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Volume 21 No. 2

Marketing and Sponsorship

A California judge last month dismissed a lawsuit brought by 18 Olympians against Samsung, saying the Genome Project that the electronics company and U.S. Olympic Committee launched before the London Games wasn’t commercial.

The athletes plan to appeal the decision.

The Genome Project was a Facebook application, which Samsung and the USOC developed with the marketing agency Team Epic, that allowed users to see how they were connected to past and present Olympians. It evaluated such biographical elements as where people are from and where they went to school and used that information to compute how they were connected to Olympians. For example, users who attended Brandeis University would see that fencer Tim Morehouse also attended the college and, ideally, become interested in following Morehouse during the London Games.

After the site went live, a group of Olympians that included Dara Torres, Mark Spitz, Greg Louganis, Jackie Joyner-Kersee, Aaron Peirsol, Cullen Jones and Jessica Hardy sued Samsung for using their image and information commercially without their permission. Some athletes had endorsements with Samsung competitors; Torres, for example, had a deal with Hewlett-Packard.

Samsung and Team Epic, which was a party to the lawsuit, filed a motion after the lawsuit was filed to have it dismissed because the Genome Project was protected by the First Amendment and the plaintiffs didn’t have legal standing to sue. The motion forced Rich Foster, the attorney representing the Olympians, to prove that the Genome Project was commercial speech not protected by the First Amendment.

Los Angeles Superior Court Judge Ruth Kwan found that Foster couldn’t do that. She sided with Samsung and Team Epic and threw out the case, saying, “The fact that Samsung may have acted with economic motivation in creating the Genome Project does not, in and of itself, turn the Facebook application and content into commercial speech.”

Foster challenged the judge, asking why a company would ever pay athletes for future endorsements if they can use their “names and images on a Facebook application for free” and “claim the athletes’ stories are public interest,” but she stood by her ruling. He plans to file an appeal after the court signs its order in the coming weeks.

“This is an important issue nationwide, not just for celebrity athletes but celebrities in general,” Foster said last week. “We have to let the California court system know this is serious.”

IMG has acquired New York-based Catalyst Public Relations, adding domestic client PR capabilities for the first time, along with social, digital and content development expertise.

Catalyst, which has 35 to 40 employees and clients including Subway, Dick’s Sporting Goods, Under Armour, Timex and Powerade, will keep its name and offices in the Empire State Building for now, although further integration with IMG’s corporate consulting group is expected eventually.

Catalyst will retain its offices in Los Angeles and Charlotte, and company head Bret Werner will become senior vice president/managing director and report to David Abrutyn, IMG senior vice president and global managing director of consulting. In addition to Werner, the Catalyst management team of Bill Holtz and Ted Fragulis will continue in their roles, only now under IMG ownership.

Terms of the deal, which closed last week, were not disclosed.

Abrutyn said he had been looking to add capabilities like Catalyst’s for a few years, but first began to speak in earnest with Werner about the acquisition at the SportsBusiness Journal/Daily Activation Summit last May in Chicago. IMG and Catalyst had teamed to work with several clients previously, including RBS and DHL.

“We feel that this acquisition makes us the only full-service sports, entertainment and lifestyle marketing agency, and for Catalyst we see tons of opportunity for them to plug into our overseas business,” Abrutyn said. He added that IMG’s internal communications function will operate separately.

PR Week, which named Catalyst its 2012 “Small Agency of the Year,” had previously estimated the agency’s revenue at $5.9 million for 2011. Werner said Catalyst’s 2012 revenue was in the “$10 million range,” adding that digital and social revenue increased 140 percent in 2012, with that business “moving close to” 50 percent of Catalyst’s revenue.

“People have approached us before about an acquisition, but the power of the IMG brand, the resources IMG can supply, the cultural fit and the ability they give us to scale globally made them the right choice,” Werner said.

Catalyst head Bret Werner (right) will become senior vice president/managing director and report to David Abrutyn (left).
Catalyst launched as Pyramid Public Relations in 2005 through investors including principals of the former Alan Taylor Communications, who remained as the agency’s majority shareholders up until the sale to IMG. The agency rebranded as Catalyst Public Relations in 2007.

Adding PR capabilities is something nearly every sports marketing agency without them has considered. However, few of the larger agencies have such capabilities. This deal may mark a tipping point, suggesting that PR’s role as the social/digital/mobile expert in many companies has elevated its importance well beyond its traditional role of bread-and-butter publicity machines.

