July 16, 2012 10:01 AM
The most significant initiative of the new program is the result of a partnership with BP that will see the oil and energy company provide carbon offsets for Team USA’s travel to the London Games. In addition to that, the USOC will adopt sustainable practices at its three Olympic Training Centers.
Dow, an IOC TOP sponsor, will analyze fertilizer used at the center in Chula Vista, Calif.; GE will provide products like motion detectors to control electricity use; and the organization will develop a recycling program and add water efficient toilets and faucets. The USOC’s fleet of vehicles at the training centers will be carbon neutral as a result of offsets provided by BP.
USOC partner Deloitte worked with the organization to develop “The Green Ring” program. The organization expects more sponsors to participate in the future, including McDonald’s, which will investigate farm-to-table options for food at training centers, and Anheuser-Busch, which will undertake a water management audit.
July 16, 2012 10:00 AM
Evan Morgenstein was drunk.
Olympic agent Evan Morgenstein.
STEVE WILSON PHOTO
He spent $300 at the bar that night and irritated several people. But it was worth it. There’s nothing Morgenstein enjoys more than provoking the establishment. He’s practically built his career out of it. In the process, he’s become the most polarizing figure in the Olympics business.
Haters believe he is litigious, brash, inappropriate, dishonest and narcissistic. Fans believe he is smart, funny, loyal, blunt and a crusader for athletes’ rights.
About the only description both sides agree on is that he is scientifically unprofessional. He has been known to show up to business meetings wearing flip-flops, gym shorts and a tank top. He has threatened to beat up a rival agent for speaking negatively about his client. And he has a Twitter feed where he tweets about overweight people on airplanes and tells newlyweds that 67 percent of marriages end in divorce.
Despite that, and largely because of it, Morgenstein has thrived as an agent as long as anyone in the Olympic world, and he has amassed a depth and scope of Olympians that rivals large agencies like Octagon, CAA and Wasserman Media Group. Last week, some 15 swimmers he represents, including Dara Torres, Amanda Beard, Jason Lezak and Eric Shanteau, as well as gymnast Nastia Liukin competed at the Olympic trials for a chance to go to London. Two other clients, diver David Boudia and beach volleyball player Phil Dalhausser, have already qualified for the Games.
This will be Morgenstein’s fourth Summer Games. Over the last 15 years, his niche athlete representation firm has evolved from a one-man shop in a 127-square-foot office in his house to an eight-person operation in a 3,700-square-foot office in Cary, N.C. He’s gone from representing what he and others considered second-tier Olympic athletes to handling the business of some of the biggest names in Olympic history, including Mark Spitz, Greg Louganis and Bruce Jenner. And he’s cut landmark deals like swimmer Cullen Jones’ reported $2 million, seven-year Nike swimwear agreement and Liukin’s partnership with Warner Bros. and JCPenney for a line of “Supergirl” apparel.
Through the years, he’s earned enough of a reputation as a salesman and marketer that celebrity chefs (Darren McGrady), professional fitness personalities (Jennifer Nicole Lee), coaches (American Swimming Coaches Association) and properties (USA Synchronized Swimming) alike have hired him. His business success serves as proof that being nice and well-mannered doesn’t necessarily win clients, but working hard, landing them deals and championing their rights does.
“He’s a fierce advocate for his clients even when it’s not in his best interest with sponsors and the media,” said Peter Carlisle, Octagon’s managing director of Olympics and action sports. “He’s smarter than people give him credit for. If he appears unfettered and reactive, there’s usually a reason for it.”
Torres, a five-time Olympian going into last week’s trials, put it this way: “He’s who he is and will say what he thinks. Every once in a while it’s not the best thing and you might cringe, but he’ll stand up for his athletes. That’s the great thing about him. … I feel I can trust Evan.”
And USA Swimming CEO Chuck Wielgus, who often finds himself opposite Morgenstein at the negotiating table, said, “He’s incredibly bright. He’s incredibly provocative. He’s incredibly entertaining. Some people find him incredibly difficult to work with, but like any good agent, he fights like a dog for his clients.”
Morgenstein’s detractors have a different perspective. It’s not that they don’t respect what he’s done for his clients. For the most part, they dislike his style.
“Agents I work with that I respect work for their athletes but at the end of the day want to get a deal done as fairly as possible,” said one agency executive, who declined to speak on the record out of concern that Morgenstein would use the quote as leverage in a future negotiation. “Everything with him has to include an argument. I’ve never thought of a deal we’ve done that went smoothly. He enjoys making it difficult.”
Morgenstein shrugged when he heard that.
“If you talk to someone at the IOC or the USOC, they don’t get me,” he said. “They’re a movement. They’re a family. Everyone comes into the house. My philosophy is: That’s not my house. I didn’t build it. I’m not invited. I’m the pariah. I’m the guy who wouldn’t shut his mouth. But I believe that they only will become a successful movement with the athletes when they give the athletes a seat at the table.”
