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Sports Business Journal: Expect sponsorship problems after league returns

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Old
11-26-2012, 10:39 AM
  #1
LadyStanley
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Sports Business Journal: Expect sponsorship problems after league returns

http://aol.sportingnews.com/nhl/stor...medium=twitter

SBJ story on antsy sponsors.



Quote:
“National sponsors will eventually have to move their dollars because they have to sell soap, beer or whatever,” said Peter Luukko, president and CEO of Comcast-Spectacor, which owns the Philadelphia Flyers and the Wells Fargo Center. “Locally, there’s more loyalty, sponsor-wise, and not as many choices, though obviously we don’t take them for granted.”
...
“If I was a company being courted by the NHL today, or if I was advising a company being courted, I would be concerned,” said Michael Neuman, the managing partner at Scout Sports and Entertainment, the agency for Geico, which has league sponsorship rights, and around 20 complementary NHL team deals. ...

Sponsors have clauses in their NHL contracts granting relief in the event of a work stoppage, reportedly after at least one quarter of the 82-game regular season is not played. Two weeks ago, MolsonCoors, the NHL’s largest sponsor, cited the lockout as one reason for lagging beer sales in Canada. The brewer said it will ask for financial compensation when the lockout ends. Neuman and others credited NHL chief operating officer John Collins, who declined to comment through a spokeswoman, for his transparency with sponsors during this lockout. But despite the open communication, the lockout is now beginning to affect important activation platforms, and may cause NHL licensees to miss the entire holiday shopping season.

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11-26-2012, 12:06 PM
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http://www.tennessean.com/article/20...nclick_check=1

Nashville keeping up contacts with sponsors, trying to find ways of promoting their brands during lockout (including recent "Smashmob").

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11-26-2012, 12:46 PM
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Best thing to come out of the lockout if more sponsors directed their money to minor hockey. I'd be thrilled and maybe excepting the owners were making less. Wish Kraft would make it pernament.

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11-26-2012, 03:06 PM
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“We shut down for a full season and it took us two years to get back to where we were,” said Andrew Judelson, who was senior vice president of sales and marketing at the NHL for eight years, including the canceled 2004-05 season, and is now an executive vice president for WWE. “There was a year of selling and then a year of getting those partners up to speed and activating. The unfortunate thing is that the league had so much momentum over the past several years, and now you wonder how much of that momentum has been extinguished. … The good news is social and digital media allow your sponsors to activate and plan to activate much more quickly and in the U.S., most of the NHL partner activation is during the Stanley Cup playoffs, so that is still very possible.”
Losing one year to a lockout, then 2 yrs to recover/regain that momentum.

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11-26-2012, 03:25 PM
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... ya, and Collins really has his hands full stemming the tide of those who've decided enoughs enough, abandon ship. In order to retain a lot of them, he's going to have to seriously discount fiscal 2013/14 rates & beyond in light of the lost expenditures (and resultant business) made via pre-production in putting together collateral materials of all types by the sponsors and advertisers for the washed out 2012/13 season....

Then theres the whole issue of integrity & reputation. Sales through association. Both the casual & hardcore fan will be slow to return, some deciding to punish not only the league itself through boycott but so too its sponsors & partners. Having worked so hard & to have enjoyed so much success in securing these sponsorships since 05, forget the 2 steps forward 1 step back analogies, this is going to cripple the league & the teams for several seasons to come.

Never mind NBC, CBC & all of the rest of the broadcasters who in a chain of falling dominos' wont be able to get premium rates as a result, while at the local team sponsorship levels, the small to mid-sized businesses, the lockout will have been particularly painful, many unable to commit to continued support as they'd counted on the returns from this year, living hand to mouth, business drying up.

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11-26-2012, 07:29 PM
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Originally Posted by Killion View Post
... ya, and Collins really has his hands full stemming the tide of those who've decided enoughs enough, abandon ship. In order to retain a lot of them, he's going to have to seriously discount fiscal 2013/14 rates & beyond in light of the lost expenditures (and resultant business) made via pre-production in putting together collateral materials of all types by the sponsors and advertisers for the washed out 2012/13 season....

