SBJ/January 14-20, 2013/Marketing and Sponsorship

Persistence pays off as MLB and T-Mobile overcome complexities of partnership

Last week’s announcement of T-Mobile’s three-year Major League Baseball sponsorship had all the glitz, glamour and noise one expects of a news conference at the International Consumer Electronics Show in Las Vegas.

Elaborate setting featuring a prototype of T-Mobile cellphone docking stations that will be in MLB ballpark dugouts and the motorcycle from the company’s TV ads? Check. Star power from NL Rookie of the Year Bryce Harper? Check. Fun bluster from new T-Mobile Chief Executive John Legere, who went on a long, entertaining rant on his intent for the country’s fourth-largest wireless carrier to challenge market share leaders AT&T, Verizon and Sprint? Check.

But all that belied just how difficult it was to piece together baseball’s first league-level telecommunications deal in 15 years, and how important the deal is for the sport. The pact, pegged by industry sources at $125 million for the three-year term and roughly a year in development, gives T-Mobile designation as the official wireless sponsor of MLB. The deal also includes extensive rights with MLB Advanced
The deal brings the advent of mobile phones in dugouts to call bullpens.
Media, and T-Mobile will aid efforts to improve in-venue mobile connectivity for fans (see related story).

T-Mobile also will make marketing commitments and advertising buys with MLB rights holders, including a new deal for T-Mobile to become the presenting sponsor of ESPN’s “Wednesday Night Baseball.” The national deal will be supplemented by five or six signature-level club deals, company executives said. T-Mobile is already aligned with the Seattle Mariners and Pittsburgh Pirates.

The pact also brings the advent of mobile phones in MLB dugouts to call bullpens. Teams will have the individual choice on whether to use those mobile phones, and whether the docking stations will carry T-Mobile branding. League executives described the deal as without rival with regard to its scope covering both baseball and business operations.

Telecommunications has long been a vital category in sports marketing, often ranking in importance with the established pillars of auto, beer, soda and financial services. But in baseball, the separate operating structure of MLBAM and the importance of the wireless category to individual clubs made piecing a deal that combined marketing and technology, and that balanced the agendas among all the national and local stakeholders, extraordinarily complex.

Still, Lou Koskovolis, MLB senior vice president of sales and marketing, aggressively targeted a telecommunications deal soon after his arrival to baseball in early 2011, and the league began a long negotiation toward a deal. Genesco Sports Enterprises aided T-Mobile in the talks.

“The technological challenges on this deal were huge, but this is a story of everyone working together to deliver a new asset that would attract a new and important wireless partner after years of chasing one,” said Tim Brosnan, MLB executive vice president of business. “Most of our fans are using mobile communications to connect with the game, and we developed a great platform with MLBAM to showcase that, along with a dugout [branding] presence which really works for advertisers in a space we protect zealously.”

The deal also marked a union between the cultures of MLB and MLBAM, making a statement to marketers who over the years have privately been frustrated trying to make deals with baseball.

“Honestly, there’s still a part of me that still can’t believe the marriage worked,” between Brosnan and MLBAM President Bob Bowman, said one involved marketer speaking on the condition of anonymity. “It’s a testimony to persistence on many sides of the deal.”

MLB had timing on its side as it sought a telecommunications deal, just as T-Mobile was looking to make a big statement of its own. After a failed merger with AT&T, a dissolution of its NBA ties after six years and a newer merger with Metro PCS, T-Mobile is aiming to use 2013 as a major corporate repositioning as the self-proclaimed “uncarrier” in which it will seek to offer cell service without many of the common industry hassles and contractual constrictions.

The MLB partnership is a major part of that plan.

“Our objective is improve perception of T-Mobile’s network in the marketplace,” said Mike Belcher, T-Mobile vice president of media and sponsorships. “This is a great way for us to bring the capabilities of our network and devices using MLB content. Most people only know about 5 to 10 percent of what a phone can do, so at retail it is a great way to help sell for us.”

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