SBJ/June 11-17, 2012/Marketing and Sponsorship

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  • IndyCar offering deal to eventually replace title sponsor Izod

    The IndyCar Series has begun searching for a potential replacement for its title sponsor, Izod, three years before the sponsorship is set to end.

    IndyCar executives have approached current series sponsors and brands about becoming the presenting sponsor of the series in a deal that would make them title sponsor at an undetermined date. The series’ top executives have approached Verizon and Firestone, two of its existing partners, and one company outside its collection of sponsors with the proposal.

    IndyCar's international ambitions have lined up with Izod's efforts to increase its sales outside the United States.
    Photo by: GETTY IMAGES
    “What we’ve given them is a presenting [sponsorship] that rolls into a title,” IndyCar CEO Randy Bernard said. “I’d like to see us have a presenting sponsor by next year.”

    Bernard said that the series still has a long-term deal with Izod that runs through at least 2015 and added that the sales effort is designed to prepare the series for the future by helping IndyCar secure long-term sponsorships in the technology and tire categories and the funding it needs to expand the number of races it holds.

    “IndyCar and Izod have and have had a great relationship,” Bernard said. “I look forward to working with their senior management in the future.”

    Izod executives were not available for comment.

    IndyCar’s search follows an executive change at Izod parent company Phillips-Van Heusen Corp. Longtime President and Chief Operating Officer Allen Sirkin, who championed the IndyCar deal, is retiring. Sources familiar with the company say his replacement as chief operating officer, PVH Chief Financial Officer Michael Shaffer, has been less enthusiastic about the more than $60 million deal Izod signed in 2009.

    The change in executives has coincided with a general decrease in Izod’s marketing support of the IndyCar Series.

    It is still doing autograph sessions at Macy’s stores in race markets and running a marketing campaign on Facebook that asks fans to vote for their favorite IndyCar T-shirt. But Izod has curtailed some of the more elaborate marketing initiatives it undertook in 2010 when it shut down Hollywood Boulevard for a pre-race party and installed Indy 500-winning cars at Macy’s in New York, Chicago and Indianapolis. This year, Izod also eliminated the Indy 500 kickoff party that it hosted with GQ in 2010 and with Spin magazine in 2011.

    Izod is in the third year of a six-year agreement that included two options for two-year extensions that would take the deal through 2020. Sources familiar with the deal said the company pays approximately $6 million to the series annually in rights fees and spends an additional $5 million annually on media and activation.

    The company has a minimum of three years left on its deal. Bernard would not say whether Izod would fulfill that obligation.

    IndyCar currently is pitching a multiyear, presenting sponsorship deal priced in the high seven figures plus an advertising commitment to its broadcast partners, ABC and NBC Sports Network. If Verizon or another company bought the presenting sponsorship, the series would be known as the “Izod IndyCar Series presented by Verizon” or whatever the company’s name is, Bernard said. He added that Izod is aware of the pitch but declined to say whether or not Izod’s financial commitment to IndyCar would change if the series finds a presenting sponsor.

    “That’s between us and Izod,” Bernard said.

    The series’ search for a new potential title sponsor comes at a difficult time for Bernard. Just days after this year’s Indianapolis 500, he tweeted that an owner was pushing to get him fired. Later that week, the series’ race in Michigan required a two-hour delay to repair a crumbling track surface.

    Before landing Izod in 2009, IndyCar had been without a series title sponsor since 2001. The series pitched Izod’s parent company, PVH, on the deal for almost a year before the brand agreed to the sponsorship. PVH executives Sirkin and Mike Kelly, executive vice president for corporate marketing, liked the fact that the series had fewer sponsors than other sports and ambitions for expanding internationally into Brazil, China and possibly India. Izod was looking to increase its sales overseas at the time.

    In the first year, Kelly and his team at Izod viewed the title deal differently from a typical sports sponsorship. In their eyes, it gave them ownership of the sport and made them as invested in growing the series as Bernard.

    Kelly touted the series’ addition of 14 sponsors in Izod’s first year and double-digit increases in brand awareness as evidence the sponsorship was working.

