Three trends from the upfront season Kroenke comfortable wearing 2nd hat From the Field of Risk Management Plaintiff seeks documents from FSG Demos key to Microsoft’s MLS deal People: Executive transactions Reinsdorf values people he knows, trusts Racetracks attract music festivals For the WNBA, time for a clutch 3 Super Bowl’s numerals: Still a classic
SBJ/Dec. 6-12, 2010/This Week's IssuePrint All
Dec. 18, 2 p.m. (ESPN); Albuquerque, N.M.
Oakley Fuel Cell sunglasses; Oakley beanie; New Era cap
Oakley Panel backpack
Pen with box,
Dec. 18, 5:30 p.m. (ESPN); Boise, Idaho
Sony gift suite
New Era skull cap; waterproof breathable parka, winter gloves, hand warmers
Ogio Fugitive backpack
Big Game souvenir
Dec. 18, 9 p.m. (ESPN); New Orleans
Apple iPod touch
Dec. 21, 8 p.m. (ESPN); St. Petersburg, Fla.
Microsoft Xbox 360 4GB
Oakley Fuel Cell sunglasses
Oakley Panel backpack
Dec. 22, 8 p.m. (ESPN); Las Vegas
Dec. 23, 8 p.m. (ESPN); San Diego
Best Buy gift card
Hooded sweatshirt; cap
Dec. 24, 8 p.m. (ESPN); Honolulu
Kicker EB141 earbuds
Oakley Fuel Cell sunglasses; Pro Athletics custom shorts; commemorative T-shirt, golf shirt, visor
Oakley Surf backpack
Dec. 26, 8:30 p.m. (ESPN); Detroit
Timely Watch Co.
Leather duffel bag
Dec. 27, 5 p.m. (ESPN2); Shreveport, La.
Timely Watch Co.
New Era hat; souvenir hat
Dec. 28, 6:30 p.m. (ESPN); Orlando
$420 shopping spree at a local
Timely Watch Co.
Dec. 28, 10 p.m. (ESPN); Tempe, Ariz.
Sony gift suite
Though the 2012 Olympics are still more than a year away, organizers of Brazil’s 2016 Games began pitching the business community last week on the marketing opportunities the Rio event will offer.
Organizers hope to provide a six-year platform to partners who sign up early. They have developed a series of events designed to deliver value to partners before the Games.
The first will be a dramatic unveiling of the 2016 Olympic logo before more than 2 million people on Copacabana beach. Subsequent plans include a yearlong Olympic flag tour throughout Brazil, a program that was first developed for the 2000 Sydney Games, and several educational programs. Partners also will receive rights to the Brazilian Olympic team and a presence in Brazil House, a hospitality center, at the London Games.
Organizers told the International Olympic Committee that they expect to raise more than $600 million in sponsorship money.
The challenge that Olympic organizers face will be the direct competition that comes from FIFA, which will hold the 2014 World Cup in Brazil. But the Rio de Janeiro group is off to a strong start.
It announced its first partnership last week with the Brazilian bank Bradesco. The deal is valued at more than $300 million and encompasses both the financial services and insurance categories.
“Brazil is off to a tremendous start, and the nature of the first deal is further validation of the Olympic opportunity and the interest in it,” said Michael Payne, a consultant to Rio 2016 and the former IOC director of television and marketing. “Most, if not all, of its marketing partners should be on board before the London Games and be able to enjoy full exposure there.”
Rio organizers have hired Maggie Sanchez to run the organization’s marketing program. She is a former a senior marketing executive at Microsoft Worldwide.
American Express is returning to the NBA as a leaguewide corporate sponsor after a five-year hiatus.
Sources last week said the pending three-year deal was undergoing final revisions and is expected to be signed by AmEx Chief Marketing Officer John Hayes imminently. In addition to NBA rights, the agreement would give AmEx rights to the WNBA, the NBA Development League and to the NBA-marketed USA Basketball, except during the Summer Olympics, when Visa’s global Olympics sponsorship would take precedence.
Packaged with the deal are broadcast buys on the NBA’s television partners, ABC/ESPN and TNT, and advertising on league-controlled media. AmEx also is adding team sponsorship rights in Chicago and Miami, deals that complement sponsorships already held by AmEx with the New York Knicks, Los Angeles Lakers, Washington Wizards and Boston Celtics. Also included is a commitment to add three to four additional team deals annually over the life of the deal.
AmEx agency Ogilvy & Mather is working on NBA-themed creative, and the new ads could be ready in time for the league’s Christmas Day doubleheader on ABC and its tripleheader on ESPN, industry sources said.
Steve Schanwald, executive vice president of business operations for the Bulls, and Steve Weber, executive vice president of sales for the Heat, each confirmed that his team had a pending AmEx deal.
As is the case with many payment card sponsorships, much of the value of an NBA/AmEx deal will be in providing AmEx with exclusive, behind-the-scenes access and unique experiences at NBA team and league events, which cardholders can access with reward points. Since AmEx is a partner of AEG and the Staples Center, the company is expected to make a splash with its new NBA involvement at the 2011 All-Star Game in Los Angeles.
AmEx cardholders last year were given first crack at buying tickets to NBA Finals games given the company’s deals with the competing teams: the Lakers and Celtics. Last month, Wizards cardholders were invited to a meet-and-greet with team owner Ted Leonsis as part of AmEx’s rewards program.
The NBA had hoped to start the season with AmEx back in the fold, but the deal nearly went south after rival card issuer JPMorgan Chase signed a massive sponsorship deal across all of Madison Square Garden’s teams and facilities (SportsBusiness Journal, Sept. 6-12).
AmEx, one of MSG’s largest and longest-tenured corporate partners, was angered enough after Chase took that deal that it wanted to kill the pending NBA league deal. However, the addition of team rights sold by Miami and Chicago team marketers assuaged AmEx’s concerns and allowed the league-level agreement to proceed, sources said.
The deal continues a hot streak for the NBA in corporate sales. Over the past 10 months, the league has added State Farm; BBVA, its first banking category sponsor; and Bacardi. The league also renewed deals with Coca-Cola, Anheuser-Busch, Cisco, Right Guard and Kia and renewed at the “promotional partner” level with Campbell’s Pepperidge Farm for its Goldfish snack crackers.
AmEx was an NBA sponsor from 1995 to 2005 and was a charter WNBA corporate patron. At the time of the company’s exodus, a source familiar with AmEx’s marketing plan said the company was less interested in sports and more interested in entertainment for its overall sponsorships strategy.
The return of AmEx now emphasizes, in part, the rebound of the financial services category after the recession. Recent deals among payment card brands include the Chase/MSG agreement and a media and sponsorship rights deal for Discover with the NHL.
AmEx is also a sponsor of the U.S Open Tennis Championships and the PGA of America. Wasserman Media Group represented AmEx in the league and team deals.
Bensussen Deutsch & Associates has extended the agreement making it MLB’s premium merchandise agency of choice for an additional four years.
When it was signed in 2007, the MLB deal was the first in a series of large sports property agreements for the Seattle-based premium merchandise agency. Subsequent to its MLB deal, BDA has solidified its position across sports, with alliances making it the official promotional agency of NASCAR and the NCAA’s preferred premium vendor, along with similar relationships with the NFL and U.S. Olympic Committee.
Under its MLB agreement, BDA doesn’t provide all premium merchandise for sponsors and clubs, but it does approve and manage the process for the league. Howard Smith, MLB’s senior vice president of licensing, said he made the original agreement somewhat reluctantly, thinking various licensees could supply premium merchandise, but since has changed his mind.
“When I got here, I thought it was important to upgrade premiums as a means of controlling our brand,” said Smith, who started at MLB in 1998. “What we learned was that premiums are never a priority for [retail] licensees and they are a real passion for BDA. Their sourcing capabilities are unbelievable against any kind of product, and we’ve had no issues with quality control and they manage our brand as well as we do. And a focus on innovation is just part of their corporate culture.”
Company CEO and co-founder Jay Deutsch said the league affiliations helped BDA have its best year ever, both in terms of revenue and number of premium promotions. “Hopefully, this is validation that our model works,” he said, noting that BDA activated with every MLB corporate sponsor this past season. “The leagues are seeing the value we can bring, so we get to sit down with brands and their agencies at the outset to design these programs. That’s the place we want to be.”
