SBJ/September 5-11, 2011/Marketing and Sponsorship

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  • Agencies shift gears as NASCAR traffic slows

    Editor's note: This story is revised from the print edition.

    Located just off I-85 in Concord, N.C., Millsport’s NASCAR office was once a bustling operation with more than 15 employees developing marketing plans for five clients. Today, it’s a fraction of its former self.

    Just three employees work on business for one client. The rest of the firm’s work in NASCAR now is being done from Dallas, where its parent company, The Marketing Arm, has the retail marketing expertise to support the agency’s largest new NASCAR client, Wal-Mart.

    GETTY IMAGES
    Farmers Insurance is one of the few sponsors to sign a major team deal recently.
    “There was a point in time where if you were in the NASCAR business and you wanted NASCAR business, you had to say you were serious, and the way you said you were serious was you had an office in NASCAR country,” said Dan Belmont, The Marketing Arm’s president. “It’s a little less about that today.”

    That belief and Millsport’s transformation are representative of a wider trend happening across the NASCAR consulting landscape. Sports marketing agencies that set up shop in the Charlotte area in the early and mid-2000s and grew quickly during NASCAR’s boom years have seen new consulting opportunities decrease and revenue plateau across the sport in recent years.

    Agencies have reacted by either shrinking the size of their North Carolina operations, as The Marketing Arm did, or diversifying their business into other areas, as Just Marketing International has done with Formula One and GMR has done by adding clients with Olympic or golf sponsorships.

    As Octagon’s veteran motorsports marketer Mark Coughlin said of NASCAR, “When the balloon’s not getting bigger, you have to look somewhere else.”

    The reasons agencies are looking elsewhere include the fact that fewer new brands are signing on as NASCAR sponsors, many existing sponsors are reducing their spending, the number of full-season, primary sponsorships encompasses fewer races and requires less support, and many agencies have clients looking at opportunities with other sports platforms.

    No agency is more familiar with the changing NASCAR landscape than Just Marketing International. Five years ago, the agency, which exclusively works in motorsports, was signing five to six new corporate NASCAR clients a year. But this year it added just one new NASCAR client — Farmers Insurance, which will sponsor Hendrick Motorsports’ No. 5 car — and it saw another longtime client, Diageo, decrease its spending, dropping both its sponsorship of NASCAR and Roush Fenway Racing’s No. 17 Sprint Cup entry.

    A SNAPSHOT OF
    AGENCIES IN NASCAR


    CSE
        Clients:
    Aflac, Kellogg’s, 3M (hospitality)

    GMR
        Clients:
    Best Buy, Cintas, Gillette, Jim Beam, Lowe’s, MillerCoors, Speed, Time Warner

    HB&M Sports
        Clients:
    BB&T, Enersys, Exide, Irwin Tools, Kimberly-Clark Professional, Lenox, LiftMaster, Rubbermaid, Scott, Wypall

    IMG
        Clients:
    Coca-Cola, Jimmie John’s, Klipsch

    Just Marketing International
        Clients:
    Diageo, DirecTV, Farmers, Subway, UPS

    Keystone Marketing
        Clients:
    GMAC Insurance, AAA

    Momentum Worldwide
        Clients:
    Coca-Cola, Mobil 1, Office Depot, U.S. Army

    Octagon
        Clients:
    Sprint, Bank of America, Home Depot

    Team Epic
        Clients:
    Toyota, Growth Energy, FedEx, International Truck, Pepsi

    The Marketing Arm (Millsport)
        Clients:
    Sunoco, Wal-Mart

    Wasserman Media Group
        Clients:
    Nationwide Insurance, Scotts

    Source: SportsBusiness Journal

    The agency’s experience reflects the sponsorship stagnation across the entire sport. In 2004, NASCAR brought on 10 new official partners, including Sunoco, Gillette and Best Western. But in the last two years the only new companies to come into the sport as official partners were COPD, a cause-related marketing partner, and Growth Energy, which signed a NASCAR partnership to promote American Ethanol. At the team level, the only new partners to sign significant primary sponsorships were AARP and Farmers Insurance, which both signed team agreements with Hendrick.

    In the meantime, many sponsors have cut back on their spending. Budweiser cut its support of its racing team from 37 races to 20 when it moved from Richard Petty Motorsports to Richard Childress Racing, and 3M cut its spending at Roush Fenway Racing.

    “If you did a graph of Fortune 500 brands moving into the sport the last two or three years, that’s been less, and the ticket per spend has been less,” said Mike Boykin, GMR executive vice president. “Those two things in concert mean you’re going to see a decline [in agency business].”

    Another factor in the decline in agency business from NASCAR is the dilution of primary sponsorships. Just seven brands were displayed on the same NASCAR hood for all 36 races in 2010. That meant more than 30 cars had sponsors paying less for less inventory last year. That total is expected to decline again for the 2012 season.

