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Volume 20 No. 45

Marketing and Sponsorship

Large sports properties have cashed in for years from the ultra-competitive battle for market share in the soft drink, athletic footwear and fast-food markets. Well, get ready for the headphone wars.

On top of Bose recently signing a four-year deal with the NFL that grants it sideline rights in a pact that team sources said was worth $32 million a year, MLB has held advanced discussions with several high-end headphone brands, including Beats Electronics, under which branded headphones would be worn by umpires deliberating under MLB’s new replay rules.

MLB is in talks to have umpires wear branded headphones during replay decisions.

An MLB spokesman said no deal has been consummated.

The two developments indicate the growing importance of technology as a broadly defined sponsorship category and illustrate the burst of sales and profits in the personal headphone market, as anyone who regularly rides public transportation could testify.

“This is an exploding category,” said former Front Row Marketing President Chris Lencheski, who negotiated deals with Bose for GM Racing. “There are [good] margins and a lot of new brands seeking visibility.”

While Bose was a pioneer in high-end and noise-canceling headphones, Beats and others have snatched significant market share with headphones ranging from $99-$399 and more. Now, headphones rival high-end sneakers as a youth status symbol and often cost more than the MP3 player to which they are attached. Renie Anderson, NFL senior vice president of sponsorship and partnership management, said that like fellow NFL sideline sponsor Microsoft, Bose bought access to NFL sidelines as both an “authentic technology demonstration platform” and a powerful retail activation play. “This category has changed. Now headphones are the driver for the audio market,” said Anderson, noting the deal was in discussions for 18 months. Sideline headsets were without a sponsor this past season after Motorola walked away.

While Anderson would not discuss terms, several team sources said the Bose deal includes hefty media and activation commitments and a minimum spend of $100,000 per team.

Marketing deals with coaches and Bose selling licensed products are also under consideration.

Bose will be seen on NFL coaches’ headphones in 2014. 

“Bose is hoping the NFL exposure will give them a technology play that will put them in the consideration set with Beats and Skullcandy,” said a marketer familiar with the deal. “Bose is great technology, but now it’s the brand your dad wears.”

Neither Bose nor CAA Sports, its consulting agency, would agree to be interviewed for this story.

The deal clearly establishes audio headphones as a valuable piece of sponsorship inventory across sports. GTE first branded the headsets of NFL coaches at least 20 years ago. Now any property with a replay review, which means every major sport, is looking at similar deals. Sources said Beats talked with the NFL about its sideline deal, but could not make the financials work. Industry sources said other headphone brands, including Monster, Skullcandy and Sennheiser, have been casting about for deals.

As the personal headphone market has grown to a $2.3 billion market over the past five years, it has largely been athletes carrying the marketing flag. While Bose had a smaller NFL rights package since 2011, some of the NFL’s bigger stars, including San Francisco 49ers quarterback Colin Kaepernick and cornerback Richard Sherman of the Super Bowl champion Seattle Seahawks, did TV ads for Beats that ran during the NFL playoffs and generated significant buzz. Dr. Dre himself was on the sideline wearing “Beats By Dre” headphones at the NFC Championship Game in Seattle. Beats’ portfolio of celebrity endorsers includes LeBron James, Kevin Garnett, Lady Gaga and Justin Bieber. The brand gave what it said were headphones worth $25,000 apiece to every player in Super Bowl XLVIII.

Sports properties could also enable more exposure to possible headphone partners by permitting athletes to wear them during warm-ups. In the case of MLB, integration with the Home Run Derby held the night before the All-Star Game seems logical, since it involves a lot of waiting and watching.

Sports marketers polled said that league deals were significant as a developing piece of sponsorship inventory, but that they should include additional player rights to be effective.

“What we all use headphones for is music and gaming, so you’d like to see a better tie there,” said Tom McGovern, president of Optimum Sports, whose clients include heavy sponsorship buyers Lowe’s, McDonald’s and Under Armour. “Beats are part of pop culture now. They are cool by definition, so I see more upside for baseball if they can get their players involved.”

Former AT&T sponsorship chief Tim McGhee, who now heads consultancy MSP Sports, expressed some caution about the nature of the connection between the brands and the properties, and hinted at a more natural tie to music. “There’s great exposure for MLB and an interesting new piece of inventory for everyone but the NFL,” he said. “But I’m not sure if it is an organic and authentic enough connection for the brands involved.”

Less than two months removed from an injury that precluded her attempt to win a medal in the Sochi Olympics, moguls skier Heidi Kloser has signed with Nike as she begins her journey toward the 2018 Winter Games in Pyeongchang, South Korea.

An injury during a practice run kept Kloser from competing in the Sochi Games.

Financial terms of the deal were not available, but Kloser’s agent, Johnny Alamo of Johnny Alamo Entertainment, said Kloser will be an ambassador in Nike’s Olympic program and potentially part of a campaign for Nike’s women’s training and athletic line. Her deal runs through the 2018 Olympics.

An announcement is expected this week.

Sara Blasing, director of North America communications and running and women’s training at Nike, declined to comment on the contract but did say, “We look forward to our relationship with Heidi and celebrating her future successes.”

Kloser, 21, from Vail, Colo., was considered a medal contender entering the Sochi Games but she tore knee ligaments and broke her femur during a practice run on Feb. 6, the day before the opening ceremony. That ended her medal aspirations and led her to question if she was still an Olympian — a question that was highlighted by Liberty Mutual Insurance in a TV ad that featured Kloser and her parents (with her mother answering “Yes, honey; absolutely”) as part of that company’s “Rise” campaign during the Olympics.

“The Liberty Mutual ad during the Olympics reached millions and made her a household name, which is rare for the sport of mogul skiing, as alpine athletes typically take the spotlight,” Alamo said.