The University of Michigan and Michigan State, the two schools that originated the sensation of big-time outdoor hockey matches, reunite Saturday for the first hockey event in Michigan Stadium.
“The Big Chill in the Big House,” as it’s been labeled, has been a marketing bonanza for the Wolverines’ marketing partner, IMG College, which has sold a presenting sponsorship to Arby’s and supporting deals to Michigan Healthcare, Buick, Delta, Meijer and Caesars Windsor Hotel and Casino. At least 11 sponsors are paying to be a part of the event, which has been in the works since January.
The sponsorship and licensing revenue for the stand-alone event is expected to reach $500,000 to $600,000, and Arby’s presenting sponsorship is believed to cost around $100,000, industry sources say.
Nearly 40 companies have been licensed through Michigan’s licensing agent, Collegiate Licensing Co., to produce “Big Chill” merchandise with event logos, 19 of which are apparel and 18 non-apparel. Adidas, Michigan’s equipment and apparel partner, also has produced special throwback jerseys for the Wolverines to wear, which are being sold online at the school’s official site, mgoblue.com, and on campus.
A sellout crowd of more than 111,000 is expected and Guinness World Records officials will be on hand to make the attendance record for an outdoor hockey game official.
The Wolverines and Spartans began the outdoor series in 2001 when 74,544 fans watched at Spartan Stadium.
The event marks the first time sponsors have had a presence inside the iconic stadium, which does not offer signage opportunities for companies during the football season.
“We want to be respectful of the tradition, but in this evolving landscape of integrated sponsorship packages, this is a unique opportunity in the Big House,” said Lawton Logan, IMG College’s senior vice president of collegiate properties. “This is access to a place that sponsors traditionally haven’t been able to sniff, so we’ve looked at some creative ways to use this as a sponsorship platform.”
The early returns on Bypass Lane, a new smartphone-based plan for ordering food and drink at sports events, have been encouraging, and officials using the system at three big league facilities are confident it will gain traction as more Americans buy those mobile devices.
The Phoenix Coyotes, Carolina Hurricanes and Texas Rangers are among the six clients now under contract with Bypass. The Austin, Texas-based company produces a Web-based service that enables fans to order concessions through their mobile device and pick up the order at an express line set up at the food stand.
Today, at baseball’s winter meetings, Bypass is expected to introduce an Apple mobile application to provide more flexibility for teams, arenas and stadiums, said Brandon Lloyd, the company’s president.
Bypass signed its first client, Minor League Baseball’s Round Rock Express, in early July and added the MLB Rangers during the last month of the major league regular season. The University of Georgia’s Stegeman Coliseum and North Carolina State University, which plays college basketball at the Hurricanes’ home, RBC Center in Raleigh, are also Bypass clients.
At those five properties, Bypass data show per caps are 44 percent higher for Bypass users than for fans using credit cards for traditional concessions transactions, according to Lloyd.
To use Bypass, patrons must set up an account on the firm’s website containing a valid credit card number and a password to complete the ordering process. Bypass sends a text message alert when the order is ready. Bypass users pay a 99-cent fee per order.
The Coyotes installed individual Bypass lanes in mid-November at six locations at Jobing.com Arena. The Hurricanes followed soon afterward after talking to the Coyotes about their operation, said Chris Diamond, director of food and beverage for VAB Catering, Carolina’s in-house concessionaire.
Diamond and Jim Foss, the Coyotes’ senior vice president and general manager of Jobing.com Arena, both said that it was too early to gauge the success of Bypass but that they feel it is important to embrace the technology because of the increasing number of consumers using smartphones.
For Cadillac, it’s more about who is watching golf as opposed to how many. That was the root of Cadillac’s decision to sign a six-year agreement with the PGA Tour to title-sponsor the World Golf Championships event at Doral in March.
Don Butler, Cadillac’s vice president of marketing, made the announcement last week with the TPC Blue Monster serving as the backdrop.
“Put yourself in our shoes,” Butler said. “If you’re going to get back into golf, would you go with a soft shoe or go in a big way? You always know a Cadillac when you see it coming down the road, and with golf, this is a great way to establish our presence.”
Using golf as a platform to sell cars is nothing new to Cadillac or parent General Motors. Even when GM brands Cadillac and Buick left the sponsorship scene in 2009 as the automaker went through bankruptcy, Cadillac continued its grassroots program of golf clinics for its VIP clients.
But sponsoring Doral is a different proposition. WGC event title sponsorships cost $10 million to $12 million a year, compared with $7 million or $8 million for a standard PGA Tour event. Cadillac’s deal comes with a media buy on NBC, broadcaster of the event in south Florida, and an on-site presence and media buy at the other three WGC events — two in the United States, one in China — as the automotive sponsor.
Butler kept his future sports marketing plans close to the vest, refusing to say whether Cadillac has more plans in golf, but it’s likely that the GM brand will align itself with a golfer or multiple golfers to give it more of an on-course presence.
“All I can tell you is that golf is very important to us,” said Butler, who was not troubled by the PGA Tour’s slumping TV ratings in 2010 or Tiger Woods’ struggles on and off the course. “This was a very studied approach, and when you look at the data, there’s a high index of affluent customers both playing and watching golf. That’s why it works for us. With Doral, we know we’re getting a top-flight field and we know we’re getting good viewership.”
Doral delivered a 1.9 rating for its final round this year and a 1.3 in the third round. Those numbers were down significantly from 2009, when Doral drew a 3.4 rating for the final round and a 1.9 in the third round as Phil Mickelson won and Woods finished ninth. Woods didn’t play this year’s event, which was won by Ernie Els.
Cadillac will work with GM’s agency, R*Works, on the activation and promotional planning.
Buick will not be returning to golf, but it has looked at other sports marketing platforms for its brand, although no plans have been revealed.
The MLS Houston Dynamo will use and operate a $15 million, 40-acre training complex in southwest Houston whose construction is being funded by the city of Houston.
The complex, called the Houston Amateur Sports Park, will have seven training fields, including one set aside solely for the Dynamo and its academy. It also will have a 45,000-square-foot facility that houses a 5,000-square-foot locker room, a sports performance center and a rehab clinic.
Ground broke on the project in January after the city government allocated $8 million to purchase land and then raised $7 million in bond money to pay for construction, which is being overseen by McShane Construction. On Nov. 9, the city council approved a plan that allows the Dynamo to manage the facility once construction ends in February.
“We’ve established a first-class training grounds for the Dynamo and our academy and created a side business that will hopefully generate a profit and provide a unique marketing platform as well,” said Chris Canetti, president of business operations for the Dynamo. “This is a great opportunity for us.”
The Dynamo will cover the cost of the park’s operation and maintenance, an amount Canetti expects will be roughly $1 million annually. The club also will pay a mid-six-figure sum for the build-out of the locker room. Canetti said the organization would add two staffers to oversee the complex, and the Dynamo will rent field time to local youth and amateur soccer clubs as well as regional tournaments. The club will charge $75 an hour for field use and also will run its annual youth camps at the site.
In return for managing operations, the team retains the right to sell sponsorships and founding partnerships for the complex, excluding naming rights. Canetti said the club has sold founding partnerships to Volkswagen, the local Methodist Hospital system and a third sponsor, which he declined to name.
“These venues are not automatic profit centers and we’ll need to generate thousands of hours of field use over the next year to break even,” Canetti said. “We haven’t advertised [the fields] yet, but already the demand is high.”
The team has used the University of Houston’s athletic grounds as a practice site since the club’s 2006 debut.
The complex is scheduled to open in early spring of 2011, with the performance center opening in the summer. A future build-out, which will add 11 fields and a rest room/pavilion structure, does not yet have a completion date.
ESPN has asked a federal court to unseal documents potentially damaging to the ATP World Tour, pitting men’s tennis against its most significant U.S. broadcaster.
The documents in question allegedly prove that elite ATP players gambled on professional tennis matches, a charge leveled by four journeymen Italian players suing the ATP for fining and suspending them for betting.
“We have no idea if the allegations are true,” said Vince Doria, ESPN’s senior vice president and director of news. “We’re basically throwing a hook in the water to see if anything’s there.”
The motion underscores ESPN’s role as both a business partner and a news gatherer, a situation that frequently has irritated sports leagues.
