- The Washington Times - Sunday, September 15, 2002

The New England Patriots were fresh off their unexpected Super Bowl triumph in January when a crisis arose that threatened to return them to the ranks of pro football's also-rans.A career-ending injury to quarterback Tom Brady? The loss of a star free agent to another team?
The Patriots' problem wasn't on the playing field, it was on the facade of their new stadium. The naming-rights sponsor for the team's $325 million facility was in the midst of a massive collapse. The stock of CMGI, a technology holding company that lost more than $5 billion in 2001, fell from $163 a share to less than 50 cents.
CMGI's collapse put the Patriots in a tough spot. The team was scheduled to open the stadium on "Monday Night Football" on Sept. 9, and it needed to find a new sponsor and fast. But the economy was soft, and, worse yet, the market for naming-rights sponsors was suffering a pronounced slump.
In less than a year, the Baltimore Ravens, Houston Astros and Tennessee Titans each parted ways with their bankrupt naming-rights sponsors. The Seattle Seahawks and New Orleans Saints couldn't even find a sponsor.
The Patriots ultimately fared better. After a seven-month search, the team signed a contract with Gillette in August. The shaving and battery giant agreed to pay a sum believed to be nearly $100 million to pick up CMGI's contract and put its name on the new stadium.
The deal with Gillette is far more important to the Patriots than simple vanity or a few extra dollars on the ledger. Quite simply, the massive corporate sponsorship meant the difference between maintaining the Patriots' status as a competitive and economic force in the National Football League or slipping back into the ranks of the have-nots of pro football.
"Under previous ownerships, this franchise was consistently at the low end of payroll around the league," said Andy Wasynczuk, Patriots senior vice president. "The attitude of the [Robert] Kraft family is very different, and this new stadium and the Gillette relationship really backs up a lot of our long-term planning and gives us greater wherewithal to go forward. We are in a much better position to be a competitive football team."
Corporate sponsorship, long an integral part of professional sports, has never been more important, pervasive or influential than it is right now. One need look no further for evidence than FedEx Field, the ad-covered home of the Washington Redskins, or events with such wince-inducing names as college football's Insight.com Bowl or NASCAR's Checker Auto Parts 500 Presented by Pennzoil stock-car race. Even last week's death of Johnny Unitas, widely regarded as the greatest quarterback in NFL history, will not deter the Baltimore Ravens from seeking a new corporate name for its home stadium. Tens of thousand of fans unsuccessfully petitioned the club to rename its facility after the Baltimore Colts legend.
Much of the reason is economic: Ticket prices and television-rights contracts no longer show the meteoric increases of years past, but sponsorship revenue continues to march upward. Sports sponsorship amounts to more than $6.4 billion per year among North American-based companies, 41 percent higher than just four years ago.
Part of the reason is technology: New forms of sponsorship, such as virtual stadium ads that are visible only to TV viewers, are cheaper and easier to produce than they were only a few years ago.
There also is a reason that is harder to quantify: Sponsorship also allows teams to craft their own economic destinies apart from prearranged league economic and marketing systems.
"A business has to sustain itself, and there are multiple aspects to what we can now do in the new stadium, sponsorship included," Mr. Wasynczuk said. "We still have our mortgage [on Gillette Stadium], but the ability to go out and create new business and forge our own path for ourselves has been greatly enhanced."
Amid the still-flowing sponsorship dollars, though, teams, leagues and event managers all are having to work harder than ever for their contracts. The overall U.S. advertising market fell 6.5 percent last year the sharpest one-year drop in the industry since 1938 and this year has not brought much improvement.
"There's still some general branding going on, but for most companies, particularly mature ones, it's all about sales. It's all, 'Show me the money,'" said Scott Becher, a Florida-based sports sponsorship consultant. "Company demands are very simple these days: Can a sports relationship drive sales, drive the bottom line?"

Refining an age-old concept
Sports and corporate sponsorship have gone together for nearly a century. The Green Bay Packers got their nickname in 1919 from Indian Packing, a local meat-packing company, in exchange for a $500 payment used to buy uniforms and equipment, marking one of the first sponsorships of its kind.
Through the 20th century, stars such as Babe Ruth, Joe DiMaggio and Johnny Unitas hawked everything from cigarettes to shoe polish. Stadium fences were festooned with billboards advertising everything from dish soap to Cadillacs. Dozens of events and awards became rebranded with corporate names.
The core reason was always the same: Sports enjoys a passionate following and represents an unrivaled way to reach the males, who so often tune out other forms of programming.
"It doesn't really matter where the economy is. Prime sports sponsorships will always be attractive," said Richard Irwin, professor of sports marketing at the University of Memphis. "There are few other proven ways to reach that demographic as effectively."
From those relatively modest magazine ads, billboards and broadcast spots ultimately grew that $6.4 billion per year colossus that now includes eight stadium naming rights contracts worth in excess of $100 million, eight-figure endorsement contracts for star athletes and college football's sea of corporate-named bowls.
Only the smallest events in the least-popular sports are devoid of significant commercial involvement.
"Fans have really come now to expect corporate sponsorship at any event they attend or watch on TV now," Mr. Irwin said. "It becomes an added component of an event. Every recent study shows a very strong level of consumer acceptance for this. It feels odd if you see an event without any signage."
No team can compare with the Washington Redskins when it comes to bringing in corporate dollars. The Redskins are the planet's most valuable sports franchise (worth an estimated $845 million, according to Forbes), thanks largely to their power in landing sponsorship dollars.
Owner Dan Snyder has parlayed the Redskins' immense and well-heeled fan base into a powerful sponsorship machine that generates more than $30 million per year. The team holds multiyear contracts with a virtual who's who of corporate America: FedEx, Anheuser-Busch, Coca-Cola and Bank of America, among others.
"The Redskins have been very aggressive and established themselves as an industry leader because of it," said Forbes senior editor Michael Ozanian.
The Redskins also are breaking new ground: Their latest sponsorship deal with Diageo North America, distributors of Crown Royal, Smirnoff and other liquor-based alcoholic beverages, opens another realm largely untouched by most sports teams. The NFL has yet to sign off on the agreement.
Wantonly spending money on sports, however, is a fool's path for many corporations. PSINet, Adelphia, WorldCom and others fell into Chapter 11 largely for reasons unrelated to their eight- and nine-digit expenditures on sports sponsorship. But many such companies also failed to fully leverage their big investments in sports to get a full return on the other end.
"Bells and whistles are becoming fairly meaningless to sponsors, at least smart ones," Mr. Becher said. "It's about sales, and it's about finding a relationship that allows a company to achieve definable targets through its investment. Some companies and some events out there have been too focused on cuteness, and it's come back to bite them."

