Major Pro Sports Sponsorships To Total $2.46 Billion In 2011 · 2011-09-26 · Blockbuster deals at...

© 2011 IEG, LLC. All rights reserved.

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September 26, 2011 800/834-4850 | www.IEGSR.com

in depth

Major Pro Sports Sponsorships To Total $2.46 Billion In 2011 Blockbuster deals at the sanctioning body level highlight the importance corporate marketers place on pro sports.

Brushing aside economic uncertainty, swings in the stock market and ongoing labor issues, the four major U.S. pro sports leagues and teams are on track to post a 7.9 percent increase in sponsorship revenue in 2011.

total sponsorship spending is expected to total $2.46 billion, up from $2.28 billion in 2010, according to an ieG SR analysis.

the increase is slightly more than the 7.6 percent rise in spending the segment experienced in 2010, and outpaces both ieG SR’s projected 5.9 percent increase for the overall sponsorship industry in 2011 and the 6.1 percent increase for the entire sports category.

Recent deals by companies in the malt beverage and telecommunications categories demonstrate the importance corporate marketers place on pro sports sponsorships and their willingness to sign larger deals.

Case in point: this nBA has reportedly replaced its partnership with t-Mobile USA, inc. with a new four-year, $45 million deal with Sprint nextel Corp. the partnership—valued at roughly $250 million when media commitments and other contractual obligations are thrown in—represents one of the league’s largest deals.

in addition, the nhL earlier this year replaced its deal with Anheuser-Busch inBev SA/nV with a seven-year, estimated $400 million sponsorship from Molson Coors Canada and MillerCoors, LLC. the deal is the largest in the league’s history.

And if that wasn’t enough, the nFL last year replaced MillerCoors’ Coors Light with a new partnership with Anheuser-Busch beginning with the 2011 season. the deal is

Pro Sports Sponsorship Revenue

* Projected© 2011, IEG, LLC. Source: IEG Research

2.46 billion*2011

2.28 billion2010

2.12 billion2009

Estimated 2011 Sponsorship Totals(Including league/tema sponsorship revenue)

© 2011, IEG, LLC. Source: IEG Research

NFL

MLB

NBA

NHL

$946 million

$585 million

$572 million

$356 million



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reportedly valued at double what MillerCoors was paying.

in addition to Anheuser-Busch, the nFL has brought on a handful of other sponsors for the 2011 season. those include Bose Corp.; Marriott int’l, inc.; USAA; and Bp Lubricants USA inc.’s Castrol motor oil.

On the baseball front, Bayer Corp. this year expanded a three-year-old MLB partnership with a new deal on behalf of Bayer Advance Aspirin. the company has sponsored the league since 2008 on behalf of One A day vitamins.



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CAteGORy UpdAte

Extracurricular Activity: Colleges Brush Up On Sponsorship A growing number of colleges and universities are adding sponsorship to their marketing mix.

With more consumers opting for college degrees as a result of the tight labor market, a growing number of public and private four-year schools are using sponsorship to talk up their educational offerings and recruit students.

deals include Ball State University and the indiana State Fair; northeastern University and the MLB Boston Red Sox; and the University of Wisconsin-Madison and the Wisconsin State Fair presented by U.S. Cellular.

that activity follows in the footsteps of Bridgeport education, inc.; deVry inc.; Apollo Group inc.’s University of phoenix and other for-profit colleges, many of which have significantly increased their use of sponsorship over the past several years.

Indeed, sponsorship activity on behalf of nonprofit and for-profit schools has become nearly as ubiquitous as automotive, telecommunications and other active categories, with nearly every pro sports team and community festival reporting a sponsor in at least one of the two categories.

And with the U.S. unemployment rate hovering just south of 10 percent, deal-making should heat up even more as schools compete for the attention of prospective students. total enrollment in postsecondary schools is expected to increase 13 percent from 2009 through 2020, according to the U.S. department of education’s national Center for education Statistics.

Like for-profit schools, nonprofit institutions largely use sponsorship to accomplish three primary objectives: gain a point of differentiation; promote their education offerings; and recruit new students.

