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SBJ/February 28 - March 6, 2005/MarketingsponsorshipPrint All
Mixed martial arts champions Randy “The Natural” Couture and Quinton “Rampage” Jackson have signed a two-year deal to endorse Rockstar Energy Drink, the first mainstream sponsorship deal for the emerging sport.
Sources said the deal is valued in the mid-six figures.
Mixed martial arts features athletes from different combative sports — wrestling, karate, judo and kick boxing — fighting in one ring and under the same rules.
Jeremy Lappen, partner of Quattro Media, a Los Angeles sports and entertainment management and production company, negotiated the deal for Couture and Jackson.
“This is the first mainstream sponsor that has come into the sport to represent athletes,” Lappen said. “I think it’s a sign of where the sport is going. It is becoming more and more mainstream and larger everyday.”
Jason May, Rockstar executive vice president of marketing, said in a statement: “This is an exciting field with huge international popularity that’s now gaining greater traction in the U.S. … We feel the sport has the potential to become the new boxing.”
Couture is the light heavyweight champion of the Ultimate Fighting Championship league, which is seen on pay-per-view and Fox Sports and is the subject of a reality series on Spike TV.
Jackson fights for the Pride Fighting Championships league, which is seen on Prime Time Network television in Japan and on pay-per-view in the United States.
When fans head to Citizens Bank Park for the start of the $346 million ballparks sophomore season, theyll see some new action off the field.
Theyll be able to sign up for a Phillies-sponsored credit card, take home a Louisville Slugger bat engraved with their own signature or try their hand at pitching against Sammy Sosa in a virtual arcade game.
Most of the new events are backed by sponsors, as the Phillies strive for new ways to gain exposure for their team as well as their roster of 70 corporate partners. The season opener is April 4.
Sponsors will help the team foot the bill for more than a dozen giveaways this season, including collectible medallions, 5-inch-tall Phillies Mister Potato Head toys, fleece blankets, reversible bucket hats and Wiffle Ball and bat sets.
Work on the teams promotion schedule starts in the offseason when about 20 people from the teams marketing, public relations, stadium operations and ticket and advertising sales departments sit down to brainstorm ideas.
Everybody, whether its an administrative assistant on up to the vice president of sales, gets to voice their opinion about what will be hot, said John Brazer, the Phillies marketing publicist.
The large group allows the team to have different age groups represented and also ensures the teams different constituents are represented.
Dave [Buck, vice president for advertising sales] will want something that sponsors can get their name on, Brazer said, while I look for something fans will want to hold onto as a keepsake.
John George writes for Philadelphia Business Journal.
The BellSouth Classic will add prominent rotating signs to a new 18th hole leaderboard this year, becoming just the second PGA Tour event to use the technology.
More such advancements could be in the works, according to Duke Butler, vice president for tournament business affairs for the tour, who said the tour is in “think-tank mode” about the future of informational and ad signs at events.The scoreboard structure (drawing at bottom) will rise out of the pond next to the 18th green.
There will be a 10-foot-tall rotating structure on each side of the 14-by-41-foot leaderboard, each with three panels five feet wide. BellSouth has taken three of the six available positions, plus permanent signs above each of the rotating mechanisms. Tournament sponsors Georgia National Gas and EDS have one each. Event marketing director Andrew Webber said the final spot is nearly sold, to a current sponsor.
Webber declined to state the ad rate but said he is optimistic the first-year revenue from the six panels will pay for the $50,000 scoreboard expense.
Like the BellSouth skybox, the classic-styled leaderboard will be built on a permanent scaffolding that has been installed underwater. The lake is drained each spring and the skybox is built on top.
Tournaments and the tour are looking to scoreboards to generate more revenue, although representatives acknowledge the challenges of clutter and even noise. Rotating signs make noise when they rotate. Webber said the tournament is now experimenting with the rotation schedule to make sure the boards don’t distract players.
Cialis and MasterCard are sponsors of the tourwide electronic scoreboards, of which there are roughly a dozen at each PGA Tour event. The FedEx St. Jude Classic in Memphis has been using rotating signs for three years.
