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
At last week’s official unveiling, MetLife executives were peppered with questions about what kind of return on investment the company’s 25-year naming-rights deal, valued at $17 million to $20 million per year, with the New Jersey stadium that houses the NFL Giants and Jets would have.
In truth, it was the return MetLife had already achieved from its years as a cornerstone partner that was more important.
“We’d gotten more visibility than we anticipated as a corner partner, and the amount we were able to engage with fans was another area where we underestimated the stadium’s impact,” said MetLife CMO Beth Hirschhorn, speaking from the rechristened stadium’s Coaches Club.
“I’ve done this enough times that I can tell right away when it turns, and in meetings early this year, I could see it was resonating,” said Jeff Knapple, who had been working on the project since 2007 for Wasserman Media Group. “The challenge I saw right away from their perspective was why they should be doubling-down in New York as opposed to the global aspirations any large company has. As a New York company, my feeling is that they decided if there was any place for them to do this deal, it was here.”
It’s a deal (from left): Jets owner Woody Johnson, MetLife President and CEO Steven Kandarian, Giants president and CEO John Mara and Giants chairman and EVP Steve Tisch.
“Insurance is not a category everyone thinks about as much as we do,” she said. “So some constant source of a subtle reminder of the brand is what we’re trying to achieve.”
Lamping said that after the evaluation of media exposure, some key early support came in the form of data from BrandAsset Consulting, which underscored both the power of the NFL and its two New York market teams, and the yin-yang fit of the brands with MetLife.
Sources said there was considerable negotiation on what category rights would go with the naming-rights deal. Originally, the company wanted broad-based financial services along with broad insurance rights. Eventually, it settled on the latter. Restructuring rights and payments from being a corner partner to holding naming rights was an area that sources said was not contentious but took considerable time to resolve.
By May, there was optimism on both sides that the deal would happen. “Other than the fact the activation at the stadium was obviously working for us, one of the things that really moved this along was that this is a stadium where the sponsor benefits and angles were designed from the inside out,” said Richard Hong, MetLife vice president of global brand and marketing services, describing the adaptability of the proposal.
The naming rights announcement was timed to coincide with the Jets-Giants preseason game.
“I’m in a state of combined elation and relief,” said Lamping, asked to describe his emotions after a 4 1/2-year sales process.
Selling a name to the “New Meadowlands” included dynamics that will likely never again combine at one facility: two teams sharing a venue, an earlier deal being pilloried by media accounts of potential naming-rights partners Allianz’s Nazi ties during World War II, and a recession that devastated many potential naming-rights partners and cut marketing budgets to the bone.
Wasserman will continue to be involved in selling the corner spot being vacated by MetLife — with the others held by Pepsi, Verizon and Anheuser-Busch. Numerous sources said that while MetLife, as the first tenant in, having signed in 2008, was paying an average of $5 million a year for its corner position, the stadium is hoping to get twice as much from a new tenant. As always, pricing will vary by category, but already on the market are proposals with a top price of $12 million a year that include title rights to the New Jersey Transit station next to the gate and the 50-yard-line naming-rights suite that MetLife chose not to buy as part of its package, along with a large video display that is featured at the gate now held by MetLife.
“From the beginning, we all designed a ‘less is more’ strategy, where only five partners would get exposure in the bowl,” said Wasserman Media Group sales chief John Brody. “There can be no stronger validation of that strategy than that the first partner in would step up to naming rights.”
On the eve of the college football season, two powerhouses in sports marketing, UPS and MillerCoors, are taking aggressive steps to create some of the largest sponsorships in collegiate athletics.
These extensive eight-figure deals will provide the companies with a significant presence on campus and a broad national platform, the kind that’s been difficult to achieve in the fragmented college space.
The UPS agreement with close to 70 schools and a handful of conferences will give the logistics and shipping giant promotional rights from coast to coast. The deal, believed by industry sources to be worth $20 million to $25 million a year, includes many of the top college football programs in the country from IMG College’s stable, which features Texas, Michigan, Ohio State, Florida, Georgia, UCLA and others.
UPS’s deal represents one of the most ambitious plans to stitch together a national program outside of a traditional NCAA corporate sponsorship, and it showcases the growing role of college sports as a viable national platform.