    Because more sponsors are signing smaller deals for fewer races, they don’t need as much sponsorship support as they did when they used to sign year-round, 36-event agreements. Some have tried to manage their sponsorships in-house, turn them over to their media agencies or rely on a NASCAR team for support.

    Tornados, a frozen snack food brand that signed on to sponsor Stewart-Haas Racing’s No. 39 car in 2009, opted for the latter. Rather than hire an agency, it is getting activation support from executives at Stewart-Haas for its sponsorship. The team has managed hospitality, sampling programs and at-track promotions for the brand.

    David Abrutyn, IMG Consulting global managing director, said moves like that make sense because marketing budgets for many companies remain tight.

    “If you only have six races where you’re a primary, you may not necessarily think you need a sports agency, and you may try to have your ad agency extend their support for those six races,” Abrutyn said.

    When NASCAR was the “hot” sport in corporate America during the early and mid-2000s, much of corporate America was clamoring to be involved in it. But the recent recession hit the sport’s fans harder than those in many other properties, hurting attendance, and ratings also decreased.

    As a result, corporations have begun to look elsewhere for sponsorship opportunities, and they’ve taken their agencies with them. Boykin said, “Next thing you know, we’re in mixed martial arts. We’re doing the [MLB] All-Star Game.”

    Agencies with NASCAR expertise have reacted to those trends by trying to diversify into other sports. HB&M Sports, which works with Rubbermaid and Irwin Tools, historically counted on NASCAR for 80 percent of its business, but it has recently begun doing some work in golf in an effort to reduce that dependency.

    “NASCAR will continue to be our core business, but we also understand we can’t continue to be just a NASCAR business forever,” said Harper Lee, HB&M vice president. “We’ve got to slowly diversify, and the reason is we don’t want all our eggs in one basket.”

    Other agencies have diversified as part of their own strategic plan and in response to macroeconomic trends. IMG, which counts Coca-Cola as its biggest and most long-standing client in NASCAR, has looked to college sports for growth in recent years. GMR executives, who honed the agency’s sports consulting capabilities in NASCAR, have begun using the skills and reputation they developed to land clients in international areas such as the Olympics, where the agency is supporting Procter & Gamble, and the NBA, where it’s working with Spanish bank BBVA.

    Similarly, Just Marketing’s business has shifted from being 30 percent international in 2008 to 60 percent international today, largely because it’s supporting companies interested in emerging markets such as Asia and South America, which Formula One offers.

    Just Marketing CEO Zak Brown said, “America as a market is really soft. As a result, NASCAR is really soft. But Formula One has been on fire because it’s in more continents, so it’s in so many markets that it doesn’t matter as much when one market gets soft.”

    Other agencies, such as Momentum Worldwide, Octagon, Wasserman Media Group and IMG, were less dependent on NASCAR and more diversified. But even they saw their NASCAR business flatten or grow only marginally compared with other sports sectors.

    Dave Grant, principal at Team Epic, which won the Growth Energy business last year, was one of the only agency executives to say that NASCAR had become a more significant part of the agency’s business in recent years. He added, “We may be the odd duck.”

    Not all agencies have been able to diversify. Some had to cut staff and shrink operations, as Keystone Marketing did when it reduced its consulting staff from 11 employees to four after losing Hershey. The agency still executes programs with GMAC Insurance and AAA, but it does less show car work and requires fewer people, said Keystone CEO Brad Bennett.

    Agencies are optimistic their NASCAR business is poised to grow in the future. The sport’s ratings appear to have bottomed out and began increasing this year across Fox, TNT and ESPN broadcasts for the first time in five years. The sanctioning body also is expanding its sales force from a two-person operation to six employees, and it’s spending more on marketing efforts designed to reach young people and Hispanics.

    Most important, perhaps, the cost to sponsor a car has decreased, making the value proposition better for companies interested in sponsoring a car in the Sprint Cup Series.

    “The 5-Hour Energies and Dollar Generals can trade up now [from the Nationwide Series] for a couple of million dollars,” said Matt Petersen, Momentum Worldwide’s director of motorsports. “It’s a buyer’s market with a lot of great opportunities.”

    “One of the great things NASCAR’s done is address this contagious negativity, which was a problem a year ago,” Grant said. “They’ve stemmed that and they’re getting some positive news.”

    Agency leaders are optimistic that positive news will begin to attract corporate America to NASCAR. It still has a large and passionate fan base that has a history of overindexing when it comes to sponsor loyalty, and as prices for team sponsorships decrease and the value proposition in the sport improves, NASCAR should appeal to brands increasingly in the future.

    “They’ve looked in the mirror and realized their challenges,” Coughlin said. “Now they’re rising to those challenges and trying to execute against a broad strategy. It’s still a fantastic opportunity for the right brands.”

