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

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.

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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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