1 Objectives 1 To explain sports sponsorships 2

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Objectives 1. To explain sports sponsorships. 2. To examine sports endorsements. 3. To discover the relationship between sports sponsorships and endorsements. 4. To assess the future of sports sponsorships and endorsements. 2

Main Menu • Introduction • Sponsorships • Endorsements 3

Introduction 4

Sponsorships & Endorsements • Are two types of licensing • Can be considered a part of event marketing • Tie a company’s name or product to a particular identifiable figure, place or event Licensing- an agreement which gives a company the right to use another brand’s name, patent or other intellectual property for a royalty or fee Event marketing- all activities which are associated with the sale, distribution and promotion of a sport or entertainment event 5

Sponsorships & Endorsements • Occur globally • Were worth approximately $17. 2 billion in North America and $46. 3 billion globally in 2010 • Serve as an extra source of income for athletes, coaches and team owners • Are meant to increase revenue of the business paying for the sponsorship or endorsement 6

Sports Agency • Is an organization which specializes in marketing and managing sports events, sports teams and professional athletes • Are composed of sports agents • Help companies coordinate sports-related or sport-sponsored events • Provide professionals to help athletes, coaches and teams negotiate pay, endorsements, sponsorships, etc. Notable Sports Agencies- Wasserman Media Group, Creative Artist Agency, International Management Group and Octagon 7

Sports Agents • Handle contract negotiations with an athlete, team and corporate sponsors – these negotiations can include the following: § endorsements, licensing agreements, speaking engagements and personal appearances • Are responsible for meeting with team owners, managers, coaches and other individuals to promote a client 8

Sports Agents • Need to be knowledgeable regarding investments, business management, financial and risk analysis and sport trends • Should have excellent communication and negotiation skills • Are in constant contact with clients 9

Common Activities for a Sports Agent • Meet with athletes, coaches, team owners and managers • Draw up contracts and negotiate settlement offers • Travel to represent clients in contract negotiations • Recruit and market his or her services in various sports • Coordinate photo shoots, sponsorships and endorsements 10

Benefits of a Sports Agent • Help keep clients focused on the sport rather than the business • Have an extensive network of contacts • Knowledge of the laws and regulations of contracts, sponsorships and endorsements • Serve as a guide for clients’ long-term financial success 11

Sponsorships 12

Sponsorship • Is the promotion of a company in association with a property or event • Generates funds for all facets of sporting venues • Is designed to benefit both the sponsor and the sponsored • Helps increase a company’s branding Branding- the process of forming a mental association with a company or product 13

Sponsorships • Can be flexible – company can sponsor all or portions of a sporting event § example: Ø“This half-time performance is brought to you by…. . ” Ø“AT&T® Player of the Game…. . ” Ø“American Airlines® Arena” Can you name a company who has a sponsorship like the ones mentioned in the example? 14

Benefits of Sponsorships • To the sponsor: – improve sales by creating interest in products and/or services – generate brand awareness – enhance image through association with athlete, team or event Brand Awareness- the ongoing effort of sponsors and advertisers to keep their brand or product at the forefront of fans’ minds 15

Benefits of Sponsorships • To the sponsored: – help pay costs and expenses – raise standards – increase status In 1999 Fed. Ex Corp. ® agreed to pay the Washington Redskins™ $7. 6 million per year for 27 years to for the rights to name the stadium Fed. Ex® Field. 16

Types of Sponsorship • • Signage Entitlements Facility entitlements Product exclusivity 17

Signage • Is any kind of graphic created to display information to a particular audience • Can be located anywhere it can be seen such as on the scoreboard, floorboards or rafters • Provides direct advertising for the company if a game or event is televised and the sign is shown 18

Example of Signage NASCAR® offers several different opportunities for signage sponsorship. Companies can purchase the rights to place their logo, slogan and/or colors on various parts of the car in the race as well as around the track, on the driver’s suit and the pit crew’s uniforms. Home Depot®, Old Spice®, Lowe’s® and Wal. Mart® are just a few of the companies which sponsor cars. 19

• Are the association of a company’s name with the name of an event or facility in exchange for money or other considerations • Occur when there is one major sponsor for an event • Provide a clear link to the sponsor direct advertising to the sponsor Entitlements • Are the association of a company’s name with the name of an event or facility in exchange for money or other considerations • Occur when there is one major sponsor for an event • Provide a clear link to the sponsor thus providing direct advertising to the sponsor 20