    Izod expanded to China last year, and Kelly pushed Bernard to take IndyCar there as a way to raise the brand’s awareness. IndyCar signed an agreement with a race promoter in Qingdao. Now that race, set for Aug. 19, is in doubt (see related story), much like the future of Izod’s sponsorship of IndyCar.

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  • Kings sponsorship wears well for jersey seller

    MeiGray Group, a game-worn jersey seller and authenticator, this NHL season became the first company of its kind to sponsor the practice jerseys of a major league sports franchise in the United States.

    Other NHL clubs, and teams in other leagues, have signed deals of their own in recent years that give partners practice-time exposure — a group that ranges from the Tampa Bay Lightning (Dex Imaging) to the St. Louis Rams (American Airlines and, more recently, ContinuityX). But in MeiGray’s case, the timing of its application to get more involved with a club’s jerseys could not have been better.

    MeiGray Group is the practice jersey sponsor for the Los Angeles Kings.
    Photo by: GETTY IMAGES
    The Los Angeles Kings have been wearing MeiGray’s logo on their practice jerseys from training camp through the Stanley Cup Final.

    “It’s about branding and a partnership,” said MeiGray President and COO Barry Meisel, a former sportswriter who started the company with Bob Gray in 1997. “It might not bring a lot of business directly, but it’s a really great thing for us to be part of. Those jerseys have been seen by a lot of people this spring.”

    The Kings are one of eight NHL clubs that license MeiGray to control the selling of their game-worn jerseys. MeiGray also represents the New Jersey Devils, this year’s Eastern Conference representative in the Final. In addition, MeiGray handles the jerseys for the NHL at premier events such as the Winter Classic and Heritage Classic.

    In its 15 years of existence, the Branchburg, N.J.-based company has sold more than 29,000 jerseys. MeiGray also has deals with the Dallas Mavericks, Texas Rangers, Philadelphia Eagles and USA Hockey.

    “We chose to partner with MeiGray because they are the leaders understanding this market,” said Kings COO Chris McGowan. “As our team improved on the ice, we wanted to make sure we got the proper value for Kings-related items. MeiGray helps us achieve that goal with our game-worn jersey program.”

    Meisel was a sportswriter for 19 years, mostly with the New York Daily News, before starting MeiGray. An avid collector even as a reporter, he acquired a jersey each season from a player with one of the teams he covered, including the Devils and the New York Giants, Rangers and Islanders.

    He ran the idea for the game-worn jersey business by two hockey general managers, Lou Lamoriello of the Devils and Neil Smith of the Rangers. Both provided encouragement.

    “Lou and Neil are both very successful, having won Stanley Cups, but are two completely different people when it comes to their approach to business,” Meisel said. “I figured if they both gave thumbs up, we might be on to something.”

    Although MeiGray has competitors like New York-based Steiner Sports, its biggest competition comes from the teams, which often choose to sell their own game-worn jerseys. Meisel’s goal is to convince teams of the value to collectors of having a third-party authenticator. Some teams leave MeiGray and come back, as the Kings did this season after partnering with MeiGray from 2002 to 2009. Meisel said this year was the first of a multiyear deal with the Kings but declined to share additional details.

    While many game-worns are sold on the MeiGray website, Meisel has developed such a large Rolodex of fanatical customers that many jerseys are sold at his asking price before they are made available online.

    In New Jersey and Los Angeles for the Cup Final, Meisel inspected the serial numbers sewn on the inside of each home and road jersey before the series began. After the Kings defeated the Devils in Game 3 last Monday to go up 3-0 in the series, Meisel was just outside the locker rooms, confirming the serial numbers and collecting the jerseys of the two teams.

    Once a team won three games in the Final, the first set of jerseys went to MeiGray. The second set, worn until the end of the Final, becomes the property of the clubs.

    MeiGray has had no trouble finding takers. The Cup Final jersey worn in Games 1 and 2 at Prudential Center by Martin Brodeur, the future Hall of Fame goaltender of the Devils, brought in the most money as of last week: It went for $17,500. The home and road jerseys of Kings goalie Jonathan Quick were sold for $7,500 each.

