SBJ/August 22-28, 2011/Leagues and Governing Bodies

Big changes in new NFL-NFLPA licensing deal

The NFL and NFL Players Association have agreed to a new 10-year sponsorship and licensing agreement that will pay hundreds of millions of dollars to the union over the next decade while for the first time giving team sponsors, in addition to league sponsors, group players rights.

In another new aspect of the deal, the NFLPA for the first time will be required to editorially contribute to the NFL’s digital outlets, meaning player blogs could soon be a staple of NFL.com.

“This structure is a highly desirable one,” said Gary Gertzog, the NFL’s senior vice president of business affairs. “It will facilitate sponsorship activation, more players will be used in advertising and promotion, and it will be done in a more authentic way by combining the assets of the clubs and the league.”

Keith Gordon, president of NFL Players, the union’s licensing and merchandise arm, did not return messages seeking comment.

The league and NFLPA jointly contacted sponsors last week to notify them of the new arrangement.

“We appreciate your continued support of the National Football League and of NFL PLAYERS,” read an email to sponsors from Gordon and Keith Turner, the NFL’s senior vice president, sponsorship and media sales. “We also appreciate your patience as we worked to get our new agreement in place. We believe, and we are confident you will agree, that the benefits to NFL sponsors resulting from our new agreement structure will more than make up for that. We look forward to taking you through these changes in detail as soon as possible.”

The developments follow the completion Aug. 4 of a new 10-year collective-bargaining agreement, which ended nearly five months of labor strife.

The league has paid the union for group licensing rights, defined as using six or more players in advertising or promotions, since 2000, but that arrangement expired with the expiration of the old labor pact in March. Like the old contract, the new one ensures the NFLPA does not sign sponsors that rival league sponsors, meaning the NFL can guarantee its corporate partners exclusive group licensing. That right will now extend to team sponsors for the first time, which could allow clubs to charge more for sponsorships. A Chicago Bears sponsor, for example, could use six or more Bears players in ads.

“It’s a great change that will enable teams to deliver more value to their local sponsors, while taking the quality of creative to another level,” said Matt Higgins, the New York Jets executive vice president of business operations. “And it will lead to more exposure for players because it makes incorporating them less complicated.”

Gertzog said he fully expected the teams to be able to charge more for sponsorships with the new rights.

Another new feature is that league and team sponsors will be able to go directly to players with whom they want to reach deals. Under the old deal, sponsors had to go through the union to facilitate those deals. Many sponsors have sports marketing departments and would prefer not to use an intermediary, Gertzog said.

Since 2007, the NFL has paid more than $30 million annually for sponsorship and Internet rights with players (see chart), according to the union’s annual reports filed with the Department of Labor. Those figures will rise under the deal, sources said, though specific numbers could not be obtained.

Before the signing of the new CBA, the NFLPA had contacted non-league sponsors about signing deals with the NFLPA. The then-decertified union did sign one sponsor that competed directly with the NFL: Zico Pure Premium Coconut Water, which Gertzog described as a Gatorade competitor.

The water deal, announced in June, has since been dropped, Gertzog said, referring further questions to the NFLPA.

Mark Rampolla, the CEO and founder of Zico, said in a statement emailed by a spokeswoman, “Although the formal sponsorship was discontinued when the lockout ended, ZICO still supports NFL players and will maintain our relationship with these players for years to come. We have received product requests from over 500 players that were introduced to ZICO during the lockout and we continue to receive requests.”

The new sponsorship and licensing agreement covers corporate sponsorships but not what the league defines as consumer deals. For example, the NFLPA has its own deal with Electronic Arts through which the video maker gains player rights. The new deal also does not cover retired players.

The extent of the new requirements for players to contribute editorially to the NFL’s digital outlets was not available. However, the NFL rights now cover all of the league’s digital businesses, not just the Internet, as was covered by the old agreement.

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