Morgenstein landed in the Olympic world by coincidence. It was 1997, and he had recently opened his own sports consultancy, PMG Sports, to do marketing work for brands and represent athletes such as beach volleyball player Rob Heidger and NBA player Eric Mobley. He was in Atlanta with his first major client, Jumpsoles, for the world’s largest sporting goods trade show.
While he was sitting at the back of the brand’s booth, he watched a guy carrying three gold medals from the Atlanta Games walk up and ask for a free pair of shoes. As the guy turned to leave, Morgenstein ran after him and learned he was Josh Davis, the only man on the 1996 U.S. swim team to win that many golds.
Davis was there signing autographs for a hot tub company for $1,000. The paltry number floored Morgenstein, who had spent the previous two years representing NBA players at Fluid Sports & Entertainment, an agency founded by former New York Knick Charles Smith.
Morgenstein asked for Davis’ phone number and said he’d give him a call. Five days later, Morgenstein called and said he had three deals for Davis.
“How cool is that?” Davis said, recalling the episode. “In five months, [my other agent] had gotten me zero deals. In five days, Evan had gotten me three.”
Davis signed with PMG Sports immediately, and Morgenstein brought him deals with the shoe company Brooks, a safety swim vest sold on QVC, Speedo and others.
When Davis became captain of the 2000 U.S. Olympic swim team, he recommended that his teammates sign with PMG. It wasn’t long before Morgenstein was representing more than a dozen swimmers, most of them what Olympic insiders call tier-two athletes — not the Michael Phelpses or Mary Lou Rettons of the world, but ones like Brad Schumacher, Angel Martino and Lindsay Benko.
“He handled that whole middle of the pack group that really had to crawl for anything they could get,” said Skip Gilbert, who was USA Swimming’s chief marketer at the time. “He was able to literally bring money to athletes that you would be shocked they could earn.”
Morgenstein, shown in his Cary, N.C., office, has been known to show up at business meetings in a T-shirt, shorts and flip-flops.
STEVE WILSON PHOTO
“That made me feel that I was right,” Morgenstein said. “If a guy like that who is in charge of a sport doesn’t appreciate that the athletes have intrinsic value to the sport, then I’m going to keep signing athletes because you know what the athletes want? They want to believe that someone’s got their back.”
That attitude is at the heart of PMG’s culture and a major reason athletes have signed with Morgenstein through the years. He typically signs two types of athletes: those who have similarly forceful personalities and big dreams of deals and success, and those who are more mild-mannered and gravitate to his forceful personality because they know he will stick up for them.
Swimmer Tyler Clary, a silver medalist behind Ryan Lochte at the last two world championships, falls in the former category. He said he signed with Morgenstein in large part because, unlike three other agents he spoke to, Morgenstein knew about his times in the pool and understood his goals as a swimmer. He also believed Morgenstein would fight for him.
“I like the fact that he’s not afraid to piss people off if he thinks it’s necessary,” Clary said. “If he were in the business to be everybody’s friend, he wouldn’t be as good at what he does.”
Morgenstein’s style doesn’t work for everyone. Olympians Apolo Anton Ohno, Allyson Felix and Brendan Hansen all worked with him for a period and left. (All of them declined through representatives to speak for this story.) But most clients who sign with him have stayed for years.
A big reason for that is because of the deals he brings them. Torres is an example of what he is capable of doing. Prior to signing with him in 2005, she said she wasn’t getting any deals. Today she has 13 deals with brands ranging from McDonald’s and HP to AmLactin, a skin-care brand, and Sleep Innovations, a mattress manufacturer. She is expected to make more than $2 million in endorsements this year.
But not all of the deals he has brought to his athletes are clear-cut winners. In 2007, he put together a deal that saw swimmer Beard pose for Playboy. It’s an opportunity that Morgenstein said Beard chose to take, but it has had repercussions for both. It caused some blue-chip brands that had considered Beard for their roster of Olympians to ignore her, and it has caused parents of female Olympians to second-guess signing with Morgenstein, who has two daughters of his own, and tell him that they don’t want to see their daughter in Playboy.
“It helped and hurt my career in ways I’m still feeling,” Morgenstein conceded.
A lawsuit that 18 of Morgenstein’s athletes, including Jackie-Joyner Kersee, Torres and Spitz, filed earlier this year against Olympic sponsor Samsung has the potential to do the same thing. The lawsuit alleges the company did not have permission to incorporate the athletes’ names and photos into a Facebook application known as the Samsung Genome Project. No other agency or athletes have joined the lawsuit, but the PMG athletes, who Samsung removed from the Facebook app, stand by their decision to participate and said Morgenstein didn’t push them into the lawsuit.
Though his name’s not on the lawsuit, Morgenstein knows he will be the one to deal with the fallout of it. Olympic sponsorship executives will wonder if they can trust him in the future. If his athletes are willing to sue Samsung, why wouldn’t they sue Coke or Visa or McDonald’s? But that’s beside the point, in Morgenstein’s eyes.
