SBJ/June 9 - 15, 2003/This Weeks Issue

NHL renews Nextel for 3 years, $9M

The NHL has bagged its biggest sponsorship renewal of the year, with Nextel agreeing to a $9 million deal that will keep it as the league's "official wireless telecommunications provider" for the next three years.

Sources said the deal, which includes an opt-out for Nextel after the 2004-05 season, is priced at $2.8 million next year, $3 million the following year and $3.2 million in the final year. The contract is for U.S. rights only. It includes a commitment for a TV buy, online media, a provision for a pass-through to cell phone equipment vendors and rights to the NHL Players' Association. Nextel has been an NHL sponsor for the last three years.

Notably absent from the renewal is presenting sponsorship of the NHL All-Star Game, a million-dollar-plus per year expense by itself, but one that Nextel had taken on for the last two years.

Michael Robichaud, Nextel's director of sports and event marketing, said his brand's huge media spend behind the NHL (it bought enough postseason ads on ESPN and ABC to garner "presenting sponsorship status" on those networks for the entire playoffs), along with 12 NHL team deals and local NHL broadcast buys, would mean that Nextel's total NHL spending next year would equal or exceed this year's outlay.

"We'll still be very entrenched in the sport," Robichaud said. "With the sponsorship, we've increased brand awareness, and the NHL delivers us an audience that indexes well against technology-savvy consumers and business decision-makers — and we've been able to integrate the NHL well at retail."

Along with the Nextel deal, the NHL has signed renewals over the past two years with Coca-Cola/Powerade, MasterCard, MBNA, Anheuser-Busch, Labatt (Canada only) and Esso (Canada only) that extend beyond its labor agreement, even though the league is facing a potential labor stoppage after its collective-bargaining agreement ends next year.

"We expect [the league] to work it out and they've been accommodating with language that protects us if things aren't settled," Robichaud said.

The NHL's deals with Dodge, another of its biggest sponsors, and Southwest Airlines expire after next season.

"So far," said Andrew Judelson, NHL group vice president/corporate marketing, "we're providing our partners with the right comfort level."

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