At the 2007 All-Star Game, MLB banned ESPN sets from the ballpark because ESPN’s news division broke an embargo announcing the All-Star teams. Earlier this year, NFL executives complained when ESPN ran a news series on concussions during the Super Bowl. The NFL also battled ESPN in 2003 over the network’s entertainment series “Playmakers,” which the NFL complained cast the league in a bad light. ESPN dropped the series after one season.
“We had a number of issues with ESPN over the years where our perception of what is good for the game and what they needed for editorial freedom diverged,” said Frank Hawkins, a former NFL executive who now co-owns Scalar Media Partners.
Neal Pilson said he ran into similar problems as head of CBS Sports in the 1980s and early 1990s. He recalled worrying when CBS News ran a story on Augusta National during Masters weekend. He never heard from the Masters.
“The sports leagues completely understood that our news division was separate,” Pilson said. “That may be a little more difficult for ESPN, which has both departments under one roof.”
Doria said issues with leagues occur regularly.
“Virtually everyone we cover is a business partner these days,” he said. “Most business partners have realized that while some stories are uncomfortable, time moves on. After the story comes out, we’re still going to have a relationship with these entities.”
ESPN2 is a major broadcaster of professional tennis, with 570 hours committed in 2011, though some of that includes Grand Slam and WTA play. ESPN2 last month struck a deal with the ATP to broadcast the Miami and Indian Wells events, the tour’s top two tournaments.
Following the creation of the Tennis Integrity Unit to police gambling in tennis, the ATP sanctioned the low-ranked Italian players in late 2007 and early 2008 for betting on the sport. The sport’s governing bodies, including the ATP, formed the Tennis Integrity Unit in response to suspicious betting patterns in a 2007 match featuring a top-ranked ATP player and the subsequent discovery of similar patterns in other players’ matches.
In July 2009, the Italian players sued the ATP in Florida, arguing they were unaware the small bets violated ATP rules. The initial complaint stated that in 2008, the ATP became aware that many players wagered on the sport. But in a more explosive development, the four players, in an October motion opposed to the ATP’s move to dismiss the lawsuit, contended that men’s tennis was using them to distract from the real issue of top players gambling.
“[The] ATP completely ignored more serious violations of the anti-corruption program by high-ranked, more prominent professional tennis players in order to avoid negatively effecting its revenue and reputation,” the players charged.
The documents allegedly proving these charges were filed under seal.
“Gambling among professional tennis players has been an on-going public concern for some time, as this lawsuit demonstrates,” ESPN argued in its Nov. 24 motion to unseal. “Whether professional tennis players — who are public figures — are gambling on their own matches, or the matches of fellow players, is a matter of public concern. Accordingly, ESPN seeks access to the sealed judicial records in this case.
“It is ESPN’s understanding that the documents deal with third-parties’ gambling accounts or activities,” the motion continued.
In an e-mailed statement, the ATP’s outside counsel responded that the circuit opposed ESPN’s request.
“The ATP has a duty to protect the privacy interests of its players who were not involved in betting from the extortionate claims of these plaintiffs,” wrote Stephen Busey of the Florida law firm Smith Hulsey & Busey.
The case, which is scheduled to go to a jury trial on Feb. 7, is filed in the U.S. District Court for the Middle District of Florida in Jacksonville. A hearing on ESPN’s motion, among other matters, occurred last Thursday. Doria said ESPN’s editorial department completes motions like this “probably 10 to 12 times per year.”
Its motion follows The New York Times’ successful bid to unseal the transcript of an in-chambers session that occurred during the Texas Rangers bankruptcy case. The Times filed the motion in September to unseal the July 9 transcript, and after winning approval in mid-November, wrote a story based on the newly public information.
The sports and concert promotion company headed by Hall of Fame fight manager Shelly Finkel has landed a monthly slot for its boxing cards on Fox Sports Net.
Beginning later this month, The Empire Sports & Entertainment will deliver “Fight Night in America,” a boxing card to air nationally on Fox Sports Net outlets on the final Thursday of each month, said Greg Cohen, president, founder and COO of Empire.
The promoter plans to position the cards as a middle-class stop for rising prospects, with budgets of $75,000 to $90,000 for its fight cards, which easily would eclipse the $25,000 to $35,000 ESPN pays for its “Friday Night Fight” cards, putting it in line with Showtime’s developmental “ShoBox” series.
Empire will become only the third boxing promoter with a regular slot on FSN, joining Top Rank and Golden Boy.
“Our agenda with this show is to be a breeding ground for HBO and Showtime,” said Cohen, who over the years has promoted several midrange heavyweights and still promotes former champs Shannon Briggs and Hasim Rahman. “We’d like to have our guys graduate from our Fox Sports Net series to become players on [premium cable].”
“Fight Night in America” debuts Dec. 30, when the network will air a one-hour taped show from Monroeville, Pa., promoted in conjunction with Prize Fight Boxing and featuring welterweight prospects Jesse Lubash (13-0) and Hastings “Sting” Bwalya (5-0), who will fight in separate bouts. Empire hopes to expand to a two-hour live window beginning in May, when FSN’s regional schedules clear out, Cohen said.
Empire hopes to hold future events at an anchor venue — likely a Las Vegas showroom that seats about 2,500 — with a handful of cards in other cities. Longtime announcer Barry Tompkins will handle blow-by-blow calls, joined by analyst Nate Yoder. The show also will air on Fox Deportes.
“I liken boxing to the real estate market,” Cohen said. “It’s beat up and depressed. And that creates opportunity.”
The TV deal is the latest in a series of moves by Empire, which launched last year as a boxing promotion company but quickly morphed into an enterprise that plans to make large music festivals its focus.
In May, Empire hired Finkel, whose roots are in concert promotion, as its chairman and CEO, signing him to a three-year contract at an annual base salary of $500,000. Finkel also received a 10 percent stake in the company.
In June, Empire launched a private placement that raised $2.9 million by the time it closed at the end of October.
Recent SEC filings show that Empire had operating losses of $1.45 million in the seven months from its inception to Sept. 30. Cohen attributed the losses to startup costs, coupled with the fact that the company has not yet promoted a concert.
Looking for a boost in sales over the holidays, Flip Video camcorders last weekend launched an extensive commercial campaign featuring athletes.
The six-week campaign, which includes NFL quarterback Drew Brees, NBA guard Steve Nash, skateboarder Ryan Sheckler and NHL winger Jordan Eberle and center Evgeni Malkin, is the brand’s most robust sports campaign.
Each athlete will be featured in 15- or 30-second spots that they filmed themselves. The spots show everything from Brees juggling a football with his fingertips to Sheckler launching himself over more than a dozen stairs on his skateboard. They will air on national and regional cable networks.
The deals with each athlete were just commercial deals. The price varied from athlete to athlete, and terms of the deals weren’t available.
The athletes will be featured alongside celebrities and musical acts ranging from “Dancing with the Stars” host Brooke Burke to Sean “Diddy” Combs to the band OK Go.
Digital and out-of-home advertising in six markets will support the campaign. Components of it will be visible on New York taxi cabs, Los Angeles billboards and in Boston, Chicago, Minneapolis and San Francisco.
Each athlete active in social media will post notes regarding Flip on his Twitter feed and Facebook page. Brees and Sheckler also designed their own signature line of Flip cameras, which are available for purchase on Flip’s website.
The campaign expands on Flip’s use of athletes. The company has worked with Olympic skier Bode Miller and NBA guard Dwyane Wade and felt that they were effective because of the depth of their social media following. Brand executives say Flip plans to use more athletes.
“We’re a lifestyle brand,” said Jodi Lipe, director of marketing, Cisco Consumer Products, Flip Video. “When you think about lifestyle, you ask where the passion plays are, and the passion plays lie in sports, celebrity and music. We were very fortunate to find six great partners in the sports genre who are passionate supporters of our brand.”
When the NASCAR season officially ended with last weekend’s awards banquet in Las Vegas, Verizon Wireless’ involvement in the sport ended as well.
Instead, the company will shift an estimated $12 million to $17 million of motorsports spending to IndyCar, where it will sponsor Penske Racing’s No. 12 car driven by Will Power and activate against a series sponsorship it signed in August.
Verizon is leaving NASCAR after just two years, and its swift entrance and exit from the sport makes it the second major telecommunications partner to depart in the last three years. Its experience underscores both the challenges a telecommunications company faces in attempting to operate in the shadow of Sprint and the success the sanctioning body has had in protecting the exclusivity of its title partner.
