Branding the World of Sports

Archive for December, 2008

Is local sports marketing the way to go during recession?

Posted by ZA on December 30, 2008

According to Richard Luker it is; his theory is that during tough economic times people have more of a connection to the teams in their community.  Luker theorizes that people’s connection to team’s in their community outweighs their feelings towards larger sports franchises.  He thinks that spending more sports marketing dollars on “small college and high school sporting venues” will bring a better return than those spent at the professional sports level.

Luker says, “Major League Baseball…is not about me.  Minor League Baseball is about me and my neighbors.  I can feel like I am with my community.”  He supports that with the statistics that MLB attendance was down last year while Minor League attendance was up.

I agree with Luker that people’s feelings towards their local (i.e.- smaller) team are more recession proof than those towards professional teams.  But I think price plays just a big of a factor in that as proximity.  Many fans choose local during tough economic times because it’s the more affordable choice.  The Dallas Cowboys game is appealing, but too expensive, so they choose the local high school football game because it is much more affordable.

For companies spending on professional sports sponsorships or local sports sponsorships the choice really comes down to what your goals are as a brand.  Large, national companies like Coca-Cola should spend on small & professional sports because both markets help to further their global brand.  Coca-Cola is focused on aligning itself with major league teams that provide national brand opportunities, but also can easily afford local spending to connect with those communities.

Whereas smaller, regional companies need to decide whether they potential national brand exposure of professional sports deals is necessary for their brand at their current stage.  Can they afford an NBA sponsorship?  Do they need to spend millions to put their name on an NFL stadium?  Many of them will do just as well funneling their dollars into local and regional sponsorships that get them affordable coverage in their core markets.

Whataburger is an example of a company that effectively used local and regional sports marketing opportunities to grow their brand.  The hamburger chain from Texas has over 700 locations across 10 states, but they continue to focus their spending on local opportunities.  Within their core Texas market Whataburger has aligned itself with High School football by sponsoring local teams and appearing in publications like Dave Campbell’s Texas Football, that cater to that market.  Those type of marketing deals have helped to align their brand with Texas State High School Football and made Whataburger a household name.  Whataburger even offers a page on their website where people can request sponsorship dollars or merchandise.

Whataburger keeps it local

Whataburger keeps it local

Whataburger has even embraced the theory Luker offers in-regards to sponsoring a Minor League Baseball team over a Major League team.  Rather than spending with lavishely to sponsor their homestate Houston Astros or Texas Rangers, Whataburger has gotten involved with Minor League clubs across Texas.  Including paying to put their name on the Corpus Christi double-A affiliate for the Astros, appropriately named Whataburger Field.

So yes, local sports marketing is absolutely the way to go.  But not just during a recession, it is something that companies should be making a commitment to all the time.  Start locally building your brand, and work your way up from there.  Once upon a time Coca-Cola was just a regional Georgia beverage, now they are a top global brand.

Posted in Sports Brands, Sports Marketing, Venue Naming Rights | Leave a Comment »

Baseball fanatics get their fix in 2009

Posted by ZA on December 29, 2008

MLB Network

MLB Network

On January 1st, 2009 the MLB Network launches across the United States.  The MLB Network will be the first full-time baseball only cable television channel.  Unlike the NFL Network, the MLB Network will be free to some subscribers on Time Warner, Comcast, DirecTV and Cox Communications; so over 50 million homes will receive the MLB Network.

The decision to work with the cable companies, which have a minority share in the network, is a really smart move instead of battling them like the NFL Network did.  The NFL Network is still not available on certain major cable providers (Time Warner), and they are coming to the end of their second year.  If I can go this long without the NFL Network I am going to care when they are able to finally resolve them dispute?  Probably not.

The Golf Channel was the first singular sports focused channel to launch in the United States when it launched in 1995.  The Tennis Channel followed suit in 2003.  The first major professional sports league in the United States to have its own network was the NBA, which launched NBA TV in 1999.  Since then the NFL Network debuted in 2003, the NHL launched a channel in 2007 and the MLB Network goes live in 2009.

Here is the list of shows the MLB Network is planning to air.
Enter your zip code here to find out your local MLB Network channel.

Posted in MLB, Sports Brands, Sports Television | 2 Comments »

Barclays reviewing EPL sponsorship

Posted by ZA on December 17, 2008

Barclays is reviewing their $100 million dollar sponsorship of English Premier League soccer to see if they can afford to keep the deal.  It’s going to keep happening, with different sporting events and company until things shake all the way out.

