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Volume 10 No. 22

Marketing and Sponsorship

Leading sponsorship analysts warned the "the spectre of Lance Armstrong could hurt Chris Froome’s ability to fully exploit his Tour de France triumph," according to Ben Rumsby of the London TELEGRAPH. Brands "might have been expected to flock to Britain's latest cycling star." However, Froome "was also the first man to secure the yellow jersey since Armstrong confessed to doping his way to all seven of his Tour de France victories." Pitch PR CEO Henry Chappell said, "Cycling is still suffering the consequences of the Lance Armstrong situation and there’s not really a peloton of brands charging to sign deals with individual cyclists. Brands will need some convincing that there’s no risk attaches to doing deals with top-tier cyclists." There is no suggestion that Froome is anything but 100% clean, yet BrandRapport Dir Nigel Currie added, "What has gone on in cycling has damaged the sport." Currie still predicted Froome "could boost his off-bike earnings" by up to £5M ($7.7M) in the coming year if he "took full advantage of commercial opportunities" (TELEGRAPH, 7/21).

OUT OF THE SHADOWS: MARKETING WEEK's Sebastian Joseph reported Repucom's DBI Index suggested that unlike Sky colleague Bradley Wiggins, the level of national awareness around Froome "was lacking ahead of the race." The cyclist had an endorsement level of 36.6 points compared to Wiggins' 81.4. Generate Sponsorship Managing Dir Rupert Pratt said, "Froome’s win will likely signal interest from performance based brands with a more corporate image they want to convey. Wiggins’ personality has the greater longevity because he was the first and his off-track brand and mod-ish style make him more appealing to brands looking to reach a wider audience" (MARKETING WEEK, 7/22). In London, Sunday Times reporter David Walsh, who played a significant role in unearthing Armstrong's long history of doping, has spent several weeks inside the Team Sky camp and is adamant Froome "should not have to defend himself from drug slurs" (SUNDAY TIMES, 7/21).

Momentum Worldwide CEO Chris Weil "got a call from the head of his agency’s Brazilian office moments after last month’s Confederations Cup final," according to Tripp Mickle of the SPORTSBUSINESS JOURNAL. One of Momentum’s clients "wanted to postpone a World Cup marketing program that was slated to begin right after the tournament." Weil "wasn’t surprised." The company "was the second of three Momentum clients to postpone promotions." Weil said, "Anybody who is down there and on the ground understands because part of the protest is around the money being spent on stadiums and infrastructure and not being spent on the emerging middle class. That’s the crux of where you could come out tone deaf as a supporter if you are a Brazilian company. Having said that, I don’t think it’s a complete pullback. It’s a timing issue." Momentum’s clients "aren’t the only ones re-evaluating the Brazilian market after last month’s jarring protests." The protests "have led several brands and sports marketing agencies to make adjustments on everything from increasing staff and adding security to reviewing transportation plans and evaluating marketing programs ahead of next year’s World Cup." But brands and agencies alike "remain optimistic about the value and potential for sports marketing in Brazil during next summer’s World Cup, the 2016 Rio Olympics and the years that follow." European marketing magazine The Drum reported Coca-Cola CEO Muhtar Kent said, "Where there’s no risk there is no reward, and the opportunities are so much greater that I am sure they are going to be very memorable, fantastic events." Coke "stuck with its marketing plans in Brazil during the Confederations Cup despite the protests." Similarly, McDonald’s and Visa "continued to run World Cup marketing and promotions in Brazil during and after the Confederations Cup," and McDonald’s and Visa spokespeople said the protests won’t affect their future promotional plans there (SPORTSBUSINESS JOURNAL, 7/22 issue).

