When Sponsors Go Rogue

In our last post, we examined a few instances of brands dealing with the fallout emerging from their sponsored properties falling on the wrong side of law and/or public opinion. This time, let’s take a look at the other side and see what properties do when the brand that’s sponsoring them meets the same fate. 

Northern Rock was the jersey sponsor for Newcastle United from 2003 to 2012. In 2007 the bank had to be bailed out by the UK government after the sub-prime mortgage crisis, the aftermath of which led many to question the ethics of such financial institutions spending public money on sponsorships. The outcry was heightened further when the bank spent £10 million to renew the deal in 2010. The backlash did hurt some of the PR surrounding the club, which at the time was not finding great amounts of success on the pitch. When the bank finally decided to end the deal, the club was left looking for sponsors within a very short time frame considering that jerseys for the new season had to go into manufacturing.

The case with Manchester United was not very different when they had to wear the AIG logo on shirt for an entire season, despite the bank’s reputation suffering massive blows due to the multiple bailouts it was handed by the US government.

Closer to home, NASCAR had to state that they needed more oversight into sponsor selection when the NRA was announced as the naming rights partner for the Sprint Cup event. While the political aspect of this deal is something that we as a sports marketing firm cannot comment on, the fact that the deal was announced mere days after the Sandy Hook massacre was a definite blunder for all parties.

While these incidents demonstrate that sponsor selection can sometimes lead to unhappy fans, sports properties and teams also need to make sure they are financially viable, which thus requires them to often handle situations such as these delicately. The best way to navigate such proverbial minefields is to know and build relationships with their consumers, or in this case, fans. Keeping an active dialogue with the fan community and conducting research are two ways that will help keep fans updated and will give the property enough time to craft their justification for controversial sponsorship decisions.

San Jose Spartan Stadium Now Named After Credit Union!!!!

http://www.mercurynews.com/bay-area-news/ci_30214706/san-jose-states-spartan-stadium-now-named-after

By Hannah Knowles, hknowles@bayareanewsgroup.com

SAN JOSE -- With its plan to rename Spartan Stadium after a credit union in exchange for $8 million, San Jose State joins a growing number of universities nationwide striking lucrative corporate deals to rebrand athletics facilities.

The partnership, which California State University trustees approved last month, will turn San Jose State University's football and soccer team turf into "CEFCU Stadium — Home of the Spartans," or just "CEFCU Stadium." That's short for Citizens Equity First Credit Union.

While other California schools have entered similar deals for smaller sports centers like basketball arenas, SJSU will be the first NCAA Division I school in the state to sell naming rights for its stadium to a company. San Diego State's football team plays in a stadium named for the tech company Qualcomm, but the school does not own the venue and shares it with a pro team, the San Diego Chargers.

Traditionally, universities name arenas and stadiums after big donors, notable staff or simply after the institution itself, but corporate naming -- ubiquitous among professional sports facilities -- is on the rise among colleges.

"We're constantly looking for corporate partners and sponsorship opportunities, and that's an expanding area only limited by one's imagination," said Gene Bleymaier, SJSU's director of athletics.

CEFCU will give the university $8.6 million to support the SJSU athletics department through scholarships, improvements to facilities and other programs. The payment is spread out over the 15-year agreement, starting this school year with $450,000 and rising annually to adjust for inflation.

SJSU's stadium partnership is part of the school's broader push to find new sources of revenue, both philanthropic and corporate -- not just in athletics but for the university as a whole, said Paul Lanning, vice president of university advancement.

"Universities and colleges are seeking ways to continue to augment constrained budgets," Lanning said. "Public-private partnerships like this one -- they're going to be a very important element of our strategy going forward."

The strategy extends beyond athletics. Recently, SJSU entered a five-year agreement with Cisco Systems worth $1,050,000 to name a laboratory and professorship in the College of Engineering.

Lanning said that the university's budget is in "good shape," having stabilized since a last-minute scramble for budget cuts in 2013. But state funding can't cover all of SJSU's needs, he said, especially as the CSU system grapples with growing demand.