Posted in Soccer, Sponsorship Deals | Leave a Comment »

Red Sox Nation pull out your wallets

Posted by ZA on December 16, 2008

Just-in-time for Christmas the Boston Red Sox have a brand new slew of merchandise to offer their faithful fans.  The Red Sox recently debuted their new-looking uniforms and logo.  The new logo that just features a pair of red sox is a scaled down version of their past logo.  The Bosox said the new logo is a return to the “core traditions of the organization”.

A survey of Red Sox fans revealed that less than 20% actually like the changes.  Uh oh, someone in marketing has some explaining to do.

Boston Red Sox overhaul logo

Boston Red Sox overhaul logo

Posted in MLB, Sports Brands, Sports Marketing | 1 Comment »

Jones Soda getting in over their head

Posted by ZA on December 10, 2008

It is one thing for Jones Soda to sign a deal to sponsor their hometown Seattle Seahawks.  It’s a whole other thing for Jones to go head-to-head bidding for deals against Coca-Cola and Pepsi all across the country. Sounds like Jones Soda might be getting in a little over their head…or maybe they are not according to the soda founder Steve Jones.

Expect to keep hearing ‘he said, she said’ stories like this in the endorsement world for the foreseeable future.  Many brands over-committed themselves in order to land major sponsorship deals.  With the economy contracting those brands need that cash for operations, and some are going to try to get it back.

Posted in Sponsorship Deals, Sports Brands | 2 Comments »

Darling of sports marketing hits the skids

Posted by ZA on December 8, 2008

NASCAR…the fastest-growing, best-run sports business in America...” – Fortune Magazine, September 2005

For years NASCAR has been the sport that sponsors pointed to as an example of strong brand identification and growth.  NASCAR fans were known as the most fiercely brand loyal group of sports fans, this side of English Premier League soccer. The NASCAR fans are the ones who drove around with numbers on the back of their car signifying the driver they support.  They shopped at the stores their drivers pitched (you would never fan a Tony Stewart at Lowe’s) and used the products their drivers wore on their sleeves.

Now things are starting to change at NASCAR, those same fans are not turning out in the same numbers at the track or on television.  And sponsors are finally starting to reduce, or drop entirely, their sponsorships of NASCAR.  Long-time sponsors like Kodak are leaving entirely (22 year relationship) and others like Sears and General Motors are significantly scaling back their investments in the sport.  The big US automakers are being forced to rethink their investment in the sport.  NASCAR drivers are without sponsors heading into 2009 and NASCAR just laid off 1000 employees.  It seems everything and everyone involved in NASCAR are starting to tap the brakes.

The question is how long will the downturn last for NASCAR? And will NASCAR comeback just as strong once the economy, and the automakers, gets going again?  Both are impossible to answer right now because no one can accurately predict the effects of their economic downturn.  What I do know is that NASCAR once again needs to change.

NASCAR has evolved in a large way before, moving from a regional sport supported by people in the South to a sport that commands more sponsorship dollars ($3 billion per year) than the NFL.  It has shed its hillbilly, redneck reputation and being a darling of the corporate world picking up huge deals with brands like Fox and Sprint.  Now NASCAR must change again, again evolving to ensure it can stay afloat in the wake of these tough economic times.

NASCAR needs to continue to diversify, adding more drivers from other cultural backgrounds like Juan Pablo Montoya.  Don’t believe me?  The most popular driver in Formula One right now is a Lewis Hamilton, an Englishman who is black.  Hamilton has become such a phenom on the F1 circuit that he had to move from his home country, England, to Switzerland to avoid being mobbed on a daily basis (and to save a few dollars on taxes).  I know the old guard probably gets tired of outsiders, like me, beating this drum but a more diverse group of drivers will increase exposure.

NASCAR also might consider tweaking  some other things like shortening a few races to appeal to a more mainstream television crowd.  They could also do some more skills type competitions, that auto racing purists might hate, but would appeal to the casual fan.  Look at the success the NBA All-Star Game, MLB All-Star Game and Pro Bowl have been as showcases for their sports.  Also trimming the number of cars in the field from 40+ back to a more manageable 30 would help, as currently 12 drivers are without sponsors heading into 2009.

