Branding the World of Sports

Archive for May, 2010

NFL legal battle could change sports sponsorships

Posted by ZA on May 26, 2010

The United States Supreme Court issued a ruling against the NFL that could open the door for a land grab among brands that want to sponsor the league.  The court ruled that the NFL is not a single business, which means they are not covered by antitrust laws.  This AdAge article explains that the ruling means that Reebok’s leaguewide sponsorship might be in jeopardy if American Needle wins their case in Federal Court in Chicago.

My take is that the change (should American Needle win their case) will usher in an era where corporations will compete to attach their brands to the marquee teams in the league.  No longer will league wide sponsorship deals rule the day; they will still exist but won’t be prohibitive to competitors like they are today.  It means Nike & Adidas will line up the top teams and throw a lot of money at them.  Whichever company misses out on top teams will then likely strike deals with the next rung down of teams.  Which will leave the least successful teams (the small market teams in some sports) with last pick among the sponsorship deals.

But this potential change will also mean that new companies can bring into the sponsorship game for major professional leagues (think Jones Soda at Qwest Field, instead of Coke or Pepsi).  That variety will be good for the teams and ultimately provide a more competitive, balanced marketplace for team sponsorship deals.  So the Supreme Court decision was a step in the right direction, now let’s hope the court in Illinois agrees so we can open up more sponsorship opportunities.

Posted in NFL, Sponsorship Deals, Sports Brands | Leave a Comment »

Nike soccer spot is captivating

Posted by ZA on May 21, 2010

Nike recently debuted their new soccer spot which features a few of their top football stars from around the globe (Rooney, Ribery, C. Ronaldo).  It’s a great commercial that really makes you think about the influence that sports has on our lives.  Great work by Nike.

Write the Future – by Nike

Posted in Nike, Soccer | Leave a Comment »

South Africa turns over keys to FIFA for 2010 World Cup

Posted by ZA on May 17, 2010

A good article from Ad Age that covers the plans major sponsors have to promote their brands during the upcoming World Cup in South Africa.  It also talks about FIFA’s efforts to thwart ambush marketing campaigns from detracting from the 13 official World Cup sponsors.  FIFA claims there were over 3,000 “rights violations” during the 2006 World Cup in Germany, so they are already being proactive to try to limit them at the 2010 World Cup.  FIFA has created new rules to proactively prevent ambush marketing during World Cup matches.  And FIFA’s lawyers have proactively started sending warning letters to brands to deter them from planning marketing events around the World Cup.  One letter to South African airline, Kulula, prompted this humorous response from the airline on twitter:

Oh dear, letter from FIFA’s lawyers says we broke their trademark of the use of ‘South Africa’ and think our non-WC ad was about soccer…Even the use of our national flag was an issue.  It’s absolutely outrageous.  We’ve signed over our country, its symbols and our economy to one [FIFA President] Sepp Blatter. Nasty.

Although Kulula joked about it, the truth is they are not far from the truth.  When your country lands one of these major events (World Cup or Olympics) they are going to be giving away some of their “rights” to FIFA or the IOC until the event is over.  There were murmurs leading up the 2008 Beijing Olympics about the IOC counseling China on human rights issues, presumably to keep those abuses from reflecting negatively on IOC or the Olympic Games.  That comes with the territory for any country granted one of these events; you are willingly taking on a partner who is going to have control on certain issues.  So the people, and businesses, of South Africa better get used to that because they are going to be under FIFA control under July 12 – the day after the World Cup final is played.

Posted in Soccer, Sports Brands, Sports Marketing | Tagged: , , , , | Leave a Comment »

Professional team gives refund for bad game

Posted by ZA on May 10, 2010

The Seattle Sounders, a US professional soccer team from the MLS, has made a bold move that very few pro organizations have ever considered.  The Sounders announced that they are going to refund their fans for a game in which they lost.  Seattle’s “humiliating” home loss to the Los Angeles Galaxy on Sunday was the game that prompted the refund.  The 4-0 loss prompted Sounders players to say the fans deserved better and it appears the Sounders management agreed with them.  All Sounders season ticket holders will receive a one-game credit towards their season ticket purchase next season.

