StubHub and MLBAM have “signed a five-year contract extension” for StubHub to “remain baseball’s official ticket resale marketplace,” according to Eric Fisher of SPORTSBUSINESS JOURNAL. Financial terms were not disclosed, but the parties “will participate in a revenue-sharing agreement.” The original pact was “estimated to be worth nearly $60 million a year, when also including offline MLB team sponsorships, and the new deal will increase beyond that.” StubHub has been “under heavy criticism from some teams for aggressively promoting available ticket listings far below primary market prices and sometimes under a dollar.” StubHub will “seek to address the undercutting complaints by moving toward an all-in pricing model in which MLB ticket listings beginning next year will show upfront the total cost to purchasers when also factoring in commissions, delivery and other fees.” Under the new structure, the “minimum MLB ticket cost on StubHub in full will be $6, due largely to changes in how electronic delivery fees are calculated.” But the “days of the 50-cent ticket listings on StubHub are now over.” Under the contract, teams also will “gain greater latitude on whether they want to have StubHub participate in offline marketing, such as signage, within their ballparks.” Buyers also will see “secondary ticketing links directly on MLB.com and official team pages, and in some markets fans will still be able to pick up StubHub orders at ballpark will-call windows.” But at least two MLB teams, the Yankees and Angels, have “already opted out of the new contract with StubHub” (SPORTSBUSINESS JOURNAL, 12/10 issue).
Marketing and Sponsorship
Ad sales for the second live streaming of the Super Bowl are “nearly complete, with CBSSports.com nearly sold out,” according to Brian Steinberg of AD AGE. CBS Interactive Chief Client Officer David Morris said, "We only have a few packages remaining." He added that the live streaming will have ads “from marketers supporting the pre-game and Super Bowl broadcasts on CBS.” Ads will “primarily come in the form of video commercials that appear during breaks in the game and ‘companion’ advertising that is placed around the CBSSports player during game time.” Morris said that categories that “will have a noticeable presence in the CBS live-stream include autos, consumer packaged goods, restaurants, beverages, retail and technology.” But he declined to name specific clients. Morris said that “not every Super Bowl advertiser is in the live stream.” It remains unclear “whether digital viewers will be able to see all the big-budget TV ads for which the event is known.” CBS’ TV broadcast of the game has ads “going for an average of between $3.7 million and $3.8 million,” but prices for digital inventory around the game “are significantly less.” NBC for its Super Bowl broadcast last year was “selling inventory surrounding its live stream for a range that moved between the high six figure and low seven figures” (ADAGE.com, 12/10).
College football as an ad category is “hotter than ever, helping fuel an extraordinary escalation in television-rights fees for college sports,” according to Suzanne Vranica of the WALL STREET JOURNAL. Data from Kantar Media showed that companies “spent about $1 billion on college football national-TV ads in the 2011 season, up 27% from the prior season.” Some marketers are “moving money from other parts of their ad budget.” Data showed that GM, the “second-largest advertiser in college football behind AT&T Inc., boosted its spending on the category last season by 24% to $46 million -- despite cutting its overall U.S. ad spending by 16%.” Aflac said that it has “increased its spending on college football by 47% over the past three years.” It intends next year to "roll out an Aflac truck to football events to allow students and alumni to sign up for insurance.” Like the NFL, college football “gives marketers a way of connecting with affluent males watching live programs who are hard to reach through other TV programming -- but at a lower price” than pro football. Chick-fil-A “buys college football ad time because it wants to reach upscale men.” Chick-fil-A Senior VP & CMO Steve Robinson said that the QSR has “tripled what it spends on the sport over the past five years.” Vranica notes the NCAA “offers more flexibility than the NFL in allowing integration of sponsors into game broadcasts.” Data from Kantar Media showed the average price of a 30-second ad during regular Saturday college games airing on ABC, CBS or NBC in the ‘11 season “cost about $93,700, up 12% from the prior season, while the average price of a spot during the Bowl Championship Series was about $810,000, up 9%.” Kantar added that ad prices so far this season are “up between 10% and 15%” (WALL STREET JOURNAL, 12/10).
BIG BET: The WALL STREET JOURNAL’s Bachman & Futterman write under the header “College Football’s Big-Money, Big-Risk Business Model” and report that TV “has agreed to pump about” $25.5B in rights fees into college conferences and their member schools over the next 15 years. That includes ESPN’s recent deal to televise “major-college football's first playoff” valued at $5.6B over 12 years. Meanwhile, schools are "doing whatever is needed to maximize what they can command from TV.” Given the rising costs of Division I college athletics, “which at their current growth rate will increase some” $12B over the next 10 years, “this alliance represents one of the largest bets in the history of both these businesses”: a $25.5B “wager that college football, a quirky, tradition-bound game that used to be a regional fixation, can continue to draw large national audiences and, in doing so, help both the schools and the networks survive” (WALL STREET JOURNAL, 12/10).
