SBJ/June 27 - July 3, 2011/Marketing and Sponsorship

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  • MetLife eyes the Meadowlands

    MetLife is in advanced discussions with New Meadowlands Stadium to upgrade its corner sponsorship at the year-old facility to a full naming-rights deal.

    A source close to the deal described the negotiations as “very advanced, but not complete.”

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    If the deal is completed at New Meadowlands Stadium, MetLife would join Progressive (Cleveland) and Farmers (planned for L.A.) as insurance brands with naming rights at sports venues.
    Other sources familiar with the matter emphasized that while a deal to name the home of the New York Jets and Giants, and the site of the 2014 Super Bowl, MetLife Stadium was not finalized, discussions have progressed enough that those inquiring about naming rights in the last month have been told that they were not available, though a cornerstone sponsorship could be. Several sources said MetLife is paying about $7 million a year for its cornerstone deal, and that the naming-rights package being considered would average between $17 million and $18 million a year.

    For New Meadowlands Stadium, the deal would be a significant statement, as well as the
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    ultimate up-sell. National attention has focused on the inability to land a naming-rights partner at high-profile venues like New Meadowlands and Cowboys Stadium. Executives with New Meadowlands, the Jets and Giants, and Wasserman Media Group have been in the market for years pitching the deal, which initially had a sticker price of more than $30 million a year.

    Wasserman sales chief John Brody said, “There is no deal.” He would not comment further.

    For MetLife, putting its name on the building would bring it full circle. It bought the first cornerstone partnership at the stadium three years ago, gaining with it the Jets and Giants’ insurance category rights. Later that year, German insurer Allianz was close to a naming-rights deal that would have meant MetLife’s exit from the building, as was mandated by a clause in its cornerstone contract. Subsequent fallout and pressure from media reports about Allianz’s tie with Nazi Germany scuttled the deal, and now Met Life finds itself in position to take over naming rights.

    While the deal is not complete, the level of anxiety surrounding the negotiations is high, for a number of reasons. Sources point to the failure of the Allianz deal, which represented the same category, as well as continued questioning of all marketing expenditures by financial services companies in the post-recession environment. Additionally, there is some concern within MetLife as to how such a large marketing expenditure on an NFL stadium would look during a time when the league is locking out its players.

    “New York is a big fishbowl, [MetLife] is a public company, so there are nerves there, and the Allianz thing makes everyone doubly sensitive,” an industry source said.

    While MetLife does not compete in the auto and home insurance categories, the deal would intensify an already escalating battle among insurance brands seeking to break through the ad clutter in a category where the marketing noise has gone from loud to deafening.

    According to Nielsen Co. data, insurance companies spent $528 million last year on sports ad spending, a 30 percent increase from 2009.

    “It’s become a tougher category to make noise in than wireless, because there are more competitors with really big budgets spending there,” said Tom McGovern, Optimum Sports managing director. “You have Geico, one of the top spenders per se, along with Progressive, Farmers, Allstate and our client [State Farm], vying for consumers’ attention.”

    If the deal is completed, MetLife would join Progressive (Cleveland) and Farmers (planned for L.A.) as insurance brands with naming rights at sports venues.

    In addition to its deal at New Meadowlands, MetLife is a PGA Tour sponsor and its blimps, airborne since 1987, appear at PGA Tour stops and other sporting events. But this stadium deal would be by far its biggest nonmedia sports expenditure. While it is already in the building, taking over naming rights would allow for even more opportunities, observers said. As a New York-based firm, it would allow the insurer to wave its corporate flag locally and in the financial capital of the world. Being tied to a future Super Bowl, both for marketing and hospitality, only enhances the deal.

    “To some degree, there would be less of an internal sell-in, because they are already sold on the stadium as a marketing vehicle and they love what it has done for them already,” said Rob Prazmark of 21 Marketing, Greenwich, Conn., who had no knowledge of the negotiations. “It’s given MetLife an identity beyond Snoopy.”

    21 Marketing’s proprietary naming-rights valuation system estimates the exposure value of a 20-year naming-rights deal with New Meadowlands at between $64.2 million and $68.1 million annually.

    While the original asking price for the Meadowlands was upward of $30 million a year, many in the field said that the lower price, and the ability for the stadium to gain incremental revenue by selling MetLife’s corner, made MetLife’s bid an attractive offer for the property.