A continuing study charting the growth of the Internet indicates that sports marketers who understand online demographics have great opportunities.
The Pew Internet and American Life Project publishes 15 to 20 pieces of research a year regarding America and the Internet. The project, which began in 2000, is underwritten by the Pew Charitable Trusts and published by the Pew Research Center in Washington, D.C. The Jan. 25 report may be seen at www.pewinternet.org.
A few highlights:
63 percent of adults in the United States, or 128 million people 18 and older, are online.
70 million Americans log onto the Internet daily. This number is 37 percent higher than the 52 million adults online daily in the 2000 Pew study.
E-mail is the leading draw of the Internet. Last year, 58 million people e-mailed daily, up from 45 million in 2000.
19 million people use the Internet daily to research products before buying.
The study noted racial divides. Caucasians and English-speaking Hispanics are more likely to use the Internet than blacks. About 68 percent of whites and 59 percent of Hispanics use the Internet daily, yet only 43 percent of blacks do so.
Whites online are more likely than minorities to buy a product (63 percent to 53 percent) or participate in an online auction (24 percent to 16 percent). Hispanic Web surfers are more likely than non-Hispanic whites to look for new job information (61% to 38%) and listen to online music (46% to 30%).How do people use the Internet? It varies with age, race, sex and other variables, and marketers need to know that if they are going to make the best use of the Net.
Men are more likely than women to use the net to get news (77% to 66%), buy travel services (60% to 51%) and check sports scores (59% to 27%). Women use the Internet more than men to get health information (85% to 75%), research spiritual information (73% to 56%) and participate in support groups (63% to 46%).
Pew claims that the Internet was born in 1994 when the first successful browser was made free to the public.
If that’s true, it means that millions born since the mid-1980s are Internet natives. Those of us older than 19 are immigrants.
To put it another way: If you saw the movie “Wayne’s World” in a theater and you remember Ronald Reagan in the White House, you probably don’t understand the importance of the Internet to millions of kids. The Web is as integral to their daily routines as wristwatches are to the rest of us.
According to Pew, 81 percent of teenagers go online. Seventy-eight percent of the 18-29 crowd is also online daily.
Younger (under age 30) netizens are more likely to use the Web than older Internet users for the following: researching school or job training (76% to 48%), finding new job information (65% to 31%), instant-messaging (59% to 33%) and listening to music (53% to 27%).
Pew’s research has shown that the Internet genie isn’t going back into the bottle. If you’re not properly engaging customers through the Internet yet, it’s time to get busy.
But marketers, beware. Reaching customers through the Internet is a lot more about lifestyle-complementary sponsorship than intrusive advertising.
Don’t shout. Don’t clog their Internet sessions with spam, which 70 percent call annoying. Don’t splatter them with pop-up ads. If they e-mail a question, respond immediately. Give them an option to speak with a human being.
After all, 3 million netizens told Pew that they regularly use the Internet to rate products and services. You don’t need millions of people berating your advertising efforts and products.
The key to successful Internet marketing is to understand the importance of the medium to your customers’ lives. Demonstrate sensitivity to your customers’ sense of values, status, product requirements, brand preferences, loyalties and preferred promotional tone. Then reach them with good products in a tasteful manner that gets their attention.
Hasn’t that always been the challenge for marketers? Maybe this newfangled Internet thing isn’t so complicated after all.
Mel Poole is president of consulting and marketing firm SponsorLogic. Reach him at firstname.lastname@example.org.
The Buffalo Bills renewed their sponsorship with Verizon Wireless for another three years. The contract pays the team a low seven-figure amount annually.
Verizon has been a sponsor since 2000, and not much will change structurally with the new deal, save for an agreement for the first time from the wireless carrier to advertise on Bills radio broadcasts.
Verizon will continue to be the sponsor seen on the backdrop of Bills press conferences and will again sponsor the teams opening home game. The company, as part of the sponsorship, sends text messages about the Bills to the teams fans.
Russ Brandon, the clubs marketing director, described Verizon as one of the teams largest sponsorship partners.