But one thing that NASCAR needs to change for sure, is they must change the way they fund their sport so they are not so reliant on corporate sponsorships.  NASCAR teams get up to 80% of their revenue from their sponsors, which typically equates to nearly $20 million per year for the sponsors.   There are not going to be as many companies who can afford to throw down $20 mil a season for operating costs, plus the supporting millions required to promote their brand in that sponsorship.  With a declining ROI on NASCAR sponsorships large companies are going to pass on that investment opportunity, and smaller brands will only be able to tackle a portion of it.  That will leave most NASCAR teams scrambling to find dollars to keep the lights on, instead of focusing on racing.  Other professional sports teams don’t operate that way, and NASCAR won’t be able to either if they want to keep growing.

Update: NY Times did a piece on Nascar’s sponsor cash crunch.

Posted in Fox, Nascar, Sponsorship Deals, Sports Brands, Sports Marketing | Leave a Comment »

2008 BCS Bowl Game Selection Show

Posted by ZA on December 7, 2008

All of the BCS drama will finally come to a close on Sunday when the 2008-2009 bowl game schedule is announced.  At 7PM central on December 7th Fox’s BCS  Bowl Game Selection Show will reveal all of the matchups and preview the games.  Here is my take on which teams will be playing in the main BCS bowl games.

2008-2009 BCS Bowl Game matchup predictions:

BCS National Championship Game

Florida Gators vs Oklahoma Sooners
* The Sooners lucked out in passing my Longhorns, and now get the chance to play for the National Championship.  There will be a lot of points scored in this game.

Fiesta Bowl
Ohio Stata Buckeyes vs Utah Utes
* A lot of smoke about Fox wanting a #3 vs #4 matchup in Sugar Bowl, and getting Fiesta to take Utah.  I’m believing the rumors, and thinking that Ohio State will win based on the strength of their defense.

Orange Bowl

Cincinnati Bearcats vs Virginia Tech Hokies
* Looking for the lowest rated BCS bowl game?  Here it is.

Sugar Bowl
Alabama Crimson Tide vs Texas Longhorns
* Fox wants to create another strong matchup and this definitely qualifies.  Call this the ‘we deserve to be in the National Championship conversation’ bowl.

Rose Bowl

Penn State Nittany Lions vs USC Trojans
* Aside from the National Championship Game, this is the only other ‘sure thing’ at this moment.  Tough game for PSU.

Posted in College Football | 2 Comments »

Which NBA franchise is the most valuable?

Posted by ZA on December 5, 2008

If you were going to purchase an NBA team which team would cost you the most? Which NBA franchise has the highest for sale price tag? Which NBA club is the most valuable?

According to Forbes the most valuable NBA team in 2008 is the New York Knicks. Forbes valued the Knicks at $613 million dollars, which is up just slightly from their 2007 rank (when they were also #1). Much of the value of the Knicks is due to their location in one of the richest cities in the World. New Yorkers and NYC companies pay big money for Knicks seats at Madison Square Garden. The Knicks generate over $200 million dollars per year in revenue, much of that coming from ticket and luxury suite sales. The Knicks are proof of that old real estate adage that “location, location, location” is what really matters.

The Knicks were the only perennial loser among the top 10 teams on the list. Among the top 10 most valuable NBA franchises, half have won NBA Championships in the past dozen years and the rest have been the top teams and competed in NBA Finals.

The bottom 10 teams on the list reads like a who’s who of teams with ownership issues. Teams like the Bobcats, Hornets, Clippers and Thunder all have owners who have been maligned by many in the press and their own fans. Often for mismanaging the team or being too cheap to field a competitive squad.

A few observations on the Forbes 2008 NBA franchise valuations:

* James Dolan is the luckiest owner in professional sports. No one else could mess their team up that bad and still come out on top. If he had even run the Knicks halfway decent, they’d be worth over a billion dollars.

* How much is the Knicks value going to increase and the Cavaliers value going to decrease if LeBron jumps from Cleveland to New York in 2010? I might be trying to sell now if I were Dan Gilbert.

* The top ten cities in the list are: New York City, Los Angeles, Chicago, Detroit, Cleveland, Houston, Dallas, Phoenix, Boston and San Antonio. The Spurs are the only “small market” city on that list.

* The Celtics and Trailblazers had the largest one-year increase in % value. Expect that to continue for the Trailblazers eventually moving them into the top 10 (I love their young nucleus) and to peak for the Celtics next season (their aging vets will start to retire).

* The Wizards, Pacers and Bobcats all rank in the bottom half of the league in valuation. Proving that NBA stars like Larry Bird and Michael Jordan don’t necessarily translate into success NBA execs. Seems like the solid role players like Kurt Rambis, Joe Dumars and Danny Ferry might make better pro basketball execs than the superstars do.

