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SBJ/April 21-27, 2014/Marketing and SponsorshipPrint All
When Omnicom agencies GMR Marketing and SportsMark announced plans to merge 16 months ago, SportsMark founder Jan Katzoff said the combined company planned to do everything it could to retain senior executives from both agencies.
But a year later, only two of the five senior sports executives remain — Katzoff and SportsMark CEO Steve Skubic. The other three — Keith Bruce, Greg Busch and, most recently, Mike Boykin — have departed.
Bruce left last September to lead San Francisco’s Super Bowl host committee. Busch and Boykin, who left in February and March, respectively, haven’t announced what they plan to do next.
The departures, particularly of Busch and Boykin, who are credited with building GMR’s sports consultancy over the last 15 years, surprised employees and business partners alike, sparking questions across the industry about the direction of GMR.
“It’s like seeing a couple in a good marriage and then watching it fall apart,” said Trip Wheeler, a former GMR executive who now runs Speedway Benefits Inc. “You’re just sad for them. GMR is going to be fine. They’ll keep on trucking, but there are questions about how something so good could fall apart. What happened?”
The merger was designed to combine Omnicom’s strongest event hospitality company, SportsMark, with the established event marketing and corporate consulting businesses that resided at GMR Marketing. The two companies separately worked with clients like Procter & Gamble and Visa, and the hope was that they could improve their offerings to existing clients and add new ones by combining the services they offered.
Such mergers typically trigger executive changes, but the recent departures have raised more questions than answers about the agency’s direction. They also came at a time when several sports marketing companies are going through transition. IMG Consulting will soon be part of a combined WME-IMG company. CAA Sports’ consulting group is relatively new on the scene, while Lagardère is looking to ramp up its offering and Jack Morton Worldwide is moving into sports marketing.
Wasserman Media Group, Octagon, Team Epic, Momentum Worldwide and others have been stable. But the fluctuations across the industry have the potential to reshuffle some long-standing client relationships.
“You’re at an inflection point within the agencies, without a doubt,” said Chris Lencheski, former CEO of Front Row Marketing. “These inflection points happen in seven- to 10-year cycles, and you’re starting to see another change. Any time you have this type of change historically, clients will sit back, wait for it to resolve and they’ll start measuring things based on performance and new people. It puts some chum in the water.”
With Busch and Boykin out of the picture, Connelly said GMR has turned over its sports efforts to three key executives:
n Katzoff is leading global consulting efforts around everything from the Olympics and World Cup to international soccer and the NBA. He lives in Montana but travels extensively to GMR offices in Milwaukee, San Francisco, London and Brazil.
n Tyson Webber is a longtime GMR executive who distinguished himself with his handling of the Lowe’s motorsports business early in his career. He relocated from Charlotte to Milwaukee last year to oversee a client management group working across both sports and entertainment.
n Steve Dupee is another longtime GMR executive who started on the account service side of GMR’s business and recently transitioned into a role leading business development across sports and entertainment. He is based in Milwaukee.
Despite the change in ranks, the trio has had early success expanding GMR’s business. The San Francisco 49ers recently hired GMR to manage sponsor activation at the new Levi’s Stadium in Santa Clara, Calif., and the vacuum company Dyson has hired GMR to manage an international tour displaying its technology at malls and festivals. The agency also expanded its business with SAP, which it was working with in Europe and now is working with on NBA and NFL sponsorships in the U.S., and HP, which was working with GMR on some golf tournaments in the U.K. and has hired it to develop an international sponsorship strategy.
Connelly and Katzoff credit the merger of the two agencies with helping it secure some of that business. The best example they could point to was new business it won with Samsung. GMR had worked with Samsung on its handset business in the U.S., and that relationship combined with its merger with SportsMark allowed it to win Samsung’s Olympic hospitality for the Sochi Games, Connelly said. The Levi’s Stadium business also is an example. SportsMark, which was headquartered in the Bay Area, has strong ties to the 49ers, and Katzoff sits on the team’s board.
“We’re feeling efficiencies, and it’s been a great, great merger thus far,” Connelly said.
Keeping that momentum going following the recent changes in its executive ranks could be a challenge. Former Visa sponsorship executive Michael Lynch, who worked with GMR while he was at Visa, said brands hire agencies in large part because of their personnel, and brands spend considerable time working with an agency’s staff to be sure they understand a brand’s goals.
“When someone leaves, particularly at the leadership levels, that training goes out the window,” Lynch wrote in an email. “The key is the replacement personnel — are they an upgrade or not? If not, the account could be at risk. What happens to the person that leaves? Does he or she go to a competitor with all that client knowledge? If so, again, you could be at risk.”
