Over the past month, we have seen two star athletes stripped of endorsement deals.
For very different reasons, brands have turned their backs on both Aaron Hernandez and Ryan Braun.
Just days after he was handcuffed by federal agents, Hernandez lost deals with Puma and Cytosport. Although exercise is one of the few freedoms that Hernandez still has, he will have little purpose for protein shakes or athletic wear. He now spends his days in an orange uniform --- and not the kind that Puma endorser Rickie Fowler has made popular.
Ironically, an endorsement deal with Cytosport --- a legal sports supplement --- likely could have prevented Ryan Braun from losing marketing dollars from brands such as Kwik Trip. As a result of his 65-game suspension from the MLB due to PEDS, Braun will not only lose out on paychecks from the Brewers, but also from some of his commercial deals.
The recent troubles of Hernandez and Braun are examples of why brands must choose their endorsers very carefully. While struggles on the field of play may ultimately result in lower returns on investment, it is tribulations off the field that often doom endorsement deals.
It is for this reason that good-guys such as Kevin Durant, Phil Mickelson, Derek Jeter, and Peyton Manning are so often the recipients of huge endorsement dollars. These individuals have not only excelled with their performance in their respective sports, but they have also handled themselves as superstars in the press, in the locker room, and in their personal lives. These athletes represent far smaller risks than do many of their peers.
Yes, Floyd Mayweather Jr., Kobe Bryant, and Tiger Woods still rank atop the 50 highest-earning athletes. While the court of public opinion is still mixed with these athletes, their dominance has still reigned through. However, for athletes not atop their respective sports, even the smallest of blunders can damage their reputations permanently.
The recent troubles of Aaron Hernandez and Ryan Braun are clearly of different magnitude. Nevertheless, both have seen their reputations irreparably shattered. However, the effect of their mistakes is much more far-reaching than their individual careers.
Instead, their mistakes, and the inherent risk of investing millions in a single person, are reasons to why brands are now shifting many of their funds to teams, leagues, and properties. These investments are far less risky and offer more activation opportunities. Proof of such is the cost of naming rights at stadiums throughout the world. It is not only the New York Giants (Quest Diagnostics) and the Dallas Cowboys (AT&T) making enormous naming rights deals, it is also small CFL franchises such as the Hamilton Tiger-Cats, who just yesterday came to a 7-figure deal with Tim Hortons.
Though some brands, such as Gatorade and Subway, have seemingly perfected the process of selecting good-guy endorsers, the mistakes of others will result in smaller deals moving forward, and for a far smaller portion of the league's stars.
Thursday, July 25, 2013
Thursday, July 11, 2013
Kentucky May Sell Out
University of Kentucky basketball is big business. The Lexington Center Corporation knows this as well as anyone. As a result, they recently began seeking offers for naming rights to perhaps the state's most famous landmark outside of Churchill Downs: Rupp Arena.
Lexington Mayor Jim Gray assured that irregardless of whichever brand wins the bidding war, legendary Kentucky Coach Adolph Rupp's name will remain in the title. However, "State Farm Rupp Arena" just doesn't seem to have the same ring to it.
Rupp Arena always sells out, so do they really need to sell out?
The growth, and subsequent commercialization, of college sports is a good thing for taxpayers and athletic departments. Its impact on the athletes themselves is negligible. The effect on the fans is a bit more complicated.
Over the past ten years, Freedom Hall and Shea Stadium have given way to the KFC Yum! Center and Citi Field, respectively. Giants Stadium is now MetLife Stadium. Athletic Directors, Owners, and City Councilman have been blinded by the dollar signs associated with naming rights.
Unfortunately, tradition has lost out. The transition is entirely logical. Executives are responsible for maximizing revenue. How then can they turn down the prospect of multi-million dollar long-term sponsorship deals?
But at what expense? Generations of sports fans came through the turnstiles of run-down Shea Stadium. Two World Series rings were won on that field. Young children will never understand the odd allure of that facility in the Queens. They will only know the sparkling new stadium that is a dream come true for corporate partners, irregardless of the lowly landlords.
Given the trend of naming rights, one has to wonder how much longer landmarks such as Fenway Park, Yankee Stadium, Lambeau Field, and Michigan Stadium will maintain their names.