College/University Sponsorships By Number Of Deals

© 2011, IEG, LLC. Source: IEG Research

Entertainment 6%

Government 1%

Arts 6%

Conferences/Expos 1%

Causes 8%

Festivals 21%

Associations 5%

Sports 52%



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“All public schools offer a quality education, and you could almost say we offer the same courses,” said Al Rent, director of relationship marketing and community relations with Ball State University. “Sponsorship provides a way to differentiate ourselves.”

the University of Wisconsin-Madison leveraged the Aug. 2-12 Wisconsin State Fair by showcasing its athletic programs, as well as through community outreach efforts. Activities included appearances by its soccer team and blood pressure screenings and cholesterol tests on behalf of the UW medical school.

“The university is well known, but people may not know all of the things we offer,” said Tricia Dickinson, the school’s marketing director, university communications. “yes, we have agricultural classes and a great football team, but they may not know about our arts and engineering opportunities.”

the school also leveraged the tie with appearances by the UW marching band, heisman trophy-winning alumnus Ron dayne and mascot Bucky Badger.

the university pays for the sponsorship out of its alumni association budget, said dickinson. “We are careful to allocate funds appropriately. We do not fund sponsorship with public tax money.”

Sources Ball State University, Tel: 765/289-1241 University of Wisconsin-Madison, Tel: 608/263-2400



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Category Update


ACtiVAtiOn

Online Auction Services Bid On Sponsorship Online auction companies represent an untapped source for sponsorship revenue.

Although they may not have the of-the-moment cachet of Groupon, Gilt City and other daily deal sites, properties should not overlook another online category that is increasingly turning to sponsorship: auction companies.

Most of the category’s recent activity has been driven by vehicle auction providers. that includes ironplanet Motors, LLC, which recently signed a three-year, estimated low-six-figure sponsorship of the Southeastern Conference, and Copart, inc., which has sponsored the nhRA for the past two years. Copart also serves as the primary sponsor of Kenny Bernstein Racing’s nhRA Full throttle drag Racing Series team.

On the media partnership front, proxibid, inc.—a provider of online auctions for more than 2,500 auctioneers—has entered into a strategic partnership with the University of nebraska’s iMG-operated husker Sports network radio platform for the current college football season.

While each company has its own business model, their sponsorship objectives can largely be boiled down to the following three goals:

Reach targeted, tech-savvy audiences. Vehicle auction companies use sponsorship to build visibility in front of people in the market for a used car.

that audience can include both B2B and B2C targets. Copart uses the nhRA to build exposure in front of mechanics and auto enthusiasts, while ironplanet Motors aligned with the SeC to reach college sports fans.

As online companies, auction providers also want to reach active users of Facebook and other social media channels.

For example, Copart is leveraging Kenny Bernstein Racing with the March 31-nov. 14 Ultimate Vip experience Facebook promotion that dangles a trip to Las Vegas for the 2012 Summitracing.com nhRA nationals, a meet-and-greet with Bernstein and driver Brandon Bernstein and other prizes.

Consumers enter the contest by liking the Copart Racing Facebook page.



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“Through this initiative, we are leveraging our relationship with the Bernsteins to elevate the profile of the Copart brand while also rewarding one of our Facebook fans with an incredible, once-in-a-lifetime experience,” said Jay Adair, Copart CEO.

Gain perks to incent new members. Online auction companies frequently use sponsorship to access tickets, behind-the-scenes experiences and other inventory that can be used to draw interest from new members.

For example, ironplanet Motors is leveraging the SeC with a promotion that offers tickets to the conference’s football, baseball and basketball tournaments for consumers who sign up for a free membership.

Access content for auctions. in addition to member recruitment, some companies look for content that can draw interest in auctions.

proxibid is leveraging its tie-in with the husker Sports network by providing fans the opportunity to bid for nebraska athletics memorabilia. The company is donating proceeds from each auction to the TeamMates Mentoring Program, a nonprofit that provides mentors to youth to encourage them to graduate from high school and pursue a secondary education.

“this partnership allows us to help raise awareness about proxibid as well as support teamMates by enabling bidders from anywhere to purchase memorabilia online,” said Ken Maxwell, Proxibid’s director of marketing, in a statement.

Sources Copart, Inc., Tel: 707/639-5000 Proxibid, Inc., Tel: 877/505-7770

Major Pro Sports Sponsorships To Total $2.46 Billion In 2011 · 2011-09-26 · Blockbuster deals at...

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