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All Eyes on a London Franchise

It’s Super Bowl week, and once again the Patriots are in the mix, this time facing the Eagles – the regular season’s best team. The recent Divisional round of matches served up the very best of what NFL has to offer as a sport: the four matches featured an heroic goal-line stop in the last minute, a Super Bowl dynasty rolling on, an underdog team famed for their defence coming out on top of an 87-point shootout, and one of the most dramatic endings ever seen.Before the current one is finished, attention in London already turns to the 2018 season, with the latest round of International Series fixtures recently unveiled.

The 2018 Series will see six teams travel to London, playing matches at Wembley and, for the first time, Tottenham Hotspur’s new stadium. This will bring the total number of teams to have played in London to 29, with only the Packers, Panthers and Texans yet to play here. With 21 matches played to date, an average stadium attendance of over 82,000 and a host of international partners, the future of the Series seems in rude health.

At a time when the league is facing tests from injured superstars (in particular, head injuries and concussions), player protests and an aggrieved President, the NFL continues to be extremely popular in the UK: 20 of the 21 matches hosted in London have been sell-outs and the NFL claims to have three million ‘avid’ (once-a-week) fans in the UK. Broadcast and highlights packages across Sky Sports and BBC are becoming more sophisticated in their delivery, and the relaunch of the NFL Game Pass has shown willingness from the NFL to innovate their broadcast offering.

Since the first International Series match in 2007, a solid UK fanbase including ‘big eventers’ and ‘sports tourists’ has been built, but educating the wider UK public is a crucial step in the NFL’s expansion plans. As the novelty of regular season matches and the opportunity to see new teams diminishes, so the appetite for meaningful matches in London and the UK grows. Although the 2017 fixtures did not look thrilling on paper (ending up rather one-sided affairs), there were over 40,000 ‘season ticket holders’ who bought tickets to each match.

The success of visiting sides may help the prospects of attracting them to participate in the International Series, with each match winner in 2017 reaching the Playoffs; however, there is still a reluctance from teams to surrender a precious home game (teams currently have eight home fixtures per season). The Jaguars, Rams and Raiders have given up home matches in 11 of the 23 International Series matches and it is unlikely that the Rams or Raiders will be keen to surrender a home match once their Inglewood and Las Vegas stadiums open in 2020.

If rumours are to be believed, the NFL is in planning mode for a London-based franchise, with both the NFL and the UK Government seemingly receptive to a full-time team. As the popularity of some teams in the USA wanes (Browns) and stadium leases expire (Panthers), the possibility becomes ever more plausible. The Jaguars appear to be the most likely franchise to relocate, as their owner Shahid Khan is based in London and the team have committed to hosting a match at Wembley Stadium until 2020. That said, their stadium lease at EverBank Field runs through to 2030, so it is difficult to see them relocating completely just yet.

There are obvious logistical concerns about a London-based franchise, including the issue of travel, UK tax laws and employment laws impacting the current Collective Bargaining Agreement (a labour agreement between the players’ association (NFLPA) and the NFL). As it stands, it is unclear how the NFLPA would feel about a London franchise, and there is a chance that when the new CBA is negotiated, a London franchise could be vetoed by the players. Mark Waller, NFL VP of International, believes that an East Coast base could alleviate a lot of the player concerns, and that any issues can be ironed out before the next CBA is negotiated in 2021.

As a casual follower of the sport, I’d welcome a London franchise with open arms and would look forward to a team that NFL fans in the UK can claim as their own. The UK fanbase will surely only increase with the opportunity to actively support a team, rather than following the sport, which would open up further commercial opportunities. For obvious reasons, a London franchise would need to be competitive, which is a very difficult thing to achieve when starting from scratch, and there will be concern that a permanent franchise could lose its novelty quickly if results don’t go their way.

The UK talent pipeline is crucial for securing interest amongst younger demographics, and the presence of Jay Ajayi and Jermaine Eluemunor at the Eagles and Ravens respectively should strengthen interest in the sport domestically. Since 2008, the University league (BUAFL) has expanded to 83 teams and doubled the number of players, buoyed by an official association with the NFL, whilst amateur participation levels have grown by 15% each year for the past decade. The increasing opportunities for overseas players, such as the International Player Pathway, may contribute to UK-based athletes converting to American Football, as evidenced by the likes of Alex Gray – a former England 7s player, who is now on the Falcons’ roster.

