Next Level Sports Marketing

Mere hours after it was learned that Thiago Taveres had been forced out of his Ultimate Fighter 9 Finale matchup against Melvin Guillard due to an elbow injury, Gleison Tibau has been tapped to square off with Guillard in a lightweight contest on June 20th in Las Vegas.

MMAjunkie first reported the replacement earlier this afternoon.

After losing back-to-back UFC bouts to Tyson Griffin and Joe Stevenson, Tibau (16-6) has bounced back in 2009 with victories over Rich Clementi and Jeremy Stephens.

Anheuser-Busch’s spending on sports properties will be slightly higher this year as the brewer takes advantage of opportunities in the sports industry hurt by the recession.
“It’s slightly up,” Dan McHugh, Anheuser-Busch’s vice president of media, sponsorship and activation, said in an interview. “We’re not talking about dramatic numbers. In this environment … for us to say we’re actually increasing our spend against sports in ’09 is a pretty incredible story.”
Anheuser-Busch, a unit of Anheuser-Busch InBev , historically has been the biggest U.S. corporate sponsor in the sports world, and its combined estimated ad and sponsorship spending last year approached $1 billion.
Anheuser-Busch’s overall marketing budget, excluding what the company spent last summer around the Beijing Olympics, will be slightly off, almost even with what it spent in 2008, said Keith Levy, Anheuser-Busch’s vice president of marketing.
“It is a bit of an opportunity to make your dollars go a bit further as you find other big sports sponsorships or other marketers coming out of certain properties or reducing,” he said, adding that beer and sports go hand in hand.
Anheuser-Busch InBev increased its spending on U.S. advertising by 17 percent last year to an estimated $612.5 million due in large part to the Beijing Olympics, according to TNS Media Intelligence. Of that total, almost $350 million was spent on sports-related TV ads, including $53.3 million on the Olympics.
Also last year, the Anheuser-Busch business boosted spending on global sponsorships, mostly sports related, by about 5 percent from the $360 million to $365 million it spent in 2007, according to research firm IEG.
Numerous companies, including General Motors Corp and FedEx Corp , have cut sports-related marketing as the recession has squeezed their budgets.
The beer sector has been more resilient than other industries and its support is critical to the global sports industry because growth is slowing in most other sectors.
On Wednesday, Anheuser-Busch announced it had agreed to extend Bud Light’s sponsorship of Major League Lacrosse for two years. Terms of the deal were not disclosed.
“Everybody’s pretty much trying to weather the storm with the marketplace conditions,” McHugh said.
“There’s a reason we got to approaching a 50 (percent) share brewer and we’re not going to abandon some of the things that have gotten us there,” he added, referring to Anheuser’s U.S. market share. “We’re going to look for new opportunities.”
Over the last two months, Anheuser-Busch has extended its sponsorship deal with AVP, the pro beach volleyball league, and decided to end its sponsorship of the National Hot Rod Association after this season.
In the last 18 months, it also has renewed deals with the National Basketball Association and National Hockey League, and signed a new deal with UFC, a U.S.-based mixed martial arts fighting organization, Levy said.
One way the brewer has reduced costs on sports sponsorships is to back away from exclusive deals, which IEG said can add as much as an additional two-thirds to the cost. The ratio of exclusive sports deals signed by Anheuser-Busch has dropped to 56 percent today, down from 86 percent in 2004, McHugh said.

Bruce Popko, a senior vice president with IMG, has been named the new senior vice president of business development for the Buffalo Bills.

Popko replaces Pete Guelli, who left the Bills earlier this month, to join the staff of the Charlotte Bobcats.

Popko, who will be moving to Buffalo from Cleveland, was a senior vice president at IMG, overseeing its major golf events. IMG is among the largest sports marketing agencies.

Before joining IMG, Popko was employed by the Cleveland Browns working on the team’s business strategies and partnerships when they returned the NFL in 1998. Popko also worked on sales and sponsorship for the San Francisco 49ers and New York Jets.

The Bills had more than 120 corporate sponsors last year.

“Bruce has a long history of success in both the National Football League and the sports marketing industry and we are looking forward to having him continue the development and growth of our business strategies,” Russ Brandon, Bills chief operating officer and general manager, said in a prepared release.

Popko will start with the Bills early next month. He and his family will be relocated from Cleveland.