“What we’re seeing could be a tipping point for these types of huge, scalable deals in college athletics,” said Rick Jones, a veteran sports marketer in the college space with Fishbait
Where MillerCoors uses the college logo, it will use responsibility messaging with it, such as “21 Means 21.”
UPS also is in talks for sponsorship positions in the Big Ten and Pac-12 conferences, with its activation focused on the football championship games for both leagues. UPS already has a partnership with the SEC.
Officials from UPS and IMG College would not comment on the deal.
MillerCoors, meanwhile, unveiled an integrated marketing program across 23 schools to its employees and distributors last week that includes heavy responsibility messaging and the use of college marks on point-of-sale material.
Both IMG w and Learfield Sports, the nation’s two major multimedia rights holders, signed deals with MillerCoors, which will promote its Miller Lite and Coors Light brands.
Terms of the deals were not announced, but MillerCoors’ total spending is believed to be in the $10 million range annually, according to industry experts.
The heavier presence in college football will help the Coors Light brand offset the loss of its NFL official partnership this fall. Coors signed on in 2002 as the NFL’s beer category sponsor, a position it held through the 2010 season before Anheuser-Busch took it over this season.
“These are deals that offer multi-regional properties and very strong retail activation tools,” said Jackie Woodward, MillerCoors’ vice president for media and marketing. “We’re still very strong in the NFL with 21 team deals. We’re strong with fantasy football and Major League Baseball. College is now becoming a very nice part of the overall portfolio, particularly with our responsibility messaging.”
For UPS, the deals represent a deeper association with college properties. The company first moved into the space in March 2010 when it struck a deal to become an NCAA corporate partner, which gives it full promotional rights against the Final Four and NCAA tournament.
This deal with close to 70 colleges will put UPS on the ground for college football season with access to signage, TV and radio advertising, game programs, Web advertising, hospitality and tickets.
Industry sources say it’s common for the athletic department to introduce its sponsors to key decision-makers on the other parts of campus, where UPS might find more business.
The company is believed to be working through the final stages of closing the deals and an announcement could come in the next week or two.
UPS’s sponsorship represents one of the first major wins for IMG College’s new national sales group, which has been touting the college space as a viable alternative to other national properties.
IMG College was formed through $300 million worth of acquisitions, starting with Collegiate Licensing Co. and Host Communications in 2007 and adding ISP Sports in 2010. That $300 million was essentially a bet that the combined companies could consolidate the fragmented college market and make it easier to navigate for sponsors.
The acquisition of ISP Sports and its 50-some schools increased IMG College’s total client list to more than 80 across the country, giving it the critical mass it needed to create broad national sponsorship packages that also offered the ability to activate on college campuses and sporting venues.
Industry sources say the highest levels of leadership, from IMG Sports & Entertainment President George Pyne down, have been involved with both of these negotiations to get them closed.
MillerCoors’ 23-school deal isn’t as broad as UPS’s, but it probably was a good bit more complicated.
Beer advertising and sponsorships are so sensitive on college campuses that many schools won’t accept it, even if they’re turning down an attractive revenue opportunity. North Carolina, for example, does not permit any advertising or promotion of alcoholic beverages, even if it’s responsibility messaging.
“There might be a little more openness to the category now,” said Joel Erdmann, athletic director at South Alabama, a school that sells beer at its football, basketball and baseball games. “If it’s done responsibly, it can be a viable method of generating revenue, but you have to be sensitive to how it’s presented. There are cultural issues on every campus that ADs have to take into account.”
To pave the way for MillerCoors to form partnerships with 23 schools that represent 17 states, IMG College and Learfield Sports had to first identify the schools that would allow a beer sponsorship.
“Most of the conversations with IMG, Learfield and the schools was about making sure we’re bringing the right level of responsibility messaging,” Woodward said. “We’re not trying to reach underage drinkers, but we want to do what we legally have a right to do and that’s actively market to legal-age consumers. That was the biggest focus of our discussions.”
Among the more high-profile schools are Arizona State, California, Clemson, Colorado, Penn State and Washington. Several midlevel schools such as Louisiana Tech, Gonzaga, Memphis, Marshall, South Alabama, New Mexico and Wyoming are included as well.
Many variables went into the selection of the 23 schools. In some cases, such as a national power like Penn State, MillerCoors weighed the national and regional profile of the school. It also considered the needs of distributors in certain markets. For example, where Miller Lite has an NFL relationship in a market, MillerCoors could provide a college relationship for Coors Light in the same market.
