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SBJ/January 7-13, 2013/Leagues and Governing BodiesPrint All
The ATP is greatly relaxing restrictions on advertising on players’ apparel, roughly doubling the number of corporate logos they can wear, increasing the allowable size of the brand images and partially lifting the ban on gambling companies.
The new rules went into effect last week, and John Isner is one player poised to take quick advantage of the changes. Isner is expected to feature a logo from a supplements company on his cap during a tournament in Australia this week as part of a new endorsement deal.
A mockup shows how a hat logo might appear.
Image by:LAGARDÈRE UNLIMITED
“We have always wanted the rules to be loosened,” said Sam Duvall, Isner’s agent at Lagardère Unlimited. “It was not easy with only two corporate sponsors [allowed].”
The moves make the ATP more like golf. The PGA Tour’s rules state, “As a guideline, no more than four different sponsor logos should appear on a player’s clothing and headwear,” though the golf circuit also has allowances for slogans and words.
“By no means do we want to become walking billboards like NASCAR,” said Justin Gimelstob, a former player and a member of the seven-person ATP board of directors that signed off on the changes. “[But] from a player’s perspective, we need to let them monetize their brand.”
In addition to the newly allowed headwear logo, which must be on the side of the cap, players now also can sell one space on the front of their shirts. The new rules allow players to sell an additional spot as well, on the back of the shirt by the collar, but that company must be an existing ATP sponsor.
As for the ATP’s other changes, players for the first time will be allowed to sign deals with gaming companies, though only if those firms do not take bets on tennis; and the new size rules allow for sleeve logos to grow from 4 square inches to 6 square inches.
The newly allowed shirt-front space is limited to 4 square inches.
Tennis long has sought to project a clean look, thus the rationale behind the limitation on patches, and the new ATP rules only go so far. They do not apply to the Grand Slam events, the first of which, the Australian Open, starts next week, and the WTA Tour’s policy continues to mirror the old ATP rules, allowing two commercial logos only on sleeves. Still, that leaves 61 ATP events, plus the season-ending championships in London, for new exposure opportunities.
The policy change was needed because while the top players are doing well financially, Gimelstob said, the ones ranked below roughly 20th need more financial opportunities. Gimelstob pushed for a more aggressive policy, including allowing the headwear logo on the front, not the side. Board members representing tournaments resisted that in part out of fear of conflicting with their own event sponsors.
David Dean, vice president of sales and marketing at Star Scientific, which was scheduled to announce the Isner supplement deal today, said the side is fine.
“I don’t think it matters, if he is wearing the hat and moving around,” Dean said.
Star Scientific, whose anti-inflammatory brand Anatabloc will be featured on Isner’s cap, expects to enjoy wide exposure both on and off the court because Isner usually wears his headwear away from play, Dean said. The new ATP rules do prohibit Isner from wearing the cap during on-court ceremonies.
Isner is receiving shares in Star Scientific, which is listed on Nasdaq, but no cash for the deal. The endorsement is valued similar to a sleeve deal, which for a player like Isner ranked in or near the top 10 would fetch a mid-six-figure sum annually.
How much players might benefit, in total, from the rule changes varies widely. For elite players like Isner, and players from larger markets, the new space should be a boon, bringing in potentially millions of dollars more than they otherwise would have gotten under the old ATP policy. Many other players, however, struggle to sell the space they already had been allotted, so the degree to which the changes will help the lower-ranked players Gimelstob wants to aid is less certain.
The NBA has hired former Goldman Sachs partner Jason Cahilly as the league’s executive vice president of strategy and chief financial officer.Cahilly left Goldman Sachs in June. In his nearly 12 years at Goldman, he advised the league on deals including the creation of NBA China in 2008. On the team side, he was involved in the sales of the Washington Wizards, Cleveland Cavaliers and former Seattle SuperSonics.
Cahilly replaces Carol Sawdye, who left the league in October to become chief financial officer and vice chair of PricewaterhouseCoopers. Cahilly begins his new job Jan. 14.