GETTING READY: AD AGE's Laurel Wentz reported the protests' ire "appeared directed at the government, with no apparent animosity toward corporations." Indeed, protesters even adopted a popular song from a Fiat commercial with the refrain "Come to the street" as their anthem. The month-long World Cup kicks off in mid-June next year. While the focus "will undoubtedly" be on football, the political climate "will be heightened further, with Brazil's presidential election looming in early October." Protests "appear inevitable." Adidas CEO Herbert Hainer said, "We fully acknowledge that the people in Brazil [will] use the platform of the World Cup to get awareness for their issues." With such massive investments, "big pullbacks are off the table." Sports & Entertainment firm Ketchum Managing Dir Ann Wool said, "You're preparing for seven or eight years for these global events, and every issue is going to come up at some point during that cycle -- political, environmental, infrastructure, natural disasters." Wool added by the time an event is just a year away, "your activation has already started and you're closely associated with the event." Brazil "hasn't gone into full crisis-management mode yet." PR firm FSB partner Falvio Castro said, "I don't want to minimize the problem, but I don't think the exercise of the democratic right to demonstrate should be seen as a tragedy or a stain on the country" (AD AGE, 7/22).

Sports marketing company Jung von Matt/sports Co-Managing Dir Raphael Brinkert told SBD Global the goal of the newly founded division is to become Germany's top sports marketing agency. Brinkert: "Short-term plans are to attend to one top client within each of these categories: clubs, associations, enterprises and athletes. Long-term goal is to become Germany's leading creative sports marketing agency." JvM/sports, which launched on July 1 and is part of Hamburg-based ad agency group Jung von Matt, will focus on developing innovative sports marketing concepts for corporations, clubs, associations and athletes -- ranging from individual measures geared toward securing sponsorships to integrated campaigns. Brinkert: "We are in contact with several leading associations, clubs and enterprises and hope to be able to communicate our first acquisitions within the next couple of weeks." Asked how JvM/sports wants to compete with more established sports agencies, he said, "One major advantage that distinguishes all Jung von Matt agencies is the strive for creative excellence. Excellent creative output is one of our key assets in combination with a very experienced set up: two former pros and a highly experienced sports manager ensure the expertise our clients expect."

THE TIME HAS COME: JvM was founded in '91 and has managed to become one of Europe's leading ad agencies. Asked why it took JvM more than 20 years to get into sports marketing, Brinkert said, "In the past couple of years sport marketing has continuously gained importance, which we have permanently noticed when developing campaigns for our major clients such as Mercedes, Bitburger or Bild." He added, "Our wish to get majorly involved in sports has been around for quite a while -- also due to this growing interest from our clients’ side. Having Katja Kraus and Christoph Metzelder join in is a major bonus for this business venture; they are our absolute first choice candidates."

THREE-HEADED MONSTER: Kraus and Metzelder are both former professional football players and together with Brinkert the managing directors of JvM/sports. Asked about the odd constellation in charge of the new venture, Brinkert said, "I had the chance to work with Katja and Christoph in the past on several campaigns and projects that have won multiple sponsoring awards. At the time they were my clients so to say, and we had a very fruitful and energetic working relationship." He added, "Katja is an expert in everything to do with clubs and the marketing and commercialization of them. Christoph is a former international who speaks the language of the pros and who has very valuable knowledge in all CSR [Corporate Social Responsibility] matters due to his foundation work. And I would like to add my experience from advertising, social media and marketing, so that we can cover all aspects and facets of sports marketing."

The Irish Rugby Football Union "should have a new kit sponsor on board by the end of the summer," according to Barry Coughlan of the IRISH EXAMINER. Puma has bought out of its reported €40M ($52M) contract with the Union -- which was to run up to '17 -- and "paid a once-off compensation payment" of €11.5M ($15M). It was described only as an “exceptional item” in the accounts released Friday. IRFU CEO Philip Browne confirmed negotiations "have been ongoing with other high profile kit providers and said he expected a deal would be firmed up within weeks." That "will surely come as good news to the Union," which will be forced to borrow up to €25M ($33M) to fund day-to-day activities in the lead-up to the release of premium ten year ticket packages in '20, "following a lukewarm reception to a recent offering" which yielded just €14M ($18M) instead of a hoped for €40M ($53M). Browne: "The market has spoken, we are running a cash deficit each year and so for the next six years until the point where we sell the next block of premium seats we’re going to have to borrow to cover that annual cash deficit" (IRISH EXAMINER, 7/20).

