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Volume 23 No. 23

Marketing and Sponsorship

“Pass the ketchup, please,” is the operative phrase concerning naming rights at the stadium the Pittsburgh Steelers have called home since 2001. Heinz, founded in nearby Sharpsburg, Pa., has held title rights there since the building opened. Its current deal expires in 2021, and while we’re told Heinz is still at the table, the distance between buyer and (re)seller is vast, and no one across the naming-rights industry expects the Heinz name to be on the stadium after that date.

A principal reason is that Heinz is no longer locally headquartered. Kraft acquired Heinz in 2015, meaning decisions like this one will be rendered at that company’s offices in Chicago. We note with interest that Miguel Patricio started as the new CEO of Kraft Heinz this month. Read as much as you wish into the fact that he was once the CMO at Anheuser-Busch InBev, long the sugar daddy of American sport marketing. Meanwhile, Kraft Heinz’s U.S. CMO, Eduardo Luz, departed in May, replaced on an interim basis by Adam Butler, president of beverages, snacks and desserts. Is that someone willing to write a big naming-rights check?

Further complicating a potential renewal by Heinz are flagging sales at the parent and the recent downgrade by S&P Global of Kraft Heinz’s rating to one level above junk status. Companies never want to do title sponsorship deals when the optics would be bad.

Heinz Field has been the name of the Pittsburgh Steelers’ home stadium since it opened in 2001, during which the team has won two Super Bowls.
Photo: getty images
Heinz Field has been the name of the Pittsburgh Steelers’ home stadium since it opened in 2001, during which the team has won two Super Bowls.
Photo: getty images
Heinz Field has been the name of the Pittsburgh Steelers’ home stadium since it opened in 2001, during which the team has won two Super Bowls.
Photo: getty images

Kraft Heinz is paying an average of $2.85 million for the deal — well below NFL standards. We’re told Kraft could be interested in a new deal in the mid-seven figures per annum. However, look at some recent comps: The Philadelphia Eagles recently renewed Lincoln Financial’s naming rights for an average of $12 million per year. SoFi will reportedly pay $20 million per annum for its pending 20-year hookup with the stadium that will house the Los Angeles Chargers and Rams. Accordingly, we’re told that the Steelers would be happy with a deal of $10 million or more. 

So while the incumbent hasn’t officially walked, a renewal is highly unlikely. Sources tell us the food giant wouldn’t be averse to walking away early, should the Steelers land a new naming-rights sponsor. Various sales agencies have been pitching the team, but it is unclear if it has chosen one, or if it will use one at all to sell naming rights. When Kraft Heinz officially exits, we expect it to remain as a Steelers sponsor, along the lines of the “Official Ketchup” to keep the locals happy.

BROWNOUT: With NFL training camps opening, the biggest news in NFL licensing circles is the ascendance of the Cleveland Browns into a team that can actually move licensed merchandise. With the help of recently added wide receiver Odell Beckham Jr. and the maturation of second-year quarterback Baker Mayfield, Vegas lists the normally desultory Browns as the 10th most likely Super Bowl winner at 20-1. Having never even seen their team play in a Super Bowl, Cleveland fans are more optimistic than ever. They are spending so much on Browns licensed goods that several of the league’s larger licensees say they have already either sold or booked commitments to sell more of the team’s merchandise than they sold all of last season.

Numbers from the various Fanatics sites, including NFL.com, support their contention. Since March 1, Beckham’s No. 13 is the league’s top-selling jersey, and Mayfield’s No. 6 is third overall. In overall team sales, Cleveland has made up considerable ground to where it is fourth overall, trailing only reigning Super Bowl champion New England along with Dallas and Chicago.

Legends is the Browns’ longtime merchandising rights holder, and while the team’s base started at far less than perennial licensing powerhouses like the Cowboys or the Packers, it’s tough not to admire a sales jump of better than 200% from the same period last year. Sales through the Browns’ own retail channels from March 1 to June 30 jumped an impressive 509% from the same period last year.

“If this continues, the Browns may even have to think about getting a logo,” said one longtime NFL licensee with a laugh. Cleveland is the only NFL team without a logo on its helmets. 

COMINGS & GOINGS: Agency veteran Rob McQueen has joined Verizon as director of sponsorships. The telco/tech giant includes top-shelf properties like the NFL and more than 25 combined MLB, NBA, NFL and NHL teams, along with more than two dozen collegiate deals. An intriguing side note here is that McQueen will be overseeing work from Verizon agencies CSM, Jack Morton and Momentum, all former employers of McQueen. … A pair of NFL departures: Josh Feinstein has switched from licensor to licensee, joining kids apparel brand Outerstuff as EVP, new business and strategic partnerships. He was at the league since 2007, most recently as VP, consumer products. Also, Alexandra Sardo has joined Cogent Entertainment Marketing to lead their brand activation team. She’d been with the NFL since 2013, most recently as manager of sponsorship and partnership management. … Former NFL marketer Peter LaPointe has plugged in to Volta as VP/brand partnerships and sponsorships. Silicon Valley-based Volta runs a nationwide network of electric vehicle free charging stations, which support themselves by selling advertising on its chargers. … Matt Shearer joins MLS club FC Cincinnati as senior director of corporate partnerships. He’d been director of business development at Richard Childress Racing since 2014. … Bryce Townsend has joined the Drone Racing League as chief partnerships officer. He was last with GroupM’s ESP Properties as head of solutions and sales.