Then theres the whole issue of integrity & reputation. Sales through association. Both the casual & hardcore fan will be slow to return, some deciding to punish not only the league itself through boycott but so too its sponsors & partners. Having worked so hard & to have enjoyed so much success in securing these sponsorships since 05, forget the 2 steps forward 1 step back analogies, this is going to cripple the league & the teams for several seasons to come.

Never mind NBC, CBC & all of the rest of the broadcasters who in a chain of falling dominos' wont be able to get premium rates as a result, while at the local team sponsorship levels, the small to mid-sized businesses, the lockout will have been particularly painful, many unable to commit to continued support as they'd counted on the returns from this year, living hand to mouth, business drying up.

I'd imagine these guys are not happy.

Also, from the section LS posted above:
Quote:
Sponsors have clauses in their NHL contracts granting relief in the event of a work stoppage, reportedly after at least one quarter of the 82-game regular season is not played.
I wonder if the relief is a refund or just that they don't have to pay for the remaining quarters until the season resumes.

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11-26-2012, 07:55 PM
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http://sports.yahoo.com/blogs/nhl-pu...9574--nhl.html
SBJ talking about sales lost from merchandise sales (h/t from Puck Daddy)

Quote:
"Our NHL business is off substantially," said Mitchell Modell, CEO of the 150-store sporting goods chain which bears his family name. "The dollars are small relatively, but the percentages are big. Thank God for the NBA, because it came back strong last year [after that league's lockout] and they are more than offsetting our NHL sales."

Last spring's strong NHL playoffs resulted in impressive sales for NHL-licensed products, especially notable since the Boston Bruins' 2011 Stanley Cup Championship was such a bellwether for the league. Accordingly, year-to-year sales of NHL merchandise for licensed sports ecommerce specialist Fanatics.com increased 14 percent from January into this month. However, sales of those same goods from July through last week on Fanatics.com showed a 14 percent decrease. Fanatics operates ecommerce for the league, but those totals do not include sales on NHL.com.

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11-26-2012, 07:58 PM
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Good thread. Yet another reason why this all is so completely, over the top, pointless and destructive.

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11-26-2012, 08:31 PM
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Not too surprised, NHL is going to take a hit in some form sponsorwise when they play again-particularly if they lose a 2nd season in 7 years. Sponsors are there to make money, and if one of their partners keeps doing things that cut into/interfere with contracts that hurt their ablity to make money, they won't be partners again-or for a lot less.

I think this is maybe one of the more underrated ideas-the fans coming back/not coming back always gets discussed, but where NHL makes the REAL money-you don't have sponsors, you will have a hard time funding product, and I expect if NHL does lose another season, many will tell NHL to "take a hike"

I think it will be a long time before NHL gets to 3.3 billion revenues again, IMO they're pretty close to killing the golden goose.

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11-26-2012, 10:16 PM
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I see on Twitter this evening that the Sharks hosted their sponsors and suite holders at a bocce bowling event (complete with mascot, broadcasters, coach, GM and a number of former players).

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11-26-2012, 10:28 PM
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Quote:
Originally Posted by LadyStanley View Post
I see on Twitter this evening that the Sharks hosted their sponsors and suite holders at a bocce bowling event (complete with mascot, broadcasters, coach, GM and a number of former players).
.... thats astute. San Jose' has always been a pretty well run organization, community minded, responsible, appreciative of the support they receive. I wonder how many other teams might be engaged in similar activities? I suspect not many. There was a report out of Toronto in early September that Collins and some of the leagues brass met with their Canadian sponsors and advertisers, offering reassurances, optimism that it would soon be over & business as usual. Over $100M in commitments sitting around the table.

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11-26-2012, 10:59 PM
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I see the loss of sponsorship deals and national TV coverage as the reason the NHL will boot Bettman. I am sure they were prepared to lose about half of a season, but they have now done real, lasting damage that will lose them money over the course of several years and will prevent making more money from said sponsors. The NHL has essentially cut off their nose to spite their face by showing sponsors that they are willing to lock out players and cancel big market games and they cant be counted on or trusted.

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11-26-2012, 11:22 PM
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Quote:
Originally Posted by Tinalera View Post
I think it will be a long time before NHL gets to 3.3 billion revenues again, IMO they're pretty close to killing the golden goose.
Hence the reason the league won't accept delinkage...