    During SportsBusiness Journal/Daily’s recent Sports Facilities and Franchises conference in New Jersey, Giants CMO Mike Stevens was asked whether the naming-rights market is more vibrant now after a tough period economically, Stevens joked, “Vibrant? It only takes one.” He added, “People are talking again. Marketing is back. It’s reflective of the economy.” Stevens also was asked what the value of the Farmers Field deal for the expected NFL stadium in Los Angeles means for the market, and he said, “Every deal is great for the industry, but they are all very, very market-specific.”

    Industry executives acknowledge this deal could have large implications on other big-market naming-rights opportunities available.

    “I’m interested to see if this resets the market, since you’ve still got the Cowboys and Marlins and 49ers facilities in the market,” said Rob Yowell of Gemini Sports, who executed the deal for Honda on the Southern California home rink of the Anaheim Ducks.

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  • Chevrolet renews MLB deal; other sponsors step up

    MLB heads into the All-Star break next month with some of its largest corporate sponsorships renewed, with one renewed incumbent partner also adding an important consumer category.

    Chevrolet, an MLB corporate sponsor since 2005,­­­ has renewed its deal with the league, at least partially a payback for MLB granting it some degree of financial relief during the worst days of the recession. Chevy will continue as a sponsor of Sunday’s All-Star Game Selection Show on TBS, which is presented by Taco Bell. Chevy also is presenting sponsor of the MLB Network Red Carpet Show, which covers the All-Star Parade, an event created for Chevy in 2006, when the game was in Detroit.

    “Terrific partner, iconic brand and obviously one with huge sway in the media market, so they really support our broadcast rights holders,” said Lou Koskovolis, MLB’s senior vice president of corporate sales and marketing.
    Overall, Koskovolis said, more than 40 percent of the ad units sold for Fox’s broadcast of the July 12 All-Star Game were purchased by MLB sponsors (see related story).

    Pepsi, an MLB sponsor since 1997, has also renewed for multiple years and expects to launch its Field of Dreams balloting program at the All-Star Game (SportsBusiness Journal, June 20-26 issue), an effort tied to its Pepsi Max zero-calorie cola.

    Bayer, which has supported its One-A-Day Men’s Health Formula brand with MLB ties since 2008, has extended its MLB rights a year early, while also adding the pain-relief category in support of the recent launch of Bayer Advanced Aspirin, marketed as being “twice as fast” as the previous Extra Strength Bayer. To support its claims and new designation as the official pain reliever of MLB, Bayer is close to finalizing a platform that would tie its product to pitching speed. Some scattered behind-the-plate signage has already cropped up supporting the tie. A cause-related connection from Bayer is also in the works.

    Taco Bell has media in and around the All-Star Game and supporting programming while serving as the sole sponsor of the event’s street pole banner ads in downtown Phoenix, host of this year’s festivities.

    Anheuser-Busch, which renewed as part of a litigation settlement with MLB during the offseason, is leveraging its tie with appearances of its Clydesdale team, national and local media, and commemorative 16-ounce aluminum bottles.

    With changing regulations eviscerating profits from the payment card category, a category Bank of America leveraged heavily against MLB in its six-plus years with the spo­­­rt, BofA’s renewal is taking more time. However, the bank is operating as if it will renew. With more than 120 bank branches in the market, BofA will stage a cause-related campaign dubbed Give Like An All-Star, encouraging fans to donate in support of the Back to School Clothing Drive, an Arizona nonprofit that the lender has supported for nearly a decade.

    Sponsored gate premiums for the Midsummer Classic are a Taco Bell-branded ticket lanyard for All-Star Sunday; a State Farm lanyard for the Home Run Derby, which the company has title sponsored since 2007; and a logoed pin from Firestone for All-Star Game attendees.

    Any discussion of MLB marketing this season inevitably centers on the league’s newly launched Fan Cave, a new-media petri dish in Greenwich Village (SportsBusiness Journal, May 2-8 issue). Having persuaded players, sponsors and other baseball business partners to visit and generate media content, a leading question has been how to keep the Fan Cave up to date and whether inhabitants Mike O’Hara and Ryan Wagner, in the midst of watching every MLB game this season, would travel to premier league events.

    MLB is answering that by transforming Chase Field’s right-field swimming pool area into “Fan Cave West,” with the two baseball diehards appearing Monday and Tuesday.

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  • Geico to title first Chase race

    Geico has signed a three-year deal to title sponsor Chicagoland Speedway’s fall NASCAR Sprint Cup Series race.
    The deal gives Geico significant exposure in one of the nation’s largest media markets and a high-profile position as the naming-rights partner for the first Chase for the Sprint Cup race. It’s the first time the company has ever done a title-rights agreement in any sport.

