SBJ/July 17-23, 2017/Marketing and Sponsorship

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  • Dodgers asking $12 million a year for naming rights to field

    Commercialism has seeped into MLB’s historical ballparks with signage amid the ivy at Wrigley Field and ads splashed across the Green Monster at Fenway Park.

    Now, America’s third-oldest MLB venue is looking to defy MLB’s legacy as the most traditional sport even more aggressively by selling naming rights to the field in Chavez Ravine, home to the Los Angeles Dodgers since 1962. Numerous industry sources tell us that Dodger Stadium’s field — thus, it would be X Corp. Field at Dodger Stadium — has been on the market since early spring with an asking price of $12 million per season.

    Sources tell us Entitle, the joint-venture naming-rights firm formed this year by Cooper Holdings (the former CSE) and Brooklyn Sports & Entertainment, is quietly selling the package for the Dodgers, with BS&E Executive Vice President Mike Zavodsky taking the lead. BS&E CEO Brett Yormark would not comment on the matter.

    The Dodgers have brought in Entitle to sell the package.
    Photo by: GETTY IMAGES
    Certainly, any property can command a premium for a first-time sale, but it’s still interesting to note that $12 million is considerably more than many MLB ballparks and NHL arenas are seeking for the second or third round of naming rights. The competition also bears examination: a new and yet-unnamed MLB ballpark scheduled to open in the always-important Texas market in 2020, and Nationals Stadium in Washington, D.C., sans a corporate nameplate since it opened in 2008. We also note that in the same market, naming rights for the multibillion-dollar facility under construction in Inglewood, Calif., to house the NFL Rams and Chargers are for sale.

    Having paid a record $2.15 billion for the Dodgers, Guggenheim Partners is under considerable revenue pressure. Still, the rhetorical question has to be whether MLB’s other supposedly sacrosanct facilities, like Wrigley, Fenway or Yankee Stadium, are next.

    “I would counsel any potential sponsor to walk down that path carefully, because there are those certain hallowed facilities where fans will react negatively,” said Octagon CEO Rick Dudley.

    Of course, there are economic realities precluding fan sensitivities.

    “The people owning and running all of these legacy facilities feel like they are at a bit of competitive disadvantage in not being able to sell them as easily as a new building,” said Chris Allphin, senior vice president at Van Wagner Sports & Entertainment, where he oversees team and venue services, including naming rights. “I’d still say they are all in a ‘would if they could’ or ‘will if they can’ situation. Remember that the Yankees essentially did that same sort of deal (essentially a presenting sponsorship with Bank of America) for the new stadium, before it was short-circuited by the recession.”

    ICON FOR AN ICON: Evander Holyfield, a recent inductee in the International Boxing Hall of Fame in June, has selected Chicago-based Icon LLC as his exclusive marketing and licensing agency. Agency President John Michael Lee will handle marketing for Holyfield, 54, the only four-time heavyweight champion.

    COMINGS & GOINGS: Donna Goldsmith, Tough Mudder senior vice president, partnership marketing, international event licensing, corporate sales and merchandising, is departing the endurance racing circuit after more than two years. The former NBA and WWE marketer said the resignation was of her own volition, and that she’ll look for a new position after the summer. Meanwhile, Tough Mudder is expected to replace Goldsmith by hiring a new lead salesperson and by splitting her other responsibilities among several incumbent employees. … Jamie Reigle joins the Los Angeles Rams as executive vice president, business operations. He has spent the past 10 years with Manchester United in business and commercial development roles, most recently as a commercial director based in Hong Kong and managing ManU’s Asian operations. … Randy Burdette, Nike’s North America vice president/general manager, field and licensed sports, has departed after six years. Last month, Nike cut 2 percent of its workforce — or about 1,400 jobs around the world. … Former NFL consumer products czar Jim Connelly has exited IMG College after more than four and a half years, during which he helped run the Collegiate Licensing Co. business in Atlanta.

