Richard Weiss, Publisher – Sports Business Journal/World Congress of Sports (April 7, 2011):
What have you found to be the most interesting developments your publication has covered over the last year or so?
The sports industry bounces back from the recession. In many cases. Sports sponsorships, for example, Are as big or bigger than ever before; NFL ratings dominated.
The labor issue is front and center on everyone’s radar as is the NBC/Comcast deal/
Can you give readers an understanding of what the World Sports Congress is, how it came into being and what the Sports Business Journal’s affiliation is with the event?
A couple years after having launched Sports Business Journal, my dream was to build a World Economic Forum (Davos) type event for the sports industry. It made sense to expand our franchise and bring together industry leaders to discuss and debate strategically where the sports industry is heading andalso provide networking opportunities for industry leaders across different sports.
All of the people who attend our World Congress have other conferences they attend that are “sport specific” but the World Congress brings together industry executives across various sports.
Who typically attends?
The World Congress is attended by senior management in the sports industry – league commissioners, team owners and president, network heads, top corporate sponsors, facility owners and operators…
What were the biggest takeways you had from this recent event?
Corporate CMOs talked about the value of sports and social media. Some of the biggest marketers in the industry gathered on a panel to talk about why sports continues to provide a worthy marketing platformfor brands.
The panel featured Reliant Energy CMO Karen Jones; Farmers Insurance Exec VP & CMO Kevin Kelso; Subway Senior VP & CMO Tony Pace; and Coca-Cola North America CMO Bea Perez.
The CMOs all weighed in on how important sports are to their respective brands.
“It’s very important for our brand,” Pace said. “We try to be somewhat surgical with what we do in sports. When we focus on athletes, we pick an athlete first and foremost if they’re a Subway fan. Then you have to look at their short-term growth, long-term potential.”
Kelso provided a different perspective, since Farmers is relatively new to the sports marketplace but made a huge splash earlier this year by agreeing to a $600 million to $700 million naming-rights agreement for AEG’s proposed events center/NFL stadium in downtown L.A. “Sports marketing is a new area for us to participate in,” Kelso said. “It’s been very high-profile for us.” On MLB’s Opening Day, Perez recalled some Coca-Cola history to describe how important sports has been for her brand. “The reason why Coca-Cola went into bottles,” Perez said, “is two gentlemen came to us … and said, ‘We’d really like to be able to drink Coca-Cola at a baseball game.’” She added, “It’s a big part of the fabric of our brand, the DNA.”
WE ARE FARMERS: Kelso took conference attendees a little deeper into Farmers Insurance’s thoughts behind the L.A. stadium agreement. “Just the strength of the announcement really was a powerful thing for us,” said Kelso. He noted that the California-based firm already has seen $3.8 million worth of ad equivalency value just in media from the January announcement, adding that Farmers does not actually pay AEG until it is clear the stadium is going to be built. “One of our goals for the Farmers Field deal, for sure, was to put the brand on
the national stage and let people know who we are,” Kelso said.
On a similar note, Jones discussed the competition Reliant faces in Texas, since the state deregulated the energy industry 10 years ago, which has led to more than 60 companies competing for consumers. “Three things we love in Texas: trucks, our big hair and sports,” said Jones, who also expounded on the various ways Reliant uses its partnership with the Texans to reach fans on Sundays at Reliant Stadium.
The marketers touched on the power of social media, a big theme throughout the two-day conference. “If you view digital and social media as part of the conversation,” Pace said, “you have to continue to push stuff out there.” Pace specifically highlighted endorser Apolo Anton Ohno’s activity on Twitter as a great plus for the Subway brand.
Perez agreed with her Subway counterpart about the importance of social media, while acknowledging that Coca-Cola hasn’t quite figure it out yet. “We believe that will drive purchase, that will drive transactions,” she said. “Today, can I show you a spreadsheet that shows it translates to sales? No, I can’t. … But we believe this is a space we will continue to learn from, and will be important to our business.”
