SBJ/Sept. 20-26, 2010/Marketing and SponsorshipPrint All
Arco is winding down its time as an arena naming-rights partner in Sacramento, as the company is not renewing a relationship that has seen its brand on the home court of the NBA Kings for the past 25 years.
Pro forma, Arco’s rights expire in February, so while the name change could happen before the end of the NBA season, that’s unlikely, sources said.
The Maloof brothers own Arco Arena and the NBA franchise that plays there, and they are in the final stages of a review for an agency that would sell naming rights to the 22-year-old venue. Finalists include IMG, Premier Partnerships and Gemini Sports Group, sources said. A decision is expected imminently, although the Maloofs are hopeful of eliminating the need for a sales agency by convincing an incumbent building sponsor to upgrade.
While the list of NBA arenas without a corporate name is short, there are more than a few sales challenges awaiting whichever agency is selected for the Sacramento job.
Sacramento is one of league’s least-populous cities, and at 17,317, Arco Arena has the smallest capacity of any NBA venue. Plans for a new arena have long been in the works but have been unsuccessful. The fact that the arena is a 22-year-old building makes the likelihood of any deal of more than five years unlikely, as well.
Nonetheless, any deal would likely have language including right of first refusal on a new facility. Depending on the brand, an interesting deal also could be devised by combining arena naming rights with other Maloof assets, which include The Palms hotel/casino in Las Vegas and the Maloof Money Cup skateboarding competition.
At the high end, naming-rights deals for palaces like Cowboys Stadium and New Meadowlands Stadium have gone unsigned, but there have been some smaller deals done over the past nine months. EverBank put its name on the home of the Jacksonville Jaguars; Bridgestone replaced Sommet Group as prime sponsor of the Nashville Predators’ home rink; and Sun Life Financial’s moniker is on the stadium formerly known as Joe Robbie, which the NFL Dolphins and MLB Marlins call home.
Those deals are retrofits. New venues with corporate names are a much tougher sell, though there have been some recent deals there as well, like Yum! Brands with the new arena in Louisville, Ky.
“We’re seeing more activity, but not at the prices or length that we’ve seen in the past,” said E.J. Narcise, principal at Team Services, which assisted on the Louisville deal. “But especially in the collegiate area, where new revenue is an imperative, you’ll see more sports venues with a ‘For Sale’ sign on them.”
Team Services is working to sell the name of the University of Colorado’s 53,000-seat football stadium in Boulder, Colo.
“Obviously, there are some really high-profile naming-rights opportunities in New York and Dallas,” said Mike Reisman, a principal at Velocity/Team Epic, which assisted on the Prudential Center and Citizens Bank Park naming-rights deals. “The market’s definition of value has narrowed, so the days when brands just slapped their names on something are over.”
Sources said Arco is paying around $750,000 a year for naming rights, or around $1.2 million with other media and building elements included. The building claims to draw around 2 million visitors annually to 200 events.
BP-owned Arco also had its name on the Kings’ first home in Sacramento. That 10,000-seat Arco Arena was home to the Kings from 1985 to ’88.
When Canadian Tire Corp., one of the largest retailers in Canada, set out to research how strong its customers’ ties were to the sport of hockey, it knew it would find a strong emotional connection.
“What we found was 87 percent of our high-value customers rated following the National Hockey League as an integral part of their life,” said John Jobin, vice president of merchandising at Canadian Tire, adding it more than justified their plan to incorporate the NHL and an NHL player into their marketing.
Next month Canadian Tire, which started as a tire store but now sells everything from tires to sports equipment to home improvement merchandise and home furnishings, will debut its first Canada-wide commercial featuring an athlete endorser, Chicago Blackhawks center Jonathan Toews.
Jobin said Canadian Tire committed to five-year deals with Toews and the NHL to help the company emotionally connect its brand with its consumers.
The company selected Toews, who this year won a gold medal with Team Canada at the Vancouver Olympics and became the second-youngest team captain to win a Stanley Cup, after considering several NHL stars.
“He is from Canada,” Jobin said. “We wanted to get someone who was at the cusp of the growth of his career. What is very attractive for us is Jonathan is completely bilingual. He speaks both English and French, and it is not halting French.”
That’s important, Jobin said, because Canadian Tire has a large presence in the French-speaking province of Quebec.
Pat Brisson, co-head of the hockey division at CAA Sports and Toews’ agent, said, “When Canadian Tire gets behind an athlete it’s a huge statement in Canada.”
