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Volume 20 No. 42

Marketing and Sponsorship

Wal-Mart has signed a massive deal with the Oak View Group, giving the world’s biggest retailer a major marketing presence at 21 big league arenas, stretching from Sacramento to Fort Lauderdale.

The agreement is valued in the eight figures annually, according to multiple sources with knowledge of the deal, with one putting it at $40 million over three years.

It is especially significant considering Wal-Mart has not historically been a big player in sports marketing. It also stands out for its scope, reaching 70 million people a year who pass through those NBA and NHL facilities, Oak View Group officials said.

TD Garden is among the arenas included in the deal.

“This is the first step for Wal-Mart into this space,” said Dan Griffis, co-owner of Oak View Group and head of Narrative, OVG’s sales agency. “They liked the national platform with buildings in the top 25 [markets]. There is one contract and it provides economies of scale.”

It’s Narrative’s first national sponsorship deal after Oak View Group was formed 16 months ago, and facilities include two-team arenas Madison Square Garden, United Center, American Airlines Center, TD Garden, Wells Fargo Center and Verizon Center, all of which as part of this deal now feature Wal-Mart as their “official big box retailer.”

The deal comes as the Bentonville, Ark.-based company revamps its marketing and brand positioning. Its activation will center on “Walmart Community Playmakers,” a new program recognizing local residents who have given back through education, fighting hunger and sustainability, among other efforts.

Another brick in the Wal

The world’s largest retailer has a relatively brief history in sports sponsorship. A few highlights:

1997: Becomes the first nonendemic sponsor of FLW Outdoors, a partnership that later (2011-2016) includes a title sponsorship of the property’s top circuit. Will continue operating “retail-tainment” events around some tournaments this year, and Walmart Pro Days (where competitors can register and have their fish weighed) will continue at select stores.

2006: Hires Millsport as its first sports marketing firm.

2010: Begins sponsorship of LPGA Walmart NW Arkansas Championship presented by P&G (presenting sponsor in 2010, title sponsor 2011-present). The event takes place annually in mid-June at Pinnacle Country Club in Rogers, Ark.

2011: Signs nonexclusive licensing partnership with NASCAR that allows the retailer to develop apparel, home goods and other products bearing NASCAR, driver and team imagery and marks. Partners with 18 races to sponsor a ticket package that includes four tickets, four soft drinks, four hot dogs and one souvenir program for $99.

2012: Serves as the primary sponsor for the Turner Motorsports No. 50 Chevy driven by Bill Elliott in NASCAR’s Sprint Cup Series Coke Zero 400 at Daytona International Speedway.

2014: Signs a two-year extension of its NASCAR licensing agreement, through 2015.

                          Source: SportsBusiness Journal research

All 21 arenas will host at least 15 events with in-game “Playmakers” presentations over the course of the hockey and basketball seasons. Some teams have already launched that activation as their regular seasons wind down in the NBA and NHL.

The participating arenas are members of the Arena Alliance, 26 buildings that pay Oak View Group an annual fee to secure events and sponsorships at their venues, among other services. Sports and entertainment entrepreneur Tim Leiweke and music executive Irving Azoff formed OVG in 2015.

“It’s the first time that we as an industry have taken advantage of aggregating all the real estate in arenas,” said Peter Luukko, executive chairman of the Florida Panthers and an investor in Oak View Group. “There are big brands that do a lot of national advertising but aren’t looking to do one-offs, even if it’s L.A., New York and Chicago. We’ve made it a national buy.”

Members of the Arena Alliance acknowledge it would have been difficult to sign Wal-Mart on their own.

“It would have been impossible,” said Bruce Popko, chief operating officer for Pegula Sports and Entertainment, parent company of the Buffalo Sabres. “For us, it’s cool because we get to play with the bigger markets and still be part of the overall activation.”

At the Sabres’ KeyBank Center, six support columns on the main concourse will be wrapped with Wal-Mart branding.

Wal-Mart’s activation will center on its program that recognizes local residents for giving back.
“It’s almost like a league deal,” said Adam Davis, chief revenue officer for Prudential Center and the New Jersey Devils. “We’re ecstatic about it because it opens us up to a brand-new audience as we look to diversify our fan base coming to Devils games.”

Five members of the alliance — arenas in Denver, Detroit, Indianapolis, San Antonio and Toronto — had conflicts with sponsors holding exclusive deals in a similar category and are not part of the Wal-Mart deal, Griffis said.

Wal-Mart officials declined to comment on the agreement.

While details are still being worked out, in most cases, Wal-Mart can use team and arena marks in its stores in the respective markets.