Allstate Insurance Co. is set to sign a multiyear, multimillion-dollar sponsorship deal with NASCAR, according to several industry sources.
According to a league source, Allstate will get exclusivity in the life insurance category but is uncertain whether it will take the auto and supplemental categories, with price being the factor.
Allstate will likely pay a minimum of $2 million a year, with a contract requirement for an additional investment at the team or track level, industry experts said. The company plans to activate with safety vehicles at the racetrack and also will invest in NASCAR’s research and development center in Concord, N.C., the league source said.
NASCAR currently has no insurance partners and has been looking to fill the life insurance category for more than a year. It is believed that NASCAR also courted Aflac.
NASCAR officials declined comment for this story.
George Nolan, an Allstate spokesman, said a deal has not been signed but that a potential relationship is under review.
“At this time, Allstate is reviewing a NASCAR relationship, a NASCAR sponsorship, among other national sponsorships that we are considering,” Nolan said.
Allstate’s current sponsorship portfolio consists of deals with the U.S. Olympic Committee and USA Basketball and naming rights to the newly renovated arena outside Chicago that is home to the DePaul Blue Demons, AFL Chicago Rush and American Hockey League Chicago Wolves.
But the idea of an insurance company venturing into auto racing sponsorship has always been perceived as problematical considering the sport’s penchant for crashes and occasional driver injuries.
“[Allstate] figured out the value of NASCAR as a marketing platform, and obviously they feel that NASCAR fans are savvy enough to know that the company doesn’t crash the car,” said Ryan Kurek, who heads Logic Marketing + Consulting, which counts Nemco Motorsports and Haas CNC Racing among its NASCAR clients.
Other insurance companies with ties to the sport are AAA, which is the official auto club of track owner and operator International Speedway Corp., and Nationwide, which has a partnership with ISC rival Speedway Motorsports Inc.
Word that Allstate is set to partner with NASCAR comes on the heels of other announcements that signify the sport’s attempt to diversify its sponsor base. Over the last three months, NASCAR has announced sponsorship deals with Office Depot, Checkers, Nicoderm and Gulfstream Aerospace.
Staff writer Terry Lefton contributed to this report.
Citizen Watch has been on the scene at the U.S. Open since 1993.
Other than Omega’s sponsorship of the Olympic Games, the deal is thought to be one of the largest ever for a watch sponsorship of a sports property.
The deal is the latest commercial success for the Open, the lucrative crown jewel of American tennis. In the last eight to 12 months, the U.S. Tennis Association, which owns the Open, has signed sponsorships valued at $140 million, the sources said.
The two-week tournament’s ability to deliver high-end demographics attracts luxury brands such as Citizen, which has been a sponsor since 1993. The event itself is also a tremendous hospitality opportunity for a company like Citizen to entertain distributors and retail partners. Last year the company hosted 1,800 people at the Open.
The Open this year will bring in more than $50 million from sponsorships, said Pierce O’Neil, USTA chief business officer.Citizen Watch’s U.S. tennis sponsorships
U.S. Open Pilot Pen Tennis U.S. Clay Court Championship Adult and senior national championships Note: All are USTA-owned events. The adult championships are an amateur event. Source: USTA
“They will be buying about 80 30-second units,” O’Neil said. “Also new to this package, they will have a very significant online presence at usopen.org.”
The online component will include media, e-mail and radio and TV spots that promote usopen.org.
Citizen continues with signs on the match time clocks on all show courts, as well as a presence on the video boards in Arthur Ashe Stadium and the electronic scoreboards at other major courts.
Citizen also will create a special online sales offer for USTA members, the first time the company will allow consumers to buy directly from it. The company sells its watches through distributors otherwise.
The U.S. Open also recently signed sponsorship renewals, including with Olympus, and O’Neil promised a host of new deals arriving soon, including in the vacant car category.
Recent endorsement deals between action sports athletes and consumer companies prove that non-endemic brands are getting very interested in attaching their brands to athletes of sports like snowboarding, motocross and others.
The deals have pushed a handful of younger athletes, such as motocross star Chad Reed, into or near the eight-figures-a-year range of endorsement income — territory once reserved for Tony Hawk — according to several marketers.
