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SBJ/November 24 - 30, 2003/SBJ In Depth
Bonanza or Bust?
Published November 24, 2003
Editor's note: This story is revised from the print edition.
College bowl games could face rough days ahead as they sell the title sponsorships that are their lifeblood. This year's television ratings will help tell the tale.
The top handful of games appear in great shape. The four Bowl Championship Series games and one or two others appear to be delivering the ratings and impressions their title sponsors expect, with 2002 ratings for most of these games up — sometimes dramatically — over 2001.
But after that, things get murkier. Not including the BCS games, of the 21 games that existed in both 2001 and 2002, 14 saw ratings decline last year. Of these 14, seven have no title sponsor or a sponsor that's new since 2001 or 2002, and arguably not as deeply invested in the game as a longtime sponsor would be.
Because many bowl deals are for three years, many companies are about to begin the analysis that will determine whether their first bowl title sponsorship is their last.
Many sponsorship experts, including those with clients that sponsor bowl games and some who do not, believe that BCS games are dangerously drawing attention and eyeballs away from non-BCS games, especially those in the lower half of the 28-game bowl roster.
The enormous number of games, many now featuring unranked teams, has created a perilously cluttered media landscape, many say. And with fees ranging from $10 million annually for BCS games down to roughly $400,000 for the smallest, newest bowls — all before another 20 percent to 50 percent is factored in for activation — the roster of potential sponsors is small, especially for events that are over in three hours and often largely regional, not national, in appeal.
"Once you get past the top five bowls, you're looking at a huge ratings slide, and more than half the games are not on network TV," said Ethan Green, vice president, North America, at sports marketing consultancy Redmandarin, who has analyzed bowl deals for clients. "Considering these deals require a media buy, would I have bought the media if I hadn't bought the rights deal? The answer is absolutely not."
Green said the problem stems from how some companies view a naming-rights deal. "Unfortunately, there are a lot of people who still view them as an awareness-building activity and measure it by media mentions. Naming rights shouldn't be a one-off."
Sigmalytics, a sponsorship research and evaluation company in Atlanta, has analyzed title sponsorships in general and found that "the basic entitlement doesn't do anything to impact the sponsor's business, that it really is completely a function of how well they leverage them," said Larry Lubin, chief operating officer.
Ardy Arani, managing director of the consultancy Championship Group, Sigmalytics' parent company, is more blunt. "I would lay you any bet you wanted that we could go out on the street and do an unaided recall and see who can name one [bowl game title sponsor]. There's a lot of clutter out there. Also the collegiate landscape has limitations on the exploitations of trademarks, images and rights, since you're dealing with amateur athletics."
Joyce Julius & Associates has done research on unaided recall of bowl game title sponsors, and while the details are proprietary, vice president Eric Wright said, "I would slightly disagree [with Arani] for the upper-tier games. Your FedEx and Tostitos, and to some extent Nokia, are going to be fairly pleased with their recall."
If this is true, it's partly because bowl games have responded to sponsors' demands for more in-broadcast mentions and better positioning of signage. By the Julius group's reckoning, Tostitos had $76.6 million worth of exposure in last year's ABC-televised game, compared to $27.4 million three years ago. With mentions throughout the season in other media, Wright said Tostitos had nearly $100 million in exposure.
And the benefits aren't necessarily confined to BCS sponsors. The Fox-televised SBC Cotton Bowl had $22.8 million in exposure for its title sponsor last year, up from $6.5 million in 2002 despite a 21 percent dip in households reached. The Cotton Bowl tied for 12th in ratings last year. By contrast, the ESPN-televised Chick-fil-A Peach Bowl earned only $2.6 million in exposure for its sponsor, up about 250 percent from two years before.
Dean Bonham, president of The Bonham Group, which has represented numerous current sponsors in their negotiations with bowls, does not agree with all of the Julius group's valuation formulas. But he agrees that the games deliver value, with well-implemented sponsorships returning between 100 percent and 150 percent of all costs to the bottom line, and some even 200 percent, he said.
Where television viewer demographics are concerned, bowl games as a group measure up well. They draw a strongly upscale and fairly mature viewership, for starters, with adult bowl game viewers on both over-the-air and cable 14 percent more likely than the general public to buy a car, 33 percent more likely to have mutual funds, 28 percent more likely to have a money market account and 20 percent more likely to do online banking, according to Scarborough Research.
Adding spice to the demographics, viewers are 14 percent more likely to have eaten at a fast-food restaurant five times in the past month, according to Scarborough.
