Group Created with Sketch.
Volume 20 No. 46
  • Created with Sketch.
  • Created with Sketch.
  • Created with Sketch.

State Farm going, going, gone from MLB sponsorship roster

Terry Lefton
The four-game World Series sweep by the San Francisco Giants provided little in the way of drama, but there was some intriguing off-field news coming out of the Fall Classic. State Farm Insurance is out as an MLB corporate sponsor and title sponsor of the annual Home Run Derby, held the evening before the All-Star Game.

That means MLB heads into the offseason minus a sponsor of six years and with the pressure of having to sell one of its largest sponsorship packages: the ESPN-televised Home Run Derby, which State Farm had titled since 2007. Before that, Century 21 had a seven-year run.

MLB faces both positives and negatives in the hunt for a new Home Run Derby sponsor.
The good news is that the broadcast is always one of the highest cable ratings of the summer — a time when it’s difficult to achieve any kind of ratings success. This year’s Home Run Derby posted a 4.1 rating and 6.9 million viewers on ESPN, up slightly from the prior year’s event.

The bad news for those selling a package that one agency source pegged at an “asking price” of $10 million a year is that both the All-Star Game, to which the Derby is inevitably tied, and the World Series registered historic lows in terms of ratings and total viewers on Fox. We realize the need for perspective here, so let’s add that the audience for the July 10 All-Star Game still allowed Fox to win the night, and that the four-game average World Series numbers of a 7.6 rating and 12.7 million viewers was the most-watched programming for Fox since its May “American Idol” finale.

Still, there’s more distressing news for those selling MLB rights. While sponsorship buys are infamously difficult to compare head to head, State Farm already has voted with its pocketbook, renewing with the NBA for an additional four years while dropping its MLB rights. Multiple sources tell us the insurer will keep its MLB team deals while spending more on the NBA, which offers a younger audience.

“They are doubling down on the NBA,” said a senior marketer familiar with the negotiations. Under its NBA renewal, State Farm, a league sponsor since 2010, will take an ownership position of the NBA draft, continue as presenting sponsor of TNT’s Thursday night NBA package and All-Star Saturday night sponsorship, along with a raft of new social media initiatives.
Offered another involved marketer: “State Farm’s sports spend isn’t dropping at all; in fact, it may be going up. They got a lot out of MLB and the Home Run Derby, but you can make a good case that it has run its course for them. And the MLB Advanced Media exclusivity the deal started with had lapsed, so the value was diminished.”

Given the arms war as far as marketing spend by insurance brands, MLB will continue to mine that category for another Home Run Derby sponsor.

Elsewhere on MLB’s offseason sales agenda is a renewal with Pepsi, which had held baseball marketing rights since 1997. Pepsi’s “Field of Dreams” marketing platform during the past two seasons was some impressive activation, and the longtime nature of the relationship makes us believe that deal will get done. However, management and marketing strategy are anything but focused at Pepsi currently, and the beverage/salty snacks giant spent a fortune renewing its NFL deal. Additionally, while All-Star Game balloting rights were once valuable enough that Pepsi passed them through to Wal-Mart, now they’re not so much.

More than one rights buyer tells us there’s a need for MLB to package more effectively and more effectively demonstrate the value of its offerings, whether by combining its efforts with those of MLBAM or some other new sales ploy.

“Beyond the jewel events themselves, the challenge for MLB is for them to show what they have that is unique, proprietary and so precious that you just have to buy it,” said a source at an agency that has worked on behalf of its clients with MLB for decades.

“As a fan, you know what you like about baseball, but they need some innovation or packaging to communicate what makes baseball a great marketing vehicle. As for the Home Run Derby, it has become like the [NBA] Slam Dunk Contest. You just can’t be sure that year after year the biggest stars will compete. That does not make for an easy sell.”

MLB also is continuing to push for a deal in telecom/wireless, a category in which MLBAM’s overlapping rights render things confusing at best. Accordingly, MLBAM has a number of cell phone brands as sponsors, while MLB Central’s last telecom sponsorship was 14 years ago with MCI, a brand later acquired by WorldCom and, subsequently, Verizon.

> TAKING THE SUBWAY: It’s not often that a car door can swing both ways, but such was the case in Pepsi’s recent re-up with Hendrick Motorsports. With Pepsi’s reduction in its NASCAR spend, conventional thinking was that there now is an opportunity for another brand to firmly align itself with Dale Earnhardt Jr., American motorsports’ most popular driver.

Hendrick’s re-up with Pepsi may have already cost Dale Earnhardt Jr. a new deal.
However, sources tell us the recent Pepsi re-up has already cost Junior one new partner — a $750,000-a-year deal with Subway that one involved source described as being “a few feet from the goal line” was killed at Pepsi’s insistence. Pepsi was well into its negotiations with Hendrick before finding out about Junior’s pending Subway deal and the soda giant did not take kindly to what it considered late notice of a possible conflict. Coke is the primary pour at Subway’s 25,000-plus domestic restaurants.

A lap through a nearby Subway location confirmed another likely pressure point, which had been referenced earlier to us by a marketer involved in the negotiations.

“There’s an awful lot of Frito-Lay product sold in those doors, and you know who owns them,” he said, referring to PepsiCo.
Both sides indicate they are still working on a deal for next season and beyond, but there’s a further complication in Hendrick’s marketing garage: Junior’s people are now looking at a private-label chip deal. That ought to engender even more love from Frito-Lay, eh?

For Subway’s part, it already has a deal with NASCAR star Carl Edwards.

Terry Lefton can be reached at