Nets Basketball: First Newark, then Brooklyn ... and then the world
WEDNESDAY, 16 JUNE 2010 22:31
http://www.newjerseynewsroom.com/professional/nets-basketball-first-newark-then-brooklyn-and-then-the-world
BY EVAN WEINER
NEWJERSEYNEWSROOM.COM
So how do you push your way onto the world stage and become a global sports brand name like Manchester United, Michael Jordan and Tiger Woods? That is the question that Irina Pavlova will be attempting to answer in the upcoming months as she leads the campaign to make the New Jersey, soon-to-be Brooklyn Nets a player on the world stage.
The former majority leader of the United States House of Representatives Tip O'Neill joked that all politics is local and sports owners believed that all sports is local but that is no longer the case. Manchester United is better known as ManU and is a huge worldwide brand. ManU and other football (soccer) teams that have global name recognition but no National Basketball Association franchise is on that level.
New Nets owner Russia's Mikhail Prokhorov may be able to elevate the New Jersey, soon-to-be Brooklyn, Nets to that lofty perch but there is much work to be done locally whether it is in Newark or Brooklyn. Prokhorov's Nets franchise is scheduled to make a stop in Newark for two years before heading through either the Lincoln or Holland Tunnel and over either the Brooklyn or Manhattan Bridge or through the Brooklyn Battery Tunnel to the new Brooklyn arena.
So how do you make the Nets not only Moscow's team but Beijing's team?
"That's only the first step," said Pavlova, who is the President of Prokhorov's Onexim Sports and Entertainment, talking about her owner's purchase of the Nets. "We also have one of the two (NBA) Chinese players (Yi Jianlian) on our team that we are very excited about. I think really is no limit to how global the New Jersey Nets brand can become. I think Mikhail Prokhorov brings a new dimension to this team."
According to Nets President Rod Thorn, the Nets will be in China for pre-season games and will play two regular season games in London, England, which means the Nets franchise is about ready to enter the global stage. But again there is a matter of taking care of business at home.
"I think it is going to be a fluid process, it is not just three things we need to do get there," said Pavlova. "We have the move (from the Meadowlands to Newark), we have a very exciting summer ahead of us and I think we will look at it as more if you look at Michael Jordan or you look at Tiger Woods, there are both an international brand. I think our strategy is going to evolve around building the New Jersey Nets into something like that where the name transcends borders and cultures and countries."
The Nets franchise is moving. The Meadowlands is in the rear view mirror and there is a temporary stop in New Jersey before the migration across the Upper New York Bay to Brooklyn. Getting from point A (the Meadowlands) to Point C (Brooklyn) is not as easy as getting on Route 3 and hopping through the Lincoln Tunnel and turning to south to get to the Manhattan Bridge and then to the new Atlantic Yards building. How do you go from Point A to Point C?
"U-haul," laughed Pavlova. "Obviously it is a complicated process but it has been in the works for a while and we have a lot of support from a lot of our constituents. It is not easy but it is going to get done."
The Nets organization may have to go through three fan bases in the New York City area by the time the team is ready to become a player on the global stage. There is the fan base that was left behind at the Meadowlands, there will be an interim stop in Newark and then Brooklyn. NBA teams, along with those in all other sports, rely on a lot of corporate support. Will the corporate base that bought luxury boxes and club seats at the Meadowlands move to Newark and then will that money move to Brooklyn or will new corporate money be poured into the Nets and can the team induce the New Jersey corporate dollars to cross two tunnels or bridges to get to Brooklyn?
"We definitely hope our fans will follow us and that we gain new ones. We welcome everyone," she said.
The Brooklyn arena will be the fifth major venue in the New York area although it will be the newest one in 2012. There are plans to renovate the Charles Dolan-family owned Madison Square Garden in Manhattan, there are the two New Jersey buildings at the Meadowlands and Newark and the Nassau Coliseum out in Uniondale on the Island.
Chris Botta on his Islanders Point Blank website reported that the New York Mets ownership group, the Wilpon family (who are New York City real estate people), have brought in another real estate company – Jones, Lang and LaSalle – to kick the tires and explore the possibility of building an arena in Queens in the junkyards across the way from the Mets' new stadium.