“It’s not about me,” he said. “I never filed a lawsuit. … I never coerced anybody to file a lawsuit. Everyone needs to take a deep, big-boy breath and realize these athletes aren’t the cattle they think they are and recognize that each one of them deserves the respect of a conversation if they want to be involved [in a marketing initiative].”
Twitter has become Morgenstein’s megaphone of choice in his crusade for Olympians’ rights. He has just 2,600 followers, but many of his 14,000 tweets raise questions about the IOC or USOC. Last week, as the IOC ramped up its investigation into black-market ticket sales for the London Games, he posted this tweet.
“Find it interesting that the IOC is so concerned about athletes #tweeting yet their own members r scalping tickets for a fortune!”
For Morgenstein, provoking the establishment will never get old.
Among Morgenstein's clients are (clockwise from top) Dara Torres, shown in an ad for HP; Amanda Beard, featured in People magazine in 2010; Cullen Jones, who has a reported $2 million apparel deal with Nike; and Nastia Liukin, whose "Supergirl" line of apparel is sold at JCPenney.
July 16, 2012 09:59 AM
The upstart sports channel Universal Sports looked to have a bright future four years ago. It broadcast some Olympic trials and received steady cross-promotion on NBC.
Last week, as the most popular Olympic trials were being held for the London Games, the Olympic sports channel was an afterthought. The channel’s diminished presence underscores how much NBC’s priorities have changed since the Comcast merger closed last year.The merger saw NBC Sports switch its priorities from one small sports channel — in which it holds an 8 percent stake — to two well-distributed sports channels that it fully owns — NBC Sports Network and Golf Channel.
Executives at both NBC Sports Group and Universal Sports say they remain committed partners. But they acknowledge that their relationship has changed since NBC Sports Network burst onto the scene.
Universal Sports has rights to Olympic trials highlights for its "Countdown to London" show.
NBC Sports Group Chairman Mark Lazarus said, “We have a business programming agreement with them. But it is an independently owned channel. There’s a partnership that has a shelf life to it. We work very closely with them. We share a lot of programming. We give them windows on the broadcast network to do things. That will continue. We strive to be good partners with them and them with us.”
Though NBC didn’t include Universal Sports in its trials coverage, the two groups are still working together on some Olympic-themed initiatives. NBC’s ad sales team helped Universal Sports secure advertising support from U.S. Olympic Committee sponsor Chobani for 90 seconds of Olympic news that the channel plans to air hourly during the London Games.
Universal Sports, which is in 35 million homes, also has the rights to re-air marquee Olympic trials competitions in the coming weeks, and it will be the only channel to re-air the Olympics after they end Aug. 12.
NBC will provide contractually obligated advertising during the Games. It will give Universal Sports $1.5 million in online digital advertising and $8 million of TV advertising, including prime-time spots.
“That will open up casual fans to the existence of our network,” Sternberg said. “Our promotional message is if you like watching these athletes — Usain Bolt, Ryan Lochte, Missy Franklin — you’ll love watching Universal Sports because it’s where they play all year long.”
In June 2008, NBC had bigger plans for the channel. It invested in World Championship Sports Network, which provided Olympic-style programming to 2 million homes via over-the-air TV stations and a website, and rebranded it Universal Sports. The investment was made at a time when the USOC planned to launch an Olympic channel, and NBC Olympics President Gary Zenkel said the network planned to put “the full weight of NBC behind [Universal Sports] over the entire 52 weeks of the year.”
Weeks later Universal Sports streamed and broadcast some of USA Track & Field, USA Diving and USA Gymnastics Olympic trials competitions. The two partnered a month later on a deal to jointly broadcast the 2009 world swimming championships and 2009-11 U.S. national championships.
During the 2010 Vancouver Games, NBC used its leverage as an Olympics rights holder to secure space for Universal Sports to build an outdoor studio adjacent to the International Broadcast Center. The channel produced five hours of news programming daily, and NBC funneled the feed to Universal Sports’ headquarters in California for broadcast.
Later that year, the two media companies partnered to acquire rights to the Rugby World Cup. It was their last major acquisition.
Since then, most of their collaboration has been limited to sharing broadcasts of events.
In an effort to control costs, Universal Sports opted not to send staff or produce studio shows from London during this summer’s Olympics. The channel is airing a weekly studio news show called “Countdown to London” and receiving Olympic trials highlights footage from NBC for it. But it’s clear its relationship with NBC has changed.
When asked last week whether any live Olympic trials would be offered on Universal Sports, Zenkel said, “This is the Olympics, which you don’t see on Universal Sports. What you do see is a lot of promotion on Universal Sports. That is the destination for the fans of these sports when you’re not in the Olympics.”
Lazarus added, “The trials are an important part of what is the fabric of NBC Sports Network.”
