SBJ/February 26 - March 4, 2007/SBJ In Depth

Sponsors gauge their return at UK

During every game at Rupp Arena, University of Kentucky men’s basketball coach Tubby Smith paces the sideline in front of a thoughtfully placed, vibrant orange Gatorade cooler, which sits between the team’s bench and the scorer’s table.

Smith is shown while taping commercials for
Kroger, a Kentucky sponsor for a dozen years.

The cooler is empty. It’s nothing more than product placement for Gatorade, which spends about $250,000 in product and cash annually to be a Kentucky sponsor. The coolers that actually contain the sports drink sit at the other end of the bench.

Gatorade is one of 11 companies that pay between $250,000 and $750,000 annually to be a Kentucky corporate partner through the marketing of Host Communications.

In exchange, these partners receive advertising on Kentucky’s radio and TV networks, endorsement opportunities with the coaches, hospitality, promotions, use of the “UK” marks or any other service they select from a menu of assets.

Gatorade, which has deals with 71 NCAA Division I schools across the country, calls Kentucky one of its premier partnerships.

Scott Paddock, senior manager of sports marketing, said Gatorade’s research indicates that few schools offer as much visibility for its sideline cups, coolers and towels as Kentucky. “They’re always in the top 10 in terms of the exposure they deliver,” Paddock said.

For companies with more of a regional focus, such as Anthem Blue Cross and Blue Shield and Kroger, the Wildcats are an ideal platform to reach consumers throughout the commonwealth.

Anthem has been a Kentucky sponsor all 18 years that Jude Thompson has been with the company. Thompson, senior vice president of WellPoint, Anthem’s parent company, buys print and radio advertising, in addition to its promotions.

During one game, Kentucky cheerleaders threw keepsake towels into the crowd with “UK” and Anthem marks.

“What gets Kentuckians excited is Kentucky basketball,” Thompson said. “Kentucky basketball gives us a very good return on our investment.”

Sponsors say they enjoy the amount of
exposure that coach Tubby Smith and
the University of Kentucky men’s
basketball team can deliver.

In addition to serving as the group health-care provider for a number of companies, Anthem also markets its health, dental, vision and life insurance products to individuals.

“When you think of the good will involved with putting Anthem on towel giveaways or being able to send a Tubby Smith-autographed basketball to a client, it really makes sense for us,” Thompson said.

Kroger, a Kentucky corporate partner for a dozen years, pays for the use of Smith and football coach Rich Brooks in its ads.

Just a few years ago, Kroger would have gone through a coach’s agent for an endorsement deal. Now the supermarket and any other sponsor that wants to use Kentucky’s coaches call Host.

Smith receives a guaranteed amount of radio/TV endorsements as part of his contract with the school, and Host arranges the endorsements. In 2006-07, Smith’s base salary is $200,000 and his endorsement income is $1.775 million for a total of nearly $2 million guaranteed.

By writing its contracts this way, the school maintains some form of authority in an age when institutional control is closely examined by the NCAA.

“It just streamlines everything, keeps it nice and neat,” said Rob Mullens, Kentucky’s deputy athletic director. “It also is a way of protecting our assets.”

As part of its deal with Host, Kroger essentially purchases a few hours of Smith’s time to shoot multiple ads that likely will run for more than a year.

“It has a huge impact, especially if the team is winning,” said Larry Columbia, Kroger’s Mid-South vice president of merchandising.

Kroger also sells UK’s licensed merchandise in its stores, an aspect of exclusivity that it negotiated through Host. When Columbia found out that a competing grocery store was selling UK merchandise, he called Host and put a stop to it.

Columbia also believes that Kroger is tapping into thousands of potential shoppers who are University of Kentucky employees and students.

“If we can attract students who are 18 and keep them as shoppers until they’re 80, that’s good for us,” Columbia said.

University of Kentucky athletics 2006-07 corporate partners
Insurance Anthem Blue Cross and Blue Shield; Kentucky Farm Bureau
Health Care Family Home Health Care
Banking Fifth Third Bank
Sideline beverage Gatorade
Beverage Pepsi
Grocery Kroger
Restaurant McDonald’s; Papa John’s Pizza
Shoe/apparel Nike
Telecommunications Windstream Communications
Source: Host Communications


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