Kelso said social media is a way for Farmers to stand out in the crowded insurance space. “We are doing a lot of things in social media,” he said. “It’s a great place for us to engage with people. I think we’re all trying to figure out what to do with it. … In terms of just promoting it, updating the brand, all that’s working.”
The NFL lockout is forcing corporate marketers to spend twice as much time developing activation plans for the 2011 season, a panel of sponsorship executives said during a session titled, “Sponsorship Value and Innovation: The New Realities of Sports Marketing.”
Marketers are developing both regular and contingency activation plans for the NFL season. It’s an effort that Jeff Dubiel, Pepsi vice president of sports marketing, called duplicative. “It’s extra resources and extra time,” Dubiel said. It is also an effort that could hurt the return on Pepsi’s activation because it has had to water down its NFL-themed retail displays so that they can be switched from an authentic NFL display to a local college football team. Dubiel said, “It dumbs down the authenticity of the program we’re trying to deliver.”
Gillette and Proctor & Gamble are in a similar situation and have reached a pivotal point in NFL activation plans, said Global Sports Marketing Director Greg Via. The company has developed both NFL and non-NFL-related point-of-sale displays, and retailers will make a decision this May as to which one to feature.
Similarly, Visa has been speaking to its member banks to keep them abreast of the NFL’s situation so that they can determine which marketing materials they choose to use this season. Lynch: “Our plans and our hope is that we’re all systems go. …Everyone is hoping like hell it’s going to be reconciled in time. It’s that powerful a property that we are planning as if things are going to happen.”
Anheuser-Busch, which is starting the first year of a six-year deal valued at more than $1 billion, will test the public appetite for the NFL during the lockout by launching a Bud Light promotion against the upcoming NFL Draft.
A-B VP of Media, Sports and Entertainment Marketing Mark Wright said, “We’re all guns ablazing.”
The ever-elusive ROI: Marketers are still struggling to measure return-on-investment effectively, but the recent recession helped them unearth some formulas that work for their brands.
Pepsi has begun measuring a sponsorship’s effect on brand health, how it delivers against key objectives, and whether it is using all of the assets delivered in a sponsorship contract. Dubiel: “We have a disciplined audit process where a couple of times a year we’re going to report out – yes we got it, down to the picture at an NFL stadium. It forces everyone to think a lot harder about the returns and what we’ve signed up for.”
Lynch said that since Visa went public in 2008, the company’s management has been increasingly insistent that he show the value of a sponsorship. Lynch: “I can’t talk to my management now without talking numbers first. …As a global company, are we making money off this investment or not? If we’re not making money, we won’t be renewing this deal.”
P&G’s marketing objectives increasingly focus on what the results of a promotion are at retail, so it has pushed its agency partners to be more creative in designing programs that help move products.
Via said, “We don’t have a good handle on it at all. We know when we run a commercial and that commercial is tied to a property and tied to retail activation and shelf space, we can say, ‘OK. We sold product off that.’ And that’s the best way we’ve found.”
A Champions panel offered reflections, advice on the sports business.
In addition to introducing them during a lunch session yesterday, SportsBusiness Journal/Daily honored this year’s class of “The Champions: Pioneers & Innovators in Sports Business,” during a panel discussion at the end of the day.
The five recipients — former WNBA and USA Basketball President Val Ackerman; former PGA Tour Commissioner Deane Beman; IMG Media Exec VP Barry Frank; ESPN Founder Bill Rasmussen; and Premier Partnerships Chairman Alan Rothenberg — reflected on their years in sports and how the industry has evolved.
Each panelist addressed their many accomplishments, and what made them successful. Beman said, “If you play golf, you know you fail more than you win. … I think I was successful because I wasn’t afraid to fail. I wasn’t afraid to advance an idea that might be difficult.”
Rasmussen also cited not fearing failure. “I never really accepted no for an answer,” Rasmussen said. “I was never afraid to fail. In fact, ESPN got started because I got fired from my job at the Whalers.” He added, “You really have to trust your instincts, your passion, your energy.”