These figures are almost identical to those for the NCAA Tournament, all of which is shown on broadcast TV.
And the numbers help explain why Chick-fil-A has title-sponsored the Peach Bowl for seven years and why AXA/Equitable has sponsored the Liberty Bowl for just as long and was joined by MainStay Management (Independence Bowl) and PlainsCapital (Fort Worth Bowl) as title sponsors since 2001. And they help justify Toyota's Gator Bowl titlement since 1995, the GMAC Bowl since 2000, and a consortium of automakers' presenting deal with the Motor City Bowl since 1998.
The numbers don't surprise Bonham. "There are a lot of lower-income fans, but it's interesting that fan avidity tends to increase for college sports as people become more financially stable and more stable in their lives in general. They tend to want to reconnect with their alma maters."
This is backed up by Scarborough numbers showing that viewership is 6 to 7 percent more likely to be between the ages of 45 and 64 for college bowl games, and 7 to 8 percent less likely to be between the ages of 18 to 34, numbers fairly similar to those for the NCAA Tournament.
At the top of the heap, bowl games clearly are satisfying sponsors on a long-term basis. Of the six top-rated games on television last year, four had title sponsors stretching back to at least 1996. Where you see more turnover is in the lesser bowls.
Gallery Furniture has one store, in Houston, that generates $170 million in revenue. Founder Jim McIngvale paid for title sponsorship of the Houston Bowl for two years, through 2001, at about $500,000 a year plus activation costs, then realized his aspirations had outgrown what the property could provide. It would have taken $5 million or more to lure top teams to the game, he said — assuming the bowl community would have allowed such an interloper — and McIngvale felt he saw the handwriting on the wall.
"I like to do world-class events, and it's easier to do that with a tennis match than through college football," McIngvale said, explaining why he is spending $7 million a year to host the 2003 and 2004 Tennis Masters Cup, another $10 million to market the event as the promoter, and $10 million to help build the Gallery Furniture Stadium Court, where the event is played.
Sylvania title-sponsored the Alamo Bowl for three years, until 2001, following in the footsteps of one of its top accounts, Builders Square, which sponsored the game for six years before declaring bankruptcy in 1999.
During its three years, Sylvania ran seasonlong consumer promotions for trips to the game, did hospitality for top accounts and sales people, and tried to sink roots in the San Antonio community itself. "It was a Sylvania town, from the minute you got off the plane," said Mike Colotti, vice president of brand management for the company. Colotti said television ratings were satisfactory.
But Sylvania walked away for two reasons. One was that Sylvania found it hard to get top executives from its customer base to commit to attending the game, which is held during the week between Christmas and New Year's Day. Sylvania also was lured away by NASCAR, Colotti said, adding title sponsorship of the Sylvania 300 to its associate sponsorship of the Kevin Harvick Winston Cup team.
"There are sources out there that show you what the cost per thousand impressions is, and NASCAR has really taken off in that regard," Colotti said. "And the seasonality of NASCAR vs. a bowl game, with NASCAR running almost a whole year, February to November, that allows you to run a much longer program."
There are analogous problems where brand awareness is concerned. Bowl game sponsors constantly bemoan the difficulty in getting the media and the public to call the game by the official, paid-for name, which includes the sponsor's name.
Pacific Life Insurance Co. is in the middle of a four-year deal for the Pacific Life Holiday Bowl. "I'm certain I speak for many other corporate sponsors when I say that we'd really like to see more consistent references to the Pacific Life Holiday Bowl rather than simply the Holiday Bowl," said Milda Goodman, assistant vice president for advertising and public relations for Pacific Life.
By contrast, Sylvania's Colotti raved about NASCAR's ability to put sponsors front and center. "There's no other sport where the combatants wear your logo and take great pride in it. You might say it's overboard, but the reality is, if you're a major sponsor, or even a minor one, they go to great lengths to recognize who you are. You don't hear Tiger Woods thank Buick and Nike immediately after a victory, even though they're big supporters of him. It's just not the culture."
The force of history is one thing preventing the MasterCard Alamo Bowl from being called the MasterCard Bowl, analogous to the Sylvania 300. Five of 28 current bowls are named entirely after the sponsor — Capital One, Continental Tire, GMAC, Insight and the Outback — and two of them, the Outback Bowl and the Capital One Bowl, were among the top-rated bowl games on television last year after the four BCS games.
So there could be increased pressure on bowl game committees to drop the historical in favor of the commercial.