NBA Team Franchise Value % Change last 12-months
1 New York Knicks $613M 1%
2 Los Angeles Lakers $584M 4%
3 Chicago Bulls $504M 1%
4 Detroit Pistons $480M 1%
5 Cleveland Cavaliers $477M 5%
6 Houston Rockets $469M 1%
7 Dallas Mavericks $466M 1%
8 Phoenix Suns $452M 1%
9 Boston Celtics $447M 14%
10 San Antonio Spurs $415M 3%
11 Toronto Raptors $400M 7%
12 Miami Heat $393M -6%
13 Philadelphia 76ers $360M -5%
14 Utah Jazz $358M 5%
15 Washington Wizards $353M 2%
16 Sacramento Kings $350M -9%
17 Orlando Magic $349M 8%
18 Golden State Warriors $335M 8%
19 Denver Nuggets $329M 3%
20 Portland Trailblazers $307M 21%
21 Atlanta Hawks $306M 7%
22 Indiana Pacers $303M -9%
23 Minnesota Timberwolves $301M -2%
24 Oklahoma City Thunder $300M 12%
25 Los Angeles Clippers $297M 1%
26 New Jersey Nets $295M -13%
27 Memphis Grizzlies $294M -3%
28 New Orleans Hornets $285M 5%
29 Charlotte Bobcats $284M -1%
30 Milwaukee Bucks $278M 5%

Which team would you choose to own if you could have any on the list?

Posted in NBA | Leave a Comment »

“Just Do It” gives way to “Become Legendary”

Posted by ZA on December 4, 2008

Nike’s famous “Just Do It” celebrated its 20th anniversary this year.  Now Nike is hoping it can catch lightening in a bottle again by launching a new theme under its Jordan Brand.  The new Jordan Brand tagline “Become Legendary” focuses the characteristics that make winners and how they can leave their mark on sports and society.

The campaign was created by Nike’s long-time agency, Wieden + Kennedy, and will feature Carmelo Anthony, Richard Hamilton and Chris Paul in the initial spots.  The campaign will also help to launch Carmelo’s new Jordan Brand shoe called the Jordan Melo M5.  Brandweek reports that Nike will $21 million to push the Jordan Brand in 2009.

Nike created the Jordan Brand in the wake of signing NBA superstar Michael Jordan in 1984.  The brand thrived as Jordan rose from superstar NBA basketball player to global icon.  After MJ retired from the NBA, Nike has kept growing the Jordan Brand by signing a robust collection of star athletes from Derek Jeter to Terrell Owens.  The Jordan Brand continues to be a cherry in the Nike portfolio, helping the athletic shoes and apparel giant amass over $20 billion per year in annual revenue.

Jordan Brand's new tagline, "Become Legendary"

Jordan Brand's new tagline is "Become Legendary"

Posted in Apparel & Shoes, Nike, Sports Brands | 1 Comment »

Poking fun at College Football’s BCS

Posted by ZA on December 4, 2008

This was emailed to me today by a couple of people.  Not sure who the original author is that deserves the credit, but I thought it was funny enough to post.  And keep in-mind this is poking fun of the BCS, not making light of WWII.

US Ranked 4th

After determining the Big-12 championship game participants the BCS computers were put to work on other major contests and today the BCS declared Germany to be the winner of World War II.

“Germany put together an incredible number of victories beginning with the annexation of Austria and the Sudetenland and continuing on into conference play with defeats of Poland, France, Norway, Sweden, Denmark, Belgium and the Netherlands. Their only losses came against the US and Russia; however considering their entire body of work–including an incredibly tough Strength of Schedule–our computers deemed them worthy of the #1 ranking.”

Questioned about the #4 ranking of the United States the BCS commissioner stated “The US only had two major victories– Japan and Germany . The computer models, unlike humans, aren’t influenced by head-to-head contests–they consider each contest to be only a single, equally-weighted event.”

German Chancellor Adolph Hitler said “Yes, we lost to the US ; but we defeated #2 ranked France in only 6 weeks.” Herr Hitler has been criticized for seeking dramatic victories to earn ‘style points’ to enhance Germany’s rankings. Hitler protested “Our contest with Poland was in doubt until the final day and the conditions in Norway were incredibly challenging and demanded the application of additional forces.”

The French ranking has also come under scrutiny. The BCS commented “France had a single loss against Germany and following a preseason #1 ranking they only fell to #2.”

Japan was ranked #3 with victories including Manchuria, Borneo and the Philippines.

Posted in College Football | Leave a Comment »