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Volume 21 No. 2

Marketing and Sponsorship

Editor's note: This story is revised from the print edition.

The Netherlands is best known for chocolate and beer, but Dutch company Aquadraat hopes to add high-performance sports water to the list.

The Amsterdam-based company has signed a global deal that includes the World Triathlon Corp., the New York City Triathlon, Colorado’s U.S. Pro Cycling Challenge and the USA Cycling Professional Championships in Greenville, S.C.

A source pegged the multiyear deal in the low seven figures overall. The Ironman and New York City Triathlon partnerships were negotiated by Wasserman Media Group.

Marcel Ter Stege, Aquadraat’s CEO, said the deal is the first major sports marketing play in the company’s nine-year history, and will showcase its newest product, Aquadraat Sport, which hits shelves in July.

“We have a good opportunity to build a good distribution network in the U.S.,” Ter Stege said. “The U.S. is the best market for us because people expect the best quality and they will invest in the best quality.”

Aquadraat’s activation centers on becoming the official water partner at the events. Aquadraat will distribute water and receive marketing rights at the World Triathlon Corp.’s 154 global races — including the entire Ironman and 70.3 triathlon series. It also will become title sponsor of the WTC’s newest event, the Aug. 11 USA Ironman Championships in New York City.

Erik Vervloet, chief marketing officer for the World Triathlon Corp., said selling the title sponsorship to its debut Ironman in New York City was a major objective. “I wanted to have a title for New York, but of course I didn’t want to get desperate,” he said. “So for a company that wants global positioning to take that space, I could sleep well at night.”

The WTC has never had a global water sponsor. A WTC representative said water traditionally was included in larger nutrition deals, such as the 2010-11 U.S. deal with Nestlé, which promoted its PowerBar, Ironman Perform sports drink and Power Gel products at U.S. races. Nestlé still owns the domestic sports drink category with Ironman Perform, but the WTC has sold the nutrition and gel categories to other partners.

Shawn Hunter, CEO of the U.S. Pro Cycling Challenge, said segmentation shows maturation in the endurance sports market. Aquadraat will distribute water at Hunter’s seven-day professional race, as well as at four affiliated amateur-only cycling events.

“In the old days a Coke or a Pepsi would tie up everything liquid other than beer and wine,” Hunter said. “I think those days are gone now. ”

Fred Dreier is a writer based in New York.

Fifth Third Bank plans to put its number on one of Roush Fenway Racing’s Sprint Cup cars.

The Cincinnati-based bank signed a four-race primary sponsorship for Matt Kenseth’s No. 17 car. The multiyear agreement will see it sponsor Kenseth’s car at this weekend’s Sprint All-Star Race in Charlotte and at three Midwest races in Kentucky, Indianapolis and Chicago. The bank has the option to change the races it sponsors in 2013 and 2014.

The bank joins Zest as a short-term primary sponsor on Matt Kenseth’s No. 17 car.
Financial terms of the agreement weren’t available, but industry sources said Roush has been seeking $400,000 a race for Kenseth, which would put the deal in the low seven figures.

Roush recently began using Fifth Third to provide some of its banking needs, but team and bank executives said the deal wasn’t connected to the banking relationship.

Fifth Third Bank plans to use the sponsorship to support an ad campaign it rolled out in late February. The campaign, which uses the tag line “The Curious Bank,” was developed by Leo Burnett and has been featured in regional TV commercials, radio spots and in out-of-home, print and digital ads.

The deal is the second sponsor Roush has signed for the No. 17 car since the start of the Sprint Cup season. It signed a four-race deal with Zest soap earlier in the year. It also added single-race agreements with Valvoline, Fastenal and Ford. But the No. 17 car still needs sponsorship for a dozen races this season.

The amount of open inventory on Kenseth’s car has been a cause of concern for many in the NASCAR industry. Kenseth, who was NASCAR’s champion in 2003, won this year’s Daytona 500 and stood second in the Sprint Cup standings going into last weekend.

Kevin Thomas, Roush’s vice president of strategic marketing, said the team is targeting companies that haven’t been involved in NASCAR before and companies that have been involved in the sport but not with a top Sprint Cup team.

“People have a hard time realizing that the Matt Kenseths of the world, guys out there running up front, are available and they have an opportunity to do things with them that they’ve never done before,” Thomas said. “Having people understand that is a challenge for us, but once they figure that out, it’s a quick discussion.”

Thomas said that conversations for the deal with Fifth Third Bank began shortly after Kenseth won this year’s Daytona 500.

Roush President Steve Newmark had worked with the bank when he was an attorney at Robinson Bradshaw & Hinson. After Roush and Fifth Third started working together on banking matters, Roush pitched the bank on using the team as a marketing tool. Fifth Third launched its new marketing program the same day that Kenseth won the Daytona 500.

Terry Lefton
Devotees of this page know that we consider entertainment to be a subset of sports, so while our spouse of 30-plus years is familiar with the actress who played the second girlfriend of the second actor who portrayed James Bond on celluloid, we are secure in our knowledge of more important minutia, like the name of the man who played third base with Tinker to Evers to Chance.

There’s also the name of this publication providing some definition, when it comes to subject matter. However, superseding that boundary marker are two cogent facts: Entertainment and sports marketing properties compete for consumers’ loyalties, and for the same marketing budgets.

The Dolby Theatre, formerly the Kodak, rivals any venue in terms of number of events, which includes the Academy Awards.
So while you are used to reading about sports arena and stadium naming-rights deals here, there are a number of compelling reasons why we need to report and you need to read about an entertainment naming-rights deal, such as the one struck recently between Dolby Labs and the Hollywood theater that’s been the site of the Academy Awards since 2001.

