerrero brought Mayweather a guaranteed purse of $32M, with his PPV cut "yielding at least" another $13M. There are “other notable shifts this year,” with Heat F LeBron James (No. 2) passing Lakers G Kobe Bryant (No. 4). Tiger Woods (No. 5) is “back above" Phil Mickelson (No. 6) -- thanks to $4M more in tour winnings. Findings consist solely of salary, winnings, bonuses and endorsements. SI consulted players’ associations, tour records, online databases, agents and media reports. Endorsement estimates come from a stable of marketing execs, agents and other experts, including Burns Entertainment & Sports Marketing. Candidates for the Fortunate 50 must be U.S. citizens or play in a U.S.-based league. Endorsements reflect current deals, and salaries are based on current or most recently completed seasons. For auto racing and tennis, prize money came from the '12 calendar year. Golf earnings are from July 1, 2012 through April 21, 2013. Boxing purses are from August '12 through May '13 (SI, 5/20 issue).SI'S FORTUNATE 50 LIST
NAMESALARY/WINNINGSENDORSEMENTSTOTAL 1 Floyd Mayweather Jr.$90,000,000$0$90,000,000 2 LeBron James$17,545,000$39,000,000$56,545,000 3 Drew Brees$40,000,000$7,800,000$47,800,000 4 Kobe Bryant$27,850,000$19,000,000$46,850,000 5 Tiger Woods$7,839,027$33,000,000$40,839,027 6 Phil Mickelson$3,528,630$36,000,000$39,528,630 7 Derrick Rose$16,403,000$17,000,000$33,403,000 8 Peyton Manning$18,000,000$13,000,000$31,000,000 9 Alex Rodriguez$29,000,000$900,000$29,900,000 10 Zack Greinke$29,000,000$20,000$29,020,000 11 Dwyane Wade$17,182,000$11,500,000$28,682,000 12 Kevin Durant$16,670,000$11,000,000$27,670,000 13 Johan Santana$25,500,000$800,000$26,300,000 14 Felix Hernandez$25,000,000$600,000$25,600,000 15 Vincent Jackson$25,160,000$200,000$25,360,000 16 Carmelo Anthony$19,500,000$5,800,000$25,300,000 17 Cliff Lee$25,000,000$280,000$25,280,000 18 Mario Williams$25,000,000$150,000$25,250,000 19 Derek Jeter$17,000,000$8,100,000$25,100,000 20 Joe Mauer$23,000,000$2,000,000$25,000,000 21 Carl Nicks$24,285,000$0$24,285,000 22 CC Sabahia$23,000,000$1,000,000$24,000,000 23 Prince Fielder$23,000,000$500,000$23,500,000 24 Amar'e Stoudemire$19,950,000$3,500,000$23,450,000 25 Ryan Howard$20,000,000$3,200,000$23,200,000 26 Tim Lincecum$22,000,000$1,000,000$23,000,000 27 Matt Schaub$22,450,000$330,000$22,780,000 28 Mark Teixeira$22,500,000$225,000$22,725,000 29 Calvin Johnson$21,750,000$850,000$22,600,000 30 Matt Kemp$22,000,000$400,000$22,400,000 31 Dwight Howard$19,536,000$2,400,000$21,936,000 32 Vernon Wells$21,000,000$600,000$21,600,000 33 Chris Paul$17,780,000$3,800,000$21,580,000 34 Adrian Gonzalez$21,000,000$350,000$21,350,000 35 Dirk Nowitzki$20,907,000$400,000$21,307,000 36 Miguel Cabrera$21,000,000$200,000$21,200,000 37 Pau Gasol$19,000,000$2,100,000$21,100,000 38 Justin Verlander$20,000,000$600,000$20,600,000 39 Roy Halladay$20,000,000$210,000$20,210,000 40 Matt Cain$20,000,000$100,000$20,100,000 41 Barry Zito$20,000,000$80,000$20,080,000 42 Carl Crawford$20,000,000$75,000$20,075,000 43 Joe Johnson$19,753,000$200,000$19,953,000 44 Cole Hamels$19,500,000$400,000$19,900,000 45 Joey Votto$19,000,000$250,000$19,250,000 46 Albert Pujols$16,000,000$3,000,000$19,000,000 47 Chris Bosh$17,545,000$1,000,000$18,545,000 48 Eli Manning$11,500,000$7,000,000$18,500,000 49 Dale Earnhardt Jr.$5,816,567$12,600,000$18,416,567 50 Alfonso Soriano$18,000,000$200,000$18,200,000
CHANGING OF THE GUARD: SI’s Roberts cited experts who said that endorsement contracts “are undergoing a major shift, and it's due to scandal.” Harvard sports law professor Peter Carfagna said, "This whole industry has changed because of ... Lance Armstrong, not so much Tiger or other scandals. He had federal sponsors, like the postal service, and what recourse do they have when it is alleged, now, that he fraudulently induced them at a time when he was doping. He must have given them some rep that he was clean." Roberts asked, “So how do companies now protect themselves when signing a deal with an athlete they believe is squeaky clean?” There are “often ‘clawback clauses’ that allow a sponsor to recoup its investments (even money they already paid a star) if they can prove that the athlete misrepresented himself when the contract was signed.” But that can be “difficult to prove.” In the wake of “so many high-profile athlete scandals, the balance of the reps and warranties are shifting in favor of the companies.” Morals clauses “aren't new, either, but they are getting far stricter.” As long as the company “can prove that the athlete's actions caused disrepute for the company, they can terminate a contract without being sued” (SI.com, 5/15).
ON THE MARKET: NATIONAL FOOTBALL POST’s Jack Bechta, who is an active NFL agent, noted agents "will tell you that one of the biggest issues we have with our clients is setting their expectations for off-field endorsements and income opportunities.” Many NFL players “just don’t get the facial recognition that their counterparts get in baseball and basketball” because of the helmet as part of their uniforms. If NFL players are not the QB and “not constantly talking to the media after every game or practice, you won’t garner household face recognition.” And thus, they "won't get the endorsements.” Meanwhile, the chances of a great player on a losing team signing "national endorsements are slim,” while for a “great player on a bad team in a small market, they are worse.” Players have to “be patient and take their time in building relationships with a company’s decision-makers.” They also must “work at building a brand identity by giving a lot of themselves in the community, with charities and the media” (NATIONALFOOTBALLPOST.com, 5/15).
Red Sox DH David Ortiz is "selling bats emblazoned with his colorful ode to Boston after the Marathon bombings to raise money for the victims," according to Marie Szaniszlo of the BOSTON HERALD. Fans can "choose a Marucci bat that says, 'Nobody’s going to dictate our freedom!' or 'This is our (expletive) city!' -- words he famously said during a pregame ceremony, broadcast live on television at the team’s first game back at Fenway Park after the attacks." An unsigned bat on the website "costs $125, and a signed one costs $500." All net proceeds "will be donated to the One Fund Boston and the bombing victims." Alex Radetsky, Ortiz' marketing agent, said, “He knows how many people’s lives were changed tremendously. He wants to do as much as he can to help" (BOSTON HERALD, 5/16).
Stewart-Haas Racing signed State Water Heaters to an associate sponsorship deal. The agreement gives the commercial and residential water heater company branding on the No. 14 Chevy driven by Tony Stewart and the No. 39 Chevy driven by Ryan Newman. State Water Heaters also becomes the primary sponsor of the No. 39 team at Martinsville Speedway this October. Stewart-Haas Racing still has six races to sell on the No. 39 car and six races to sell on the No. 14 car.