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Volume 20 No. 42

Marketing and Sponsorship

Now that Sidney Crosby has returned to the ice, the Pittsburgh Penguins center will be featured in at least three new commercial spots that will air in Canada — including one for Gatorade, which recently extended its deal with the NHL star.

Crosby had been out of action since January, recovering from a concussion. But Gatorade, whose deal with Crosby dates to the 24-year-old phenom’s rookie year of 2005, agreed to extend its sponsorship even before Crosby’s Nov. 21 return to the ice, said Pat Brisson, Crosby’s agent and co-head of CAA Hockey.

Sidney Crosby recently extended his endorsement deal with Gatorade.
he deal had been set to expire in June; Gatorade extended it to 2015, Brisson said.

Gatorade filmed a new 30-second commercial featuring Crosby and 1,000 extras at Consol Energy Center, home of the Penguins, a few weeks before his return to action, Brisson said. The ad is scheduled to air in Canada in January, Brisson said, but could be seen in the U.S., as well.

Crosby also shot a commercial for Canada Bread, a relatively new sponsor that signed him to a one-year deal this summer, as well as a spot for longtime sponsor Tim Hortons, Brisson said. The spot for Canada Bread, a Maple Leaf Foods brand, was set to begin airing in Canada last week, and the Tim Hortons commercial is scheduled to begin airing in Canada in January.

Brisson said he has been in discussions with a financial services company and an electronics company about possible partnerships with Crosby, but no decisions have been made on those potential deals. Brisson and Crosby’s father, Troy Crosby, will host a sponsorship summit for all of the brands Crosby endorses this winter at CAA’s offices in Los Angeles to discuss Crosby’s sponsorship and marketing plans going forward, Brisson said.

In addition to Gatorade, Tim Hortons and Canada Bread, Crosby has deals with Reebok, Sport Chek and Upper Deck. An industry source said the value of each deal was in the mid-six to low seven figures per year.

Too often in the last three years, Learfield Sports encountered new business opportunities that required resources it didn’t have.

Learfield, a pioneer in the collegiate marketing industry, wanted to fund a new Big 12 channel, expand into ticketing sales and create more digital content, but instead the company found itself limited by a business that demands huge guarantees to its schools against thin margins.

Needing capital to grow, and after searching for a buyer for more than a year, Learfield finally found it last week in Shamrock Capital Advisors, a Los Angeles-based private-equity firm that has agreed to buy a majority stake in the company. The deal was finalized last week and an announcement is expected this week.

Learfield owns the multimedia rights to 48 schools, most notably blue-chippers Alabama, North Carolina, Oklahoma and Penn State, as

well as the Big Ten and Missouri Valley conferences, making the company one of the two most prevalent college rights holders, along with IMG College.

The new capital from Shamrock will push Learfield to enhance its current lines of business while developing new ones, either through acquisition or its own initiative.

“It’s a substantial move for the company,” said

Learfield owns multimedia rights to 48 schools, among those being powerhouse programs at Alabama, Oklahoma and North Carolina.
Photos by: GETTY IMAGES (3)
Greg Brown, Learfield’s president and CEO. “We’ve been in business and essentially had the same ownership for 40 years, so this is an important step for the company. From a practical standpoint, this will provide us with the resources that we wouldn’t have had otherwise.”

Terms of the sale were not released and it’s uncertain what percentage of the company Shamrock controls, except that it’s a “significant majority,” according to Brown.

ISP Sports, a company with similar college rights, sold for $100 million last year to IMG College. In a separate deal in 2007, IMG College bought Host Communications, a smaller rights holder, for $74 million.

There had been some discussion about Learfield and IMG College merging to form an even greater national college sales platform, but those talks never progressed to a serious stage, according to industry sources.

Brown will remain president and CEO, and other senior managers will continue in their current roles. The company intends to specifically grow its national sales staff, and no reductions are expected, Brown said.

Learfield properties

Boise State
Bowling Green
Fresno State
Iowa State
Kansas State
Louisiana Tech
Miami (Fla.)
Mississippi State
Montana State
New Mexico
New Hampshire
North Carolina
Northern Iowa
Oklahoma State
Oregon State
Penn State
San Diego State
San Jose State
South Carolina
South Dakota
South Dakota State
Southern Illinois
Texas A&M
Texas Tech
Utah State

Shamrock Capital investments

Harlem Globetrotters
K2 Towers
Media Storm
Publishing Group of America
Thought Equity Motion
Triad Broadcasting

The sale, which was announced to employees late last week, culminates an 18-month re-evaluation of the company by its ownership group, which included founder Clyde Lear and partners Roger Gardner, Andy Rawlings, Stan Koenigsfeld and Brown.

The biggest change is that Lear will go from being a majority owner to a significantly smaller stake.