“Regardless of the category, it’s always bad for a property to lose a major brand,” said Dan Richlen, vice president and group account director at Wunderman, which works in motorsports with brands like Panasonic. “This is another leading indicator that everyone needs to stay focused and find better return for sponsors because at the end of the day, if there were enough return, [Verizon] would be here in spades.”
NASCAR has more than 400 companies that sponsor the sport, and it encourages competition in most categories. As a result, sanctioning body partners like Coors Light and UPS race side-by-side with cars sponsored by competitors like Budweiser and FedEx. But when it comes to its series title sponsors, as well as the fuel and tire categories, NASCAR provides complete exclusivity. That means it protects Nationwide against insurers in its secondary series and Sprint from wireless competitors in its premier series.
“That’s the model we’ve had for a long time, and it’s a successful model,” said NASCAR chief marketer Steve Phelps. “That’s a sacrifice we understand we need to make, and one that allows us to fund the sport.”
Trip Wheeler, president of the motorsports agency The Wheeler Co., added, “You want flexibility. The more people spend, the more their competitors activate. But Sprint has been very good for the sport. Everyone [teams and tracks] can say, ‘I get it.’ NASCAR has to protect them.”
When Verizon acquired Alltel in 2008, the biggest sports asset it inherited was the Arkansas-based wireless company’s sponsorship with Penske Racing. Verizon had sponsored Gillett Evernham Motorsports’ No. 9 Dodge in the Nationwide Series, but its executives saw potential to do more with Penske because the sponsorship included rights to the No. 12 Sprint Cup Series car.
“It wasn’t looked at as, ‘OK, we have this, [we have to do something with it],’” said Suzy Deering, executive director of media and sponsorships at Verizon Wireless. “It was more, ‘This can be a good asset for us.’”
Verizon executives knew it would be difficult to turn the asset into something that delivered a return. Just two years before, AT&T acquired Cingular and inherited its sponsorship of Richard Childress Racing’s No. 31 car driven by Jeff Burton.
As pre-existing sponsors, Cingular and Alltel were grandfathered in as sponsors prior to Nextel (now Sprint) assuming the Cup series title sponsorship in 2004 in a 10-year, $750 million agreement. NASCAR’s contract with Sprint specified that the Cingular and Alltel brands couldn’t be changed, and no other telecommunications companies could have a presence in the sport’s top series.
AT&T sued to allow its logo to be placed on Burton’s car. NASCAR filed a countersuit and won, effectively pushing AT&T out of the Sprint Cup Series in 2008.
“You can’t justify staying in a sport if you can’t market your brand,” said Eric Fernandez, senior partner at MediaLink and a former sports marketing executive at AT&T. “If you’re striving to be an iconic brand, you want to be in the premier series. That’s not a knock on the Nationwide Series, but there’s a clear pecking order. When you can’t market your core brand, that’s a problem.”
Verizon executives knew NASCAR would protect Sprint but were optimistic there was enough wiggle room within the rules that they could get a return on their investment in the sport.
Penske, Verizon and their motorsports marketing agency, Just Marketing International, developed the Verizon Championship Racing moniker as a way to brand its involvement in the sport. The umbrella brand was designed to illustrate the heft of Verizon’s investment in motorsports by tying together its primary sponsorship of the No. 12 Nationwide car, as well as associate support of Penske’s IndyCars and Grand-Am car. It also provided a discrete and limited connection to Penske’s No. 12 Sprint Cup Car, which Verizon was funding but couldn’t brand because of Sprint’s exclusive rights in that series. A primary Cup deal alone typically runs in the $15 million to $18 million range for a team such as Penske.
Verizon backed up its loose tie to the Sprint Cup car by using the same black-and-red paint scheme on both the No. 12 Nationwide and No. 12 Sprint Cup cars. The only difference between the two was that the Nationwide Series car featured a Verizon logo, while the Sprint Cup Series car featured a Penske Racing logo.
The hope was that the similarities between the cars racing Saturday and Sunday would be strong enough that consumers would associate both with Verizon in the same way they associated Marlboro with the red-and-white, unbranded Ferrari car in Formula One.
NASCAR, which has final say over the paint schemes of the cars, approved the No. 12, and Penske Racing President Tim Cindric and NASCAR spokesman Ramsey Poston called the paint scheme agreement a good compromise.
“Everything about the sport is conflict and compromise and cooperation, and that’s what happened here,” Poston told NASCAR.com in 2009.
Verizon Wireless targeted the Daytona 500 in 2009 as the moment when it would trumpet its new presence in NASCAR. It branded a dozen Smart cars that toured and passed out flyers on Daytona Beach; it rebranded a popular local spot, the Ocean Deck, as the V Lounge for four days; and it used its retail store across from the speedway as the site for driver autograph signings. The promotions were the cornerstone of a yearlong activation campaign comparable to the more than $10 million the average primary partner spends to activate in NASCAR.
Verizon planned to supplement its spending around town with a creative buy on Fox during the race. Together they developed a plan to superimpose Verizon logos electronically on the roll bars and interior of the No. 12 car during in-car shots during the race, similar to the way the yellow “1st & Ten” marker is applied during a football game. It tested the idea at the Bud Shootout, the week before the Daytona race.
On race day, word spread that Sprint and NASCAR didn’t like the idea. NASCAR called a meeting with Fox, Verizon and Penske executives and said that they couldn’t apply the Verizon logo to the No. 12 car during the race broadcast. The sanctioning body executives threatened to black flag the car driven by David Stremme if the logo appeared during the race broadcast. Verizon executives abandoned the plan rather than risk affecting the race, sources familiar with the meeting said.
Verizon declined to comment on the meeting, but Deering said, “There are constraints we face every day from a media standpoint. We always shoot for the moon, and if we get pulled back, we get pulled back.”
Sprint officials deferred questions regarding Verizon’s involvement in NASCAR to the sanctioning body.
There were other problems that arose during the year, as well. Verizon couldn’t use Stremme at retail. It couldn’t feature him in creative. And while Verizon could invest in a driver like Penske’s Justin Allgaier in the Nationwide Series, if he succeeded and moved up to the Sprint Cup Series, all the equity Verizon created would be worthless because they couldn’t stay with him.
All of those things were challenges Verizon officials knew about up front, but it wasn’t until they got fully involved with the sponsorship that they understood just how limiting the restrictions could be. Verizon’s enthusiasm and optimism about its opportunity in NASCAR waned.
“There were a lot of limitations that made it apparent business could be driven more effectively elsewhere,” said Jon Flack, president and COO of Just Marketing International, the marketing agency that worked with Verizon on its NASCAR sponsorship.
Verizon’s deal for the No. 12 Nationwide and Cup Series cars was due to end in 2010. It continued to fulfill its commitment and didn’t cut back on its activation spending, but it began to make plans to leave the sport.
Earlier this year, it signed on as the primary sponsor on Penske’s No. 12 IndyCar entry. It later negotiated an IndyCar Series deal that allowed it to develop a mobile app and provide content to IndyCar fans on its V-Cast network.
The two deals allowed Verizon to exit NASCAR but stay in motorsports. It made its final appearance on the No. 12 car last month at Homestead-Miami Speedway.
Deering said the decision to double down on IndyCar was driven by the fact that there were fewer races and the company felt it could do more concentrated hospitality as a result. It also gave Verizon the chance to be the category leader and allowed it to maintain its commitment to Penske.
“The overall thinking is focus,” Deering said. “It’s about maximizing what we have, elevating our brand and reaching our consumers.”
NASCAR executives hope Verizon returns to the Nationwide Series or Camping World Series, but it’s unlikely the sport will change its exclusivity in a way that makes room for Verizon in the Sprint Cup Series.
“I wouldn’t say never, but it’s hard to predict,” Phelps said. “With so many categories out there, having limitations in three or four categories doesn’t seem too onerous. But at the same time, we want to be sure we have race cars on racetracks and teams are fully funded.
“There are still 400 sponsors in this sport, which is incredible, and the reason they are there is that they’re getting a solid return on their investment.”
Virginia Tech punter Brian Saunders has a stat line that reads far deeper than his one season of on-field action provides.