It is worth remembering that the participation increase is taking place from a very small base and not everyone in the UK is enamoured by the glitz and the glamour of the NFL. YouGov recently revealed that 59% of those surveyed found the sport quite or very boring and in an already busy market place, watching NFL might be a relatively disposable leisure activity. The relocation of NFL teams into the Los Angeles market has been far from straightforward and this is a city where American Football is ubiquitous. The same can’t be said of London.

Yet.

Breaking the Model

Sports marketing was invented in the US at a time when broadcast TV was most definitely king.  The problem is that shifts in audience behavior and technology have made the media environment much more fluid.  In a recent survey we commissioned with Deep Focus/Intelligence Group (our Sister Agency at Engine) questioning nearly 4,000 people on their sports consumption behaviors, a whopping 83% agreed that the way they are consuming sport has changed significantly over the past 5 years. Quite simply, the traditional sports marketing model hasn’t kept pace with this change – it’s time for disruption.

 

The fact that broadcast TV ruled the roost when the model was established meant that broadcasters were able to set the rules.  One of these rules was a precedent whereby broadcast contracts contained an obligation for the rightsholder to guarantee a minimum level of spend with the media owner.  This obligation, in turn, is passed on to the sponsors. In pretty much every sponsorship contract we see in the US, there is a significant “minimum media spend” clause. (As an aside, that kind of clause simply doesn’t exist in the UK, thanks to the non-commercial nature of the BBC.)

This arrangement clearly makes perfect sense for both the media owners and the rightsholders. The media owners significantly reduce their financial risk as the guaranteed income partially offsets their rights fee, while the rightsholders ensure a minimum level of activation from their sponsors.  Sometimes, the rightsholder is the media owner, which makes that clause particularly attractive!

 

The problem is, in this day and age, the “minimum media spend” clause is nothing short of a disaster for sponsors.  The only thing it guarantees a sponsor is a sub-optimal activation campaign.

Firstly, it can force sponsors into inefficient media strategies. For example, one of our clients is an asset management firm whose (significant) media budget is targeted squarely at Financial Services professionals. Primarily, that means advertising outdoor in financial centers (eg. posters, taxis, airport takeovers etc.) and advertising on TV, online and in print with the key financial channels and business titles. Forcing them to spend any of their media budget with the rightsholder’s media partners is literally forcing them to waste money. Of course this is a relatively extreme example. In most cases the sponsor will choose to use a portion of their media budget with the broadcast partners anyway as a means to reach the audience of the sport, teams or events they sponsor.  But, if that’s the case, why do we need the “minimum media spend” clause at all? That’s the kind of “protectionism” the US usually stands against.

The next consequence of the “minimum media spend” clause is that it leads sponsors towards advertising-heavy activation campaigns.  With so much cash committed and so much inventory to fill, it’s obvious that the activation starts with advertising. The problem is that with such a large chunk of the budget accounted for by the media obligation, the activation often ends with advertising as well.

Over 60% of US sponsors use their advertising agency as their lead agency on their sponsorship campaigns, but that just re-enforces the issue.  Advertising agencies might create great advertising campaigns – but great sponsorship campaigns need to be so much more, because the fact is that fans are consuming sport in a completely new way.

This was clearly demonstrated to us in New York recently, when we went to a sports bar to watch the Mets take on the Dodgers in the NLDS.  Clearly, the crowd were glued to the TV during the game, but it was a completely different story between innings.  While the TV played advertising (much of which was from official sponsors), almost everyone in the bar was looking at their phone – checking their social media platforms of choice for more information and opinion on the game they were watching.  So, collectively, brands were paying millions of dollars to be on TV – but no-one was watching.

 

In the same Deep Focus/IG study we discovered that around half the people under 35 are constantly checking their social media channels during a live game. The reality is that audiences are spending more and more time beyond the reach of traditional advertising, and sponsorship campaigns have to follow them.

This reliance on advertising also means that sponsors have lost the initiative when it comes to finding new and innovative ways to engage with the audience.  They are leaving it all to the rightsholders, who are coming up with an ever-increasing list of “micro-assets” for the sponsor to buy.  As this blog in April explored, there’s nothing wrong with the “FedEx Air and Ground Player of the Week” or the “Maytag Filthiest Play of the Day”, as long as there is a great campaign around it.  But, too often, there’s not, which is probably the reason why these micro-assets don't resonate with the audience.

We tested this theory in the Deep Focus/IG study by giving the audience a list of 30 micro-assets and asking them which ones they recognised.  The twist was that 21 of the micro-assets were real and 9 were completely made up.  The result: the 2nd most-recognised micro-asset was completely made up (Dunk of the Day presented by Dunkin Donuts) and there was no statistically significant difference between the average awareness levels of the real and made up micro-assets.

