BRANDWEEK LOOKS AT SPONSORS' WILLINGNESS TO PAY NFL FEES
With the NFL "struggling to net an increase in a soft-
drink category that has been its cash cow, NFL owners ...
may finally be ready to address the question of whether" the
league "should fundamentally change the way it sells
corporate sponsorships," according to Terry Lefton of
BRANDWEEK. Recent "industry buzz" has incumbent Coca-Cola
offering $18M and Pepsi $14-15M, "but with little
enthusiasm," for the category. And while NFLP Senior Dir of
Corporate Sponsorships Steve Phelps said that fast-food
negotiations have been "put aside" pending a soda deal,
"insiders say Taco Bell balked" at the $10M price tag the
league was "hoping to get from incumbent McDonald's."
Without being specific, Phelps said that those numbers have
changed and added, "we will land a soft-drink deal within a
month, and we will get an increase if we grant certain
rights." Strike Ten VP/Marketing John Sohigian on the NFL's
negotiations: "Rights fees are going down as far as pure
cash, so to get an increase, the value has to go up
significantly." MLS Exec VP Randy Bernstein: "Sponsors
don't care so much about logo exposure, it is their caseload
and are you moving that?" (Terry Lefton, BRANDWEEK, 3/23).
HOW MUCH IS TOO MUCH? Lefton adds that the "larger
issue" is whether the NFL should expect rights fee increases
"when sponsors may see as much as a 30% increase in the cost
of advertising on NFL games." Sprint VP/Advertising &
Sponsorships Tim Kelly, on the $24M annual rights the
company pays: "I'm pretty confident in telling you we won't
be able to buy much more." The NFL has 17 categories up for
renewal, and Phelps said, "We are going to have a record
year as far as renewal percentage as well as renewal dollars
and activation." Lefton adds that the value of the TV and
Sprint deals "may have also convinced ownership that there
is similar revenue potential in corporate sponsorship."
IMG's Gary Jacobus, a former NFLP Sales Exec, said, "Some
owners think they should be getting that (amount) in every
big category. It just can't be done" (BRANDWEEK, 3/23).