SBJ/April 8-14, 2013/Opinion

How sponsorship shifts; backing the business side

A few insightful and fun comments I picked up while attending the Business of Sports Summit in Atlanta late last month, presented by affiliated publication the Atlanta Business Chronicle and the Atlanta Sports Council:

• Atlanta Mayor Kasim Reed opened the event by praising the private/public partnership for a new $1 billion facility for the Atlanta Falcons that will include a public contribution of up to $200 million. The building is scheduled to open in 2017. “This will be a transformational project for this city,” he said. “We want Atlanta to be known as a city that embraces the business of sports. It is really part of our core business.”

• There was a strong opening panel looking at corporate sponsorship in sports. Mark Gambill, Home Depot vice president of integrated media and marketing, had a smart take on building out sponsorship programs to be accessible to broad ranges of the population. He said that too frequently certain demographics are ignored. “I’m a huge sports fan and enthusiast,” he said, “but too often, brands ignore people like me. We were in a meeting recently, and my team was talking in wonkish terms about, ‘Well, we need to reach the 18-to-34 demo.’ I’m like, ‘Wait. I am 45 and I am probably more psychotic about my sports and my teams, and I can actually afford to be more psychotic. So we can’t ignore people like me.’”

In looking at how sponsorship has changed over the years, Gambill pointed directly to social. “You can really extend the experience now, but the companies that don’t get it right in this space are an annoyance,” he said. “The great thing about social is that, as a brand, you can interject a personality, so you can move your personality a bit without the CEO pulling me into his office.”

• The marketing session frequently included use of jargon, like “cross-department functionality.” When someone finally asked Daryl Evans, AT&T’s vice president of consumer advertising and marketing communications, what that meant, he offered his clever, dry delivery and said, “Well, it’s just multiword corporate talk for a bunch of people working together.”

Evans had a few other interesting points. In talking about content creation, he stressed that brands need to stick with what they do best, adding, “When we have tried to produce our own content, we haven’t been happy with ourselves. We are not producers, so that is where we see the value in being with the properties and using their content.”

And who’s got a larger role at the table in today’s sponsorship discussion at the brand level? Evans noted a few groups, including the AT&T U-verse executives, have “added a new element to our sports sponsorship discussion.” But he mentioned a familiar group playing an even larger role. “The lawyers have a bigger and bigger role — more than ever than I can remember,” he said. “Especially as we move into the digital and social worlds and the complicated use of IP.”

Evans echoed a familiar theme we hear, referring to the rapid pace of change, especially with today’s technology. “The iPad has been around only for 39 months, and look at how that’s changed the world. How do we plan for Rio for instance? What will Twitter be like then?” He used that theme to make a familiar plea to properties: “Help us build flexibility into our programs and abilities to revisit our deal terms so we can take advantage of things we don’t even know are coming.”

• Gambill’s advice to properties: “Come to us with ideas. More ideas. We are a big test-and-learn company. Don’t just give us the, ‘Well, it worked well last year; we should probably do it again.’ No. We love new ideas.”

Rich McKay, with Bob Williams, Atlanta Hawks and Philips Arena president, said Falcons owner Arthur Blank emphasizes listening to the customer at all times.
Photo: BYRON E. SMALL
• As many of you know, Atlanta Falcons President and CEO Rich McKay is one of the most well-respected executives in sports. Every time I hear him speak, I pick up something new and admire his forthrightness. On a panel of team executives, each was asked about ownership’s day-to-day role, and McKay discussed how involved Arthur Blank was in the Falcons. He said Blank was very involved in the first five years on changing direction and culture. Now, he’s more strategic. But McKay also noted the consistent emails, asking and probing from Blank. “Arthur is continually questioning, ‘Why are we doing this? Why are we doing that?’,” McKay said. “He also stresses that we must listen to the customer all the time. We may be in a meeting, and he’ll ask a question, and either me or Jim Smith [Falcons vice president and CMO] will say, ‘We think it’s because of … ’ And he’ll always say, ‘I don’t care what you think. What does the customer think?’ And that will drive us back to talking directly to the customers, because you can’t go wrong when you listen directly to them.”
 
McKay also shared a note from a recent discussion by CBS President and CEO Les Moonves, who talked to the league and teams and offered as much support as possible to them in terms of helping ticket sales — a major challenge to many teams. Said McKay, “He told us, ‘We want your games to be sold out. It doesn’t do any of us any good to broadcast your games that aren’t sold out. We want to help you and will do whatever we can to help you sell out your buildings.’”

Derek Schiller, executive vice president of business operations for the Atlanta Braves, talked about Liberty Media’s ownership of the team. “We have the best of all worlds,” he said. “We have a company with deep resources that allows our people to run the baseball team. There is this perception that they are not as committed to ownership — when it is the exact opposite in that they let people like [Chairman and CEO] Terry McGuirk and [President] John Schuerholz run the team and offer them all the support they need.”

• The topic of signing players came up, and Schiller earned points in my book by being outspoken about the need to raise revenue. “My job is to raise as much revenue as possible so that the baseball side can afford the best players that they need to help our team be successful,” he said.

Good for him. Too often teams are apologizing for focusing on the business side of their efforts. That’s ridiculous, and teams need to be more open about putting emphasis on the business side. That’s why it was refreshing for Boston Red Sox owner John Henry to finally come out strong in an emailed interview with the Boston Herald recently and support his business side, which has been criticized for being the predominant focus of the franchise. “There is this perception that Larry [Lucchino] is focused on revenue — that the three of us are. It’s one perception that is true. And there is good reason for it. Any major league club that doesn’t do everything it can to intelligently generate revenue, isn’t doing everything possible to generate a payroll that can be successful over the long term. … Revenue isn’t the only ingredient in winning championships by far. But if you don’t have very strong revenues you can only compete periodically. It’s common sense.”

More and more teams need to be more effective in getting this type of messaging out in their marketplace.

Abraham D. Madkour can be reached at amadkour@sportsbusinessjournal.com.

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