For years, the fact that client-side marketers had the dollars properties coveted led to immediate return of phone calls, as sponsorships have always been hard to find. The selling process is hard, but the property owners desired the relationships because they needed the incremental revenue and the promotion sponsors bring to the table.
But now, I am seeing a disturbing trend: Properties are not returning brand managers’ phone calls. When the properties do call back, they often schedule meetings for “a few weeks from now when things slow for us.” In one case, I witnessed a property owner look at a sponsor offer and scream, “They are trying to rip us off.” And rather than try to negotiate a mutually beneficial partnership, he simply passed on the opportunity to bring a powerful national marketer into his event.
I am becoming concerned that properties may not be interested in sponsors. Property stewards are asking, “Do I really need sponsors?” In some ways, it is a valid question to ask. Sponsorship requires properties to serve as account managers, and it is time-consuming for internal teams to activate. The kicker is that sponsorship revenue is becoming a smaller piece of the pie. Due to rising revenue from ticket sales and entry fees in participatory events, digital and media rights becoming more lucrative, and greater licensing opportunities, the sponsorship slice of the pie is smaller than ever. While that may sound responsible, this is high-risk thinking. Continuing down this path, there is a potential every stakeholder will lose — especially the most valuable stakeholder: the consumer. Consumers segment themselves into “sports fandoms.” Some align with emerging sports such as MMA, while others align themselves with “water cooler” sports: “Did you see the fourth quarter of the Mavericks game?” We tell our clients that the cliché is critical: The consumer is the ball, and never take your eye off the ball.
Sponsorship is a critical part of the marketing medium, and I hope smart property owners revert from apathetic to enthusiastic partners. Here’s why:
1. Consumer experience
Lost in the new thinking is the importance of the consumer experience. Business is about the consumer. A mobile phone station at the end of a marathon makes the property better, offers value to the consumer and allows a brand to be part of that consumer story at its highest passion point. Those long TV timeout promotions keep fans engaged. The experience is why some fans attend the game as opposed to watching on their 60-inch HDTV at home. Remove that sponsor, and the consumer experience loses a valuable benefit.
|Properties with friends like Pepsi are good company to keep.
Properties are brands, and brands keep good company. If a brand is friends with Visa, Pepsi, Budweiser and Campbell’s, that is good company to keep. Hello, NFL. Smart marketing programs build a brand. Partners promote the event and use the property’s trademark on packaging, on apparel and in media to drive those larger revenue parts such as ticket sales.
3. Media sales
As media becomes a more critical, and lucrative, part of the revenue pie, sponsorship deals should be packaged with media to raise the value of a property’s rights. This also helps drive up its media category as a whole, especially when category exclusivity or first right of refusal is given to sponsors.
4. Building a bench
Business changes. What is seen as not important today could be important tomorrow. Building a bench hedges against a weaker economy, slowing ticket sales and entries, or if a property just gets its pricing policy wrong. Sponsors allow a property to forecast its business without as much revenue fluctuation. See Yankee Stadium, for example. The revenue line from slowly selling front-row ticket sales can be offset by the influx of sponsorship deals.
5. Plug and Play
Activation does not have to tax a property’s organization. The key is for the property to build systems and processes that make sponsor obligations “plug and play.” Build a sponsor calendar so it can be routed internally to PR, legal and other departments. Plug into a template. Done. In polling major sports-spending brands, the NFL shines as having the best systems and processes to make things easier for sponsors. Yes, the Super Bowl site is selected several years in advance, the Pro Bowl is in the same city each year, and they have fewer games, but the internal office and teams are well-linked and make things easier on sponsor brands. These brands are more apt to renew.
So is the property-sponsorship model dead? No, but the relationship model may be dying.
The relationship is no longer just about the property and sponsor. At the center of the model is the consumer. The property needs to partner with sponsors to offer added value to the consumer, who is now the engine driving the machine. Using sponsorship to improve consumer experiences will ultimately make a property unique versus its competition, provide high-margin revenue, drive other slices of the pie such as tickets or ratings, and make that property into an enduring brand.
Dan Schorr (Dan@Start2FinishMarketing.com) is CEO of Start2Finish Marketing, a Boston-based consulting and experiential marketing shop that connects brands to active lifestyle consumers.