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  • BMW bringing preferred parking program to Big Ten

    Fans arriving to this season’s inaugural Big Ten football championship game in a BMW will have their own reserved parking close to Lucas Oil Stadium.

    Through a new partnership created with Big Ten Sports Properties that will make BMW the conference’s official luxury automobile, the German automaker will establish a preferred parking program at many of the conference’s championship events. The program is similar to BMW’s preferred parking for customers at golf tournaments on the PGA and European tours.

    The 2011-12 agreement will cover football, men’s and women’s basketball, baseball, and Olympic sports. BMW is still working on deciding which events it will activate against.

    BMW signage also will appear in Big Ten stadiums and arenas where the conference has inventory. BMW expects to use scoreboard messaging and promotions at the football championship on Dec. 3 in Indianapolis. One of the promotions is expected to be through text messaging so that BMW can collect leads for potential new consumers.

    Some auto brands have activated with preferred parking programs in the professional ranks, but this is the first time an auto partner has brought this program to the Big Ten. The conference previously partnered with Infiniti, which left last year when it joined the NCAA’s Corporate Partner program.

    “This will be an innovative way for BMW to connect with alumni and other fans in a VIP type of program,” said Scott Bailey, general manager of Big Ten Sports Properties. “BMW owners will be notified by email, social media or other correspondence that this is available to them.”

    Big Ten Sports Properties is managed by Learfield Sports, which sold the BMW sponsorship. Terms of the arrangement were not available, but conference deals typically range from the low six figures to high six figures, depending on the assets.

    BMW’s deal also includes a commitment to buy advertising on the Big Ten Network for football and basketball broadcasts.

    Any ad buys on Fox’s broadcast of the conference championship game would have to be a separate conversation.

    Fox owns the rights to the championship game broadcast and any TV-visible signage, such as goal post nets. Big Ten Sports Properties has the rights to promotions, scoreboard messaging, on-field promotions and the national radio broadcast.

    Dr Pepper, title sponsor of the championship game in the ACC and the SEC’s Fanfare, has signed on as presenting sponsor of the Big Ten’s championship game fan fest through Big Ten Sports Properties as well.

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  • His vision of eyeblack company is paying off

    Professional baseball and college football games are Peter Beveridge’s best marketing tools.

    Those dark smudges under the eyes of many players chasing down a fly ball or reeling in a pass are likely to be Beveridge’s product. Gone are the days of athletes smearing grease under their eyes to block out the sun’s glare. Today, the rage is strips of plastic often adorned with team logos.

    The CEO of Potomac, Md.-based Eyeblack.com started his company with two employees in 2003. Today, he has 17 staffers, thanks to lucrative licensing agreements with 400 colleges and Major League Baseball.

    Eyeblack.com’s revenue is increasing by 35 percent annually, Beveridge said. In 2010, the company sold more than 5 million pairs of eyeblack. A pair of collegiate eyeblack sells for $2.56.

    Recently, Eyeblack.com signed pro tennis player Bethanie Mattek-Sands and two NFL players to endorse its products. Beveridge spoke to correspondent Jimmy DeButts about how his unconventional business took off.


    NICHOLAS GRINER / BALTIMORE BUSINESS JOURNAL
    Peter Beveridge’s Eyeblack.com has a licensing agreement with Major League Baseball.
    What does it mean to be a Major League Baseball licensee?


    BEVERIDGE: It immediately tells everybody in the industry you’re a real player. We liked getting involved with Major League Baseball because it recognized there are a lot of youngsters in high school and below who play all year round. But there was never a product for them to wear on the field and to continue to brand Major League Baseball.

    How did you decide on eyeblack as a business?

    BEVERIDGE: The first thing I thought was wouldn’t that be valuable space to put a logo. My company exclusively licenses these for the USA and Europe. It seemed to make sense at the time. We created a market for a brand-new product.

    What’s next for Eyeblack.com?

    BEVERIDGE:
    We’re working with Marshawn Lynch of the Seattle Seahawks and Stevie Johnson of the Buffalo Bills. We can build an eyeblack around their uniqueness. About 70 percent of NFL teams use our products. Now we want to build a line of products that they can get on board with.

    Do you participate in any sports that require eyeblack?

    BEVERIDGE: I don’t. I play basketball a lot. I wear eyeblack when I play basketball because it’s important for me to test out the product. I want to make sure it won’t be sweat through and it stays on.

    Was there a learning curve about your product’s benefits?

    Beveridge: We tested the product at Virginia Tech, the University of Florida, the University of Miami and the University of Maryland. The athletes loved it. It was the best kind of feedback we could get. Players on the field were getting it; it was everybody else who needed to learn about the product. The way you make money is you have people on the field using it and people in the stands [buying] it.

    Jimmy DeButts is associate editor of the Baltimore Business Journal, an affiliated publication.

