SBJ/February 14 - 20, 2005/Marketingsponsorship
Speeding toward ATP renewal
Published February 14, 2005
Mercedes-Benz is on the verge of renewing its ATP sponsorship in a three-year, $36 million deal that would keep the luxury car maker’s logo on the circuit’s tennis nets across the globe through 2007. That figure does not include Mercedes’ promotional and advertising spending.
The deal is expected to be announced next month.
“They are very likely to renew for three more years,” said Mark Miles, the ATP’s chief executive. “Mercedes has invested at least $120 million [in the ATP] since 1996.”
A Mercedes spokesman in Germany, Gerd Hoffmann, said the company was still in negotiations with the ATP and no deal had been struck.
Sponsorship experts said Mercedes is among the gold standards of sponsorships because the company’s original deal with the ATP has now lasted nearly a decade and the name Mercedes has become synonymous with the sport.
“ATP tennis, along with golf, are the principal consumer audience for Mercedes, and the tournaments are in a global market that gives the car maker a great platform,” said Bob Basche, chairman of Millsport LLC. The cars are often featured at events, serving as the official transport for players and officials, as well as modeled on site.
The deal would be the second major sponsorship in the sport this year. In January, Sony Ericsson announced it would title-sponsor the WTA Tour in a six-year, $88 million deal.
As part of the Mercedes deal, top ATP executives receive free car leases, and Miles himself drives a Mercedes SUV that he received as part of the sponsorship.
The ATP ends up sending most of the money from the sponsorship to its tournaments to, in effect, buy out the car sponsorship category to ensure exclusivity at its 64 events.
Miles said the ATP probably could pull in more money for itself by dropping the Mercedes sponsorship and selling regional sponsorships as the women’s tour has done, leaving the car category to the tournaments to sell.
That would then allow the ATP to sell a title or presenting sponsorship to the season-ending Masters Cup, which will be in Shanghai for at least the next three years. The Mercedes deal precludes that.
“[Shanghai] would write us a check that is bigger than what we keep from the Mercedes deal,” Miles said.
But clearly the elite rub the ATP gets from the long-standing Mercedes association, and the global sponsor theme rather than a patchwork of regional deals, are worth it for men’s professional tennis.