Frank recalled his early days in sports business. “A large part of my success was due to that I wouldn’t quit,” he said. “The first big deal I made was for the 1988 Winter Games in Calgary, and I knew there was big money there. … I made about four trips out to Calgary to convince (the IOC) that I could get them more money than they could get themselves.” Rothenberg chimed in, “It’s the ability to seize an opportunity that’s
in front of you, then work energetically. … You build a reputation over time as a person who can accomplish great things.”
The panelists engaged in a good back-and-forth about what the future may hold for ESPN. Rasmussen, understandably not wanting to seem too biased, suggested that even the new NBC Sports conglomerate will not be able to challenge ESPN. Frank took it a step further, declaring that no one will unseat ESPN from its chair atop the sports media landscape. “That’s not my opinion,” he added. “It’s a fact.”
In addition to recalling their careers in sports business, the panelists also discussed what’s ahead for the industry. Frank and Rasmussen agreed that college sports could experience a rebirth in the coming years. “With production equipments costs coming down,” Rasmussen said, “technology improving every hour on the hour, even the smaller colleges are going to figure out how to produce games.”
Looking at the current sports landscape, the panelists were asked about which league they would like to run today. Beman said, “I think everyone would like to run the PGA Tour. … There are challenges, but not the problems other sports have.” Frank took a different angle on the question, mentioning the biggest league in North America. “There’s only one league to run today if you want to be powerful, and that’s the NFL,” he said.
Rasmussen provoked laughter from the audience when he said, “Is Bud Selig retiring soon? I don’t want all the problems he has, but it’s a fun job.” The five didn’t bite much when asked about regrets and mistakes in their careers, though Ackerman chimed in with what she deemed a smaller issue. “I regret that I don’t speak any language other than English,” she said. “I function now a little in the international world … and the ability not to be able to converse with people in the downtime — I try to cough up a few pleasantries — I regret that.”
Beman joked, “I don’t have too many regrets as commissioner. I’m a little upset I didn’t make one more birdie in the U.S. Open in 1969. I might not have had to take the job as commissioner.”
The panelists were asked, “What advice do you give to young people wanting to get into the sports business industry?”
Rothenberg: “Knock on every door. Take the first and best opportunity you’re given. Then do a phenomenal job.”
Rasmussen: “Go to the local radio station, go to the local TV station. Make a pest of yourself if you have to, just get yourself in the door.”
Frank: “The job you want to take, for your first job, is anything that has upward mobility as a possibility.”
Beman: “I agree with Barry. You have to want to be in the sports business bad enough to start at the bottom. Jim Nantz is the perfect example — he started as a runner.”
Ackerman: “You have to pick a specialty. If you want to work in PR, there’s this skill set and this career path. If you want to work in marketing, there’s this skill set and this career path. … Your attitude has to be: no job is too small.”
What sense do you have of the bigger issues the various leagues and teams are concerned about over the next couple of years?
Labor, labor, labor!!!
Many leagues are looking to grow internationally – how are leagues working internally and externally to do so?
All the leagues continue to explore international, the NBA leads the pack…
Technology is rapidly changing the way sports are being played. What is your sense of how they plan to utilize those technologies in the near future without “overusing” them to the point they turn fans off to the actual sport?
A huge revenue driver for teams; most are using technology to enhance the fan experience with state of the art video-boards, concessions technology to allow fans to avoid waiting in lines, ticketing technology that allows teams to get the maximum amount for tickets at various points in time, leading up to a game without being stuck with unsold tickets…
How was the economic downturn addressed at this event – do you get a sense teams are feeling better about the economic climate?
The overall buzz was that the economic downturn is behind us…
What is the buzz about the NFL lockout?
Most agree that agreement will be reached before regular season games…
With the various new forms of media growing in importance (blogs, twitter, etc,.) how are you seeing sports teams addressing the need to work with these “non-traditional” but essential media outlets and how does this event address this issue?
For the most part, teams, leagues and other properties, as well as other companies playing in the sports space are embracing social media, some more quickly than others.
All agree that social media is powerful; all agree that social media communication must be authentic; all agree that they continue to grapple with how to monetize social media. But all know and understand that they have to embrace it and experiment with it.