SBJ/Jan. 31-Feb. 6, 2011/In Depth

Lockout unease has sponsors weighing all their options

For NFL sponsors used to planning their marketing calendars six to 18 months in advance, the uncertainty of when and if the next season will start is about as comfortable as pebbles in a dress shoe.

“I have no doubt they will play at some point. When seems to be the big question,” said Woody Thompson, executive vice president at Octagon, which is implementing Castrol’s new NFL league sponsorship. Octagon also has clients with multiple NFL team deals, including Bank Of America, Sprint and MasterCard.

“In these situations, leagues rarely blink first, and these guys have guaranteed TV money coming in,” Thompson said. “Sponsors are secondary to TV money, and as long as that is taken care of, they can wait for this thing to shake itself out. What we can do is be prepared with plans A, B and C, stay close, and read the tea leaves as closely as possible.”

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Sponsors are trying to hedge their marketing bets as the labor situation unfolds.
While every sponsorship deal has language covering the eventuality of a work stoppage, allowing for fee adjustments, there’s still a feeling of uneasiness on behalf of brand stewards more used to exacting control over their marketing.

“You try to plan, but planning is the hardest thing, because the only certainty is uncertainty,” said Kern Egan, principal at Richards Sports & Entertainment, which handles Bridgestone’s title sponsorship of the Super Bowl Halftime Show. “The good news for us is that our activation is focused later in the season, so it isn’t as big of an issue for us as it will be for some others.”

Genesco Sports Enterprises’ roster of consulting clients with NFL league sponsorships includes stalwarts like Pepsi/Frito-Lay, Motorola and Verizon. “I am confident there will be football sometime next season,” said Genesco co-founder and CEO John Tatum. “I just wouldn’t front-load the programs or do anything behind draft or preseason. You need to hedge your [NFL sponsorship] investment, so I wouldn’t go all in until there is some certainty.”

Packaged-goods marketers typically plan their marketing calendars out the farthest. Consequently, Gillette filmed ads for its recently expanded “Young Guns” campaign late last year with NFL players Matt Ryan and Ray Rice.

“We [Procter & Gamble] know how to use the NFL now, our brands are doing a really nice job with it, and it has proved to be a very valuable asset,’’ said Greg Via, global director of sports marketing at Gillette. “But if this goes down and our brands get hurt by it, then it’s going to be a different conversation next year.”

“Media buys and digital programs move more quickly, but you need maybe six months of lead time to sell in an NFL retail program, and someone like Wal-Mart wants to know a year out,” said Mike Boykin, executive vice president of sports marketing at GMR, which consults with NFL league and team sponsors Visa, MillerCoors and P&G. “So if this isn’t solved by April or May, you’re in a terrible spot.”

If the NFL misses regular-season games, do other sports stand to gain?

“The obvious winner in an NFL stoppage is college football,” Egan said. “Our media group has been keenly focused on securing whatever college football inventory they would need in that eventuality, because there won’t be any when we do want it if there are issues with the NFL. I don’t know anyone who is buying college instead of NFL. But if you are in college football already, you need to be buying it now, because it might not be available later.”

IBM uses its NFL rights as a hospitality and technology demonstration and platform, since it provides some of the league’s IT infrastructure. “Those things are still critical whether or not there is football,” said Rick Singer, who heads IBM’s sponsorships as vice president of client executive marketing. “Our exposure isn’t as big as those who use NFL rights for consumer marketing, but we’re starting to think how to redeploy those dollars just in case. It could be in college, but it may not even be sports.”

While you might think the answer is obvious, there are divergent opinions on whether marketers can or should leverage the NFL during a work stoppage. Assuming they were so inclined, brands could market their products using NFL indicia and players — just not in tandem.

“If any actual work stoppage were to occur, the opportunity remains for proactive league partners to still leverage their rights fee investment by activating in a targeted way that enables fans to stay connected to their passion, even if official play isn’t happening,” said Bryce Townsend, executive vice president and general manager of GroupM ESP, which helped negotiate Castrol’s recent NFL sponsorship. “Through content and engagement, a brand can help fill the void, creating an even deeper connection with consumers.”

Said Octagon’s Thompson, “There will be real damage to an NFL team’s brand if there’s a work stoppage, but there are still some teams we deal with that don’t necessarily want to believe that. They believe it’s OK for us to be in the marketplace with marketing programs even if they aren’t playing on Sundays. I’m pretty sure that Brand X doesn’t want to run an NFL promotion when there are no NFL games being played.”

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