Terry Lefton can be reached at tlefton@sportsbusinessjournal.com.

Rams running back Todd Gurley and his teammates got their warmup suits just in time.
Photo: Getty images
Rams running back Todd Gurley and his teammates got their warmup suits just in time.
Photo: Getty images
Rams running back Todd Gurley and his teammates got their warmup suits just in time.
Photo: Getty images

As the Los Angeles Rams prepared to fly to Atlanta one week before Super Bowl LIII last January, they were hoping to travel in style.

 

In fact, the Rams wanted matching warmup suits for their contingent of around 200 people.  

Some provisos: Because Nike holds NFL master apparel rights, the warmups had to be Nike-branded, and they had to be in Los Angeles in time for a Sunday morning pep rally. But because a company of Nike’s size can have difficulty fulfilling such orders on a tight turnaround, the smaller but more nimble AdPro Sports — one of the country’s largest Nike team dealers — was able to step in.

Raccuia
Raccuia
Raccuia

Since 2017, AdPro has been majority owned by Terry and Kim Pegula, who also own the Buffalo Bills and Sabres. They bought in thinking their connections would help AdPro reach new heights. In this case, the plan worked perfectly. While the Rams’ overtime win against New Orleans in the NFC Championship Game had cost AdPro a large “if win” order from the Saints, a congratulatory email from Kim Pegula to Rams owner Stan Kroenke elicited the warmup suits order.

Schintzius
Schintzius
Schintzius

Then things started getting difficult. The only Rams blue warmup suits that Nike had in sufficient quantity were Jordan Brand, decorated with Jumpman logos. Not until those warmups were shipped, however, did Nike decide it didn’t want its top basketball brand involved.

AdPro, which decorates and embellishes apparel manufactured by leading companies such as Adidas, Nike and Under Armour, executed a deft brand swap. Paul Schintzius, partner and senior vice president, suggested embroidering over the Jordan chest logos and replacing the Jumpman on each pant with a Nike swoosh — even though that meant removing each Jumpman indicia by hand with tweezers.

Nike and the Rams quickly signed off and AdPro prepped for an even quicker turnaround. Then the package of swoosh patches arrived — around 70 short. AdPro made its own, and added Super Bowl LIII logos to complete the look. The order was finished late Thursday and 20 boxes were delivered to FedEx by 9 a.m. Friday — where they stayed, immobilized, like everything else around Buffalo, by more than 17 inches of snow. With the help of a transfer in Memphis from FedEx to a commercial flight, the warmups made it to LAX early Sunday and the “Jordan Unbranded” warmups were worn by the Rams at their pep rally.

AdPro Sports became a Nike dealer in 2002 and corporate accounts have been climbing.
Photo: Courtesy of AdPro Sports
AdPro Sports became a Nike dealer in 2002 and corporate accounts have been climbing.
Photo: Courtesy of AdPro Sports
AdPro Sports became a Nike dealer in 2002 and corporate accounts have been climbing.
Photo: Courtesy of AdPro Sports

“That was one of our best turnaround stories,” said AdPro President Ron Raccuia, who’s helped morph AdPro over the past quarter-century from a B2B supplier of furniture and office supplies to a supplier of top athletic branded apparel to teams, including the Pegula’s Bills and Sabres.

AdPro originally used the local sports connections of Raccuia and other top executives to sell into colleges and high schools. In 2002, the company became a Nike dealer and its trajectory took off. “Basically, we offered Nike’s big head-to-toe apparel and marketing deals to colleges and high schools,” said Schintzius.  

“We were executing a B2B strategy in the team business when no one was,” said Raccuia, who played baseball at nearby Canisius College. “Then we got Nike and things got even better.”

AdPro Sports

HEADQUARTERS: Cheektowaga, N.Y.

EMPLOYEES: 85

EXPERTISE: Entirely business-to-business. As one of America’s largest Nike team dealers, AdPro takes apparel from the likes of Adidas, Nike and Under Armour and decorates it, adding the names and logos of a high school, college or pro team, and increasingly, corporate entities.

Key executives

Ron Raccuia, president, partner

Jeffrey Diebel, svp/partner

Tom Naples, evp, partner

Paul Schintzius, svp/partner

Even before the Pegulas bought in, AdPro was growing. There have been six straight years of growth of at least 15%; this year revenue is on target to increase from $23 million to $27 million.

As for the advantages of having an NFL owner as your lobbyist: “Visibility and networking are the two biggest things,” said AdPro Senior Vice President Jeff Diebel. “At the top levels, we used to scrape to get connections; now we have credentials that get us in to new accounts.” 

Five years ago, AdPro’s business was 90% team sports, but today it’s 60%. Among the new corporate accounts  are M&T Bank, which has large sponsorships with the Bills, Jets and Ravens; and CBS Sports, which was eager for corporate-branded apparel with the quality and stature afforded by Nike, Adidas and the like. Gifting at the NBA Finals for VIPs was from AdPro. So was staff apparel worn at the NBA draft. AdPro is also expanding,  with NFL deals in Charlotte and Jacksonville.

On-site decorating capabilities — including screen printing, heat appliques and hand sewing, with a 60,000-square-foot attached warehouse — allows AdPro to be especially agile while producing more than 1 million pieces annually.

“Like any B2B operation, we’re about relationships and solving problems,” said Tom Naples, partner and executive vice president. “As long as we continue to do that, growth should follow.”