Jerry Reinsdorf joins elite trio
|Billie Jean King
readers who may not have attended the live event have missed out on the amazing stories and accomplishments that fill the ballroom on the night the honoree is recognized. So I turned to King and his editor, Tom Stinson, for this assignment and thought I’d share with you some of Bill’s thoughts from the project. The following are Bill’s words:
It was a privilege, because he’s done so much. And a challenge, because he’s done so much. Fortunately, Jerry tells a great story. My part was just to listen and watch.
To prepare, I spent a couple of weeks reading everything I could find about him, going all the way back to when he bought the White Sox, and talking to people to get some more context before I went to see him. I was in Chicago for two days. The first was at the ballpark, watching a game with him from his suite. A great scene. After that game we did the bulk of what you’d consider the interview, in his office — although all the time you spend around someone shapes the story. The next day I spent the afternoon at the Bulls offices at the United Center, and then I caught a cab over to the ballpark to meet up with him to chat for another hour. We rode to the Bulls playoff game together, which I knew would be another scene I’d use. I spent that game with him in the suite — yet another scene. And then after everybody was gone we sat and watched the postgame press conferences and talked a little more. He was incredibly gracious with his time and his reflections, and he was relaxed and candid. When we were done and the traffic had cleared, he offered to drive me back to the hotel. In fact, he assumed he was driving me back to the hotel. You’ll get why that’s relevant when you read the story.
I knew he was smart. Everybody talks about his ability to grasp complex issues quickly. But his recall for details is astonishing. I asked him a really open-ended question when we shifted to talking about the Bulls: What are your most vivid recollections of those six championships? He went year by year through them all, including play by play of the key stretches. Detailed play by play. Stuff like “Phil called timeout” and how much time was on the clock. He was that way with everything. The details of the games, and the seasons, are like the song track to his life. You could tell how much they meant to him.
His office is like a wing in Cooperstown. The Jerry wing. Bats and balls and seats and other mementos. And photos and photos and photos and photos. The first time you go in, he points out that everything in there was a gift. Everything in there is connected to him in some way.
Bill will share more on the background of this story in our newsroom blog, On The Ground, and in a video this week posted on our website. I’ll leave you with the final thought he shared with me:
“When Jerry Reinsdorf cares, he cares deeply. About baseball. About basketball. About people. I think that’s where the loyalty comes from. At times, it’s come back to bite him. But that’s him. It’s like everybody else said. That’s Jerry.”
> CHOOSING THE WINNERS OF OUR SPORTS BUSINESS AWARDS: I hope to see many of you Wednesday night. A few notes about how we select the Sports Business Award winners, which will be revealed for the first time exclusively at the event, and how to follow us on Twitter for real-time updates. First, the editorial staff of SBJ/SBD reviewed hundreds of submissions that were entered and considered during the eligibility period of March 1, 2012, through February 28, 2013. From that internal research, we unveiled on March 18 the 74 nominees across the 15 different categories. These nominees include 30 companies or individuals being nominated for the first time. Once the nominees were selected, we followed the process that we have used for the last two years: We invited outside, independent judges to decide the winners. We believe this outside perspective clearly establishes these awards as “industry” recognition. This year, a new group of 14 judges was selected; experienced and knowledgeable executives in the sports business who were asked to sit on various committees. All the judges received research and video files on the nominees, and earlier this month, over two days in New York, the committees met and deliberated on 13 of the 15 categories. Athletic Director of the Year and Executive of the Year were selected solely by an SBJ/SBD editorial committee.
There was fun, intelligent debate and discussion, and after thorough deliberations, secret votes were cast until every category had a winner. The identity of the judges will be revealed at the awards celebration and in Thursday’s issue of SBD and next Monday’s issue of SBJ. These individuals committed a great deal of time and energy to this process, and we’d like to thank them for being so dedicated to this process and serving the industry; their contributions make the awards program stronger and more transparent.
Meanwhile, if you can’t make the event, follow us on Twitter — our handle is @SBJSBD — and check our newsroom blog, On The Ground, for highlights from the Red Carpet, interviews, a complete list of winners and other news from an exciting night in sports business. You can find links to the blog at the top of the SportsBusinessDaily.com and SportsBusinessJournal.com home pages.