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  • IMG’s reach creates big college platform for UPS

    UPS loves logistics, but there was a time that doing a national sponsorship deal in the college space was a logistical nightmare.

    Ron Rogowski, UPS’s sponsorship chief, admits that if he had to go school to school to aggregate 68 college sponsorships one at a time, the way sponsors had to in the past, he never would have done it. Talk about daunting: 68 negotiations, 68 contracts, 68 approvals from legal.

    IMG COLLEGE
    In UPS, IMG College found a willing partner that already was committed to college sports.
    “There’s no way,” Rogowski said. “It would have been too big a challenge.”

    That’s the uphill task brands faced in the past if they wanted to create a national college sponsorship. That’s also why many of them went elsewhere. It was just too complex.

    The beauty of the four-year, $100 million national deal UPS closed recently with IMG College to sponsor 68 colleges lies in its simplicity: one negotiation, one contract, one approval from legal. IMG College calls it the largest college sports sponsorship deal ever signed, primarily because it’s the first of its kind. No entity has ever been in a position to package this many schools together in one deal.

    “What’s transformational about this is the platform,” said George Pyne, the president of IMG Sports & Entertainment who came over from NASCAR in 2006 and made college marketing the focus of a new-look IMG. “The college sponsorship market was very fragmented and it was extremely hard to do a national deal unless it was a media buy. Now we can do that, and it’s a value that’s unmatched in sports.”

    Industry experts say they expect three to five more deals like UPS’s this year — eight-figure expenditures that are national in scope across dozens of colleges. IMG College supposedly has deals in principle with two of them, sources say.

    What the marketplace will be watching is how UPS and other brands activate so many college relationships, said Jeff Ehrenkranz, executive vice president for Octagon Marketing.

    “The test is whether or not companies will really activate enough to get their value out of the deal,” Ehrenkranz said. “For UPS, with their B2B focus, that makes a lot of sense. But the proof point will be how much brands push it. This is a buy for veteran sponsors who understand the challenge. I’d be very wary of companies trying to do this if they haven’t been in sports sponsorship before.”

    The Collegiate Multimedia Rights Business

    All but a handful of schools in the six major conferences outsource their marketing and media rights to a third party. Here’s how these deals work:

    n The rights holders: CBS Collegiate Sports Properties, IMG College, Learfield Sports, Nelligan Sports

    n The deals: In most cases, rights holders pay a guaranteed rights fee to the school, plus a revenue share if sales hit certain thresholds. A small percentage of schools, like Texas, have straight revenue-share deals, which offer greater upside and greater risk.

    n The sales: Rights holders typically buy a school’s rights to sell sponsorships, signage, radio/TV ad units, website ads, scoreboard messaging, hospitality, promotional rights, experiential marketing packages and coaches endorsements.
    Getting the deal done is just the first step. Managing a portfolio of 68 school relationships is a completely different task, one that can become overwhelming if it’s not staffed properly.

    IMG College plans to hire 75 to 100 employees in the next year across all of its divisions. Some of those executives, based in the company’s Winston-Salem, N.C., headquarters, will be assigned one brand to work with. If partners have a problem or an idea, they will funnel it through their contact at IMG College, instead of reaching out to the schools directly. The purpose is to streamline communications for the brand.

    “We are fundamentally changing the whole buying and selling experience in college sports,” said Ben Sutton, president of IMG College. “Internally, this [UPS] deal was like the shot heard ’round the world. We’ve made college sports more accessible to brands than it’s ever been and we believe the floodgates will open.”

    Bryce Townsend, CEO of GroupM ESP, is one of those evaluating the national college platform for his clients. While he is not sure that the national college platform is ready to take on the NFL, he sees the potential for sponsors that are committed to the college space.

    “A large part of the success of the NFL or the NBA or any major entity is how the brand showcases them,” Townsend said. “A large part of their success has come from the brands elevating them to a broader audience. The key will be how brands embrace the college platform and if they elevate it. There’s certainly a very good premise there. It remains to be seen if you’ll eventually be able to compare the college platform with the professional sports.”

    The other complexity in putting together the national sponsorship was clearing the inventory across so many schools. IMG College had to standardize the package from school to school so that it provided a consistent set of assets.

    That task fell largely on Lawton Logan, senior vice president, U.S. business development. He said IMG College has tried to simplify the list of assets by boiling them down to three categories: intellectual property, experiential marketing and unique access, such as hospitality, on-field access during games, seats on team flights and other experiences. Those assets go along with the typical sponsorship elements, such as ad units on radio and TV and signage.

    “Every school is unique so it’s hard to have the exact same assets at every school,” Logan said. “But we know we can offer those three main categories — IP, experiential and access. It’s definitely a task to coordinate that on a per-school basis, but now that we have one down, it should be much easier moving forward.”