Dolan's Newsday newspaper dismissed Botta's story but that property has been eyed by developers and once was mentioned by Donald Trump back in 1984 as a possible home for a new football stadium for his United States New Jersey Generals. Can six arenas in such a small area co-exist?
"To be honest with you, I am not following everything to same extent you mention, so I am not familiar with the Islanders situation," said Pavlova. "We broke ground in March (in Brooklyn), we are going ahead with it. So far everything is going smoothly and we are hope it will continue to go that way. We are planning to open in two years. So the season of 2012-23, we plan to be there."
How far into the building process is the Brooklyn arena?
"They're digging," said Pavlova.
The Nets basketball franchise has been around since 1967, first as the New Jersey Americans, Teaneck-based American Basketball Association squad then as the New York Nets between 1968 and 1977 in various buildings on Long Island and then back to New Jersey in 1977.
The team moved into the Meadowlands in 1981. Despite having Dr. J and winning two ABA titles in 1974 and 1976 and joining the NBA in 1976, the team has never captured the attention of the tri-state area like the Manhattan-based New York Knicks. Getting equal attention in New York has been a tough go for decades, so will it be easier to get global attention?
"I can't tell you exactly how it is going to go," said Pavlova. "Obviously we will have a marketing team that will work on that. It is not an overnight process but that's in the plan."
A Russian owner, a pre-season in China and regular season games in London could change the Nets perceived perception. People have a perceived perception of the Nets which is probably not deserved. New Jersey has had some NBA success but the Meadowlands and New Jersey have never been fairly compared to the Garden by the New York media even though Sumner Redstone once threatened to move his New York Rangers franchise to New Jersey and his Knicks to the Nets old Nassau Coliseum venue if he didn't get a break in property taxes and the electric bill at the Garden in the early 1980s. Redstone got both. Redstone had no problems with New Jersey for his hockey team but the New York media has never bought New Jersey or Long Island for that matter as the big time even though the National Football League Giants and Jets played across the street from the Meadowlands Arena and the Jets trained next to the Nassau Coliseum.
Again, it is all about perceived perception.
Rod Thorn, an NBA lifer who played in the league when teams were still moving from city to city back in the 1960s, would like to elevate the Nets franchise onto the global stage.
"I think that certainly is a lofty goal," said Thorn. "Something that we will obviously aspire to. We have a leg up by having an owner like Mikhail who is known all over the world and has owned sports teams before. That is something to really look forward to. I think our going to China has more to do with us having Yi right now than it does anything else and then we are also going to London in March to play regular season games. So, it is exciting, there are a lot of experiences that we are going to have here in the next couple of years and everybody is looking forward to it.
"Basketball is an international sport, teams play all over the world. So there is a base for basketball virtually anywhere. Pre-season for China. Two games in London."
Thorn started in the NBA in 1963 when the league barely had a TV contract, the NBA was not seen on national TV in the United States in 1961-62, and Chicago had just moved to Baltimore. Thorn was drafted by the Baltimore Bullets in 1963. Thorn also played for the St. Louis Hawks, a franchise that moved to Atlanta in 1968. The NBA of Thorn's youth only shares the initials NBA with today's league which is an international business.
"Not really," was Thorn's response when asked if he thought the NBA would grow into a global presence. "But during my time over there (with the NBA office between 1986-2000), the league really became more involved in international play with the McDonald's Open first (in 1987) and by participating in the Olympics and World Championships, so it happened while I was there, I didn't even think about things like that."
Now Thorn is running a team with an owner who plans to make the Nets brand a global presence along side of Manchester United and icons like Michael Jordan, Tiger Woods and Lebron James. It is all about getting the product in front of people whether it is in Moscow, Beijing or London. Prokhorov is planning to push the Nets onto the global stage which is so un-Nets-like.