Seven rings, seven watches, Oakley Thump MP3 sunglasses, an iPod nano, a GPS system, a Sony PlayStation Portable and noise-canceling headphones — not to mention a bounty of apparel.
Such is the haul for a fifth-year player who after this past weekend’s ACC championship game has been with the Hokies for seven postseason games: three conference title games and four bowl games.
The goodies have come courtesy of various bowl committees, the ACC and Virginia Tech as a reward for participating in the postseason games. It’s a seasonal gift-giving practice that gets its greatest visibility this month, with the start of bowl season.
Saunders, through his years, has seen a change not only in the type of gifts given, but also the fashion in which the gifts are distributed. Jerseys and shoes have given way to iPods and Xboxes. Handouts have been replaced by gift suites, where players have a chance to view items available to them and place individual orders on the spot.
“The suite was a really nice surprise,” Saunders said, referencing the Hokies’ Orange Bowl trip two years ago. “Guys definitely like picking out their own things.”
At least 14 of this year’s 35 bowl games will offer suites to players. New, though, is that some of the suites are coming to the players before the players arrive at the game site.
The NCAA allows each bowl to award up to $500 worth of gifts to 125 participants per school. Schools can, and almost always do, purchase additional packages that they can distribute to participants beyond that 125 limit. In addition, participants can receive awards worth up to $350 from the school and up to $350 from the conference for postseason play, covering both conference title games and any bowl game.
Teams historically have received these gifts shortly after arriving in the game’s host city. In recent years, some bowls have sent the packages straight to the school. Saunders credited the 2006 Chick-fil-A Bowl committee for sending duffel bags, from Russell, to campus a week before the game, saying that most of the players used them as luggage bags for the bowl trip.
Two years ago, Orange Bowl officials added a twist, reserving a suite at each participating team’s hotel and stocking it exclusively with Sony Electronics products. When the players arrived, they were taken to the suite and given a list on which they could mark off the items they wanted, up to $300 in total value. The gifts were then delivered to the players’ addresses of choice.
Word of the suite spread, and other bowls followed with similar offerings. What’s changing now is that at least a dozen bowl committees over the next few weeks plan to set up similar rooms directly on the campus of each competing school as part of their pre-bowl preparation work.
“We know they’re out here to play a game, so by doing all of these in advance, it removes a big distraction during game week,” said Gina Chappin, director of media for the Rose Bowl Game presented by Vizio. “It doesn’t add any costs because we were already going to the campus anyway, and it removes a big source of stress off the shoulders of the football ops guys.”
In fact, the process is expected to save money. Once the players make their selections, the requested items are freight-shipped directly to campus rather than items being sent to players’ individual addresses.
The Allstate Sugar Bowl experimented with the on-campus concept last year and received positive feedback.
“It’s nice to get the stuff when you get in town for the game,” said John Widecan, assistant director of athletics for football operations at the University of Cincinnati, which played the University of Florida in last season’s Sugar Bowl. “But honestly, some kids lose it, or leave it. When we got home from a bowl game one year, a few guys opened their bags, and their new DVD players were in pieces.”
The earlier ordering also increases the chance that the gifts arrive in time for the holidays.
The gift-suite concept is the brainchild of Jon Cooperstein. A veteran of the incentives gifts industry, Cooperstein was hired by Carrolton, Texas-based Performance Award Center (PAC) in April to launch its sports division. He took his sports Rolodex with him, and the 30-year-old company instantly became the dominant player in the niche. PAC has a 60,000-square-foot warehouse where it handles every stage of the process, from ordering to shipping.
Cooperstein said having a suite on two campuses, compared with a single, on-site hotel presence, allows for more local media coverage for the bowl. It also can provide a school with some nontangible benefits.
“Let’s say you are a coach,” he said. “You can walk high school recruits through the suite and say, ‘Check this out. Next year, when you’re on our team, this will be you walking through here.’”
To make the on-campus plan happen, Cooperstein and his staff have assembled eight complete gift suites that they must pack and unpack quickly over the next few weeks. A minimum of eight PAC employees will be traveling to campus and game sites during the bowl season.
Cooperstein said last year’s distributed bowl packages included more than 10,000 watches and electronics items, the most ever. He said that record will certainly be broken this year. Clayton Walvoord, who handles Sony’s premium incentive sales in the Southeast, said he expects to ship 8,000 units of electronics to bowl committees this year, up from about 5,000 last year.
The increases are the result of schools ordering more packages for VIPs this year than previously.
Ironically, the most popular item last year, according to Cooperstein, and echoed loudly by Chappin and Widecan, was not a piece of technology. It was a recliner, from Lane Home Furnishings. Participants ordered nearly 500 chairs last year, about 10 times what the company had expected.
Among other vendors, Oakley, in its 20th year as a provider, is providing products to players in six bowls this season and to VIPs at three games, including the Rose Bowl. Timely Watch Co. continues to be a favorite among committee executives, appearing in eight gift packages this season.
“This thing has caught on so quickly because it’s one-stop, no-touch shopping for the schools,” Cooperstein said of the suites. “No one has to worry about players or coaches or coaches’ wives not liking the product when you have 40 things to choose from.”
As for Saunders, who is on his way to the final bowl game of his career, he knows his treasure chest is about to get a little bigger.
“I’m going to cherish these for life,” he said of the gifts. “I’ve really enjoyed being part of each game, and the emblems on the items will remind me of that.”
Mandalay Baseball Properties President and Chief Executive Art Matin said the company’s portfolio of minor league clubs has emerged much stronger following a flurry of deals over the past several months.
Mandalay last month exercised an option with the New York Yankees and Lackawanna (Pa.) County to purchase the publicly owned Class AAA Scranton/Wilkes-Barre Yankees for $14.6 million. Mandalay will become an equity partner with the New York Yankees for the minor league franchise within their joint venture, SWB Yankees LLC.
The pact follows a four-year run in which Mandalay managed the day-to-day operations of the club. It also follows September deals for Mandalay to purchase the Class AAA Oklahoma City RedHawks from a group led by Bob Funk Sr., and to sell the Class A Hagerstown (Md.) Suns to a group led by Florida businessman Bruce Quinn.
The Suns deal helped fund the RedHawks acquisition.
Along with the Scranton purchase comes $40 million in planned, publicly funded renovations to 21-year-old PNC Field and a long-term lease at $750,000 per year for the club to play there. Numerous steps remain to finalize both the purchase agreement and the stadium-renovation funding, but the deals are expected to be completed.
“We’re very excited about our portfolio as it stands right now,” Matin said. “Adding Oklahoma City and deepening our commitment in Scranton really strengthens the mix. It’s our long-term desire to be in strong baseball markets and execute well within them, and up and down our portfolio, we definitely have that.”
Mandalay also owns the Class A Dayton (Ohio) Dragons, which have sold out 774 consecutive games; Class A Staten Island (N.Y.) Yankees; Class AA Erie (Pa.) SeaWolves; and Class AA Frisco (Texas) RoughRiders. As with Scranton, Mandalay is a co-owner with the MLB Yankees for the Staten Island club.
The timing confluence of all the deals was coincidental, Matin said. The portfolio shuffle also arrives in a period of executive change for the company, as Jon Spoelstra, Mandalay managing director for professional sports franchises, in late October completed a long-planned exodus to focus more on his series of business and management books.
“Each one of these has a pulse of their own,” Matin said. “Oklahoma City, we worked on for nearly a year. Scranton, we were there four years before this [memorandum of understanding] happened. These things have sort of all come together at the same time, but the common undercurrent is that we remain very optimistic about the health of minor league baseball.”
To that end, Matin said the company may add additional teams to the portfolio.
“There’s nothing imminent,” he said, “but we’re definitely investing and building in this business, and we continue to look for unique opportunities that make sense.”
Under the new structure in Scranton, Mandalay and the New York Yankees will seek to address a troubling situation in which total attendance for the club in 2010 fell to 12th in the 14-team International League and has fallen 42 percent since 2007, the first year of both Mandalay’s involvement and the affiliation with the Yankees.
The sale of the franchise at a price now allegedly below market value and the public financing of the stadium renovation, predictably, has generated local controversy in Scranton, including competing lawsuits from Lackawanna County and neighboring Luzerne County.
But county commissioners believed the deal with SWB Yankees was the best way to ensure the long-term survival of pro baseball in northeast Pennsylvania, in part due to state aid for the renovations that required local contributions, with that money derived in part from the franchise sale.