Sternberg hopes that the London Games on NBC perform well enough to raise enough visibility and awareness of Olympic sports to drive interested viewers to Universal Sports after the Olympics. The channel will try to differentiate itself from NBC and NBC Sports Network by noting that those channels show Olympic sports and cycling events like the Tour de France occasionally, while Universal Sports shows them year round.
“This is still a pivotal and positive year for us,” Sternberg said. “This is when, every four years, real attention is paid to our sports not just by consumers but advertisers and distributors, and we’re working hard to make the most of that.”
July 16, 2012 09:58 AM
In Vancouver, U.S. speed skater Allison Baver tried the salon.
P&G / GETTY IMAGES
The P&G U.S. Family Home and Global Family Home will be on the south bank of the Thames near the Tate Modern at a large event and restaurant space called Vinopolis. About 40,000 square feet inside the facility will be used for the U.S. Family Home, which will be accessible to U.S. athletes and family only. An additional 25,000 square feet will house the Global Family Home.
The P&G Family Home will be the physical extension of its “Thank you, Mom” program in London. The facility is designed to help the mothers of Olympians and their families defray costs during the Games by providing meals, services and a quiet place where they can watch the competition and spend time with their children.
More than eight P&G brands will be showcased inside Vinopolis. Each will be integrated into branded rooms and areas. For example, Tide will provide a laundry service where families can drop off laundry for cleaning; Olay and CoverGirl will offer makeup and styling for moms and athletes; Gillette will have a “man cave” with giant TV screens, video games and shaving services; and Duracell will offer a computer and phone recharging area.
Like in Vancouver, Tide will be ready for laundry duty.
P&G / GETTY IMAGES
The company had much more time to find and plan the 2012 edition of the family home. In 2010, it became the sponsor of the family center after former U.S. Olympic Committee sponsor Bank of America, which underwrote the cost of the hospitality center during the 2008 Beijing Games, decided to drop its sponsorship. P&G had only 96 days to find a location, develop a concept and design the first family home. It wound up renting a conference center at a local university and hosting more than 200 athletes and 700 of their family members.
Team USA will send four times as many athletes to the London Games, which has more than three times as many events as a Winter Olympics. P&G expects to host as many as 1,000 guests a day at the Family Home.
GMR helped P&G develop the center for London. The company worked with GMR and its sister agency, Sportsmark, on the Family Home it offered in Vancouver.
July 16, 2012 09:58 AM
While NBC expects to lose money for its second straight Olympic Games, it has sold more than $60 million in digital inventory. Not surprisingly, the figure represents an all-time high for digital ad sales. But it also showcases how digital is becoming a significant part of NBC’s Olympic revenue and could help the network mitigate losses in future Olympic years.
The Summer Games will be the first time every event will be streamed live online via NBCOlympics.com. NBC’s ad sales are reaping the benefits of that added online programming.The $60 million figure has helped the network achieve record-high ad revenue around the Games. During the Beijing Games four years ago, NBC brought in $24 million in digital ad sales, which represented just 3 percent of the total $850 million in ad sales. Digital sales this year account for 6 percent of the $950 million in ad sales that NBC has booked, said Seth Winter, NBC Sports Group’s executive vice president of sales and marketing.
NBC Sports Group's Seth Winter
NBC’s record digital ad revenue does not surprise industry experts, like BTIG analyst Rich Greenfield, who describes the market as being in its infancy with a lot of room to grow.
“We’re still very, very early in the digital ad sales business,” Greenfield said. “The Olympics is something where you can see more digital activity.”
NBC’s total sales figure of $950 million for this year’s Games shows that NBC has sold $50 million worth of Olympic ads in the past 4 1/2 months. In February, the network said its revenue was at $900 million (SportsBusiness Journal, Feb. 13-19 issue).
NBC is not selling digital ads on its own; it is packaging digital ads with TV sales.
“If you buy our digital media, you have to invest in all of the platforms that we distribute our Olympic content on,” Winter said.
NBC’s digital performance is important, considering that NBC executives have been hinting that they expect to lose money on the London Games on top of the $220 million the network lost from the Vancouver Games.
“We don’t necessarily expect that they will be profitable,” NBC Sports Group Chairman Mark Lazarus told a press conference last week. “We will have an improved financial position over the plan that was inherited at the time of the merger over a year ago.”
July 16, 2012 09:58 AM
Four years after it signed a late agreement to sponsor USA Basketball prior to the Beijing Games, 24 Hour Fitness has cut a similar agreement ahead of the London Games.
The deal is a one-year agreement that makes 24 Hour Fitness, which is a sponsor of the U.S. Olympic Committee, the official fitness center of USA Basketball.Financial terms weren’t disclosed.
The company already has begun activating the sponsorship. It is running an internal sales promotion for staff that will award trips to USA Basketball exhibition games. It also plans to put USA Basketball logos on the basketball courts at more than 200 of its 400 clubs.
“If you ask our team members, they’re excited about our partnership with the U.S. Olympic team, but the USA Basketball affiliation was something our front-line employees were continuously asking about,” said Carl Liebert, CEO of 24 Hour Fitness. “The other side of this is our members love it.”