The CEFCU deal, SJSU's largest corporate sponsorship to date, will help restore an aging stadium to top shape with improved concessions and amenities for spectators. It will also help cover new costs in the athletics department caused by a change in NCAA rules last year that meant the university needed to contribute about $1.6 million more per year toward sports scholarships. The NCAA expanded the definition of an athletic scholarship to include travel expenses and other miscellaneous items, which effectively raised the amount of money that schools are allowed to provide their players. Currently, SJSU is tapping general university resources to provide those extra dollars.

SJSU found CEFCU through a third party, a sports consulting company called Bonham/Wills & Associates that specializes in naming deals. CEFCU has been a lower-level Spartan Stadium sponsor since 2011, one of over 100 sponsors at various levels throughout the entire SJSU athletics department.

While some cash-strapped colleges have embraced brand names from AT&T to Papa Johns for their stadiums, other universities have shied away from the corporate trend and turned down millions of dollars. In 2007, shortly after University of Minnesota debuted TCF Bank Stadium in return for $35 million, officials at Notre Dame University and Michigan State University told Sports Business Daily that they would not follow suit and wanted to maintain a strictly collegiate image.

Other schools in Bay Area feel similarly. Stanford avoids corporate signage for its sports venues. Santa Clara University has none either. UC Berkeley has no plans to sell naming rights to Memorial Stadium, even as it struggles with debt after spending $321 million to upgrade the venue, which a study deemed unfit to weather earthquakes. A school spokesperson said that the Memorial Stadium name is "essential to the history and traditions of the university."

However, UC Berkeley welcomed a corporate sponsorship similar to SJSU's in 2013, a year after completing the stadium renovation. The school made a 15-year, $18 million deal to rename the playing field inside the stadium after Kabam, a video game company with three UC Berkeley alumni among its cofounders.

SJSU will debut the new name at its first home football game Sept. 10 against Portland State.

Some worry that SJSU's stadium name change will undermine the Spartan tradition.

"We take pride in where we went to school, and when you start seeing names that really do not go with the university, I think it takes away from the teams," said Judy Najero ,who graduated from SJSU in 2004 and works in San Jose. "I think you're going more toward the dollars than the education or what makes up the Spartan community, which is the alumni, the students and the staff."

Bleymaier said that the athletics department weighed these concerns but believes the sponsorship will only enhance the sports program And, as Lanning pointed out, the stadium's official title still includes "Home of the Spartans."

"We understood that change can be difficult," Bleymaier said. "But looking at the environment and the need to generate new money is not something that's new to colleges."

The Olympic Advertising Platform #BeTheFastest

Marketers have been using sporting events to advertise as long as a television has been in living rooms around the world.  There are more and more events going on every year, providing a great platform for this continued practice.  One of the most coveted events on a global scale is of coarse one of the oldest and only takes place every 4 years, thus creating even more anticipation and excitement leading up with a big count down.  The 2016 Olympic Games.

Marketers worldwide have a chance to use this global build up to their advantage when it comes to advertising.  With 207 countries participating this year and 306 events to take place imagine the multiplications included when it comes to calculating global reach for brands that will be advertising during and leading up the event.  

Emotional connection when creating an advertisement has become increasingly important. As the public consumption has reached an all-time high,  the subconscious has adapted to blocking out many forms of advertising to the point where brand recognition is comparable to breathing for our younger generations.  How often do we really remember the advertisements that we see? What captivates us? Innovation and emotion are the 2 main factors we recognise in Virgin Media's, Usain Bolt add #BeTheFastest below. 

This advertisement uses emotions, excitement, pop culture and pure heart to capture the audience. This is a tastefully done advertisement because as you can see, it is impossible to decipher what brand it is actually for until the very last frame. The audience is captivated by each 9.58 second interval, they do not want to look away, it is so eloquently put together that most would not even realise that it is indeed an advertisement at all.  We recognise and commend Virgin Media on this successful campaign #BeTheFastest. Comment below and let us know your thoughts!

Corporate Sponsorship of Municipal Properties

Over the years, municipal and public facilities such as parks, beaches and sporting facilities have witnessed a decline in government funding which as a result has led to difficulties in conducting maintenance and upkeep.

In order to combat this, properties have historically looked towards donors and more recently, corporate sponsors. This brings up an interesting debate about over-corporatization, with commentators on both sides of the fence making their opinions heard, including prominent personalities like Bill Maher in this video. 