Abraham D. Madkour can be reached at firstname.lastname@example.org.
Museum CEO Micah Parzen is decidedly sane, but he did have an incredible vision for a showcase last year: Host the inaugural stop of “Ramp it Up — Skateboard Culture in Native America,” a Smithsonian Institution traveling exhibition. His only “insanity” was to build and operate a public skateboard ramp in the museum. For Parzen, the ramp uniquely anchored this modern display of Native American sports and culture, and it allowed the Native American skaters (and others) to show off skills and style. Despite our initial admonitions on risk and liability exposure (our firm represents the museum), the ramp simply had to fly.
So with input from museum staff, we evaluated event options, operational approaches and strategies for allocation of risk between sponsors, contractors and related parties. Despite logistical challenges and varied stakeholder interests, the public skateboard ramp operated successfully throughout the four-month run of the exhibition. To formulate the risk paradigm for this unique event, we kept it basic in the evaluation of the questions that go into any event: who (and where), what, and how.
Because many entities were involved in Ramp It Up, the “who” analysis required an understanding of each party’s concerns. Key stakeholders included a municipal lessor (San Diego), nonprofit entities (Smithsonian and Museum of Man), skateboard teams and companies, insurance companies/brokers, the general public, and many Chicken Littles (the lawyers). To maintain the museum’s strategic objective, we first highlighted the cultural aspects of the exhibition and its success in Washington, D.C. We then applied strategic analysis for each party, incorporating that into our site-specific, operational plan to reduce respective risk exposures. It was critical to address individual risks before developing the comprehensive risk approach for the whole event. Stakeholders thus expressed support but wondered how the ramp could operate inside the museum.
|A public skateboard ramp was built inside a San Diego museum as part of a traveling exhibit.
Different risk issues arose because the public would have access to the ramp. Parzen was adamant that the public, especially kids, should skate the ramp. California law provides some skateboard liability limits for city facilities, but a temporary ramp, operated on city property in a museum, required a more robust approach. The museum enlisted skateboarding experts to design and construct the ramp, but outsourcing public oversight would blow the museum’s budget. And museum employees could not properly supervise public ramp access due to insurance limitations. To address this gap, we developed detailed public participation parameters, including registration criteria, documentation checklists, timing restrictions and related participation requirements that were prerequisites for any public access to the ramp. By adapting operational risks to museum specifications for public use, we negotiated greatly reduced costs for outsourcing oversight duties. With a narrower duty, the ramp-builder could provide supervision, thereby ensuring public participation.
Allocation of other risks required analysis of all stakeholder insurance policies to mesh coverage terms. The available insurance coverages varied widely depending on the activities covered (e.g., construction, access, safety equipment, operations, removal and spectator protection). We evaluated each party’s duties and coverages to package the overall risks for underwriters. Above all, the museum needed to honor its obligations to its municipal lessor, its employees, its contracting parties and its paying guests. Strategic analysis efforts were complemented by contractual negotiations and temporary coverage endorsements to address specific risk scenarios. Detailed written releases (including proof-of-age and minor authorization documents), along with safety equipment (e.g., helmets for all, knee/elbow pads for minors) were employed on a “no exception” basis, in accordance with museum specifications and contractual obligations. We also helped the museum utilize various sponsor packages (e.g., safety equipment, skate decks, and food, exchanged for publicity and access) to defray underwriting costs for the overall risk management program.
As with any sporting event, successful risk management for a unique venue demands a deep understanding of the sport and attention to all event and venue details. For Ramp It Up, early involvement allowed us to evaluate stakeholder risks so that mitigation measures were part of the design and implementation of the event. The museum thus reduced both risks and costs, despite the apparent incongruity of skateboarding inside a museum. Most importantly, Parzen succeeded in creating an innovative way for young people to experience Native American culture and history through a decidedly 21st century sports activity.
Cordon Baesel (email@example.com) and Stefanie Warren (firstname.lastname@example.org) are attorneys at McKenna Long & Aldridge (www.mckennalong.com), specializing in action sports, risk management and business litigation.