Michigan Stadium, for what its worth, also doesn't allow any corporate signage within its turnstiles. And yet, the Athletic Department remains profitable.
Unfortunately, David Brandon's program is the anomaly. Other organizations need every endorsement dollar possible to operate effectively. As a result, they will gladly exchange a bit of tradition for a whole lot of cash.
Lexington Mayor Jim Gray assured that irregardless of whichever brand wins the bidding war, legendary Kentucky Coach Adolph Rupp's name will remain in the title. However, "State Farm Rupp Arena" just doesn't seem to have the same ring to it.
Rupp Arena always sells out, so do they really need to sell out?
The growth, and subsequent commercialization, of college sports is a good thing for taxpayers and athletic departments. Its impact on the athletes themselves is negligible. The effect on the fans is a bit more complicated.
Over the past ten years, Freedom Hall and Shea Stadium have given way to the KFC Yum! Center and Citi Field, respectively. Giants Stadium is now MetLife Stadium. Athletic Directors, Owners, and City Councilman have been blinded by the dollar signs associated with naming rights.
Unfortunately, tradition has lost out. The transition is entirely logical. Executives are responsible for maximizing revenue. How then can they turn down the prospect of multi-million dollar long-term sponsorship deals?
But at what expense? Generations of sports fans came through the turnstiles of run-down Shea Stadium. Two World Series rings were won on that field. Young children will never understand the odd allure of that facility in the Queens. They will only know the sparkling new stadium that is a dream come true for corporate partners, irregardless of the lowly landlords.
Given the trend of naming rights, one has to wonder how much longer landmarks such as Fenway Park, Yankee Stadium, Lambeau Field, and Michigan Stadium will maintain their names.
Michigan Stadium, for what its worth, also doesn't allow any corporate signage within its turnstiles. And yet, the Athletic Department remains profitable.
Unfortunately, David Brandon's program is the anomaly. Other organizations need every endorsement dollar possible to operate effectively. As a result, they will gladly exchange a bit of tradition for a whole lot of cash.
Wednesday, July 10, 2013
Tottenham Hot(Spur) with American Brands
Over the last several years, the English Premier League has
attracted top dollar from Fortune 500 brands.
H owever, while titans Manchester United and Chelsea have
historically dominated the space, mid-level clubs are now joining the fray.
Even lower-tier clubs such as Swansea City are signing multi-million dollar
jersey sponsorship deals.
Tottenham FC is one of the clubs cashing in on the rising
popularity of the EPL. Unlike many of the other top-tier teams that are turning
to Asia for their latest endorsement deals, Tottenham has cashed in across the
pond. For one, Tottenham has become the first major European club to wear
jerseys produced by Baltimore-based Under Armour. In turn, Under Armour has
utilized the club as their primary vehicle in marketing to soccer-starved
Europeans.
Most recently, the Hotspurs have secured jersey sponsorship
from Hewlett Packard, based in the soccer hotbed of Northern California. With
their principal partnership, HP is rekindling their sponsorship of the club
that dates back to the 1990s. While sports sponsorship is nothing new to HP,
the deal represents one of the brand’s first forays beyond the United States.
HP has previously held marketing deals with the NBA, Filipino Boxer Manny
Pacquiao, the San Francisco 49ers, NASCAR and the Davis Cup. They are also the
title sponsor of the Byron Nelson Championship (golf) and previously held the
title of the San Jose Sharks arena.
HP’s new deal with Tottenham coincides with the club’s
recent rise to the top of the EPL table. With wunderkind Gareth Bale leading
the way in 2012-3, Tottenham tallied the most points in the club’s history. After
surprisingly retaining Bale’s services and adding a couple other key pieces,
Tottenham appears poised for Champions League qualifications, and perhaps even
greater accomplishments, in 2013-4.
Their recent success on the pitch aside, Tottenham proves a
tremendous fit for technology titan HP. With last year’s acquisition of United
States National Team star Clint Dempsey, the Hotspurs seem keen on becoming
America’s team of sorts. The benefits are already being reaped in the form of
additional marketing exposure throughout this country. In a new billboard
advertising their EPL rights for the 2013-4 season, NBC Sports chose to
highlight Tottenham’s Gareth Bale, and in turn sponsors Under Armour and HP.