Now, while we won’t comment on the political aspect of this debate (we’re a marketing firm!) what we can comment on is public perception on this issue and how facilities can pursue corporate sponsorship whilst shielding citizens from overt and intrusive branding. On the other side, we think that corporations can benefit immensely from this practice and can increase their presence amongst consumers without being invasive. If done correctly, it can be a win-win for both sides and will keep the general public happy.

To begin with, let us begin be examining how public attitudes towards sponsorship of park facilities has changed. In 2014, IEG published results from a research study conducted by Virginia’s Fairfax county park authority. The key takeaways from the study included perceptions on the kid of facilities that should pursue sponsorship and the overall levels of support/opposition to facilities pursing sponsorship. They are listed as under – 

• Support for sponsorship is high and has increased over the years
• That being said, there are still concerns over commercialization
•  Pursuing sponsorship and Naming Rights deals is considered acceptable depending upon the type of venue/facility 
• Coupons and special offers for park users and logos on publications are appropriate forms of sponsorship activities
•  Of course, the industry categories that are considered appropriate also differ with regards to the type of property. In the case of parks, sporting goods and home and garden categories were considered most appropriate
•  People are for sponsorships if it is eased into and is done tastefully

Although, this study was done on a small scale, the results do show promising signs for corporations. Although tasteful and understated execution of activities may not provide corporations with the same high profile that they receive from sponsoring, lets say a major stadium, what it does provide is a boost in local presence and an unobstructed share of mind, which can prove to be valuable.

As far as the park authorities are concerned, it will help inject much needed funds in a system that, as analysts predict, currently needs $12 billion dollars (in the USA alone) worth of repairs across the board. It doesn’t help that the US Congress set an annual budget of only $2.85 billion this year. While facilities may not be able to raise such high levels of cash from sponsors, it will be a start. They also need to make sure that activation is done right. For example, by putting up North Face branded trail markers in some parks, Virginia is showing how it can be done.

So what is our verdict? We feel that the hyperbole around inappropriate sponsors is a little unjustified and parks and municipal facilities can pursue sponsorship in a successful, yet tasteful way.

BWA has worked with and continues to work with numerous municipal properties in order to help them achieve their sponsorship goals.

Technology Game Changers

We have seen many new industry trends based on rapid technological advances over the last few years. One of the trends the team at BWA has been following through 2015 has been wearable technologies and real- time alalytics.  Over the last few years, leagues have really committed to being a part of the growing trend.   

NBA has partnered with Sport VU.  SVU is a high tech camera system, most commonly hung from above the court, that collects data.  The unique twist to this cutting edge camera system is that it collects data at a rate of 25 times per second, simultaneously following the ball and every player on the court. Sport VU has been installing their system in all NBA arenas since 2013. 

A front runner within the wearable side of technologies is Catapult.  It has been a breakthrough company with major investors like Mark Cuban, and multinational brands Adidas, Reebok and Nike. This micro-sensor (essentially) is currently utilised by over 300 teams around the globe and it provides a more analytical perspective in “real-time”.  When partnered with the visual assistance such as Sport VU. This allows sports scientists access to a full breakdown of the game,  player performance, coordination and a series of algorithms quantifying player interactions generated by the raw data. 

Another company to watch for is Cityzen., who develop smart sportswear such as the sensor-embedded “D-Shirt”.  This phenomenal “Smart Sensing Technology” has been utilised during practice, and has proven to be one of the pioneering garments within this new wave of technology.  This shirt contains textile embedded sensors measuring activity, heart rate respiration posture and more, truly living up to its reputation of being the “textile of the future”.

In 2016 we have a keen eye on whether this rapid data collecting and wearable's  will translate smoothly from training purposes and move toward other subsidiaries of the industry that may benefit from this type of “real time” data.  

Looking heavily at the stats for TV/sports coverage as well as more accurate data for the betting fans, it will surely be a matter of time before the correct deals and agreements are in place allowing extended outlets to capitalise on this new trend.  The benefit from having these stats on hand every second of the game would surely foster more accurate predictions for betters and sports casters alike. Alternative media as well as sponsors may also make a bid for selective data collection that will enhance exposure and fan experience.