Evan Weiner is an author, radio-TV commentator and lecturer on "The Politics of Sports Business" and can be reached at evanjweiner@yahoo.com
LAST UPDATED ( WEDNESDAY, 16 JUNE 2010 22:31 )
Showing posts with label Manchester United. Show all posts
Showing posts with label Manchester United. Show all posts
Thursday, June 17, 2010
Sunday, September 13, 2009
The European and North American Sports Cultural Divide
http://www.mcnsports.com/en/node/7531
The European and North American Sports Cultural Divide
By Evan Weiner
September 13, 2009
10:00 PM EDT
(Copenhagen, Denmark) -- On September 1st, the wife and I were walking down Strøget, the main shopping area in Copenhagen when she spotted a fellow in a red shirt with the letters AIG emblazoned on the front. She wondered why anyone would want to wear the insignia of a disgraced financial company that is being bailed out by America taxpayers on a shirt until she realized that the shirt was actually part of the Manchester United football kit.
In Europe, no one thinks twice about seeing a corporate logo on a sports uniform. It is part of the game unlike the practice in North America where advertising on Major League Baseball or National Football League or National Basketball Association or National Hockey League shirt is akin to drawing a moustache on the Mona Lisa.
The European football kit is not much different than a rugby shirt. The team's major sponsor has a big logo which captures the eye while a much smaller team logo resides in the upper left hand side of the shirt. The shirt or kit manufacturer has a small logo on the upper right side of the shirt. The logo is clearly visible on TV screens, from the stands or in newspaper/magazine pictures.
That is the reason the sponsorship is so attractive.
AIG's logo has been plastered on Manchester United's shirts since 2006 as part of a four-year, $100 million (US) deal. AIG is not the only taxpayer bailout English Premier League team marketing partner. The U. K. has nationalized the Northern Rock bank. Northern Rock's logo appears on Newcastle United's shirt. Northern Rock also is a major sponsor of Newcastle's rugby team.
Financial institutes have been sports marketing partners for a long, long time and it seems that people in the United States have no problem with stadium naming rights except possibly Citibank's marketing deal with Fred Wilpon's New York Mets. In the United States, journalists and editors who should know better and avoid corporate names in articles, columns, radio updates and talk shows along with TV talking heads embrace the corporate names. The fourth estate has accepted corporate marketing partnership and so have sports fans.
Naming rights, presumably, for a stadium do not interfere with a game nor does the NBA's marketing deals with a car company to sponsor league trophies for the Most Valuable Player Award, Defensive Player of the Year, Sixth Man Award and Most Improved Player.
The English Premier League is sponsored by Barclay's bank.
But there is a great sports cultural divide between Europe and North America. In Europe, sports teams whether it is in football, cycling, rugby or cricket have advertising on their shirts, in North America there is still a thought that advertising on baseball uniforms, football, hockey and basketball shirts is something of a violation that might even supersede the separation of church and state although it is rather unclear just what is so sacred about a jersey in those sports even though there is subtle advertising on those shirts as the companies that make the shirts have clearly visible logos on the clothing.
In North America, it is accepted practice for race drivers to have their uniforms plastered with sponsor logos and Major League Soccer follows European tradition and places advertising logos on soccer shirts.
Does a sponsor’s logo ruin a game? The answer is no.
In Europe, the inclusion of a sponsor logo is no big deal. But to some like Ralph Nader, a sponsor's logo on a sports shirt is absolutely wrong and breaks the covenant between the fans sports owners. There are others who feel the same way.
On May 4, 2004, Nader sent a letter to Major League Baseball Commissioner Bud Selig condemning Selig and Major League Baseball owners for putting advertising logos on New York Yankees and Tampa Bay Devil Rays uniforms for the opening series of the 2004 MLB season in Tokyo, Japan.
Nader didn't hide his feelings in his salvo to Selig.
"The great lengths of selfishness with which you are willing to go to desecrate baseball and alienate fans of the game should no longer surprise us. Still, your placement of advertisements on the New York Yankees and Tampa Bay Devil Rays uniforms for Major League Baseball's opener on March 30 in Tokyo ambushed fans across the country and left them shaking their heads at this obscene embarrassment," Nader wrote in his opening paragraph.
"We urge that you immediately put this issue to rest once and for all and eliminate any current or future possibility that Major League Baseball will accept advertisements on uniforms.
"You are suffocating Baseball's fan base. It's not enough for fans who want to enjoy a game to be forced to watch this pitch sponsored by that company or that home run sponsored by this corporation. In addition, they go to a stadium paid for by the fans and taxpayers, yet almost every available space is filled with ads and named after some multinational corporation with no ties to the community.
