Group Created with Sketch.
Volume 24 No. 117

Marketing and Sponsorship

N.Y. Road Runners has a new title sponsor for its flagship N.Y. Marathon that will also support its other top-tier events. IT services and consulting giant Tata Consultancy Services (TCS) has signed on as a top-level sponsor with NYRR in an eight-year deal that sources pegged at around $100M. NYRR officials would not confirm the value. Following the '13 N.Y. Marathon on Nov. 3, Tata will replace ING, which had been title sponsor of the marathon since '03. TCS, a $10B company, has been a N.Y. Marathon sponsor for several years and is part of the Tata group, India's largest industrial conglomerate. TCS also sponsors the Boston and Chicago marathons. This is the fourth year that TCS will sponsor all three of the largest U.S. marathons. Just as when it landed ING years ago, NYRR found a corporate patron headed by a distance runner. TCS CEO & Managing Dir Natarajan Chandrasekaran has run marathons in Mumbai, Prague, N.Y. and Stockholm. With ING exiting and the controversy surrounding the cancellation of last year's event, many thought this big ticket would be a tough sell. However, from early this year, NYRR officials indicated they were finding abundant marketplace interest. Sources said BMW was also in the hunt for around to the same money as TCS. However, those same sources said NYRR preferred TCS since it was a pure play against marathons and runnings and thus would receive more focus and marketing support. Early bidders included New York Life and some health care companies.

SIGN OF THINGS TO COME? With technology roiling the consumer and business landscapes, and every sports venue looking to provide better connectivity, Tata's big spend prompts the question of whether the tough-to-differentiate IT category will henceforth spend at the level of some of the biggest sports sponsors. Of course, IBM has been a buyer of top-shelf sports rights for years. SAP and Cisco also have been buying large sports sponsorships of late, and even an unfamiliar IT brand like High Point Solutions put its name on Rutgers' newly-renovated football stadium in '11. "We are seeing the technology category sliced more thinly and the companies invoked are all in each others' businesses," said Octagon President & CEO Rick Dudley, whose company consults for Cisco. "The challenge is combining the technology showcase, which every sponsor wants, with a branding and b-to-c reach."

Penske Racing has signed new deals with driver Brad Keselowski and Miller Lite that will keep last year’s Sprint Cup champion and sponsor together through ‘17. The new sponsorship agreement extends a partnership that Penske Racing began in ‘91 but ends Miller Lite’s 23-year run as a full-season primary sponsor. Under terms of the deal, Miller Lite will go from sponsoring 36 races to 24 races on the No. 2 car known as the “Blue Deuce.” Miller Lite’s current sponsorship is valued at more than $13M a year. Financial terms of the extension were not available, but sources described it as a “significant” increase. The deal includes a one-year option for ‘18. Roger Penske, who declined to discuss terms of the deal, said that he asked Miller Lite execs to reduce the number of races the brand sponsors so that Penske Racing could increase its revenue by finding one to two other sponsors for the remaining 12 races. Penske said, “I said, ‘It gives you a chance to stabilize your spend and not look at annual increases, and it gives us a chance to take that real estate and find people who want three, four, five races.’ It’s a win-win. It gives them stability with us and opens the door for us to get more sponsorship revenue.” Miller Lite was in the second year of a three-year deal with Penske Racing when Penske approached MillerCoors execs about a renewal. MillerCoors CMO Andy England said that the brand did not want to give up 12 races but agreed because it wanted to remain partnered with the team and recognized the team wanted to increase its revenue. England added, “We firstly wanted to be partnered with (Roger Penske) for a long time to come. Secondly, we want him to be successful. We want to enable that success. … For a NASCAR team and driver to be successful, they have to have the right team behind it (and) the right equipment.”

LOOKING TO REBOUND NEXT YEAR: Coming off last year’s Sprint Cup title, Keselowski has struggled in the No. 2 Miller Lite car this year. He failed to win a race and he became only the second defending Cup champion to fail to make the Chase for the Sprint Cup Championship. Penske and Keselowski believe the combination of a long-term deal with Miller Lite plus two other sponsorships will boost the No. 2 team’s revenue and allow it to invest in improving the car in coming years. Keselowski: “The naked eye looks at this as going from 36 to 24 (races). The initial reaction to that is that this is a reduction to the sport. But that’s not how things are working here. This is a strategic play. … What this does for us is open up 12 races to increase sponsorship and revenue base for our team, which we think is going to make us more competitive.” He added that the sponsorship extension and his contract extension will help him improve as a driver, as well. “When you have a deal extended long-term, this is beyond myself, this is sponsorship, you can put that out of your head. When you can put those out of your head and focus on the task at hand, performance, that can be healthy for the team. You can become more focused.”

SALARY INCREASE AS WELL: Keselowski, who is represented by John Caponigro of Sports Management Network, also got an increase in salary under his new deal. Penske said that some of the increase in costs for the No. 2 team will be because of driver salary. He added, “One of the good things is we pay our drivers based on performance. To (Keselowski’s) credit, he did not come back after he won the championship and knock on our door and say, ‘You have to increase my salary.’ That’s the type of guy he is.”