Traditional sports marketer Snickers recently announced its sponsorship of The Collection, four Octagon-repped snowboarders (a number that’s likely to grow, including non-Octagon athletes). Music service Napster has sponsored the six-racer Amsoil/Chaparall/Honda moto/supermotocross team, and it expects to add another six athletes from various sports to “Team Napster.”Energy drink Red Bull has taken its place among Travis Pastrana’s endemic sponsors.
The following lists 10 top action sports athletes with a list of their non-endemic endorsement deals. Those deals signed since January 2004 are in bold, where that information was available. (Sport; agency handling endorsements in parentheses.) All information provided by respective agencies. Tony Hawk (retired, skateboard; William Morris): Kellogg’s Frosted Flakes, McDonald’s, Video Now, Birthday Express, Fox Sports Net/Fuel, Sirius, Activision Chad Reed (motocross; WMG Management): Slim Jim, Amp’d Mobile Marc Frank Montoya (snowboard; WMG Management): Napster, ZooYork, Monster Energy Drink, Kicker Audio, Block Hotels Bucky Lasek (skateboard; WMG Management): T-Mobile, Campbell’s Soup at Hand, Meguiars, Jones Soda Travis Pastrana (freestyle motocross; WMG Management): Red Bull, Kicker Audio, Ogio Shaun White (skateboard, snowboard; IMG) T-Mobile, Mountain Dew, PlayStation, Target Ross Powers (snowboard; Octagon): Snickers, Lego Chris Klug (snowboard; Octagon): Saturn/GM, Fujisawa (pharmaceuticals), Fiji Water, Gift of Life Foundation Gretchen Bleiler (snowboard; Octagon): Jeep, Napster, T-Mobile, 24-Hour Fitness Kelly Clark (snowboard; Octagon): Snickers, Stoneyfield Farms (organic milk products)
“There doesn’t seem to be any doubt that non-endemic brand sponsorship of action athletes is trending up,” said Bill Carter, co-founder of Fuse Marketing, which consults companies on their action involvements. Some of it is the expansion of athlete programs from longtime action sponsors like Mountain Dew or Slim Jim, but Carter still sees the industry reaching a new phase.
“The athlete sponsorship piece is rarely the starting point for a brand in action sports,” he said. “We’re seeing that event or property sponsorship is still the primary means by which a brand will utilize action, and the athlete piece is a means to extend or broaden the whole platform.”
Napster, for example, soon expects to add event sponsorship to its portfolio of action involvements, which are overseen by the Wasserman Media Group. And it is in serious discussions on cross-promotion with other kinds of consumer brands in the action world, according to Brad Duea, Napster CEO.
Meanwhile, it’s promoting its moto/supermotocross deal in many ways, including with trading cards that include athletes’ three favorite songs and a code for a free song download from napster.com.
There are exceptions to Carter’s theory, such as snowboarder Chris Klug, who was a Saturn endorser before Saturn became presenter of the Gravity Games. Either way, the trend indicates growing leverage among the athletes.
“It’s the natural evolution of any sport, and we’re just a little bit behind,” said Circe Wallace-Hetzel, senior manager of summer action sports for Octagon. “In the past, an athlete would sign any waiver just to get on TV, but now we’re carving out marketing rights that you can package to a company, and perhaps make the company use the athlete in a way you want. Athletes are not just filler for events anymore.”
For the most part, however, action athletes haven’t reached the level of other sports. “Probably one of the reasons I’m not getting calls [for action athletes] is there are very few [mainstream] superstars,” said Nova Lanktree, executive vice president of marketing for Lanktree/CSMG Sports, the talent side of CSMG Sports.
Most of the skateboarders and snowboarders you see on commercials today are making no more than $40,000 if a spot runs all year, Lanktree said.
Red Bull energy drink has had athlete endorsers since the late 1980s, and it has roughly 120 under contract with cash deals, said Jim Gunning, director of athlete relations. It currently is planning to underwrite adventure athlete Will Gadd’s attempt to climb a two-mile-high ice wall in Nepal.