    The UPS agreement is the kind of national deal that wasn’t available before IMG College consolidated the college space, unless a company was willing to aggregate college deals one at a time. State Farm did this and it now has 90 college relationships that have been built over 25 years, but most companies haven’t been willing to make that kind of investment in time or resources.

    IMG began by acquiring Collegiate Licensing Co. in 2007 and added Host Communications and ISP Sports, all for $300 million. Those acquisitions gave IMG College the ability to sell the marketing and media rights to more than 80 Division I colleges, most of which were packaged into UPS’s deal. The handful of schools that weren’t part of the deal mostly were schools that don’t have football.

    As many as five or six different multimedia rights holders represented schools in the past, while another handful of universities handled sales internally. It made the college space incredibly complicated before IMG College began gobbling them up to create a one-stop shop, or as close as you can get to one these days.

    Learfield Sports still represents close to 50 college properties, including blue-chippers like North Carolina and Penn State.

    “For as long as I’ve been in this business, people have complained about how fragmented this industry is,” said Sutton, who founded ISP Sports 20 years ago and sold it to IMG last year for $100 million. “But to be able to create a coast-to-coast platform with schools all over the country, it’s a dream come true for me. It’s why I sold my company to IMG.”

    In UPS, IMG College found a willing partner that already was committed to college sports. Represented by Momentum, UPS became a corporate partner with the NCAA and the SEC last year through separate agreements.

    Jim Pyne, who works out of IMG’s Atlanta sales office, had sold UPS the SEC deal, and late last year he was back to pitch the first national sponsorship. He invited Rogowski and UPS’s CEO, Scott Davis, to attend the BCS championship between Auburn and Oregon in Phoenix in January.

    Jim Pyne, who is George’s younger brother, knew that Davis was a huge Oregon fan. Rogowski, meanwhile, saw immense business-to-business potential in partnering with universities that are often like small cities unto themselves.

    Davis and Jim Pyne sat next to each other at the game and talked football. Pyne, a former All-America center at Virginia Tech, spent part of his NFL career with the Detroit Lions. Davis grew up a Lions fan near Detroit.

    From there, it took six months of haggling over assets and price, mostly price, but Rogowski finally agreed to terms with IMG College over dinner at Seasons 52 in Atlanta, where UPS is based.

    A text message from Pyne to Logan read simply, “Done.”

    The two sides went back and forth for months over price because a single deal that aggregated so many schools had never been done before. There wasn’t a template to go by.

    As the talks evolved, UPS looked at the pricing of comparable assets, both in the college space and in other sports properties.

    “We had to do a lot of work to put a price on it,” Rogowski said. “The actual negotiations were tough. The language, the finer points of the deal, we were plowing new ground here. It took a lot of back and forth.

    “As for the value, what we paid is the value. Three, four, five years from now, we’ll see.”

    IMG College calls its national platform unlike anything else in the sports sponsorship landscape. George Pyne touts the 80-plus school properties that cover 49 of the top 50 markets and nearly every state. Pyne also gushes about the 172 million college fans, 80 million female fans and 29 million fans who make $100,000 or more.

    This platform, he says, can challenge the reach of the NFL, NBA or any other property.

    “When you look at the numbers, it makes you think, ‘Where is everybody?’” Pyne said. “There are five or six really mature categories in the college space. When I was at NASCAR, we had 32. Even now, people just don’t know the untapped value in the college market.”

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  • Adidas bolsters MLS partnership to include youth teams

    Adidas wants the next generation of U.S. soccer fans to think of Major League Soccer first instead of international soccer.

    So in the year since it added $200 million and eight years to its MLS sponsorship deal, Adidas has broadened its partnership to include the league’s network of youth academies and development teams.

    “We want to get kids in the United States to potentially choose MLS teams over Champions League,” said Ernesto Bruce, MLS category manager for Adidas.

    Adidas now outfits all teams that fall under Major League Soccer’s youth development umbrella with uniforms and soccer balls. Each MLS team has a reserve team and two academy teams, as well as regional youth affiliates. FC Dallas alone has more than 130 affiliated youth teams in Texas.

    Adidas also hosts at MLS Cup the Generation Adidas Cup tourney for under-17 teams, which it is positioning as the premier tournament for American teen soccer players.

    The focus on MLS youth programs comes one year after Adidas ended its 15-year partnership with the U.S. Youth Soccer Association, the nation’s largest network of youth soccer teams, with 3.2 million players. Bruce said Adidas switched its youth soccer focus to MLS because the professional league creates an aspirational angle for young players.

    “We’re trying to showcase to our fans and consumers that MLS is a major part of our soccer portfolio and is on the same level as major international teams like Real Madrid,” he said.

    Javelin Group President Jeff Bliss said the move shows Adidas is targeting quality over quantity in the youth market. MLS affiliate teams funnel talented players to the academies, which feed players into the league.