Example of Entitlements • PGA® has entitlement sponsors for a majority of its tournaments – the sponsor’s name appears in the name of the tournament – The Buick® Invitational, The Outback Steakhouse® Pro-Am and The Wachovia® Championship are just a few of the tournaments with entitlement sponsors 21

Facility Entitlements • Occur when a company purchases the promotional rights to an entire stadium • Have become a popular way for companies to gain publicity • Offer publicity to the company when any event is held at the facility Raymond James Financial®, the stadium entitlement sponsor for the hosting venue of Super Bowl XLIII in Tampa Bay amassed an overall exposure value of $37. 3 million from the media coverage leading up to and following the big game. 22

Example of Facility Entitlements • Many NFL® teams play in stadiums which have facility entitlements • Reliant® Stadium in Houston, Heinz® Stadium in Pittsburgh and Lucas Oil® Stadium in Indianapolis are just a few of the stadiums with facility entitlements 23

Product Exclusivity • Occurs when only one product in a product category is approved for sponsorship • Prevents other companies from advertising or selling their product at the event • Ensures a company makes a profit from their product being sold 24

Example of Product Exclusivity • The Olympics have many official sponsors which use product exclusivity • Coca-Cola® is the official drink of the Olympics meaning only Coke® products are sold in Olympic-sanctioned stores • Kodak® is the official camera of the Olympics therefore only Kodak® cameras would be sold at the Olympic stores 25

Endorsements 26

Endorsements • Are statements of approval concerning a product or service by an individual or organization on behalf of the producer • Generate publicity through the use of an individual’s or organization’s celebrity in an advertisement • Provide familiarity and credibility to a product by making it relatable to a consumer In 2008, Dallas Cowboy quarterback Tony Romo signed a five-year, $10 million endorsement deal with STARTER®, which is believed to be the largest footwear and apparel deal in NFL® history. 27

Example Endorsements • A few of the athletes Nike® has endorsed include Tiger Woods, Le. Bron James and Serena Williams • Hanes® is endorsed by Michael Jordan • Canon® has an endorsement deal with Maria Sharapova • Peyton Manning has an endorsement agreement with Direct. TV® 28

Endorsements • Are highly regulated by the Federal Trade Commission • Require by law the endorser actually use the product at some point in time • Must not be deceptive in nature – it is illegal to produce advertisements with endorsements consumers find misleading 29

Endorsement Factors • • • Name recognition Positive image Successful career Demographic match Similar qualities to the product 30

Name Recognition • Is necessary because if people do not know the athlete, the product might not seem as special or unique – for example: § Who would you be more willing to buy from if you were purchasing a set of Callaway® golf clubs, Phil Mickelson or Bob White? § If you were purchasing a pair of ice skates who would you choose to give their opinion, Michelle 31 Kwan or Sarah Connor?

Positive Image • Is a major factor because athletes who endorse products can be viewed as role models in the public eye – an athlete’s image is one of their most valuable assets – negative publicity can severely damage an athlete’s image – most endorsement contracts include clauses or statements releasing the company from the contract if the athlete’s image changes Negative publicity- anything which places the athlete in a negative light 32

A Successful Career • Is the basis for most athletes receiving an endorsement – players who are successful receive more media attention and therefore are smarter choices for endorsement deals • Can be the basis for a company to create a product line using an athlete’s name – examples include the following athletes with successful careers: • Air Jordan® by Nike • Lance Armstrong Signature Series by Oakley® sunglasses • Dale Earnhardt Jr. has a racing footwear, apparel and accessories line with Adidas® 33

A Successful Career • Can set the stage for endorsements after an athlete retires from a sport – Arnold Palmer has several successful endorsements – quarterback Joe Montana completes personal appearances and works as a motivational speaker 34

Demographic Match • Can be used to reach out to a target market of a product – examples: • in China, many American companies pay basketball player Yao Ming to endorse their products • when Reebok® wanted to amplify its women’s sportswear line it obtained an endorsement deal from Venus Williams 35

Similar Qualities to the Product • Link the athlete to the product thus increasing the impact of the endorsement – for example: • Canon® believes Maria Sharapova’s image reflects some of the qualities of the Power. Shot. TM camera, such as power, precision and beauty 36

