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Volume 21 No. 1

Marketing and Sponsorship

The Association of Volleyball Professionals, which was revived last year, has hired IMG to oversee operations for a seven-stop tour this year.

The tour, which is owned by Donald Sun, plans to visit seven cities across the U.S. from late May to late September.

Sun, the son of a California billionaire, acquired rights to the AVP after it folded in 2010 and filed for bankruptcy protection. He revived it last year and took it to seven cities nationwide.

Wasserman Media Group oversaw operations for five tour events and IMG oversaw two in 2013, but Sun hired IMG to oversee all operations this year. James Leitz, IMG senior vice president and director of action sports, will lead the effort.

“They’ve done volleyball for close to 25 years now,” Sun said. “They also bring respect and enthusiasm to what they do, and I like that.”

The AVP is seeking a revival on the business front.
The AVP was founded in 1983, and its popularity surged after beach volleyball became a marquee Olympic sport in 2004. By 2008, it held more than 30 events and generated annual revenue of nearly $25 million. But the tour filed for bankruptcy protection in 2010.

Sun bought it out of bankruptcy with hopes of reviving the AVP over the next five to seven years. The goal this year is to add several more sponsors, increase attendance and work toward a new TV agreement. It is in the second year of a two-year time buy with CBS Sports Network.

The tour had limited sponsorship success last year. It signed Wilson to a multiyear deal and Mercedes-Benz’s Smart USA brand to a one-year agreement.

It has signed a new deal for this year with Gallo Wines, which will promote its Refresh brand, and it is in extension talks with Smart USA.

Sun said conversations with potential corporate sponsors have improved after the new AVP completed its first season. Many executives remembered the tour failing in 2010 and wanted to see it succeed before committing, but Sun said that mentality has begun to change.

“From a partnership side, sponsors, television, related partners, if we can overachieve for them and continue bringing back the enthusiasm for this brand, this year will be a success,” Sun said. “Rome wasn’t built in a day. This is going to take time.”

The AVP faces some competition to be the premier beach volleyball organization in the United States. Former AVP Commissioner Leonard Armato is overseeing the Asics World Series of Beach Volleyball, a FIVB-sanctioned competition in Long Beach, Calif. The event, which will take place for the second time this July, had 11 hours of programming on NBC and NBC Sports Network during its first year.

Sun said that the Asics World Series event should help the AVP and that the AVP should help the Asics World Series.
“As long as we’re all here to promote the sport, it’s OK,” he said. “It’s important to have a domestic tour [like the AVP]. This is the training ground for Olympic medalists.”

Hulman & Co. CEO Mark Miles expects last year’s work to restructure the IndyCar Series and Indianapolis Motor Speedway to pay dividends with double-digit revenue increases this year.

Internal projections show Hulman Motorsports, which includes the IndyCar Series and Indianapolis Motor Speedway, should see a 20 percent to 25 percent increase in ticket sales and sponsorship this year.

IndyCar opens its season this Sunday in St. Petersburg, Fla.

Miles said the revenue increase is being driven by the combination of a new title sponsorship with Verizon, another sponsorship that is being finalized, and ticket sales around a new race and a concert at IMS this May.

May is the biggest month on the calendar for IMS. It will begin this year with an inaugural road race, continue through Indianapolis 500 qualifying, include a Jason Aldean concert Memorial Day weekend, and culminate with the Indy 500.

“Last year was a transitional year for us where we tried to reshape our organization and re-establish relationships in the marketplace and articulate a clear strategy for our racing businesses,” Miles said. “This year we expect to begin to see the benefits of that repositioning with significant top-line sales growth. The changes we made in the May program are significant.”

The May events will be the primary driver of ticket sales increases. IndyCar races average more than 35,000 spectators, and the new road race at IMS is expected to draw more than that. Aldean typically plays to more than 20,000 spectators, which would take total new ticket sales that month to more than 50,000.

The Verizon title sponsorship, which was announced earlier this month, helped the series avoid going without a sponsor for the 2014 season after Izod exited its deal early. Verizon agreed to pay more than $10 million annually in rights fees, media and marketing. The company is shooting IndyCar-themed commercials that it plans to run nationally.

Miles said Hulman Motorsports also expects to sign a title sponsor for its inaugural road race at IMS as well as a new timing and scoring sponsor for the IndyCar Series.

In addition to improving sponsorship and ticket sales revenue, Hulman Motorsports plans to put more marketing resources behind the IndyCar Series. Miles hired longtime Ford marketer C.J. O’Donnell last year as the series’ marketing chief. He has developed a campaign, “Rivals,” that highlights drivers and competition on the track.