Professional sports are suffering a declining number of sponsors due to the recession and advertisers’ reduced budgets, and professional golf is particularly struggling.

The Corning Classic on the LPGA tour is discontinuing the tournament after it is played for the 31st time next month, following a loss of about $500,000 worth of outside sponsorships, according to the AP (via the Desert Sun).

On the PGA Tour, U.S. Bank has pulled out of the Milwaukee event, Ginn Resorts has abandoned a Tour event planned for later this year, and Stanford Financial has decided not to sponsor the tour’s Memphis event.

Even as companies pull out of sports sponsorships, consumers have been increasingly questioning companies that invest big dollars in sponsorships commitments.

Bank of America is one company, however, which is adamant that its sports marketing activities are worth the pricetag. Multimillion-dollar sports marketing deals are worth the investment because for every dollar spent on sports marketing, the company gets $10 in revenue and $3 in earnings, says Bank of America Corp’s CEO Kenneth Lewis.

Another major sports advertiser, General Motors, has pulled back significantly on its sports presence (amidst a general cut in marketing spending) for the last year. The company sat out the Super Bowl and severed its sponsorship of two NASCAR racetracks. And it decided to not renew its partnership with the United States Olympic Committee at the end of its contract last year. Still, GM will not pull back from sports entirely, says Peter Ternes, GM director of communications for sales, service and marketing. “I think we’ll still be there. It may not be at the volume that people have seen before, but we’ll still be a presence,” he says.

SNY and the New York Jets have broken their huddle and inked a multiyear renewal of their programming and marketing partnership deal.

The pact, terms of which were not disclosed, takes effect this Saturday with the National Football League Draft as the New York-based regional sports network will receive deeper access and exclusive year-round coverage of Jets players, coaches and front office executives. In addition, SNY – subject to NFL guidelines — will have the right to distribute content via SNY.tv.

As part of the partnership extension, SNY, the cable home to the New York Mets, will continue to air Jets Post Game Live, which will now feature a new on-field Q & A with a key Jets player immediately following each game. SNY will have priority access to the locker room, including head coach Rex Ryan’s closed-door address to the team. Following Ryan’s weekly press conferences, SNY will provide viewers with live exclusive interviews with the coach.

Other programming will include a revamped Jets Nation, an off-season weekly program that provides fans an inside look at Jets players, coaches, and team personnel; Jets Extra Point, a weekly show that dissects the previous week’s game; and Jets Game Plan, which replaces 1st and Goal, and will focus primarily on previewing the upcoming game.

“We are thrilled to extend our partnership with the New York Jets,” said SNY president Steve Raab in a statement. “The Jets have been a cornerstone of SNY’s programming since the network’s launch, and we’re excited that together we continue to find new ways to take our viewers further behind-the-scenes and closer to the action.”
SNY’s enhanced Jets’ coverage kicks off with the 2009 NFL Draft coverage from Cablevision-owned Radio City Music Hall on Saturday April 25 at 11: 30 am.

Jets Nation: Draft Day 09 will feature unprecedented draft room access, player profiles and live interviews. General manager Mike Tannenbaum and Ryan will contribute live from the Jets draft room in Florham Park, NJ. SNY’s coverage will be headquartered from the network’s street-level studio — located directly across the street from Radio City Music Hall.

In addition to the live interviews, SNY’s two-day Jets draft coverage will feature multiple in-studio guests, including NFL.com senior analyst Pat Kirwan, Jets 2007 team MVP Leon Washington and wide receiver Jerricho Cotchery; in-depth analysis from former Jets Ray Lucas and Greg Buttlle; and commentary from NFL Insider Adam Schein, Jets reporter Steve Overmyer and host Brian Custer.

Grand Island got a $1 million boost from hosting the National 4-H Shooting Sports Competition last June, and state volleyball is yet to come, as are the 7-on-7 football championships.

“Every event brings new money into the community,” said Renee Seifert, Grand Island/Hall County Convention and Visitors Bureau executive director.

Members of the Greater Grand Island Sports Council, a subsidiary of the bureau, will speak on Tuesday night to the Grand Island City Council about the impact of sports marketing.

The presentation will be part of a 7 p.m. study session at Grand Island City Hall, 100 E. First St.

“We’ve seen it continue to grow. It’s not been adversely affected by economic conditions,” sports council Chairman Brian Gallagher said of sports marketing.