I think it’s refreshing to see a team take position.  It’s not something that most teams are able to do, but Seattle will undoubtedly benefit from this move in fan and media support.  Most of the coverage of the Sounders today is people commenting on this rare, but forward thinking, move by the team execs.  Fans have become so accustomed to just taking whatever their team serves up, that when a team goes out of their way to repay the fans, it makes us all stand up and take notice.  Kudos to the front office of the Seattle Sounders.

[Assist: Sports Business Daily]

Posted in Soccer | Tagged: , , | 2 Comments »

Nike looking to gobble up competition

Posted by ZA on May 6, 2010

Nike announced that they have targeted annual revenue of $27 billion by 2015.  Nike plans to achieve that growth through expansion into developing markets (China & Eastern Europe), by expanding their existing line of products and by pursuing “acquisitions and partnerships”.  That target is a big increase (near 50%) from Nike’s 2010 revenue projection of $19 billion, so to achieve their goal the Swoosh is going to have to be very aggressive.

This announcement only solidifies my opinion that Nike will try to acquire rival Under Armour.  Under Armour reported 2009 revenue of just under $900 million dollars, which should put UA in the $1 billion annual revenue range in 2010.  So Nike not only gobbles up a strong competitor and gains ground in the performance sportswear category, they would also be adding $1 billion plus dollars in revenue towards their bottom line.  That billion plus in extra revenue is more than Nike is receiving from their current subsidiaries; Cole Haan, Converse, Hurley and Umbro.  So Under Armour has to look attractive and I think Nike buys them this year.

Posted in Nike | Tagged: , | 2 Comments »

What will FOX pay to broadcast the Olympics?

Posted by ZA on May 5, 2010

Variety reports that Fox is planning to make a “major run” at securing the rights to broadcast the 2014 Olympics (Sochi) and 2016 Olympics (Rio).  Fox would need to knock off incumbent broadcast partner, NBC, in order to land the Olympics.  NBC has been the television partner for the Olympics since 2000, but have said they lost money to broadcast the most recently Vancouver Olympics.  Fox is rumored to have bid much less than NBC (half is the reported number) for broadcast rights to ’08 & ’10 Olympics.

So how much will Fox bid on rights to the ’14 & ’16 Olympics? My guess is they bid somewhere in the $750 million range for each, which is well below the current broadcast rights on Olympics.  NBC will lay out close to $2 billion dollars for the rights to broadcast the ’10 Olympics and 2012 London Olympics (chart of broadcast rights paid on Olympics).  So the natural questions are why would Fox bid an amount lower than what it costs today?  And does Fox stand a chance to win the broadcast rights for the Olympics?

I think Fox bids $750 million (-ish) for each of Sochi & Rio because that’s what they think they are worth.  No network in their right mind should think that Sochi & Rio are going to have the revenue potential as London (2012) and Beijing (2008).  So Fox’s bid will be closer to what NBC paid in Athens ($793 million) and Sydney (Sydney $705 million) earlier this decade.  And it’s possible that Fox (and others) bid even lower on the 2014 Olympics, because Winter Games do not sell as well in the United States and Sochi isn’t a name destination.

I think Fox will have a shot, but probably loses out to NBC or ABC/ESPN.  NBC has made the Olympics their thing, so I think it’s worth it to them to bid more just so they can continue to be the “Olympic Network”.  ESPN is a sports media juggernaut 365 days a year, so they would have the potential to market the Olympics in a way we’ve never seen.  It just seems those two networks should want the Olympic broadcast rights more, so I think ultimately Fox’s bid will fall short.

Posted in ESPN, Fox, NBC, Olympics, Sports Television | Tagged: , , , | 2 Comments »