“Basically, the commissioners have viewed this as an opportunity to reinvent baseball in this community,” said Frank Tunis Jr., solicitor for the Lackawanna County Multi-Purpose Stadium Authority, which has owned the franchise and PNC Field. “There aren’t really public funds to continually rehab the stadium as we’ve been, so we’re seizing upon this opportunity.”
NASCAR has finalized eight of 12 renewals and added two new partners, a combination that increases its total annual sponsorship revenue by 10 percent in 2011.
The sanctioning body has renewed two-thirds of the sponsorship deals due to elapse this year, signing renewals with Toyota, GM, Dodge, Unilever and DirecTV. Three other extensions are agreed to and currently being finalized, said Jim O’Connell, NASCAR vice president of corporate marketing.
Tylenol, Tissot and Nicorette all declined to extend their agreements, and the sanctioning body is still negotiating with insurer Aflac, which has one year left on its sponsorship of Roush Fenway’s No. 99 Sprint Cup car driven by Carl Edwards.
The sanctioning body added partnerships with Drive 4COPD, a national public health campaign, and Growth Energy, an American ethanol interest group.
NASCAR’s marketing partnerships generally range from $2 million to $10 million a year. “For any property to be up 10 percent given the economy and tight corporate budgets shows there’s still a lot of value there,” O’Connell said. “We’ve done a good job of finding new categories, and that’s helped.”
NASCAR announced the Growth Energy agreement last week in Las Vegas. It is the sanctioning body’s first marketing partner in the green, environmental category, and its biggest new marketing deal since signing its Nextel/Sprint title sponsor in 2004.
NASCAR brought Growth Energy on in concert with official fuel provider Sunoco, which will provide Sunoco E15 fuel at the track. Growth Energy will be strictly a marketing partner and will use the NASCAR rights to promote American ethanol.
Team Epic, the recently formed Carat-owned agency that includes Velocity Sports & Entertainment and Vivid Marketing, will handle the account.
Unilever signed a multiyear extension for the first time in more than five years, ensuring that it will continue to use NASCAR to promote Hellman’s mayonnaise. DirecTV’s renewal ensures it will continue to provide “Hot Pass,” a service that provides an in-car view of the race from four cars.
Tylenol and Nicorette decided to exit NASCAR because of different challenges facing their respective businesses. Tylenol faced multiple product recalls last year, while Nicorette’s market share has decreased because of new competition. The two had been partners of NASCAR since 2006 and 2005, respectively.
Tissot decided to discontinue its four-year-old relationship as NASCAR’s official timekeeper in order to shift all of its motorsports marketing spending to become the primary sponsor of Danica Patrick’s Nationwide Series car, owned by Dale Earnhardt Jr.’s JR Motorsports.
“It’s a win-win,” said Sharon Buntain, Tissot’s U.S. brand president. “We get to be tied to the Earnhardt family and we’re on Danica’s car. It’s a home run.”
NASCAR has three key renewals due in 2011 with Mars, Bank of America and UPS. It already has begun negotiations with those partners and is looking to add new partnerships in the timekeeper, consumer electronics and salted snacks categories. It plans to be more aggressive in seeking additional green partnerships, too.
“The traditional categories are tougher and tougher,” O’Connell said. “We’ll need to create new opportunities to keep growing.”
The Monster Energy Supercross series has signed five new sponsors and renewed four key partners for the 2011 season, increasing its annual sponsorship revenue
5 percent to 10 percent from a year ago.
The series, a division of Feld Motor Sports, signed new agreements with DC Shoes, Smith Optics, Amsoil, Falken Tires and Traxxas, a remote-control car manufacturer. It renewed partnerships with Toyota, Parts Unlimited, U.S. Air Force and THQ, a game publisher. Terms of the agreements were not available.
The only sponsor not returning from 2010 is Spike TV. The series also is looking to add one more partner before the season that will be the presenting sponsor of the holeshot award, which recognizes the rider who gets the early lead in a race.
The additions come during a season that will be highlighted by the series’ first event at Dodger Stadium. The season opens Jan. 8 in Anaheim.
“Nobody’s going to do a handstand and say (the series is) growing 50 percent a year, but by any measure, supercross continues to have an arrow pointed up,” said Ken Hudgens, Feld’s chief operating officer.
Supercross saw attendance increase in 2010, improving to an average of 46,329 over 17 events from an average of 46,289 in 2009. On TV, it averaged 200,000 viewers over 18 broadcasts on Speed, and approximately 1 million viewers during nine hours of programming on CBS.
Hudgens said that one of Feld’s biggest priorities is improving supercross’s ratings. The series bought time on CBS on Dec. 26 to broadcast a season preview show that organizers hope will boost interest in race broadcasts throughout 2011.
The series expects promotional support from new and returning partners to help it continue to boost attendance and ratings. One of the most important new sponsors it signed is DC Shoes. The footwear brand has been active in the sport for years, but it’s typically sponsored riders and not sponsored the series.
“Our heritage in motorsports has been around the characters of the sport and we’re looking for that next chapter,” said Brian Cassaro, DC Shoes’ sports marketing director. “We’re ready to start engaging our customers, which we’ve never done before.”
Cassaro said DC Shoes will activate on-site at supercross events by setting up a tent that emphasizes the footwear brand’s history in supercross, as well as its involvement in skate, surf and BMX. It hired IMG to assist with activating its sponsorship.
Toyota’s renewal means it will remain the official vehicle and truck partner of supercross. The company, which also provides support to the Joe Gibbs Racing motocross team, estimates 15 percent of supercross fans now own or lease a Toyota.
THQ, the maker of the game “MX v. ATV,” signed on for its eighth season of sponsoring supercross. Its one-year deal is valued in the six figures, and it plans to activate in the pits with gaming consoles and giveaways.
“We would want to be there regardless of the fee,” said Michael Lustenberger, THQ’s vice president, global brand management online. “It’s a tremendous value for us.”
Marketing agent and NFL insider Mike Ornstein has been cooperating with law enforcement authorities in multiple federal investigations throughout the United States for four years, federal prosecutors revealed at a court hearing last month in which Ornstein was sentenced to eight months in prison.
“Mr. Ornstein’s cooperation has been extensive, it has been ongoing, and it continues today,” John Sammon, an assistant U.S. attorney, told U.S. District Judge Christopher Boyko. Sammon said Ornstein’s assistance to the government warranted a major reduction in the length of his punishment.
The detail was part of a dramatic sentencing hearing Nov. 19 in Cleveland, in which Boyko admitted that he wrestled with determining the proper punishment for Ornstein, whom the judge cited for his many charitable contributions.
But the major news from the sentencing was that Ornstein provided what was described as substantial cooperation with federal law enforcement officials, and that is sure to reverberate in the sports industry and especially around the NFL, where Ornstein enjoyed high-level access until news broke in October of his legal problems. Industry buzz for weeks has been whether Ornstein would name names to avoid prison time.
He pleaded guilty to one count of mail fraud and one count of conspiracy in June, acknowledging in federal court that he conspired with others to scalp Super Bowl tickets and sell NFL jerseys falsely advertised as game-worn.
Ornstein was out on bond last week, awaiting a determination by the Federal Bureau of Prisons as to where he would serve his sentence. His attorney did not return a phone call for comment on this story.
Ornstein, who had faced a maximum of 25 years in connection with the felony convictions, had also pleaded guilty in the mid-1990s to a federal charge that he defrauded former employer NFL Properties of $350,000. But other factors weighed on Boyko during his deliberations, including Ornstein’s work helping disadvantaged children and the people of New Orleans after Hurricane Katrina. “I really wish there were more people doing what you do in this world,” Boyko said during last month’s hearing.
At the same time, Boyko told Ornstein, “You are an intelligent man, Mr. Ornstein, and for you to be here in front of a federal judge for a second time, it's pretty stupid.”
“Very stupid,” Ornstein agreed. “But I am a good person, at the end of the day.”
Ornstein was able to serve his previous sentence under house arrest. His attorney, Angelo Lonardo, asked that Ornstein be able to spend the new eight-month sentence at home, as well, but the judge said no.
“I’m sorry … but it is prison,” Boyko said.
