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Volume 6 No. 212

Marketing and Sponsorship

Andy Murray's recent success "hasn’t improved his consumer appeal in America" as global endorsement contracts "are yet to follow his on-court wins," according to Eben Novy-Williams of BLOOMBERG. As Murray begins his U.S. Open title defense in N.Y. this week, he "lacks the allure of Roger Federer, Rafael Nadal and Novak Djokovic." Dallas-based sports marketing group The Marketing Arm Senior Dir Darin David said, "Andy Murray had to fight really hard to catch up with the Big Three on the court, and now he has to fight to match up with them in the eyes of fans. He’s now a multiple Grand Slam winner, so maybe he’ll start making inroads, but it’s a tough hill to climb." Murray’s endorsement portfolio "is almost unchanged since he won Wimbledon last month." His contracts with adidas, Royal Bank of Scotland, racket supplier Head and watch manufacturer Rado Uhren "earn him roughly" $12M annually, according to BrandRapport sports marketing exec Nigel Currie. Last week, Murray "signed an endorsement deal with Fuse Science." Financial details "weren't released." Q Scores Exec VP Henry Schafer said that the awareness of Murray among U.S. consumers following his Wimbledon win grew to 20% from 17% earlier this year. That trails Federer (38%) and Nadal (26%), as well as U.S. champions Serena Williams (67%) and Andre Agassi, who is known by 53% of U.S. consumers "seven years after retiring from tennis." Currie said that if Murray continues his current trajectory, the endorsement opportunities "will grow." He said that the dominant player in a global sport such as tennis "can expect to make" about $75M annually in endorsement deals. Currie said, "Companies were waiting to see if he could crack it, and he has now. He’s in a good position to build on that further, and if he gets to the point where he’s won four or five Grand Slams, then you start talking about an all-time great and one of the sport’s top earners" (BLOOMBERG, 8/23).

To mitigate the risk of many of sport's most marketable names becoming embroiled in scandals, while the cost of endorsement contracts and worldwide marketing efforts is huge, companies such as Nike "are using specialised insurance plans and more stringent contracts in endorsement deals worth hundreds of millions of dollars," according to Jason Abbruzzese of the FINANCIAL TIMES. Companies normally "have two choices when an endorsement goes wrong." Cut ties with the athlete, "or ride out the storm." Forgoing the sports star connection altogether "is not an option." IMG Global Consulting Dir David Abrutyn said that "endorsements are more important and more lucrative than ever before." Abrutyn: "It's a cliché, but the death of talent marketing has been widely exaggerated. If you take a wide look at it and you see how celebrity and talent are able to break through in a world today that is as cluttered as it has ever been, I would venture to say more money has been spent this past year on talent marketing than the year before." Not all brands will stand by a disgraced athlete, "and need a tidy way to terminate contracts and recoup losses." Companies "have begun to insert clauses to allow for the sponsor to cancel the agreement if an athlete acts in a way that could be considered damaging to the brand." Aon Risk Solutions' Global Entertainment Group CEO Joe Addison said, "What has happened over the past few years is that contracts have gotten pretty tight. It has evolved because of what has happened." Addison added that "some major stars have the clout to negotiate morality clauses out of their contracts, leaving companies to pursue insurance coverage." Law firm Dickstein Shapiro associate Shaun Crosner said that these policies have become more popular, "as they allow companies to sign up the most popular players while addressing concerns about possible losses." Crosner: "There's so much money going into these ad campaigns. You could pay tens of millions of dollars to partner with these athletes. If you have to abandon that campaign, it's potentially a big loss on your books" (FT, 8/23).

Dutch banking group RaboDirect has "pulled the plug" on their sponsorship of the rugby union Pro12 tournament, according to WALES ONLINE. RaboDirect "will cease to put their name to the Celtic and Italian league at the end of the coming season." It means the search "will be on for a new sponsor," though the upcoming TV deal with Sky Sports "may make that an easier process." RaboDirect "has been the league sponsors for two seasons" having taken over from Magners at the end of the '10-11 season (WALES ONLINE, 8/23). In Dublin, Gavin Cummiskey reported RaboDirect is ending their sponsorship three years into a four-year agreement. RaboDirect GM Tim Bicknell said, "The partnership with the PRO12 has helped us achieve key business objectives and has been extremely beneficial, especially in terms of developing and communicating our brand values, connecting with rugby fans and giving us a platform to reward our customers" (IRISH TIMES, 8/23).

The National Rugby League Cronulla Sharks have "finally secured a jersey sponsor," despite the Australian Sports Anti-Doping Authority scandal, "salary-cap dramas, secret bank accounts and a year of damaging media," according to Phil Rothfield of the SUNDAY TELEGRAPH. The company One Solution will replace CSFC for Monday night’s "blockbuster with the Roosters." They have "bought the front of the jersey for the rest of the season." Not one sponsor "has left the club this year," and the new deal is worth about A$300,000 ($270,000). The Sharks’ new board of directors, under Chair and Ad Exec Damian Keogh, "has done an outstanding job." Membership is up 95%, merchandise is up 20% and all corporate areas "have sold out at the past three home games." Noyce said, "One Solution, like everyone else, has seen all the negative media comments. Yet they have confidence in the people in the club, the corporate governance and a new board with lots of enthusiasm and energy. The Shire is full of typical Australians who have backed this team to do well and we’ve stepped up in the community" (SUNDAY TELEGRAPH, 8/25).

Bundesliga club Hamburg SV has extended its partnership with online sports broadcaster for another four years. The company, on behalf of Deutsche Telekom, has been in charge of the club's website since '09. optimized the website in terms of user friendliness ahead of the '13-14 season (Hamburg SV). ... Second Bundesliga club VfR Aalen has signed a new sponsorship deal with regional financial institute Kreissparkasse Ostalb. The bank will become an exclusive partner of the club and receive the title rights for the VIP forum at the Scholz Arena (VfR Aalen). ... Handball Bundesliga (HBL) club HSG Wetzlar and regional bank Volksbank Mittelhessen have extended their sponsorship deal for another two years (HSG Wetzlar). ... Ultimate Sports Nutrition has become the nutritional partners of Premiership Rugby side Gloucester. USN will provide the players and staff with supplements (USN). ... Irish rugby side Connacht Rugby has partnered with sports nutrition brand Kinetica. The collaboration will see Kinetica produce and supply a wide range of nutritional products to the senior Connacht squad for the next three years (Connacht Rugby).