Whether it be their recent success, their acquisition of
Dempsey, or Bale’s growing celebrity, there is little question that Tottenham
has now developed a cool factor that is so appealing to fans and corporate
sponsors alike. It will be interesting to keep an eye on whether this
translates into the club’s increased popularity state-side.
Tuesday, July 9, 2013
MLS & EA Partner on New Method of All-Star Selection
Major League Soccer is putting All-Star Game selection in the hands of the fans....literally.
In collaboration with EA Sports, the MLS has developed the AT&T "In the Game" Challenge, which will determine the final starter on the MLS All-Star roster for their July 31st showdown with Serie A's AS Roma.
Whenever a virtual player has scored a goal in a "FIFA 2013" game over the past week, he has received a point. The Forward with the most points tomorrow morning will start the game up top for the MLS side vs Michael Bradley & co. The other 10 starters were previously selected through fan voting on the MLS website and via text messaging.
With Thierry Henry and Chris Wondolowski already voted in, leading candidates for the final roster spot include Seattle's Eddie Johnson, Philadelphia's Jack McInerney, and fan favorite Landon Donovan of the Los Angeles Galaxy. Regardless of which player earns --- for lack of a better word --- the start, this innovative partnership with EA Sports has established the MLS as a trend setter amongst the major sports leagues.
Given the recent efforts of Gary Bettman, Bud Selig, and Roger Goodell to raise interest in their sports' all-star showcases, one can expect this partnership to be imitated by other leagues.
Though the MLB sadly ended its long relationship with EA Sports in 2012, they would be wise to duplicate this with their own mobile apps. For example, how about if the final Home Run Derby selections were determined by the players in each league that hit the most long balls in Taco Bell's Home Run Derby app?
Or how about the final guys on each NHL All-Star roster were determined by those who have scored the most goals in NHL 14? The franchise is one of the most popular sports games on the market, so the league would be wise to take full advantage. It matches perfectly with the brand's brilliant tagline, "If it's in the game, it's in the game."
EA Sports has become increasingly interactive with their promotions over the past several years, including contests to determine its cover athletes. This year's Madden competition even matched the sport's current stars against legends, ending with Barry Sanders earning the nod for the 2014 cover.
Given leagues' efforts to increase fan interest in the All-Star Games, and the very neat precedent set forth by Major League Soccer, one can expect similar activation from the NHL, NBA, and NFL in the near future.
In collaboration with EA Sports, the MLS has developed the AT&T "In the Game" Challenge, which will determine the final starter on the MLS All-Star roster for their July 31st showdown with Serie A's AS Roma.
Whenever a virtual player has scored a goal in a "FIFA 2013" game over the past week, he has received a point. The Forward with the most points tomorrow morning will start the game up top for the MLS side vs Michael Bradley & co. The other 10 starters were previously selected through fan voting on the MLS website and via text messaging.
With Thierry Henry and Chris Wondolowski already voted in, leading candidates for the final roster spot include Seattle's Eddie Johnson, Philadelphia's Jack McInerney, and fan favorite Landon Donovan of the Los Angeles Galaxy. Regardless of which player earns --- for lack of a better word --- the start, this innovative partnership with EA Sports has established the MLS as a trend setter amongst the major sports leagues.
Given the recent efforts of Gary Bettman, Bud Selig, and Roger Goodell to raise interest in their sports' all-star showcases, one can expect this partnership to be imitated by other leagues.
Though the MLB sadly ended its long relationship with EA Sports in 2012, they would be wise to duplicate this with their own mobile apps. For example, how about if the final Home Run Derby selections were determined by the players in each league that hit the most long balls in Taco Bell's Home Run Derby app?
Or how about the final guys on each NHL All-Star roster were determined by those who have scored the most goals in NHL 14? The franchise is one of the most popular sports games on the market, so the league would be wise to take full advantage. It matches perfectly with the brand's brilliant tagline, "If it's in the game, it's in the game."
EA Sports has become increasingly interactive with their promotions over the past several years, including contests to determine its cover athletes. This year's Madden competition even matched the sport's current stars against legends, ending with Barry Sanders earning the nod for the 2014 cover.
Given leagues' efforts to increase fan interest in the All-Star Games, and the very neat precedent set forth by Major League Soccer, one can expect similar activation from the NHL, NBA, and NFL in the near future.
