Pierre Boivin, President and COO of Canstar Sports is interviewed in this month's issue of SPORTING GOODS BUSINESS and addressed Nike Inc.'s buyout of Canstar. Boivin, on possible changes in the management structure: "We have discussed this in great length, and the basic attitude is that if 'it ain't broke don't fix it.' ... I have seldom seen such a perfect marriage between two companies." On the in-line industry retail sales in '94: "It's very difficult to predict at this stage, but all the indications are that the growth in North America will probably be somewhere between 40 and 50 percent (over 1993's figures). In Europe, it looks like the market will probably have doubled, and it may have even tripled from 1993's level." Boivin expected Canstar to grow from $160M in sales in '93 to "well above" $400M in sales over the next four to five years. On the success of in- line category continuing in the next few years: "This year has been a surprise so far, and we are starting to see a segment very clearly between in-line skates and in-line hockey. And for us to attain our goals, they are now two very separate sectors today, because the fastest growing area of in-line skating is roller hockey. It's significant because we are to in-line hockey what Rollerblade was to the sport of in-line skating at its inception" (Greg Pesky, SPORTING GOODS BUSINESS, 1/19).
Sponsorships Advertising Marketing
Cobra Golf Inc. reported a net income of $5.2M for the 4th quarter ending December 31, an increase of 220% from net income of $1.6M for the same quarter in '93. The company's net sales increased by 130% to $29M in the quarter up from $12.6M in '93. Cobra attributes the increase in net sales and net income to continued demand for all of its oversize product lines, which the company claims is partially a result of their increased marketing efforts (Cobra).
The CISL and Garcis, USA announced yesterday that they have signed a three-year marketing and sponsorship agreement to become the league's official uniform, shoe and soccer ball sponsor. CISL Commissioner Ron Weinstein: "This is a major step for the CISL. Garcis' sponsorship of the CISL is the most extensive uniform, shoe and soccer ball agreement ever for a professional indoor soccer league" (CISL).
The Hornets are the No. 1 team in total sales of NBA-licensed products -- including jerseys, caps, computer games, andother products -- for the 1st quarter of the '94-95 season. TheBulls have led the league since the '89-90, but have fallen to2nd. Joe Martucci, manager of Modell's Sporting Goods in NewYork: "Last year, people really didn't get the effect of Michael(Jordan) not being on the Bulls. This year we have noticed it insales" (Tom Lowry, N.Y. DAILY NEWS, 1/20). The complete listincludes:
NBA Marketing Communications Manager Jon Stern said theHornets success is worldwide, and attributed it to a "combinationof the teal, the way they've marketed themselves and the logo."The Hornets were the first pro team to have teal as their primarycolor. Stern also pointed to the popularity of the Hornets'version of the video game "NBA Jam" as a parameter of theirsuccess. Team President Spencer Stolpen said their researchshows the Hornet's merchandise to be the top seller among "inner-city minority youth." Stolpen: "The irony is the smallest marketin the NBA is now the top-selling merchandiser" (Ron Green,CHARLOTTE OBSERVER, 1/19). Stern said that NBA Properties isprojecting over $3B in sales worldwide for '94-95. The Raptorsand Grizzlies, two expansion franchises who have yet to play agame, both made strong initial showings (THE DAILY). RaptorsConsumer Products Dir David Strickland estimated his team and theGrizzlies "may have sold as much as $100M in merchandise and thatis without having team uniforms on the markets, traditionally oneof the fastest moving items" (Craig Daniels, Toronto GLOBE &MAIL, 1/19).
An Atlanta-based alliance of minority leaders launched a boycott campaign against Burger King, "alleging discrimination against African Americans and Hispanics" (MIAMI HERALD, 1/19)....The first KFC "Colonel's Kitchen" opens today in Dallas, TX. It is the company's attempt to challenge Boston Chicken's market share in the "comfort food" wars (USA TODAY, 1/20)....RJR Nabisco raised $1.2B from the sale of 19% of its Nabisco food operations in a move aimed at bolstering its stock price and reducing debt (N.Y. POST, 1/20)....Next week, MCI is expected to report "flat-to-down" earnings, "a sorry fourth quarter in an unusually troublesome year" (WALL STREET JOURNAL, 1/20). ....Northwest Airlines posted record fourth quarter profit that was more than double what Wall Street had expected (WALL STREET JOURNAL, 1/20)....Apple reported the highest quarterly sales in the company's history for its first fiscal quarter, with earnings up 78% over last year's first quarter (FINANCIAL TIMES, 1/20)....A digital tape-editing machine developed by Avid Technology in Tewksbury, MA, that "whittles down the hours it takes to search through footage and cobble various tape segments together" was used by three NFL teams this past season to speed the "time-consuming" chore of watching game films. The company hopes that the machine becomes popular enough so that some day "all game footage is digitally stored in a central NFL library" (Carl Desens, BUSINESS WEEK, 1/23 issue).
