SBD/July 18, 2013/Marketing and Sponsorship

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  • EA Sports Plans To Continue Making CFB Game Despite NCAA Pulling Its Name, Logo

    Analysts think the NCAA is trying to limit its legal exposure to class-actions lawsuits

    EA Sports Exec VP Andrew Wilson yesterday posted a statement online that the company will continue to develop and publish a college football video game despite the NCAA's decision to end its contract licensing its name and logo for EA Sports' "NCAA Football" franchise. Wilson wrote, "Our relationship with the Collegiate Licensing Company is strong and we are already working on a new game for next generation consoles which will launch next year and feature the college teams, conferences and all the innovation fans expect." The NCAA in a statement yesterday said, "We are confident in our legal position regarding the use of our trademarks in video games. But given the current business climate and costs of litigation, we determined participating in this game is not in the best interests of the NCAA (THE DAILY). USA TODAY's Steve Berkowitz cites legal analysts as saying that they "thought the NCAA was seeking to limit its legal exposure" by announcing the non-renewal "at a time when it is a co-defendant, along with EA, in at least two federal lawsuits concerning the use of college athletes' names and likenesses." Tulane Sports Law Program Dir Gabe Feldman said, "The NCAA is trying to minimize its risk going forward" (USA TODAY, 7/18).

    MOVE BROUGHT BY O'BANNON LAWSUIT
    : In N.Y., Steve Eder writes the NCAA's move is "perhaps the biggest real-world development in a more than four-year-old legal battle focused on the rights of college athletes on how their likenesses can be used and what, if any, compensation they should receive." The NCAA "cautioned that its decision not to renew the video game contract should not be seen as a signal that it would back away from its legal stand." NCAA Associate Dir of PR & Media Relations Stacey Osburn said, "This decision and the NCAA’s business relationship with EA only pertained to the NCAA logo and name. Student-athletes were never a part of this relationship, and plaintiffs’ attorneys know it" (N.Y. TIMES, 7/18). However, Michael Hausfeld, the lead attorney representing the plaintiffs in the Ed O'Bannon case, said the organization's decision "underscores their belief they're above the law." He said, "It demonstrates how petty and vengeful the association is." In Birmingham, Jon Solomon notes a former EA Sports exec "testified in the O'Bannon suit that video-game avatars were designed to replicate actual players without using their names." E-mails filed in the case showed that NCAA officials "knew the video games used real players and some officials expressed concern about the perceived commercialization of college athletes through video games" (BIRMINGHAM NEWS, 7/18).

    CAUTIOUS ABOUT THE FUTURE: While EA plans to continue with a college football game, Univ. of Kansas Associate AD/External Affairs Jim Marchiony said that school officials would "want to digest the NCAA's decision." He said, "I'm not surprised CLC and EA Sports have a Plan B and we're looking forward to hearing from them about it, to see how we'll proceed in the future." Stanford Deputy AD Patrick Dunkley, whose school also is with the CLC, "expressed similar sentiments" (USA TODAY, 7/18). ESPN's Darren Rovell said, “Should CLC not license the schools in future games, this franchise is over” (ESPN.com, 7/17). Meanwhile, SPORTS ON EARTH's Patrick Hruby wrote, "Here’s the problem for EA Sports, the CLC, schools, conferences and bowl games if they continue with 'College Football 15' and beyond: Unlike the NCAA, they won’t be dodging future liability." Instead, they would "be on the financial hook." A loss or settlement in the O’Bannon case would "set a precedent for paying players for the use of their NILs, making future college football games less profitable and probably not worth the trouble" (SPORTSONEARTH.com, 7/17).

    NOT A BIG FINANCIAL HIT FOR EA: In San Jose, Jon Xavier noted NCAA games "don't make EA as much money as flagship products like Madden and the FIFA series," but "all the NCAA games were a strong, predictable source of revenue for the company year after year" (BIZJOURNALS.com, 7/17). Boston-based Cowen & Co. research analyst Doug Creutz estimated that "NCAA  Football" accounts for about 2% of the $3.8B in total annual revenue for EA Sports. Creutz: "They will still be able to make a college-football video game, just not with the NCAA name or logo. I suspect they will still make one, though it might sell fewer units because of the changes. But this is a game that, so far, has not been that important in the grand scheme of things" (ORLANDO SENTINEL, 7/18).

    REAL LIFE IMPACT: SI's Austin Murphy notes Univ. of Missouri DT Lucas Vincent earlier this month wrote on his Twitter account he wants to "buy the new NCAA game but I also don't wanna be poor till September." Vincent: "My likeness is on the game why do I have to pay for it?" Murphy notes Vincent the next day claimed he was joking with the tweet, but he managed to "distill the unfairness of the status quo: Players sweat and bleed in the arena, but they are not paid for their labor." Vincent was "asked by a reporter on Twitter if a stipend from EA or the NCAA would make his life easier." He responded, "Extremely easier! (I'd) be able to buy more groceries and be able to put more than $25 in (the) gas tank at a time . . . Would be great lol but lets be real never gonna happen" (SI, 7/22 issue).