Monday, July 8, 2013
Murray Expected to Put On Pounds
Andy Murray's loss to Roger Federer in the 2012 Wimbledon final broke the hearts of Brits. Many wondered whether the Scot had squandered his opportunity to etch his name into the record books.
However, as so often happens in sports, when Federer and Nadal both exited the Championships early, the door to redemption opened for Murray. This time, however, the Scot capitalized on his chances and defeated Novak Djokovic in straight sets, thrilling millions of his compatriots. In doing so, Murray is expected to cash in big time via endorsement deals.
Murray's victory at Wimbledon will no doubt elevate his stardom to new heights. While he won the 2012 US Open in the media capital of the world, it simply does not compare to the significance of a Brit winning the Wimbledon title. Some have compared the feat to Andy Roddick's 2003 US Open victory, which skyrocketed his popularity throughout the United States.
Though Roddick's feat was huge for tennis in this country, it does not approach the significance of what Andy Murray just accomplished. Brits have been longing for a Wimbledon title for 77 years, the last 20 of which were spent watching its stars such as Tim Henman and Greg Rusedski struggle under the pressure of the native fans.
Other journalists have compared Murray's triumph to that of Adam Scott months earlier at Augusta. Though Scott did not have to overcome the pressure of winning in front of a home nation starving for victory, he did make history, becoming the first Australian to ever win the Masters. For a nation rich in golf history, Scott's Green Jacket elevated his celebrity status Down Under to new heights altogether. As was certainly the case with Murray's Wimbledon win, Scott's victory triggered a number of incentive clauses in his endorsement contracts, in turn making him an even richer man.
Though Scott's win was historic, it still likely does not compare to the value of Murray's title. Sure, it can be argued that the Masters now generates more interest globally than does Wimbledon. As a result, Adam Scott --- arguably already a bigger name internationally than Murray --- benefitted in a big way. However, Murray's victory on home soil is expected to make him the country's second-richest athlete --- next to the incomparable David Beckham.
Some estimates put Murray's endorsement potential as high as $60 million per year. Though that figure appears aggressive, especially considering Tiger Woods' $65 million in endorsements in 2012, the impact on his commercial profile is undeniable. For one, his renewal discussions with Adidas have already commenced. According to some sources, Adidas now has Murray pegged to become one of their global ambassadors, besides the aforementioned Beckham, FC Barcelona's Lionel Messi, and Chicago Bulls' Derrick Rose. If true, that will be the first indication of Murray's new status as an international celebrity.
While other analysts suggest that Murray's endorsement value may rise to a mere $30 million, there is little question of his value to advertisers in the UK. Murray's international endorsements will be tied closely to his continued success. However, even if the Scot, now ranked #2 in the world, does not soon win another Grand Slam, he will always be a star in Britain. As a result, one can expect Murray to capitalize on his triumph via a number of lucrative marketing opportunities throughout the United Kingdom.
Murray will surely reap the benefits of the current media storm, be it through new sponsorship deals, or as many experts predict, by reupping with the brands that have been loyal to him from the beginning. With a career-high ATP ranking and a burgeoning rivalry with World Number One Novak Djovokic, Andy Murray is in a great position to cash in off the court.
However, as so often happens in sports, when Federer and Nadal both exited the Championships early, the door to redemption opened for Murray. This time, however, the Scot capitalized on his chances and defeated Novak Djokovic in straight sets, thrilling millions of his compatriots. In doing so, Murray is expected to cash in big time via endorsement deals.
Murray's victory at Wimbledon will no doubt elevate his stardom to new heights. While he won the 2012 US Open in the media capital of the world, it simply does not compare to the significance of a Brit winning the Wimbledon title. Some have compared the feat to Andy Roddick's 2003 US Open victory, which skyrocketed his popularity throughout the United States.
Though Roddick's feat was huge for tennis in this country, it does not approach the significance of what Andy Murray just accomplished. Brits have been longing for a Wimbledon title for 77 years, the last 20 of which were spent watching its stars such as Tim Henman and Greg Rusedski struggle under the pressure of the native fans.