RATINGS BONANZA: AD WEEK’s Anthony Crupi notes the Notre Dame-Alabama BCS National Championship matchup “suggests that the ratings for the Jan. 7 broadcast will be celestial.” The title sponsors are “allotted between eight and 10 spots in their showcase BCS games,” and inventory was “tight long before the matchups were even announced.” Ad units went “particularly fast in this year’s upfront,” and ESPN President of Customer Marketing & Sales Ed Erhardt estimates that he “sold between 80 percent to 85 percent of all of his available bowl inventory in the spring bazaar.” Crupi notes the relative “scarcity of air time and the potential for blockbuster deliveries have latecomers digging deep.” While ESPN does not comment on pricing, media buyers said that 30-second spots packaged with digital opportunities “were going for as much as $1 million just two weeks ago.” Erhardt said, “We have a handful of opportunities that we are using very strategically so that all parts of our portfolio are monetized.” He added that “nearly every linear TV buy is packaged with real estate on a suite of digital properties that includes ESPN.com and the WatchESPN app.” Those looking to buy in-game spots to stream on WatchESPN are “out of luck” (ADWEEK.com, 12/10).
On the heels of Texas A&M QB Johnny Manziel winning the Heisman Trophy on Saturday, the university is not "wasting any time marketing itself," according to Darren Rovell of ESPN.com. The school will "toast the latest Heisman winner with a billboard in the heart of Times Square" in N.Y. It is an "extravagant spend" for the school, but there "are big plans and hopes for a decent return on investment." The campaign reads: "They call him Johnny Heisman. The 12th Man stands a little taller today as we congratulate Aggie quarterback Johnny Manziel, winner of the 2012 Heisman Trophy." A&M also "bought full-page ads" that ran in today's editions of the N.Y. Times and USA Today. The marketing blitz "includes ads online, nationally with ESPN.com and SI.com and regionally with the Dallas Morning News, Houston Chronicle and San Antonio Express-News" as well as the Austin American-Statesman. A&M VP/Marketing & Communications Jason Cook would not disclose the ad budget, but said that it was a "collaboration between the Aggies athletic department and the university at large." adidas, the school's athletic-gear provider, has "made shirts with the Texas A&M logo and colors with Heisman imagery to be sold at retail" (ESPN.com, 12/9). In Texas, Kelly Brown wrote A&M's marketing team has not "let the opportunity slip by." Cook said, "Johnny Manziel being a part of the Heisman discussion has brought an incredible amount of attention and visibility for Texas A&M. The eyes of the entire country have truly been on Texas A&M for the past several weeks, and Johnny has been a great ambassador for our university throughout the entire process." City of College Station Dir of Public Communications Jay Socol said that he has "noticed a major increase over last year ... in state and national mentions of College Station in the media" (Bryan-Station College EAGLE, 12/9).
Reebok's CCM Hockey brand is driving home the message that "there's more to hockey" than the NHL, introducing a "new advertising campaign with the theme Start Your Legend," according to Pat Hickey of the Montreal GAZETTE. While CCM products are endorsed by "some of the brightest young stars in the game," including Avalanche LW Gabriel Landeskog, Oilers C Ryan Nugent-Hopkins and Islanders C John Tavares, the latest ad campaign is centered "around a group of youngsters from the Montreal area." With the help of minor hockey organizations, CCM "identified 1,100 promising 10-year-olds to participate" in CCM Skills Camps. The campaign represents a "chance to sell the youngsters on their products and the camps also served as a testing lab for its new Crazy Light foam protective gear and the new RBZ stick." When it was decided to build a print and video advertising campaign around the youngsters, CCM "unleashed a casting director on some of the 125 youngsters who attended the Montreal camp." The kids in the ad "are seen playing street hockey and shooting pucks in a garage, with each youngster predicting: 'I am the future.'" CCM VP/Global Marketing Glen Thornborough said, "Choosing some of these players to be part of our campaign was not difficult after seeing how dedicated they all were and how much enthusiasm they had for the game." Hickey noted the cancellation of the Jan. 1 NHL Winter Classic "provided CCM with an unexpected opportunity to expand on its commitment to youth hockey" (Montreal GAZETTE, 12/9).
TEENAGE DREAM: SPORTSBUSINESS JOURNAL's Liz Mullen reports CCM is "close to signing a multiyear head-to-toe apparel and equipment endorsement deal with 15-year-old hockey phenom Connor McDavid, the No. 1 pick of the Ontario Hockey League." The deal would be "the most significant deal Reebok has signed with a young hockey player" since '05, when it signed Sidney Crosby, 17 years old at the time, to a five-year deal. McDavid, who will be eligible for the '15 NHL Draft, would be the "youngest hockey player to endorse Reebok" (SPORTSBUSINESS JOURNAL, 12/10 issue).