Several Major League Soccer teams are building sponsors into the construction process, offering presenting sponsorships to companies involved in erecting their new stadiums, in a concept that more marketers may take a look at.
Real Salt Lake and the New York Red Bulls have done deals with industrial power tool supplier and league sponsor Makita, contracts that span 18 months to two years and expire when the stadiums open their doors. In addition to name exposure, such as the “Red Bull Arena — Built By Makita” tags on construction updates from the Red Bulls, the deals get Makita products into the hands of workers on-site.
Makita is paying Red Bull, which owns the New York team and is footing the cost of the $150 million stadium, a low-six-figure fee over each of the next two years. The building is scheduled to open in late summer 2009. In Sandy, Utah, where Real Salt Lake opens its $110 million stadium in October, the team and Makita signed a mid- to high five-figure deal.
Premier Partnerships, the marketer selling sponsorships for the new MLS stadium in Philadelphia, has a platform of presenting sponsors, construction partners and supporting vendor packages to take advantage of the retail, housing and entertainment elements tied to the surrounding 100-acre mixed-use development, with a target of total revenue in the low seven figures.
Power tool maker Makita has its brand on the
Red Bulls’ stadium, in rendering above.
Makita is among several companies Premier is talking to about signing 18-month deals, which could be turned into founding partnerships after the stadium opens in March 2010, said Premier Partnerships President Randy Bernstein. The product and services categories include turf, lumber, paint, hardware, concrete and insurance.
“We feel there has been an incredible missed opportunity for commercial companies,” said Bernstein, who anticipates announcing Philly’s first MLS construction partner in the next few weeks.
Dick Sherwood, president of Front Row Marketing, said of the idea, “Any way you can get a buck in this environment, that’s terrific.”
But such deals can present a challenge for sports marketers trying to push exclusives on general contractors and subcontractors that have already cut their own deals to get the best equipment rates, said E.J. Narcise, co-owner of Team Services. “Once a contractor has negotiated a guaranteed maximum price, they already know who they want to work with and they don’t want you to get in the way,” Narcise said. “At the end of the day, they don’t need power tools.”
Dale Koger, vice president and general manager for Turner Construction’s sports group, understands from an owner and supplier standpoint why they would want to do these deals, but says it’s impractical from the contractor’s perspective. “Subcontractors and their staffs don’t buy all new tools and equipment on a per-project basis,” he said.
Team Services holds the marketing rights for the new Louisville arena, and is soliciting construction-related presenting sponsorships. The marketer has $1 million proposals on the table in seven to eight categories.
“We have chased more [business-to-business deals] to a dead end than we have closed,” Narcise said.
Red Bulls officials said the team did not meet resistance with general contractor Hunter Roberts on the Makita deal.
The contract requires subcontractors to use Makita tools in most cases during stadium construction. In turn, Makita provides deep discounts on its tools to construction firms, a savings ultimately passed on to the Red Bulls through lower fees they charge the team for their services, said Andrew Lafiosca, the club’s vice president of marketing and sales.
In Utah, the MLS team positioned the sponsorship as an educational forum for the Layton/Turner construction team, with Makita holding safety meetings with workers on site. They are not required to use Makita tools but could buy and rent them, said RSL spokesman Trey Fitz-Gerald.
