Have you ever imagined watching a sports game through the eyes of the player, or better yet, a team’s mascot?
That futuristic idea is becoming a reality in sporting events as the Sacramento Kings lead the way in integrating technology into sports. Piggy backing on last week’s eSports post, the Kings are also personifying the seismic shift in the way that sports and live events will be seen and promoted for the future. The NFL, MLB, and NBA are all looking towards the future both with consumer wearables and tech innovations. Improving the fan experience and consumer insights is at the forefront of this growing trend of tech-driven sports. It also means a new medium through which teams, players and sports can increase brand awareness and create value.
So how is the Kings’ owner Vivek Ranadive changing the King’s global brand and influence through wearables and his NBA 3.0 philosophy? What does this initiative mean for professional sports and brands?
Over a decade ago, the Kings franchise was the hot ticket in the western conference, but soon fans lost interest. Despite a period of dwindling fans, the franchise has been at the forefront of sports technology beginning in 2007 as the first NBA team on Twitter and having a YouTube channel with more than 18 million views since 2006. This was just the start to their tech boom when Ranadive acquired the Kings Franchise in 2013 and made groundbreaking changes to the future of the Franchise’s culture and direction. It certainly doesn’t hurt that Ranadive is the founder of the real-time data processing software maker TIBCO! Since his leadership, the Kings have partnered with Bitcoin, Uber, Google Glass and TIBCO’s data analysis software, among others. With each of these adoptions, the Kings move closer to putting their fan’s interests first and increasing their reach.
This forward thinking approach is increasing the Kings’ audience and fan experience, but also changing the way we will view sports in the future and how data can improve athlete’s performance. The King’s innovative use of Google Glass for example could change the way sponsors approach athletes with advanced analysis and through a real-life view. This different perspective offers immense opportunity to be added for sponsorships globally, especially with the growing player-spectator relationship. The fan experience is also expanding globally with the King’s app that includes mobile ticketing functions, high speed messaging, and location based offers. With further data analysis, the Kings will be able to quantify their understanding and insight of fans in order to make better decisions for the future of the team, the game, and their brand in the NBA.
With a projected market of 285 million wearables by 2017, sports and technology are moving to the future together. Teams like the Sacramento Kings have left the “old school” of sports and are leading the way in how we view professional sports both on and off the screen. By maximizing social networking, implementing virtual currency, adopting tech innovations, and increasing the fan experience and medium of interaction, sports can create a global brand and reach through technology like never before.
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Have you ever imagined watching a sports game through the eyes of the player, or better yet, a team’s mascot?
Readers, we’re posting a recent Performance Research press release below. We’re all excited to analyze this weekend’s Daytona 500!
Listening To the Fans: Performance Research Announces Groundbreaking Dive into the Conversations Posted From the Grounds of Daytona International Speedway
Performance Research, the world’s leader in sponsorship evaluation, will be introducing EVsdrop, its groundbreaking geo-location based social media analysis platform to collect and monitor all public posts originating from the Daytona 500.
While other social media analytics tools capture the national conversation solely based on keywords and hashtags, the social media insights Performance Research provides will be derived from posts specifically originating from those within the confines of Daytona International Speedway for this weekend’s Great American Race. Never before has this level of analysis been available.
The EVsdrop analysis will collect posts, geographically located within the grounds, in real-time, and will include all social media activity across multiple platforms – regardless of hashtags or language used. Within hours, we will understand which sponsors are dominating the conversations and which are being ignored. We’ll also be providing unprecedented insights into fans’, teams’, and analysts’ immediate reactions to all of the on-site activations and operational issues in addition to all of the race action surrounding the events of the weekend.
For more information on this service, or access to this unique stream of data, (including any requests to receive social media data tailored for your specific needs), please contact Julia at Performance Research before Sunday: EVsdrop@performanceresearch.com.
Insights and analysis from this unique project will be posted throughout the weekend, including a wrap-up following the conclusion of the race.
The proverbial has hit the fan in Hollywood, and sponsors scrambled to evacuate over the Sterling controversy.
Sponsors of the Los Angeles Clippers were quick to strike after an audio recording of team owner Donald Sterling leaked last week containing racially insensitive commentary. More than a dozen corporate sponsors ended or suspended their relationships with the team in the days after this story broke.
Controversies like this one are nightmares for marketers and brand reps. Mercedes-Benz, CarMax, Virgin America, Kia and State Farm quickly put their public relations teams to work, citing the comments as offensive and (most importantly) inconsistent with the views and values of their respective brands. While this step is important due diligence in terms of damage control, cutting ties altogether sends an even stronger message – a sentiment certainly on the mind of NBA Commissioner Adam Silver when he announced that Sterling would be banned from the league for life and likely stripped of his ownership of the team.
