SBJ/March 3-9, 2014/Marketing and Sponsorship

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  • Tweets lead to Cheesecake Factory endorsement

    American restaurant chain The Cheesecake Factory is known for its hefty portions and four-figure calorie counts, not for its sports marketing. Agnieszka Radwanska is a Polish athlete playing a sport, tennis, with a modest-at-best visibility in the United States.

    So it might seem strange that the restaurant chain Tuesday is scheduled to announce Radwanska as its first endorser, doing so at its location in Rancho Mirage, Calif., near where Radwanska will begin wearing the company’s logo on her visor at the start of the BNP Paribas Open. The event is the WTA Tour’s biggest stop.

    Radwanska at the Cheesecake Factory’s booth at the BNP Paribas Taste of Tennis last year
    Photo by: THOS ROBINSON / GETTY IMAGES FOR BNP PARIBAS
    THE CHEESECAKE FACTORY


    Most recent quarterly results
    REVENUE: $469.99 million
    NET INCOME: $27.48 million

    Source: Company 10-Q report filed with the SEC

    “We hope it spurs conversation about, ‘What is that restaurant doing on her visor,’” said Donald Evans, the company’s chief marketing officer. “The answer is, she is one of our biggest fans.”

    The endorsement grew from social media, which will play a major role in promoting the ties between the Polish star and the American outlet. For years, Radwanska, now the third-ranked player in the world and who reached the 2012 Wimbledon final, has tweeted her enthusiasm for The Cheesecake Factory when touring in the United States. (Outside of the brand’s 181 U.S. locations, there are three Middle Eastern outlets owned by franchisees.)

    Six months ago, one of her representatives at Lagardère Unlimited, Drew LeMesurier, cold-called the company — but not for a deal.

    “Initially, I wanted to get her VIP treatment at one of the restaurants,” said LeMesurier, director of talent marketing for Lagardère. That meant cutting the waiting lines the restaurants frequently boast, and maybe some gift cards.

    It’s not an uncommon request; just ask Evans. Celebrities ranging from Justin Bieber to David Spade, and past and present NBA players such as Shaquille O’Neal and James Harden, are well known acolytes of the menu’s 250 offerings. “We help them out when they go to our restaurants,” Evans said.

    So why did Radwanska land an endorsement deal with the company — a multiyear pact totaling six figures — when there are so many other celebrity customers? Indeed, the Celebrity DBI, which measures potential endorser popularity for corporate customers, does not rank Radwanska. “We have data on 1,100 athletes,” said Kathy Gardner, a spokesperson for DBI, a unit of Repucom. “These are determined primarily by client request, and no one has asked for her yet.”

    Rendering shows logo on Radwanska’s visor.
    Photo by: COURTESY OF LAGARDERE
    Part of the answer draws from a long tradition in golf and tennis endorsements: the marketing people like the sport. Evans, who handled the deal himself, admits he is a tennis fan who played the sport competitively in high school, so when LeMesurier’s call came, he took it.

    Then there is Radwanska’s apparent sincere affection for the food and her to-date unpaid promotion of the brand. “We felt like while it is not the biggest athlete, we need to feel good about who we are working with,” Evans said.

    The Cheesecake Factory also does not rely on traditional marketing, eschewing print and TV ads for word-of-mouth and social media. That paradigm could underutilize a well-known U.S. athlete, who likely would want more cash than the company budgets for promotion. And, as in many food businesses, consumer decision-making tends to skew female, so a woman athlete fit the criteria for an endorser, Evans said.

    Radwanska is required to wear the visor with the company logo in the U.S. under terms of the deal, and she’ll have a set number of appearances. One assignment comes on July 30, which the chain is hyping as National Cheesecake Day. The heart of the deal is social media, though, and Radwanska is expected to continue her long-standing promotion.

    “She really indirectly had been an ambassador for us for years,” Evans said. “Now it becomes official.”

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  • Company will launch social media index devoted to sports

    A Dallas-based social media agency this week will unveil a sports-specific index that measures the social media power of athletes, leagues and teams.

    The MVPindex will rank them based on their social media reach, engagement and the conversation they generate. All of those factors will be combined into an algorithm that produces an MVPindex score.

    Spieth
    Nelson
    LeBron James’ MVP score, for example, can be compared with other NBA players, other athletes his age, other athletes in the Miami market, and even other teams and leagues. More than 9,000 athletes and teams from the major sports leagues, plus the Olympics, are measured.

    The company behind the MVPindex is Stout Partners, a social media consultancy co-founded in late 2012 by Shawn Spieth and Kyle Nelson. Spieth is the father of PGA Tour star Jordan Spieth.