Usually, we watch new technologies utilised by a team or league to enhance productivity and conduct sports science studies first. Commonly after this phase, the trend will trickle down to sub categories within the industry. We are looking forward to watching the direction the sports and entertainment world will embrace this cutting edge technology readily available today.

Meeting in the Middle

In sponsorship, no great partnership comes full circle without a very important contract. How do corporations and properties come to the terms of agreement?  

Negotiation

The Negotiation phase is one of the most critical stages when forming a successful partnership.  When you think of the meaning behind Negotiation, some may tend to lean towards the idea of a “win/loose” outcome.  This idea may indeed be relevant in the real estate market, automotive sales or company buyouts/takeovers. But when it comes to creating a long term partnership within the sponsorship realm, no matter what side of the table you are sitting on, it is imperative that the “negotiation process” is a discussion utilized to build the strong foundation needed to support the relationship for years to come.  Unlike buying a car, once the deal is made, in order for both parties to benefit, everyone needs to be moving in the same direction.  Each party is trying to gain and add value symbiotically and simultaneously.

What is so appealing about creating these long standing partnerships, especially within the Sports and Entertainment world, is that the negotiation process can become very creative.  BWA, alongside our partners and clients alike, are consistently pushing the boundaries through innovative offerings strategically specified to the brand/property/deal at hand. We know what is going to benefit not only our clients but the potential partnership as a whole.

Before entering into negotiations you must identify the needs assets and benefits of each individual party.  Contracts can be very long and complicated but the negotiation process should be fairly painless if the partnership is a good fit. Both groups should enter with realistic goals for pricing, planning and lead times. It is also imperative to have a strong understanding of contra vs. cash and what benefits, rewards or downfalls each method/offering may present itself to the corporation or property.

As a sponsor, don’t see the property or opportunity as an original offer or nothing at all.  Seek out opportunities or even create your own, utilizing the information you have. Target markets always come first! What type of impressions are relevant to your target markets?  Are there any additions would you like to make to the offerings that will align with your marketing goals? Do you see any unidentified assets that will add value for your brand?

As a sponsor seeker, It is in best practice to have all assets valued before entering into sales and especially negotiations. Only offer what is relevant to your potential sponsor.  Impressions/assets on properties or during events, if not executed smartly, can cross the line of over kill exposure, the last thing you or your sponsor wants to do is to put off fans/attendees and potential consumers with a bombardment of advertising.  Essentially this type of overexposure at a venue can devaluing both the property and brand.  Get to know your potential partner, identify those specific assets that will apply to their business model/directives and start from there.

The way we see it, is that if you can provide an offering that will help your potential partner achieve a goal, and there is no expense/downfall to you, than in good faith provide every opportunity you can, and expect the same in return. This negotiation and should also leave room for updates and allow the partnership to evolve and grow through the length of the term. Moving and shaking with the rapidly changing industry and environment is essential for long term success. If you develop the right relationship with your partner through the initial negotiation phase, your groups should have no problem moving forward successfully in this ever advancing industry, creating increased brand awareness through sponsorship. 

Sponsor Logos on NBA Jerseys: What Do We Think?

The NBA recently approved a three-year pilot program that will allow for a 2.5-inch by 2.5-inch advertising space on team jerseys to be sold to sponsors who can then put their logo. The NBA have already experimented with this in the 2016 All-Star game which featured team jerseys with the Kia logo on a the front left opposite the jersey manufacturer’s logo.

Teams will have to sell this space on their own and will have to put half of the revenue generated in the league’s revenue sharing pool. According to industry estimates, this initiative will generate $150 million in additional annual revenue. Obviously, teams with a more global presence and probable playoff appearances will end up selling the space for higher rates, but that being said, this will help do wonders for some smaller, less successful teams.

Financially speaking, this is a welcome addition to the league; however, one also has to analyze what fans are thinking and social media sentiment around this issue is rather divisive. We gather that the the outrage is gathered around two main issues, namely – 

Sponsor logos will be intrusive and will make affect the aesthetics of the jerseys, making them look more like motorsport overalls.
While soccer teams have had sponsor branding on their jerseys for a long time, it makes sense for them considering they have only commercial break during half time. On the other hand, NBA games have more breaks, including timeouts.