Sales trends for Miller Lite and Coors Light also factored in.
Some of the deals, like Washington’s, are renewals of existing contracts, while other schools either didn’t have a sponsor in the beer category or they’ve switched from a competitor to MillerCoors. More schools could be added this fall, Woodward said.
“You have to have a great understanding with your partner,” said O.D. Vincent, senior associate athletic director at Washington, which has MillerCoors as its domestic partner and a local brewery for its craft beer category. “You understand going in that it’s a very sensitive category and you’ve got to treat it responsibly so that it becomes an enhancement for both brands and something that’s not a drawback to either party.”
MillerCoors will not put university marks on bottles or cans, nor will it use actors to portray college athletes in advertising.
The brewer will put college marks on point-of-sale advertising at retail outlets, but won’t use the marks in its TV advertising.
MillerCoors marks and school logos could appear on co-branded merchandise such as T-shirts, hats, koozies or coolers.
Where MillerCoors uses the college logo, it will use responsibility messaging with it, like “21 Means 21” or “Great Beer, Great Responsibility.”
Woodward didn’t say exactly what percentage of the ads must be responsibility based.
“We’ve had some deals with colleges in the past, mostly around retail activation,” Woodward said. “What’s new is our ability to create a broader platform across the U.S. and the responsibility messaging that we’re bringing to every school.”
In addition to the media buys across TV, radio, Internet and print, MillerCoors will have access to traditional sponsor assets such as hospitality and tickets. Any in-stadium signs will display a responsibility message.
Schools have veto power on any ads it does not approve.
Additionally, MillerCoors is creating a grant program called “Great Plays” that will provide funds for on-campus programs that address alcohol responsibility issues. MillerCoors, which is represented by Genesco Sports Enterprises, has not yet determined how much money it will give annually through the grant program.
The U.S. Tennis Association, which owns and operates the U.S. Open, has signed Gordon Smith to a second four-year term as executive director, taking him through 2015.
The terms of the deal, Smith said, are similar to his first deal, which expires Dec. 31. He earned an average of $1.15 million a year in the first two years of that deal, according to the USTA’s most recent tax returns.
Smith also said that the USTA as a whole earned $46 million last year, up 45 percent from three years ago. The Open itself earns more than $100 million, fueling the not-for-profit USTA’s mission to promote the growth of tennis.
Among the challenges for Gordon Smith's next term: getting young people to play, developing U.S. pro champions.
“Smith really got rid of the silos, with community tennis and pro tennis being separate,” said Ilana Kloss, CEO of World TeamTennis. The USTA owns a part of WTT.
Kloss also pointed out an attribute of Smith that is important in the insular world of tennis: Smith is passionate about the sport and has worked at the grassroots level. He went to the University of Georgia on a tennis scholarship and later ran the USTA section that oversees tennis in the South.
Smith identified four key challenges for his next term: getting young people to play the game, improving the U.S. Open, increasing revenue and developing American pro champions.
“We need to create a whole new generation of young people playing the game,” he said during a recent breakfast near his upper west side Manhattan home.
As such, the big push this year for the USTA has been a new program to get kids ages 10 and younger to play. From Smith’s perspective, creating tennis players helps the pro game. The USTA’s philosophy under Kantarian’s guidance was the inverse: the sizzle of the pro game got people to play.
Smith has clearly changed the messaging inside the USTA, even going so far as to make sure during an interview that he lauds the volunteer staff of the USTA. But he said he is not shirking any responsibility to the pro game. In addition to the Open, the USTA owns the WTA and ATP stop in Cincinnati, as well as a clay court men’s tourney in Houston.
“Gordon deserves great credit for driving growth across two of the central pillars of the USTA: the U.S. Open and grassroots promotion of the sport,” said Stacey Allaster, CEO of the WTA Tour.
This year, the Open unveils a new, 3,000-seat stadium, and the USTA expects to replace its No. 2 venue, Louis Armstrong Stadium, sometime in the next decade.
There are no plans, though, to install a roof over the main court, Arthur Ashe Stadium. The last three men’s finals at the Open have been pushed from Sunday to Monday by rain.