"Over the last several years, fans have been made to watch 'virtual advertising' infiltrate television broadcasts, and T.V. commentators using the broadcast booth to hawk cell phones during the playoffs and World Series. This over-commercialization is sapping the fun out of being a fan of Major League Baseball.
"Now, you have sunk to a greedy new low. Bending Baseball to the demands of advertisers and accepting more than $10 million (according to Advertising Age) for a corporation to plaster ads on the uniforms for the two-game series in Tokyo. It's supposedly a one-time deal, but conventional wisdom says otherwise -- that permanent advertising on uniforms isn't a question of 'if,' but 'when.'
"MLB executive vice president for business Tim Brosnan, told reporters in Japan 'Are there any definitive plans to put logos on uniforms? No. I don't see that happening. But on the other side of the coin, never say never.'
"'We're mindful of the fans, but I don't think [advertising on uniforms] is unreasonable,' Brosnan later told the New York Post. 'We're always looking for new ways to advance our business.'
"That must sound reassuring to fans. The public tolerates a certain amount of commercialism, but why do you insist on trying the patience of loyal baseball fans across the country? We already have NASCAR, with drivers doubling as walking commercial billboards. Is that really what you want for the national pastime?
"Commissioner Selig, no one is trying to get in the way of your ability to make money, but you need to look beyond the immediate bottom line to make Major League Baseball sustainable. As primary caretaker, this means your job is to respect cities and fans, ensure the integrity of the game, and eliminate self-interested and destructive tendencies. Advertising on uniforms runs counter to each of these critical principles.
"If you allow such an explicit interference of baseball with another greedy vehicle for corporate marketing -- using player uniforms as product placement surfaces -- apathy is not what you should expect from fans and sportswriters. There will be considerable resentment, and fans will drift away. A matter of taste can sour more quickly than you think."
Major League Baseball has not added logos to the front of team shirts yet. Nor as the NFL, NBA or the NHL. But the way North American sports is structured today, there is no reason to keep logos off of shirts except for tradition. The National Hockey League a few years back wiped off the names of the companies that supply equipment to players unless the league received a stipend from the companies. Putting a logo on a Major League Baseball, National Football League, National Hockey League, and National Basketball Association uniform would not compromise any games. Logos on shirts in Europe or Asia are commonplace. There is nothing scared about sports uniforms.
eweiner@mcn.tv
The European and North American Sports Cultural Divide
By Evan Weiner
September 13, 2009
10:00 PM EDT
(Copenhagen, Denmark) -- On September 1st, the wife and I were walking down Strøget, the main shopping area in Copenhagen when she spotted a fellow in a red shirt with the letters AIG emblazoned on the front. She wondered why anyone would want to wear the insignia of a disgraced financial company that is being bailed out by America taxpayers on a shirt until she realized that the shirt was actually part of the Manchester United football kit.
In Europe, no one thinks twice about seeing a corporate logo on a sports uniform. It is part of the game unlike the practice in North America where advertising on Major League Baseball or National Football League or National Basketball Association or National Hockey League shirt is akin to drawing a moustache on the Mona Lisa.
The European football kit is not much different than a rugby shirt. The team's major sponsor has a big logo which captures the eye while a much smaller team logo resides in the upper left hand side of the shirt. The shirt or kit manufacturer has a small logo on the upper right side of the shirt. The logo is clearly visible on TV screens, from the stands or in newspaper/magazine pictures.
That is the reason the sponsorship is so attractive.
AIG's logo has been plastered on Manchester United's shirts since 2006 as part of a four-year, $100 million (US) deal. AIG is not the only taxpayer bailout English Premier League team marketing partner. The U. K. has nationalized the Northern Rock bank. Northern Rock's logo appears on Newcastle United's shirt. Northern Rock also is a major sponsor of Newcastle's rugby team.
Financial institutes have been sports marketing partners for a long, long time and it seems that people in the United States have no problem with stadium naming rights except possibly Citibank's marketing deal with Fred Wilpon's New York Mets. In the United States, journalists and editors who should know better and avoid corporate names in articles, columns, radio updates and talk shows along with TV talking heads embrace the corporate names. The fourth estate has accepted corporate marketing partnership and so have sports fans.