What we are left with is far too many sponsorship campaigns that consist entirely of advertising (to fulfil the “minimum media spend” clause) and “micro-assets” to tick the fan engagement box.  And if sponsors do look to push things through different channels like PR or experiential, then it is usually some isolated activity that is not connected to the central campaign idea.

There is clearly a better way to think about sponsorship campaigns.  One which is rights, media and channel neutral; which plays out one central idea through the very channels that the audience is actively using; which has no conflicts or vested interests; and which encourages rather than restricts innovation and creativity from brands. One of our favorite recent campaigns is the Madden '15 GIFerator.  Innovative, built on a solid fan insight, social at its core and not an ad or micro-asset in sight.

But this kind of disruption isn’t easy.  The fact is that there is so much vested interest already in play, as the existing players (from media owners to large agency groups) aim to protect the revenue associated with the status quo. So the only ones who can disrupt this market are the brands.  Brands who recognise that it takes more than an ad and some off-the-shelf micro-asset to connect with fans and who understand that they need to be driving creativity and innovation in this space. Brands who realise that we need to break the old model and replace it with something born in the connected era.

A Synergy Blog presented by Microassets Ltd*

*Microassets Ltd. is the world-leading provider of small ‘features’ within a bigger sponsorship asset, including content, giveaways, challenges, stats and in-game moments than can be sold to a Presenting Partner.

On a recent trip to New York, Tim Crow and I had the pleasure of going to Madison Square Garden to watch the New York Knicks take on the Indiana Pacers. Anyone who has followed the NBA this year knew that we were unlikely to witness a basketball masterclass or a win for the home team. Rather, we were going for a first-hand experience of US sports marketing and sponsorship activation. And where better than in one of the world’s most iconic sporting venues?

We certainly got more than we bargained for. Here’s what we found (and I promise I’m not making any of this up):

  1. We were told to collect our tickets at the North Concierge presented by Lenox Hill Hospital. I have no idea if the South, East or West Concierge had different presenting partners
  2. The game was part of an NBA-wide Latin Night presented by Sprite which “celebrates the growing support of NBA fans and players across Latin American and U.S. Hispanic communities”
  3. In an early time-out break, we were treated to the Cub Reporter presented by Hi-Chew, a neat little segment where the big screen showed a kid interviewing Roger Federer. The best bit: all the Pacers’ players were looking up and watching it rather than listening to their coach
  4. There was a controversial “out-of bounds” call. Luckily, we had the Official Review presented by Chase to make sure the refs made the correct decision
  5. The entertainment kept coming at the end of the first quarter with Dance Like a Champion presented by Norwegian Cruise Line. Two members of the audience had a (admittedly hilarious) dance-off for the right to win a big cardboard cut-out of a ship and a cruise with the sponsor
  6. As always, there were plenty of celebrities at courtside including Jesse’s dead girlfriend from Breaking Bad, the big dude from Blind Side, one of the inmates from Orange is the New Black, and Mahoney from Police Academy. We saw them all courtesy of Celebrity Row presented by Douglas Elliman
  7. The T-Shirt Toss presented by Kia showed us exactly what lengths people will go to catch a promotional t-shirt that is probably worth about $1
  8. Clearly, they just couldn’t blast enough t-shirts into the crowd with their measly “one-at-a-time” t-shirt cannons. Thankfully, there was the Mega T-Shirt Machine presented by Foxwoods, which, as the name suggests, raised both the quantity and distance of the t-shirts blasted quite considerably. It was a bit strange, though, that it was presented by a different sponsor to the standard t-shirt toss
  9. The Madison Square Garden has hosted some remarkable events in its history. Garden 366 presented by SAP gave us a taste of some of them on the big screen. I still haven’t worked out why it’s called “Garden 366” though – maybe the number of days in a leap year?
  10. The Knicks City Kids presented by Hi-Chew were an awesome troupe of young dancers/cheerleaders throwing some shapes to Carlos Santana (it was Latin Night remember), MC Hammer and others
  11. It is always brilliant to see your MSG-related tweet on the big screen. Luckily, Tweet Your Message presented by Duracell Powermat could make that happen, presumably while your phone was being charged
  12. The Half Time Highlights presented by Chase reminded people how and why the Knicks were losing again
  13. The Half Time Scores (from around the league) presented by Douglas Elliman reminded people that the Knicks weren’t going to make the play-offs
  14. There was another controversial moment and this time the referees could turn to the Official Review Replay presented by Delta. Wait, I though Official Reviews were presented by Chase?
  15. There is no doubt that US rightsholders do a huge amount of positive work in their local communities. In one of the breaks during the third quarter, the big screen told us all about one of these initiatives: Community Assist presented by Garden Veggie Snacks
  16. While we were all lucky just to be there, there was one fan that was even more lucky than the rest of us: the Lucky Fan presented by Sprite. I’m not sure what he or she won…maybe a year’s supply of Sprite
  17. The 3rd Quarter Stats presented by Delta reminded us that the Knicks were still losing in pretty much every statistical category
  18. We found out what was happening in the night’s other games with Scores from Around the League presented by Terra Vegetable Chips. Wait, I thought Scores from Around the League was presented by Douglas Elliman?
  19. As the tension ramped up and the game neared its conclusion, we had the Final 5 (minutes) presented by Foxwoods. It probably would have helped had the game been a bit closer
  20. At the end of the game, the best play of the night was awarded the Drive of the Game presented by Kia
  21. It was also important to remind people not to drink and drive which is why we had the Good Sport Designated Driver presented by Bud Light
  22. Trees for Threes presented by PWC made sure that we could all go home with the knowledge that there would be a tree planted for every three-pointer made during the game
  23. Finally, on our way out we walked past the Lexus show cars. They looked great but they looked lost. Why were they there? How could fans experience them? How were Lexus capturing leads?
  24.  