"We have opted not to do that. Alamo is synonymous with the destination of the city, a true icon, and we've opted to maintain that name," said Derrick Fox, president of the MasterCard Alamo Bowl. "And quite frankly, we've only had one company mention the idea in 10 or 11 years, and our response was, 'You don't want to go there. You'd do more harm than good.'"
The right way
Analysts suggest the titlement and the in-game spots are just the beginning of the obligation, if a game is to be leveraged effectively.
David Grant, principal and co-founder of consultancy Velocity Sports & Entertainment, which works with FedEx Corp., explained it this way: "You see a spectrum of sponsors in the BCS — FedEx, a business-to-business company; Tostitos, a consumer brand; and Nokia, which is both. FedEx will bring in hundreds and hundreds of top customers and capture them in a friendly environment for three to four days. Tostitos will activate over the course of the whole season. Tostitos can probably declare victory or defeat before anyone takes the field, but not so with FedEx, where so much of the success is a function of business-building and follow-up."
Top sponsors now treat their allotted airtime the way Super Bowl advertisers treat their spots. Nokia hired late-night television personality Jimmy Kimmel last year to do a live on-field promotion at halftime that integrated former college football greats and a fan contest involving camera phones. This year it will be a highly produced three-minute short film.
Two years ago Tostitos did an end-zone stunt with a huge salsa jar that walked the line between progressive and cheesy, "but those stunts are really good for new products," said Chris Smith, chief strategy officer of The Marketing Arm, which has handled Nokia's Sugar Bowl sponsorship for nine years and SBC's sponsorships of the Cotton Bowl and the Red River Shootout.
This large and long-term commitment of resources appears to contrast with the situation for several of the bowls that have seen a succession of sponsors, each on board for a few years or less.
Ross Ely, vice president of marketing for Micron PC, admitted that his company discovered that hospitality costs during its three-year Tangerine Bowl titlement made it impossible to profit from the deal. "In the end it was costing us $1 million to do each game, and we didn't do sales of $10 [million] to $15 million, which would have made it worthwhile. Our guests appreciated the relationship-building, but they still had to look for the best value in what was almost a commodity [computer] market, so at best it could be a tie-breaker."
A model for bowls not among the top five or six might be the Chick-fil-A Peach Bowl, which has had one title sponsor straight through since 1997. The bowl and its sponsor have avoided the pitfalls many of the experts have described.
As it has the ninth-biggest payout among bowls, at $2.1 million per team, and features the SEC's No. 5 team and the ACC's No. 3, the game isn't necessarily going to affect the top half of the national rankings.
But the bowl earned a 7.8 rating last year regionally — very satisfactory to Chick-fil-A, which has restaurants in three-quarters of the ACC and SEC markets. Chick-fil-A also has sponsorship relationships with both conferences, to deepen the association in fans' minds.
The chain's menu is integrated into all game events, with the 25,000-visitor fan fest serving as a testing ground for new recipes and the game itself representing the biggest sales day for any Chick-fil-A location each year. And the sponsorship is integrated online, where 72,000 fans signed up for a free-coupon promotion in two hours during last year's game.
The partners meet once a month for three hours to plot strategy, starting at a BCS game, where they spend three days observing how one of the big boys does things. "Our job is to provide Chick-fil-A a return on investment, and theirs is to partner with us to make the game bigger and better, because holistically, if it's bigger and better, they'll have more opportunities to promote their brand," said Gary Stokan, president of the Peach Bowl.
Even a smaller bowl, the Gaylord Hotels Music City Bowl, boasts an arrangement that appears to be working, but with a different strategy. The Nashville event is designed to showcase Gaylord's top property, Gaylord Opryland Nashville and its 2,881 rooms, and to drive business to its other Nashville venues and to the city in general. The game features the No. 6 teams from the SEC and the Big Ten.
Gaylord spokesman Jim Brown said the company is satisfied with the bottom-line results (although Brown won't state them), the branding achieved and the benefits to the city. Brown expects last year's dip in ratings to be reversed this year, as the game has landed a New Year's Eve slot on ESPN. "We're delighted with the sponsorship and the effect on our business," Brown said.
According to Bonham, there are no intrinsically bad bowl games among the 28, just the possibility a company will overestimate the possible benefits or underutilize the opportunities. "There are some sponsorships that aren't delivering value, but in 15-plus years that I've been evaluating and negotiating, I haven't found where I said, 'This is just a bad deal.'"