The Clippers are one of the most exciting teams in the NBA in one of the largest markets in the country. Corporate partnership with the team has certainly been fruitful and could be again in the future, but swift action on their behalf may prove to be the best move for these aforementioned sponsors. Actions most always speak louder than words, and this situation was no exception.
Some of these companies may still be on the hook for sponsorship dollars, but promptly and publicly cutting ties with the scandal will save them even more in the long run. The longer you hold onto a sponsorship in a situation such as this, the greater the risk for decreasing public sentiment toward your brand. In an instant, years of work to promote brand recognition and loyalty can be negated. These negative associations can be extremely difficult to reverse.
So as a sponsor, are you ready for a scenario like this? Do you have a plan in place to save your brand from its divisive demise?
Performance Research has conducted extensive research on this very topic and presented details of their findings at IEG’s 31st Annual Sponsorship Conference in March.
Once such controversy detailed in the presentation was the Lance Armstrong/LIVESTRONG dynamic after Lance admitted to using performance-enhancing drugs after years of denial. Corporate sponsors including Oakley and Nike severed ties with Armstrong directly, but continue to support the LIVESTRONG foundation’s efforts. PR found that public opinion of Armstrong decreased after he admitted to doping, but the majority of respondents actually had an improved opinion of the LIVESTRONG foundation. In this case, sponsors were able to cut their losses by simultaneously ending their relationships with Lance Armstrong and increasing affiliation with a brand on the rise in LIVESTRONG.
MORE from IEG Presentation: Taking a Stand– How Consumers React When Sponsorship Turns Into Criticism And Controversy
NBA commissioner Adam Silver’s swift and decisive actions regarding Sterling certainly turned the tables and may very well present the Clippers organization in a stronger position than ever. Sponsors now need to rethink their plans to abandon their partnerships with the Clippers.
Both Kia and State Farm will continue to run national advertising campaigns centered on Clippers stars Blake Griffin and Chris Paul. The “Griffin Force” and “Cliff Paul” spots allow these brands to continue to cash in on the success of the team without the risk of a direct corporate partnership with the Clippers organization.
Maybe other sponsors will follow their lead, or simply wait out the storm before rekindling their relationship with the team. We will certainly be watching to see how these brands handle their partnerships with the Clippers in the near future.
As many of you may know, Performance Research founders Jed Pearsall and Bill Doyle have been consistently attending & analyzing the on-site activities at Olympic Games for over 30 years. In fact, Jed’s first Olympic event was “Miracle on Ice”- the legendary USA vs. USSR hockey game held during the 1980 Lake Placid Olympic Winter Games, where Jed’s Mom bought the tickets from a sidewalk scalper for just $25 each.
Since Lake Placid, Jed has attended 13 out of the last 15 Olympic Games (Winter & Summer), with Doyle attending eight of his own. This bi-annual pilgrimage has been a mix of business and inspiration, allowing us to provide observations and insights to sponsors worldwide, while also being reminded of how lucky we are to work in such a fascinating industry.
However, starting with the controversial and antagonistic laws against gay rights propaganda passed by the Russian government, we both felt we could not, in clear conscience, attend these Sochi Games.
Now, following weeks of reports of possible terrorism, U.S. Department of State warnings, reports of the near certainty of computer hacking against any and all devices brought into the country, and most recently the U.S. Department of Homeland Security bulletins to airlines warning of the potential threat of explosive materials being contained in toothpaste tubes, we are convinced more than ever that we made the right choice.
Apparently we are not alone– just yesterday TMZ reported that AB-InBev is not hosting its traditional “Club Bud” party at the Olympics, suggesting that the threat of terrorism is just too large even for corporate America.
While we are disappointed to not attend the Games, we are proud of our integrity that drove the decision. And, we will always question the rationale of the IOC (especially when we could have been headed to competing bid city Salzburg, Austria right now instead of staying away from Sochi). So for this Olympic Winter Games, for the first time in nearly three decades, you will be reading Performance Research updates (now tweets) written from the viewpoint of our couch instead of from the bleachers.
See you in Brazil!
With Nationwide Insurance announcing that it will no longer continue its entitlement partnership with NASCAR’s B-level series, the nation’s top motorsports organization will have to find a new company that is willing to be the one of the major faces of a sport who’s interest has been steadily declining in recent years.
The decision by Nationwide to abandon its sponsorship wasn’t necessarily driven by poor performance. They have actually chosen to increase its overall investment in NASCAR sponsorships by increasing exposure on Sundays, where the fan base is about twice the size of its current Saturday series. Nationwide will be sponsoring up and coming Sprint Cup driver and two-time Nationwide champion Ricky Stenhouse Jr., continuing its TV ad campaigns featuring select Sprint Cup drivers, all while increasing its online media and good will efforts.