Today at 12:00pm EST, the Jaguars will unveil the team's game uniforms and new logo. While the colors of gold, teal and black will remain the same, the Jaguar logo will make a 3/4 turn so that it is more of a front shot of the animal rather than a profile (Jaguars). The new logo is an attempt to defuse a lawsuit filed by Jaguar Cars Ltd., which claimed that the new NFL's team logo too closely resembled the registered trademark of the luxury sports car. Besides the logo, the key issue in the suit is the team's name, which the car manufacturer believes it owns. It is seeking an agreement with the team that would acknowledge the car company's name ownership through a license or some other arrangement (Baltimore SUN, 1/20).
According to a survey conducted by Edelmann Scott, a Richmond-based advertising and public relations firm, more than a third of people planning to watch the Super Bowl say they will either ignore all the ads or watch 25% or less of the ad time. Edelmann Scott's David Blum: "This is bad news for advertisers investing $1 million for each 30-second." Eighty-three percent of those surveyed say they plan to watch the game. Interest in both the game and the ads is highest among 18-24 year olds and people who earn more than $50,000 a year and lowest among retirees. But according to Nike's Keith Peters, the number of ad viewers is higher for this game: "If you were to ask the same group of people about ads on some other special event or program, you'd probably have more than one-third of them ignoring the ads" (Dottie Enrico, USA TODAY, 1/20)....Today's USA TODAY "Super Bowl Ad Watch" features Isuzu's campaign. They have bought one 60- second ad in the third quarter (USA TODAY, 1/20).... Ford will unveil their Super Bowl ad campaign today which will feature the Ford Explorer (Ford)....Former player Lawrence Taylor's business manager Bobby Cupo said Taylor will not sail on the controversial Super Bowl cruise that will feature gambling and nude dancers. The NFL has warned any players or those affiliated with the league that if the sail on the cruise they could face fines and/or lifetime suspension (N.Y. POST, 1/20).
PBS' "Nightly Business Report" examined the new "battle for Britain" between Coke and Pepsi. Pepsi will be using "a new advertising weapon" in supermodel Cindy Crawford. PepsiCo Int'l/Europe VP/Advertising Larry McInstosh: "Today Coke and Pepsi are neck and neck in the States. And while a lot of factors have contributed to our success, it was our advertising that really convinced millions of Americans to be part of the Pepsi generation." In November in the UK, Coke's market share "dipped below 50% for the first time ever" to 42.2%, while Pepsi had a 20.1% market share ("NBR," PBS, 1/19). Pepsi's new U.S. campaign, which debuts during the Super Bowl, will feature the slogan: "Nothing Else is a Pepsi." The company is "backing off from its youth kick" and emphasizing "brand tradition" in order to target a wider audience (Harry Berkowitz, N.Y. NEWSDAY, 1/20). In New York, Stuart Elliott examines Coca-Cola's agency strategy --based on creative criteria instead of those used to dealing with huge corporations (N.Y. TIMES, 1/20).
In the current issue of FORBES, Rita Koselka asks whether ITT made the right decision in buying Caesars World, rather than Bally Entertainment Corp. ITT bought Caesars for an estimated $2B while it could have acquired Bally for around "$850 million in cash plus assumption of $260 million in debt." And now, there is speculation that the company's CEO, Arthur Goldberg, is "fattening Bally to put it on the block at a better price than it would have fetched from ITT." Goldberg plans to invest around $44M into a "riverboat" project in the Mississippi/Louisiana area. Such investments question whether he "wants to expand rather than sell out." And, if he does, "it will be for a lot more than the $1.1 billion deal that ITT walked away from in 1993" (Rita Koselka, FORBES, 1/30 issue).