The centerpiece focuses on the “Playmakers,” where individuals will be honored after being selected by the teams and venues in each market through fan submissions at a custom Wal-Mart website. “Playmakers” receive tickets to the game, a Wal-Mart gift card and a plaque commemorating their contribution to the community.

The “Playmakers” presentations offer Wal-Mart digital moments of exclusivity on center-hung scoreboards, courtside signs and LED ribbon boards in the seating bowl.

The move builds off what many teams are doing to recognize local residents going above and beyond.

The deal extends to the Reno (Nev.) Bighorns, the Sacramento Kings’ D-League team.
Apart from “Playmakers,” assets made available by teams and arenas vary depending on the market. Each worked with Narrative to sort through their respective inventory, Griffis said.

In Sacramento, for example, the Wal-Mart deal extends to the Reno (Nev.) Bighorns, the Kings’ D-League team. The retailer has its brand on the team jerseys, extending its activation outside of northern California, Kings President Chris Granger said.

The deal follows a shift in Wal-Mart’s marketing strategy as the retail giant continues to overhaul its stores and upgrades merchandise, in addition to improving its online and e-commerce operation.

“They’re trying to change people’s perceptions of them and it starts with a dialogue on culture,” Griffis said. “And any time they can step up the competition against Amazon, it’s in their best interests.”

Griffis approached Wal-Mart in October with a proposal and worked on the deal with Wal-Mart consultant Michael Francis, his former boss at Target Stores, and Gary Tobey, CEO of Haworth Marketing & Media, the agency Wal-Mart recently hired to pursue strategic partnerships in media and entertainment. The contract was signed in February, four months after the talks began.

Who gets the revenue? Breaking down the revenue split

    The 21 arenas involved in the Wal-Mart deal receive an equal share of revenue under the agreement.
   Who gets that share depends on who controls the facility, and the scenario varies by market. In Philadelphia, for example, the Flyers own the arena, so the 76ers are not part of the deal, said John Page, president of Wells Fargo Center. The same is true at TD Garden in Boston, owned by Delaware North, owner of the Bruins, said Glen Thornborough, the arena’s chief revenue officer. The Celtics are not part of the deal.
   In Chicago and Dallas, where joint ventures run the arenas, the NBA and NHL teams share revenue from the Wal-Mart deal, said Dan Griffis, co-owner of Oak View Group. In Washington, Monumental Sports & Entertainment owns both clubs and the revenue goes to that single entity, Griffis said.

                                                                                                                                       — Don Muret

Minor League Baseball has signed a multiyear sponsorship with ServiceMaster Global Holdings Inc., a deal that will see brands such as American Home Shield and Terminix promoted in the affiliated minors.

The deal extends a run of corporate dealmaking for MiLB that in the past 14 months has also included agreements with John Deere, Uncle Ray’s Potato Chips, Sunrun, Esurance, Crayola and Bush’s Beans.

This spring and summer, ServiceMaster will send to various MiLB ballparks a 53-foot expandable trailer that contains an interactive showcase for its portfolio of home and property services, which in addition to home warranties and pest control includes furniture restoration, commercial and residential cleaning, disaster restoration, and property inspection.

ServiceMaster also has sports partnerships with the ATP Memphis Open, the Memphis Grizzlies and the Memphis RedBirds. Minor League Baseball’s other sponsors include: Esurance, Bush’s Beans, Crayola, E. & J. Gallo Winery, John Deere, Sunrun and Uncle Ray’s Potato Chips.
The ServiceMaster Experience trailer, developed with specialty trailer design firm Kentucky Trailer, was created last year for internal employee use and trade shows. The MiLB partnership will represent its first use with the public.

Other planned components include social media-based activations, and the creation of a joint “Welcome Home” logo.

“Even though we have national and international brands, our service provider network is really locally based,” said Pete Tosches, senior vice president for Memphis-based ServiceMaster. “That lines up really well with Minor League Baseball as a local and community driven property.”

Financial terms were not disclosed. The deal is set to be formally announced this week at a spring training game between the Philadelphia Phillies and Minnesota Twins at Hammond Stadium in Fort Myers, Fla.

ServiceMaster brands such as American Home Shield, Terminix, AmeriSpec and Furniture Medic will each receive designation as an official partner of Minor League Baseball.

The deal, in development since last summer, was initiated in part by the Class AAA Memphis RedBirds, which have had a relationship with ServiceMaster for the past decade. Team president and general manager Craig Unger helped arrange the introduction to MiLB executives to discuss a national marketing program.

“We’re getting a great brand that is heavily invested in our sport long term, and another partner that is using our ballparks as a key part of their marketing strategy,” said David Wright, MiLB chief marketing and commercial officer.

ServiceMaster is also being aided in the MiLB partnership by public relations, social media and experiential marketing firm Olson Engage.