It is not clear exactly what kind of assistance Ornstein provided to the government, and federal law enforcement authorities do not comment on active investigations. But Sammon said, “It is possible that as a result of other investigations ongoing in different parts of the country, that other offices may bring charges against certain people as a result of the cooperation by Mr. Ornstein.”
It is believed that Ornstein bought Super Bowl tickets from NFL employees and players to resell, but the sentencing hearing revealed little about the scalping operation except that Ornstein had players fill out forms regarding their sale of tickets and that Ornstein paid taxes on the profits he made from it.
But the hearing did contain several revelations about the jersey scam, including that NFL officials knew as far back as 2003 that Ornstein had tried to sell jerseys falsely advertised as game-worn.
Lonardo, in asking for leniency for his client, said that Ornstein had already been punished for selling the jerseys by the NFL. “He had to go in front of the NFL and everybody else and make amends for it and also be punished, at least in terms of NFL Properties,” Lonardo said. “That is back in 2003, Judge, and then for the next three years, he really did nothing, or nothing much with NFL Properties.”
Ornstein told a similar story. “What happened eight years ago, it was an opportunity on these jerseys, but I can stand here today and say every penny was paid back and every jersey recovered,” he said. “There was no victim of that crime. The intent was there. I was wrong. When it was brought to my attention by the NFL, I sent my guy. … We bought every one back. … And the NFL, when I met with the NFL, they weren't happy about it, but they let — they passed on it,” he said.
The NFL declined to comment for this story.
Ornstein told the court that none of the jerseys ever hit the market, but that statement surprised prosecutors and contradicted the bill of information to which he pleaded guilty in June. According to the bill of information, Ornstein sold jerseys to multiple outlets, including a memorabilia dealer, and some of the pieces were cut up and affixed to trading cards, netting Ornstein more than $100,000, according to court documents.
“It was the government’s understanding that some of these cards were sold, but apparently that’s not the case?” said Henry DeBaggis, an assistant U.S. attorney.
In an interesting twist, he added that the nephew of IRS agent Brian Sallee “came into possession” of one of the NFL jerseys that had been fraudulently marketed as game-worn. The IRS and the FBI were both involved in investigating the case.
Sallee, according to the transcript, appeared caught off guard by Ornstein’s statement. “This is kind of the first time — we have heard in the past that Mike has — I believe the cards were in commerce,” Sallee said. “That’s what I thought.”
But Ornstein, in court, said that after the NFL called him in, he bought all the jerseys back from Pacific Trading Cards and destroyed the jerseys. “So we never did make any money on the jersey thing and there were no jerseys ever used,” Ornstein said.
Pacific Trading Cards is no longer in business and attempts to reach former officials of that company for comment were unsuccessful.
It was also revealed at the hearing that Ornstein first became aware of the investigation at a Cleveland Browns game in 2006, but the circumstances of that situation were not described.
The colorful Ornstein, a 30-year veteran of the sports business known as “Orny” to his friends, has extensive ties throughout the industry. He has been particularly close to the reigning Super Bowl champion New Orleans Saints.
In fact, Ornstein, a friend of Saints coach Sean Payton, was on the New Orleans sidelines at the Super Bowl this year and later sported a Super Bowl ring that he showed off to others in the industry, multiple sources said. (Saints spokesman Greg Bensel said, “The team did not give him a Super Bowl ring.”)
But virtually no one in the business knew Ornstein had criminal charges hanging over his head. He told the judge that it had cast a shadow over his life for a long time.
“I’m so remorseful, believe me,” Ornstein said. “When you wake up every morning for 10 years and 10 times a day and every time you go to bed at night, that is the only thing on your mind, I’ve been in jail for 10 years. I really have.”
Digital media startup 247Sports.com has struck a partnership with the Austin (Texas) American-Statesman newspaper designed to create a multiplatform destination for coverage of University of Texas sports.
With the deal, the American-Statesman’s existing Texas Longhorns fan site, HookEm.com, will receive a substantial repurposing and become part of the 247Sports.com network of team affinity sites. Recruiting lists and other proprietary content from 247Sports.com will appear on the new HookEm.com and in the newspaper. The two entities will sell advertising against the venture as well as subscriptions to premium-level Longhorns content, which will be available through both HookEm.com and 247Sports.com.
247Sports.com sees this newspaper-partnership model as a key driver for growth and is nearing several similar pacts in both pro and college team markets, with at least one other deal expected by the end of the month.
“We see this as an effective way to combine the assets of what each party does as well as anybody,” said Bobby Burton, 247Sports.com president. “They have incredible newsgathering abilities, and our expertise in recruiting and the fan-affinity business is powerful, too. We’re creating a new type of product that nobody out there has had.”
Financial terms were not disclosed, but the deal is based on sharing of the advertising and subscription revenue. Content subscriptions begin at $9.95 a month.
“As well as we’ve done covering Texas, and most of our readers are happy with our coverage, there is definitely a market for recruiting coverage, and the 247 guys basically invented the category [while at Rivals.com],” said Michael Vivio, publisher of the Cox Enterprises Inc.-owned American-Statesman. “We’re also eager to see this partnership help advance our paid-content initiatives online.”
Burton and Shannon Terry teamed roughly a decade ago to create Rivals.com, which Yahoo! acquired in 2007 for $98 million. The two executives then left the company last year and launched 247Sports.com earlier this year.
247Sports.com recorded more than 400,000 unique visitors in November, according to internal analytics, just its fourth month of formal operation. Nov. 29 marked an all-time high for a single day for the company, with 96,500 unique visitors.
“We’re now getting ourselves in a position to really have the next generation of fan sites,” Terry said. “The pieces are definitely coming together.”
Editor's note: This story is revised from the print edition.
Shell-Pennzoil executives think the company’s sponsorship of Penske Racing has the potential to pay for itself based simply on the amount of fuel and oil it sells across the Penske system of more than 310 auto dealerships and 200,000 rental trucks.
The company last week unveiled a new paint scheme at Penske Ferrari in Las Vegas and disclosed details of the multidimensional, business-to-business relationship that led to its multiyear agreement to sponsor Penske’s No. 22 car.
The partnership makes Pennzoil-Shell the preferred oil and fuel provider for Penske’s truck leasing business and the preferred motor oil of Penske Automotive Group, which includes dealerships throughout the U.S., Germany and the United Kingdom.
The ancillary agreements are some of the most far-reaching that Penske Racing has ever cut with a partner. Penske’s previous agreement with Exxon Mobil around the No. 77 car driven by Sam Hornish Jr. made Mobil 1 the preferred lubricant supplier of Penske Automotive Group. The new deal with Pennzoil-Shell expands on that business-to-business opportunity by adding the truck leasing relationship.
“The B-to-B side is somewhat unprecedented in terms of the magnitude of the relationship,” said Heidi Massey-Bong, Shell’s senior business adviser for NASCAR. “I don’t think you can find [another partner or team] in the garage doing so much to bring money to the bottom line.”
Darren Marshall, senior vice president of research at sports marketing agency rEvolution, said the deal is one of the few team-level deals in NASCAR that offers an immediate return on investment.
“The nice thing about this deal is that it’s going to have a substantial impact on purchasing consumers will make, but by the same token there’s already going to be money in the bank from the Penske relationships,” said Marshall, who was hired by Shell to analyze the deal after it was cut. “It’s a hard number you can take and share with the COO. It’s not an impressions number. It’s actually, ‘Here’s the balance sheet.’”
Sport Dimensions, Shell’s longtime motorsports agency, will help it activate the partnership.
The deal also has the potential to help further Pennzoil’s relationships with auto manufacturers. Pennzoil is the factory-used product for five auto manufacturers, and it hopes that it can become the oil of choice for others by leveraging Roger Penske’s extensive dealership relationships with everyone from Audi to Porsche.
Shell-Pennzoil also has signed on as an associate sponsor supporting Penske’s IndyCar drivers Helio Castroneves, Will Power and Ryan Briscoe, as well as being the primary sponsor on Castroneves’ Indy 500 car.
The Buffalo Sabres could earn between $10 million and $12 million in ticket revenue from the IIHF World Junior Hockey Championships. The tournament, which features 31 games between the world’s 10 best junior national teams, runs Dec. 26-Jan. 5.
As of last week, the club had sold 11,800 of the 12,000 all-session ticket packages to HSBC Arena, which are available for $493, $833 and $1,250. The club has sold another 1,000 passes for the 1,800-seat Dwyer Arena, which will also host games. The club opened single-day ticket sales to season-ticket holders on Nov. 22 and sold 774 in a day and a half. The club also is selling single-, double- and triple-game packages.
