BrandDunk

Branding the World of Sports

Archive for March, 2009

AIG loses their shirt…literally

Posted by ZA on March 18, 2009

The news for troubled insurance giant AIG has not been kind lately.  When the most powerful man in the free world is angry with you, that is never a good thing.  And President Barrack Obama did not mince words this week when he said he was angry at AIG over their handing out bonuses to top executives.

So how does a brand respond to the crisis?  How is AIG responding to this current crisis?
It appears AIG is doing a whole lot of nothing.  This article from AdAge discussed what PR steps AIG could take to help their current situation.  Even the PR experts admitted this situation is going to be extremely tough for AIG to rebound from, because money spent on a PR campaign to win back consumer hearts and minds will likely be viewed as more excess.  AIG did not respond to questions sent by AdAge on the story.

Making it worse for AIG is that while they take their duck and hide approach to handling this crisis, one of their biggest marketing opportunities just ran away.  News came out that AIG is losing its shirt sponsorship with soccer club Manchester United.  The deal which AIG has held since 2006 will not be renewed after the 2010 season is done.  While on the surface it might seem great for AIG to rid themselves of a $25+ million dollars per year team sponsorships, it is a big loss for AIG.

Manchester United is one of the most popular football (i.e.- soccer) clubs in the world.  Man U jerseys (or “kits” as they are called in soccer) are worn by their fans across England, Europe, Asia and the United States.  Wikipedia reports that Manchester United has over 330 million supporters worldwide, which is almost 5% of the Earth’s population.  Assuming it is true, that means that one out of every twenty people on this planet count themselves as a support of this soccer team.  That means there are millions upon millions of people walking with Man U jerseys with AIG on the front.

Is it worth $25 million dollars per year for AIG to get that type of brand exposure? I think so; and some smart company is going to jump at the chance to pay Man U even more in their next jersey sponsorship deal.  CNN reports that Indian conglomerate Sahara and Saudi Telecom are already interested and I bet a few American corporations give it a close look.  Nike, are you listening?

So AIG is not saving $25 million dollars per year, they are losing brand exposure on a global scale.  The richest club in all of professional sports, with the largest fan following in sports, is wearing your company name on their chest; and you give that up?  Makes no sense to me, it seems like they could have cut corners on some other marketing deals in order to maintain the relationship with Manchester United.  But alas, it is just another blunder in a series of missteps that AIG has made lately.

Advertisements

Posted in Apparel & Shoes, Soccer, Sponsorship Deals, Sports Brands, Sports Marketing | Tagged: , , , | Leave a Comment »

Wells Fargo walks away from PGA sponsorship

Posted by ZA on March 18, 2009

Wells Fargo’s acquisition Wachovia is not only walking away from their sponsorships with the PGA Tour, they are walking away and leaving money on the table.  Some of Wachovia’s deals with the PGA Tour are through 2014, but Wells Fargo still made the decision to give them up.  The reason Wells Fargo is giving up the PGA Tour is that consumers are seemingly unhappy with the failed financial company (Wachovia) still spending money on sports sponsorships.  This bowing down to public perception occurred even though Bank of America has come out recently with data in support of their sponsorships of sporting events.

pgatour_logo

More at SportBusiness on Wells Fargo pulling the plug on their sponsorships of the PGA Tour.

Posted in Golf, Sponsorship Deals | Tagged: , , | Leave a Comment »

Using sex to sell the AVP Tour

Posted by ZA on March 17, 2009

The AVP and Crocs have designed some eye catching advertisements to promote their upcoming AVP Tour beach volleyball tournaments.  The ads feature the posterior of some of the AVP’s female players in a tight bikini bottom.  Each one includes the logos of the AVP Tour sponsors, including: Bud Light, Crocs, Gatorade, Paul Mitchell, and Wilson.

avp_advertisement

So is it wrong for the AVP Tour to use sex to sell their events? In my opinion, no.  Beach volleyball, both on the professional circuit and in the Olympics, has for a long time been great athletes playing a tough sport.  But it is also about the atmosphere at the events which often includes plenty of skimpy bikinis and tan bodies, both on the court and in the crowd.  The players are at the peak of physical fitness and do not seem to be shy about showing off their sculpted bodies.  Even in the Beijing Olympics the Nike “uniforms” (aka: small bikinis) worn by beach volleyball’s most famous duo, Misty May and Kerry Walsh, were cut to reveal a lot of flesh to the NBC audience watching at home.  And it is not just the women, the guys of the AVP are running around the beach bare chested in-front of thousands of female viewers.