    “USYSA is a huge behemoth, but you have a mass of players being coached by volunteer parents,” Bliss said. “From Adidas’ perspective, would they rather focus on the masses, or go after the elite and let the message trickle down?”

    MLS had not yet fully developed its youth and development system in 2004, when Adidas signed its first deal with the league. At the time, the 10-year, $150 million deal was the largest in the league’s history.

    Doug Quinn, former president of Soccer United Marketing and the current CEO of FC Dallas, said the growth of the development system changed the marketing abilities of the league. Quinn said Adidas specifically asked for rights to the academy system during the negotiations in 2010.

    “Beyond the value of a growing league and more retail opportunities, [Adidas] bought the best soccer infrastructure in the country for youth development,” Quinn said. “These kids are the key influencers in the sport.”

    Adidas representatives declined to say whether they have seen growth in the youth sales market. Bruce said total sales rose 12 percent from 2010. According to the Licensing Letter, a publication that covers consumer product licensing, apparel accounts for nearly one-third of the retail sales of licensed merchandise for MLS. The Licensing Letter estimated for 2010 that MLS apparel sold roughly $105 million.

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  • NBA and Sprint connect for deal

    With the NBA now in the third month of a lockout that threatens the start of the season in November, league marketers have quietly signed Sprint Nextel to a new four-year sponsorship deal.

    Sources close to the deal, signed in early summer, said that the $45 million rights fee paid by Sprint was one of largest ever collected by the league and that total value of the agreement approached $250 million, including media commitments and other contractual requirements.

    Sources said that while the NBA was in talks with AT&T as late as during the NBA Finals in June, it was fervent interest by upstart cell brand MetroPCS and the subsequent leveraging of Metro against Sprint that allowed the NBA to sign Sprint to what one well-placed source said was 15 percent to 20 percent more than what incumbent NBA wireless sponsor T-Mobile had been paying.

    A look back at 1998-99 lockout provides prospective cancellation timeline for NBA.
    Sprint and NBA officials refused to comment.

    As far as activating its new rights, Sprint will have a tough act to follow. T-Mobile was one of the league’s most active sponsors over the past six seasons, including a series of ads with basketball hall of famer and current TNT NBA commentator Charles Barkley and Miami Heat guard Dwyane Wade. T-Mobile also was title sponsor of the Rookie Challenge game during All-Star Weekend.

    With the start of the 2011-12 season in jeopardy, activation plans are scant, but sources close to the deal said that Sprint’s newfound NBA rights have much more to do with content, similar to competitor Verizon’s NFL rights deal. Sprint reportedly will also begin selling Apple’s wildly popular iPhone in October, so the NBA season, scheduled to tip off Nov. 1, would seem a natural launch platform — if the season starts as scheduled.

    Assuming it purchased broad category rights, Sprint could also use the NBA to market Clear, its 4G wireless Internet service, which has attributes of speed, power and reliability that would match well with any sports platform.

    Sprint did not have any NBA team sponsorships at the end of 2010, so it will likely add those. Sprint’s Boost Mobile prepaid cell brand was a New York Knicks sponsor for the 2010-11 season, but that category is now open at MSG.

    The deal elicits questions about Sprint’s sponsorship strategy. The nation’s third-largest wireless carrier has been without a top-level sponsorship of a stick and ball sport since it lost NFL rights after the 2009 season. Its naming rights to NASCAR’s top race circuit run through the 2013 season, and CEO Dan Hesse has been quoted saying the company intends to continue the deal.

    Whether it can derive any more value from a sponsorship that put Nextel on the map is open to debate.

    Boost Mobile announced last month, with some fanfare, an eight-figure WNBA deal, in which the league sold advertising space on 10 of its 12 team jerseys, along with title sponsorship of the WNBA All-Star Game and presenting sponsorship for the league’s playoffs. Even though the size of that deal was impressive for any women’s sports property, clearly that deal was the tail wagging the dog.

    “The last thing [the NBA] wants to talk about during CBA negotiations are new revenues,” said a marketer close to the deal.

    Staff writer John Lombardo contributed to this report.

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  • Phelps by a Head (& Shoulders)

    Procter & Gamble has signed Olympian Michael Phelps to a seven-figure endorsement deal for its billion-dollar Head & Shoulders shampoo brand.

    Phelps is signed through next year’s Summer Games in London and will be featured in a commercial, which was shot in Baltimore last month, according to sources.

    Officials at P&G and Octagon, which represents Phelps, declined to comment.

    The signing is the first major endorsement that a P&G brand has closed since the company signed a 10-year, multimillion-dollar deal in 2010 to become a worldwide Olympic sponsor. Both P&G and Head & Shoulders have added sports to their marketing after years of eschewing sponsorship spending in favor of large media buys. In recent years, the company also has added sponsorships with the NFL and MLB and paired them with its Gillette and Head & Shoulders brands.