Lazard Middle Market advised Learfield on the deal and Chris Bevilacqua, who also has worked with the Pac-12 on its new network, consulted as well.

Learfield also worked with Tim Irwin, an author and business consultant, on a strategic plan for the company’s future. Irwin wrote “Run With The Bulls Without Getting Trampled” and “Derailed.”

A five-person board will be formed to oversee the company’s management, with three of the positions going to Shamrock, one to Learfield’s Brown and another to an independent director. At least one of Shamrock’s board positions will be occupied by Will Wynperle, a partner with the firm.
In his message to the 400-plus employees in Learfield’s sports division, Brown emphasized that there would be minimal disruption and that no offices would be closed because of the sale.

“It was critical for us to maintain the culture of the company and the leadership,” Brown said. “We’re going to have that luxury, kind of like having your cake and eating it, too.”

Learfield, which was founded in 1972, was a pioneer in cultivating the collegiate marketing industry. It began by broadcasting college games on the radio and eventually moved into the sale of sponsorship, signage and promotional rights at its client schools.

Over the years, Learfield broadened its college business into concessions in a partnership with Levy Restaurants and naming-rights sales with its Team Services division. Learfield also owns the rights to inventory at Rupp Arena in Lexington, Ky., and the KFC Yum! Center in Louisville, Ky.

But as schools looked in recent years to outsource more of their business, such as ticketing sales and other new media initiatives, Learfield couldn’t accommodate the business opportunities that could conceivably grow its business.
Learfield, which owns the rights to seven of the 10 schools still in the Big 12, had been involved in talks with many of the schools about forming a conference channel, minus Texas and Oklahoma. Texas has its own school-branded channel already and Oklahoma is planning to launch one in 2012.

But subsequent defections by Learfield schools Texas A&M and Missouri to the SEC have thrown those plans onto the back burner. Brown said there remains a keen interest in developing more content, which could run on school digital channels, like those at Kansas State and Missouri, or on a TV channel like the one being planned at Oklahoma.

“We need to be able to monetize the content that we have access to,” Brown said. “Day-to-day changes in the company will be subtle, but looking through a longer lens, this new financial bandwidth will provide more opportunities to develop digital content, expand our national sales team and further develop ancillary businesses. An organization like Shamrock provides the financial resources to grow those businesses.”

NASCAR renewed six of 12 existing sponsors in 2011, but the departure of three partners means total sponsorship revenue will be flat to slightly down in early 2012.

The sanctioning body renewed half of the sponsorship deals that were due to end this year, signing Bank of America, Goodyear, UPS, Kraft, Sirius and Mars. It is still in discussions with Visa, Exide Batteries, the official auto batteries, and Drive4COPD, the official health initiative.

Some of NASCAR’s sponsors, such as Bank of America, which first signed on as an official partner in 2006, negotiated to pay less because NASCAR attendance and ratings have declined from the levels they were when they last negotiated their sponsorship.

Craftsman, Diageo and O’Reilly’s, the official auto parts store, all declined to extend their agreements. Craftsman is a division of Sears, which reported a net loss of $421 million last month for its most recent quarter. Diageo decided to end its sponsorship of NASCAR and Roush Fenway Racing and invest in a race title sponsorship for Indianapolis Motor Speedway’s Brickyard 400.

NASCAR offset those departures with new deals with Freescale Semiconductor, a producer of embedded hardware, and McLaren, which signed on as the sport’s official engine control unit. It also secured an early renewal through 2017 with Goodyear, one of its largest partners.

“We had a strong year in terms of renewals and people who wanted to stay in the sport — big brand names, blue-chip sponsors,” said Jim O’Connell, NASCAR’s chief sales officer. “The fact that they want to stay in the sport proves what we do for their business. Did we lose some? Absolutely. Diageo repurposed its money. Craftsman has had its business troubles. But given the overall economic climate, we had some good success with our overall sponsors.”

O’Connell said he was optimistic about the prospects for adding new sponsors in 2012. In July, he hired Sean Downes to lead the sanctioning body’s sales efforts as its new managing director of business development. Downes has hired three new sales executives, nearly doubling the size of the sanctioning body’s sales team.

The sales group aggressively is pursuing sponsors in new categories such as green and technology, and traditional categories such as airlines, quick-service restaurants, spirits and electronics. O’Connell said he would like to see at least two new sponsors come into the sport in 2012, especially in the green or technology sector.

In addition to new business, NASCAR will have several significant sponsors to renew in 2012. MillerCoors, Office Depot and Gillette are all up for renewal and each presents different challenges: MillerCoors became a joint venture between SABMiller and Molson Coors in 2007 after Coors cut a six-year, $20 million deal with NASCAR; Office Depot’s business has been challenged by the recession and trying to contain costs; and Gillette recently reduced its marketing commitment to the sport by dropping its NASCAR Young Guns program.