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


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  • New fund puts spotlight on sports sponsors

    The fund's holdings include sponsors and broadcasters of MLB, NBA, NFL and NHL .
    Photo by: GETTY IMAGES
    Companies that sponsor and broadcast sports leagues greatly outperformed the Standard & Poor’s 500 over more than a decade, according to research compiled by the founders of the first exchange traded fund to track these shares.

    Since June 2005, shares in companies that sponsor or broadcast the NBA, NFL, NHL or MLB nearly doubled the Standard & Poor’s 500 index, rising 282 percent versus 146 percent, according to the Pro Sports Sponsors Exchange Traded Fund, which began trading last week.

    “A company’s affiliation with pro sports leagues gives them access to a dedicated and loyal customer base,” said Nick Fullerton, president of the fund. “This in turn can lead to increased revenues for companies and, if they are containing costs, increased earnings.

    “A company like Papa John’s has doubled down on their sports partnership investment,” he said. “They started with pro football and attribute a large portion of their growth to that partnership. Now they are working with pro baseball to continue to capitalize on baseball fans’ loyalty to league partner brands.”

    Fullerton and his partner, NBC Sports announcer Jim Kozimor, point out other reasons these companies may outperform: Employees have pride in the association with sports and perform better, and sports affiliation boosts general brand recognition.

    Many of these companies are large, and sports is only a small part of their businesses. Take Amazon, which is in the index because of its recent one-year streaming deal with the NFL.

    Asked whether that connection is tenuous, Kozimor responded during a lunch last week that sports is likely to become a large part of Amazon’s future business.

    Tracking companies that spend in sports is as close to buying into professional sports as small investors will get (the fund is also marketed to money managers). Leagues are not public nor are many teams, though some teams are part of larger public media companies. The Atlanta Braves trade as a Liberty Media tracking stock, and the Green Bay Packers are public but the shares do not trade.

    The fund has 66 companies, each equally weighted toward performance. Four times a year the fund will rebalance the companies, based on exiting sponsors and new ones.

    To come up with the data since 2005, the fund performed significant research on sponsors in that time, contacting the leagues.

    The fund does not track team sponsors, nor sponsors of others leagues such as MLS or sports such as NASCAR and golf. Kozimor said they might in the future create new indexes that track other sports, but for now he and Fullerton are focused on the current fund.

    Kozimor came up with the idea for the fund and shared it with his friend Fullerton, a finance executive. At first Fullerton wasn’t sure, but when he ran some of the numbers, he said, he discovered that tracking these companies could allow an investor to outperform the market.


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  • IndyCar to sit down with title sponsor Verizon for renewal talks

    Verizon struck its deal with IndyCar in 2014. The agreement is set to expire at the end of 2018.
    Photo by: GETTY IMAGES
    IndyCar CEO Mark Miles said renewal talks with title sponsor Verizon will begin soon, about 18 months from the end of the deal’s term.

    Verizon’s deal is worth about $10 million annually and expires at the end of 2018. It’s common for properties to be informed of a title sponsor’s future plans well in advance of a deal’s end date, given the length of time it can take to find a replacement.

    Miles acknowledged that talks will get underway in the next few months, and believes it won’t be long before the sanctioning body knows which way negotiations are heading.

    “This is a conversation that will start in earnest soon — and that we’ll have some clarity on before long,” Miles said.

    Miles, who is in his fifth year with IndyCar and also in the middle of media-rights negotiations with ABC/ESPN and NBC Sports, is hopeful of a renewal. But amid several executive changes at Verizon, multiple sources close to the deal said a renewal could be challenging to secure.

    Miles conceded the “very significant change” in Verizon management since the two sides originally struck the multiyear deal in 2014. That includes the departure of former Verizon Wireless CEO Dan Mead, who helped strike the original partnership and was known to be a fan of racing. A source close to the deal said current executives at Verizon are split on the program. The source said Verizon Communications Chairman and CEO Lowell McAdam is among the current executives who support the sponsorship.