GMR has built a reputation through the years of replacing key personnel with dependable staff. Matt Lederer, Comcast Cable senior director of sports marketing, has worked with the agency for five years and seen people working on the Comcast account come and go, including Dupee, who once led the account team.
“Whether it’s a junior account executive or a more senior executive, they always replace them with top-notch people,” Lederer said. “I have full confidence that they will get the right quality of person in whatever role they need.”
The GMR-SportsMark merger that played a role in the departures of Busch and Boykin can be traced to 2012. In September of that year, executives from GMR and SportsMark met to discuss the merger for the first time. A few days later, then-GMR Chief Operating Officer Bryan Buske died of a heart attack at just 52. He was the agency’s second employee and served as a key adviser to its founder, Gary Reynolds, who sources describe as a distant executive focused on financial results. Buske led the company’s operations and had a strong relationship with Busch and Boykin that made him a key advocate of their leadership over the years.
In the years prior to the merger, Reynolds, like many executives facing revenue declines during the recession, pushed GMR to improve its margins by reducing overhead, sources said. Senior staff such as GMR President Jay Lenstrom, Ed Kiernan and Tamera Green departed during that period and their positions were filled by promoting other employees.
The approach, which had its roots in the recession, continued as GMR and SportsMark merged.
For more than a decade, sports within GMR operated independently from the rest of the agency, which did entertainment, retail, music and lifestyle marketing. The sports group evolved during that time from being regarded as a talented event marketing agency to a full-service consulting group that could help evaluate and execute sponsorships for brands like P&G, which signed a worldwide Olympic sponsorship in 2011.
Busch and Boykin had been critical to the sports division’s evolution. They became the public faces of the sports group and worked in tandem to win business and build a staff to work with new clients like Gillette, Lowe’s, Comcast and Humana. GMR went from being a small player in sports event marketing to a major competitor in sports consulting, challenging established agencies like IMG and Octagon for business with big brands.
The duo expected that work to pay off with senior leadership roles following the merger.
As the merger played out, GMR restructured its well-regarded consulting practices, bringing sports and entertainment together for the first time. According to sources familiar with the merger, Busch pushed to lead the new combined client services group, and Boykin pushed to lead sales and business development. But those roles went to Webber and Dupee, respectively.
Around the same time, GMR named senior vice president Cameron Wagner head of its Charlotte office, displacing Boykin, who had led it since it opened in 2000.
Bruce was the first top executive to leave following the merger. Last September, the longtime Bay Area resident accepted the chief executive position at the San Francisco Bay Area Super Bowl Host Committee for Super Bowl L, a prestigious job overseeing the biggest sports event in the history of booming Silicon Valley.
Busch left GMR several months later in early February. Boykin followed in late March, and his departure was announced in a brief, internal email. Neither have announced what they plan to do, and both declined to comment for this story.
The news rattled much of GMR’s Charlotte office and sparked industrywide response.
“The way you handle key people like that leaving is as important as the decision of letting them go,” said Steve Lauletta, president of Chip Ganassi Racing and a former executive with Omnicom’s Radiate Group. “There were questions internally about what was going on and questions externally, and I don’t know that’s a good position to be in.”
GMR clients say they have been advised on changes at the agency. Lederer worked with Busch early in Comcast’s use of GMR, and he said he was told several weeks before Busch left GMR that he would be departing.
“From an existing client standpoint, those changes won’t impact me,” Lederer said. “That’s not a knock against Greg or Mike. They did a great job. But they have a machine [at GMR], and they have really good people.”
BigTeams, a Northern Virginia-based provider of website and software solutions for high school athletic programs, has hired industry veteran Clay Walker as its chief executive officer and recently closed a venture capital funding round aimed at fueling a major national expansion.
The BigTeams funding, a Series A round worth an undisclosed, low-seven-figure sum, was led by Capital Sports Ventures, the venture capital fund founded last year by former Monumental Sports & Entertainment executive Greg Bibb and backed by SWaN & Legend Ventures, led by Monumental minority investors Fred Schaufeld and Tony Nader. SWaN participated in the BigTeams funding round as did former Signal Corp. chief executive Roger Mody, and Scott Brickman, former chief executive of property management giant The Brickman Group. Mody and Brickman also are Monumental minority partners.
BigTeams’ software products seek to help automate a variety of functions for high school sports administrators, including scheduling, fundraising, registration, website management, content creation and dissemination. The company, based in Warrenton, Va., has more than 500 client schools in 41 states. But Walker said he saw an opportunity to build significant scale in a segment of the sports industry that to date has been heavily fractured among many smaller outfits.