But Toews, who also will be featured in a national Canadian commercial for hockey equipment brand Bauer, is not the only one of Brisson’s clients getting endorsements. The Pittsburgh Penguins’ Sidney Crosby will be featured in four TV commercials running in Canada this coming season — for Reebok, Gatorade, sporting goods retailer FGL and restaurant chain Tim Hortons. Canadian Tire also considered Crosby as its new hockey spokesman, Jobin said.
Brisson said he could not recall a time when multiple young NHL stars would be featured in as many national commercials running in Canada.
Canada has featured NHL players in national television commercials before, “but because we are a border nation, we see a lot of U.S. creative that is brought over to Canada,” said Brad Pelletier, a Canadian native and former head of IMG Canada. “Individual athlete marketing has often been very difficult because we often associate with U.S. athletes as much as our own because of the television market.”
But in Canada, every sport is secondary to hockey. And the popularity of Crosby, 23, and Toews, 22, has seen a huge surge after Canada won Olympic gold. Toews was voted the No. 1 forward in the Games, and Crosby scored the gold-medal-winning goal in overtime.
Tim Hortons was one of the first major Canadian brands Crosby endorsed, and Jobin praised the brand for its use of the young star.
“We think they have been tremendously successful,” Jobin said. “Tim Hortons doesn’t sell anything related to hockey. They sell the image of parents taking their kids to the rink at 7 in the morning and getting a cup of coffee at Tim Hortons.”
Crosby is an authentic spokesman for the chain because he played in the company-sponsored Timbits Minor Hockey program as a child, said Rob Forbes, senior director of regional marketing and national promotions for Tim Hortons.
Crosby’s growing presence in ads for other companies is not a bad thing, Forbes said. “We don’t mind sharing him.”
Stocking the camper during race week at most tracks requires a trip to a local grocery store, but this week Dover officials will save fans that trouble by bringing a grocery store to the track.
An agreement between Giant Food, Dover International Speedway and NASCAR will allow Giant Food to erect a 5,000-square-foot pop-up grocery store at the track for this week’s race and set up NASCAR promotions in more than 200 mid-Atlantic stores.
Pop-up grocery stores have been constructed at racetracks in the past, but this represents the first time that a grocer has bought sponsorship rights to a pop-up store and simultaneously partnered with NASCAR on an in-store promotion.
Giant Food, which is a subsidiary of the Dutch company Ahold, signed a multiyear agreement with Dover to become a partner of the track. The deal, which sources valued in the low six figures, gives Giant Food the right to set up the pop-up store, and provides it with signs at the track, hospitality and activation rights.
A separate agreement with NASCAR makes Ahold and Giant Food a strategic retail partner and will result in a five-week in-store promotion at more than 200 mid-Atlantic stores. The “Chase for the Savings” promotion, as it will be known, will feature NASCAR official partner products from Coca-Cola, Kraft, Unilever, Mars and Procter & Gamble at front-of-store displays and in circulars. The promotion will include consumer offers for chances to win race tickets, NASCAR merchandise and trips to the NASCAR Champion’s Week in Las Vegas.
The deal is NASCAR’s second partnership with a grocer. It partnered with Brookshire’s last fall in Texas on a similar promotion that Coca-Cola officials credited with triggering triple-digit growth for the company’s marquee brands.
NASCAR, Dover and Bulldawg Marketing, a retail marketing agency based in North Carolina, negotiated the agreements with Ahold and Giant Food.
NASCAR is working on additional strategic retail partnerships and hopes to have as many as six retail partners next season. It is in conversations with two to three other large retailers now.
“It’s a complex process because we have to make sure it’s a strategic account with enough stores and also make sure that we’re able to build a program with [the retailer] on their calendar that’s successful,” said Matt Shulman, NASCAR’s director of business solutions.
Hockey icon Wayne Gretzky is once again an in-demand corporate pitchman following his work in highly visible roles at the Vancouver Olympics, where the Canadian men’s hockey team won gold.
Gretzky in recent months has signed new promotional deals with EA Sports, TD Bank and Skechers as well as an extension with Breitling watches. The deals add to relationships Gretzky has with Pepsi, Ford, Samsung and Bigelow Tea.
With EA Sports, Gretzky is the cover athlete for the brand’s new hockey title for the Nintendo Wii, “NHL Slapshot.”
The revival comes as Gretzky has begun to rehabilitate his image following an embattled tenure as coach and managing general partner of the Phoenix Coyotes, in part through a high-profile spot lighting the Olympic cauldron during the opening ceremony in Vancouver. Gretzky, the NHL’s all-time leading scorer, remains popular with fans, particularly in his native Canada.