    It was during Jordan Spieth’s climb into the top 15 in the world that agents and brands began to regularly approach his father about representation and endorsement deals. Shawn Spieth, whose background is in mobile app consulting and digital sales, found himself intrigued by how many companies remain stuck in what he called traditional media.

    “Very soon, digital advertising is going to surpass TV advertising,” Shawn Spieth said. “Most measurements are still gauged by traditional media, almost across the board. That’s where we saw an opportunity.”

    So Spieth and Nelson, a software and social media entrepreneur, began working on a sports-specific index that would measure and rank athletes and teams, based on real-time data. Several patents are pending for the formula they use.

    There are other players in the space but few with such a broad offering. Nielsen has BuzzMetrics, which measures the social media conversation around brands, and HootSuite features a dashboard that analyzes social media traffic, but neither is sports-specific. Klout has a product that scores social media influence of celebrities and other public figures on a scale from 1-100, but includes everyone from President Barack Obama to Justin Bieber. In terms of athlete rankings, The Marketing Arm produces the Davie-Brown Index, based on surveys of fans, but it isn’t a social media measure.

    Spieth and Nelson will unveil the MVPindex this Friday in a new sports segment of South By Southwest, the annual film, music and interactive festival in Austin.

    At launch, the MVPindex will have at least three clients — Under Armour, Lagardère Unlimited and TaylorMade — two of which have close ties to Jordan Spieth, the 2013 PGA Tour Rookie of the Year. Under Armour is Jordan Spieth’s apparel sponsor, while Lagardère’s Jay Danzi represents the golfer. Spieth, however, plays Titleist equipment.

    Subscriptions to the Web-based MVPindex will start at $1,000 per month for basic access. Monthly fees can go into the low five figures, depending on how specialized the client wants the information.

    The index is intended for brands and agencies to help them measure the social media power of the athletes they’re currently sponsoring or would like to sponsor. Access to the index is through a password-protected Web portal.

    “The athlete’s brand presence on social media is stronger than the brands themselves,” Nelson said. “It’s a completely new form of relationship management. It’s much harder to have interaction with a brand than a person, and the athletes who are doing it well are becoming the strongest brand influencers.”

    Stout Partners spent the last year-plus collecting roughly 20 million points of data to gauge social media reach, engagement and conversation tied to the athlete or team. Their measurements use data from the Facebook, Twitter, Instagram, Google Plus and YouTube platforms, as well as search engines.

    Those points of data range from the most obvious — retweets and followers — to keywords that determine whether the conversation around an athlete, league or team is positive or negative. The index can also break down the audience by gender.

    A comparison of James and Kevin Durant, for example, shows that James is No. 1 in overall reach among NBA players, while Kevin Durant is fourth. On Twitter, James’ 11 million followers is almost twice Durant’s. The MVPindex also indicates that 82 percent of NBA players are on Twitter, compared to 44 percent on Facebook.

    While it’s not breaking news that James ranks first in social media juice, the index makes it quantifiable.

    “The goal is to help athletes better position themselves digitally, and for brands to maximize their returns,” Spieth said. “We think it’s the first sports intelligence platform with real-time tracking for all of the major sports.”

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  • Years after bumpy rollup, SFX Sports alums reunite to remember

    At a Manhattan tavern during Super Bowl week, they gathered, the soldiers of the late ’90s SFX sports and entertainment rollup, commemorating over beer and finger food. It was a group laden with talent, yet with so many egos that perhaps it never could have succeeded in challenging the likes of IMG.

    But oh, what an all-star team.

    The Marquee Group, headed by former MSG chief Bob Gutkowski, rolled up the likes of Athletes & Artists, Alphabet City, ProServ, ISI and SMTI. SFX entered the agent business in 1998 by acquiring David Falk’s FAME agency (then managing Michael Jordan and many other NBA stars) and followed that by swallowing up The Marquee Group. The SFX shopping spree continued with the acquisition of top agents like the Hendricks brothers, Tellem & Associates and sports branding agency SME.

    At the time, you wondered if the egos of all those entrepreneurs could even fit in the same room, much less achieve any synergy. For example, Falk, then chairman of SFX Sports, had ProServ head Donald Dell reporting to him, even though the pair had a messy split when Falk worked for Dell at ProServ. “The cultures — especially of the agents — were tricky,” said Falk, who did not attend the reunion.

    E.J. Narcise talks with SFX Sports reunion organizer Brian Corcoran.
    Photo by: TERRY LEFTON / STAFF
    There’s always a question as to whether size matters when it comes to sports marketing. SFX Sports was unwieldy. ISI co-founder Fred Fried recalled being summoned to an SFX off-site gathering in Florida, restricted to senior vice presidents and above. When he arrived, there were more than 700 people.

