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Volume 23 No. 13
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In Super South Florida, buzz is about ‘value’

The mood among marketing and media types at Super Bowl XLIV was clearly more upbeat than last year, when the country was in the middle of the biggest financial crash in generations.

The main question among marketers gathered in Miami was of the recession’s legacy. Did the  economic meltdown change sports marketing permanently? Or will things go back to the “sales uber alles” (sales above all) mentality if the Dow recovers on a sustained basis?

“The question a lot of us are asking here is whether there has been a real reset in this business,” said Rick Singer, the former NBA marketer, who heads up sponsorships as vice president of client executive marketing at IBM, an NFL sponsor. “The reset will be in the marching orders brands give their sponsorship people — you just can’t keep spending. It won’t be slashing, it will mean picking one or two properties and supporting them at a higher level.”

Bank of America sponsorship czar Ray Bednar reflected on the past year. “Obviously, there’s been a fundamental shift in financial services, but also in the entire sponsorship industry.”

Two of the biggest shifts have been with figuring out client entertainment and placing a greater emphasis on cause-related and community programs, he said. “It’s part of our business and our marketing to entertainment, but probably not with the opulence of the past.”

The problem is that marketers have to deal with a new level of scrutiny and nobody really knows what should change.

“In the broadest sense, there’s a new demand for demonstrable value,” said Keith Turner, the NFL’s senior vice president of media sales and sponsorship. “What that is and how we change our offer is exactly what I’m trying to figure out right now.”

Reebok introduced its new ZigTech line at the
Super Bowl on a yacht with help from Chad
Ochocinco and “Sugar” Shane Mosley.
Reebok has two seasons left in its NFL deal.

Genesco Sports Enterprises CEO John Tatum says a change is needed. With NFL clients that include Pepsi, MillerCoors and Motorola, Tatum says properties may need to repackage more.

“The days of one-size-fits-all should be over,” Tatum said. “You need to customize and offer NFL packages that can be different to all. You can’t look at what goes on [around the Super Bowl] and tell me there can’t be an NFL Entertainment package. You want access to high-wealth individuals, the NFL can offer that, as well. [And] Thanksgiving may be the most underleveraged thing the NFL has when you look at all the food that is consumed and all the purchasing that happens the next day.”

With the maturation of sports marketing, it is surprising to hear brand marketers still asking for properties to be more cognizant of their business goals, instead of simply trying to sell inventory.

TOP FIVE LARGEST SUPER BOWL AUDIENCES
The 106.5 million viewers who tuned to CBS for the game set an all-time record, eclipsing the “M*A*S*H” finale, which had held the record for 27 years, and once again showing the power big event live sports have in the digital TV marketplace.
Year SB NET RATING VIEWERS (000s) MATCHUP
2010 XLIV CBS 45 106,476 Saints-Colts
2009 XLIII NBC 42 98,732 Steelers-Cardinals
2008 XLII Fox 43.1 97,448 Giants-Patriots
1996 XXX NBC 46 94,080 Cowboys-Steelers
2007 XLI CBS 42.6 93,184 Colts-Bears
Source: SportsBusiness Daily

“I still don’t see properties serving client needs with nearly the same effort they give when they are selling or renewing  rights,” said Woody Thompson, executive vice president at Octagon, which has NFL corporate sponsor clients including Sprint, Bank of America and Procter & Gamble. “Major properties have not fully realized the impact of what’s gone on with the economy and adjusted pricing accordingly.”

However slowly, some said a shift from sales to marketing on the property side also appears to be happening.

“It seems fundamental, but I think we are shifting from the primary discussions being about tickets, suites and signage to direct discussions about wealth management and stadium financing,” said Bank of America’s Bednar, whose bank has done more than $18 billion in sports debt and equity placement since 1992. “In the past, it was, ‘Here is the sushi menu — what is your order?’”

UNIFORM CODE: While the pro forma “request for proposal” for the NFL’s new apparel rights contract is expected to be issued before the end of February, we’re told NFL officials were already talking to several interested brands during Super Bowl week. Reebok has, since 2002, been the league’s lead apparel licensee, which includes exclusive rights to sell jerseys, caps and other on-field apparel. 

There’s no official timetable, but apparel companies expect a decision before training camps open. Reebok holds the rights for another two seasons, but the league is floating a proposal now to account for production time, sell-in, shipping, and selling off old togs, which requires around 18 months.

One of the NFL’s main questions is whether it can make more money by continuing with a single entity or going with multiple licensees. Prior to Reebok’s current deal, NFL on-field rights were split between Adidas, Reebok, Champion and Nike. Handicapping the field of potential NFL uniform providers is tough. Several senior industry sources said parent company Adidas, not its Reebok subsidiary, will make a play for NFL rights. However, Adidas/Reebok licensing chief David Baxter said that decision has not been made yet. Nike, which has not had NFL on-field apparel rights since 2002, would “be thrilled to be an NFL (on-field) partner again,” said John Slusher, Nike vice president of global sports marketing. But probably not so thrilled that it would overpay, especially since about 70 percent of NFL players already are under contract to Nike. Still, we’d be surprised if Nike was not a big part of the next deal.