    “We have an excellent relationship, the program has delivered what they originally had as their expectations, and we’ve not yet really started to have discussions with them about the future, so I don’t want to jump to any conclusions,” Miles said. He touted the series’ growth prospects; ratings had been up multiple years in a row heading into this season, and the Indianapolis 500 has experienced an attendance resurgence that Miles has called a “really helpful and important achievement.”

    Verizon, which works with CSM Sport & Entertainment on motorsports marketing and Momentum Worldwide as its sports marketing agency, did not respond to a request for comment by press time.

    Whether Verizon’s entire motorsports portfolio is up for renewal at the same time was unclear. Sources said Team Penske’s Verizon deal, which has a robust business-to-business element, appears to be safe. Those sources also said that Verizon could drop the title sponsorship but stay on as the official telecommunications provider of the series.

    Miles added that “there’s never been anything in the relationship that was a speed bump; I think we’ve delivered or over-delivered, and they’ve done what they’ve said (they would) as well.”

    A source said that in IndyCar, Verizon intends to increasingly focus on its Hum product, which connects cars with the digital world, instead of on the overarching Verizon brand. Hum can provide drivers such services as emergency assistance, maintenance reminders and vehicle diagnostics. Verizon has been activating the Hum product in IndyCar in recent years, but that has been mixed in with a steady amount of pure Verizon brand marketing.


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  • Lagardère Sports signs to sell international sponsorships for WWE

    WWE has hired Lagardère Sports as its international sponsorship sales agency in a multiyear agreement.

    Financial terms of the deal were not disclosed. As is typical in these types of agreements, Lagardère Sports will receive a fee as well as a percentage of sales.

    WWE hired Lagardère, a subsidiary of Paris-based Lagardère Group, to build its sponsorship revenue in Europe and Asia. In the last two years, WWE’s new U.S. deals have included Mars brands Snickers and Combos, Nestle brand DiGiorno, AT&T’s Cricket Wireless and KFC.

    WWE posted record revenue of $729 million for 2016, up 11 percent from the prior year. Sponsorship revenue is not disclosed, but John Brody, WWE executive vice president of global sales and partnerships, said it has quadrupled since 2010. Brody joined WWE in 2015 after working at Wasserman and MLB.

    The entertainment company, built on professional wrestling, hosts 500 live events a year, 60 of which are overseas. WWE programming is available in more than 650 million homes worldwide in 180 countries and in 20 languages.

    But while international audiences make up 70 percent of its content consumption, international accounts for 30 percent of revenue, so WWE has targeted Europe and Asia for growth, Brody said.

    “We need a partner who will help us activate this vision internationally,” Brody said. “Lagardère shares our philosophy.”

    Lagardère Sports employs 1,600 people in 25 countries.

    Andy Pierce, Lagardère Sports president and CEO for the Americas, said that announcing the relationship is the beginning of the second part of a plan. Lagardère was formally engaged in February and its global consulting group has been working since then on an assessment of WWE’s assets worldwide.

    “What we are not trying to do is get a sponsor for the London show,” Pierce said. “What we are looking at is getting European sponsors for all of Europe. It could be a global sponsor. It could be European. It could be Asia-centric. But it certainly would be for more than one market.”

    Last year Lagardère won the rights to sell sponsorships in Europe for the NHL and NHL Players’ Association’s World Cup of Hockey and to manage the NFL’s social media in Germany, and Pierce said those European deals may have factored into the WWE’s decision.

    “It’s one thing to say this is what we want to do,” Pierce said. “It’s another thing to actually do it.”

    Lagardère was chosen both for its international experience and for the interest from the leadership at the agency, Brody said.

    “For me it started with the level of commitment at the most senior level,” Brody said, adding that he has known Pierce for years.


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