Cahilly, 42, will report to NBA Deputy Commissioner Adam Silver and will oversee the league’s financial affairs and business planning as well as the financial dealings between the league and its 30 teams.
He also was involved in several of Goldman’s major media deals, including General Electric’s sale of NBC to Comcast, and has worked on deals involving Time Warner, Anheuser-Busch and Yahoo.
“I have known Jason for more than a decade, and over the years he has provided [the NBA] advice and insight on a number of domestic and global opportunities,” Silver said. “He has deep experience on the team side as well and is a proven leader with financial management experience across the media and communications industries.”
The NBA did not use a search firm for the hire.
While Cahilly was familiar to Silver and NBA Commissioner David Stern prior to taking the job, he also was interviewed by team owners on the league’s audit committee.
“What attracted me to the league is that it is an amazing global media company that under David and Adam has enjoyed tremendous value creation and yet you can see substantial value increase over time both domestically and globally,” Cahilly said.
The NFL is bringing back its Super Bowl hospitality venue, NFL House, for a second year.
The high-end spot for corporate sponsors and other NFL business partners, run in conjunction with Sportsmark, returns with a larger footprint and some outdoor space, given New Orleans’ warmer climate compared with Indianapolis, last year’s Super Bowl host.
A rendering shows NFL House, which will be in the warehouse district of New Orleans.
While NFL House will keep its hours of noon until 2 a.m. from the Thursday through Saturday of Super Bowl week, morning activities have been added, included spinning and yoga classes, along with a blow-dry bar and hot-towel shaves. A game room returns for sponsors and licensees, and a car service has been added. Naturally, the food is New Orleans cuisine.
Additionally, “House” privileges now can be used outside the venue for its subscribers, at least to some degree. NFL House subscribers get a reserved table and gratis meals at a nearby restaurant, space at the World War II Museum and reserved places at Café Du Monde for the traditional morning coffee and beignets — presumably before spinning class.
“The idea was to show that membership had privileges, which can also travel,” said Frank Supovitz, the NFL’s senior vice president of events.
Player appearances continue, along with a fun run with players scheduled for Saturday. A merchandise store from last year has been converted to merchandise sales via tablet this time around.
Following the disastrous Super Bowl in Dallas two years ago, the NFL introduced the premium concept in November 2011 and eventually it sold out the space for the House’s 2012 debut. Supovitz said the buzz from last year’s NFL House at Union Station in Indianapolis was enough that deposits were being taken the day after the last Super Bowl, and a waiting list indicating a sellout (around 1,000 passes) was assured by April. Pricing has increased this year, as it is now $450 for a one-day pass and $1,200 for a three-day pass, compared with $400 and $1,050 last season.
“The concept is resonating,” said Keith Bruce, president of Sportsmark, which has done similar hospitality houses at the Olympics and other big sports events. “We wanted it to be like a b-to-b hotel lobby where you could meet people you wanted to talk to whether or not you knew they were going to be there.”
NFL corporate sponsor Verizon is the presenting sponsor of NFL House and will have a branded charging station, along with product demonstrations. New league sponsor Lenovo will also support by showcasing its convertible tablets and PCs.
Editor's note: This story is revised from the print edition.
Nearly sold out of its title sponsorships, the PGA Tour is placing big bets in 2013 on new inventory that will come from bringing its digital operations in-house and expanding into territories outside the U.S.
The tournament in Tampa is the only PGA Tour event without a title sponsor in 2013, and the rest of the 45 events are sponsored through at least 2014, giving the tour’s sales staff a unique window this year to develop its new properties in Latin America and Canada.
It also comes at a time when the tour is building out its own digital division, which was previously managed by Turner Sports until Dec. 31.
Tour sponsor FedEx extended its deal in 2012. The brand also sponsors the tour’s stop in Memphis, a deal that will come up in 2014.
Photo by:GETTY IMAGES
“Now we’re going to have a unified app for all of our tournaments,” said Jay Monahan, the PGA Tour’s senior vice president for business development. “The user experience will be significantly improved, there will be better mapping technology and it will do more for live data and scoring. I can’t say too much about it yet, but that will be coming in 2013.”