Naming rights, presumably, for a stadium do not interfere with a game nor does the NBA's marketing deals with a car company to sponsor league trophies for the Most Valuable Player Award, Defensive Player of the Year, Sixth Man Award and Most Improved Player.
The English Premier League is sponsored by Barclay's bank.
But there is a great sports cultural divide between Europe and North America. In Europe, sports teams whether it is in football, cycling, rugby or cricket have advertising on their shirts, in North America there is still a thought that advertising on baseball uniforms, football, hockey and basketball shirts is something of a violation that might even supersede the separation of church and state although it is rather unclear just what is so sacred about a jersey in those sports even though there is subtle advertising on those shirts as the companies that make the shirts have clearly visible logos on the clothing.
In North America, it is accepted practice for race drivers to have their uniforms plastered with sponsor logos and Major League Soccer follows European tradition and places advertising logos on soccer shirts.
Does a sponsor’s logo ruin a game? The answer is no.
In Europe, the inclusion of a sponsor logo is no big deal. But to some like Ralph Nader, a sponsor's logo on a sports shirt is absolutely wrong and breaks the covenant between the fans sports owners. There are others who feel the same way.
On May 4, 2004, Nader sent a letter to Major League Baseball Commissioner Bud Selig condemning Selig and Major League Baseball owners for putting advertising logos on New York Yankees and Tampa Bay Devil Rays uniforms for the opening series of the 2004 MLB season in Tokyo, Japan.
Nader didn't hide his feelings in his salvo to Selig.
"The great lengths of selfishness with which you are willing to go to desecrate baseball and alienate fans of the game should no longer surprise us. Still, your placement of advertisements on the New York Yankees and Tampa Bay Devil Rays uniforms for Major League Baseball's opener on March 30 in Tokyo ambushed fans across the country and left them shaking their heads at this obscene embarrassment," Nader wrote in his opening paragraph.
"We urge that you immediately put this issue to rest once and for all and eliminate any current or future possibility that Major League Baseball will accept advertisements on uniforms.
"You are suffocating Baseball's fan base. It's not enough for fans who want to enjoy a game to be forced to watch this pitch sponsored by that company or that home run sponsored by this corporation. In addition, they go to a stadium paid for by the fans and taxpayers, yet almost every available space is filled with ads and named after some multinational corporation with no ties to the community.
"Over the last several years, fans have been made to watch 'virtual advertising' infiltrate television broadcasts, and T.V. commentators using the broadcast booth to hawk cell phones during the playoffs and World Series. This over-commercialization is sapping the fun out of being a fan of Major League Baseball.
"Now, you have sunk to a greedy new low. Bending Baseball to the demands of advertisers and accepting more than $10 million (according to Advertising Age) for a corporation to plaster ads on the uniforms for the two-game series in Tokyo. It's supposedly a one-time deal, but conventional wisdom says otherwise -- that permanent advertising on uniforms isn't a question of 'if,' but 'when.'
"MLB executive vice president for business Tim Brosnan, told reporters in Japan 'Are there any definitive plans to put logos on uniforms? No. I don't see that happening. But on the other side of the coin, never say never.'
"'We're mindful of the fans, but I don't think [advertising on uniforms] is unreasonable,' Brosnan later told the New York Post. 'We're always looking for new ways to advance our business.'
"That must sound reassuring to fans. The public tolerates a certain amount of commercialism, but why do you insist on trying the patience of loyal baseball fans across the country? We already have NASCAR, with drivers doubling as walking commercial billboards. Is that really what you want for the national pastime?
"Commissioner Selig, no one is trying to get in the way of your ability to make money, but you need to look beyond the immediate bottom line to make Major League Baseball sustainable. As primary caretaker, this means your job is to respect cities and fans, ensure the integrity of the game, and eliminate self-interested and destructive tendencies. Advertising on uniforms runs counter to each of these critical principles.
"If you allow such an explicit interference of baseball with another greedy vehicle for corporate marketing -- using player uniforms as product placement surfaces -- apathy is not what you should expect from fans and sportswriters. There will be considerable resentment, and fans will drift away. A matter of taste can sour more quickly than you think."