    “Having two of our partners in the Cup Final,” said Meisel, “has been the capper of a very good season.”

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  • Basketball shoes for dancing, not dunking

    Over the years, the marketing appeal and athleticism of NBA stars have established and later made fortunes for footwear brands, from Chuck Taylor and Converse to Michael Jordan and Nike. Now, a decidedly different type of shoe manufacturer is aligning with the league, which has granted it a license to make NBA-logoed women’s dress shoes.

    The licensee is Herstar, an Orlando company founded last October, which describes its mission on its Facebook page as one of “adorning sports fans in fashion forward and sexy sports attire.”

    It is offering two shoe styles available with NBA team logos. A microsuede pump with a four-inch heel sells for $99.99. For $249.99, it’s offering a “crystal pump” with a six-inch heel. Initial distribution is limited to the company’s website. Herstar also offers shoes with logos from the universities of Florida, Alabama and Miami.

    Though NFL licensing chief Leo Kane said the NFL has not licensed Herstar, the company is offering potential customers the opportunity to join an NFL product waiting list for a small fee, somewhat similar to NFL teams’ waiting list for season tickets. Earlier this year, NFL sock licensee For Bare Feet launched team-logoed heels and boots (SportsBusiness Journal, March 12-18).


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  • Local MLB TV deals give brand national platform

     For Subway CMO Tony Pace, one of the most efficient ways to make a national media buy is to go hyperlocal. And the best way for Subway to go hyperlocal is to attach its brand to local telecasts of MLB teams.

    That’s why Pace — through Subway’s media buying agency MediaCom — cut a deal with the Fox Sports-owned sales unit Home Team Sports to advertise in the local telecasts for all 29 U.S.-based MLB teams. HTS sells national ads around MLB, NBA and NHL games for most regional sports networks, whether they are operated by Fox or not.

    The yearlong deal is valued in the mid-seven-figure range. Though the ads will appear locally, the spend comes out of Subway’s national budget.

    Photo by: CATALYST

    KEY DECISION-MAKERS

    Tony Pace, CMO, Subway

    Martin Blich, Managing Partner, MediaCom

    Kyle Sherman, Executive Vice President,
    Home Team Sports

    Stephen Ullman, Regional Vice President,
    Home Team Sports

    “Many of our local markets buy their local team,” Pace said. “But we thought there was an opportunity to weave together all of those relationships by working with the folks at Fox across all of the team relationships that they have. We look at it as an unwired network.”

    The campaign will feature in-game and postgame activation. Subway also will be presenting sponsor of the FSN series “The Boys in the Hall.”

    “To us it delivers the kind of national audience size that we want and it complements what our local markets are already doing,” Pace said.

    The deal represents an increase in media spending for Subway. The brand is not cutting back on its national budget and had a big presence, in particular, during the NBA playoffs on ESPN and TNT.

    But the deal also shows how Fox is trying to use its local markets to create a broadcast-style national network by grouping together all of the regional sports networks. The HTS pitch to Subway is that a deal would give national reach, while tapping into the passions of the local fan bases.

    “Most people who own a local franchise can’t afford to buy 150 Yankee games,” said Stephen Ullman, regional vice president of strategic partnerships with HTS. “If you own 10 Subways inside Pittsburgh and Subway has an ad running on the ESPN Yankees-Red Sox game, how does that help you? It doesn’t help you at all. The guys that come into your store may watch ESPN, but nowhere near the amount of people who are wearing Penguins and Pirates hats.”

    HTS has sold similar seasonlong national schedules to brands like Aflac, AT&T, Geico and MillerCoors. But what makes the Subway deal unique is an online aspect that attaches Subway to a dedicated part of FoxSports.com centered on “The Boys in the Hall,” which features profiles of current and future hall of famers, polls and fan forums. Subway’s brand also will be attached to elements around the series on Facebook and Twitter.

    KEY DEAL POINTS


    Subway buys ad time in local telecasts for all 29 U.S.-based MLB teams.

    Cost is in the mid-seven-figure range.

    Campaign features in-game and postgame activation.

    Subway messaging gets integrated into FoxSports.com’s “The Boys in the Hall” series.