For Nationwide, this decision seems like a no-brainer. Several studies developed by Performance Research indicate that there are solid returns to be made from an increased commitment to NASCAR’s top series. Nationwide’s longstanding relationship with NASCAR and its fans acts as a testament to these findings. With that being said, who will be willing to step into Nationwide’s shoes when the sport has been surrounded by so much controversy lately?
One can’t deny the sheer amount of people that consider themselves NASCAR die hards. On average, the Nationwide Series has pulled in about 1.7 million viewers throughout the 2013 season. While these numbers are down from last season, 1.7 million viewers is still a great number to have on a weekly basis over a 10 month season. However, one has to be wary when you see the fact that NASCAR’s ratings have been on a steady decline since 2005, sinking to their lowest level in 10 years
Some consider this downturn in recent interest as a direct result of a 2011 rules change which restricts drivers to only earn points towards one series per season. This means the big time Sprint Cup names that typically draw in fans to the Nationwide Series are no longer a key part of the action each week. Given the one-two punch of a decline in ratings and fewer big name drivers, who knows how long it will take the series to gain traction with its fans again.
And what about the issue of integrity? The recent allegation of race manipulation against the Michael Waltrip Racing team has seriously damaged the competitive spirit of the sport and may spell the end of MWR. NAPA Autoparts has already pulled their sponsorship, with more sponsors waiting until the dust settles at the end of the season to decide if they are willing to continue their efforts. This wasn’t the first time MWR has been caught cheating either… Anyone remember the fuel tampering scandal of 2007?
From the outside looking in, one has to wonder how much of this continues to go unnoticed. While the organizing authority has enforced strict penalties on the team involved in the latest scandal, nothing may be able to make up for the damage done to the public’s perception of the sport.
This news comes in light of NASCAR signing a multi-billion dollar TV contract with FOX and NBC. While these two recently established networks are more than happy to open its doors to so many racing fans, it begs the question, why have ESPN and TNT been so willing to give up one of the only sport that consistently competes with the NFL for viewers each week? Perhaps NASCAR’s fan base isn’t as stable as this new deal would suggest. With NASCAR’s ratings in decline, who could blame the two incumbents for not wanting to pay any additional rights fees in order to renew their contract?
Sports Business Daily released the terms and conditions for NASCAR’s new entitlement sponsorship, expecting the new sponsor to shell out around $30 million a year in rights fees, activation and media expenditures. At this price, NASCAR is guaranteeing unmatched fan loyalty. Our very own Jed Pearsall will attest to the influence a NASCAR title sponsorship will have on consumer behavior. In a previous study on NASCAR fans, he said, “NASCAR fans provide one of the highest levels of brand loyalty and sponsorship support of any one of the hundred or so sports and special events we’ve tested.” In any case, it would be safe to say that any prospective sponsors should carefully consider paying a premium to replace Nationwide as title sponsor of NASCAR’s B-level racing series.
Image Source GFR Racing
Big things have been happening across the pond as October marked the signing of the largest jersey manufacturing deal in history. Manchester United has reportedly signed with Nike for £300 million over the next five years, giving Nike the right to manufacture Manchester United game kits (kits are apparel worn by football players during games) until 2019. This historic deal shatters the previous record held by Spanish football club Real Madrid and sponsor adidas, worth £248 million over eight years.
Not only does Manchester United receive a significant cash infusion, which is likely to be used for signing more star players to their roster, but also included in the contract is the right to sell the jerseys. Sales could generate another £15 million a year, pushing the potential worth of this contract close to £375 million.
The latest partnership with Nike isn’t the only record-breaking deal England’s most commercially successful football club struck this year. This past May, Manchester United worked a deal with Chevrolet for the American car company to become the principal sponsor of the team starting in the 2014/2015 season, replacing insurance company AON. The deal is supposed to run until 2021 and will be worth $559 million.
This deal doesn’t mean the end of AON’s involvement with the club. AON has partnered with Manchester United as the official sponsor of the team’s training facility and practice kits in a $240 million, 8-year deal. They will also assist the club with player analysis and risk management practices. While they were unable to secure the principal sponsorship again, AON’s reinvestment in the Manchester United brand speaks volumes about the marketing power of the world’s largest football club.
The partnership with Manchester United sponsorship solidifies GM’s position in the English Premier League. Chevy has also worked a deal as the official automotive sponsor of Liverpool. The deal with Manchester United did not come without controversy for the American auto brand. GM’s Global Chief Marketing Officer, Joel Ewanick, resigned the day before the Manchester United deal was announced. It has been said that the deal with Manchester United was the breaking point for GM, which asked Ewanick to resign on his own terms.
While there is much doubt in the GM camp regarding the value this sponsorship will bring, they cannot question the global reach their new partnership will extend to them. With over 650 million fans in nearly every country on the planet, Manchester United’s brand is recognized by millions of people all over the world. Receiving that kind of exposure will certainly bring Chevrolet a new level of awareness globally, especially among the 325 million Manchester United fans in Asia alone. Pair those numbers with the current trends in the auto industry outlined by the current KPMG report, and the Manchester United / Chevy partnership seems like a match made in heaven.
