Sidearm Sports adding Learfield schools Forty Under 40: Meredith Starkey Cartoon: Law and order league NFL licenses firm to market experiences Forty Under 40: Masters Champions Dinner D-League returns to ESPN Forty Under 40: Sashi Brown Forty Under 40: Chris Klein Richardson writes to fellow owners Arris connects with NASCAR
SBJ/May 21-27, 2012/Marketing and SponsorshipPrint All
Sales of Minor League Baseball licensed merchandise climbed to near-record levels in 2011, according to data obtained by SportsBusiness Journal and scheduled to be released by MiLB today.
The 160 U.S.- and Canada-based clubs affiliated with MLB teams generated $52.2 million through the sale of apparel, headwear and novelties last year, up 2 percent from 2010 and trailing only pre-recession 2008 as the highest annual total ever.
A new store in a new stadium put Omaha in the company of gate leaders Round Rock (Texas) and Lehigh Valley (Pa.) for merchandise sales.
Photo by:OMAHA STORM CHASERS
“Over the last five years, the Eastern, Carolina, Florida State, Midwest and Northwest leagues have each increased their sales of licensed products by more than 25 percent,” she said, “and half of the MiLB teams experienced a double-digit percent growth in sales.” Hebert added that 11 of the 14 MiLB leagues have seen their sales figures increase since 2007.
The Class AAA Omaha Storm Chasers represent the lone newcomer on the 2011 top-teams list, following a franchise rebranding and a move to a new stadium. Known as the Omaha Royals for most of its first 42 years of existence, the Kansas City Royals affiliate had spent that time playing at Rosenblatt Stadium, which opened in 1948. The team’s new $36 million Werner Park opened last spring and included the Storm Front team store located prominently at the front of the stadium next to the ticket windows.
Top 25 MiLB clubs for merchandise sales in 2011 Team (level) No. of
years in the top 25*
Carolina Mudcats (AA) 14 Charleston RiverDogs (A) 9 Corpus Christi Hooks (AA) 7^ Durham Bulls (AAA) 19^ Fort Wayne TinCaps (A) 5 Greensboro Grasshoppers (A) 8 Lake Elsinore Storm (High A) 14 Lakewood BlueClaws (A) 11^ Lansing Lugnuts (A) 15 Lehigh Valley IronPigs (AAA) 4^ Louisville Bats (AAA) 5 Midland RockHounds (AA) 6 Myrtle Beach Pelicans (High A) 8 Omaha Storm Chasers (AAA) 1 Pawtucket Red Sox (AAA) 14 Portland Sea Dogs (AA) 19^ Reno Aces (AAA) 3^ Richmond Flying Squirrels (AA) 2^ Rochester Red Wings (AAA) 14 Round Rock Express (AAA) 12^ Sacramento River Cats (AAA) 12^ Salt Lake Bees (AAA) 7 Toledo Mud Hens (AAA) 17 Trenton Thunder (AA) 18^ Wisconsin Timber Rattlers (A) 14 Notes: Teams listed alphabetically. Rankings and team-specific sales data were not available. Teams in bold were not in the top 25 for 2010. Teams falling out of the top 25 from the last year are the Albuquerque Isotopes (AAA), Bowling Green Hot Rods (A), Columbus Clippers (AAA) and Indianapolis Indians (AAA). * Since 1993, the first season MiLB began tracking sales data. ^ Ranked every year of team‚Äôs existence and/or every season since 1993. Source: Minor League Baseball
Licensed merchandise sales for MiLB teams 2011 $52.2 million 2010 $51.1 million 2009 $45.7 million 2008 $54.7 million 2007 $48.7 million 2006 $44.1 million 2005 $42.9 million 2004 $38.7 million 2003 $38.1 million Source: Minor League Baseball
“We discovered last year that we could identify a certain part of specific games where store sales drop off, so we created a sort of Crazy Eddie, New York-type character who tells fans about our Power Hour, where a specific slow-moving item is moved to the front of the store,” Kinney said. “We’ve definitely seen an uptick in sales in the later innings since we started that program.”
According to the Storm Chasers, the team ranked in the 90s among all MiLB clubs for merchandise sales in 2010 compared with the club’s top-25 performance in 2011.
Brandiose (formerly Plan B. Branding), whose design work has helped numerous clubs land on the annual list of top sellers over the past decade, handled Omaha’s rebranding from the Royals to the Storm Chasers.
