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Volume 24 No. 112

Marketing and Sponsorship

Penn State for more than 20 years has "had a close relationship with Nike," but exactly how much the deal is worth is "a Penn State secret," according to Smart & Gross of the Lancaster INTELLIGENCER JOURNAL. The newspaper in a six-part series is taking a look at the relatioinship between Nike and Penn State. Experts estimate the deal "to be worth about" $2M per year, which represents "a tiny portion of the university’s overall athletic budget." But "in the wake of the Jerry Sandusky child sex abuse scandal and the NCAA sanctions that followed, Penn State’s athletic department lost money last year -- making the Nike money all the more important." State legislators "have proposed bringing Penn State under the right-to-know law," but until then, only "one chunk of the Nike money is visible -- the money paid" to football coach James Franklin. Of Franklin's salary, $500,000 "will come from Nike every year." Former Penn State football coach Bill O'Brien "got $350,000 annually from the proceeds of the university’s Nike contract." Temple Univ. sports economist Joel Maxcy said of Penn State's outfitter deal, "I'd say Penn State is in the top half of the Big Ten for sure. They probably trail Michigan and Ohio State, but get more than Purdue or Indiana." He noted that the $2M annually is "a small figure in the context of Penn State's $100-million-plus overall athletic budget." However, other experts "say the money is key." Syracuse Univ. sports management professor Richard Burton said, "Even if it's only 5 or 10 percent of the overall operating budget, that's much more than a rounding error." Experts said that were Penn State and Nike to "negotiate a contract extension today," the school might "get a smaller deal than it would have gotten had the Sandusky scandal not occurred" (Lancaster INTELLIGENCER JOURNAL, 3/6).

Portland "does not have to disclose how much money Providence Health paid for the rights to put its name on the city-owned stadium" used by the MLS Timbers, Portland State Univ.'s football team and others, according to Allan Brettman of the Portland OREGONIAN. City of Portland Office of Management & Finance Communications Manager Kelly Ball wrote that under the Stadium Operating Agreement for Providence Park, Peregrine Sports "is not required to give the city a non-redacted version of the contract." Ball's statement "came on the heels of Monday night's release of a redacted copy of the Naming Rights and Sponsorship Agreement between Peregrine Sports and Providence." Peregrine "is the limited liability corporation owned by Timbers owner Merritt Paulson." Among the "amounts of money redacted in the 40-page agreement are the initial year payment Providence is paying Peregrine, subsequent year payments, food credits for the End Line Deck and the medical service fees" for the NWSL Portland Thorns' pre-season physicals. The agreement "includes 20 bullet points specifying where the company name or logo would appear." The Providence agreement also "specifies what the Timbers agree to provide the health organization: 60 suite tickets to the Providence Sports Care Center in Providence Park, four VIP field seat season tickets, four KeyBank Club season tickets (food and beverage included during the first half) [and] 18 endline season tickets" (Portland OREGONIAN, 3/6).

Nike CEO Mark Parker today said the company’s “innovation for the World Cup this year is more than we've ever produced for any major event, certainly in the sport of football ever.” Appearing on CNBC’s “Squawk on the Street," Parker added, “You'll see more innovation coming between now and the World Cup, and we think that the impact it will have on Nike is not just in terms of football and what we do, but to reinforce our position as a leader in sports shoe and apparel innovation." Meanwhile, Parker said of Nike’s competitors, “I actually like to focus on the distance between Nike and our potential versus the distance between Nike and our competition. I think as a leader we have a lot greater opportunity in focusing our potential going forward than we do trying to feel that much better than what we might be doing than anybody else in our industry. That's where we place our focus, and on the relationship with the athletes." Parker mentioned Nike has been in talks with former Texas A&M QB and NFL prospect Johnny Manziel for an endorsement deal. Parker: "He's an amazing athlete. We think he's going to bring a lot to the professional game. It's exciting to see what he's done in college football" ("Squawk on the Street," CNBC, 3/6).

In L.A., Mike DiGiovanna notes Angels CF Mike Trout "has been busy this spring, the demands of stardom" pulling him "in many directions." There was a "Nike photo shoot, the filming of a commercial" for MLB, appearances on ESPN, MTV, FS1 and FS West, and interviews, with an SI cover photo shoot still "to come." Trout: "People think the commercials are a lot of work, but if you try to have fun with them and try to trick your mind a little bit, they're OK" (L.A. TIMES, 3/6).

DRIVER'S DREAM: ADWEEK's Tim Nudd noted a new 60-second NASCAR spot from Ogilvy & Mather, N.Y., "shows the sport's youngest fans talking about what they want to be when they grow up -- and they end up describing their NASCAR heroes pretty well." It is a "fun and different way to leverage one of the sport's great assets -- the star power of its drivers -- while touching on the truth of how people become fans in the first place" (ADWEEK.com, 3/4).

TICKLING THE IVORIES: In L.A., Eric Pincus reported Lakers G Kobe Bryant while rehabbing from Achilles and knee issues "apparently had time to build a custom piano." At least that is the "premise of his latest Nike commercial." While the spot "features Lionel Richie playing on a piano in the shape of Bryant's logo, the narrator admits that Bryant did not, in fact, make the instrument" (LATIMES.com, 3/5).

CANADIANS CASH IN: The CP's Lori Ewing reported Canadian Gold Medal-winning bobsledder Kaillie Humphries is "making the most of her medal before the small window for endorsements and appearances is slammed shut." Her agent, Sprint Management COO Kris Mychasiw, said that he is "receiving some 20 emails a day with requests for appearances or product endorsements for the bobsledder." Meanwhile, Mychasiw on Tuesday also signed deals with the members of Canada's Gold Medal-winning men's curling team, and "despite the 10 days or so that have passed since Sochi, he believes the curlers will be an easy sell" (CP, 3/5).