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PayPal much more than a patch for Phoenix Suns

Partnership seen as an important step in the evolution of sponsorships, the maturation of payment services and overall fan experience.

During my career I have been fortunate to see sponsorships evolve into partnerships. While some have been more of a partnership than others, nevertheless as an industry we are evolving and improving. In 2018, Anheuser-Busch InBev challenged the traditional sponsorship model and announced what at the time was a revolutionary model. The new model was built on incentives for performance on the field, pitch or court, as well as off of it. Every A-B sponsor deal going forward, whether with a team or a league, includes a base compensation amount, plus metrics that trigger larger investments.

For example, a playoff appearance or boost in attendance could lead to more sponsor money from A-B. Another possibility could be a new digital platform that engages fans or increases awareness of A-B brands that might spur larger payouts. Moving forward, Anheuser-Busch will work with teams and leagues to choose these incentive metrics on a case-by-case basis. No doubt that the influence of A-B will influence other categories to introduce similar models. Categories such as soft drinks, pizza and QSR could follow a similar path. 

phoenix suns

Thus, when I saw the jersey sponsorship agreed to by PayPal and the Phoenix Suns I became very intrigued — not just by the patch — but because of the agreement and the efforts by both parties to help grow each other’s business. In other words, a mutually beneficial, multilevel partnership that provides each party a significant financial opportunity to grow their revenue — together.

During my consulting work I have had the opportunity to work with the Suns’ Dan Costello and witness some of the more interesting partnerships that he has put together with Verizon and Carl’s Jr. Costello and the Suns approached this opportunity as a way of working with a partner that could add to the fan experience through advanced e-commerce capabilities that would introduce mobile payment for tickets, concessions, merchandise, parking and ultimately gaming. According to Costello, “We entered this relationship focused on the consumer. Our own in-house research showed us that 85 percent of our ticket-holder base used PayPal/Venmo. With PayPal/Venmo having 300 million active users in 200 countries, that became our motivation because we would have a partner to drive commerce and strengthen and win B2B opportunities. It was never solely about the patch partnership, but a bigger shared vision that would impact our customers and those of our current and future partners.”

I had a conversation with Jim Ciortan, general manager of global sales for PayPal and Braintree, to understand his interest in creating the partnership. According to Ciortan, the agreement actually evolved from a cold call that came at the right time. “The Suns thought about a partnership the way we did,” he said. “They weren’t looking for just a check. Dan Costello and the Suns demonstrated an understanding of our business and what was important to us — namely to create a modern, innovative thread between the venue, the team and its customers to create a better experience, especially in terms of payment. Companies want to innovate payments and provide customers with choices and we are excited to bring our technology to bear in providing those choices.”

Success isn’t just defined as payments made through the PayPal platform but also collaborations with other Suns sponsors — advancing their own digital payment opportunities. The true partnership comes from the willingness of the team and PayPal to drive business and reputation in a mutually beneficial fashion. The Suns were willing to allocate one staff person to solely concentrate on growing the PayPal business to ensure the agreement will be successful. In a similar vein, PayPal continues to learn about the fan experience as they see how fans are using payments in the arena as well as on their mobile devices. This allows for the ability of greater innovation and potential future developments that will enhance the in-venue experience for fans. In addition to the jersey patch, PayPal also receives a suite, which they have reconfigured from the typical setup into a business development suite, known as the PHX Showcase, modeled after PayPal’s Innovation Showcases in San Jose and New York. PayPal will host meetings there on game days and non-game days to showcase their technology and capabilities to their clients and guests.

The PayPal deal started as a cold call and evolved into a true partnership that aims to create a technology thread between the venue, team and its customers.getty images

Both groups look upon their newly formed agreement as not a disruption of the current systems but more of an evolution — innovating in the payment services spaces and being accessible to the masses, not the few. “We’ve created a progressive approach to partnerships, evolving from a traditional brand exposure model to one that utilizes the resources of our organization to truly assist the business goals of our partners,” said Suns President and CEO Jason Rowley. 

When I asked the Suns what would be changing in the immediate future, their response mentioned:

All tickets will be available using PayPal/Venmo.

The PayPal mobile wallet will store loyalty and allow for the tokenization of credits and coupons, which will lead to payments being made in and outside of the arena to other partners.

Mobile pay at concessions, merchandise and parking.

Mobile express ordering.

Suite express ordering.

This B2B and B2C escalating platform that incentivizes BOTH parties to continually seek out ways to activate and innovate will become more accepted in the industry. While it requires more effort on the part of both parties, the incremental revenue potential for both parties is too great to be ignored. Because this opportunity is unlimited, fulfilling the potential of the agreement will be an organizational priority for all concerned.

Bill Sutton (wsutton1@usf.edu) is the founding director of the sport and entertainment business management MBA at the University of South Florida and principal of Bill Sutton & Associates. Follow him on Twitter @Sutton_ImpactU.

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