SBJ/February 20-26, 2017/Marketing and Sponsorship

Gatorade’s NBA D-League deal seen as boon for research and development as much as brand marketing

Gatorade’s Sports Science Institute will use player data to improve athlete performance.
Photo by: GATORADE
In a deal that will be assessed more on its research and development indicators than traditional branding, Gatorade is counting on its bold makeover of the NBA D-League to serve as a petri dish for the company’s sports science laboratory.

The sweeping agreement includes title rights that will change the name to the NBA Gatorade League, or G-League, beginning next season and embed the G-League logo into every component of the NBA-owned entity. But company officials stressed how the deal will allow Gatorade to tap into the league for vast research and development purposes, including efforts around new product testing, benchmarks for athlete performance and recovery, and use of data to enhance both the brand and player optimization.

“This is about sports nutrition, this is sports fuel and future innovation that is accessible to athletes everywhere,” said Brett O’Brien, senior vice president and general manager of Gatorade. “To test it on court and put it in locker rooms and see how it is helping athletes and what their reactions are goes a long way for us to turn around and educate future consumers. We get all that.”

The deal marks the first time a traditional stick and ball league has sold naming rights, and neither the NBA nor Gatorade would disclose any financial details. The NBA gets a significant marketing and branding benefit for the fast-growing D-League with the added legitimacy of having Gatorade’s investment.

Naming rights were always a part of the NBA’s plans for the D-League, said D-League President Malcolm Turner. “Given the growth, we always felt it was the right window to explore a new branding identity. While that was the focus, it was the content that was the game changer for us. This is innovation-led. It is also validating to have a partner like Gatorade come on board.”

It was a deal in the works since 2014 when NBA Commissioner Adam Silver hired Turner to run the NBA’s minor league with a specific mission: Convince a company to buy into an unprecedented level of sponsorship for a traditional stick and ball league.

Turner and NBA Deputy Commissioner Mark Tatum immediately targeted Gatorade given that the company was a founding partner of the D-League in 2001 when the new property floundered in eight Southeast markets where college football, not minor league basketball, is king.

Today, the D-league is flourishing, thanks to the increasing number of NBA teams snapping up franchises for player development. Next year, the league will expand from 22 teams to 25 teams, with 20 owned and operated by NBA teams as the D-League nears its target of 30 teams for each of the NBA’s 30 franchises.

Confident in the league’s growth, Tatum and Turner met with O’Brien last August in a conference room at NBA headquarters to pitch the idea of expanding the deal to include naming rights. The two sides had floated a rebranding concept over the years, but were now focused on more serious discussion. Tatum and Turner laid out the league’s vision and how Gatorade could align with the D-League’s mission of innovation.

“The biggest hurdle was the first hurdle,” Turner said. “I came on board in November 2014 and I’ve seen in short order how much we changed. We had to tell that story to Gatorade. The league had grown up before our eyes and we had that type of conversation. It was a bit of a brand reappraisal.”

There were no white boards or PowerPoint presentations in the meeting. There was no discussion of a specific deal structure and no handshake agreement. But interest on both sides grew out of the presentation. “We just talked it through,” O’Brien said. “We started to say similar things. We walked away thinking that there was something to it.”
Six weeks later, both sides began to exchange feedback and by the end of 2016, negotiations picked up steam, with specific deal points hammered out.

On Jan. 18, Turner flew to Chicago for a pivotal meeting with Gatorade. The deal had progressed to where both sides presented their logo of the rebranded league.

“It was actually a smooth process,” Turner said. “At that point we knew it could happen very fast.”

Sensing a deal, Gatorade pushed to complete the agreement by All-Star week to add visibility to their partnership.

During Super Bowl weekend, Tatum and Silver were in Houston for the Rockets honoring Yao Ming in the team’s Hall of Fame, and O’Brien said they all met at the game to finalize plans. Because of the focus on innovation and testing,they decided to roll out the announcement just before last week’s All-Star weekend at Gatorade’s Sports Science Institute in Bradenton, Fla.

“From a sponsorship perspective, the NBA wanted the force of a powerful marketer like Gatorade up and down the league on everything from balls to integrating the name itself,” said Jeff Urban, co-founder and president of Whistle Sports and former senior vice president of sports marketing at Gatorade. “But I would almost take this out of sponsorship and call it a great R&D play to get more invested into athlete research. I’m interested to see what that research will yield, in terms of product development or athlete insights.”

D-League teams, not usually the beneficiary of such broad partnerships, are expecting major benefits.

“The ability to work with the Sports Science Institute and understand more about condition recovery and nutrition will benefit the players and ultimately the quality of play on the court, which inherently impacts our business” said Chris Murphy, president of the D-League’s Santa Cruz Warriors. “You have one of the most well-known brands sharing the story rather than us only telling the story.”

The blending of the brands also dovetails with the NBA’s long-held view of the D-League as a test kitchen for both business and basketball initiatives. Everything from new timeout rules to new uniforms have been tested in the D-League, and it was that experimental nature that attracted Gatorade to the deal.

“What is captivating to me was the notion of testing athletes and what does technology look like in so many areas,” O’Brien said. “We wanted to put our name on something that translated into innovation and growth.”

Staff writer Terry Lefton contributed to this article.

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