The deal is the 14th sponsorship signed by USA Basketball, which is marketed by the NBA. There is no player involvement in the company’s activation plans as USA Basketball winds down its sales efforts before the London Games.
“We have a few more deals in the pipeline, but the gap is closing pretty quickly,” said Jim Tooley, CEO of USA Basketball. “There may be a couple of smaller deals out there.”
Liebert played basketball at the Naval Academy. The team lost to Duke in the 1986 NCAA tournament, and he has known Duke and USA Basketball coach Mike Krzyzewski for years.
24 Hour Fitness’ sponsorship of the USOC is up for renewal, and Liebert said he hopes that he will be able to announce a renewal with Team USA shortly.
July 16, 2012 09:57 AM
When USA Track & Field’s board convened this spring at an airport hotel in Denver to interview CEO candidates, the group was weary from an 18-month search for a new executive, but its mood changed the moment the second interview began.
Max Siegel, a former music and NASCAR executive and USA Track & Field board member, walked into the room and grabbed the group’s attention with a sharp critique of the organization. He called its TV contracts horrendous, the sites of its competitions subpar, and its negotiating approach inadequate. In his eyes, the organization had settled for the status quo, and the status quo wasn’t good enough anymore.
Max Siegel is seen as a visionary and skilled orator, but he found difficulties during his time in NASCAR.
USA TRACK & FIELD PHOTO
The board later voted unanimously to hire Siegel, who they believe will help track and field regain its place as the pre-eminent Olympic sport in the U.S., a position it ceded over the last decade as doping scandals and dropped batons tarnished its reputation.
Just seven weeks into the job, that’s exactly what Siegel is trying to do.
The CEO, who this weekend will oversee his first Olympic trials in Eugene, Ore., has hired a new chief operating officer and begun a reassessment of the organization’s mission. He wants to reshape USATF for the future, and he’s started that process by highlighting problems he wants to fix, such as membership and sponsor attrition.
“Having a 50 percent attrition rate with your membership because they don’t see the relevance of being a member tells you that you have a problem with your brand,” Siegel said. “Having your sponsors leave over the years and taking hand-me-downs from the [U.S. Olympic Committee] is a real problem. If it were … easy and weren’t that complicated, then we wouldn’t be in this position and there wouldn’t be a need for me.”
Siegel, who is the organization’s fourth CEO in five years, comes into the track world with a mixed résumé in entertainment and sports. He had success in the music industry but ran into a series of challenges during his five years in NASCAR. The first NASCAR team he ran, Dale Earnhardt Inc., no longer exists. The second, Revolution Racing, has failed to pay bills on time and furloughed staff to control costs.
The struggles in NASCAR have led more than a dozen former colleagues to characterize Siegel as a visionary thinker who is adept at setting ambitious goals for an organization but dependent on staff to map out how to get there. He is a skilled orator in private settings, capable of laying out clear revenue goals before the USATF board or convincing Toyota to sponsor his race team, but guarded and evasive when it comes to setting goals publicly.
Since entering the sports industry full time in 2007, he has gravitated toward jobs that look impossible from the outside. He became the president of global operations at DEI right when Dale Earnhardt Jr.’s contract was up for renewal and the economy was on the verge of collapse. He subsequently launched a race team devoted to developing minority drivers for NASCAR, a sport that has had only seven African-American drivers in its 64-year history.
The track and field job looks similarly difficult from the outside. USATF had been without a CEO since October 2010 when it fired Siegel’s predecessor, Doug Logan. The organization has a reputation as the most political national governing body in the U.S. because of its array of constituent groups ranging from race walking to road running to track, and it is less than a decade removed from the doping scandals that tarnished the sport and triggered a decline in interest among casual Olympic viewers.
“We have the best team in the world, but Americans don’t know we have the best team in the world,” said Michael Lynch, the former Visa sports marketing executive who is now an independent consultant. “If I were to ask you how many track and field athletes were in a BusinessWeek list of the top 100 most powerful athletes in America, who would it be? There’s one, and it’s Usain Bolt, and he’s not even an American athlete.”
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Siegel was born in Indianapolis, where USATF is based. His father was a record executive and his mother a singer. When they divorced, he and his sister were abducted by his father, who convinced the two his mother was dead. It wasn’t until his father died of cancer when he was 12 that Siegel was reunited with his mother. He has described her as a functioning alcoholic, and he moved out of the home at 14. He eventually enrolled at the University of Notre Dame and its law school.
It was Siegel’s entrepreneurial spirit that got him his first job after graduating from law school in 1992. Jack Swarbrick, now the athletic director at Notre Dame, visited the school to interview students on behalf of his law firm, Baker Daniels. Swarbrick said most students he spoke to wanted to be in litigation, but Siegel told Swarbrick he wanted to create the firm’s first sports and entertainment practice. His vision was so compelling that Swarbrick decided to hire him on the spot.
