Marketing and Sponsorship
NASCAR drivers "make their money in three primary areas -- salary, percentage of race winnings and bonuses" -- and those at the top of the sport "can significantly supplement their income with merchandise sales and personal endorsements," according to Bob Pockrass of SPORTING NEWS. NASCAR's highest-paid driver is "believed to be Dale Earnhardt Jr." Pockrass cited an SI report as showing that Earnhardt Jr. made $28.1M in '11, made up of $4.1M in salary and earnings and $24M in endorsements. NASCAR insiders "shake their heads at suggestions that any driver currently in the sport" makes more than $10M in endorsements, as "rarely does any endorsement deal eclipse a half-million unless it's a major endorsement for someone like Earnhardt." Sometimes a team will "base the salary of a driver on the team's sponsorship." NASCAR team owner Roger Penske said that sponsorships for top teams currently "bring in $12-15 million, although it is believed that top drivers can attract more sponsor dollars." Pockrass noted drivers typically "command between 30 and 50 percent of what the sponsor pays the team, with the more the sponsor pays, the more that can go to the driver." Driver Jeff Gordon said, "I feel like every driver should be paid based on the sponsorship. ... In my case, I know I'm getting a percentage and (exactly) what percentage I'm getting of the sponsorship." Pockrass noted drivers "often get 33 percent of the apparel and merchandise profits that bear their likenesses, although sometimes it's 30 percent as the team takes a little more as an administrative fee." Some drivers, if the sponsor "does not take a cut, will get 40-45 percent." Sources said that while the most popular drivers in the Sprint Cup Series can "earn more than $500,000 in merchandise sales, only a driver such as Earnhardt could crack more than $1 million a year in merchandise royalties" (SPORTINGNEWS.com, 12/4).
Baylor Univ. estimates that Robert Griffin III's Heisman Trophy win last year was worth $250M in "extra donations, increased ticket sales, licensing fees, sponsorship deals [and] an expanded deal with Fox Sports Southwest," according to Michele Steele of ESPN.com. Baylor said that Griffin’s Heisman win "has resulted in a 10 percent rise in giving to the Bear Foundation," while licensing royalties "are up more than 50 percent." Also, "most importantly, plans for a new $250 million stadium were finalized soon after Griffin’s Heisman win." Baylor Assistant AD/Communications Heath Nielsen said, “We were still beating the trees for donors and money, and as soon as (the Heisman win) happened, we finalized all our plans." Meanwhile, Baylor athletics "set a Web traffic record." Media measurement company General Sentiment said that Baylor "earned the equivalent of $14 million more in media mentions in the month that RG3 won the Heisman." Steele wrote, "But what about the players? ... If you win the Heisman, are you set for life even if you don't have an amazing football career afterward?" ESPN analyst and '89 Heisman winner Andre Ware said, “Not at all." Tri-Star Productions President Jeff Rosenberg, whose company promotes athlete autograph shows, said that the first year after winning the Heisman is "a bonanza for an athlete’s business." After Griffin signed with Tri-Star, he "charged more than $100 per signature." Rosenberg: “They are set up financially, but they’re not what I would call set up financially for life. They’re making tens of thousands per year, not hundreds of thousands of dollars a year.” Pro Stars Ink President Ben Litvin estimates a Heisman winner "can pull down about $50,000 a year from three to four autograph sittings a year, three to four corporate appearances a year, two to three paid golf appearances per year, and three speeches" (ESPN.com, 12/7).
JOHNNY ON THE SPOT: Texas A&M QB Johnny Manziel is the favorite to win this year's Heisman Trophy, and Texas A&M VP/Business Development Shane Hinckley said that the school has "two full-time employees in compliance devoted to addressing issues related to the unauthorized use of anything related to Manziel on a daily basis." Hinckley, who also runs A&M's athletic licensing business, said that the school's compliance office "has sent out 60 cease-and-desist letters to people making Manziel product and 37 cease-and-desist letters to bootleggers making product specifically using Johnny Football as well as Texas A&M trademarks" (ESPN.com, 12/7).
Baltimore-based sporting goods manufacturer STX has "signed a three-year agreement to become the supplier" of the men's and women's NCAA Lacrosse Championships, according to Chris Korman of the Baltimore SUN. STX as part of the agreement will "provide balls and nets for the event." The company also will "supply equipment used in interactive displays around the stadium, and will bring athletes" sponsored by STX to meet with fans and the media. STX Marketing Dir Ed Saunders said that this agreement is "unique in the sport." He added that "increased interest in the sport of lacrosse -- especially in the South and Midwest -- has helped fuel what will be STX's best year, with growth of 20 percent." Korman noted next year's NCAA men's championship "will be hosted by Philadelphia, but the event returns to Baltimore in 2014 for a sixth time since 2004." The Division I women's championship also will "be in Philly next year," but the Division II and III tournaments will be hosted by Stevenson Univ. in Owings Mills, Md. (BALTIMORESUN.com, 12/6).
The NHL lockout is having an “impact on NHL merchandise retailers, a group who are feeling the impact no matter how close they are to actual arenas,” according to Blake Murphy of the EDMONTON JOURNAL. Jersey City store manager Mark Breckenridge said sales for NHL products are “way down” at the retail chain’s West Edmonton Mall location. Breckenridge: “We usually see a spike for home games, especially for Original Six and other popular teams like the Penguins.” An Edmonton-based A Game On Sports assistant manager said, “It’s like it’s out of sight, out of mind. It’s been a budgetary nightmare.” Another retailer, United Cycle, has “witnessed a shift in the hockey memorabilia market entirely.” United Cycle Sales Campaigns & Coordinator Kelly Hodgson said, “Memorabilia has been way down. Not only is there not much available, since the players aren’t around to sign, but there isn’t as much demand. The value also seems to have gone down” (EDMONTON JOURNAL, 12/7).