Major League Baseball has not added logos to the front of team shirts yet. Nor as the NFL, NBA or the NHL. But the way North American sports is structured today, there is no reason to keep logos off of shirts except for tradition. The National Hockey League a few years back wiped off the names of the companies that supply equipment to players unless the league received a stipend from the companies. Putting a logo on a Major League Baseball, National Football League, National Hockey League, and National Basketball Association uniform would not compromise any games. Logos on shirts in Europe or Asia are commonplace. There is nothing scared about sports uniforms.
eweiner@mcn.tv
Wednesday, June 3, 2009
One Less Taxpayer Bill to Pay, AIG Replaced as a Manchester United Marketing Partner
http://www.mcnsports.com/en/node/7397
One Less Taxpayer Bill to Pay, AIG Replaced as a Manchester United Marketing Partner
By Evan Weiner
June 3, 2009
9:00 PM
(New York, N. Y.) -- American taxpayers got some good news earlier today out of Manchester, U. K. The Manchester United football club will have a new corporate logo on the team's uniform top starting in 2010 as the Chicago-based insurance company Aon has signed a marketing deal with the squad to replace the "to big to fail" insurance company, the American International Group or as it is better known, AIG as a ManU shirt sponsor.
For whatever reason, AIG executives back in April 2006 decided to partner with ManU, arguably the best known sports brand name in the world. The deal was for four years and paid Manchester United about 56.5 million pounds over the life of the deal. On January 21, 2009, the day after Barack Obama was sworn in as the 44th President of the United States, AIG officials announced the "too big to fail" insurance company would not extend the sponsorship.
American taxpayers, who own a good chunk of AIG, will be on the hook for a $25 million payment to the English football club for the 2009-10 season. That is, of course, a pittance compared to the monies the United States government has "loaned" the "too big to fail" insurance giant since September 2008.
In March 2009, House Democrat Ann Kirkpatrick of Arizona was threatening to hold hearings to see if any of the government bailout money was going to pay off the AIG-ManU agreement. Nothing came of that but AIG monies going to sports and junkets is a sensitive topic.
The idea of having the AIG logo on the ManU shirts was part of a marketing effort to expose the company to new clients around the world. That strategy did not work with AIG, at least not when you consider that AIG hit a liquidity crisis on September 16, 2008 and collapsed. The Bush Administration came to AIG's rescue by loaning the company up to $85 billion. AIG received more than $120 billion in the fall of 2008.
After the 2009-10 English Premier League season, AIG will be out of the sports business, at least in Manchester. Other companies seem to be leaving sports sponsorships as well and that is playing havoc with three National Football League teams, Jerry Jones' Dallas Cowboys, the Mara family and Tisch family owned New York Giants and Robert Wood (Woody) Johnson IV's New York Jets. Jones has been unable to sell the naming rights to his soon to be opened new Cowboys Stadium in Arlington, Texas and the Mara-Tisch-Johnson troika is still looking for a naming rights partner for the new Meadowlands stadium opening up in East Rutherford, New Jersey.
Finding marketing partners in Arlington and East Rutherford may be difficult in this economic climate when the truth of the matter is that no one can really quantify just how much business is brought in when a company spends money on naming rights at stadiums or arenas.
Jones, the Maras, the Tisches and Johnson need the naming rights dollars to help pay off debts incurred by stadium costs. Even though local governments in Arlington and in New Jersey are putting up hundreds of millions of dollars in developing the facilities, the owners were counting on corporate dollars to pay off the bills.
Because Jones, the Maras and Tisches and Johnson are not getting that money, it could spur them to really take a hard line in the just started owners-players collective bargaining negotiations. The owners want the players to understand that there may not be as much money available to pay them in 2011 and will suggest that give backs might be appropriate.
The old days of NFL Commissioner Paul Tagliabue and NHLPA Executive Director Gene Upshaw extending the 1993 labor agreement is done. Tagliabue has retired and Upshaw passed away last August. Also missing from the negotiating table is Dan Rooney, the Pittsburgh Steelers owner who was named ambassador to Ireland by President Obama. The players trusted Rooney.
Although the present labor deal ends in 2011, there is some pressure to get a deal in place shortly after next February's Super Bowl. The provision that wedded the owners and players to the 1993 agreement, the owners would lose the salary cap in the final year of the collective bargaining agreement while the players would cede the chance to be gain free agency after four years and would have to wait until six full years of service, expires sometime next March. That clause caused nightmares for both sides as the owners have set players cost while players, many of who never last six years, could bid their services to other teams after four and any change would upset the applecart. The owners though want change and are willing to risk losing the cap in 2010 if they are able to get the players to agree to cost reductions in the next collective bargaining agreement.