    “I looked around and thought sports was just way too small to be important,” said Fried, now a principal at Team Services.

    To be fair, SFX achieved synergy on the entertainment side through its marriage of radio stations, concert promoters, venues and Broadway producers.

    However, on the sports side of the house, “We felt like we were sitting in the back seat,” said Brian Corcoran, who worked for ISI/SFX for more than three years and who organized the reunion, “but we had the talent for something that really could have endured.”

    Brian Mieth and Fred Fried
    Photo by: TERRY LEFTON / STAFF
    Brian Mieth
    , now vice president of sales at Icon International, came in through the ISI side of the SFX conglomeration and like his “classmates,” recalled learning so many practical lessons. “If there had been a vision other than financial, it could have been something special,” he said, “but it was just about blowing up a stock.”

    Howard Schacter, the former SFX corporate communications executive, said all those acquisitions “meant we were sprinting all day, every day.” As time progressed at that speed, “it became apparent that it was all about making us palatable to the investment community,” said Schacter, now president of DiGennaro Communications.
    Jeff Sofka worked under four different company nameplates from 1997 to 2002.

    “Now I know someone on almost any business connected to sports and entertainment,” said Sofka, an independent marketing consultant. “The lesson for me is that buying talented entrepreneurial individuals is so much different from rolling up hard assets, like radio stations.”

    Whatever can be said about the untapped potential of SFX Sports, the rollup worked as a financial play. SFX sold to Clear Channel in 2000 for $4.4 billion. By the mid-2000s, many of the SFX sports marketers had left. Some of the bigger agents, including Arn Tellem, bought their practices back.
     
    Around 14 years later, William Morris Endeavor’s recent acquisition of IMG shows that siren song sports and entertainment synergy is still driving billion-dollar deals.

    Falk says he’s discussed his SFX experiences with CAA President Richard Lovett and William Morris Endeavor co-chief Ari Emanuel, “both of who will now be slugging it out in an intergalactic battle” with competing sports and entertainment agencies.

    “The lack of a culture [at SFX] made it very difficult, and maybe I wasn’t a great manager or motivator,” Falk said when asked about what might have been, “but we had all the ingredients …”

    It all gets back to whether size and scale matter. FAME had 24 employees and 40 clients when it was acquired by SFX in 1998. Three years later, Falk was heading SFX Sports, with 900 employees and 1,100 clients. Today he has two employees and 10 clients.

    “I’m grateful to [former SFX head Robert] Sillerman, because the [FAME] sale gave me independence,” Falk said. “But these days, I’ll tell you that smaller is better.”

    The reunion bar grew noisier as the second and third rounds were served.
     
    “What’s fascinating is how everybody has flourished,” said Corcoran, now owner and president at Shamrock Sports and Entertainment. “There’s enough material here for a book. And we’re all hoping to finish writing that before this night’s over.”

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

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  • Young entrepreneur’s wood sticks make an impact in lacrosse

    From the time that Cortland Begor was selling lemonade in his front yard or reselling old textbooks and novels for a few dollars, he’s had a knack for business.

    Now a 19-year-old high school student in New Hampshire, Begor has combined his two loves — lacrosse and business — and created a company that he hopes will change the sport.

    Begor’s company is TimberStix Lacrosse, which makes wooden shafts for lacrosse sticks. He’s been selling the wooden shafts out of the trunk of his car to friends and competitors for the last few years, but this past fall he decided to formalize the process.

    Cortland Begor makes all of TimberStix’s wood lacrosse sticks, in addition to playing on Proctor Academy’s team. Managing the fledgling business gets more challenging next year when he heads to college.
    Photos by: COURTESY OF CORTLAND BEGOR (3)
    Begor, a senior at Proctor Academy, a boarding school in Andover, N.H., reached out to the school’s chief financial officer, John Ferris, who has a background in starting companies. Begor hoped to tap into Ferris’ entrepreneurial know-how. Another family friend, Morgan Salathe, assisted with Web design.

    The result was an independent study class with Begor serving as the lone student and Ferris as the instructor. The mission of the class was to start a company — TimberStix.

    “I’m a kid, so I wasn’t really sure how to get started or who I needed to talk to,” Begor said. “What I knew was that my friends really liked the wood sticks and that maybe I had a niche.”

    Most manufacturers make the shafts of lacrosse sticks from a type of metal alloy. Neither one of the main professional leagues, the indoor National Lacrosse League nor the outdoor Major League Lacrosse, play with wood sticks. Mostly, wood sticks are found at the high school and recreational level.