“High schools are sort of the last great frontier of the industry,” Walker said. “There are a lot of players in this space, but nobody’s really solved it yet and built major scale.”
Walker will work out of Capital Sports Ventures’ office space in Arlington, Va., which has been set up to help accelerate its partner companies. BigTeams represents the first major investment for the 15-month-old Capital Sports Ventures. Walker and Bibb also have worked together as adjunct professors at nearby Georgetown University.
“They’re in a growing market, have an offering that’s very scalable, deals in participatory sports which is a big interest for us, and is both hyperlocal and national. So it sort of checked off all the boxes for us,” Bibb said.
BigTeams founding executives Matt Carson, Jeff Gilbert and Steve Sutherland will remain as majority owners.
The start of the NBA playoffs means a new slate of activation plans from the league’s corporate partners, including new creative from three sponsors.
State Farm Insurance is marking the postseason with a new commercial featuring Los Angeles Clippers star Chris Paul in its “Born to Assist” campaign. The 60-second spot will feature a cameo by Golden State Warriors star Stephen Curry.
Sprint is launching a 30-second spot featuring Oklahoma City Thunder star Kevin Durant to promote the company’s new “Framily Plan.” This marks the brand’s third ad featuring Durant.
Among other partners, Bud Light is using the postseason to activate
Foot Locker is running a 30-second ad featuring Damian Lillard and former NBA and NFL greats.
The video was slated to debut on the Bud Light YouTube channel and through the brand’s other social media outlets.
League partner Kia plans to run current spots throughout the postseason as well.
The playoffs began this past weekend.
Movie studios are again using the NBA playoffs as a promotional springboard. Warner Bros., Sony, and Disney are set to run spots to promote a total of five movies this year. The first will be from Sony, which will be promoting “The Amazing Spider-Man 2.” The other spots have yet to be disclosed.
Last year, Warner Bros., Universal, Sony and Disney all ran spots promoting movies during the playoffs.
Social media again has a key role in the league’s postseason initiatives. Taco Bell is developing the Taco Bell Buzzer Beater playlist on the NBA’s YouTube channel, with each “buzzer beater” video clip to be promoted on Instagram and Twitter. Like last season, the NBA also plans to push out real-time game highlights through Twitter, with Champs, American Express and State Farm partnering with the league on the effort.
“Social media is another way we are engaging with fans,” said NBA Deputy Commissioner Mark Tatum. “There is going to be a whole host of social platforms.”
Northwestern Mutual will be the new presenting sponsor of the Rose Bowl, according to industry sources, in a deal that makes it a major supporter of the new college football playoff structure.
College writer Michael Smith and Executive Editor Abraham Madkour talk about Northwestern Mutual's presenting sponsorship with the Rose Bowl, as well as Alabama's lucrative deal with Learfield Sports.
ESPN, the rights holder for the College Football Playoff as part of its 12-year, $5.64 billion deal, sold the sponsorship to Northwestern Mutual, which already has a large advertising spend with the network on its college programming.
Specific terms were not available, but sources believe the presenting sponsorship to be worth $25 million a year over six years. Title sponsorships in the old BCS went for $15 million to $20 million annually per game. The Rose Bowl is the only bowl in the CFP group that has a presenting sponsor instead of a title sponsor.
ESPN has been in negotiations with incumbent bowl title sponsors and prospects since late last fall. While not all of the CFP sponsorships have been locked down, industry experts expect the Rose Bowl to be the only one that turns over. Discover, AT&T, Chick-fil-A, Tostitos and Allstate are the other incumbent title sponsors on CFP bowls. Allstate and AT&T, like Northwestern Mutual, also are corporate partners with the NCAA.
Ed Erhardt, president of sales and marketing, and Rob Temple, vice president of sports management, are leading ESPN’s team on CFP sales.
ESPN also is seeking six to eight CFP official partners — separate from the title sponsors — across multiple categories, similar to the NCAA’s corporate partner program, sources said.
It’s not certain when ESPN will announce its new CFP partnerships. The only deal the network has acknowledged so far is with Dr Pepper, which was announced last month. The soft drink will have official status in its category with the CFP and serve as presenting sponsor of the national championship trophy.
Vizio had been the Rose Bowl’s presenting sponsor for the past four years, and it’s not immediately clear why it didn’t renew. But the emergence of Northwestern Mutual in the CFP shouldn’t come as a surprise. Since 2012, when Northwestern Mutual struck its NCAA partnership, the Milwaukee-based financial services firm has invested heavily in college sports. It recently extended its NCAA corporate partnership through 2020.
