SBJ/March 21 - 27, 2005/Marketingsponsorship

MLB sponsors hang tough during probe

Even as testimony on steroid use in baseball commenced last week before the U.S. House Government Reform Committee, a cross section of MLB’s corporate sponsors and their agencies expressed support for the national pastime and a universal belief that their seven-figure-plus marketing investments were sound.

MLB Commissioner Bud Selig and President Bob DuPuy listen to last week’s hearing.
To be sure, the MLB sponsors or their marketing firms interviewed for this story were feeling some angst, as the news and sports headlines since the day after the Super Bowl have been predominantly focused on steroid use in baseball.

“It’s kind of like watching a long train wreck,” said Tom Fox, senior vice president of sports marketing at Gatorade, an MLB sponsor since 1990, “but sports are remarkably resilient, so we’re feeling good about our sponsorship. I worry about the integrity of the game and its records, of course, but I absolutely believe MLB is doing the right thing and that the integrity of the game will be restored.”

While MLB executives declined to be interviewed for this story in deference to the hearing last Thursday on Capitol Hill, corporate sales at the league level remain healthy. MLB announced a two-year sponsorship with General Mills recently, under which Wheaties will become the league’s official breakfast cereal and will produce three national MLB-themed cereal boxes during each year of the agreement. In addition, leaguewide sponsorship deals with Home Depot and General Motors are expected to be announced shortly.

Current sponsors gave the league high marks for keeping them informed on the fluid steroid situation and on its response to the congressional inquiry. For example, days before the hearing, sponsors were all given copies of the prepared statements read by MLB officials.

“There’s no question the issue of steroids is capturing a great deal of the public’s attention,” said John Galloway, vice president of sports marketing and media at Pepsi, an MLB corporate patron since 1997. “However, we are confident MLB is taking the right steps to move the game forward.”

The demonstrated ability of sports in general to recover from scandal and labor problems caused most marketers associated with baseball to see the steroid mess as a short-term marketing hit, at worst.

“Just as no one cared about the Olympic bribery scandal once an American was up on the medal podium, we and our [MLB] clients believe baseball has a solid future,” said Woody Thompson, senior vice president of Octagon’s corporate consulting division, which handles MLB sponsorships for Bank of America, Century 21, MasterCard and Viagra. “The game has survived worse, so we’re confident MLB will fix up and move on.”

Having pulled back on a promotion that involved Barry Bonds’ chase for a new career home run record, MasterCard is probably the MLB sponsor that has been most affected. Bonds is one of a number of star players in the spotlight, having been part of the ongoing Balco investigation and having been forced to answer multiple questions about taking performance-enhancing drugs, a charge he has consistently denied.

Marketers interviewed for this story felt that the most damage stemming from the hearings would fall to individual players, rather than MLB as a whole.

“Individual athletes could end up tainted, but unless your brand is wrapped around them, it shouldn’t hurt too much. I don’t see that one sport, including baseball, is in crisis mode because of this,” said John Tatum, co-founder of Genesco Sports Enterprises, which handles Pepsi’s MLB sponsorship and MasterCard’s NFL marketing.

Tatum also noted that there has been no indication that baseball’s popularity is suffering from the steroid issue, as the game’s business vitals are strong. “The MLB fan base is very strong now,” he said.

So, despite the congressional merry-go-round, it’s full steam ahead for consumer marketers relying on the appeal of MLB to sell products and services.

“The game is a lot stronger than steroids,” said Howard Jacobs, president of The Marketing Arm’s Millsport, which handles MLB sponsorship activation for MLB rights holders Taco Bell and XM Satellite Radio, along with MLB club relationships for SBC Communications and Office Depot. “There have certainly been questions and concerns from our baseball clients, but we continue to believe passion for baseball is widespread across America, and that’s what determines marketing value. ”

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