    Phelps’ global recognition should help P&G as it tries to leverage the Olympics to achieve its goal of increasing its customer base from 4 billion to 5 billion consumers in the next five years. He joins a roster of athlete endorsers for Head & Shoulders that includes Pittsburgh Steelers safety Troy Polamalu and Minnesota Twins catcher Joe Mauer.

    Subway is among Phelps’ other endorsement deals.
    Head & Shoulders joins a Phelps sponsor list that includes Speedo, Under Armor, Hilton, 505 Games, Hewlett-Packard, Subway, Omega, Pure Sport, Visa and, most recently, Master Spas, which makes spas for swim training. His deals start at a minimum of $1 million.

    In the run-up to the London Games, Octagon is focused on signing Phelps to deals with global companies that are committed to using him in international markets. The London Olympics could be his last, and raising his profile internationally would go a long way to increasing his earnings potential after he finishes competing in the pool.

    The signing with Head & Shoulders should help Phelps with that goal. The brand is distributed in markets stretching from Europe to China.

    Phelps and Usain Bolt, the Jamaican sprinter, were the biggest stars to emerge during the Beijing Games. The Baltimore-born swimmer signed a series of endorsement deals following his eight-gold-medal performance at the Beijing Games. After those Olympics, Kellogg’s, Mazda and Subway signed him and began promoting him at retail and on TV.

    His endorsement future appeared bright, but his reputation and brand image took a hit when a photo surfaced six months after the 2008 Olympics that showed him smoking marijuana. After that revelation, sponsors like Kellogg’s and Subway were asked repeatedly by media if they would drop Phelps as an endorser. Mazda asked him to record a video apology for the incident, and Kellogg’s did not renew its deal with the swimmer.

    Phelps bounced back in 2010 by signing deals with Under Armour and Master Spas. 505 Games in February also released “Push the Limit,” a swimming video game that features Phelps.

    P&G first signed on as a partner of the U.S. Olympic Committee in 2009, and it saw 18 brands incorporate the Olympics into their marketing efforts during the 2010 Winter Games in Vancouver. The centerpiece of the company’s marketing efforts was a “Thanks Mom” campaign that saw P&G help defray the costs that mothers of Team USA members paid to travel to the Games.

    Head & Shoulders was one of nearly 32 P&G brands that didn’t incorporate the Olympics into its marketing that winter. Its signing of Phelps suggests that more P&G brands will use the Olympics in marketing next summer than did so in 2010.

    GMR handles sports marketing for P&G, while Platinum Rye handles athlete negotiations for the consumer products giant.

    Print | Tags: Marketing and Sponsorship
  • Return of football could be part of Fenway Park anniversary

    Terry Lefton
    Other than 86 years between championships, Fenway Park had the misfortune of hosting its first official Red Sox game in 1912 in the same week that the Titanic sank. Accordingly, news of the ballpark’s new wonders was buried in local papers.

    FENWAY SPORTS MANAGEMENT
    Sam Kennedy announced the 2012 “Frozen Fenway” hockey date last week, one event being planned for the centennial.
    Red Sox COO Sam Kennedy is hoping for a somewhat splashier celebration of Fenway’s centennial next year with a variety of events being planned, including a Jan. 7 “Frozen Fenway” college hockey doubleheader, an anniversary gala next spring and possibly football. Fenway hasn’t hosted a pro football game since 1968 when the Patriots left for the ’burbs in Foxboro, and hasn’t hosted college football since Boston College left in 1946.

    Kennedy said the sponsorship sales approach will be to tie sponsors to individual events, rather than sell one yearlong anniversary sponsor. “There’s incremental events, so there’s incremental revenue opportunities,” he said, “but this is much less about revenue and much more about celebration.”

    STAR POWER: Coordinating talent for a commercial shoot can often be the most daunting part of the creative process. Imagine how many handlers it takes to coordinate nine Heisman Trophy winners for a production. Sources tell us that is how many assembled recently in New Orleans for Nissan House of Heisman branded-content vignettes as part of Nissan’s sponsorship of ABC’s college football schedule. Included in the Big Easy shoot were nearly enough Heisman winners to field a starting 11: Marcus Allen, Doug Flutie, Vinny Testaverde, Tim Brown, Barry Sanders, Charlie Ward, Eddie George, Troy Smith and Mark Ingram.

    INSURING VISIBILITY:
    After last week’s MetLife Stadium naming-rights deal at the New Meadowlands Stadium and USAA joining the NFL‘s roster of corporate patrons, it is no surprise that more insurance brands are piling on. New York Life is buttressing its year-old “Protection Index,” a measure of pass protection proficiency formulated in cooperation with Stats LLC, by adding team sponsorship deals with the Dallas Cowboys, New York Jets, New England Patriots and Indianapolis Colts. New York Life will spread the word on the index through electronic and social media, including the Colts’ “Protection Index Score Game” on Facebook that allows fans the opportunity to predict the Colts’ score in the Protection Index each week. Peter Stern’s Strategic agency, New York, represents New York Life.

