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SBJ/Sept. 20-26, 2010/Opinion
How marketers should plan with a potential lockout looming
Published September 20, 2010, Page 45
Can a lockout be avoided? Sure. We all would love nothing more than to have fears dissipate and the lockout averted. However, the NFL has negotiated its television deals to maintain revenue levels in the event of a stoppage, and concurrently, the NFL Players Association has told its members to put away 25 percent of their 2010 salaries and increased association dues in preparation for a long standoff.
The deep entrenchment of both sides, the amount of money involved and the short- and long-term contractual legacy indicates that there is a strong potential for a lockout. It’s abundantly clear that both sides are already deep in preparation for that possibility.
Marketers need to also be prepared and develop their game plans for the 2011 season. Regardless if you are a league sponsor, team sponsor, use players in your campaigns or some combination of the aforementioned, your brand will be affected by a work stoppage. Do you continue down the path of activation planning in the hope that a new CBA is reached? Do you scale back your programs so you have less exposure in the event of a lockout?
The players’ demonstration was a stark reminder to marketers of the NFL’s labor uncertainty.
There is no boilerplate solution, but marketers need to be looking at all potential scenarios and timing around their NFL marketing campaigns and their business objectives.
The following are some of the steps that brands with NFL investments should be considering:
1. Conduct a legal review of your current NFL agreements.
With a potential lockout looming on the horizon, it is critically important that you analyze your current league, team and player endorsement deals to fully understand the contractual language or force majeure provisions (a clause that suspends or terminates contracts due to acts that cannot be controlled) and how your organization may be affected.
The question, in absence of specific lockout language that may be in your sponsorship contract, is how your organization may be affected or protected by your agreement. Are you working with your general counsel to determine what the implications might be?
2. Protect yourself from a competitive blitz.
As a league sponsor, your brand has had the luxury of the sponsorship agreement with the NFLPA and its protection on player usage by competitors. When the current CBA expires on March 4, the players association’s sponsorship agreement will expire as well.
The players association has already put its stake in the ground with a letter to all league sponsors, making it clear that they will now be free to speak to any companies they like, and will aggressively pursue competitive deals should you not come to a new separate deal directly with the association. Your competitors might have an opportunity to circumvent your league deal to do a player association deal during the lockout. Another question to ask is whether a player-only deal has any merit with no games being played.
3. Audit other sponsorship platforms within your portfolio and determine if other sponsorships can fill the promotional void without the NFL.
Does your brand have other national/local sponsorships in its current portfolio that cover the promotional windows and, perhaps more importantly, can you ramp those up to cover the loss of NFL programming? Those agreements are in place with activation and your internal organization already has familiarity with activating around them. They may have been complementary to your football programming, but now they may need to take a lead position with increased budget support and promotional activation. Can another property replace the NFL in your promotional calendar?
4. Review potential sponsorships that may fill the gap on your portfolio if there is a lockout.
There’s a very good chance that the NFL is the largest priority or only sponsorship in your portfolio, so you may need to evaluate other platforms or properties that you don’t currently partner with. Do you look toward college football or do the other major professional sports hit your target audience or geographies? Do you look outside the sports landscape for partnership platforms around music, entertainment or cause marketing?
There’s much work to be done — and some of it is likely under way. Protecting your investment requires a dedicated effort with a sincere focus. It won’t be easy, but in the end, it will provide the best safe haven for your brand in the event of a lockout.
Once you’ve done your analysis, planning and built your playbook for 2011, sit back and enjoy this NFL season.
Greg Busch (email@example.com) is executive vice president of client management for GMR Marketing.