    Terms of the deal weren’t available, but race title sponsorships typically sell for around $1 million a year. Sources said the Geico deal was backloaded so that the company would pay less this year and more in the final two years of the deal. It includes marketing and promotional commitments.

    “We’ve had a history of B2B title partners, and we’re excited to have a consumer partner,” said Chicagoland President Scott Paddock said. “We’re excited about their history and commitment to activation. The media and promotional support of this is going to be outstanding. They understand the opportunity this platform provides for them and are putting a very attractive amount of resources behind it.”

    The deal is Geico’s second this year with International Speedway Corp., which owns Chicagoland and 11 other Sprint Cup Series tracks. It previously signed a five-year, seven-track sponsorship at ISC-owned campsites. The company underindexes in the Chicago market where competitors like Allstate and State Farm are headquartered.

    After playing host to sellout crowds for eight consecutive years, 80,000-seat Chicagoland experienced a drop in attendance last summer. ISC wants to reverse those trends this year. It named Paddock, a longtime Gatorade marketer, as president of Chicagoland earlier this year and he’s worked to drive ticket sales by undertaking fan-friendly changes such as offering wider bench seating and allowing spectators to bring coolers to the race.

    The race sponsorship extends Geico’s spending in sports. It is the leading sports spender in the insurance category. It increased its sports spending by 30 percent in 2010 to $216 million.

    Geico has not made a commitment to buy media for the race. That is sold separately by ESPN, which televises the Chase for the Sprint Cup.

    The deal with Geico closes out one of three open race title sponsorships for ISC. The company is in final negotiations on deals for Richmond and Talladega.

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  • Sprint to award big bonuses to drivers, fans

    Sprint plans to raise the stakes on this summer’s NASCAR season by rolling out a six-race, $3 million promotion that will reward winning drivers and fans.

    The Sprint Summer Showdown, as it is being referred to in communications between executives at Sprint and tracks, will give the winning drivers of ESPN’s first five NASCAR Sprint Cup races the chance to square off for a winner-takes-all prize at the Sept. 4 race at Atlanta Motor Speedway. If a driver who wins one of the five races — Indianapolis, Pocono, Watkins Glen, Michigan or Bristol (on ABC) — wins the Atlanta race, Sprint will pay the driver $1 million, the driver’s charity of choice $1 million, and a fan $1 million.

    The promotion is the first of its kind by Sprint and rivals the $1 million it pays the winner of the Sprint All-Star Race. It is reminiscent of promotions run by NASCAR’s previous title sponsor, Winston.

    Between 1985 and 1997, the Winston cigarette brand’s parent company, R.J. Reynolds, ran the Winston Million promotion, offering $1 million to any driver who won three of the sport’s four biggest races. From 1998 to 2002, it recast the promotion as the Winston No Bull 5 and offered $1 million to qualified drivers who won select races. It also gave $1 million to a fan associated with a driver through a sweepstakes.

    It’s unclear how Sprint will incorporate fans into its promotion. A Sprint spokesperson said the company was planning an “exciting promotion” but declined to comment further.

    The Winston Million and the Winston No Bull 5 were two of the most memorable promotions in the history of NASCAR and became ingrained in the minds of fans because they added interest to select races. They also put an emphasis on winning, which is something some fans have complained that NASCAR’s points system fails to do.

    The Summer Showdown has the potential to replicate those previous efforts and become one of the bigger initiatives Sprint has undertaken, said Mike Boykin, executive vice president of sports at GMR Marketing, which consults with clients ranging from Gillette to Best Buy on NASCAR promotions. Boykin added, “It’s positive for the sport when the series sponsor puts together a major campaign like that.”

    Sprint has been NASCAR’s title sponsor since its 2004 acquisition of Nextel and its inheritance of Nextel’s 10-year, $700 million lead sponsorship. In 2007, Sprint offered a $1 million prize to a fan based on the winner of the Chase for the NASCAR Cup championship, but it never has offered a promotion that rewards a driver for winning a Sprint Cup points race.

    Sources said that in the past, NASCAR brass opposed paying drivers a special prize for winning select races because of concerns that it would devalue a race by creating a race within a race. At one point, Sprint considered creating a bonus that would pay drivers for winning four major races but shared NASCAR executives’ concerns that it would elevate select races above the series. Instead, Sprint decided to focus its energy on the All-Star Race.

    The Summer Showdown marks a shift from that strategy. The promotion will take place during what is known generally as the Race to the Chase, the final few races before the Chase for the Sprint Cup, and has the potential to build some momentum before the sport’s equivalent of the playoffs begin Sept. 18.

    Sprint is expected to announce the promotion at New Hampshire Motor Speedway the weekend of July 17.

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