Sports & Entertainment Marketing Mrs. Wilson Licensing Sports & Entertainment Marketing Mrs. Wilson

LICENSING: What DOES it mean? An agreement that give a company the right to use another’s brand name, patent, or other intellectual property for a royalty or a fee Licensor Is the company or individual granting the license for a fee in this legally binding contract Licensee Is the company or individual paying for the rights to sue the licensor’s name or property

Licensed Products In sports marketing, a company may pay a fee to use a league’s, team’s or individual’s name, image, or logo on a product or on its packaging Sports figures on a box of cereal or T-shirt, you know that a company is paying a fee to that sports figure or team (licensor) Ex: NHL web site will show the types of licensing deals

Mutual Advantages

The Products Licensing agreements can apply to just about any product imaginable. Apparel, key chains, toys, sports equipment, food products, credit cards, video games, and household items

Merchandising Licensed Goods It is available through many channels of distribution Department stores, chain stores, league-sponsored retail outlets, Internet Some own their own retail stores Sweepstakes and contests are run by a sponsor, with the prize being tickets to the sporting event

Merchandising Licensed Goods Sponsors provide promotional support Some licensed products are used as promo incentives for buying a product Sports Illustrated: You may receive a free video of that year’s most celebrated athlete. The video is the licensed product.

Two Forms of Licensing: Sponsorships & Endorsements What is the world’s most recognized logo?

Olympic’s Five Rings….

Companies Pay Top $$$ They pay for the right to be identified as one of the sponsors Agreements are made called sponsorships or endorsements

Sponsorships Promotional vehicles that financially support sports events All major sports organizations use sponsorships

Importance of Sponsorships Exposure & Free Publicity Olympics—exposure is international Research is done to measure the impact of sponsorship programs Can you name a product or service that you associate with a sports figure?

Sponsorship Types Can be flexible Can sponsor a team for a length of time or just an event Just portions of an event—halftime sponsor Signage--signs at a stadium Hoods / Uniforms--NASCAR Virtual Boards Floorboards Scoreboards

Premium Sponsorship Two examples are entitlements and product exclusivity Entitlement: Occurs when there is one major sponsor for an event Ex: NASCAR signed a 10-year contract with Nextel (replacing who?? And why?) Ex: PGA grants entitlement sponsorships for almost all of its schedule of its tour events (Buick Invitational, Sony Open, AT&T National Pro-Am) Product Exclusivity: Only one product in a product category is granted sponsorship. Ex: Coca-Cola sponsors the Olympics, therefore only Coke can be sold at the Games.

Evaluating Sponsorship Effectiveness Why sponsorship works affinity marketing Define affinity— An attraction to or liking for something Relationship/Kinship Why it sometimes doesn’t work ambush marketing Define ambush— To attack

Ambush Marketing

Examples of Ambush Marketing 1984 Olympics: Kodak sponsors TV broadcasts of the games as well as the US track team despite Fuji being the official sponsor. Fuji returns the favor in kind during the Seoul 1988 games of which Kodak is the official sponsor. At the 1992 Barcelona Olympics Nike sponsors press conferences with the US basketball team despite Reebok being the games’ official sponsor. In the greatest ambush marketing feat of all time Nike’s man Michael Jordan, Air Sponsorship himself, accepts the gold medal for basketball and covers up the Reebok logo on his kit.

Nike’s Ambush The 1996 Atlanta Olympics is still seen as the ambush of all ambushes. Saving the US$ 50 million that an official sponsorship would have cost, Nike plastered the city in billboards, handed out swoosh banners to wave at the competitions and erected an enormous Nike center overlooking the stadium. The tactics devastated the International Olympic Committee’s credibility and spooked other organizations such as FIFA into adopting more assertive anti-ambushing strategies.

Endorsements This is a statement of approval of a product, service, or idea made by an individual or organization speaking on behalf of the advertiser Usually involve celebrity figures or a public figure

Entitlements Occurs when there is one major sponsor for an event. NASCAR signed a 10-year contract with Nextel to be its sponsor. Benefit is exposure to the 75 million fans in over 100 countries. Also facility entitlements through which a company purchased the promotional rights to an entire stadium.

Product Exclusivity Another premium sponsorship whereby only one product in a product category is granted sponsorship. No other competitor’s products can be sold or promoted. “Pouring rights” at our school is an example.

Assignment (if time permits) Name two forms of licensing and briefly describe them. How do sponsorships benefit the sports organization and the sponsor?