The key for the AVP is to not ever objectify the ladies or men of their sport.  If one woman wants to wear a one-piece suit or a cover up, then it has to be perfectly okay for her to do that.  If a guy wants to play with a shirt on (which they often do) then that has to be absolutely okay with everyone at the league.  No dress code should be implemented that requires the players to wear revealing swimsuits.  As long as the league and their marketers steer clear of anything that makes the athletes feel they are required to dress a certain way to participate or thrive in the sport, then it is perfectly okay to promote them in a manner reflective of the sport.  In this case they are using sex appeal, showing sexy body parts, in their ads to sell beach volleyball.  Their marketers are saying that this (i.e.- sexy bodies) is part of our experience, so come watch.

That sexy image on the posters truly does represent the sport.  The woman’s butt featured on the ad above is not a model, it is one of the female athletes who compete in the AVP.  She choose to wear a bikini.  My guess is that the California beaches, where most of the AVP players live and train, has influenced what the volleyball players wear.  And if the AVP players are proud of their bodies and comfortable with what they are wearing on the court, then it is perfectly acceptable for their league to market that image.

This topic was inspired by a piece that Darren Rovell at CNBC did on the subject.

Posted in Athletes, Olympics, Sports Brands, Sports Marketing | Tagged: , , | 1 Comment »

Bank of America is making money off sports marketing

Posted by ZA on March 16, 2009

Why all the fuss about Bank of America spending on sports marketing? People have been complaining about BOA’s spending on sports endorsement deals and sponsorships because BOA took government bailout money.  They took TARP money, but Bank of America is making money from their sports marketing deals.  Let me repeat that, Bank of America is reporting that they are MAKING MONEY from their sports marketing deals.  So it appears those that criticize BOA’s spending, might not really know all of the facts; perhaps they should have listened to the BOA CEO before passing judgment.

Bank of America CEO, Kenneth Lewis, says they make “Ten dollars ($10) in revenue and three dollars ($3) in earnings” for every one dollar ($1) they pump into sports marketing deals.  Lewis went on to say that the money Bank of America spends on sports marking “is not wasted money.”

I don’t know much about how Bank of America runs their business, but it does appear their support of sports has been lucrative for their business.  They are making a 300% ROI (profit) from investing in sports, which you take every time in the advertising world  So perhaps the politicians in Washington will refrain from wagging their tongues on the matter, until they at least have some facts to support their criticism.

Bank of America’s Sports Sponsorships
include:

* Major League Baseball
* Nascar
* NFL
* PGA golf
* US Olympic Team

Read more on BOA’s sports sponsorships on their website.

Posted in Sponsorship Deals, Sports Marketing | Tagged: , , , | 4 Comments »

NBA player Shawn Marion is going to get his $

Posted by ZA on March 16, 2009

Great quote from Toronto Raptors forward Shawn Marion, who will be looking to sign a new contract at the end of this season.  Quote from the Globe & Mail story.

“We do talk about stuff like that (the down economy), but is the NBA going to fold? Marion said.  “You see people in baseball and football signing these big-ass contracts and I’m pretty sure their attendance went down a little bit.  Everyone is taking a hit, but at the same time it’s not stopping people spending money.”

The NBA league office might need to remind players that greed is not always good.

NBA league office memo to players: Greed is not always good.

My comments on Shawn Marion quote:
* Shawn is correct that deals are being handed out in MLB and NFL, but only some of those deals are “big-ass contracts”.  And those few huge deals also involved clubs that typically spend a lot of money; the Albert Haynesworth to the Washington Redskins and CC Sabathia to the New York Yankees deals are the minority.  Most MLB & NFL teams are spending more sensibly because they do realize that the economy is much different going forward.