Rogers Communications is planning a C$700M "coverage boost in Alberta while inking a 13-year exclusive partnership" with the Oilers, according to Matt Dykstra of the EDMONTON SUN. Rogers will "receive official sponsorship and marketing rights" for the Oilers, WHL Edmonton Oil Kings and Rexall Place. Oilers President & CEO Patrick LaForge said, "They've been our largest broadcaster, providing 60 games a year to Oilers fans and now we're adding to that with Rogers technology and sponsorship in a much bigger way to generate content and implement it better." LaForge added that the deal "will carry over to the new downtown arena when it's finished." The deal "includes advertising placements, arena signage, concourse, rink, in-ice, in-bowl and in-game applications." Rogers also will be the "presenting sponsor of Oilers television broadcasts, the Oilers website and the Oilers Mobile App." Rogers Exec VP & CMO John Boynton said that the plan is the "first step of a bigger Rogers investment in Alberta." Boynton said Rogers plans to be "a dominant player" in the province and that some changes will start soon. He said Rogers will "experiment" with several different ways to interact with Oilers fans (EDMONTON SUN, 10/2). LaForge: "We had a relationship with Telus (which has expired). We are happy to say that Rogers is adding on to our relationship." The agreement "does not include naming rights for the yet-to-be-built downtown arena" (EDMONTON JOURNAL, 10/2).

Reebok is "turning to sponsorship deals with prominent fitness groups to try to revive a venerable name that has faded" since adidas acquired the brand in '06, according to Victoria Bryan of REUTERS. Reebok is "winning converts among hardcore sports enthusiasts and aims to build on this support to make up ground it has lost to rivals such as global market leader Nike." In addition to its CrossFit partnership, Reebok has linked with fitness group Les Mills and the Spartan Race, while CrossFit "is attracting devotees in Europe." Reebok's effort "already appears to be paying off," as when adidas "warned on its profit last month, analysts were quick to note that Reebok was, for once, not cited as a problem." adidas said that it "needs several brands to cover the whole of the global sportswear market." While the adidas brand is "big in soccer and basketball," Reebok is "focused on fitness and fashion." Reebok's focus on fitness is "not unlike a renewed emphasis on soccer deals, team sports and running products now underway at rival Puma." adidas Chair & CEO Herbert Hainer "has predicted growth in coming years" for Reebok. Industry experts "applaud Adidas for stepping back from growing sales" to improve Reebok’s gross profit margin. Reebok makes up around 10% of adidas’ sales, while Reebok’s share of the global $245B sportswear market "has slipped" to 1.8% in '12 from 2.1% in '07 (REUTERS, 10/1).

Hillerich & Bradsby, maker of Louisville Slugger, "has been losing major leaguers to other bat companies for several years and no longer is the undisputed king of swing," according to Ray Giler of USA TODAY. The Marucci Bat Company "has emerged as Slugger's biggest rival in an increasingly crowded field of manufacturers." There are 32 companies "licensed to make bats for major league and minor league players," which is up from 10 in '93. Marucci said that it is the "No. 1 bat when it comes to usage by major leaguers, a claim difficult to verify." But Louisville Slugger "does acknowledge it has lost significant ground to Marucci and others." Blue Jays 1B Edwin Encarnacion has "used both bats, although he has relied mostly on Marucci in recent years." At the '13 All-Star game, Encarnacion "was greeted by a representative of Louisville Slugger offering to donate money or equipment to a charity of Encarnacion's choosing if he swung a Louisville Slugger bat in the game." Marucci held a party in N.Y. during the All-Star break "to trumpet its milestone of passing Louisville Slugger." But Hillerich & Bradsby sent out a press release that said, "The Official Bat of Major League Baseball is still being manufactured in Louisville, Ky., and despite what competition has recently said, Louisville Slugger is still the #1 choice among the best players in the game." Marucci BOD member Reed Dickens said, "We can get into arguments all day about how to count numbers, but the crux of this story is that we have never paid a player and they do pay players. ... From five years ago to today, we have taken half their market share without paying a player" (USA TODAY, 10/2).

Golf HOFer Jack Nicklaus and Bridgestone have partnered to "produce three types of golf balls," according to Golf Channel's Todd Lewis. The Nicklaus Black, Nicklaus Blue and the Nicklaus White are made to "accommodate three skill levels of a player using the traditional tees to which they typically play." Lewis noted golfers can "get the balls online and a percentage of the ball sales will be donated directly back to the Nicklaus Children’s Health Care Foundation to support pediatric programs nationwide." Nicklaus told Golf Channel's Jimmy Roberts on Monday it is not a "conflict" to be in the golf ball construction business while simultaneously advocating for rolling back the distance of the balls. Nicklaus said, "The game needs to be simplified for the average golfer. These are not golf balls for the pros." Nicklaus, on Bridgestone and other manufacturers limiting distance and performance of golf balls, said, “I can’t imagine any manufacturer who really thinks about what’s good for the game of golf who would not consider (limiting the distance of the balls)" ("Live From: The President's Cup," Golf Channel, 9/30).

Continuing THE DAILY's look at sponsored segments during NFL broadcasts this season, Fox is the only net to have pregame, postgame and halftime sponsors -- Ford, Visa and Lowe's -- that do not support segments on other nets. All three are returning in familiar sponsorship roles from last season. Ford is in its 11th consecutive year as the "Fox NFL Sunday" pregame show sponsor.

WATERS THAT RUN DEEP: "Fox NFL Sunday" also has partnerships with brands familiar across multiple NFL programs: State Farm (Doublecheck Rundown), DirecTV (Headlines), Microsoft Windows (On the Field) and Pizza Hut (Make It Great Play of the Week).

Ford (Pregame)
Visa (Halftime)
Lowe's (The OT)
DirecTV (Headlines)
Windows (On the Field)
State Farm (Doublecheck Rundown)
Pizza Hut (Make it Great Play of the Week)