Gretzky was a special adviser to the 2010 Canadian Olympic hockey team behind Steve Yzerman, executive director for Team Canada. Gretzky also was an ambassador for the Olympic host committee.
“Interest in Wayne is at an all-time high since his retirement [in 1999],” said Darren Blake, Gretzky’s Phoenix-based business manager. “Through Vancouver, he’s transformed back into Wayne Gretzky, legendary hockey player, and not the disgruntled head coach.”
Specific financial terms for the new endorsement signings were not disclosed but range from low six figures to low seven figures each per year. Initial discussions on the new endorsements began soon after the Olympics but were generally not completed till summer, with activations designed to coincide with the 2010-11 hockey season.
EA Sports, releasing its first NHL title for the Wii with “NHL Slapshot,” is using Gretzky to broaden its customer demographic beyond the heavy concentration of males ages 15 to 30 that play its simulation-based titles on the PlayStation 3 and Xbox 360. A high-profile TV commercial for the game recently debuted featuring Gretzky breaking household items with a hockey stick while watching an NHL game before being given the hockey stick-shaped controller that comes with the video game.
“Wayne is a natural fit for that more family-oriented, casual audience that we’re targeting for this game,” said David Le, EA Sports director of marketing.
Kia, an NBA corporate sponsor since the league’s 2007-08 season, has renewed for another three seasons, according to industry sources.
Since it signed with the NBA, the league’s official auto has put its name on four of the NBA’s most important performance awards. The annual awards for MVP, most improved player, defensive player and sixth man are collectively dubbed the NBA Performance Awards presented by Kia.
The auto brand is expected to continue with that platform as well as again helping to sponsor the league’s Tip Off Week celebration and, of course, buying media on NBA rights holders ESPN and Turner. Last season, Kia had team deals with 13 clubs, and we’re told that total should increase before the new season begins Oct. 26.
While we can’t give the NBA all the credit, Korean carmakers continue to set the pace for the industry. Kia, specifically, reported earlier this month that year-to-year sales were up 31.6 percent through August, including a 10.7 percent increase for North American sales over 2009.
IMG Consulting handles sports sponsorship for Kia.
LOCKED OUT: In what might be considered the first impact of a possible NFL work stoppage, some NFL sponsors are starting to grumble about the difficulties of planning marketing for next season.
Predictably, these are the consumer packaged goods brands that routinely are planning marketing activation programs tied to sports or entertainment properties a year or more in advance. Since they include some of the largest buyers of sports media in the country, it’s important to take note of their concerns.
“We’re normally 18 months ahead with any program,” said a top marketer at one NFL sponsor. “The NFL is talking to us, but everybody [on the sponsor side] is PO’ed, and it is difficult for me to say now that we’ll do any retail activation with the NFL next season even if they’re playing next year.”
Even for those whose marketing calendars don’t extend quite as far out, because of the uncertain future of the collective-bargaining agreement, the league is unable to assure sponsors that there will be a scouting combine, a player draft in April, minicamps or training camps. That shrinks the lead time on activation even more.
“There’s not a lot the league can do short of settling the thing, but increasingly, the consumer products companies that are [NFL] sponsors are going to be in freeze mode when it comes to NFL planning for 2011,” said a well-placed agency source.
Of particular interest to us will be Anheuser-Busch’s strategy, since its new and pricey NFL league rights don’t begin until next year.
NET EFFECT: On the positive side of the NFL ledger, sales at the NFL Network are just as buoyant as they are at the league’s broadcast rights holders. David Pattillo, NFL vice president of media sales, said the net has sold “in the mid-90 percent range” of its inventory, compared with 80 percent a year ago. The strong number is no doubt aided by the net’s increased carriage number, with NFL Network now available in 57 million homes, up 10 million from last September.
Especially active categories, Pattillo said, were auto, movie studios and telecommunications.
New advertisers include General Auto Insurance, Chrysler and Pizza Hut. Southwest Airlines is underwriting aerial coverage of NFL Network’s game schedule. Returning for their fixed positions are Sears as title sponsor of the pregame show; Lexus for the “Pre-Kick” show; former league sponsor Sprint with the halftime show; and Kay Jewelers with the postgame show.
Terry Lefton can be reached at firstname.lastname@example.org.
Bank of America last week named a new leader of its sports marketing division, promoting an internal candidate who will be charged with redefining the bank’s sponsorship strategy.