In-stadium attendance obviously can play a part in merchandise sales. To that end, the two clubs that led MiLB at the gate in 2011 — the Lehigh Valley IronPigs (628,925 in total attendance) and the Round Rock Express (618,261) — were both on the list of top 25 teams for merchandise sales.
Although it is unusual for a single player to have a significant impact on a minor league team’s full-season merchandise sales, Hebert said there was a spike in online sales for the Class A Hagerstown Suns, where Bryce Harper, the Washington Nationals’ highly touted prospect, spent most of his 2011 season. Similarly, in 2010, now-Nationals pitcher Stephen Strasburg pitched six games for the Class AAA Syracuse Chiefs, and the club saw a 33 percent increase in merchandise revenue that year, according to Wendy Shoen, the team’s director of merchandising.
The Class AA Harrisburg Senators, Harper’s home for 37 games last year and where Strasburg made a one-game, sold-out rehab appearance, saw a double-digit increase in sales in 2011. Despite those gains, none of the three Nationals affiliates cracked the list of the top 25 teams for merchandise sales.
New clubs or teams with new logos can have strong sales in their early years but often fall out of the annual top 25 quickly. Last year, for example, the Class A Bowling Green Hot Rods made the list in their second season of play in Kentucky, but the club did not make the top 25 this year. Other recent examples include the Class AA Northwest Arkansas Naturals and Montgomery (Ala.) Biscuits, and the Class A Great Lake (Mich.) Loons and Lake County (Ohio) Captains.
That honeymoon-period success is not lost on Donna Kirby, who operates the merchandise business for the expansion Pensacola Blue Wahoos, the Cincinnati Reds’ Class AA affiliate. The club began its first year of play last month, at $54 million Community Maritime Park, and can’t keep merchandise on the shelves at the Bait & Tackle team store.
“The appetite for just about everything is almost insatiable at this point,” Kirby said. “And even when we pad the numbers to try to anticipate sell-through percentages before the next reorder hits, we still find that we’re running out.”
Kirby said the team is on its third reorder of caps, baseballs and foam fingers.
NASCAR and Activision are borrowing a promotion from EA Sports’ “Madden NFL” game and allowing fans to cast votes for the driver who will grace the cover of its newest video game.
The promotion, which launches Wednesday, pits 32 drivers against each other to identify who will be featured on the cover of “NASCAR The Game: Inside Line.” Consumers will be able to vote for their driver of choice through a Facebook application. There will be four rounds of voting, and the drivers with the most votes will advance to the next round until a head-to-head competition is held between two drivers in July.
The consumer campaign is the first Activision has ever run to determine the cover for one of its games.
“When you think about the NASCAR fans and the enthusiasm they bring, this will drive awareness and engagement with the brand and game itself,” said Mindy Grantham, senior brand manager at Activision.
Dale Earnhardt Jr. has been voted NASCAR’s fan favorite for nine consecutive years, making him the early favorite to win the competition. But Blake Davidson, NASCAR vice president of licensing and consumer products, said that’s not guaranteed. The sanctioning body is working with its teams to turn this into a social initiative, and they hope that both drivers and their sponsors will latch onto the program and drive votes in ways they haven’t always done for the sport’s most popular driver competition.
“The topic came up [that] Dale Jr. is going to win this thing in a runaway, but the thing that makes this different that we can’t measure is the impact sponsors can have,” Davidson said. “If a sponsor has a good social media presence and can leverage that to promote their driver, or if a company with a large employee base gets behind it, that can change things. It’s more than popularity.
“I wouldn’t be surprised to see upsets. Sometimes you get a groundswell of support for someone who is the underdog. All of a sudden, you have people say, ‘That would be really cool to see this person on the cover.’”
NASCAR hopes that the competition will drive enough interest in “NASCAR The Game: Inside Line” to boost sales in 2012. Activision sold 600,000 units of the game in 2011, and the goal is to increase sales for the new version of the game, which will be released in November, to approximately 1 million units.
“We have every expectation given the improvements and new features in the game that we will see an increase in sales this year,” Grantham said.
The hottest crop of college golfers in years has equipment makers salivating, but new PGA Tour qualifying rules could upset the traditional model of the equipment deal for future pros.