    Sticks made from wood mostly have been
    viewed as a vintage product with limited appeal for the high-performing players, but Begor thinks that commonly held view is changing. He sees more and more competitive players using wood on the travel circuit.

    Part of Begor’s independent study class required him to develop a brand position in the marketplace for the product. He’s also trademarked his company name and logo — “Got Wood.”

    “One of the questions Cortland had to answer was how to position this product,” Ferris said. “What started out as more of a traditional lacrosse product has changed into a high-performance stick. That will enable him to go after the college and high-end high school players that want it.”

    Begor, whose family lives four hours away from Proctor in Connecticut, started making the wood sticks as a young teen in his family’s wood shop with his older brothers.

    At first, it was just a hobby. Begor would find wood from a local sawmill, shape it, sand it and put a finishing coat on it so the wood wouldn’t swell or split. It takes him about 15 minutes to make a shaft, but he now works in bulk, making several at a time. The wood shafts, made from locally harvested ash, sell for $37.99 on his website, TimberStixLacrosse.com, which is a less expensive price point than his competition.

    Wood sticks typically offer a different feel than alloy, Begor said. While alloy is often lighter, the weight of the wood shafts deliver more punishing hits to the opponents when they’re checked with the stick.

    Begor, who plays well enough to be recruited for lacrosse by Boston College, Dartmouth and others, simply knew that his friends liked the wood.

    “It’s got a unique feel that’s hard to describe,” Begor said. “My product is designed, produced, marketed and sold by lacrosse players, so I think there’s an authenticity to it.”

    TimberStix is not the first company to market with wood sticks. Easton, Hikstik, Blue Magic and Blackfeet are among the manufacturers selling wood sticks now, so Begor is entering an increasingly competitive marketplace, where sales are almost exclusively made online.

    “All you have to do is give Cortland a seed of an idea and he will run with it,” Ferris said. “He’s got a niche business that can be profitable and he’s doing it all himself, from manufacturing to sales and marketing.”

    Finding enough time to manage his academics, athletics and run a business has been among Begor’s chief challenges.

    In addition to playing lacrosse, he’s a highly competitive alpine skier. In fact, he went to Proctor for its skiing. The International Ski Federation has a training facility on Proctor’s campus. He’s at times been forced to take business calls on the slopes.

    The balancing act will only become more challenging next year when Begor goes to college.

    That’s led him to look for ways to help the business mature. He’s seeking to outsource manufacturing so that Begor isn’t personally making all of the sticks. He’s also talking to retailers that might help distribute his product online and in brick-and-mortar stores. Right now, all sales are made on the TimberStix website or by Begor himself.

    For this summer, he’ll still be a one-man show. He intends to travel the country after graduation, selling TimberStix out of the trunk of his car at youth lacrosse tournaments. He sold more than 500 shafts that way last summer at six different events.

    “The hardest part has been just finding ways to put the product in consumers’ hands,” said Begor, whose parents have helped provide resources during the startup. “But I love the idea of the company and trying to make a statement for lacrosse. I think there’s a real movement to wood.”

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  • Unilever signs to sponsor U.S. soccer teams

    Unilever has signed a two-year deal with Soccer United Marketing for sponsorship of U.S. Soccer’s men’s and women’s national teams. The deal, which an industry source said is for $2 million a year, gives Degree, Unilever’s antiperspirant brand, the designation “official deodorant of U.S. Soccer.”

    Clint Dempsey will become Degree’s lead soccer endorser in the U.S.
    Photo by: GETTY IMAGES
    Among the activation plans is a series of documentary shorts, directed by “Mad Men” star Jon Hamm, on U.S. men’s national team forward Clint Dempsey.

    Along with Landon Donovan, Dempsey is widely viewed as one of the faces of American soccer. His signing by the Seattle Sounders last summer, after six seasons in the English Premier League, was much touted by MLS. The heavily tattooed Dempsey also is popular with fans for being outspoken and for his passion for hip-hop music.

    “Dempsey has been called ‘American soccer’s nonconformist,’ and we love that,” said Ryu Yokoi, Unilever senior brand manager. “He’s a captain and he speaks his mind. We found out that Jon Hamm was a big Clint Dempsey and U.S. Soccer fan, so he became a natural to work on these films for us.”

    Dempsey has signed a personal services agreement with Degree and will become the product’s lead soccer endorser in the United States. The video profiles on Dempsey that Hamm creates will be similar to ones that musician John Legend has directed on Golden State Warriors guard Stephen Curry for Degree’s basketball campaign. Like the Curry spots, Hamm’s films on Dempsey will be posted on the company’s digital platforms and on YouTube.