Swarbrick, who did legal work for USATF in 2007 and 2008, described Siegel as a “serial entrepreneur” and said that was exactly what USATF needs.
“They need a new vision for the enterprise, and someone who will bring a fundamental new perspective,” Swarbrick said. “As long as there’s an outlet for him to build and create, he’ll be there long term.”
Siegel left the legal profession for a career in the music industry, starting first as an agent representing gospel artists and eventually becoming an executive at Sony. It was there that he showed his ability for diagnosing and solving problems. He recognized revenue at the label he managed was depressed because artists weren’t delivering albums on time. Missing deadlines is common in the music industry, but he met with artists and convinced enough of them to be on time, helping the label triple its revenue from $25 million to $75 million between 2001 and 2007.
“Where others said, ‘Oh, that’s a cranky performer,’ he went out and listened to the issue the performer had and tried to fix it,” said Eddie O’Loughlin, who runs a gospel label called Next Plateau/Universal. “He’s very persuasive. That was a big cause of that billing tripling.”
Siegel’s success in the music industry helped him land a job in NASCAR in 2007 when Teresa Earnhardt hired him to run her late husband’s race team, Dale Earnhardt Inc. He wanted to take the late Dale Earnhardt’s brand and expand its relevance outside the world of racing to make it relevant globally in entertainment and licensing.
Brian Barr, a sales director with the team, described Siegel as a manager who painted the big picture and pushed the staff to achieve that. After the team expanded in 2007, it was in jeopardy of losing primary sponsor Principal Financial Group. Siegel pulled the marketing staff together and told them to come up with innovative ways to keep the deal. The team put together a package that included access to its facility, known as the “Garage Mahal,” for business meetings, access to the DEI trophy room and a private coach for at-track hospitality. The team had never included so many elements in a package before, and Barr credited Siegel with getting them approved and later retaining Principal Financial’s sponsorship.
“Some people might see that as difficult if they’re task-oriented, but others rise to that if they’re self-motivated and enjoy the opportunity,” Barr said.
Siegel wasn't able to keep Dale Earnhardt Jr. (left) in the fold at DEI, leading to its demise.
Siegel was brought in to bridge that divide and convince Earnhardt Jr. to stay with the team. But the driver reportedly wanted 51 percent of the team, and when Siegel couldn’t convince him to pay for it or convince Teresa to give it up, Earnhardt Jr. left for Hendrick Motorsports.
The team hung around for one season after losing Earnhardt Jr., but a lack of funding forced it to merge with Ganassi Racing at the end of 2008.
Siegel subsequently won a contract from NASCAR to spearhead the organization’s effort to develop minority drivers. To do so, he created Revolution Racing, a team that gives young female and ethnically diverse drivers a chance to compete in regional racing series.
The team has had success in developing drivers. Its most successful driver, Darrell Wallace Jr., is now competing in Nationwide Series races for Joe Gibbs Racing, and current driver Kyle Larson won a recent developmental series race. But financial issues arose last year.
Much of Revolution Racing’s equipment was repossessed, it furloughed most of its staff, it owed more than $400,000 in back taxes, it moved to three race shops in a single season, and it was sued by the owner of one of the shops for not paying rent. The team relies on NASCAR and two of its partners, Toyota and Goodyear, for most of its financial support, and former employees said it struggled to secure sponsorship.
“Like many teams in this sport, we have had challenges over the last year, but every issue is being addressed or has already been handled,” Siegel said. “We now have the staff in place who manage costs and provide the oversight any business needs. Through every issue we have faced, my commitment to the team and the sport has remained strong and is the reason why I have chosen to restructure and right-size rather than take the more drastic measures that other owners have regretfully had to pursue.”
The team is back up and running this year under a new name, Rev Racing, and Siegel remains involved with it, holding weekly phone calls with staff, but his reputation in the sport has been tainted by the team’s financial troubles.
“He can be a little hard to deal with,” said Todd Braun, whose family estate is suing Revolution Racing for unpaid rent. “It doesn’t seem like his deals really work out.”
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Siegel’s transition from his work in NASCAR into his new job at USA Track & Field concerned many senior leaders in the Olympic movement. He was a member of the organization’s board of directors for three years before resigning last October so his marketing agency, Max Siegel Inc., could be hired to manage USATF’s marketing and sponsorship sales.
When the board decided to hire him six months later as CEO, it brought back memories of the USOC’s controversial decision to appoint former board member Stephanie Streeter as CEO in 2009. But USATF’s chairman, Stephanie Hightower, pointed to examples of other organizations elevating board members to CEO as evidence that such a move is common in the corporate world.
“The real issue here is that Max was not on the board when he was selected for this position,” Hightower said. “I don’t understand why anyone would be cringing, because he was not a board member when we started this process.”
In contrast to his predecessor at USATF, Doug Logan, who was brash and quick to set public goals for the organization, Siegel has taken a measured approach to the job. He wants to build consensus with the staff, the board and track constituents before laying out his goals for the future.