Accordingly, several agency principals suggested that Catalyst’s expertise in digital and social media, as well as content development, were principal factors behind the deal. Further, IMG has lagged in those areas — company CEO Mike Dolan admitted in a SportsBusiness Journal interview last year, “We’ve been behind the curve. … The error IMG made was trying to build a big digital group internally.” IMG’s move to acquire more social and digital capabilities is indicative of the importance clients have placed in supporting sports and entertainment platforms with more cohesive and effective social and digital marketing programs.

“One of the primary marketing priorities for brands in 2013 is creating sustainable engagements with their target audience via digital, mobile and social,” said Tony Schiller, a partner at Paragon Marketing, who heads that agency’s corporate consulting practice. “PR agencies are at the forefront of understanding how to optimize digital technology, especially social media, to create connections between brand and consumer. Any agency that is creating large marketing platforms that include strategic activation would benefit from having PR expertise in-house.”

Dan Belmont, president of The Marketing Arm, said his agency was creating a new client offering to support these types of efforts, called Social Sponsorship.

“We have 40 people dedicated to nothing but social media work and it’s growing,” Belmont said. “Social, digital and mobile has gone from being a portion of every sponsorship to becoming the lead program, in many cases. PR has owned social up to now, but I think the next development is that it has become so important that every agency will have a piece of social media. It’s become a primary question and need for all of our clients.”

The Daytona 500 was the top race in terms of media value, along with being the only race to make the list of top 10 brands ranked by exposure.

Brand exposure for companies doing business with NASCAR’s Sprint Cup Series in 2012 totaled $1.21 billion, up 6.6 percent from 2011, according to the results of a study conducted by Repucom exclusively for SportsBusiness Journal/Daily.

The increase in value came despite a decrease in the overall number of exposures (down 12.6 percent), the total time on-screen duration (down 11.2 percent), the number of brands tracked (down 3.5 percent), and a decrease in viewership (down 3.6 percent) compared with 2011. Those negatives were offset because cost-per-minute advertising rates for the 29 races that were run through Sept. 30, 2012, increased 10 percent versus 2011. The final seven races of the year — six on ESPN, one on ABC — saw rates increase 15 percent.

Top 10 brands featured during the 2012 NASCAR Sprint Cup Series

Rank Brand Media value Change in rank vs. 2011 ($ change vs. 2011)
1 NASCAR $115,934,858 No change (+ $19,910,358)
2 NASCAR Sprint Cup Series $58,149,159 No change (- $1,599,412)
3 Chevrolet $51,974,922 No change (- $1,800,897)
4 Sprint $45,785,775 No change (+ $3,593,917)
5 Toyota $35,078,828 No change (+ $2,284,903)
6 Lowe’s $28,354,112 No change (+ $3,263,226)
7 5-Hour Energy $23,251,148 + 123 (+ $21,762,330)
8 3M $22,657,734 + 2 (+ $5,745,953)
9 FedEx $22,517,359 + 5 (+ $7,416,620)
10 Daytona 500 $21,552,997 + 16 (+ $11,470,146)
TOTAL ALL BRANDS $1.21 billion — (+ $75,224,773)

Top 5 Brand Moves: Changes in media value, 2012 vs. 2011

Brand Change
5-Hour Energy + $21,762,330
NASCAR + $19,910,358
Farmers Insurance + $18,361,665
Daytona 500 + $11,470,146
Aaron’s + $11,114,500
Brand Change
Red Bull -$15,488,845
Aflac - $13,674,395
Pizza Hut -$12,611,698
UPS -$11,666,631
Fox -$8,375,996

Key findings:

The NASCAR logo remained the top generator in media value for the third straight year, capturing 9.6 percent of the total value calculated for brands.
The increase in value for 5-Hour Energy can be related to its primary sponsorship of Clint Bowyer’s No. 15 car as well as an increased presence around the track and through network assets, according to Repucom.
Miller Lite finished the season ranked 15th in overall media value. However, when looking at team assets alone, Miller Lite, as primary sponsor of Sprint Cup champion Brad Keselowski’s No. 2 car, ranked third in 2012 behind Lowe’s (Jimmie Johnson) and FedEx (Denny Hamlin).