While these concerns are legitimate, here are our thoughts on the matter – 

When speaking about aesthetics, one thing that fans have to remember is that this will be a rather small patch and will not be intrusive. Soccer jerseys naturally allowed for significant sponsor branding simply because club logos have traditionally been in the form of small crests placed on the top left of the jersey. Because NBA jerseys have never accounted for significant branding before, it would mean that the team’s branding would have to be reduced. And that is not something that any team is going to stand for, simply because teams have been present for a long time during which, they have built up a significant amount of brand value. Any major change to jersey designs would result in a drop in that value and that’s not what any team wants. So fans can rest easy that the addition of a small patch will be done tastefully and will definitely not result in the jersey looking like motorsport overalls. 

Secondly, ask any person who is a fan of both soccer and basketball (and we have a few within BWA), basketball is definitely a much easier sport to watch either live, or on the television, simply because the commercial breaks allow for more opportunities to get up from one’s seat and not miss out on the in-game action. The risk of leaving one’s couch to fetch a cold one from the fridge is definitely a lot higher in soccer.

Lastly, if fans are still worried about having their team jerseys with logos stitched on, they have to remember that the NBA’s merchandise division will still be selling the jerseys without the patches. The jerseys with the sponsor branding will only be available through the teams’ official store.

The final word: Change such as this has always been inevitable and in time, the fans will get used to it and will grow to accept it. And to this, we’d like to give the example of FC Barcelona. The Catalan soccer team has some of the most loyal and devoted fans amongst all sports teams in the world and had always snubbed jersey sponsorship till 2006 when they signed a deal with UNICEF. As part of the deal, the club also donated €1.5 million to fund, which seemed to appease the purists who were extremely opposed to the deal. After this deal expired, the club signed a deal with Qatar Sports Investment worth €150 million. This decision was met with surprisingly little opposition from the club’s fans. Thus, in time, this phenomenon will also gain acceptance from the league’s fans.

The Meteoric Rise of eSports

Why would anyone want to watch someone else play a computer game? That’s the questions that a lot of sport marketers may have asked themselves when first witnessing the advent of professional gaming tournaments, or as the industry calls it, eSports. The answer may lie in the ‘professional’ part. 

For example, if you are a lover of soccer and play it in your spare time. Would you still follow the games of your favorite professional team on the TV? Would you try to watch them if they were playing in your town? If your answer is yes, then you understand the sentiment behind why so many millennials flock to arenas or tune in to watch their favorite professional gamers practice their craft. Gaming at the highest levels requires an average of 200-300 mechanical actions per minute coupled with critical thinking, quick decision-making and seamless team communication and strategizing. 

Now that we’ve gone behind some of the psychology behind this, let’s look at how popular eSports actually are.  In October 2013, Over 32 million unique viewers tuned into the finals of League of Legends World Championships. This figure also includes a sold out crowd at the Staples Center. To put this into perspective, this total viewership figure is more than the combined viewership of the 2014 World Series and NBA Finals. With figures like this, it is safe to say that gaming tournaments are no longer confined to a group of friends having a Counter-Strike LAN party hunching into their monitors whilst consuming unhealthy amounts of Cheetos and Mountain Dew.

A testament to this is the rise in the number of universities in the USA that offer gaming based scholarships. Furthermore, the number of students participating in inter-university gaming events dwarf the number of participants in men’s division 1 basketball, soccer and hockey.

With such impressive stats and major sports networks starting to broadcast professional gaming tournaments, it was only about time that sponsors would start getting in on the action. Brands such as Red Bull, Monster, Coke Zero, Intel, Nissan, and American Express have been sponsoring major eSports events. In fact, even the Obama administration utilized the help of professional gamers to promote the launch of healthcare.gov. 

That being said, there is still a lot of space in the market for other brands to come in. of course, they have to be mindful of the fact that there is still some stigma attached to playing games. Pre-conceived notions about gamer's still exist amongst a large amount people, including parents and peers. But to that we counter and say that we’re in 2016, and nerdy is the new sexy.