“The challenge is this isn’t like private business,” Siegel said. “When you have government and constituent issues, you can’t make a decision overnight.”
The staff is in the process of setting departmental goals. Once those are completed in the next 35 to 45 days — right before the London Olympics — there will be a clearer picture regarding how much membership will increase and how much sponsorship revenue will be generated.
Increasing the organization’s annual revenue is a priority, but Siegel declined to specify how much. His predecessor, Logan, set a public goal of doubling USATF revenue to $30 million, and increased it from $14.7 million in 2007 to $19.1 million in 2011, the comparable year in this quadrennial.
“Any board member or anyone out there could say, ‘Hey, go get me more money,’ but how are we going to get there?” Siegel said. “I have a solid handle on that, probably a better handle on where our business is and what we need to do organizationally than anybody in the last few years.”
Siegel’s immediate priority is to create a predictable schedule each year that TV partners can promote and sponsors can plan their media budgets around.
Right now, the only event USATF owns outright is its championships. It puts together the rest of a season by partnering with existing events such as the Penn Relays, which are owned by an organization in Philadelphia. Historically, USATF bought the television rights to those events and then tried to place them on TV and find a presenting sponsor for the broadcast. Oftentimes, it does so at a loss.
“Our biggest asset and our biggest opportunity is to relaunch the brand in the media space,” Siegel said. “If you don’t know when your events are and you get not-so-great airtime and your schedule isn’t organized, then you don’t have a chance to get people to invest because people need to plan their media.”
He sees a direct link between that and sponsorship sales. Siegel believes it takes 18 months to sell a new sponsorship, and though he plans to hire a new sponsorship sales director, he cautioned that it will take time for the organization to cut new deals. He didn’t sell any new sponsorships in the six months he worked as a consultant, and the organization has not announced any since he took over as CEO on May 1.
“No one is going to stroke a check in three months,” Siegel said. “We have to get ahead of the sales cycle.”
Siegel’s challenge will be to speed up the 18-month buying window he said media planners need. Track will be in the spotlight at the Olympics this summer. After that, it will be largely invisible to most brand marketers in the U.S.
“The best time to be selling the next four years is now,” Lynch said. “I hope that he’s pounding the pavement and making sure the corporate community is embracing track and field now.”
Track stakeholders are encouraged by what they’ve seen from Siegel so far. They’re impressed with his desire to build consensus and work with promoters and top athletes to increase the visibility of the sport. He met with New York Road Runners President and CEO Mary Wittenberg and representatives of the Armory Foundation, which owns the Millrose Games, during a recent trip to New York and began a discussion about how their respective organizations could work together to raise the profile of track and running in the U.S.
Winning over the support of athletes won’t be as easy. Top athletes don’t need USATF for much. Many can go abroad and earn enough money at international track meets to support themselves financially. But agents, promoters and Olympic observers hope Siegel can bring them into the fold.
“He can draw the sport together,” said Mark Wetmore, a meet promoter whose agency, Global Athletics & Marketing, represents top athletes such as sprinter Tyson Gay. “The professional side is alive. Is it well? For a lot of athletes it is. Could it be better? Of course. The most important thing he can do is raise the profile of the sport and make it more visible so athletes can be more visible.”
Siegel couldn’t have said it better himself.
July 16, 2012 09:56 AM
Two of the U.S. Olympic Committee’s largest partners are teaming on an extensive merchandising program that will roll out in 2,300 Wal-Marts across the U.S. starting next week and running through the London Games.
Procter & Gamble will work with WinCraft, one of the largest USOC licensees, for an activation effort that will see thousands of Olympic-themed pallets of P&G products combined with a variety of licensed goods in the nation’s biggest retailer.The Stand Together & Save program will put the red, white and blue pallet displays in Wal-Mart’s high-traffic “Action Alley” area, prime real estate that’s adjacent to the retailer’s checkout aisles, where Wal-Mart’s biggest price promotions are featured. Wal-Mart isn’t lending any specific marketing support to the program, but since 130 million people shop at the retailer weekly — or 84 percent of the U.S. annually — that’s not unusual or even necessary.
Wal-Mart will also use the program as a July promotion.
P&G, a USOC sponsor since 2009, will feature brands including Cascade, Duracell, Febreze, Puffs, Tide and Pampers on the pallets, Meanwhile, WinCraft, one of the country’s largest hard-goods licensees, will be selling an assortment of Team USA-logoed products — from towels, pennants, magnets and mugs to key chains, signs and car flags — through the pallet program.
For the USOC, the program could be a boon. Not only does it offer an exclusive design on the merchandise at America’s biggest retailer, it also will be Wal-Mart and the USOC’s largest retail program this year.
“This is really an all-star program at the right time of year to capitalize on Olympic interest to generate impulse sales at Wal-Mart,” said WinCraft President and COO John Killen, “so it’s in a place where everyone wants to be when everyone wants to be there.”