NFL owners recently extended over the air network contracts with CBS and FOX and reworked a deal with DirecTV.
The NFL has had a problem for years with revenue sharing and it was not with the players. The owners have apparently abandoned the "leaguethink" policy which NFL Commissioner Pete Rozelle in 1960 or 1961 usurped from Lamar Hunt's newly formed American Football League after Hunt borrowed the concept from Branch Rickey's Continental Baseball League which was looking for owners in 1959. Rickey's league never got off the ground but his idea of sharing TV revenues among the Continental League owners along with other revenue streams took hold in Rozelle's NFL in 1961 and 1962 after Rozelle convinced Jack Mara in New York, George Halas in Chicago and Daniel Reeves in Los Angeles that sharing TV money equally with the Green Bay Packers, Steelers and Baltimore Colts would strengthen the league. Today, big market teams want to keep large revenues generated within their markets and not share it with small market franchises. That has caused a discrepancy between large and small market teams because some of the large market teams use the money to pay off debts or create larger football coaching staffs or scouting staffs.
That divide is still a problem for the owners.
Naming rights are a big deal. But do naming rights really promote a company. The New York Mets and Citibank entered into a $400 million-20 year naming rights deal that started well before the bottom fell out for the bank. American taxpayers have put money into Citibank along with Bank of America which has the naming rights for the Charlotte football stadium and a multiyear deal with the Richardson family's Carolina Panthers.
But does a name slapped onto a football stadium, baseball field or an arena really bring in business? Does an AIG logo on ManU's shirts mean business for AIG? That is a question that is probably unanswerable. Companies still invest in sports because they believe that it is the best way to get their message across to 18-34 year old men. The only thing that is sure that American taxpayers are off the hook after the upcoming Manchester United season for $25 million a year as the AIG logo will fade into ManU's history book. But they are still on the hook for Citibank, Bank of America, General Motors and other entities that have received bailout money for sponsorships and while the monies paid for sports sponsorship is a drop in the bucket, the question of propriety should be answered. Should government back entities like AIG spend even a nickel on any advertising?
eweiner@mcn.tv
One Less Taxpayer Bill to Pay, AIG Replaced as a Manchester United Marketing Partner
By Evan Weiner
June 3, 2009
9:00 PM
(New York, N. Y.) -- American taxpayers got some good news earlier today out of Manchester, U. K. The Manchester United football club will have a new corporate logo on the team's uniform top starting in 2010 as the Chicago-based insurance company Aon has signed a marketing deal with the squad to replace the "to big to fail" insurance company, the American International Group or as it is better known, AIG as a ManU shirt sponsor.
For whatever reason, AIG executives back in April 2006 decided to partner with ManU, arguably the best known sports brand name in the world. The deal was for four years and paid Manchester United about 56.5 million pounds over the life of the deal. On January 21, 2009, the day after Barack Obama was sworn in as the 44th President of the United States, AIG officials announced the "too big to fail" insurance company would not extend the sponsorship.
American taxpayers, who own a good chunk of AIG, will be on the hook for a $25 million payment to the English football club for the 2009-10 season. That is, of course, a pittance compared to the monies the United States government has "loaned" the "too big to fail" insurance giant since September 2008.
In March 2009, House Democrat Ann Kirkpatrick of Arizona was threatening to hold hearings to see if any of the government bailout money was going to pay off the AIG-ManU agreement. Nothing came of that but AIG monies going to sports and junkets is a sensitive topic.
The idea of having the AIG logo on the ManU shirts was part of a marketing effort to expose the company to new clients around the world. That strategy did not work with AIG, at least not when you consider that AIG hit a liquidity crisis on September 16, 2008 and collapsed. The Bush Administration came to AIG's rescue by loaning the company up to $85 billion. AIG received more than $120 billion in the fall of 2008.