“The athlete angle has always worked for us,” Gunning said.
Mobile, Ala., is 333 miles from Atlanta and 210 miles from touching the nearest part of the Georgia border. So when Atlanta Falcons sponsor Budweiser ran a team sweepstakes last year that reached into the Gulf of Mexico port city, NFL national sponsor Coors cried foul.
It was not an isolated case. After complaints from Coors Brewing Co., which has near-exclusive rights to states without NFL teams, the league last season cracked down on team beer sponsors like Budweiser extending their alliances into these areas. The league sent memos to its clubs reminding them of Coors’ sponsorship rights, which the Colorado company reportedly paid $300 million for in 2002, a figure that includes promotions and advertising spending.
“We had an issue down here with Alabama,” recalled Jim Smith, the Falcons’ vice president of partnerships. “We had one of our partners extend outside our marketing territory, and we had to talk to them and correct it.”
Smith declined to say whether the beer sponsor was Miller or Bud, both Falcons backers. Sources identified the company as Budweiser. Anheuser-Busch, parent of Budweiser, declined to comment.
As the NFL sponsorship model evolves with more rights returning to the teams, along with the territory where a club sponsor can market, feuds such as these are apt to arise.
But several events brought this issue to a head.
Traditionally, team sponsors could promote their ties to the club only within 75 miles of the team’s home city. All other areas were the province of national league sponsors.
In practice, however, the league had turned a blind eye to such practices. Take Iowa. It borders four states with NFL teams, and some clubs in those states have long been active in the Iowa markets, marketing sources said.
Teams like the Minnesota Vikings, and even the Denver Broncos in Coors’ home state, had to pull back the reins on their local beer sponsors. And some sources said the crackdown went as far as instructing local bars in non-NFL states to remove team and beer sponsor neon signs.
“We do report violations of team logo usage outside of their rights area,” said Laura Sankey, a Coors spokeswoman. “We do this to protect our sponsorship value and sponsorship rights.”
The NFL could not be reached for comment.
Vince Cicero, marketing director with the Cincinnati Bengals, said his team has always looked at neighboring Kentucky as a fertile territory.
In March 2004, the NFL adopted a new business model, which included eliminating the 75-mile rule and giving teams access to their entire state.
For clubs adjacent to states without NFL teams, the new rule is fairly limiting. If the non-NFL state falls within 75 miles of the team’s home city, then a club’s sponsors can run promotions in that state within that radius.
The Falcons’ Smith figures that gave his sponsors about 10 miles into east Alabama, a far cry from Mobile. The problem: Beer distributors who deliver the cases promoting the sweepstakes have different territories. And in the case of an Atlanta distributor, it included Mobile.
“The tricky part in our case is when you have distributors who cross state lines,” Smith said.
Jamey Rootes, Houston Texans chief marketing officer, said it is always a problem when sponsor companies have different geographic assignments than the league.
“It’s not a new issue, but given the change in the territory definition, we need to work through it,” Rootes said.
The problem is particularly acute with beer sponsors, given the large number of point-of-sale promotions and contests run in the category.
“How clubs utilize beer rights will continue to be a hotly debated topic,” said Mark Donovan, vice president of marketing for the Philadelphia Eagles. He helped negotiate the national Coors deal three years ago while with the league’s marketing office.
One former beer executive, who declined to be named, said it was good that the league was cleaning up the marketing territory issue. Before, what a team sponsor could do was a gray area; now it has become more black and white, this executive said.
The league has said it will make exceptions, and it is considering a request from the Carolina Panthers, based in Charlotte, to include Charleston, S.C., in its territory, sources said. Charleston is 209 miles from Charlotte, and by comparison, 321 miles from Atlanta. The Panthers did not return calls for comment.
And the league gave Gary, Ind., to the Chicago Bears. While Gary is in the home state of the Indianapolis Colts, the city has long been considered part of the Chicago market, said Bears senior director of corporate sales Dave Greeley.
Phil Thomas, marketing director of the St. Louis Rams, said towns across the Mississippi River in Illinois, such as Belleville and Alton, are also considered the Rams’ territory and not that of the Bears.