* The financial shape of all of the 4 major professional sports leagues are somewhat tenuous right now.  It seems like every single day the Sports Business Daily is reporting on new cuts or job losses is from some team in one of those leagues.  But the NBA and NHL seem to be in worse shape than the NFL and MLB.  If I had to rank order the leagues, based on the financial health of their franchises, I would rank them this way:
1. NFL
2. MLB
3. NBA
4. NHL

* Shawn has every right to seek the maximum deal available to him, but running his mouth about it is not going to endear him to very many people right now.  No one wants to hear a person who just completed a 6-year, $80 million dollar contract talking about getting his money.  Mr. Marion needs to show some humility and discretion in talking about the money available to him in his next contract.  Because many of the fans that have supported him in Phoenix, Miami and Toronto are struggling financially more than they ever have.  So while they might have overlooked some comments from a seemingly self absorbed wealthy athlete when times were better, they are less likely to support that greedy athlete now.

* As the Globe points out, huge contracts are not usually paid to NBA players averaging 12 points and 8 rebounds.  Shawn Marion’s best years were with the run & gun Phoenix Suns, and those seem to be behind him now.  But good luck getting another huge contract, Shawn.

Posted in Athletes, NBA | 4 Comments »

What is the top selling category of sporting goods?

Posted by ZA on March 14, 2009

Consumers in the United States spend close to $20 million dollars every day on sporting goods & athletic apparel.  The Sporting Goods Manufacturers Association (SGMA) estimates the total U.S. sales at close to $70 billion dollars per year.  That figure encompasses a wide range of sports from bowling to racquetball, some of which are growing (basketball, ice hockey) and some of which are declining in the current economy (golf, tennis).  But the real question is which categories of sporting goods are the top sellers?  Which are the largest revenue producers?

Top selling sporting goods by sport (2008 revenue):
1. Golf – $2.76 billion
2. Athletic shoes – $1.24 billion
3. Baseball/softball – $602 million
4. Football – $496 million
5. Basketball – $356 million
6. Soccer – $304 million
7. Tennis – $256 million
8. Ice Hockey – $218 million
Source: SGMA

No surprise that golf is the top of the list because golf equipment is expensive.  I bought a new driver and fairway wood last year and it cost me close to $600 for the pair.  Tennis shoes (I’m referring to any athletic shoes) are a clear #2 in sports, although they did experience a 5% decline in revenue between 2007 and 2008.  The next four are all sports that U.S. kids typically play growing up, so it’s not surprising to see that kind of money being spent on those sporting goods.  A guy told me yesterday that every sport his kids play costs him $100, every single year they play.  While obviously not scientific, the point is that parent’s are laying out a lot of cash to put their kids in the latest baseball, football, basketball and soccer gear.

Sports are a big part of culture, so I don’t expect any decline in spending for sporting goods to last long beyond the current recession.  People need sports, so they will continue to spend aggressively on the necessary equipment.

Posted in Apparel & Shoes, Sports Brands | Tagged: , , , , , , | Leave a Comment »

Nike launching new LeBron themed shoe

Posted by ZA on March 13, 2009

To pay tribute to the place where it all began for basketball superstar, LeBron James, Nike is going to release a new shoe.  The shoe will represent Akron, Ohio; which is LeBron’s hometown.

Nike's Akron themed shoe for LeBron James

Nike's Akron themed shoe for LeBron James

Nike has done a lot to support LeBron, who is one of their top endorsement stars.  They already did a few LeBron themed shoes that resembled a New York taxi cab and Rubber City at the House of Hoops in NYC.   I can’t wait to see what Nike does if LeBron does wind up playing for the New York Knicks in 2010.  They will probably release a whole line of new LeBron athletic apparel to celebrate his move to the top media market.

Posted in Apparel & Shoes, Athletes, NBA, Nike, Sports Brands, Sports Marketing | Tagged: , | Leave a Comment »

The Ryder Cup to be played in a pool

Posted by ZA on March 13, 2009

If British swimming federation and British Gas have anything to do with it, then soon we’ll be seeing a Ryder Cup style event occur in swimming.  The proposed event would match the best swimmers in the United States versus the best swimmers in Europe.  The event was detailed in an article in The Scotsman.