    Last week, upon completion of the deal with SUM, Degree launched DegreeSoccer.com, with Dempsey featured prominently under the deodorant’s slogan, “Do: More.” The only other element to the new site currently is a sweepstakes through which customers can win a trip to Brazil to see the U.S. men’s national team compete in this summer’s World Cup.

    During the World Cup, Degree plans to sponsor a daily video diary at DegreeSoccer.com on the American Outlaws (the large band of soccer fans who travel across the globe to attend the U.S. team’s matches) as they make their way around Brazil for the U.S. matches there.

    Fan Jon Hamm will direct documentary shorts on Clint Dempsey.
    Photo by: GETTY IMAGES
    Degree is making what a source termed a “significant” media buy of television spots for ESPN’s coverage of the World Cup and U.S. Soccer coverage on NBC and NBCSN. It also is producing branded U.S. and Mexican national team deodorant sticks and is planning point-of-sale promotions with retailers such as Wal-Mart, Kroger, Target and Costco.

    Soccer United Marketing, MLS’s commercial arm, represents both U.S. Soccer and the Mexican national team, among other properties. In 2009, Degree entered into a partnership with SUM to become the official antiperspirant and deodorant of the Mexican team. That sponsorship is still in effect. Degree also is a sponsor of MLS clubs Los Angeles Galaxy and FC Dallas.

    “This deal is truly an extension of the partnership that SUM has established with Degree and Unilever over the last five years,” said David Wright, senior vice president of global sponsorship for MLS and SUM. “Degree is known for being progressive in their marketing, and you’re going to see that with its promotion of U.S. Soccer around the World Cup.”

    Gilt Edge Soccer Marketing, the Illinois-based company founded by former Chicago Fire CEO and Octagon executive John Guppy, worked on behalf of Degree on the deal.

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  • Stryker strikes PGA Tour marketing deal

    Stryker, a joint replacement manufacturer, has entered into a multiyear marketing agreement with the PGA Tour that will include it creating exhibits for 10 tournaments this season.

    As the tour’s new official joint replacement product, Stryker will have marketing rights at select PGA Tour and Champions Tour events.

    “It’s by far the largest sports marketing program we’ve ever put together,” said Tony Cambria, senior manager of marketing communications for Stryker. Terms of the deal were not available.

    With the number of hip and knee replacements doubling since 2000, the joint replacement industry has grown more competitive, Cambria said. Stryker is one of four major competitors in the space and the company envisions the PGA Tour as a mechanism to increase market share.

    About half of all the spectators at PGA Tour events are 45 or older, and that rate grows to 71 percent at Champions Tour tournaments.

    “From a demographic standpoint, that’s a great fit for us,” Cambria said. “Stryker’s business continues to grow and with the rising need for hip and knee replacement in the coming years, we believe we are well-positioned.”

    Stryker, based in Kalamazoo, Mich., will launch a mobile display this week at the WGC Cadillac Championship at Doral that will be the cornerstone of Stryker’s activation. The Stryker Mobility Zone will be a 30 foot by 20 foot structure on the golf course designed to engage and educate fans about joint replacement. Orthopaedic surgeons will be available for questions and a putting green will add a golf flavor.

    Stryker also has endorsement deals with Fred Funk and Hal Sutton on the Champions Tour.

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  • Adidas opens prototype in China

    Adidas last week unveiled its next-generation retail store as it ramps up efforts to sell more products directly to consumers.

    The Beijing store is the model for 25 additional stores Adidas plans to open globally this year. The store features a facade that’s designed to look like an arena and an entrance that’s similar to the tunnel athletes walk through on the way to the playing field.

    The center of the store has a “shoe bar,” which includes an interactive display designed to help consumers pick the appropriate shoe. Adidas refers to the store concept as HomeCourt.
    The Beijing store is designed to look like an arena and features a “shoe bar” at its center.
    Photo by: HUANGLERONG

    Adidas and rivals Under Armour and Nike want to sell more products directly to consumers in order to increase profits by circumventing wholesalers and retailers. Under Armour in the spring plans to open its next Brand House store in New York.

    “Our new retail concept HomeCourt offers a consumer experience unlike any that Adidas fans have enjoyed before,” said Michael Stanier, chief sales officer for the company’s consumer direct division. “We look forward to bringing this concept to Adidas fans throughout the world this year.”

    The Germany-based company has its North American headquarters in Portland.

    Matthew Kish writes for the Portland Business Journal, an affiliated publication.

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