The Open generates a little over $200 million in revenue per fortnight, but increasing that amount will be a challenge as the grounds at Flushing Meadows are already overflowing and TV deals are in place. One possibility is to begin charging for streamed matches, Smith said. Those matches currently are free.
MetLife isn’t the only insurance brand hoping the NFL will help it cut through the marketing clutter in its category.
USAA, a relatively unknown brand in the hypercompetitive insurance market, quietly signed a four-year deal as the NFL’s new insurance sponsor earlier this month, coming with far less attention than MetLife’s much-talked-about naming-rights deal at the New Jersey home of the NFL Jets and Giants.
San Antonio-based USAA sells insurance and other financial service products to military, retired military and their families. It hopes to use the power of the NFL to celebrate and commemorate military service and differentiate itself within the insurance market.
Said Don Clark, USAA executive director of marketing: “We feel like there is a real opportunity to use the NFL and tell people that USAA is a different kind of company. It is all about combining America’s passions for football and the armed services.’’
The NFL is by far USAA’s largest sports investment. The company signed a 10-year deal in 2009 making it presenting sponsor of the annual Army-Navy football game. It also sponsors the service academy teams, and it has backed both the hometown San Antonio Spurs and the MLB Padres in military-heavy San Diego.
While an NFL investment is a greater degree of magnitude, USAA has seen growth in recent years that made it believe that the high price of renting NFL equity was worth the cost. Since altering eligibility requirements in late 2009, USAA through June had added 1 million new customers and 2,500 new employees. With an incremental 35 million people now eligible to buy USAA insurance and other financial products, the company sees the NFL as a way to cut through the noise in what has become a category notable for its increasing marketing clutter.
“It is a noisy [insurance] market, but we like this opportunity to show our eligible universe of 60 million consumers what kind of company we are,’’ Clark said.
IMG is USAA’s sports agency of record. It handled the negotiations and will implement activation.
Pricing for the USAA deal could not be determined. State Farm, the last NFL league insurance sponsor (2006-09) was paying $7 million a year, but its package included presenting sponsorship to the Pro Bowl. However, marketing spending within insurance has escalated pointedly since then. According to Nielsen Co. data, insurance was the fifth-biggest advertising category within sports in 2010, with companies spending $528 million last year, up 30 percent from 2009.
Activation will center on military service appreciation and will see USAA advertise on NFL games with NFL-themed ads. The company is developing an awards program recognizing those in communities doing the most to honor and thank the military.
Club deals with the San Diego Chargers and Washington Redskins — two military strongholds — have been completed to support the league sponsorship.
MetLife’s new affiliation with the Jets and Giants and the NFL’s new insurance rights holder produce an intriguing conflict: Will the MetLife blimp fly over the 2014 Super Bowl being held in a stadium for which that company has naming rights? Or, since the Super Bowl is a league event, would the company holding league rights get precedence?
One involved party jokingly suggested that given USAA’s military connections, it might not be advisable to engage them in an air battle.
MetLife Stadium CEO Mark Lamping deferred to league policies on the matter. IMG officials said the matter was not discussed during their negotiations. As for USAA? “Our rights are clearly laid out by the NFL,’’ Clark said. “We’re pursuing them and feel really good about what they are.”
Gary Stokan peered out of his downtown Atlanta office toward the Georgia Dome a year ago, wondering which two teams would play there to open the 2011 college football season in the Chick-fil-A Kickoff Game.
Through a series of actions, his long-sought matchup had fallen apart. And now, the fact that the property’s chief executive didn’t have a matchup in place less than a year before kickoff caused Stokan his fair share of heartburn. He billed the annual game from its outset in 2008 as the Daytona 500 of college football and there’s considerable pressure on him to deliver a matchup compelling enough to sell out the Georgia Dome and attract a prime-time slot in ESPN’s lineup.
CHICK-FIL-A KICKOFF GAME
Gary Stokan (left), with LSU’s Les Miles, faced hurdles on the way to Georgia-Boise State.
“A year away from kickoff, scheduling-wise, means you’re down to the last minute,” Stokan said. “Most schools schedule years in advance. It was definitely more of a challenge this time than what we’ve had in the past.”
It took several months, and by November of last year, Georgia and Boise State had been secured to open the 2011 season this Saturday night, extending the game’s four-year streak of featuring two ranked teams. Getting to this point, though, required the help of six schools, all of ESPN’s scheduling acumen, and a series of dominoes that had to fall just right.