The marketing materials include full-length advertisements that can run during race broadcasts on ABC and NBC Sports Network, and 25-second ads that promoters can use locally after filling in the remaining five seconds with ticket sales information.

O’Donnell estimates that between the eight promoters who plan to use the commercials along with IndyCar’s advertising during races, digital ads and print ads, the series will have $10 million in media value behind it this year. The series also plans to buy advertising in race markets during the weeks after it visits.

“When we come to town, we make quite a splash, and in past years, we wouldn’t continue that dialogue after the weekend,” O’Donnell said. “Our intent now is to stay present through advertising and make sure we have a continual dialogue with fans there [in race markets] and encourage them to continue to follow us in races after the race they attend.”

Miles said he is finishing the 2015 IndyCar schedule. In the coming months, he hopes to secure two to three international races for the start of the year. His goal is to take the series back to Brazil, where it raced 2010-13, and one other market such as the Middle East. “Getting back to Brazil is important,” Miles said. “There’s demand there. We just have to figure out how to line it up.”

Longtime MLB on-field cap rights holder New Era is joining with the league and Lids for a seasonlong promotion called “Home of the Authentic” across 200 Lids stores.

In teaming with its largest retailer, New Era is trying to drive home the message of authenticity, particularly within malls, where competition for licensed-product sales is fierce. MLB caps represent the No. 1 league for sales at Lids’ 1,000-plus stores.

Fixtures holding hundreds of caps with Lids and New Era branding, along with MLB player imagery, will be front and center within mall-based Lids stores in many of MLB’s largest markets, including Dallas, New York, Los Angeles, Chicago and Boston. Lids also will get some exclusive headwear products as part of the deal.

The program will encompass both authentic and fashion-fitted headwear. Support includes a roster of 10 to 12 MLB endorsers, including Matt Kemp, CC Sabathia and Prince Fielder.

Fixtures holding hundreds of caps will be front and center at mall-based Lids stores.
“Snapback caps were selling so well over the past few years that they were taking away [sales of] core items,” said Lids President Ken Kocher. “Consumers are coming back to fitted caps now, and this is a way to reconnect.”

Musical artists will be integrated into the program later this season, and all three parties will support with digital and social media.

For New Era, the effort marks a change of sorts: The company typically at the beginning of an MLB season will launch an ad campaign.

“It’s a change in approach to more of a retail/grassroots play,” said New Era President Pete Augustine. “Lids is the dominant player especially in the fitted market. This is to celebrate authentic caps with the fitted fashion colors we’re famous for.”

The program comes after a season in which even the ever-optimistic MLB licensing execs described sales as flat, and one in which the New York Yankees, normally at or near the top in licensed MLB product sales, failed to qualify for the playoffs.

“Malls are where kids go, and making the connection at 200 doors keeps us fresh and relevant,” said Tim Brosnan, MLB executive vice president, business. “Baseball is the only sport where the cap is an authentic item, and reminding folks that authenticity matters is always a good thing.”

Retail-specific programs are a delicate balancing act since they can create hostility from other licensees and retailers depending on the size and scope of the exclusive products and marketing support. Notable ones from other large properties include the NBA/Foot Locker deal, NASCAR’s deal with Wal-Mart, and the NHL’s recent “super shops” within Dick’s Sporting Goods locations.

This program, however, was a symbiotic mix between the biggest cap retailer for both New Era and MLB. So, how big could it grow?

“We fully anticipate this being rolled out in the majority of our stores eventually,” Kocher said..

> NO GAMBLE: With Citi Field entering its sixth year as the home of the New York Mets, the original top-level signature partner sponsorships will start to come up for renewal next year.

Caesars has become the first of the original seven to renew its rights, extending them through the 2018 season. Illustrating changes in the marketplace since the company’s first go-round with the team, the casino operator has added digital and social inventory to a sponsorship that previously had none. Caesars does continue with its branded stadium club and large left-field upper deck sign. A SportsNet New York media spending commitment continues as well.

The other signature sponsors at Citi Field are Anheuser-Busch, Delta, Geico, Pepsi, Verizon and naming-rights sponsor Citi. “We’re about 95 percent sold and attacking these early,” said Lou DePaoli, Mets executive vice president and chief revenue officer.

New inventory available to every MLB club marketer this year is sponsoring stadium video of MLB’s expanded replays, which marketers can be sure fans will watch. Two sponsors have bought in for the Mets: SNY and Barracuda Networks.

Terry Lefton can be reached at