Shifting ‘Madden’ out of launch mode New era, big money, today’s NFL KFC using Colonel in SummerSlam activation Rams tap Corona as first sponsor in L.A. Porsche continues sports focus with Mets MiLB adds color with Crayola deal Bud Light signs on for Bristol game NASCAR closer, but no deal yet for title Ganassi confident about replacing Target ACC hits the road for tour
SBJ/April 7-13, 2014/Marketing and Sponsorship
Category making some noise
MLB may follow NFL into headphone deal
Published April 7, 2014, Page 1
On top of Bose recently signing a four-year deal with the NFL that grants it sideline rights in a pact that team sources said was worth $32 million a year, MLB has held advanced discussions with several high-end headphone brands, including Beats Electronics, under which branded headphones would be worn by umpires deliberating under MLB’s new replay rules.
MLB is in talks to have umpires wear branded headphones during replay decisions.
The two developments indicate the growing importance of technology as a broadly defined sponsorship category and illustrate the burst of sales and profits in the personal headphone market, as anyone who regularly rides public transportation could testify.
“This is an exploding category,” said former Front Row Marketing President Chris Lencheski, who negotiated deals with Bose for GM Racing. “There are [good] margins and a lot of new brands seeking visibility.”
While Bose was a pioneer in high-end and noise-canceling headphones, Beats and others have snatched significant market share with headphones ranging from $99-$399 and more. Now, headphones rival high-end sneakers as a youth status symbol and often cost more than the MP3 player to which they are attached. Renie Anderson, NFL senior vice president of sponsorship and partnership management, said that like fellow NFL sideline sponsor Microsoft, Bose bought access to NFL sidelines as both an “authentic technology demonstration platform” and a powerful retail activation play. “This category has changed. Now headphones are the driver for the audio market,” said Anderson, noting the deal was in discussions for 18 months. Sideline headsets were without a sponsor this past season after Motorola walked away.
While Anderson would not discuss terms, several team sources said the Bose deal includes hefty media and activation commitments and a minimum spend of $100,000 per team.
Marketing deals with coaches and Bose selling licensed products are also under consideration.
Bose will be seen on NFL coaches’ headphones in 2014.
Neither Bose nor CAA Sports, its consulting agency, would agree to be interviewed for this story.
The deal clearly establishes audio headphones as a valuable piece of sponsorship inventory across sports. GTE first branded the headsets of NFL coaches at least 20 years ago. Now any property with a replay review, which means every major sport, is looking at similar deals. Sources said Beats talked with the NFL about its sideline deal, but could not make the financials work. Industry sources said other headphone brands, including Monster, Skullcandy and Sennheiser, have been casting about for deals.
As the personal headphone market has grown to a $2.3 billion market over the past five years, it has largely been athletes carrying the marketing flag. While Bose had a smaller NFL rights package since 2011, some of the NFL’s bigger stars, including San Francisco 49ers quarterback Colin Kaepernick and cornerback Richard Sherman of the Super Bowl champion Seattle Seahawks, did TV ads for Beats that ran during the NFL playoffs and generated significant buzz. Dr. Dre himself was on the sideline wearing “Beats By Dre” headphones at the NFC Championship Game in Seattle. Beats’ portfolio of celebrity endorsers includes LeBron James, Kevin Garnett, Lady Gaga and Justin Bieber. The brand gave what it said were headphones worth $25,000 apiece to every player in Super Bowl XLVIII.
Sports marketers polled said that league deals were significant as a developing piece of sponsorship inventory, but that they should include additional player rights to be effective.
“What we all use headphones for is music and gaming, so you’d like to see a better tie there,” said Tom McGovern, president of Optimum Sports, whose clients include heavy sponsorship buyers Lowe’s, McDonald’s and Under Armour. “Beats are part of pop culture now. They are cool by definition, so I see more upside for baseball if they can get their players involved.”
Former AT&T sponsorship chief Tim McGhee, who now heads consultancy MSP Sports, expressed some caution about the nature of the connection between the brands and the properties, and hinted at a more natural tie to music. “There’s great exposure for MLB and an interesting new piece of inventory for everyone but the NFL,” he said. “But I’m not sure if it is an organic and authentic enough connection for the brands involved.”