We couldn’t quite believe the sheer intensity of the brand bombardment that we had just experienced. But when we told one US sports marketing veteran about it, his response was simple: “Welcome to America!”

Really? Is this the direction that sports marketing in the US is heading? Is the Madison Square Garden a template for the future or a relic of the past? Will the future just be an endless collection of semi-meaningless assets like “The FedEx Air and Ground Players of the Week” (NFL), “The Dominos #DomiNoNos” (MLB) and “The Dunkin Donuts Dunks of the Week” (actually that last one doesn’t exist, but it probably should)?

The appeal of this model for rightsholders is obvious. It’s about carving up rights into smaller and smaller pieces and creating saleable “micro-assets” out of thin air – basically money for old rope. Who can’t see the appeal of that? But that’s only if you see sponsorship as a zero-sum game – a transaction rather than a true partnership.

The best way for rightsholders to create more value for themselves is by focusing on creating more value for their sponsors, and then figuring out ways to tap into that incremental value; not by coming up with more and more things to sell them. And the plain truth is that this model isn’t particularly good at creating value for the sponsors.

First and foremost, and at an incredibly basic level, with 16 different brands all vying for a bit of attention at this particular event, there are simply too many brands present without enough whitespace between them. The problem isn’t the number of brands per se, but the fact that they are all basically doing the same thing (sticking their name on a particular feature), meaning that none of them are really memorable. Without scrolling up, try to remember who the presenting partner of the mega T-shirt machine was, or what Terra Vegetable Chips sponsored.

Great sponsorship needs a Big Idea: a powerful insight that connects the brand to the audience via the asset they are sponsoring, and an activation campaign which brings that Big Idea to life through different channels, over time and in new and interesting ways. But frankly, it’s really hard to see how any of the items on the list above connect to a bigger, more meaningful insight or are part of a broader, more engaging activation programme.

Sure, there are some obvious connections like the fact that the ‘drive of the game’ was being presented by a car company or that the two assets involving children are presented by a brand of chewy sweets. In fact, I’m pretty certain that someone, somewhere has come up with a logical justification for all of them (“We dance on Norwegian Cruise Line Ships so we should sponsor Dance Like a Champion”; “Trees for Threes rhymes with PWC” etc.)…but, in truth, none of them help to tell a meaningful and compelling brand story that the audience cares about. Because, to do that, you have to go beyond the obvious.

Also, it was hard to see how any of the activity we saw in the building was part of a broader campaign. Clearly, Sprite’s Latin Night was part of a bigger NBA-wide sponsorship property, but nothing happened on the night to give it that sense. Is there a PR or social media component to Douglas Elliman’s celebrity spotting? Do Chase have a campaign around helping people make better decisions which their sponsorship of the video review brings to life? Do Delta use stats in any of their other marketing communications?

If the answer to all these questions is “no”, then what’s the point of even doing them? The fact is that none of these “micro-assets” are big enough to stand on their own, so if they aren’t part of a bigger campaign, they are just tactical media buys that reach the 18,000 people inside Madison Square Garden.

Surely that’s no template for the future.