    Print | Tags: EA Sports, NCAA, Marketing and Sponsorship
  • Tiger Woods Signs Another Long-Term Deal With Stay With Nike For Clubs, Apparel

    Tiger Woods has "signed a new endorsement deal with Nike that will take the place of a contract set to expire this year," according to Bob Harig of ESPN.com. Mark Steinberg, Woods' agent, yesterday said that the contract was "signed about two weeks ago during a series of meetings in Florida." Steinberg did not disclose financial terms or the length of the deal. Steinberg said that there "would be no new requirements as part of the deal but that Woods would continue to work closely with Nike to develop products." Woods' current deal with Nike "was signed in 2006," and he has been with the company since turning pro in '96. He also has endorsement deals with Rolex, Fuse, NetJets, EA Sports and Japanese pain relief brand Vantelin Kowa (ESPN.com, 7/17). GOLF WEEK's Gene Yasuda wrote picturing Woods "adorned with anything but Nike swooshes is difficult to do." His "value to Nike Golf is difficult to quantify, with typical metrics such as advertising exposure and product sales falling well short of capturing his full impact." Woods "virtually single-handedly ... legitimized Nike, known foremost as an athletic shoe and apparel company, as a golf brand." His latest deal with Nike "arguably, caps a complete rebound from his marital problems that became publicly known in 2009 and derailed his marketability" (GOLFWEEK.com, 7/17).

    Print | Tags: Golf, Marketing and Sponsorship, Nike
  • Baltimore IndyCar Race Unlikely To Have Title Sponsor This Year, Hopeful For '14

    Several companies have shown interest in next year's Baltimore Grand Prix

    The Izod IndyCar Series Grand Prix of Baltimore "likely won't have a title sponsor for this year's race, but organizers are still working on lining one up for next year," according to Gary Haber of the BALTIMORE BUSINESS JOURNAL. Event GM Tim Mayer said that race officials are "looking for a title sponsorship deal in the low seven figures." He said several companies "have expressed interest for next year." While he did not identify any of the companies, Mayer said that they are "interested in reaching people living in the mid-Atlantic region." The Labor Day weekend race has not had a title sponsor since it was created in '11. Mayer said that both ticket and corporate suite sales "continue to trend ahead of last year." He added that officials "expect to exceed the 131,000 tickets sold in 2012 and are on target to reach the roughly 150,000 sold in 2011." Haber noted new event sponsors for this year include auto service company Mr. Tire, meat company Esskay and watchmaker Ritmo Mundo (BIZJOURNALS.com, 7/16). Race On LLC VP/Sales & Marketing Debbie Bell, whose firm organizes the event, indicated that sponsorship sales "are up over last year -- when Race On had only 100 days to organize the race after previous groups failed to do so -- but would not say by how much." Last year's race "brought in $800,000 in sponsorship money, about one-third as much as the inaugural event" (Baltimore SUN, 7/18).

    Print | Tags: Marketing and Sponsorship, IndyCar
  • Yonex Ends Caroline Wozniacki Sponsorship After She Uses Blacked-Out Racquets

    Yonex was upset at Wozniacki for playing with a Babolat racquet this spring

    Tennis player Caroline Wozniacki is "no longer under contract with Yonex," according to Matt Cronin of TENNIS.com. A report in Danish tabloid Ekstra Bladet stated that Yonex was "upset with Wozniacki for playing with a blacked-out racquet this spring and negated their contract." The racquet was "presumed to be a Babolat, as she once played with one before." Wozniacki's reps indicated that "no new deal has been struck with another racquet company" (TENNIS.com, 7/16). TENNIS WORLD USA's Federico Coppini noted Wozniacki, the former top-ranked player in the world, "enjoyed her best results using a Babolat racquet," but she "stands to lose a lot of money from the Yonex contract." Wozniacki is currently ranked No. 10 and "will not find it easy to get a similar contract elsewhere" (TENNISWORLDUSA.org, 7/17). Wozniacki signed with Yonex in '11 (THE DAILY).

    GETTING A BIG HEAD: USA TODAY's Chris Chase noted Roger Federer earlier this week confirmed he would switch from his "classic 90 square-inch racket head ... to a 98 square-inch racket head." He has been "practicing with a blacked out racket before this week's tournament in Hamburg." It is a "massive change" for Federer, but it "puts him in line with most of the ATP Tour" (USATODAY.com, 7/16). TENNIS.com's Jon Levey noted the "assumption is that Federer has switched to the Blade 98." Wilson, Federer's racquet sponsor, "would only comment that Federer will be using a blacked-out frame to start his Hamburg run." It is "conceivable, although unlikely, that Wilson would roll out an entirely new frame mid-season" (TENNIS.com, 7/16).

    Print | Tags: Marketing and Sponsorship, Tennis
  • Marketplace Roundup

    MARKETING WEEK's Sebastian Joseph reported Li Ning has "suspended its deal with Jamaican sprinter Asafa Powell as the fallout from his positive drugs test escalates." The company said it "strongly" supports the star's "proactive" approach toward the incident and his cooperation with WADA, but it has put its deal on hold (MARKETINGWEEK.co.uk, 7/17).

    SWEATER WEATHER: GOLF WORLD's Tim Rosaforte reports Under Armour is sending golfer Jordan Spieth, who is playing in his first British Open, his "outfits for the week" from its Baltimore HQs. Spieth, a UA endorser, qualified for the event by winning the PGA Tour John Deere Classic on Sunday. Spieth said that "all he packed for his latest three-week trip on the PGA Tour was short-sleeved shirts"  (GOLF WORLD, 7/22 issue).

    LOOKING FOR MORE
    : BRAND REPUBLIC's Maisie McCabe noted Gatorade released a new TV ad in the U.S. to "build on the idea that its Thirst Quencher drink can help sportspeople as they ask their bodies to perform 'one more.'" The ad, created by TBWA\Chiat\Day, "intersperses clips of an American football team training with images of men lifting weights in the gym, all using Gatorade Thirst Quencher to do 'one more' of the exercises" (BRANDREPUBLIC.com, 7/16).

    SCORING A TOUCHDOWN: The NFL has signed an exclusive agreement with Export Now to utilize its e-commerce strategy to establish an official online store in China on the Tmall.com domain. The new online store will debut in September (Export Now).

    Print | Tags: Marketing and Sponsorship
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