After the 2009-10 English Premier League season, AIG will be out of the sports business, at least in Manchester. Other companies seem to be leaving sports sponsorships as well and that is playing havoc with three National Football League teams, Jerry Jones' Dallas Cowboys, the Mara family and Tisch family owned New York Giants and Robert Wood (Woody) Johnson IV's New York Jets. Jones has been unable to sell the naming rights to his soon to be opened new Cowboys Stadium in Arlington, Texas and the Mara-Tisch-Johnson troika is still looking for a naming rights partner for the new Meadowlands stadium opening up in East Rutherford, New Jersey.
Finding marketing partners in Arlington and East Rutherford may be difficult in this economic climate when the truth of the matter is that no one can really quantify just how much business is brought in when a company spends money on naming rights at stadiums or arenas.
Jones, the Maras, the Tisches and Johnson need the naming rights dollars to help pay off debts incurred by stadium costs. Even though local governments in Arlington and in New Jersey are putting up hundreds of millions of dollars in developing the facilities, the owners were counting on corporate dollars to pay off the bills.
Because Jones, the Maras and Tisches and Johnson are not getting that money, it could spur them to really take a hard line in the just started owners-players collective bargaining negotiations. The owners want the players to understand that there may not be as much money available to pay them in 2011 and will suggest that give backs might be appropriate.
The old days of NFL Commissioner Paul Tagliabue and NHLPA Executive Director Gene Upshaw extending the 1993 labor agreement is done. Tagliabue has retired and Upshaw passed away last August. Also missing from the negotiating table is Dan Rooney, the Pittsburgh Steelers owner who was named ambassador to Ireland by President Obama. The players trusted Rooney.
Although the present labor deal ends in 2011, there is some pressure to get a deal in place shortly after next February's Super Bowl. The provision that wedded the owners and players to the 1993 agreement, the owners would lose the salary cap in the final year of the collective bargaining agreement while the players would cede the chance to be gain free agency after four years and would have to wait until six full years of service, expires sometime next March. That clause caused nightmares for both sides as the owners have set players cost while players, many of who never last six years, could bid their services to other teams after four and any change would upset the applecart. The owners though want change and are willing to risk losing the cap in 2010 if they are able to get the players to agree to cost reductions in the next collective bargaining agreement.
NFL owners recently extended over the air network contracts with CBS and FOX and reworked a deal with DirecTV.
The NFL has had a problem for years with revenue sharing and it was not with the players. The owners have apparently abandoned the "leaguethink" policy which NFL Commissioner Pete Rozelle in 1960 or 1961 usurped from Lamar Hunt's newly formed American Football League after Hunt borrowed the concept from Branch Rickey's Continental Baseball League which was looking for owners in 1959. Rickey's league never got off the ground but his idea of sharing TV revenues among the Continental League owners along with other revenue streams took hold in Rozelle's NFL in 1961 and 1962 after Rozelle convinced Jack Mara in New York, George Halas in Chicago and Daniel Reeves in Los Angeles that sharing TV money equally with the Green Bay Packers, Steelers and Baltimore Colts would strengthen the league. Today, big market teams want to keep large revenues generated within their markets and not share it with small market franchises. That has caused a discrepancy between large and small market teams because some of the large market teams use the money to pay off debts or create larger football coaching staffs or scouting staffs.
That divide is still a problem for the owners.
Naming rights are a big deal. But do naming rights really promote a company. The New York Mets and Citibank entered into a $400 million-20 year naming rights deal that started well before the bottom fell out for the bank. American taxpayers have put money into Citibank along with Bank of America which has the naming rights for the Charlotte football stadium and a multiyear deal with the Richardson family's Carolina Panthers.
But does a name slapped onto a football stadium, baseball field or an arena really bring in business? Does an AIG logo on ManU's shirts mean business for AIG? That is a question that is probably unanswerable. Companies still invest in sports because they believe that it is the best way to get their message across to 18-34 year old men. The only thing that is sure that American taxpayers are off the hook after the upcoming Manchester United season for $25 million a year as the AIG logo will fade into ManU's history book. But they are still on the hook for Citibank, Bank of America, General Motors and other entities that have received bailout money for sponsorships and while the monies paid for sports sponsorship is a drop in the bucket, the question of propriety should be answered. Should government back entities like AIG spend even a nickel on any advertising?
eweiner@mcn.tv
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