At Under Armour’s splashy party at a private Miami Beach residence, the company’s founder and CEO, Kevin Plank, said he’d like to expand his NFL rights. The NFL certainly covets the younger audience that Under Armour attracts, but the question is whether Under Armour can compete with offers from the likes of Adidas/Reebok and Nike. There’s also the thorny issue of whether the competition, especially Nike, would allow a contract in which Under Armour received underlayer rights. “Assuming it’s a multiple-licensee deal, the question then becomes exactly which rights are split and how,” said one suitor.

A dark horse could be VF, which certainly has the size and scale to compete, and whose Majestic unit has been a consistent performer with MLB’s on-field apparel.

NETWORK SCHEDULES: Network executives from CBS, ESPN and Fox met with the NFL in Miami to give their wish lists for next year’s TV schedule. NBC’s main executives were in Vancouver preparing for the Winter Olympics and will identify the games they want in the coming weeks. The league releases the dates and times for next season’s games in April.

If these meeting held true to form, all the networks angled for games involving the Cowboys and whatever team Brett Favre happens to be quarterbacking. The Cowboys and Favre’s Vikings were the league’s highest-rated teams last year. 

Still, some of the league’s marquee games came into better focus. With its Super Bowl win, the Saints will open the season on NBC with one of its eight home games. Only two games on its home slate are big enough to kick off the season. The Vikings and Steelers are scheduled to visit New Orleans next season, offering the NFL either a rematch of this year’s NFC Championship game or a game with the past two Super Bowl winners. Our guess is that if Favre still is playing, the Saints-Vikings will open the season. If not, look for the Steelers to travel to the Big Easy for the opening game.

The NFL’s other signature games come on Thanksgiving. This year, CBS has the early game, which means the league has to pick an AFC team to oppose the Lions. The Patriots and the Jets — two marquee draws — are the only AFC teams to travel to Detroit this season.

Fox will carry the late game, which is hosted by the Cowboys. The league has to pick an NFC team, which leaves just five teams: the Saints and Bears in addition to the Cowboys’ NFC East rivals (Giants, Eagles and Redskins). In past years, the NFL has decided against putting a marquee matchup on Thanksgiving, believing it would have a captive audience regardless. Last year’s Raiders-Cowboys game on CBS drew an 11.6 rating. That would suggest either Bears or Redskins could be picked to oppose the Cowboys. The league could decide to try and drive Thanksgiving ratings with a better matchup, which would put the Saints or Giants in play.

SALES SEASON: It’s been a little more than four months since former NBC sales exec Turner took over as the league’s senior vice president of media sales and sponsorship, and his group’s organizational structure is beginning to take shape. He established a dedicated digital sales team. Now, he’s focused on creating a new business unit of about five new employees that will be headed by a still-to-be-hired vice president of business development.  He hired a search firm for that position. “We need some people looking only at categories and strategies and new revenue opportunities,” he said.

Turner’s moves are critical, especially since the NFL will have to contend with a renewal list that includes some of its biggest sponsors: Bank of America and Sprint. Both banking and telecom have changed drastically in recent years, so keeping either company is not automatic.

“The way we made money and the way we will make money are fundamentally different,” said Bank of America’s Bednar. “Based on that, we need all kinds of new assets, so this is like a brand-new contract.”

The wireless category also has a lot of questions. Sprint has spent heavily on sports, with high-profile sponsorships like the NFL and NASCAR. Now we’re wondering if this is where they begin to unwind. If so, that would open the NFL to tap cell brands like AT&T or Verizon, which would likely want NFL broadband video rights included in any deal.

Beer is another large category that is entering complex renewal discussions.

MillerCoors wasn’t unified when the last rights deal was negotiated. With one less brewer in the mix, how does that affect negotiations? Will Anheuser-Busch’s Super Bowl advertising exclusivity, which runs through 2012, come into play?

That’s the first bundle of rights we’d insist on as part of any NFL suds deal.

As for other categories: the NFL had four short-term quick-service restaurant deals during the last season: IHOP, KFC, McDonald’s and Papa John’s. We expect at least one to return as a full-time NFL corporate patron. The NFL also needs to replace State Farm in the insurance category. The question: one or many? “We’re trying to zero in whether it’s life, auto, wealth management, or all of those,” Turner said. “The one thing I’m learning is how different it is from a straight media buy. You need to activate for two or three years before you can really tap into the value and reach of the NFL.”

TISCH ON SMITH: Privately among NFL teams, much has been made of NFLPA Executive Director DeMaurice Smith’s outspoken style and brash rhetoric. But a day after Smith predicted that on a scale of one to 10 the chance of a lockout was a 14, New York Giants co-owner Steve Tisch applauded Smith’s approach. “He is sort of the new face of the players association, he is being publicly very strong and passionate, which I totally understand and there is no reason why he shouldn’t be,” Tisch said. “He does understand the issues … he is a very bright guy and he is not at all naive about what is going on, which I think will compel him to sit down with us and get a deal done. No one wants a lockout.”

Staff writer Daniel Kaplan contributed to this report.