In addition to activation and advertising through CBS and Turner Sports during March Madness, Northwestern Mutual has taken an active role in sponsoring other NCAA events on ESPN. The firm, which works with GMR Marketing, is the presenting sponsor on ESPN’s broadcast of the NCAA volleyball, men’s and women’s soccer, wrestling, ice hockey, and men’s and women’s lacrosse championships.
Northwestern Mutual’s activation is largely predicated on hospitality events for its financial planners and clients. The company has 350 offices across the U.S.
With the Rose Bowl, the brand gets one of the most prestigious bowl games in an attractive setting over New Year’s. It also has been one of the most highly rated of the bowl games. This year, the game figures to have even more attention as it will be the first of the playoff games that day.
Conrad York, Northwestern Mutual’s vice president of marketing, oversees the company’s sports sponsorships.
There is no timetable for other CFP deals, but industry experts say ESPN could announce additional agreements at its upfront event on May 13 in New York.
Since the last sponsor summit in June 2013,
Still, between the lines, it seems the powers that be could be prepping for a larger play, with more arenas. With Nets/Barclays Center CEO Brett Yormark so ensconced in selling and with the renovated Nassau Coliseum due to reopen in the fall of 2016 after a $229 million renovation as a retail and entertainment complex, you get the idea there are other facilities in the sights of Forest City’s Bruce Ratner, the developer behind the Brooklyn arena and the Nassau Coliseum facelift. “Ideally, we’ll put together a couple of these facilities where they look, feel and act the same,” Yormark said. “So you could say ‘That’s a Ratner venue.’ That’s something we’d like to pursue, but Nassau is the next step.”
Yormark touted the success of the last year and plans for the future at the Nets/Barclays Center Summit.
Photo by:ADAM PANTOZZI / BROOKLYN NETS
Closer to Brooklyn, the Nets are expected to take the wraps off a new practice facility in the area’s Industry City collection of rehabbed warehouses by the end of May.
> PURE SILVER: NBA Commissioner Adam Silver entertained the summit during a wide-ranging interview session. Looking ahead, Silver said technology represents a more immediate overseas prospect than international expansion. “It’s more of a digital and mobile opportunity,” he said. “Replicating that arena experience is going to come with advancements in digital media. [You’ll get] better access and better video.”
As for the long-awaited European expansion, Silver said, “I’m not ready to say we can get that done yet, but I think if any league can get that done, we can. However, we’re no bystander to what’s happening in Southern Europe and the economies there. A few years ago, we were a little more optimistic, but if there is 40 percent unemployment in Spain or whatever, we’re not going to be talking about putting a team there any time soon.”
Silver accepted that the 75-mile protected marketing area for NBA teams is an outdated concept, because of the Internet. “Those distinctions don’t make quite as much sense as they once did. … It’s a question of finding the right balance,” he said. “Team presidents are constantly bringing us opportunities and saying ‘Let’s keep tinkering with what historically has been viewed as local and what the league has viewed as national and international.’”
As for the concern across sports about the high-quality home viewing experience threatening live sports? “I hear the NFL saying a lot that because the HD experience is so great, that’s what accounts for flat attendance. … In an arena sport, we’re actually selling a very different experience,” Silver said. “I don’t think watching the game at home is a substitute. … It’s a communal experience: You go there to be with other people and cheer and jeer. My job is to find a way to replicate that experience, as opposed to worrying about if the HD experience is better. There’s no better experience than courtside seats to an NBA game. Through technology, we are trying to take that experience that only a minuscule amount of our fans will ever experience and find a way to bring it to the fans at home.”
Photo by:ADAM PANTOZZZI / BROOKLYN NETS
“Most brands are marketing like it’s 2009,” he said, lobbying for a reapportionment of media spending more in line with where consumers are spending their time. He advised that while it won’t be easy to get a CMO who doesn’t understand Instagram or Snapchat to invest in them initially, “The single biggest reason people go out of business or leave opportunity on the table is that they are romantic about what they’ve done in the past and aren’t comfortable with challenging the status quo,” Vaynerchuk said. “The last 75 years of marketing will go down historically as the dark ages, when it wasn’t quantifiable.”
Vaynerchuk asked for a greater understanding of the psychology of those consuming social media, noting that the same woman looking at Facebook for 30 minutes brings an entirely different mindset when perusing her Pintrest account. With more consumers spending more time on their mobile devices, traditional ads are now anathema, he said.
“Every brand in the world is now a media company,” he said, citing Red Bull and GoPro as leading examples. “Brands need to elevate themselves out of just being salesmen. That means you will talk [to consumers] about passion instead of product. Then, you’ll get permission to sell to them."
Terry Lefton can be reached at firstname.lastname@example.org.