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11-28-2012, 07:06 PM
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Washington Post: Fans, business partners might not return

http://www.washingtonpost.com/sports...f15_story.html

Quote:
Given the current economic climate, along with eroding attention spans and vanishing goodwill, O’Hara believes that any approach taken to win back fans this time around will require more than simply thanking them for sticking with the NHL.
“There will have to be financial incentive for fans to come back, whether free tickets, events, products,” O’Hara said. “However they do it, it’s got to be authentic, real, and hit the wallet of the ticket buyer.”
Fans aren’t alone in feeling betrayed; companies that hold sponsorships and corporate ticket packages look to maximize the return on their investments. Sponsorship deals include relief clauses for the work stoppage, but that hardly addresses the full concerns of business partners.
...
As companies look to trim costs, ticket and suite purchases for sporting events are under greater scrutiny. Spotlight TMS helps roughly 3,000 companies manage corporate ticket purchases. According to CEO Tony Knopp, a quarter of those businesses are seeking to reduce their budget. The lockout could make it an easy decision for companies to not re-up on a block of seats or luxury suites.
“Business continues, whether it does for the NHL or not. Competition among corporations continues, and so no company is sitting around, waiting to entertain customers until the NHL comes back,” said Knopp, whose company also works directly with eight NHL teams to help manage corporate sales.
“The overall amount being spent hasn’t changed, according to our data, they’re just spending it elsewhere,” Knopp said. “The league is playing Russian roulette with this, because who’s to say those companies will be there when hockey comes back?”
http://nhl-red-light.si.com/2012/11/...brand-suicide/
Quotes above article; headline: NHL on the road to brand suicide



More proof that individual fans and business may choose to walk away or will take a lot of persuasion to return.

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11-28-2012, 08:13 PM
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Quote:
Originally Posted by THW View Post
I see the loss of sponsorship deals and national TV coverage as the reason the NHL will boot Bettman. I am sure they were prepared to lose about half of a season, but they have now done real, lasting damage that will lose them money over the course of several years and will prevent making more money from said sponsors. The NHL has essentially cut off their nose to spite their face by showing sponsors that they are willing to lock out players and cancel big market games and they cant be counted on or trusted.
Bettman does what he's told to do by the owners. I don't get why people don't understand this.

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11-28-2012, 08:22 PM
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These are billionaire owners imagine the political connections to companies who sponsor there all connected.The only way the league will loose sponsorship is if the fans turn away from the league in big way.If people watch your sport sponsorship will grow and the amount you can charge will grow.The one danger the league has if there is an option for players too go-another league or a new formation of a league

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11-28-2012, 08:27 PM
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Originally Posted by chizzler View Post
Bettman does what he's told to do by the owners. I don't get why people don't understand this.
Pretty silly of the owners to pay a guy 8 million a year just to do what they tell him, don't you think.

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11-28-2012, 08:34 PM
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Originally Posted by chizzler View Post
Bettman does what he's told to do by the owners. I don't get why people don't understand this.
More accurately Bettman needs the support of 8 owners or 27% of them.

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11-28-2012, 08:36 PM
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Originally Posted by Stix and Stones View Post
Pretty silly of the owners to pay a guy 8 million a year just to do what they tell him, don't you think.
Its actually $9M and Bettman definitely advises the owners, he just needs 8 to follow for total control.

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11-28-2012, 08:40 PM
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This doesn't help the NHL with sponsors either

“The league has become known for lying to its fans, to its sponsors,” said Ed O’Hara, senior partner of New York-based SME Branding, which helped devise the strategy for the NHL eight years ago and still counts the league among its clients.

Excerpt from this article.

http://www.washingtonpost.com/sports...f15_story.html

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11-28-2012, 08:43 PM
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Originally Posted by thom View Post
These are billionaire owners imagine the political connections to companies who sponsor there all connected.The only way the league will loose sponsorship is if the fans turn away from the league in big way.If people watch your sport sponsorship will grow and the amount you can charge will grow.The one danger the league has if there is an option for players too go-another league or a new formation of a league
These billionaire owners may have connections, but sponsors aren't going to waste their marketing/advertising dollars on a partner they can't count on.

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11-28-2012, 09:20 PM
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NHL deserves it.

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