Charles Greenstein, a 22-year veteran with Bank of America who previously managed the bank’s baseball partnerships, replaces Ray Bednar. Greenstein, who is based in the company’s Boston office, becomes Bank of America’s sponsorship chief at a time when its two most significant national deals, Major League Baseball and NASCAR, are up for renewal and the bank is being led in a more conservative direction by new CEO Brian Moynihan.
The official partnership with MLB ends this season, while the bank’s deal with NASCAR runs through 2011.
Bednar, who joined the bank in 2006, took a leave of absence for personal reasons late in the summer and his return is uncertain, although industry insiders say they don’t expect him to return. Bank officials said Bednar is in the process of pursuing other opportunities, which could be inside or outside the bank.
Bank of America, once one of the biggest spenders in sports sponsorship under Bednar, cut its national sponsorship portfolio in half in the last year, ending partnerships with the NFL and the U.S. Olympic Committee. The nation’s largest consumer bank still has a bevy of local agreements that provide national visibility, such as its deals with the New York Yankees, Dallas Cowboys and Washington Redskins.
It also has its name on the Bank of America 500 in NASCAR’s Sprint Cup Series, the Bank of America Chicago Marathon and Bank of America Stadium, home of the Carolina Panthers. The NASCAR race sponsorship ends this year, but industry sources say that the bank and Charlotte Motor Speedway are deep into discussions to renew.
Despite the loss of two highly visible national deals in the last year, the bank remains committed to sports marketing.
“There have been a lot of changes in our industry, but we continue to believe in the value of sports to drive our strategic objectives,” said Bank of America spokesman Joe Goode.
As recent financial reform reshapes the banking business, the bank is planning to shift the focus of its sports sponsorships away from affinity credit card and debit card opportunities and toward sponsorships that support cross-selling across areas ranging from wealth management to home loans to investment banking businesses.
For years, Bank of America’s sports spending was fueled by the company’s view that the partnerships delivered healthy returns. Bednar last year said that the sponsorships delivered $10 in revenue and $3 in earnings on every dollar spent. The return contributed to three aspects of its business: consumer banking, corporate investment and wealth management.
At the core of consumer banking has been Bank of America’s affinity credit card program, which featured teams, athletes and leagues on credit cards, debit cards and checks. Bank officials said sports affinity products were among the bank’s top-selling checking and credit card accounts in 2008 as former CEO Ken Lewis was pushing to be the top company in the credit card industry. This was on the heels of its 2006 acquisition of MBNA Corp. for $35 billion.
But new financial regulations signed into law this year have changed the value of the affinity business. Financial reform has introduced stricter consumer lending rules and lower transaction fees for debit cards.
In July, Moynihan estimated the new regulations would cost the bank’s global card services business $1.8 billion to $2.3 billion in annual revenue beginning in 2011. Moynihan said recently that overall demand for credit remains weak because of economic uncertainty and that he is repositioning the bank to rely less on credit card transactions and borrowing.
“There are several reasons you’d pull back from these deals,” said Robert Hammer, who runs his own credit consultancy firm in California. “Loan losses may have climbed to unsatisfactory levels. Affinity and loyalty are not what they used to be. Credit cards represent the least loyalty of any banking product. And of course, all of that leads to lessened profitability, perhaps to an unsustainable level.”
“It’s become more difficult to persuade card issuers that these deals are worth all of the skin they have in the game,” Hammer added, even though JPMorgan Chase recently agreed to a 10-year, $300 million deal to sponsor Madison Square Garden.
In light of that, the bank is planning a strategy shift that will emphasize other areas of its business. The move reflects not only the changes triggered by financial reforms but also the company’s acquisition of Countrywide (now known as Bank of America Home Loans) and Merrill Lynch. Those acquisitions delivered the bank a more diverse array of product and services, as well as customer base, than it had previously, and it wants future sponsorship opportunities to benefit those businesses.
The bank’s new sponsorship strategy will unfold over the next 12-18 months, Goode said.
“A central focus of our strategy will be to impart greater integration and activation of our global sponsorships across all our brands to engage more customer segments and to facilitate a greater level of cross-selling,” he said.
Bednar, a triathlete who usually rose before the sun to work out 15 hours a week, joined the bank in 2006 as senior vice president and global sponsorship executive after serving as CEO at Prism, a sponsorship, activation and event agency.
He immediately made an impact by striking several deals, including an official partnership with NASCAR in late 2006 and a deal to be the NFL’s official bank in early 2007.
Bednar also redistributed the bank’s sponsorship accounts from the Radiate Sports Group to Octagon for NASCAR, MLB and NFL, while golf went to IMG. The bank’s Olympics business stayed with Radiate’s GMR Marketing at the time.