SBJ/20100816/This Week's News

NFL Players alerts sponsors to post-CBA plan

The NFL Players Association’s marketing arm recently notified NFL sponsors that their rights to use players in advertising end in March if, as expected, the league’s collective-bargaining agreement expires. The group, NFL Players, in a letter dated Aug. 6 also offered league sponsors the opportunity to continue using players through a separate union deal.

In addition, sources said, NFL Players has been talking to NFL sponsors’ competitors as well as marketing agencies about potential deals.

The sponsorship agreement regarding NFL players is not part of the CBA but it runs concurrently with the labor deal. The NFL pays the NFLPA as part of the agreement, which was signed in 2001. In return, the union does not sign competitor sponsors, while league sponsors have to go through the union for player group licensing deals.

Last year, the NFL paid the NFLPA a $25.1 million sponsorship fee as part of a $43.8 million sum that also included fees for Internet rights and other player marketing, according to the union’s annual filing with the U.S. Department of Labor.

“The overall Sponsorship Agreement between NFL PLAYERS and the NFL is set to expire on March 4, 2011,” states the letter from Allison Tucker, vice president of business development and corporate sponsorships for NFL Players, which was obtained by SportsBusiness Journal. The CBA expires at the same time.

“NFL PLAYERS has exclusive group rights of all players in the National Football League and we receive a portion of your sponsorship payments to the NFL in exchange for access to these rights. As of March 4, 2011, however, we will no longer be receiving this payment and the group player rights will no longer be included in your NFL sponsorship.”

“Looking ahead, we want to prevent any interruption to your business, and want to continue providing you with the ability to market your products, brands, and services by using our players, while continuing to restrict access to the group player rights by competing entities,” the letter said. “Accordingly, we wish to discuss an option we have developed to continue our partnership in the event that the overall Sponsorship Agreement expires for any period of time.”

It is not clear how the option for continued access to players rights would function. NFLPA officials declined comment for this story.

Greg Aiello, NFL senior vice president of public relations, when questioned about the letter, responded, “This just came to our attention, and we will address it with the union.”

The NFL, Aiello added, has not advised sponsors how to continue using players if the CBA and sponsorship agreement expire in March.

Industry experts said they were not surprised NFL Players had sent the letter now, seven months from expiration, because companies plan their sponsorship activities months before the NFL season.

If NFL Players were to sign companies that compete with league sponsors, it wouldn’t be the first time for that type of union-based effort. The NFLPA competed with the NFL for sponsorships from at least 1989, when the union decertified, until 2001, when it reached the current sponsorship agreement with the league. The league and union signed the current CBA in 1993, but it would take another eight years to strike the sponsorship side agreement.

Some industry insiders viewed the letter to the NFL’s sponsors as a veiled threat. Frank Vuono, who ran NFL licensing and marketing from 1985 to 1993 and now works as a sports consultant and adviser, said the letter is certainly a threat to sign with the union, or else.

“The people involved are very savvy,” he said.

When Vuono was at the NFL, the league at one point represented 900 players for marketing rights, he said. Ultimately, the NFLPA assumed that role, but Vuono said if the current structure evaporates, there is nothing to prevent a third party from trying to represent them.

A key question, Vuono said, is the value of the players without the team marks — meaning that by divorcing team rights from players, the players could not appear in uniform in ads. Also, the use of the term NFL would be restricted. In 1999, for example, a federal court ruled that the NFLPA could not tout Coors as the official beer of “NFL players” because the league controlled the word NFL.

To that end, Dockery Clark, a former sports marketing executive with Miller and Bank of America, said players historically are used more by non-league sponsors in advertisements, pointing to the example of MasterCard spokesman Peyton Manning. Rival Visa is the NFL sponsor.

“Player rights are not as important as you might think [to league sponsors],” Clark said. “I haven’t seen much activity with the significant sponsors. All the league [sponsorship] represents is the shield, the jewel events and collective rights of all the teams.”

Some sources saw nothing threatening in the letter. One person noted that if the union wished to act threatening, it could have sent a letter warning, “Your rights will expire by March 4 and you are hereby notified.”

In the letter, Tucker wrote, “We are working hard to enter into a new Collective Bargaining Agreement and an extension to the Sponsorship Agreement. Please note that it is our sincere intention to shield you from any dispute we may have with the league — our sole concern is to allow you to continue your utilization of group player rights no matter the overall labor or business climate.”

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