Part of the tour’s new digital inventory will come from the simulcast of each tournament, which was part of the tour’s most recent media rights agreements. Essentially, the CBS, NBC or Golf Channel broadcast will simulcast on PGATour.com and other digital outlets for the first time. With that will come additional exposure for title sponsors and new inventory for the tour to sell.
PGA Tour telecasts on NBC and Golf Channel will be simulcast on a co-branded video player that users can access via PGATour.com, GolfChannel.com and their branded platforms. A similar arrangement will exist with telecasts on CBS where a co-branded video player will simulcast the telecasts for visitors of both PGATour.com and CBSSports.com.
The tour had hoped to begin the simulcasts at last weekend’s Hyundai Tournament of Champions, but it wasn’t ready yet. The tour said it plans to have the simulcast up and running early this year, but the look and feel and commercial inventory could not be determined.
The tour’s run of sales success in the last two years has prevented any erosion from its tournament schedule or its revenue through difficult economic times. Sales and marketing revenue steadily grew in the single percentage points in 2011 and ’12, the tour said.
In 2012, when 11 title sponsor deals were set to expire, the tour renewed 10 of them. Transitions Optical, the sponsor in Tampa, was the only one that didn’t come back. Yet another title sponsor, AT&T, signed on for the Byron Nelson Championship in 2015 and ’16. Those title sponsorships go for $6 million to $8 million a year for tournaments that are televised by CBS or NBC. Roughly half of that money goes to the networks for advertising and the other half supports the tournament.
Additionally in 2012, the tour extended FedEx’s hefty deal, re-signed MasterCard, brought in new tour partners in Avis and Aflac, and found Web.com to replace Nationwide on the developmental tour.
“The tour has done an amazing job of selling their assets in both difficult times and prosperous times,” said Kevin Ring, vice president in IMG’s consulting division. “They’re in such a strong position in North America that they can start going into Latin America and other places because there’s not a lot of inventory available [domestically]. The tour is in a truly enviable position.”
Expansion has followed the tour’s success domestically. The new Latinoamerica tour launched in September, while PGA Tour Canada will embark on its first season under the tour’s management this year.
That means the challenge in 2013 will be selling new umbrella sponsorships for series that don’t have a proven track record. Those umbrella deals, which will offer brand integration into the logo for those developmental tours and a slew of media and on-site assets, will sell for $3 million to $4 million a year, according to industry sources, and are being sold internally by the tour’s sales team.
“More brands are finding our international footprint and our international TV distribution to be a strength of ours,” Monahan said. “We’re talking to more domestic companies that are looking to expand internationally, and to international companies as well. … We’re spending a lot of time talking to companies in the market for those two tours. Those include domestic businesses that are looking to grow into those markets, as well as companies that are based in those markets. Finding the right umbrella sponsor for those two tours is a big priority.”
Zajac said the tour has effectively developed a global brand for a property that is almost exclusively U.S.-based. The World Golf Championship events, new tournaments in Asia and a growing number of international stars playing on the PGA Tour has contributed to that.
“One of the things that’s particularly attractive to many sponsors is the global impact of the tour, especially when you consider nearly 50,000 broadcast hours going out to more than 200 countries outside the U.S. each year,” Zajac said. “Continuing that global relevance is important.”
Only Hyundai’s deal for the season-opening Tournament of Champions expires this year. Going into the tournament last week, the tour characterized those negotiations as ongoing. Even if Hyundai doesn’t return, SBS, a second-level sponsor, is signed through 2019 and would take over the title sponsorship, meaning the tournament would remain on solid financial footing.
Zajac said the new long-term broadcast deals with CBS and NBC through 2021 allow the tour to “get out in front of renewals and wrap up sponsors for longer terms.”
“The tour has done a good job of effectively building beyond the things you could always count on — an audience rich with business decision-makers, a positive image for the sport, and a great charitable story,” Zajac said. “It was only two years ago that top guys like Lee Westwood and Rory McIlroy wouldn’t take up a PGA Tour membership. Now, they’re all members.”