“We have successfully recruited, organized and hosted a number of sporting events, providing our area with direct economic benefits through increased motel occupancy, patronage of restaurants and other travel-related income,” he said.

“Due to our success, we are now being asked to host larger and more prestigious events, including the recently announced decision to award Grand Island and Hastings with the 2010 and 2011 NSAA State Volleyball Championships,” Gallagher said.

The volleyball championships had 37,000 paid admissions over the three-day competition last year, Seifert said. That’s expected to provide a significant boost to the local economy.

“It’s retail, food, lodging — motel rooms and campgrounds — gas, visiting other recreational attractions,” Seifert said. “It’s basically everybody in town.”

The same kind of boost was seen during the National 4-H Shooting Sports Invitational last year, she said.

The three-day shooting competition last June had 428 competitors from 29 states. But coming with those competitors were family, friends and coaches.

The result was about 1,600 visitors during the shooting event that contributed just more than $1 million to the local economy, Seifert said.

Gallagher said the sports marketing industry covers everything from traveling baseball, basketball, softball and volleyball teams to high school, collegiate and other special events.

Grand Island has quality facilities that can host a wide variety of events — horse shows, shooting, bowling, golf, wrestling, soccer, softball and even water dog trials, just to name a few, Seifert and Gallagher said.

“We just feel with the centralized location we have and the quality of facilities we have … we have something to offer,” Gallagher said.

Palm Beach County’s tourism leaders are proposing a $3 million “stimulus” plan they hope will quickly lure tourists and ease the financial bleeding their agencies have faced as a result of dwindling revenue from a tax on hotel stays.

The county’s tourism agencies, including the Convention and Visitors Bureau, Cultural Council and sports and television commissions, want to pull the money from their reserve accounts and spend it on a marketing and media blitz.

The proposal would set aside money to offer one-time grants to sports groups considering holding their events here before the end of the year. The events could add as much as $7.6 million to the local economy, according to a presentation shown to the county’s Tourist Development Council last week.

The agencies also plan to ramp up electronic marketing and advertisement in trade publications.

The money would be spent by Sept. 30 in hopes that travelers will start showing up by the end of the year.

Palm Beach County has seen revenue from its “bed tax” on lodging fall by about 15 percent in recent months. Occupancy at area hotels is also down.

The county’s tourism groups rely on the tax revenue to lure travelers.

But they just aren’t coming, and the fewer that come, the less tax money the agencies will receive to try to bring them here.

“This is a real crisis,” said Jorge Pesquera, CEO of the visitors bureau.

He points to Jamaica, where officials have seen an uptick in travelers after spending millions on television ads. In January, the number of people arriving on the Caribbean island was up by 4.2 percent, county tourism officials said.

The county’s tourist council is considering launching its own television campaign to compete.

“We need to look at the cost of creating the footage and how much bang for the buck you will get,” said Deputy County Administrator Verdenia Baker, who oversees the county’s tourism agencies.

County commissioners are expected to discuss a change to county rules that would allow the tourism groups to pull the stimulus money from their reserve accounts at a meeting in May.

In hopes of some immediate relief, the visitors’ bureau this month unveiled a promotion to mark the county’s centennial year that lets travelers stay at some of the area’s best hotels for $19.09. The county was founded in April 1909.

Tourists who stay at certain hotels for two, three or four nights get an additional night for $19.09.

In the last four years, first NASCAR and then the NBA enhanced their revenue portfolios by ending a ban on allowing liquor marketing within their sports. The NFL could be next in line to consider whether the opportunity makes sense for America’s most popular sports league.

As the recession sinks its teeth into leagues and sports properties struggling to generate new sources of revenue, a proposal to change its regulations and permit both liquor and lottery sponsorships is expected to be on the agenda for the upcoming NFL owners meeting, Sports Business Journal reported Monday.

The annual meeting runs Sunday to next Wednesday in Dana Point, Calif.

According to Sports Business Journal, the plan to allow such marketing was approved by the NFL business ventures committee earlier this month.

“There’s definitely opportunity,” Kevin Rochlitz, vice president of national sales and partnerships for the Baltimore Ravens, told SBJ. “Using [team] marks at retail to drive sales would be a whole different piece of real estate for us, if we can get it.”

NASCAR’s ban on liquor advertising ended in 2005 when it made deals with Crown Royal and other spirits brands. The NBA recently permitted its teams to carry spirit brands at retail outlets, in advertising and on camera-visible signage.