It should come as no surprise that Asia is slated to become the world’s next big market for autos. As rapidly developing countries such as China and India begin to witness an increase in the purchasing power for their ever growing middle class, the demand for quality, name-brand automobiles should provide the auto industry with plenty incentive to shift the focus of their global supply chain to Asia. GM has already positioned itself to take advantage of this growth by establishing an Asia-Pacific headquarters in Shanghai, as well as developing several manufacturing plants throughout China, Russia, and India. Three countries that, when grouped together, are expected to surpass the US in automotive sales in the next 5 years.
These moves mark a significant shift in the corporate philosophy of GM, showing that in order to maintain their expansive share in the automotive market, a serious effort needs to be made to get the attention of the people living in developing areas. Although the team at GM recognizes that there is foreseeable future in the Asia-Pacific region, bringing awareness to these people will come at a cost for the American auto giant.
In order to fund their global football initiative, GM has been forced to cut spending on domestic advertising and sponsorships. Last year it was forced to eliminate advertising on Facebook and even cut their ad in the Super Bowl. While their new sponsorship with Man U and the One World Futbol Project paints Chevy in a positive light to footballers everywhere, GM could appear to be neglecting the needs of its own city.
As we mentioned in a previous post, Detroit is desperately seeking a corporate sponsor for its new hockey stadium. However, with a price tag of $650 million, a new stadium for only the US’ 3rd most popular sport pales in comparison with the Manchester United deal. Although soccer fans around the globe will begin to recognize Chevy, this iconic symbol of American ingenuity may risk losing the support of the city that fondly refers to itself as Hockeytown, and built the company up to where it is today.
Fantasy sports have long provided a platform for fans to become more connected to their favorite professional athletes. Monday Morning Quarterbacks obsess over player statistics and weekly matchups all in an effort to win fantasy games against their friends. However, thanks to Fantex Brokerage Sevices, fans will soon be able to get even closer to their favorite athletes.
Arian Foster is set to become the first professional athlete to be publicly traded on a Fantex platform that valuates the its high-profile clients as a ‘brand.’ The bay area company is finalizing its Initial Public Offering (IPO) to raise $10 million for a 20% return on the running back’s future earnings. Fantex is offering 1.06 million shares at $10 a share to the bidding public.
Investors will be able to buy and sell shares of “Fantax Series Arian Foster Convertible Tracking Stock,” exclusively online through the Fantex platform. The company has also reached an agreement with San Francisco 49ers tight end Vernon Davis to receive 10% of his future earnings in exchange for $4 million up–front. If these ventures are successful, Fantex plans to secure athletes in other sports, as well as celebrity entertainers and musicians.
This move leaves many wondering: Why would Arian Foster sell an interest of his future earnings during the prime of his career? Essentially, Foster is securing an insurance policy on his football prowess. Currently in his fifth year in the league, he has already outlived the average 3.5-year shelf life of an NFL player. Foster is hedging his bets as he approaches his 30’s, and presumably, a decline in production.
In the case of Arian Foster, this offering gives all fans, rich and poor, an opportunity to own a piece of their favorite player. The idea seems more of a novelty than an economic opportunity. However, if other players express interest in similar insurance policies, corporations could step forward offering a lump sum in exchange for an interest of their earning potential. And unlike Fantex, they could proceed without selling shares to the general public.
Endorsement deals have served as the mutually beneficial vehicle connecting brands and players in the past. Return on investment is certainly tied closely to on-field performance. Under Armour, for example, is set to increase its revenue-generating abilities with success of its athletes such as Cam Newton and Foster. The results, however, are not as concrete. Under the parameters of the Fantex platform, athletes experience the security of cash up front, while investors enter a high-risk, high-reward scenario with the potential for massive dividends.
A successful Arian Foster stock market could leave traditional sponsorships and endorsement deals in the rear view mirror. Instead, companies could begin to seek investments in athletes, rather than sponsorship of them.
Popular targets would include athletes with high earning potential during the dawn of their careers. Imagine if Company X agreed to invest $3 million in Tom Brady after he was selected in the 6th round of the 2000 NFL Draft in exchange for, say 15% of his future earnings. 13 years and three Super Bowl Championships later, that company would be experiencing stratospheric profits.
However, would it be ethical for that company to capitalize on Mr. Brady’s hard work and good fortune? Should he be penalized for insuring his football career before it took off?
By offering shares of the Arian Foster brand, Fantex raises some unique moral and ethical questions. The success or failure of this Arian Foster stock will have a profound impact on the sponsorship industry. With its groundbreaking Arian Foster IPO, Fantex may have opened the floodgates for forthcoming changes in sponsorship deals.