Other journalists have compared Murray's triumph to that of Adam Scott months earlier at Augusta. Though Scott did not have to overcome the pressure of winning in front of a home nation starving for victory, he did make history, becoming the first Australian to ever win the Masters. For a nation rich in golf history, Scott's Green Jacket elevated his celebrity status Down Under to new heights altogether. As was certainly the case with Murray's Wimbledon win, Scott's victory triggered a number of incentive clauses in his endorsement contracts, in turn making him an even richer man.
Though Scott's win was historic, it still likely does not compare to the value of Murray's title. Sure, it can be argued that the Masters now generates more interest globally than does Wimbledon. As a result, Adam Scott --- arguably already a bigger name internationally than Murray --- benefitted in a big way. However, Murray's victory on home soil is expected to make him the country's second-richest athlete --- next to the incomparable David Beckham.
Some estimates put Murray's endorsement potential as high as $60 million per year. Though that figure appears aggressive, especially considering Tiger Woods' $65 million in endorsements in 2012, the impact on his commercial profile is undeniable. For one, his renewal discussions with Adidas have already commenced. According to some sources, Adidas now has Murray pegged to become one of their global ambassadors, besides the aforementioned Beckham, FC Barcelona's Lionel Messi, and Chicago Bulls' Derrick Rose. If true, that will be the first indication of Murray's new status as an international celebrity.
While other analysts suggest that Murray's endorsement value may rise to a mere $30 million, there is little question of his value to advertisers in the UK. Murray's international endorsements will be tied closely to his continued success. However, even if the Scot, now ranked #2 in the world, does not soon win another Grand Slam, he will always be a star in Britain. As a result, one can expect Murray to capitalize on his triumph via a number of lucrative marketing opportunities throughout the United Kingdom.
Murray will surely reap the benefits of the current media storm, be it through new sponsorship deals, or as many experts predict, by reupping with the brands that have been loyal to him from the beginning. With a career-high ATP ranking and a burgeoning rivalry with World Number One Novak Djovokic, Andy Murray is in a great position to cash in off the court.
Monday, July 1, 2013
Cashing In On Success
The University of Michigan's announcement to turn to dynamic ticket-pricing for single-game college football tickets is a significant move for not only the school, but for all of college athletics.
Though the South Florida football and Georgetown basketball programs have previously used the ticketing model, Michigan --- as any of their 500,000+ alumni will tell you --- is at another level. The Michigan Athletic Department, one of the only profitable programs of its kind in the nation, is big business. As a result, the nation often pays very close attention to what happens in Ann Arbor.
Beginning this fall, the school will use dynamic ticket-pricing for all single game football tickets. The cost of these tickets will be based on demand; which will be calculated electronically by computer program QCue. Prices will change over time, but will never fall below their stated face value of $65. However, tickets for the Wolverines' premiere home games against rivals Notre Dame and Ohio State will likely triple to over $200. Though this may upset many Michigan fans, it will not affect any of the season ticket-packages, which are main vehicle through which alumni and students purchase their tickets.
For the university, the decision is a no-brainer. While low-profile non-conference games such as the team's opener against Central Michigan will likely not sell for more than face value, its games against the Nebraskas and Penn States of the world will fetch over $100 per ticket. This will boost ticket revenue significantly for the university, which has recently invested millions in the renovation of Michigan Stadium and Crisler Center, the school's basketball arena. Given the school's rabid fan base, the higher ticket prices will not prevent the team from selling out the Big House each Saturday, irregardless of team record or weather. Many fans typically pay these higher prices on secondary ticket sites such as StubHub anyway. The only difference is that the school will be profiting directly.
Many experts predict that Michigan's decision to embrace dynamic ticket-pricing will have a domino effect throughout collegiate sports. However, while the model makes sense for schools such as Michigan, it may not be the right decision for smaller universities. Universities such as Michigan already operate their athletic departments as if they are professional teams. The Wolverines even lured current CMO Hunter Lochmann from his former post as VP of Marketing for the New York Knicks. For smaller schools, with less loyal fan bases, the move towards dynamic ticket-pricing may not prove as beneficial to the bottom line. With less demand for tickets, prices may not rise significantly above face value. Furthermore, it risks alienating the school's fans forever. And for those programs with a not-so-Big House, this may actually prove a costly mistake in the end.