FUNDING CUTS: In Dublin, Gavin Cummiskey reported Browne "also confirmed the funding of all professional squads will need to be reduced." Browne: "We will all have to tighten our belts, but we are going to continue to operate at the levels we are at. We will continue to fund four professional teams and the national team and the domestic game." This "all came as a surprise to the union." They had "consulted 10-year ticket holders." Brown: "I think everybody is surprised we didn’t sell as many as we hoped but that’s the nature of the economy" (IRISH TIMES, 7/20).

There "are fewer women on the list of top 10 Olympic sponsorship earners" now than there were before the 2012 London Olympics, according to SKY SPORTS. Team GB "enjoyed huge success" in London, finishing third in overall medals. However, one year later, the Games "seem to have been a missed opportunity for British women athletes." There have been some success stories. Heptathlon Gold Medalist Jessica Ennis-Hill "has seen her profile raised with sponsorship deals and advertising campaigns." However, Ennis-Hill "is the exception to the rule." She is "one of just three women -- and the only one still competing -- in the top 10 Olympic sponsorship earners based on income related exclusively to the Games." Double Gold Medalist Mo Farah "tops the list" with around £3M ($4.6M) worth of post-Olympic earnings with Ennis-Hill second -- with an estimated fortune of £2.5M. ($3.8M) (SKY SPORTS, 7/22).

Global nutrition company Herbalife signed a three and a half-year deal with AEG to make Herbalife the official shirt sponsor of AEG-owned Swedish football team Hammarby Fotboll Club. The deal runs through '16. Herbalife is also the shirt sponsor of Major League Soccer's L.A. Galaxy, which is also owned by AEG. The new Herbalife shirts will be revealed at the Hammarby vs. Paris St. Germain friendly on Tuesday. Additionally, the deal will encourage more direct links between Hammarby and the L.A. Galaxy. Herbalife products will be promoted at both team's stadiums and on social media. The agreement also includes commitments for Hammarby to train at the StubHub Center in the U.S. during the term, as well as for Galaxy and Hammarby to play a friendly at the stadium (AEG).

German Hockey League (DEL) side Cologne Sharks has extended its main sponsorship deal with utility company RheinEnergie AG. The company's logo will continue to be featured on the players' chests. RheinEnergie has been a partner of the club since '99 (Cologne Sharks). ... Second Bundesliga club VfL Bochum has signed a new sponsorship deal with health insurance company Knappschaft. The company will receive ad space on boards at the rewirpowerSTADION, the club's home ground (VfL Bochum). ... German 3rd League football club SpVgg Unterhaching has signed a new stadium naming rights deal with candy company Alpenbauer. The home ground will be renamed Alpenbauer Sportpark (SpVgg Unterhaching). ... The ATP event at Hamburg's Rothenbaum "has extended its title sponsorship deal with online betting provider bet-at-home for another two years until '15." In addition, bet-at-home "will cover part of the starting fee for top players" (FRANKFURTER ALLGEMEINE ZEITUNG, 7/22). ... Chelsea FC announced that luxury British menswear brand Hackett London will be the club's official formal wear supplier through '16. Hackett London will dress the first-team squad, management and coaching staff (Chelsea). ... The Scottish FA announced a four-year sponsorship extension with Scotland-based Vauxhall Motors, which will run through the 2018 World Cup in Russia (Scottish FA). ... Reebok India said that it "has roped in Bollywood actor John Abraham as its brand ambassador in a long-term deal." Terms of the deal were not disclosed (ECONOMIC TIMES, 7/22). ... The Melbourne Stars announced Australian retailer Dick Smith as its principal partner for the next two seasons of the T20 Big Bash League (Melbourne Stars).