SBJ/July 17 - 23, 2006/This Weeks News

Prescription for steroid issue: Don’t mention it

From the MLB All-Star game

For the second consecutive year, the subject of steroids was hardly mentioned among business partners at MLB’s All-Star summer fest. The mantra repeated endlessly by the league’s corporate partners in Pittsburgh last week was: “NMP” or “Never More Popular.”

Having teams with enormous pent-up demand such as the Chicago White Sox and Boston Red Sox win consecutive championships certainly helps, but that’s not the only reason for MLB’s resurgence.

“There are some teams contending that usually don’t,” said Tom Fox, Gatorade senior vice president of sports marketing. “It’s not quite the parity of the NFL, where any team can rise to the top, but it’s starting to feel that way. As a result, baseball is in as strong a position as I can remember in the last 20 to 25 years, and the positive headlines are pushing past any attempts to drag it down into this [steroids] controversy.”

Judging by attendance, television ratings, the new TV deal announced last week and the remarkably enduring strength of MLB’s licensed goods in a market that is cyclical by nature, the only conclusion is that fan interest is unaffected by steroids — or, that fans are satisfied that MLB is policing itself.

“For a sport that has been around so long, it’s remarkable, but MLB is stronger than ever,” said MasterCard sponsorship chief Tom Murphy, whose company is in the final stages of a five-year sponsorship renewal. “You’ve had great rivalries like Yankees-Red Sox on center stage that helps bring in new fans, there’s a nice stream of young talent and there’s a ton of new ballparks like here in Pittsburgh that are as much of an attraction as the game itself.”

A FanFest kiosk let fans create their own
“I Live For This” video on DVD.
MLB’s renewal is even more impressive when you recall that the All-Star Game in Milwaukee that ended in a tie — often seen as the nadir of Bud Selig’s administration — was only four years ago.

“In the year and a half we’ve been a sponsor, baseball has definitely gotten stronger nationally,” said Karen Jones, DHL vice president of advertising, brand and promotions, “and it’s delivering a wide audience to us, like women, one of our fastest-growing customer segments.”

“Like no other sport, it cuts across ages,” said Faust Capobianco IV, president of Majestic Athletic. “And it’s far less seasonal. Baseball is now strong all year for a lot of retailers. I can’t say that about another sport.”

CORPORATE SPEAK: One of our favorite pieces of activation in Pittsburgh was the relentless sampling of Baby Ruth bars by new MLB sponsor Nestlé, which distributed more than 250,000 mini candy bars.

We were also impressed by Dick’s Sporting Goods’ overwhelming presence and by product from licensees Nike and Reebok, the latter selling a shoe with All-Star Game marks for the first time.

Adidas was not evident, making us wonder about their future with MLB.

MLB’s FanFest itself drew more than 106,000 people, one of the top five draws ever and the most since 1999, in Boston.

Looking ahead, MLB’s biggest corporate sponsorship renewal is in the beer category. We hear renewal talks are not going smoothly with Anheuser-Busch, the incumbent since 1980, so there’s a real possibility MLB may shop that category.

Mascots cavort at the Home Run Derby; fans
greet their heroes at a player parade.
Otherwise, Gatorade, an MLB sponsor since 1990, is looking for a comprehensive long-term deal. Pfizer will be more problematic, since the erectile dysfunction category has not developed the way marketers had hoped. Citgo and MLB continue to talk about a new deal, according to MLB’s corporate sponsorship chief John Brody, but, he added, “there are very difficult dynamics for everyone in that category right now.”

SPONSORS TO SUPPORT TV BROADCASTS: Somewhat overlooked in last week’s new television deals with Fox and Turner was the role that sponsorship plays. The new Fox deal, for example, guarantees that a minimum of 20 percent of all advertising inventory will be bought by MLB’s corporate patrons.

“More than one third of All-Star Game ad inventory was bought by our sponsors, so it’s fair to say growth of our sponsorship business is driving growth in many other areas,” said Tim Brosnan, MLB executive vice president of business.

CHEAP HELP: After several years of producing the ads for the “I Live For This” campaign, Jacqueline Parkes, MLB senior vice president of advertising and marketing, is letting fans in on the action. A kiosk at FanFest allowed fans to combine highlights from their favorite team with their own video exhortations to produce a customized “I Live For This” ad delivered on a DVD.