For the study, Repucom analyzed the brand exposure of all TV-visible brands (more than 1,700 across the season) from all source locations, including cars, drivers, team equipment, broadcast graphics, track/promotional signage, and audio mentions from race broadcasts on ABC, ESPN, Fox, TNT and Speed. The broadcasts covered the 36 regular-season Sprint Cup Series races, the Sprint All-Star Showdown, the Sprint All-Star Race, the Budweiser Shootout and the two Gatorade Duel 150 races, for 41 events total. Pre-race coverage was included, but live race footage accounted for more than 90 percent of the media value generated for sponsors.

All visible exposures are scored based on size of logo, duration and placement on screen, among other factors. Also, for the purpose of summary calculations, each audio mention was assigned a duration of four seconds with a quality score of 100 percent.

The media values for brands, drivers and races are dependent on multiple factors including viewership, network advertising and broadcast sponsorship rates, and pedigree of the race itself. For example, 13.7 million viewers watched the two-day, rain-delayed 2012 Daytona 500 on Fox, down 12.4 percent compared with 2011. Still, it was NASCAR’s biggest audience of the year, and the race’s brands generated 161 percent more exposure value than the 2011 race because of the weather delay on Sunday and the red-flag incident during the Monday night telecast.

On the other hand, ESPN’s consecutive race weekends on Aug. 5 (Pennsylvania 400 at Pocono) and Aug. 12 (Finger Lakes 355 at Watkins Glen) produced the two lowest races in terms of overall media value. The broadcasts went head-to-head with NBC’s London Olympics coverage and were two of only three races without a title sponsor.

Top cars

Rank Car Media value Change in rank vs. 2011 ($ change vs. 2011)
1 Jimmie Johnson (No. 48) $56,045,749 No change (+ $12,188,308)
2 Jeff Gordon (No. 24) $37,410,169 + 2 (+ $2,816,112)
3 Denny Hamlin (No. 11) $34,323,337 + 5 (+ $11,318,379)
4 Tony Stewart (No. 14) $34,178,379 + 1 (+ $490,802)
5 Dale Earnhardt Jr. (No. 88) $30,583,098 + 2 (+ $2,498,449)

Note: This data includes all brands receiving exposure on the car and associated with the participant.

Key findings:

Johnson’s No. 48 car received the highest value for the third straight year and increased 27 percent in media exposure value from last year.
Series champion Brad Keselowski finished the year just outside the top five, ranking sixth and producing $29.92 million in media value, up 62 percent versus his 2011 output.
Matt Kenseth’s No. 17 car and Martin Truex Jr.’s No. 56 car finished 13th and 14th, respectively, in Repucom’s media value ranking. They were the only two of the 12 Chase for the Sprint Cup Championship participants to finish outside of the top 12 in media value. Conversely, Kyle Busch (No. 18) and Carl Edwards (No. 99) were not in this year’s Chase but finished inside the top 12 for media value.

Top races

Rank Race Media value Change in rank vs. 2011 ($ change vs. 2011)
1 Daytona 500* (Feb. 26-27) $171,076,622 + 1 (+ $105,718,111)
2 Aaron’s 499 (May 6) $74,604,609 + 2 (+ $15,695,604)
3 Goody’s Fast Relief 500 (April 1) $72,639,611 - 2 (+ $3,760,484)
4 Federated Auto Parts 400 (Sept. 8) $63,755,815 + 7 (+ $15,695,604)
5 Coca-Cola 600 (May 27) $62,543,643 - 2 (- $2,105,087)

* Includes rain-delay coverage and coverage on subsequent Monday night
Note: Federated Auto Parts 400 aired on ABC. All other races listed aired on Fox.

Key findings:

The 13 “points races” on Fox produced more than 50 percent of the total household viewership in 2012.
The top 16 races in terms of generating media value were all featured on network broadcasts (Fox/ABC).
The preseason Budweiser Shootout on Fox produced more value than the season-ending Ford EcoBoost 400 on ESPN.
Despite being dethroned as the top race from 2011, the Goody’s Fast Relief 500 still increased in value by nearly $4 million.

Sprint is adding another sponsorship to its NASCAR portfolio.

The title sponsor of NASCAR’s top series signed a multiyear deal to sponsor the season-opening race at Daytona International Speedway. The race, which was formerly known as the Budweiser Shootout, will become the Sprint Unlimited at Daytona. It will be held Feb. 16 and broadcast on Fox at 8 p.m.

Budweiser switched its sponsorship from the Shootout to the Duels race.
Sources valued the deal in the mid-six figures annually.