    ICON SMI
    Bart Starr (left) and Roger Staubach, shown in 2006, are among the legends in Allstate’s “Hometown Heroes” program.
    Meanwhile, Allstate is looking to slice off some NFL equity through a three-year sponsorship of the Pro Football Hall of Fame, a platform through which it will launch a “Hometown Heroes” program honoring HOFers including Howie Long, who serves as a spokesman for the program. Others featured include Sanders, Joe Namath, Chuck Noll, Bart Starr, Sonny Jurgensen, John Madden, Walter Payton, Roger Staubach and George Halas.

    “This fits well with our mission to get our Hall of Famers out of the building and to their fans,” said George Veras, president of Pro Football Hall of Fame Enterprises.

    As part of the deal, Allstate will also take the lead sponsorship of the Hall of Fame selection show on NFL Network the day before the Super Bowl. Van Heusen was last year’s HOF selection show presenting sponsor.

    Considering that Long appeared in so many ads for Chevrolet and that former GM marketer Mark LaNeve is now Allstate CMO, this also could portend a broader marketing relationship for Long with the insurer.

    COMINGS & GOINGS: After quietly selling media for NBC’s late-night “Poker After Dark” series for a year, Scott Becher has parlayed it into a new game of chance. He is now senior vice president of partnership marketing for Federated Sports & Gaming’s new five-tournament Epic Poker League, where former World Series of Poker Commish Jeffrey Pollack is CEO. The “other EPL” started play in Las Vegas in August and will continue through next May, with seven hours on CBS beginning Oct. 8 and 13 hours on the Discovery Channel’s new Velocity network starting Sept. 30. “Building a sports league from scratch is an opportunity I could not resist,” said Becher, who’s seeking a presenting sponsor for the league for low seven figures and other top-level sponsors for mid-to-high six figures. … Amos Dylan Varon moves to MSG, New York, as director of sports sales, reporting to Todd Melfi, the new vice president of sports sales. Varon worked for Brett Yormark at NASCAR and the New Jersey Nets for a total of seven years. … Former NBAer Brian Mieth is now vice president, new business development at integrated marketing agency Peppercorn. Mieth was vice president, sports marketing at corporate barter specialist Icon International.

    Terry Lefton can be reached at tlefton@sportsbusinessjournal.com.

    Print | Tags: Marketing and Sponsorship
  • U.S. Open mad as ale over ads

    The U.S. Open last week demanded that Stella Artois remove ads touting the beer brand near the site of the event, but the Belgian beverage maker declined.

    Ambush marketing is no stranger to big events like the Open, but the scale of the Stella Artois ads had U.S. Tennis Association officials angry. There were 15 ads located on the highly trafficked Long Island Rail Road platform a few hundred yards from the USTA Billie Jean King National Tennis Center, site of the tournament.

    The ads had tennis themes, with slogans like “The Top-Seeded Belgian,” “Your Trophy Awaits” and “A Perfect Match.”
    “We approached Stella Artois and asked them to reconsider this blatant ambush,” said USTA spokesman Chris Widmaier. Adding that the USTA would protect its sponsors, Widmaier said, “We have many people who would like to capitalize on the power of the U.S. Open
    DANIEL KAPLAN / STAFF (2)
    The event says the tennis-themed ads touting Stella Artois amount to ambush marketing.
    without going through proper channels.”

    Anheuser-Busch InBev, which owns the Stella Artois brand, could not immediately be reached for comment.
    The Open’s beer sponsor, Heineken, renewed this summer for another four years. It has been an event sponsor since 1992.

    While the U.S. Open’s exclusivity for sponsors stretches beyond the tennis center to include all adjacent parkland, the nearby Citi Field parking lot and the heavily trod boardwalk stretching from a subway station to the center, it does not reach to the nearby LIRR platform.

    The platform is the property of the Metropolitan Transit Authority, which runs LIRR. From the platform, fans can clearly see the grounds of the tennis center.

    The Open’s sponsorship rules also do not cover several large MTA buildings that overlook the boardwalk. In years past, K-Swiss, AIG and Rolex have been among the companies to have hung large ads on these buildings while not being an Open sponsor.

    “They want to share some of the association and they want to market around it,” said Ben Sturner, CEO of sports marketing firm Leverage Agency. “They just have to be careful.”

    Likely thousands of people take the LIRR train daily from the Open into Manhattan. Widmaier said he was unsure if the USTA had also complained to the MTA.

    Gordon Smith, USTA executive director, said the problem is that if the Open sponsors do not buy the space, the MTA will sell it to someone else.

    Print | Tags: Marketing and Sponsorship
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