Interesting concept and definitely something that could raise the Q rating of a lot of swimmers and the sport in-general.  Plus the timing is perfect, by scheduling it on the heels of Beijing Olympics (where swimming was most watched event) and leading towards London 2012 Games, it will keep the average fans attention on swimming.

Plus if you are Michael Phelps it means people will talk about you for some other reason than the photo of you smoking pot.  I imagine Phelps would love this type of event, because it gives him another stage to show off his amazing skills.  Plus Phelps seems to love the competition and probably would like the chance to beat the French relay team again, who were talking trash before losing to the Americans in Beijing.

Posted in Olympics | Tagged: , | Leave a Comment »

Suites in the new Cowboys Stadium are flawed

Posted by ZA on March 12, 2009

For over two years we’ve been hearing about the unveiling of the grandest stadium in sports, the new home for the Dallas Cowboys (aka: Jerry World).  The story has consistently been the same, that Jerry World will be the finest stadium in professional sports.  Packed with every imaginable amenity to make a Cowboys home game more fun than breakfast in Paris, lunch at Disneyworld with the kids and dinner in Las Vegas.

But now the story is starting to change.  Oh no, not the official story from the Dallas Cowboys.  They all still have smiles on their faces and are saying that sales are going just fine.  They continue to justify that by pointing out that they have 273 out of 300 luxury suites leased.  Nero also played the violin as Rome burned.

The reality is that the luxury suites and other premium areas in the new Cowboys Stadium are beyond what the current marketplace wants to buy.  The economy today is different than two years ago, so the Cowboys need to take some proactive steps to make sure they are adjusting to the changed economy.  Darren Rovell nails this concept in his article about the Cowboys Stadium.

A few interesting tidbits from Rovell’s story:
* There will be people who break their luxury suite leases at the new Cowboys Stadium.
* The Giants, Jets, Mets and Yankees are all dealing with similar issues at their new stadiums.
* Safeco Field converted 8 of their luxury suites into a large area that could be sold to smaller businesses.

Not sure if Jerry Jones is reading CNBC today, but if he does see the article he might consider making some changes now.  Never wrong to admit you overestimated the market.  The Cowboys have already (smartly) started to lower prices on some of the premium PSL’s they offer, so why not change the plan on luxury suites as well.  Doing it now might save millions in dollars down the road.

Posted in NFL, Stadium Construction, Venue Information | Tagged: , | Leave a Comment »

David Beckham to buy an MLS franchise

Posted by ZA on March 10, 2009

Saying that he is “passionate” about developing soccer in America; David Beckham announced that he plans to buy an Major League Soccer (MLS) franchise when he retires from playing.  This announcement comes after months of wrangling between Beckham and his MLS team, the Los Angeles Galaxy, about whether he would play a whole season for the Galaxy in 2009.  Apparently Beckham enjoyed his European football renaissance with Real Madrid so much that he wasn’t ready to return to his team in America.

Becks currently flip-flopping aside, it would be a huge plus for MLS to get such a high profile athlete supporting their league.  Even in retirement Beckham is sure to garner a lot of attention (think Mark Cuban, but only 1,000x more) from the media.  That media attention is always key for a burgeoning league like the MLS.  If the MLS is getting featured in People, USA Today and celebrity tabloids next to Beckham, then it should only raise the league’s profile in the United States.

SportBusiness reports that the most likely home of the franchise would be Las Vegas or San Diego.  If I were MLS soccer I would approach Steve Wynn or the Maloff brothers about co-owning a Vegas soccer team with Beckham.  The Maloffs own the NBA’s Sacramento Kings and the coolest hotel in Sin City (the Palm), so the relationship could be a perfect fit.  It could be a pairing (Beckham + Maloffs + Vegas) that could bring a lot of glitz and glitter to the MLS.  Maybe Wayne Newton would agree to be their Public Address announcer.

Posted in Soccer, Team Transactions | Tagged: , , | Leave a Comment »