According to team officials, 65 percent of ticket sales have come from Canadian buyers.
“This tournament is tantamount to the Final Four in basketball for Canadians, so for us being this close to Canada is huge,” said Dan DiPofi, Sabres COO and minority owner. “I don’t think many NHL cities can appreciate the breadth of this tournament, but we can.”
Last year, the tournament generated international buzz after the United States beat Canada 6-5 in a dramatic overtime game in Saskatoon, Canada.
DiPofi said he is confident the club will surpass its break-even number for the entire event, which is 75 percent capacity of the 18,690-seat HSBC Arena. He declined to give any estimated net profit from the event.
USA Hockey controls broadcast rights for the event, and is in the final year of a three-year partnership for U.S. rights with the NHL Network, which will carry the Jan. 5 championship game, as well as all American games and a select number of other games. TSN will carry the games in Canada, and will stream the tournament live. The website Fasthockey.com will provide online streaming to American viewers.
Buffalo beat out Minneapolis-St. Paul and Grand Forks, N.D., to host the 2010-11 event, which the IIHF awarded to the United States in 2007. Buffalo’s bid proposal for the tournament included an undisclosed ticket revenue share and a guaranteed $4 million payment from owner Thomas Golisano.
“There was no question the [$4 million] was a factor in the evaluation,” said Dave Fischer, a member of the bid evaluation team for USA Hockey. “We’re not yet comfortable with our hockey turnout to go to Dallas or some city in the South that can’t support a two-week tournament.”
The tournament has produced impressive revenue numbers for previous hosts. The 2008-09 tournament, which was hosted by the Ottawa Senators, sold 470,000 tickets and generated $14.5 million for Hockey Canada, $12.5 million of which came in a guaranteed payment from the Senators and the rest from shared ticket revenue. Senators President Cyril Leeder declined to disclose how much the team made from the tournament but said the tournament requires significant operations cost — specifically in providing hospitality and transportation for 10 teams in two weeks. Despite the cost, Leeder said, the tournament was a financial success.
“It’s like hosting a major concert every day for 10 days,” Leeder said. “From an attendance point of view, it’s the biggest single-sport event you can host in Canada.”
A North Carolina company that sells subscriptions to its database of college coaches contracts has added a new section that will make multimedia rights contracts and other vendor deals available to athletic directors.
Durham-based Winthrop Intelligence began selling its database earlier this year under the brand Win AD. The service, offered exclusively to college ADs, initially offered information about head and assistant coaches’ contracts from all divisions, including copies of the actual documents.
Win AD has grown through the year to also include athletic administrators’ contracts, annual budgets, and football and basketball game contracts between schools.
The newest offering now includes many of the vendor contracts between schools and their partners, such as the multimedia rights holder, isotonic beverage and equipment supplier.
Winthrop does not release information about its subscription rates or its clients, but a Marquette University administrator said he has found the tool useful in negotiating game contracts. Guarantees that go to visiting teams for basketball games range from the high five figures to low six figures.
“In the past, honesty has not really been a standard negotiating tactic in the process,” said Mike Broeker, Marquette’s deputy AD. “It’s been more about, ‘Well, I’m getting X amount from so and so to play there.’ Now I can look up that information to get an understanding of what those costs actually are.”
Administrators have struggled over the years to find accurate, comparable information for salaries and budgets to help them make decisions on budgets and salaries. Some of that information is shared within conferences, but that doesn’t typically include the actual document, which Win AD makes available as a pdf file. The company acquires the contracts through public information requests to the schools.
Iowa State Athletic Director Jamie Pollard ran a business from 1998-2004 that specialized in analyzing data from each athletic department’s annual report to the U.S. Department of Education.
“I think the business model is probably good and the information is good, but the question you have to ask is how often, over the course of the year, will you find yourself turning to it?” said Pollard, who is not a client. “Is it enough to justify the expense?”
The sale of the Detroit Pistons will be delayed until at least the NBA All-Star break in mid-February, according to financial sources, and possibly longer.
Citigroup, which represents Pistons owner Karen Davidson, recently notified interested buyers that it would like to close a deal by February. Given the NBA’s sales-approval process, closing by the All-Star break suggests that a sales agreement would need to be signed in the next few weeks.
NBA owners must approve any sale, and typically, a prospective new owner meets in person with the NBA board of governors before a vote. The next scheduled BOG meeting is during the All-Star break, which is set for Feb. 18-20 in Los Angeles.
NBA Commissioner David Stern told reporters in mid-October that he thought an agreement to sell the Pistons could come by the end of November, following a 30-day exclusive negotiating period between Davidson and Detroit Tigers and Red Wings owner Mike Ilitch. But the Ilitch-Pistons talks broke down over price, though Ilitch remains firmly in the mix to buy the team and is seen as the most logical buyer for the franchise because he could move the Red Wings and Pistons into one building.
Even if a deal is announced in the next few weeks, closing by mid-February could prove tough. The Golden State Warriors’ recent sales agreement was announced in July, but the deal only closed in November, four months later and one month after then-prospective owners Joe Lacob and Peter Guber met with NBA owners in October at a BOG meeting.
New Jersey Nets owner Mikhail Prokhorov reached a sales agreement to buy the Nets in September 2009 and met with owners the following month but did not receive his ownership approval until May, eight months after the initial agreement.
Citigroup wants to accelerate the timetable because there are concerns about the effects of ownership uncertainty on the franchise. Davidson first announced her interest in selling the club in January. Also, with a lockout looming in the summer, a sale could prove trickier as that situation gets closer.
Citigroup and the Pistons declined to comment.
Ilitch exclusively negotiated with Citigroup for a month, but after initially indicating he would be willing to pay about $450 million for the full package of assets, including the team, arena and other entertainment venues, the talks fell apart over price.
The exclusive period ended in early November, with Citigroup reopening the bidding. A group led by former Houston Rockets President George Postolos was among the bidders prior to the exclusive negotiating period between the Pistons and Ilitch. Tom Gores, chief executive of private firm Platinum Equity, also has expressed interest in a deal.
As soon as the Steelers’ game against the Panthers ends Dec. 23, grounds crews from the home team and the NHL will start transforming Pittsburgh’s Heinz Field into the world’s largest hockey venue for the Jan. 1 Bridgestone NHL Winter Classic. Nine days marks the shortest window of prep time in the event’s four-year history.
“When the game ends, the stadium becomes ours, and we go to work,” said Don Renzulli, senior vice president of events for the NHL. “When it’s all done, you’re looking at 150 to 200 people working 12-hour shifts every day.”
The NHL has held its marquee regular-season event at baseball stadiums the last two seasons, and last year the NHL had three weeks to build the rink at Boston’s Fenway Park, which receives little use in the winter.
But Renzulli said Heinz Field’s 65,050 seats — compared with 39,928 at Fenway and 41,160 at ’09 host Wrigley Field — and the cooperation of the Steelers organization outweighed the challenge of negotiating the tight schedule.
Workers will first build a series of plank roadways on the field where they can bring in equipment to set up the rink. The rink construction requires a sizable staging platform on the field’s bowed surface, which drops 18 inches from the center to the sidelines. On Christmas, they will start making the ice and moving broadcast teams in to the various television booths.
The Pittsburgh Penguins are building an outdoor rink of their own in an adjacent parking lot that will open Dec. 23 for public skating. The rink will also host an international junior hockey tournament the week before the Winter Classic.
“There’s no time for the general public to use the rink [in Heinz Field], so that’s why we’re undertaking [the construction of the other rink],” said James Santilli, vice president of marketing for the Penguins.
According to Renzulli, NHL crews will begin tearing down the ice rink in Heinz Field immediately after the game. The field could host the AFC Wild Card playoff game as early as Jan. 8, giving the crews little time to resod and paint the field. The NHL declined to comment on the total cost of the construction.
Jim Sacco, executive director of stadium management for Heinz Field, said the build-out highlights the degree to which the Steelers, NHL and Pittsburgh Penguins organizations are working together to put on the event.
“We’re following [the NHL’s] lead on the field setup, and it seems like they have it down to a science,” Sacco said. “Everybody is on board. It’s definitely not something that happens every day.”