    “We think that’s a perfect fit for one of our marketing approaches, which is this notion of ‘Where Winners Eat,’” Pace said. “We wouldn’t have gotten those kinds of things done if we just did local deals in the local markets.”

    Subway’s local franchisees often buy time in local sports telecasts. This buy will not stop that from happening. In fact, HTS says Subway opts not to run national spots in specific markets where local franchises already have bought time.

    HTS also promised to hold some of the national messaging out of telecasts where local franchises have bought a lot of spots. Ullman described it in similar terms as a broadcast network working with affiliates.

    “There’s always national and local working in tandem, particularly in broadcast networks,” Ullman said.

    The deal is focused on baseball. Pace said he has looked into extending it to the NBA and the NHL locally but has not made any moves yet.

    “There are some peculiarities about what makes sense for us from a seasonality standpoint,” he said. “During the summertime, it’s the sport’s Sahara Desert in terms of how you reach big numbers of people. This was a great way to do that.”

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  • After 50-plus years with Coke, Steelers switching to Pepsi

    Terry Lefton
    Coke’s Mean Joe Greene TV ad ran during Super Bowl XIV in 1980, but more than 30 years later it is still one of the most renowned Super Bowl ads. Greene was elected to the Pro Football Hall of Fame in 1987, but it can easily be argued that the ad’s fame has exceeded that of the Pittsburgh Steelers’ defensive tackle. Over time, it has grown in stature to become one of the most famous TV ads of all time — inside or outside of sports. The ad won a Clio as best commercial of the year, and in a 2011 poll, Ad Age readers named the spot their favorite all-time Super Bowl ad.

    If that ad were to be updated for the coming NFL season, however, you’d need to replace Coke’s ubiquitous contour bottle with a container of Pepsi. Pepsi is replacing Coke as the Steelers’ soft drink sponsor, ending a relationship between the red cola and the team that lasted more than 50 years.

    NFL sources tell us the deal is a decade in length and is a “Power of One” arrangement that includes salty snacks from Pepsi’s Frito-Lay unit. Pepsi has held NFL league sponsorship rights since 2002.

    The move is a 180 from what’s happening at the other end of Pennsylvania, where the Philadelphia Eagles are flipping from Pepsi to Coke, and comes at a time when more than 20 NFL team soft drink sponsorships are in play (SportsBusiness Journal, April 30-May 6).

    Joe Greene drank a Coke in the iconic Super Bowl ad, but the Steelers are making a change.
    Given the Steelers’ six Super Bowl titles and their extraordinarily large national (and international) fan base, though, flipping them from the red to the blue is akin to a Republican winning Massachusetts in a presidential election year.

    The original “Mean Joe” Coke ad from McCann-Erickson has been mimicked many times. Most recently, Procter & Gamble used Greene in a homage from Grey Advertising to the Steelers’ original ad, this time for Downy fabric softener. The ad, which ran in this year’s Super Bowl pregame show, was nearly identical to the original, save for the fact that when Greene throws his jersey as a gift, it is thrown back, because it’s malodorous. “Last time I’m doing this,” Greene says.

    Troy Polamalu reprised the role in a 2009 Super Bowl ad for Coke Zero, and the original commercial inspired a 1981 NBC TV movie, “The Steeler and the Pittsburgh Kid,” in which Greene played himself.

    Along with replacing the lines that pour soda at Heinz Field, a change-out will have to be made at the Coca-Cola Great Hall, a museum and hall of fame at Heinz Field that showcases Steeler history.

    We can’t see Coke allowing Pepsi to swap beverages in the ad as well, but there will be plenty of opportunities for Pepsi to activate its new rights. This is the 80th anniversary of the Steelers and the 40th anniversary of Franco Harris’ “Immaculate Reception.”

    BETTER LUCK: While Andrew Luck was the top pick in this year’s NFL draft, we continue to believe that Robert Griffin III will be the most marketable player among this year’s crop of incoming collegians. Griffin, chosen second overall by the Washington Redskins, recently shot a Nissan campaign in Los Angeles with some fellow Heisman Trophy winners, including Eddie George, Herschel Walker and Mark Ingram. For Nissan, lead sponsor of the Heisman Trophy, it’s a relaunch of last season’s Heisman House campaign, which ran on ESPN. The Nissan ad is one of at least three national ads RG III will have this year. The others are for Adidas and Subway. CAA represents RG III.