Other major United States sports leagues, by comparison to liquor sponsorships, allow both the leagues and teams to market on lottery tickets.

Sports sponsorships are shrinking along with the economy – and many consumers think that’s a good thing. 32% of U.S. consumers say they are paying “less attention” to corporate sponsorships than they were a year ago, and 62% would like to see less spending on sports sponsorships by companies in trouble, per a Performance Research study.

In particular, 68% think companies accepting federal bailout money should spend less on sponsorships.

More than two-thirds (69%) of consumers report they have a “lower approval” of American companies than they did a year ago, and the majority do not believe increased sports and cultural sponsorships will do anything to increase these opinions, writes Marketing Charts.

Only 13% say that increased sponsorship of their favorite sporting event would raise their opinion of corporate America, while 26% reported decreased sponsorship would raise their opinion.61% say that an increase or decrease would make no difference.
20% say that sponsorship of their favorite cultural event should increase to raise their opinion of corporate America, and 20% say it should decrease.
The industry of the sponsoring company also plays an important role in attitudes toward sponsorship, the study found. When asked if they would be more or less confident if a company were to sponsor their favorite sporting event, industries most under fire in the current economy (banks, investment firms, and domestic automakers) were most likely to inspire “less” confidence as a sponsor (37%, 36%, and 30%, respectively). Only about 10% indicated they would be “more confident” by seeing sponsorship from companies in these industries.

When asked about specific corporations and their individual sponsorships, favorable reaction to sponsorship is down. For example, 22% indicated they would have reacted positively to Citibank sponsoring the New York Mets a year ago, compared with 15% today. Identical numbers were shown for Wachovia and the Wachovia (PGA) Championship.

Sports such as the NFL and NASCAR have been feeling a reduction in sponsorships for months. The average price of NFL ads dropped slightly in mid-season to below $400,000, and NBC struggled to sell its last Super Bowl slots, as advertisers like General Motors and Garmin sat out the big game.

GM, a staple of sports advertising, has been pulling back on its sports presence amidst a general cut in marketing spending. In addition to sitting out the Super Bowl, GM severed its sponsorship of two NASCAR racetracks and decided to not renew its partnership with the United States Olympic Committee at the end of its contract.

The automaker has said, however, that it will not pull back from sports entirely. “I think we’ll still be there. It may not be at the volume that people have seen before, but we’ll still be a presence,” says Peter Ternes, GM director of communications for sales, service and marketing.

About the survey: Performance Research conducted this study among random sample of American consumers, ages 18-65, in the last week of February 2009. A total of 1,005 respondents were included in this study.

Budgets for sports sponsorships will be down this year as many companies struggle with declining demand, and even two major brewers — whose industry has held up better than most — do not plan to pick up the slack.

“We all know that we’re facing a tough 2009,” Keld Strudahl, international marketing director for Danish brewer Carlsberg Breweries, said on Wednesday.

Strudahl and a MillerCoors marketing executive told Reuters the beer sector has been more resilient than others, but they are not looking to add to their portfolios of sports deals.

“We’re not going to go out and spend on new activities,” Strudahl said at a conference hosted by IEG, a unit of ad giant WPP Plc (WPP.L) that tracks sponsorship spending.

Carlsberg, with several soccer sponsorships in Europe, spent a record amount on marketing last year, and that figure will drop this year due to fewer planned activities, Strudahl said. Sponsorship of the European soccer championship last year alone cost the company more than $20 million, according to reports.

“It’s very tempting,” he said of the opportunity to sign new, low-cost deals. “There should be opportunities, but it’s also important we clean our own house.”

Carlsberg, whose other brands include Tuborg and Baltika in Russia, has been hurt by weakness in the Russian beer market, where the brewer derives around half its profits, and the weak Russian ruble.

The beer sector’s support is critical to the global sports industry, which also counts Anheuser-Busch InBev (INTB.BR) a major financial backer, because growth is slowing or declining in most other sectors.

In January, IEG said the U.S. recession would lead North American companies to slam the brakes on sponsorship spending in 2009, especially for sports, leading to the smallest growth rate since the research firm began studying such data.

North American companies are expected to increase spending on sports, arts, cause and entertainment marketing by just 2.2 percent to almost $17 billion, IEG said. Last year, spending rose 11.4 percent.