After this year, college players going through the tour’s qualifying school will be funneled to the developmental Nationwide Tour instead of the PGA Tour, making equipment deals with companies like Callaway, Ping, TaylorMade and Titleist far less lucrative when those players turn pro.
“From our perspective, it is just going to change the whole deal,” said Chance Cozby, Ping’s director of tournament player relations.
Harris English (top) went from college to Q school to the PGA Tour, something that collegians Jordan Spieth (middle) and Patrick Cantlay will be unable to do after this year.
Photos by:GETTY IMAGES (3)
“That is a very rare thing,” said Mark Steinberg, Woods’ agent. “There are only a handful of players that have ever earned enough money in the limited number of starts to avoid tour school.”
The other route is to go to the tour’s qualifying school, a grueling three-stage gauntlet that for 40 years has rewarded the top 25 players with playing privileges on the PGA Tour. The tour, however, announced in March that it is revising Q school so that those qualifiers go straight to the developmental tour, not the PGA Tour, beginning in 2013. Those revisions are expected to be finalized this summer.
The rule change has agents predicting that many of the top college players will come out early and attempt Q school this year, while they still can take advantage of the old system. College golfers who don’t make it are allowed to return to school.
The talent pool of college golfers is the best it’s been in years, agents say, especially among the underclassmen. Golfweek’s ranking of the top college players lists freshmen Jordan Spieth of Texas, Justin Thomas of Alabama and Patrick Rodgers of Stanford among the top four. And that doesn’t include Golfweek’s top-ranked amateur, UCLA sophomore Patrick Cantlay, who finished as low amateur in this year’s Masters and the 2011 U.S. Open. Cantlay is ranked ninth on the college list.
“The freshman class is as good as I have ever seen, and when you add in a bunch of really good sophomores, the guys turning pro in the next couple of years is a really good list,” said veteran golf agent Rocky Hambric. “It’s a field day for us, but it’s one of those situations in which we don’t know what is going to happen because of this rule change.”
Chuck Prestigiacomo, TaylorMade-Adidas’ senior vice president of global sports marketing, said selecting the tour’s next stars is hard enough because, he said, nine out of 10 prospects usually don’t pan out. Under the new qualifying rules that will send practically all of the college stars to the developmental tour first, equipment companies will have an even more difficult time choosing which young golfers to back.
“Will you be willing to make the commitment for a long time and be on ice while the kids play on the Nationwide Tour?” Prestigiacomo said. “And that [question] will cause more anxiety for guys like me.”
Harris English, who finished his eligibility at the University of Georgia, was one of the few college golfers to earn his PGA Tour playing card at Q school and advance straight to the tour this year, where he’s already made more than $500,000 and stands 66th in the FedEx Cup rankings.
“I’m sure a lot of young guys will look at coming out earlier,” English said. “That’s what it’s set up for. Now, starting next year, you won’t be able to go straight through Q school and go to the PGA Tour. That’s everybody’s dream.”
The PGA Tour counters by saying that very few college players jump straight to the PGA Tour anyway, and those who do don’t fare as well. Only seven golfers coming out of college have earned their PGA Tour card in the last five Q schools. English was one of those.
In addition, of the PGA Tour players who advance through the Nationwide Tour, they retain their card the following year at a 40 percent clip, whereas those who made the tour through Q school retain their playing privileges the following year at a 27 percent rate. Two-thirds of the golfers on the PGA Tour played on the Nationwide Tour, according to the tour.
“We get the question about the college kids,” said Bill Calfee, president of the Nationwide Tour and a former PGA Tour player. “Are we stifling them? I don’t think so. We looked at it, and it’s a good thing to play the Nationwide Tour for a year — even if you’re a top college player.”
The rule change comes at a time when the PGA Tour is seeking an umbrella sponsor for the developmental tour at $10 million a year. Nationwide’s sponsorship ends this year, and a replacement hasn’t been found.
Calfee said the developmental tour should be more attractive to prospective sponsors because of the college talent that will be moving through the tour. The PGA Tour also will have three tournaments in the fall where pros from both tours will compete for playing privileges on the PGA Tour the following year.
For those players strong enough to go straight to the PGA Tour, equipment deals typically are the first and often the only deal young golfers sign when turning pro. Most equipment companies sign a handful of new pros each year with the expectation that the highest-rated players will start immediately on the PGA Tour, where the exposure will be maximized in front of TV audiences on NBC and CBS, as well as the largest galleries.