Though the South Florida football and Georgetown basketball programs have previously used the ticketing model, Michigan --- as any of their 500,000+ alumni will tell you --- is at another level. The Michigan Athletic Department, one of the only profitable programs of its kind in the nation, is big business. As a result, the nation often pays very close attention to what happens in Ann Arbor.
Beginning this fall, the school will use dynamic ticket-pricing for all single game football tickets. The cost of these tickets will be based on demand; which will be calculated electronically by computer program QCue. Prices will change over time, but will never fall below their stated face value of $65. However, tickets for the Wolverines' premiere home games against rivals Notre Dame and Ohio State will likely triple to over $200. Though this may upset many Michigan fans, it will not affect any of the season ticket-packages, which are main vehicle through which alumni and students purchase their tickets.
For the university, the decision is a no-brainer. While low-profile non-conference games such as the team's opener against Central Michigan will likely not sell for more than face value, its games against the Nebraskas and Penn States of the world will fetch over $100 per ticket. This will boost ticket revenue significantly for the university, which has recently invested millions in the renovation of Michigan Stadium and Crisler Center, the school's basketball arena. Given the school's rabid fan base, the higher ticket prices will not prevent the team from selling out the Big House each Saturday, irregardless of team record or weather. Many fans typically pay these higher prices on secondary ticket sites such as StubHub anyway. The only difference is that the school will be profiting directly.
Many experts predict that Michigan's decision to embrace dynamic ticket-pricing will have a domino effect throughout collegiate sports. However, while the model makes sense for schools such as Michigan, it may not be the right decision for smaller universities. Universities such as Michigan already operate their athletic departments as if they are professional teams. The Wolverines even lured current CMO Hunter Lochmann from his former post as VP of Marketing for the New York Knicks. For smaller schools, with less loyal fan bases, the move towards dynamic ticket-pricing may not prove as beneficial to the bottom line. With less demand for tickets, prices may not rise significantly above face value. Furthermore, it risks alienating the school's fans forever. And for those programs with a not-so-Big House, this may actually prove a costly mistake in the end.
Sunday, June 30, 2013
EPL Kit Sponsorship is Big Business
On Friday, EPL club Swansea City unveiled Goldenway, a Chinese finance firm, as their new uniform sponsor. The team will receive over 3 million dollars from Goldenway, double the number from their previous partner, 32Red. The new deal is largely the result of the Welsh club's successful 2012-3 campaign, where they finished in 9th place and qualified for the UEFA Europa League.
Swansea's deal with Goldenway represents a couple of trends within the space. Firstly, it demonstrates the globalization of the sport. However, it is no longer just Manchester United signing deals with Asian companies. Firms like Hong Kong based Goldenway are now choosing to invest their first sports sponsorship dollars in clubs such as Swansea, based solely on the rising popularity of the game overseas.
The deal also represents teams' slight shift away from gambling companies as sponsors. While companies such as 32Red very much maintain a presence in the sponsorship world, teams appear to be distancing themselves just a bit. Just days ago, Tiger Woods turned down nearly $100 million in potential marketing dollars from an Irish gambling house.
Finally, if clubs such as Wales' Swansea City, can earn $3 million from uniform sponsorship, then one must wonder when we might see advertisements on NBA, NFL, and MLB jerseys in the near future. Based on several reports, Adam Silver the NBA may be the first to make the move. If so, it will be extremely interesting to monitor what type of deals the league's most prominent franchises can bring in.
Swansea's deal with Goldenway represents a couple of trends within the space. Firstly, it demonstrates the globalization of the sport. However, it is no longer just Manchester United signing deals with Asian companies. Firms like Hong Kong based Goldenway are now choosing to invest their first sports sponsorship dollars in clubs such as Swansea, based solely on the rising popularity of the game overseas.
The deal also represents teams' slight shift away from gambling companies as sponsors. While companies such as 32Red very much maintain a presence in the sponsorship world, teams appear to be distancing themselves just a bit. Just days ago, Tiger Woods turned down nearly $100 million in potential marketing dollars from an Irish gambling house.
Finally, if clubs such as Wales' Swansea City, can earn $3 million from uniform sponsorship, then one must wonder when we might see advertisements on NBA, NFL, and MLB jerseys in the near future. Based on several reports, Adam Silver the NBA may be the first to make the move. If so, it will be extremely interesting to monitor what type of deals the league's most prominent franchises can bring in.
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