Looking forward: NFL partners remain bullish
Mark Shapiro smiled and gave a hearty laugh.
Sitting in a warm, hip hospitality lounge on a cold Minneapolis day, the co-president of WME and IMG was asked whether the NFL’s popularity had peaked. It was a question that dominated conversations during Super Bowl Week, coming after a season where the league couldn’t seem to get out of its own way. From anthem protests and concussions to its frustrating rule book and public dispute between Cowboys owner Jerry Jones and NFL Commissioner Roger Goodell, stories that held the NFL in a bad light dominated news cycles throughout 2017.
Super Bowl week always has been about celebrating the league and the sport. This year, however, the NFL spent the week on the defensive, culminating in a Wall Street Journal headline just two days before the Super Bowl that declared that the “NFL is losing its core audience.”
The mere thought that the league’s best days are behind it — that, maybe, some other sport was lying in wait to take the mantle as the biggest sports brand in American culture — felt so farfetched to Shapiro, that he sat back in his chair and laughed.
“It’s cyclical,” he said. “I have no doubt that the NFL will create stars and bounce back.”
To Shapiro’s eye, the NFL has lost a lot of star power over the past two years. Some of the league’s most bankable stars, like Peyton Manning, retired. Other bona fide stars spent much of the season on injured reserve, like Aaron Rodgers, J.J. Watt and Odell Beckham Jr.
Plus, some new, appealing faces being groomed as the next generation were hurt and spent more time in the trainers’ room than on the field, like Carson Wentz and Deshaun Watson.
The funny thing about all the angst surrounding the NFL right now is that none of it is coming from anybody that does business with the league. Sure, the NFL’s TV ratings are down, but so is everything else on television. And NFL games still make up the most popular programming on television — by far.
It’s the same for sponsors. The 2017 season may have been a little rough. But, they say, nothing produces like an association with the NFL (see related story).
Business is good enough for Fox to buy “Thursday Night Football” rights. The NFL also was able to close new business (Amazon Web Services and Sleep Number) and renew business (Microsoft, which now includes laptop rights, along with tablets and sideline branding), Verizon, and Procter & Gamble.
“While we obviously assess traditional measures such as ratings, we are focused on whether the NFL is a platform that allows our clients to drive brand and business results — and the answer to that is a resounding ‘absolutely,’” said CAA Consulting head Greg Luckman, whose NFL clients include Bose, New Era and EA Sports.
Perhaps some of the negative storylines, like fan boycotts, have cut into some sponsor profits and brand equity. But sponsorship executives insist that the NFL is the surest bet in sports.
Fanatics founder and Executive Chairman Michael Rubin had a similar reaction as Shapiro when asked if the league was past its prime. The NFL, which is an investor in Fanatics, remains the biggest draw for the company.
“I’m sure the NFL hasn’t peaked,” he said. “There’s no secret the NFL had a challenging year, and a lot of things contributed to that. We know that the anthem stuff was a challenge. We know that the [perennially top-selling] Dallas Cowboys went from having an extraordinary year to a challenging one. And apparel in general has some challenges now. All that said, we grew our NFL business in 2017 mid-single digits compared to our business in 2016.”
League sponsors in developing categories were even more bullish on the question of whether the NFL has peaked.
“Far from it,” said Verizon Executive Director Chris Paul, who said his company had invested enough to improve network coverage by more than 500 percent in and around Minneapolis. “As fans want to access the NFL in new and different ways, we will enable that. The script hasn’t even been written yet for that, but we’re moving it far beyond traditional sponsorship.”
Even the league’s television ratings, which have been the source of much negativity, look much better when they are put into context, said David Schwab, an executive vice president at Octagon.
“When people talk about the NFL’s problems, the first thing they refer to are TV ratings,” Schwab said. “Outside of the NBA, all sports are seeing ratings challenges.”
Schwab pointed to NBC’s “Sunday Night Football,” which ended 2017 as television’s most-watched prime-time series for the seventh consecutive season — even in a down year. “Interest is huge,” Schwab said. “The gap between the NFL and everybody else is staggering.”
That’s the same message the NFL delivers to sponsors who bring up falling TV numbers, NFL sponsorship chief Renie Anderson said.
“I tell them that the NFL is still the best content on television,” she said. “Ratings drops are not an NFL thing, they are a television thing. Remember, we don’t sell ratings, we sell the ability to leverage our rights. TV is an important place for that, but so is retail. It’s not like the sky is falling. Even with all the off-the-field stuff this season our [sponsorship] business is strong.”
Anderson’s message seems to be getting through, at least to some sponsors.
“You can see the NFL’s headwinds in its viewership numbers, but they are still gigantic, compared to everything else in U.S. sports,” said Dean Evans, CMO of NFL sponsor Hyundai, who cited declining youth participation numbers and a shrinking TV audience among the desirable 18-34 male demo as concerns. “It still wins the night. We’ll see over the next five to 10 years where it’s heading. When we can get past the kneeling thing and get back to football, I think the game will seek and find its natural level again.”
Getting past “the kneeling thing” may not be as easy as it seems, some sponsors say. The hope is that player protests, and the backlash to them, aren’t damaging the NFL’s shield long term.
“I don’t think it’s as simple as, ‘Trump is upset, so I’m not buying a jersey,’” said a senior executive at a large NFL licensee. “But all the negativity leads to a less robust fan base. It’s the same thing with TV. Most fans didn’t stop watching NFL games; they’re just watching less. Both licensing and TV will rebound because nothing’s even close. For all the negatives, it’s still an unbelievable property, with no rival, as far as American sports.”
The NFL’s Anderson recalled leaving a Sunday church service to deal with the Trump issue as it was blowing up one weekend.
“Clearly, it is a very difficult subject, one that’s very personal,” she said. “We don’t want to talk about politics. We want to talk about football. We bring people together around a TV or a tailgate. Moving forward, you’ll see us talking more about the game and the fan and positioning the NFL as a unifying agent.”
Nick Kelly, who heads U.S. sports marketing for Anheuser-Busch InBev, said that executives at his company liken the NFL’s market position to that of Bud Light. It is still the world’s top-selling beer and available at every retailer that sells beer. However, its market share has been declining for a decade.
“We ask that question internally all the time, and while some NFL measures, including ratings, are down, no other sports property is close,” said Kelly, whose company hosted around 400 wholesaler and retail guests during Super Bowl Week. “It’s still the biggest game in town.”