“It’s hard to appease everybody,” Stokan said. “The challenge in scheduling these games year to year is that you have to schedule pretty far out and at the same time you have to have two teams that can sell out the Georgia Dome. The closer you get to the date, the more moving parts you have to deal with.”
The scheduling process started more than a year ago with Southern California, a team that offered a different profile from the SEC and ACC teams that had filled the Atlanta-based games previously.
Stokan found those talks promising until a change at athletic director — Pat Haden was hired in July 2010 — led to a change in scheduling philosophy and wiped the Trojans away as a candidate. Haden wanted more home games.
Georgia Tech appeared to be a willing opponent and had even agreed to move its 2011 season opener against Western Carolina, but when USC pulled out, the Yellow Jackets decided to stick with the sure thing and play the Catamounts at home.
So last August, barely a year away from the game’s kickoff, Stokan was left without any teams. High-profile TV games like this are often scheduled two to three years in advance. Stokan, for example, currently has Kickoff Game matchups secured through the 2014 game.
Once Southern Cal and Georgia Tech fell through, Stokan found himself starting from scratch to get the 2011 game scheduled. That same month, though, another AD change, this one at Georgia, created a new opportunity. Greg McGarity, the Bulldogs’ new AD, came on board. Stokan had known him since the 1970s, when McGarity was a tennis coach at Georgia and Stokan was an Adidas rep.
The Bulldogs didn’t have a date available on their 2011 schedule, but McGarity liked the idea of opening on a big stage in Atlanta against a marquee opponent. He also preferred not to play the types of home-and-home series that Georgia engaged in with Arizona State, Colorado and, starting this season, Louisville, because he wants more nonconference home games.
If Stokan and Dave Brown, the former college football scheduling czar at ESPN, could get Georgia out of the Louisville game, the Bulldogs would agree to play in the Kickoff.
The problem, from a public relations standpoint, was that McGarity didn’t want to be the type of AD who starts his tenure by canceling football games. So Stokan, knowing there was an opportunity to get at least one team into the Kickoff, volunteered to do it for him.
Stokan paid Louisville $500,000 out of the Kickoff Game’s coffers for Georgia to exit the contract. Brown, meanwhile, found Louisville an attractive home-and-home replacement in North Carolina, with the likelihood that the UNC-Louisville games would wind up on an ESPN platform.
“One thing we have to do is keep our ear to the ground on what people are trying to accomplish,” said Brown, who has since moved to the Longhorn Network, where he is the vice president of programming. “We’re always looking to make schedules better, and getting Georgia was a good starting block for us.”
The next chore was to find an opponent for the Bulldogs. Stokan again began working the channels he has developed in 30 years of being in the college business.
Stokan had a close friendship with John Hartwell, a former associate AD at Georgia State who recently had taken a job on the Mississippi staff. Ole Miss was scheduled to open the season against Boise State. Stokan initiated talks about moving games around and Hartwell brought his AD, Pete Boone, into the discussion.
Stokan proposed that Ole Miss and Boise move their game into the Kickoff’s next available slot, in 2014, which would free up Boise to play Georgia this year. The Broncos will fill Stokan’s desire to have a team from outside the ACC-SEC footprint for this year.
Once both schools agreed, with a little financial incentive from the Kickoff Game, Stokan had his matchup by mid-November. The game’s total payout will approach $4 million, with $2.2 million going to Georgia (including the $500,000 buyout to Louisville) and $1.4 million going to Boise. The Bulldogs get a little more because they took a ticket allotment of 53,000, compared with the Broncos’ allotment of 7,500.
The game announced a sellout last month for the Georgia Dome, which has a capacity of more than 71,000.
“To move that many games around and still make everybody whole, that’s pretty unusual,” Stokan said.
The last hole that had to be filled was a season opener for Ole Miss. Again, Brown put his contacts to work.
He knew that BYU, as a new football independent this season, would need games and he pitched Ole Miss on the idea of an attractive matchup that would be televised nationally. So Ole Miss subbed out Boise for BYU this year, and along the way gained a spot in the 2014 Kickoff Game against the Broncos.
“There’s all sorts of things you put on the board and they never happen,” Brown said. “You’ve got to have a unifying principle, something that makes it work for everyone, and I think we’ve got that here. Once in a while, it all comes together and it works.”
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