'It's all changing'
Just as interest in sports sponsorship continues to rise, its effectiveness is being dulled along many avenues. TV ratings are down for nearly every major sport. Stadium naming rights have flattened in value considerably since the go-go days of the late 1990s. Many fans turn off commercials during a game or have technological gadgets, such as Tivo, to help zap them out.
As a result, the last few years have seen an avalanche of new sponsorship ideas designed to reach fans in ways that are zap-proof and geared for top-of-mind awareness.
Boxing agent Joe Lear late last year caused a major stir in the sports industry when he began selling ad space on his fighters' bodies in the form of corporate tattoos. Stretched along the fighters' backs were ink-drawn ads for Golden Palace.com, an online casino. Other companies soon joined. The tattoos washed off after the fights, but often not without a struggle.
The corporate tattoo idea had been joked about in the sports industry for years. Bernard Hopkins, represented by Mr. Lear, made it a reality and brought it into the mainstream when he won the world middleweight title in an upset from Felix Trinidad.
ESPN quickly refused to show any fights in which boxers wore the tattoos. A legal fight with the Nevada State Athletic Commission ensued, ultimately won by Mr. Lear and his clients. Mr. Lear plans to defy the ESPN ban and also is looking to ultimate fighters and other athletes with significant skin exposure to sell tattoo space. More than 40 fighters have worn the tattoos because of Mr. Lear.
"Sports is a much different business today. It's all changing," Mr. Lear said. "What I'm trying to do is give these boxers an opportunity go out and tap into an untapped source of income, take more charge of themselves, and, yes, build a business for myself. We're creating a middle class in boxing, which really hasn't existed."
Other emerging ideas include virtual ads seen only by TV viewers and sponsorship of small segments of sports shows. Virtual ads behind home plate in baseball have been around for several years and advanced to another level during last year's World Series with a larger, more colorful and more advanced set of ads. Other applications include fairways in golf, track surfaces in auto racing and tennis courts.
Comcast SportsNet, the Washington-Baltimore area's regional sports network, last year sold title sponsorship of its nightly reports to Northrup Grumman Information Technology and Baltimore-Washington International Airport. The multiyear deals, reached for undisclosed sums, include standard commercial time, during breaks, but the core of the accords is the large corporate signs in the network studios and frequent on-air mentions of the companies by network anchors.
"We tried this idea first in Philadelphia, and it worked well there," said Comcast SportsNet President Sam Schroeder. "It's a rather valuable piece of real estate and helps provide that extra programming, the value added for the viewer. And for Northrup Grumman and BWI, we have offered them differentiated ad space as well, a way to break through the clutter."
Other new sponsorship ideas were even more simple. The Redskins earlier this year introduced Digital VideoDrop, a computer-based product that replaces the static corporate logos now ubiquitous during post-game press conferences with ones that can change on the fly. The result is a exponential increase in available ad space to sell and a patent pending on the technology for the Redskins. Conceptually, Digital VideoDrop is similar to LED boards becoming common among indoor arenas
"The whole thing is really simple. The [static] banners were becoming a bit cumbersome to keep redoing," said Redskins Senior Vice President Karl Swanson. Creating the ads involves computers connected via software to off-the-shelf projection TVs. "Sponsors can change things in real time. We can change things in real time. We wish we had done this sooner."
Video games are yet another key area of sponsorship growth. In the all-consuming goal of realism, many popular sports titles, including Madden 2003, have many of the same ads seen at the real stadiums depicted in the games. But the inclusion of the ads usually comes as a cost, sometimes tens of thousands of dollars per ad per game.

Bottomless well?
While corporate America continues its love affair with sports, the debate of how much is too much continues.
Few serious bans or rules apply, but some lines have been drawn. ESPN banned corporate tattoos. The Olympics and NCAA insist upon "clean" venues for competition that are free of advertising. Most major sports leagues will not allow corporate logos on team uniforms, except for the garment maker itself.
But few, if any, significant hurdles to the onward march of sports sponsorship, appear on the horizon.
"Our guiding principle has always been enhancing the fan experience," said Bill Squadron, chief executive of SportVision, the company behind the popular first-and-10 line visible to TV football watchers and the virtual ads behind home plate in baseball. "That isn't ever going to change. But these innovations do come with a cost, and some commercial applications may help defray the costs."
Mr. Schroeder, of Comcast SportsNet, said he has not received any complaints about his company's commercial intrusions into the news, and he doesn't expect any.
"How much is too much? I don't know. It's probably like the famous court decision regarding pornography: You can't define it, but you know it when you see it," Mr. Schroeder said. "Each of us has a different tolerance, but, no, I don't think we're there yet."

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