More than 4,000 fans played ad director last week, and the program served as a prototype for one that will be rolled out during the second half of the season to seven clubs: the New York Mets, Boston Red Sox, Chicago White Sox, St. Louis Cardinals, Kansas City Royals, Minnesota Twins and Seattle Mariners. Fans will pay $9.95 at parks to do their own MLB ads, where adding highlights for that day’s game will offer a unique, customized collectible.

“It’s not about revenue. If we break even, we’ll be happy,” Parkes said. “It’s just a great way to engage fans.”

It’s also a way to get new creative work, as the best ads will be used locally and nationally as part of the “I Live For This” campaign.

Participants have to sign consent forms.

Given the likely extensions into sponsorship, by adding sponsored content or traditional ads on the DVD, and by including coupons redeemable at stadium or outside retail, it’s an intriguing marketing platform.

Next up for MLB’s creative effort is a fall tune-in campaign that will attempt to convince baseball fans that no matter which team they are fans of, watching October postseason baseball is a necessity.

Ryan Howard’s blast made a winner out of
MasterCard and a lucky fan.
SIGNS OF THE TIME: For the second consecutive year, MasterCard was successful in its “Hit It Here” promotion, rewarding a randomly selected fan after Philadelphia Phillies slugger Ryan Howard connected on his last home run on his way to winning the Century 21 Home Run Derby. It all made MasterCard’s Murphy maybe the second-happiest guy in PNC Park — after contest winner Bert Brooks, whose wife originally accused him of having a few too many drinks after being told by phone that he was the prize winner. “Anyone doing one of these [promotions] would rather give the prize away,” said a smiling Murphy, “but I don’t think it’s something we can count on every year.”

ADDING DEFINITION TO MUSCLE: ESPN used the Home Run Derby as a test run for its new, high-definition mobile production truck, a unit developed after the network gained rights to “Monday Night Football.”

Developed in conjunction with Pittsburgh-based NEP Broadcasting, one of ESPN’s key vendors for mobile TV production services, the two-trailer, $10 million setup essentially serves as a traveling version of its two-year-old digital production facility in Bristol, Conn. The key differences of the new facility compared with prior production trucks include an ability to handle all video and audio without the use of tape, and a connectivity with the Bristol campus that reduces the time for footage from remote events to be repackaged into other ESPN shows.

“This is a true big-game truck for us. Everything in it is state of the art,” said Rick Abbott, ESPN vice president of remote operations. “It’s essentially a production equivalent of a moving Super Bowl.”

The truck also will be used for the X Games, NCAA Women’s Final Four and NBA playoff games.

COMMISSIONER VOWS SOLUTION TO BLACKOUTS: Selig pledged to find an answer to baseball’s often-maddening geographic territorial system in which some pockets of the country are claimed by as many as six teams. That means for buyers of out-of-market packages such as MLB.TV and Extra Innings on digital cable and satellite TV, more than a third of a day’s scheduled games can fall under local blackout provisions.

Areas particularly susceptible include Las Vegas and parts of Iowa.

“I don’t understand [the blackouts] myself,” Selig said. “I’m watching games at home and even I’m getting blacked out from some games.”

LABOR DAZE: News on the collective-bargaining front continues to be sparse as MLB and the union pursue a new labor deal in an unusually low-key, private fashion. With drug-testing provisions already revised twice in the current accord, much of the attention predictably is centering on the economic front, specifically the use of revenue-sharing funds, which will total $323 million this year.

MLB officials insist the money is being used as intended, and in May produced an internal study indicating the recipients of revenue sharing from 2003 through 2005 spent far more on player payroll and development than they took via central-fund and revenue-sharing payments. The players’ camp isn’t sure, and to that end, the idea of a minimum payroll is again being discussed.

The union in 2002 refused management overtures of this concept, fearing it would prove a slippery slope to a much-hated salary cap. But with the Florida Marlins’ $15 million payroll this year representing a mere fraction of their anticipated revenue-sharing and central-fund receipts, the concept has resurfaced.

USA BASEBALL GETS BOOST: Lost in the din of MLB’s new television deals was a separate agreement for the league in which it will commit a minimum of $10 million over the next decade to USA Baseball in exchange for gaining ownership to the organization’s commercial and digital rights.

For MLB, the biggest upside may come through showing games online of USA Baseball’s Olympic and national amateur teams. More immediately, the nonprofit USA Baseball gains relief from devoting significant energy to fundraising.

“Making sure we cover expenses in order to grow the game was becoming a bigger and bigger issue for us,” said Mike Gaski, USA Baseball president.

USA Baseball’s new national training facility will open next year in Cary, N.C.

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