WinCraft will also have similar free-standing displays of USOC-licensed merchandise in 500 Kroger grocery stores.
“All signs point to this being one of the most successful Summer Olympics ever and being able to pull together this much product with a consumer-products powerhouse like P&G, with the USOC and Wal-Mart under a red, white and blue thematic, is just immensely satisfying,” said Philip Welp, WinCraft vice president of business development. “And it works well, because so many of our products are manufactured domestically.’’
With this program as a model, the prepackaged retail program could serve as a template for other large properties, especially with P&G and other large packaged goods companies getting more active in sports sponsorships. For example, P&G is also an NFL corporate sponsor, WinCraft is an NFL licensee, and Wal-Mart has bought ads on NFL game broadcasts.
“Their supply chain is not really set up to do hot-market products, and mass merchandisers like Wal-Mart have been forced to cut margins recently, so it’s tough for them to accept the margins that are normally considered acceptable in licensing,” said Jeff Bliss, the former president and CEO of the Sara Lee Olympic Partnership, who now heads The Javelin Group, an Alexandria, Va., marketing and licensing consultancy.
“But if you can get a top vendor like P&G to participate, it’s a real door opener to this kind of deal at that class of retail.”
July 16, 2012 09:55 AM
Financial terms of the eight-year extension were not available, but sources said it offers the U.S. Olympic Committee both cash and value-in-kind support. Oakley, which signed its first USOC agreement in the fall of 2010, will remain the official eyewear supplier of Team USA.
International Olympic Committee rules prohibit non-Olympic sponsors from featuring Olympians in advertising in the weeks prior to, during and after the Games. By signing a long-term agreement with the USOC, Oakley ensures it can promote its roster of marquee Olympians in their respective Summer and Winter Games, including American track star Lolo Jones, beach volleyball star Kerri Walsh, decathlete Bryan Clay, snowboarder Shaun White and skier Lindsey Vonn.
“We’ve always looked at the relationship with the USOC as both an obligation and an opportunity,” said Scott Bowers, Oakley’s senior vice president of global marketing and brand development. “As a small company, it was fine to work with Olympic athletes behind the scenes, but eventually we got big enough to where it became almost like ambush marketing. That’s when it became an opportunity for us to leverage the U.S. team marks, develop sunglasses and give back to the USOC.”
Oakley released a signature line of sunglasses last year and launched its “Beyond Reason” campaign in April for the London Games. The campaign involves commissioning artists to do paintings of Oakley athletes that capture what drives those athletes to succeed. The company will show the art in London on July 26, the day before the start of the 2012 Games. It is using “Beyond Reason” as a tag line in its Olympic marketing, as well.
Bowers said Oakley will launch a social media initiative during the Games. The company will host its athletes at a hospitality venue in London that it’s calling the Oakley Safe House. It will be a place where athletes can come and relax during the Olympics, and the company plans to have a website that bears the same name where it aggregates Twitter feeds and perspective from its athletes about the Olympics.
Details on that effort will be announced at a later date.
July 16, 2012 09:55 AM
A-B took Club Bud parties to Beijing, as well as Turin and Vancouver.
TRIPP MICKLE / STAFF
The U.S. Olympic Committee sponsor recently secured a venue in London and plans to host three nights of parties, Aug. 9-11, during the final weekend of the London Games. The company’s U.S., United Kingdom and international divisions will be collaborating on the party.
Sources familiar with Budweiser’s plan said the party venue will be similar to the one the company had in Vancouver, which was a 19,000-square-foot, 1,000-person capacity, multilevel bar that had a concert stage. The Vancouver venue had several bars, a concert stage, elevated seating and lounge areas that were adjacent to a 2,646-square-foot dance floor. There were live DJs.
The three parties planned for London represent a slight decrease from what the brand has done at previous Olympics. A-B staged four parties in Turin, Italy, during the 2006 Winter Games, it doubled that total to eight in 2008 when its Budweiser brand was the official beer of the Beijing Games, and it hosted five parties in Vancouver during the 2010 Winter Games.
Budweiser became the party planner for Team USA in 2006 after Sports Illustrated ended its two-decade reign as party host. Through the years, it has used Club Bud as a hospitality venue for key distributors and a way to garner media attention and buzz during the Olympics.
The venues have played host to many Olympians after competition, including snowboarders Seth Wescott, Gretchen Bleiler and Lindsey Jacobellis, and swimmers Michael Phelps and Natalie Coughlin. There also have been celebrity appearances such as “Mad Men” star Jon Hamm and singer Michael Bublé.
“It’s become the see and be-seen [spot] of the Olympics, which is a good thing for the brand,” said Mary O’Connor, The Marketing Arm’s vice president of Olympic marketing and global platforms, which does not work with Anheuser-Busch. “The Olympics are the place where all their key clients come together, all the sponsors come together and all the athletes come together. It’s not a bad place to have a party.”