NASCAR also is in negotiations with Sprint to renew its title sponsorship of the sport’s top series. Sprint’s chief marketer, Steve Gaffney, indicated last month that negotiations are going well, and O’Connell confirmed that.

“We’re optimistic we’ll continue working together,” O’Connell said.

O’Connell said that he’s optimistic his team will be able to renew the sponsors that are up in 2012 and add new partners.
“There’s a really good vibe right now about NASCAR — a lot of momentum and good buzz,” O’Connell said. “We have the right people in place on business development. We have really good targets and we think the environment is right and the economy is starting to turn.”

Speedway Motorsports Inc. has signed as a client of Turnkey Sports & Entertainment’s sponsorship management system called Activator.

The company is the first motorsports operation to use the system. It joins a list of users that includes leagues like the NBA and MLS and teams like the Chicago Bears and Seattle Seahawks.

Activator is a real-time, cloud-based management tool that allows sponsors to access up-to-date information from Nielsen, Arbitron and others. It also creates a secure, virtual workroom where sponsors and properties or teams can exchange information, review everything from logos to activation plans, and manage ticketing and hospitality.

Among Speedway Motorsports Inc.’s properties is Texas Motor Speedway.
“As deals have become more and more complicated, not just ‘Here’s your 100 tickets,’ this makes sense,” said Mike Burch, SMI’s vice president of business development. “There can be eight to 10 people involved in a deal from agencies to individual contractors, and this checked off a lot of boxes by offering a place everyone has access to.”

SMI owns speedways in Atlanta; Charlotte; Las Vegas; Bristol, Tenn.; and Fort Worth, Texas, among other properties. Burch said the company will begin making Activator access available to its corporate service team over the next two weeks. All of its sponsors — both national entities and local partners affiliated with individual speedways — will have access to it by January.

Turnkey President and CEO Len Perna said other motorsports companies are expected to begin using Activator in 2012, as well. He declined to name the companies because negotiations with one are ongoing.

“The NASCAR industry guys are on the road all the time,” Perna said. “How can they work on a deal when all their files are on a server or desktop in Charlotte? This exists in the cloud. You can work on a laptop, smartphone, any device with an Internet connection.”

SMI has more than 30 national sponsors. Burch said adding Activator won’t result in any layoffs in the company’s client services group.

“It will make the people we have more effective and efficient,” Burch said.

Apparel maker Under Armour has signed a two-year partnership with Tough Mudder, a series of endurance running events in which participants navigate obstacles and run through mud. The deal gives Under Armour exclusivity in the apparel and footwear categories. The value of the deal was not known.

The two-year-old series of races sends competitors into water and under barbed wire.
“We think [Tough Mudder] is going to become the premier endurance competition in the U.S.,” said Matt Mirchin, senior vice president of global sports marketing for Under Armour.

Founded in the fall of 2009 by a Harvard MBA student, Tough Mudder sends runners on a 12-mile course that features freezing water, barbed wire, a fire pit and live electric wires, among other obstacles. Last year, the series attracted approximately 150,000 participants. For 2012, the series has grown to 32 events, including stops in Squaw Valley, Calif.; Sydney, Australia; and Tokyo.

Since the fall of 2010, Tough Mudder has brought on Dos Equis, Clif Bar, FRS, Degree antiperspirant and Bic razors as sponsors.

“One of the most frequent questions we get asked is, ‘What should I wear?’” said Alex Patterson, Tough Mudder’s chief marketing officer. “Under Armour is synonymous with being hard-core and tough, and that’s what we think Tough Mudder is in the events space.”

Tough Mudder becomes Under Armour’s first event sponsorship in endurance racing.
Under Armour has a personal endorsement deal with two-time Ironman triathlon champion Chris McCormack, but the Tough Mudder deal is its first event sponsorship in endurance racing. Starting with the Jan. 14-15 Tough Mudder event in Arizona, Under Armour will receive signage, a branded obstacle (which has yet to be designed) and activation space in the finish-line “party zone.” It also will receive naming rights for the May 12-13 Tough Mudder event to be held outside of London as well as an event in Maryland that will occur in the fall.

Finishers at all Tough Mudder events will receive an event-branded Under Armour performance shirt and headband. Under Armour also will sell Tough Mudder-branded apparel — including its new coldblack line of temperature-reducing active wear — online as well as at Tough Mudder events. The apparel will not be available at retailers nor in Under Armour’s stores.

The series and apparel maker also will launch a co-branded training program for the events in 2012. The details of that program have not been decided.

Dan Weinberg, sponsorship director for Tough Mudder, said the series was in discussions with Reebok as well as Under Armour for the category. “It’s hugely important and will help with the credibility factor,” Weinberg said.