    Yaffe
    COMINGS & GOINGS:
    Longtime NHL marketer Ken Yaffe is hanging out his own shingle after 19 years at the league, most recently as senior vice president of international. He described the new Yaffe Sports Ventures as an agency with capabilities in global marketing, and event marketing, aiming at European companies looking at the North American sports market or vice versa. Yaffe most recently oversaw the NHL’s international media, event, sponsorship and licensing businesses and previously directed the league’s fan development and events efforts. YSV’s clients are athletic training center Athletic Republic, a 150-location chain of sport-specific training centers looking to expand into Europe and Russia, along with MIPS (Multi-Directional Impact Protection System), a Swedish company that makes a helmet technology said to reduce concussions. “Player safety is the foremost issue in hockey, and their goal is to be as much of an ‘ingredient brand’ as Gore-Tex and Intel,” Yaffe said. … Group Director Christine Brown is leaving Octagon after 13 years to join NRG as director of sponsorship. As detailed here (SportsBusiness Journal, Feb. 6-12), the energy provider has been buttressing its sponsorship portfolio lately with NFL team sponsorships accompanied by stadium buildouts with Dallas, New England, both New York clubs, Philadelphia and Washington.

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

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  • USGA signs Chevron as sponsor

    Chevron, which ended a four-year association with Tiger Woods’ World Challenge event six months ago, is back in the golf business with a corporate partnership at the U.S. Golf Association.

    The Northern California-based global energy giant will announce its new sponsorship this week at San Francisco’s Olympic Club during the U.S. Open, the USGA’s premier event.

    Neither side would comment on the terms of the deal, but industry sources said that Chevron’s three-year agreement runs $4 million a year, which includes media commitments for TV, digital and print advertising.

    Even though the USGA and Chevron just closed the deal, Chevron has TV advertising ready to run on the NBC broadcast.

    “With the U.S. Open coming to Northern California, Chevron had a keen awareness of the Open and the kind of platform that they could build on,” said Sarah Hirshland, the USGA’s senior managing director of business affairs.

    Chevron initiated talks with the USGA around the first of the year and outlined an educational experience called STEM (science, technology, education and math) that the company wanted to integrate into its next golf sponsorship.

    Having already bought a major hospitality package for the U.S. Open at Olympic, Chevron explored ways with the USGA to build its involvement into a full-fledged sponsorship.

    Hirshland said the USGA has been happy with the size of its partner program at four — American Express, IBM, Lexus and Rolex — and wasn’t looking for an additional partner. But the educational component to Chevron’s planned activation sold the governing body of U.S. golf on moving forward with the negotiations.

    “We certainly were not looking to add partners just for the sake of adding partners,” Hirshland said. “But we are open to partnerships that really have an impact and that represent an authentic fit for the USGA.”

    Chevron will debut its STEM Zone in the corporate partner pavilion where the AmEx Experience and the Lexus Performance Center also will be situated. The site will be near the clubhouse in a highly trafficked area of the course.

    The STEM Zone will be an interactive area that shows how the concepts of math, science and technology are inherent to the game of golf, linking, for example, math to the handicap system, science to course maintenance and ball flight, and technology to the TV broadcast. Fans will have the opportunity to sit in a broadcast studio, read from a teleprompter and offer commentary on golf highlights.

    Chevron has run the STEM Zone in other events, such as the AT&T Pebble Beach Pro-Am, for select youth organizations, but the U.S. Open will be the first time that the area has been open to all fans, said Glenn Weckerlin, Chevron’s global director for brand and product line management.

    Hirshland led the talks for the USGA with Weckerlin. Chevron’s agency, IMG, also was involved in the talks, which carried on through the departure of the USGA’s chief marketer, Barry Hyde, who left in April to join Wasserman Media Group.

    Hirshland said she intends to replace the position, but it will not be with the same CMO title that Hyde carried.

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