SBJ/January 8 - 14, 2007/This Weeks News

Capitals go it alone on sponsorship sales

On an October train trip to New York for a Capitals-Rangers game, Washington Capitals defenseman Jamie Heward approached John McPartland, a marketing manager from Coca-Cola, in a private car reserved by the team for its sponsors.

Washington Sports & Entertainment had
handled the team’s sponsorships for more
than a decade.

“Thank you for supporting us,” Heward told the representative from one of the Capitals’ oldest corporate partners.

While such private trips are common among teams looking to strengthen their ties with sponsors, this was a first for the Capitals and marked a change in their approach to corporate sales. After more than a decade of having Washington Sports & Entertainment handle their sponsorships, the Capitals are now doing it alone.

The transition has afforded the organization the opportunity to restructure its approach to partners, but it also has made it a competitor in a crowded marketplace where many sponsors place it behind the Redskins, Wizards and Nationals in local significance.

“The game hasn’t changed, it’s just they’re fighting for dollars now,” said Mike Rothbard, CEO of Executive Media Communications, a sports marketing firm that represents Papa John’s Pizza, which sponsors the Capitals. “They’re going to have to put a competitive product out there, they’re going to have to sell seats, they’re going to have to show more in TV ratings. Only time will tell if they’ll be successful.”

Washington Sports & Entertainment, overseen by majority owner Abe Pollin, relinquished its corporate and ticket sales responsibility for the Capitals this fall to focus on its core businesses of the Wizards and the Verizon Center. The move left Capitals owner Ted Leonsis, who has a 44 percent minority ownership through Lincoln Holdings in Washington Sports & Entertainment, to develop a sales staff shortly before the start of the hockey season.

Leonsis hired Michael Humes as senior vice president of sales. Before joining the organization, Humes was vice president and chief marketing officer for the Seattle SuperSonics and Storm. He entered the market without any ties to the team’s marketing partners, so he spent his first week sending out letters explaining his role.

In the past, many programs the team was involved in were bundled with activation efforts for the Wizards or the Verizon Center, or both. While some partners, such as Coca-Cola, did activate at retail with Capitals-specific programs, such as a ticket sweepstakes through Powerade, Humes has worked to expand activation efforts around the Capitals.

Michael Humes

Already, Pulte Homes, a national home builder, has begun offering tickets to Capitals games to home buyers, and Kettler, a residential real estate development company and new partner, has offered two free tickets to every resident of their 8,500 condominiums.

Since Humes joined the team right before the start of the season, he had no time to hire a sales staff of his own, so he hired SportsWorX to help service current partners and add new sponsors. (Humes plans to hire a staff in the offseason.) Together, they’ve had 10 letters of agreement signed and should have more than five multiyear contracts completed, Humes said.

Despite some early success, the transition presented several challenges. Some partners had strong ties to Washington Sports & Entertainment and have been hesitant to embrace the new staff.

The organization also faces declining attendance. Currently, the team’s season-ticket base hovers around 8,500, down from a high of 12,000 in 2001, and currently the team is 26th among NHL teams with an average attendance of 13,100.

During down times in the past, Washington Sports would bundle Capitals partnerships with its other properties. But that aggregation of assets is no longer available.

That could be particularly difficult as they try to retain Coke, which has been a partner for more than a decade, since the Capitals no longer have influence over the pouring rights at the arena. Coke currently has the arena’s pouring rights, but that deal expires in September.

“In the past it was one-stop shopping,” Rothbard said. “Now they’re competing against each other, which makes it tough.”

Matt Williams, a spokesman for Washington Sports, said that they do not see the Capitals as a competitor, adding that the only time he could see a problem arising would be if both teams were doing well competitively in the future.

“At the end of the day,” Williams said, “they’re minority partners in our company, so we want them to succeed.”

Though he’s not seen as a competitor, Humes, with the help of Marc Bluestein of SportsWorX, has had to re-engage former partners who were alienated in the past. For example, Papa John’s ended its partnership with the Capitals before Humes was hired when the team sought more money for the pizza sponsorship category than the company felt it was worth. The organization was unable to fill the category and it remained vacant.

Humes brought Papa John’s back into the fold when he arrived.

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