There’s the magnitude of the deal, which we’ll get to later. However, the agencies involved also made for a compelling story since it had two influential names when it comes to naming rights: Randy Bernstein of Premier Partnerships, whose naming-rights deals include O.Co Coliseum in Oakland and MLS venues Pizza Hut and PPL parks.

Bernstein and Premier represented the seller on the basis of having completed a 10-year pouring-rights deal with Pepsi immediately before incumbent naming-rights holder Kodak filed for bankruptcy protection in January.

On the other side of the table was Jeff Knapple. If there is any institutional memory in naming rights, we humbly suggest it’s either his or ours. Knapple’s naming-rights credentials date from Target Center in 1989 and include Los Angeles’ Staples Center.

After a decade with Wasserman Media Group, Knapple joined Van Wagner Sports as executive vice president in mid-February. Four days later, the phone rang; it was an unsolicited call from Dolby Labs’ outside counsel asking Knapple to work in securing the rights to what used to be called the Kodak Theatre, which Oscars host Billy Crystal referred to as the “Chapter 11 Theater” and the “Your Name Here Theater” on this year’s Oscars telecast, during which the Kodak name was conspicuously absent.

Jeff Knapple of Van Wagner Sports represented Dolby Labs.
Another intriguing fact: Knapple and his former Envision agency represented the theater’s original developer on the Kodak deal. Oddly, Dolby didn’t know that when they called Knapple. We don’t know what prompted Dolby to call Knapple; they wouldn’t agree to an interview. Very low-fidelity on their part.

Premier made initial inquiries to around 100 prospects, a list that was narrowed to four within 30 days. Dolby made sense because of its target audience and because of the global nature of the property.

“The first couple of phone calls with them, we didn’t even talk price,” Bernstein said. Any potential partner had to want global reach and believe what was being sold “is like having the Super Bowl at your building 20 years in a row,” Bernstein said.

Value is the most relative of terms, but the uncluttered nature of what is now the Dolby Theatre compared with the signapalooza at any pro sports venue also helped, as did the theater’s unquestionable prestige.

Then there’s the matter of price, which makes this deal relevant to anyone selling venue marketing rights. Kodak’s agreement, voided by bankruptcy, was 20 years for about $74 million. Neither agency would comment on the price of the new deal, but lest we be accused of fictionalizing, industry sources we trust tell us Dolby’s 20-year deal was in the neighborhood of $175 million. On a per-annum basis, that makes it one of the larger deals in naming rights, especially intriguing when you consider it’s a 3,300-seat theater, and the larger naming-rights deals are with arenas and stadiums that are exponentially larger.

Still, the theater rivals any venue in terms of number of events. Cirque du Soleil alone has 350 shows there annually.
It’s also interesting that this is a business-to-business naming-rights deal. We can think of only a few comps: Oakland’s Oracle Arena, a vanity plate for Larry Ellison, and Nashville’s LP Field, a hometown play for the building products company based in Tennessee’s capital.

Certainly, this was an ideal situation for Dolby, because of the film industry Hollywood audience that Dolby covets. Perhaps the lesson is one of filling a need rather than asking for assistance in moving inventory.

“No brand sets out to name a stadium, arena or theater,” said Bernstein. “If you can create a powerful enough value story, they’ll have a conversation and you have an opportunity to show that whatever the price, is far exceeded by the expected return.”

Another important reason for sports-marketing types to pay attention to this non-sports deal is that there are still some big, new sports assets out there without corporate monikers, including Jerry World, the Dallas Cowboys’ home field in Arlington, Texas, and the Marlins’ month-old home in Miami.

While it’s still unclear to us whether and how much money changed hands, there was a good enough story built around the NFL in downtown Los Angeles that a naming-rights deal was struck there before there was a blueprint, a site plan, or even an NFL team committed to moving into Farmers Field, which may never be plowed — or built.

The paramount question for sports marketers regarding this entertainment marketing deal is whether the days of an automatic cash bounty in exchange for the nameplate of every new pro sports facility are over. From our vantage point, it’s clear that premium seating and naming rights are the only parts of the pro sports economy that haven’t recovered from the recession. Will they ever?

“Quality and scarcity are the ultimate drivers in this and any market,” said Knapple. “They both were very much in play here.”

FLYING HIGH: CAA Sports’ nascent corporate consulting group won a shootout among some of the biggest sports agencies, landing the right to work on Emirates Airline’s domestic sports marketing initiatives.

It’s the first big win of a high-profile agency shootout for CAA, which brought on former GroupM Entertainment & Sports Partnerships CEO Greg Luckman to lead its consulting business. Since then, it has added Best Buy and RBS as consulting clients, and others in golf, through its acquisition of MG Sports Marketing. Luckman would not comment.

Stateside, Emirates’ sports properties center on its recent U.S. Tennis Association deal, in which the airline received naming rights to the U.S. Open Series of summer tournaments, along with rights for the U.S. Open itself. Globally, Emirates is one the biggest sports spenders, with top-shelf properties including FIFA World Cup rights, the jersey sponsorship and stadium naming rights for EPL club Arsenal, other jersey deals with fellow Euro soccer powers AC Milan, Paris Saint-Germain and Hamburger SV and primary sponsorship of New Zealand’s America’s Cup challenger team.

COMINGS & GOINGS: David Bruce joins Major League Soccer as senior director of brand and integrated marketing. Bruce worked previously at General Sports and Entertainment and brand consultancy Wolff Olins. … 24 Hour Fitness CMO Tony Wells leaves after five years to become CMO and chief marketing and customer officer at ADT. Bill Quinn, senior vice president of merchandising, is the fitness chain’s interim CMO.

Terry Lefton can be reached at