In the early 2000s, the top amateurs turning pro could get multiyear equipment deals that paid as much as $2 million a year over multiple years. Now, top players will get in the neighborhood of $250,000 to $750,000 a year when they turn pro, industry experts said. Players who are good, but not great, may get in the neighborhood of $250,000 if they get their PGA Tour cards but as little as $25,000 to $50,000 a year if they don’t get a card.
“I think it’s going to be a challenge for us [to identify the best prospects] and it’s going to change the landscape for players turning pro,” Ping’s Cozby said.
Said current tour pro Rickie Fowler, who left Oklahoma State early and qualified for the tour through Q school in 2009, “You want to go straight to the PGA Tour. That’s everyone’s perfect world. Not that a year or two on the Nationwide Tour is a bad thing — it’s a great place to learn — but the unfortunate side would be not getting that direct path to the PGA Tour.”
Conventional wisdom would have it that the Sixers have been playing with house money since unexpectedly winning their first-round series against the Eastern Conference’s No. 1 seed Chicago Bulls. Whatever money they are playing with, there’s more of it thanks to a new ownership group that took control Oct. 18 from Comcast-Spectacor. Still, the team won’t be playing with a full deck until July, as that’s when it will begin selling its own marketing assets. The team’s sponsorships have been sold by a Comcast-Spectacor subsidiary for 15 years.
Sixers CEO Adam Aron expects big gains in sponsorship sales.
Photo by:NBAE / GETTY IMAGES
With sponsorships rights restored in July, the team is rebuilding a sales staff and will soon hire a new sponsorship chief who will face renewals in the beer, health care, quick-service restaurant and wireless categories, among others. Under terms of the sale agreement, TV rights remain in the hands of Comcast-Spectacor, not quite in perpetuity, but almost. As far as basketball-related advertising and inventory within the bowl at Wells Fargo Center, it’s a small base to build from, as the team’s sponsorship revenue is 6 percent of ticket revenue, leaving a lot of upside.
“We can easily do two to three times better,’’ said team CEO Adam Aron, also a member of the team’s ownership group and whose marketing résumé includes doing the United Center naming-rights deal while he led marketing at the airline.
Looking at what the team has done to build a similarly neglected season-ticket base, it’s easy to affirm Aron’s conviction that “there’s nothing but marketing upside.” Over the first season of the new ownership group — which bought the club just in time for a lockout — attendance grew from an average of 14,751 (25th in the NBA) to 17,503 (14th in the NBA), and Aron said that since comps were down considerably, the Sixers actually sold more paid tickets for a 66-game season than for the prior 82-game season, even with lockout-related scheduling peculiarities like 13 home games in January and the last five regular-season games on the road.
The season-ticket base for next season has increased from 3,294 to 5,438, and Aron said that number should be at or around 6,500 by opening night of next season. Revenue per seat has increased due to rescaling and the reduction of rampant discounting and comps.
The team in July will move into its own office space at the old Philadelphia Navy Yard while maintaining its offices at Wells Fargo Center. Also on the to-do list is building a practice facility to replace the one at Philadelphia College of Osteopathic Medicine, where, until recently, players competed with students and faculty for parking spaces. Aron said ownership is committed to building a new practice gym, which would cost between $10 million and $30 million. “I’d be surprised if we’re not in the design phase of that by fall,’’ Aron said.
Of course, that would also be an important new piece of sponsorship inventory. We’ll be intrigued to see what happens once the Sixers are more fully armed — on and off the court.
Tony Ponturo (right, with Magic Johnson and co-producer Fran Kirmser) isn’t giving up on sports-themed plays.
Photo by:TERRY LEFTON / STAFF
“We’re trying to create a new space, which is never easy, but we still think there’s opportunity there,” Ponturo said, adding that he believes there’s still ample licensing opportunities for both earlier plays. “Lombardi,” for example, had an eight-week run in Milwaukee and will be performed later this year in Cleveland, Dallas and Phoenix.
As for lessons learned after two efforts of what Ponturo hopes is a developing genre? “You need to give the audience something they don’t get every day from ESPN or whatever, and while sports are primarily local, you have to have a subject relevant enough to be larger than the story and national in scope,” he said.
In an ideal scenario, a third sports play from the Kirmser Ponturo Group could be on the stage in as soon as 18 months.
Terry Lefton can be reached at email@example.com.