Alamo noted how two brand-name companies have now aligned with Kloser despite the fact she has yet to officially compete in an Olympics let alone stand on a podium.

“I think what this is showing is the future of sports marketing,” Alamo said. “It’s about what people can relate to. [You] see all the time an athlete doing something so outlandish or so over-the-top the general public can’t really relate to it, but everybody can relate to when Heidi asked her parents in the ambulance in Sochi, Russia: ‘Am I still an Olympian?’ Everybody felt that.”

Kloser underwent surgery roughly three weeks ago and is currently able to ride a stationary bike and put a limited amount of weight on her leg.

Monster Energy is expanding its role with the Professional Bull Riders to become title sponsor of the PBR’s premier series in Brazil.

Financial terms of the deal were not available. The agreement was expected to be announced this week.

The newly titled Monster Energy PBR begins Friday at ExpoLondrina, an agricultural and industrial exhibition in Londrina, Brazil. The tour includes 30 events throughout the country. More than 400 riders will compete for $1.5 million in prize money, as well as for points to qualify for the PBR Built Ford Tough World Finals in Las Vegas and the PBR World Championship.

Along with the title sponsorship, Monster will be featured on in-arena signage, rider uniform patches and television ads on U.S.-based PBR Built Ford Tough Series events that air in Brazil. Monster Energy PBR does not have a television deal. The sponsorship deal also includes Monster product sampling, on-site activations, and social and digital media promotion.

The PBR operates a Touring Pro division in Brazil, but the Monster Energy PBR will feature the country’s top events, similar to the PBR Built Ford Tough Series in the U.S.

Monster signed a multiyear deal with the PBR in 2012 making it the official energy drink of the series. With the expansion to Brazil, the company joins Stanley Black & Decker as the second American brand to sponsor the Brazilian tour, which is the PBR’s most popular international circuit when considering attendance as well as TV distribution and viewership. Australia, Canada and Mexico also boast PBR circuits.

The deal was negotiated in-house.

“We are extremely excited to have such a great partner as title sponsor of our Brazilian series,” said Dave Cordovano, chief global events officer for the PBR, in a statement. “Monster Energy is an iconic brand with worldwide recognition.”

The PBR opened offices in Brazil in 2006. Eight PBR world champions have been Brazilian, the most recent being Silvano Alves in 2011 and 2012.

“Whether in the U.S. or Brazil, the PBR’s intensity and its fan base’s passion align perfectly with Monster Energy’s brand,” said Mitch Covington, vice president of sports marketing for Monster, in a statement.

Outside of European imports like David Beckham, an MLS player in national television ads for a consumer packaged goods brand is about as rare as a double-digit soccer score.

Still, this is a World Cup year, so Unilever is going with Clint Dempsey, a veteran of two prior World Cups who’s also captain of this year’s U.S. national team, in a forthcoming TV ad for Degree antiperspirant/deodorant. The ad was shot recently and we’re told it should debut this month, with an accompanying digital and social media campaign.

> PHONE HOME: MLB corporate sponsor T-Mobile is prepping TV ads with Washington Nationals outfielder Bryce Harper and Pittsburgh Pirates center fielder Andrew McCutchen, the reigning National League MVP. Both had done social media for T-Mobile in the past.

McCutchen’s expanding national endorsement portfolio also includes New Era Caps and Sony, which has McCutchen on the cover of “MLB ’14: The Show.”

> BIRD WATCHING: A nest full of new sales types at the Baltimore Orioles has helped the team land 19 new corporate partners for the 2014 season. Largest among them is Baltimore-headquartered investment management firm Legg Mason, which has purchased a fixed sign on the center-field scoreboard at Camden Yards, a location that formerly had been held by Ford.

The Orioles grabbed a Southwest renewal.
Photo by: ICON SMI
Remarkably, another local brand of renown is in as an Orioles sponsor for the first time: Under Armour. Other new sponsors are Chick-fil-A and Floyd’s 99 Barbershop, a unisex national hair-cutting chain that bills itself as the “The Original Rock ’n’ Roll Barbershop.”

Also, Southwest Airlines and AT&T have returned via long-term renewals.

> SAYING YES: Even with a miserable winter in the East causing a reduction in advertising from the auto category, YES ad sales vice president Howard Levinson says that, despite coming off a record sales year, 2014 sales are pacing “slightly ahead of 2013.” The improving Nets are attracting dollars, and new money on Yankees telecasts includes the growing health care category, where New York Presbyterian Hospital has joined the roster.

“Commitments to the [Winter] Olympics and weather kept things a little tight, so we’re feeling good about where we are,” Levinson said.

Advertisers continue to ask for social media tie-ins. AT&T is sponsoring a photo tweet-in for Yankees fans this year on YES telecasts.


> COMINGS & GOINGS: Lee Stacey joins Monumental Sports, the parent company of the Washington Capitals and Wizards, as director of corporate partnerships, reporting to Chief Revenue Officer Jim Van Stone. Stacey is one of a half-dozen recent hires in Monumental’s corporate sponsorship department, which is being reorganized. Stacey returns to a familiar market, as he was senior director of corporate sales with the Washington Bullets and Washington Sports & Entertainment from 1993 to 1996. More recently, he was senior vice president of global sales and marketing with Comcast-Spectacor’s Front Row Marketing in Philadelphia since 2012. He’s also held sales and marketing slots with IMG, the New York Jets and Cleveland Cavaliers. … At Horizon Media’s Scout Sports and Entertainment, Dan Parise moves from associate director to managing director. Parise has been with Scout for three-plus years. Before that he was with the Chicago Fire and the Strategic agency, New York.

Terry Lefton can be reached at