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MKTG Insights: Key Takeaways from the 2014 PrimeTime Sports Management Conference

MKTG Insights: Key Takeaways from the 2014 PrimeTime Sports Management Conference

It was a sentiment echoed consistently at the 2014 PrimeTime Sports Management Conference: the sponsorship and sports business ecosystem in North America is reaching news levels of sophistication, demanding industry professionals to bring increased discipline and rigour to their craft.

New technologies, intense competition, a changing media landscape, and greater levels of influence afforded to leagues, teams, and athletes to have a crossover impact on society are all forcing those in #sportsbiz to be more strategic than ever before; more strategic with their dollars, their ideas, and their talent.

Conferences like PrimeTime represent rare continuing education opportunities to unite and galvanize an industry to share best practices across industry leaders, while simultaneously breaking down the barriers to entry for students and young professionals.

MKTG shares key insights from the 2014 PrimeTime Sports Conference most relevant to sponsorship professionals.

1. A Focus on Jersey Sponsorship: One of the most frequently debated topics at this year’s conference was the notion of jersey sponsorship in the Big Four North American professional sports leagues. While some panelists referenced a battle for the "soul" of sport and argued that jerseys are the last pure and unbranded frontier, the overwhelmingly majority of panelists referred to jersey sponsorship as a matter of when, not if. The jersey stands for history, passion, and community – motivating forces for why brands enter sponsorship in the first place. Therefore, rightsholders must proceed with caution. . A corporate logo on jerseys – some hypothesized – may dilute overall value in a property. Matthew Shuber, VP – Business Affairs and Legal Counsel with the Toronto Blue Jays pointed to perhaps the strongest sports brand in North America: his AL East competitor New York Yankees. The Yankees, Shuber noted, have no stadium naming rights deal despite being able to make the most lucrative deal in MLB history should they choose to sell the asset. He argued that the unbranded stadium is a contributor of value to so many other revenue streams and part of what drives fan passion. A naming rights deal – while undoubtedly driving lucrative transactional value – may in fact have a more complicated impact on the property’s prestige. While Shuber has raised valued points, it is worth noting that a decision of this magnitude would be made at the league level, with inputs from teams of varying market sizes. Teams that do not have the historical prominence of a team like the New York Yankees may be more inclined to seek out additional sources of revenue. Others pointed to complications around merchandising and how the buying behavior of fans might change at the retail level should jerseys become overtly branded. In sum, regardless of where sponsorship professionals stand on the matter, one premise is universal: the topic requires a more nuanced explanation than simply throwing out a potential revenue figure.

Gary Bettman, Commissioner of the NHL insisted that the league would be "dragged there" but that they would not initiate the trend. Perhaps the NHL will apply a test and learn approach by studying the NBA, where Commissioner Adam Silver has spoken of jersey sponsorship as a likely scenario and is beginning to test corporate advertising on D-League jerseys (Chase Bank recently became a jersey sponsor of the New York Knicks’ NBADL affiliate franchise). Given activity in the marketplace, sponsors, properties, and agencies must all begin to articulate how they will strategically anticipate and react to this paradigm shift.

2. Discipline Is Key to Success in Athlete Endorsements: The "Player Agents Roundtable" placed a particular emphasis on various strategic approaches athletes can take towards brand-building and entering marketing partnerships. All panelists referenced the need for athletes to be selective in their endorsement deals and choose partners that share their vision for their long-term brand positioning. More than ever before, athletes are properties. They face similar challenges between balancing short-term revenue bias, and long-term strategic discipline. With athletes becoming bigger, faster, and stronger, injury risks are amplified. With shorter career lengths, athletes often seek to take on as many partners as possible. Agents are in many respects the gatekeepers of not just an athlete’s contract status but their brand as well, and must be increasingly sponsorship-savvy or pivot their firm’s to become more multi-service agencies where athletes can one-stop shop for all of their professional services. Given the Canadian Hockey League’s recent string of incidents surrounding inappropriate usage of social media amongst players, the panel spoke to the importance of advising athletes on social. While digital presence can contribute greatly to an athlete’s overall reach and resonance and drive sponsor interest, it can also quick erode value. Athletes entering professional sports in their teens that grew up in a digital age need greater support from their camp on channeling their social-media savvy for good. The onus does not just rest on athletes and agents. Corporate sponsors must protect their investments in young stars through due diligence and coaching.

 3. Preparedness Prior, Flexibility During and Research After Identified as Keys to Developing Corporate Partnerships: MKTG President & CEO Brian Cooper moderated a panel on "Developing and Maintaining Corporate Partnerships" that included MKTG clients Jacqueline Ryan of Scotiabank and Kim Saunders of Canadian Tire, as well as Mark Ditmars of the Toronto Blue Jays. The panel was a rich discussion on how properties and sponsors can plan for success at all phases of the sponsorship continuum – before securing partnerships, optimizing success mid-deal, and planning for renewals. Preparedness and doing your homework was identified as a key success indicator for sponsors and properties. Ryan spoke to the fact that properties must take advantage of the fact that they operate in an age of free information, where the strategies and objectives of a sponsor are often available in the public domain. Ryan noted that, "for sponsors who broadly activate, their strategy is not a secret." Properties must do their research to anticipate the strategic direction of a prospective sponsor prior to pitching them.

After partnerships have been secured, all panelists spoke to the importance of flexibility. Saunders was quick to highlight that Canadian Tire renamed their sponsorships department their "Partnerships" department, to showcase the importance of relationship-building. The importance of partnership is crucial in a dynamic business landscape, where business needs can shift in real-time, leadership changes can occur, and quite simply, as Saunders pointed out, "sometimes programs simply don’t resonate with consumers the way we thought they would." Properties and sponsors must work together to swap out assets and build activation plans that evolve in lockstep with a brand’s strategy. Saunders also highlighted the importance of sponsorship as a tool to showcase organizational values to employees.

Finally, both sponsor and property representatives on the panel spoke to the importance of leveraging data as a proof-point in decision-making, specifically during renewal periods. Ditmars referred to the role of research at the Toronto Blue Jays as "the gift that keeps on giving", serving as 3rd party validation of the value provided in the Jays property. Conversely, Ryan noted that while research is an invaluable tool, it can reveal poor performing properties or portfolio inconsistencies, forcing sponsors to have difficult conversations around exiting partnerships. Sponsors and properties must prepare and plan for less than ideal results.

The 2014 PrimeTime Sports Management Conference provided a 360-degree viewpoint of the sports industry, constantly drawing back to the business implications of emerging trends. Even on-field issues like player safety and analytics have a crossover impact on fan engagement. On topics like concussions, corporate sponsors are being challenged to articulate an opinion. Across the #sportsbiz community, nothing exists in isolation, and industry professionals are required to speak intelligently on areas outside their day-to-day portfolio, reinforcing the need for a cross-functional understanding of the sports landscape.

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