Assessment 37

Assessment 1. A _______ is a type of promotion of a company in association with a property or event. A. Endorsement B. Sponsorship C. Relationship D. All of the above E. None of the above 2. Which of the following is not a type of sponsorship? A. Signage B. Entitlement C. Facility entitlement D. Product exclusivity E. All of the above are types of sponsorship 38

Assessment 3. _______ is an agreement which gives a company the right to use another brand’s name or patent. A. Licensing B. Branding C. Brand exclusivity D. All of the above E. None of the above 4. ______ is the process of forming a mental association with a company product. A. Licensing B. Branding C. Brand exclusivity D. All of the above E. None of the above 39

Assessment 5. ________ are statements of approval concerning a product or service by an individual or organization on behalf of the producer. A. Branding rights B. Licensing rights C. Endorsements D. All of the above E. None of the above 6. A sports _______ is an organization which specializes in marketing and managing sports events, sports teams and professional athletes A. Symposium B. Agency C. Network D. All of the above E. None of the above 40

Assessment 7. Who handles contract negotiations for an athlete? A. Coach B. Team owner C. Sports agent D. The athlete E. None of the above 8. If a stadium is named after a donor such as Minute Maid® Park, what type of sponsorship is it? A. Signage B. Entitlement C. Facility entitlement D. Product exclusivity E. None of the above 41

Assessment 9. A sports caster states, “Coca-Cola® is the official soft drink of today’s game. ” Which type of sponsorship is this an example of? A. Signage B. Entitlement C. Facility entitlement D. Product exclusivity E. None of the above 10. Which of the following is not a good reason to choose an athlete for an endorsement? A. Positive image B. Successful career C. Name recognition D. Good looking E. All of the above are reasons 42

Resources • Gilbert, Sarah Jane. “Marketing Maria: Managing the Athlete Endorsement”. HBS Working Knowledge. 29 Oct 2007. 26 Feb. 2008 <http: //hbswk. hbs. edu/item/5607. html> • Heath, Thomas. “With New Stadium, Name of Game Is Money”. 28 Nov 2006. 26 Feb 2008 <http: //www. washingtonpost. com/wpdyn/content/article/2006/11/27/AR 2006112701288. html> • Rovell, Darren. “The Why of the Tiger: Grading Tiger Woods Endorsements” CNBC. 4 Apr 2007. 28 Feb 2008 <http: //www. cnbc. com/id/17952894/> • Rovell, Darren. “Sources: Le. Bron, Nike agree to seven-year deal” ESPN. com. 21 May 2003. 28 Feb 2008 http: //espn. go. com/nba/news/2003/0521/1557489. html • Barovick, Harriet. et al. “Notebook” TIME. 18 Jan 1999. 28 Feb 2008 <http: //www. time. com/time/magazine/article/0, 9171, 990035 -1, 00. html> • “FTC Guides Concerning Use of Endorsements and Testimonials in Advertising” FTC. gov. 28 Feb 2008 <http: //www. ftc. gov/bcp/guides/endorse. htm> • Brock, Catherine. “Sponsorship Marketing” A Framework For Evaluating Opportunity” Brock Communications, Inc. 28 Feb 2008 <http: //www. brockcommunications. com/images/Sponsorship. Marketing. pdf> 43

Resources • (2012). Retrieved September 11, 2012, from Forbes. Com: www. forbes. com • IEG Sponsorship Report. (2011). Retrieved September 11, 2012, from www. sponsorship. com/IEG/files/fc/fcbe 683 bd 2 a 8 -4 f 0 b-9 b 35 -121 a 86 ab 3 a 2 b. pdf • (2009). Retrieved March 30, 2009, from ABC News: http: //abcnews. go. com • Strategic Advisor on Branding Excellence. (20022009). Retrieved March 30, 2009, from Venture. Republic: www. venturerepublic. com 44

Acknowledgements Production Coordinator: Technical Writer: Justin Jones & Megan Mitchell Jessica Odom Project Coordinator: Production Manager: Meghan Blanek & Maggie Bigham Dusty Moore Graphic Designer: Executive Producers: Ann Adams Gordon Davis, Ph. D. , Jeff Lansdell © MMIX CEV Multimedia, Ltd. 45