Daytona President Joie Chitwood approached Sprint with the opportunity last year. The sponsorship became available after Gatorade opted to discontinue its sponsorship of the annual Duels race that serves as the qualifier for the Daytona 500. Budweiser signed on to sponsor the Duels, which meant Daytona needed to find a new partner for the Shootout.

Chitwood met with Sprint’s Steve Gaffney, vice president of corporate marketing, and Tim Considine, director of sports marketing, last spring and negotiations picked up last summer. He said he never met with any other potential sponsors.

“The relationship they have with NASCAR and the drivers means they can do some things promotionally other partners couldn’t,” Chitwood said.

Sprint chose to call the race the Sprint Unlimited at Daytona because the company’s marketing strategy is focused on contrasting the unlimited data plans it offers with the limited data packages sold by competitors AT&T and Verizon.

The Kansas City-based company is beginning its 10th season as title sponsor of NASCAR’s top series. In addition to being the title sponsor of the NASCAR Sprint Cup Series and signing on to sponsor the opening race of the season, the telecom company sponsors NASCAR’s annual all-star race in May.

The company will announce its activation plans later this month. Part of it will focus on integrating fans into the race. Fans attending the race will be eligible to receive special upgraded race experiences, including roles as grand marshal, honorary starter and trophy presenter.

“It is the ideal way to start this milestone season,” Gaffney said, “and we look forward to sharing all of the details later this month.”

Octagon advises Sprint on its NASCAR marketing.

Terry Lefton
With the help of pass-through rights from top-tier NCAA corporate champion Coca-Cola, McDonald’s is staging what is believed to be the company’s largest college sports promotion ever.

While we realize folks at the Golden Arches have generally stuck with pro properties for national promotions, this spring they’ll be depending on the power of March Madness and the Final Four to build restaurant traffic from March 12 through April 1. During that time, about 21 million “Win at the Buzzer” scratch-and-win game pieces will offer instant-win prizes including food, cash and other gifts supplied by NCAA corporate sponsors, including LG. Support for the program includes packaging on McDonald’s Angus burger, with game pieces also on packaging for the Egg McMuffin and large french fries. Media support includes TV, radio and point-of-sale.

Coke previously has passed through its NCAA rights to Papa John’s and more recently Domino’s Pizza. The fact that McDonald’s is now getting NCAA rights on the cheap tells us a lot about the amount of media support behind the program and the influence Coke has with the NCAA, even in the last year of its current deal.

Tom Shine has quietly left Reebok for XIX Entertainment.
> SHINE ON: Recently we’ve noted some of the country’s biggest brands, and those most heavily invested in sports marketing, attempting to further their marketing ROI by combining sports and entertainment marketing investments. From Coke’s Olympic “Move to the Beat” music platform to Pepsi’s current “NFL Anthems” campaign, the new programs just seem to make sense, especially when big brand expenditures for music and sports programs are easily into seven figures. We’ll have to wait and see if Pepsi’s Super Bowl tie is as impressive as Coke’s Olympic overture. However, we do have news of one sports marketer’s job change that underscores our contention that integration is more important than ever.

Longtime apparel and athletic footwear marketer Tom Shine, who has been senior vice president at AdidasReebok brand for the past 11 years and one of the footwear/apparel company’s most senior sports marketing execs, quietly left the company late last month to join Simon Fuller’s XIX Entertainment in a senior position. Shine’s title was still undetermined at press time, but he will report directly to Fuller.

“The [entertainment and athlete] talent that we’ve got under contract is huge,” said Shine, who will remain based in Indianapolis, home of Logo Athletic, the now-defunct licensed sports apparel company he founded in 1968. “The idea is to build them as brands, and bring some of the ones with marketing savvy from entertainment to sports, along with combining those disciplines.’’

Fuller and XIX Entertainment made their mark with “American Idol” and the rest of the global “Idol” franchise, which debuted in the U.K. under the name “Pop Idol” in 2001. However, Fuller’s group also represents some global sports stars already trying to make the jump into entertainment, including David Beckham — Fuller is credited as being a central figure in bringing Beckham to the U.S. — as well as top F1 driver Lewis Hamilton and tennis star Andy Murray. Fuller’s entertainment clients include Steven Tyler, Carrie Underwood and The Spice Girls, and his company has a joint venture with Jennifer Lopez and Marc Anthony.

Terry Lefton can be reached at