Sponsors still keen on sports

With sponsorship and advertising dollars slowing to a trickle, sports leagues have a new message.

“If you have any money to spend, it’s best to spend it with us.”

Despite recent declines in corporate spending, officials in the sports world said they are confident that companies will view sports as a safe haven for their marketing dollars because attendance and television ratings have remained relatively high.

The NFL, NBA and Major League Baseball recently laid off workers as a result of the global economic downturn, with many economists warning of even more difficult times ahead. But for the time being, attendance at major sporting events has risen or dipped only slightly and television ratings are as high as ever. Sunday’s game between the Dallas Cowboys and Pittsburgh Steelers on Fox drew 25.7 million viewers, making it the most watched program this fall.

“People continue to flock to brands they love and trust, and that’s where we’re uniquely positioned in that we’re fortunate to have such a deep and passionate fan base,” NFL spokesman Brian McCarthy said. “And that’s what we have to offer to corporate America: We have the passionate fan base on Main Street, which translates to Wall Street.”

McCarthy confirmed that the NFL would miss its revenue goal this year by about $50 million after several deals fell through because of the economy. But he also said sponsorship revenue for 2008 will still be higher than in 2007.

Locally, the Capitals and Redskins still appear to be attractive to sponsors. Local television ratings for both teams are high, and neither is having attendance troubles.

“Right now, we’re doing well and we’re very popular,” Capitals president Dick Patrick said. “We’re trying to take advantage of that when we’re going out to get new clients. This is a good time to get aboard. There are still some opportunities out there, and it’s a matter of being attentive and getting before sponsors and showing how you can help them.”

Several business sectors, including U.S. automakers and banks, have halted new advertising almost completely. But across the world of sports, deals are still getting done.

The NBA said it renewed all of its sponsorships for the 2008-09 season - and even added a new sponsor, Hewlett-Packard. NBC said it has nearly sold out its inventory for the Super Bowl despite a 30-second ad costing as much as $3 million. Restaurant chain KFC and job search Web site Monster.com are among the companies that in recent weeks announced partnerships with the NFL for the Super Bowl; German automaker Audi said Wednesday it would have a Super Bowl ad.

“The KFC media team is always looking for properties and associations that will allow us to reach our target audience most efficiently,” KFC spokesman Rick Maynard said. “Sports-related opportunities, like the ’official wing sponsor’ agreement with the NFL, are always on our radar screen, and we’ll continue to look at them in the future.”

Quietly, many league and team executives said they expect attendance to decline in 2009 as the impact of the economic downturn hits fans’ wallets. But industry experts said that doesn’t necessarily mean sponsorships will become less valuable; instead, the advertising with the greatest impact will be found on television instead of in the arena.

“As you see these corporations rethinking sponsorship, one of the areas they may want to be thinking about is ’Where are these passionate, loyal fans?’” said David Carter, principal of The Sports Business Group, a Los Angeles-based consulting firm. “They’re probably going to be sitting in front of their televisions. Just because they’re priced out of a professional sporting event doesn’t mean they’re going to forgo it altogether.”

No sports league has been hurt more by the decline in sponsorships than NASCAR, which has seen several teams merge. The racing body is also uniquely exposed to the struggles of U.S. automakers.

“The NASCAR sponsorship is not an insignificant spend - it’s a big check that companies have to write,” said Andrew Giangola, NASCAR’s director of business communications. “Our job is to convince them that it’s the right check to write. We think NASCAR is one of those platforms that can help build market share, and it’s kind of our job to go out there and explain it.”

Giangola said the cost of sponsorships has leveled off after several years of dramatic increases and that they could become even cheaper as NASCAR works to make it less expensive for teams to operate. The introduction of the Car of Tomorrow this past season was designed to make it less expensive to race. NASCAR also has banned testing at all of its tracks as a cost-saving measure.

“We see the marketplace changing, and hopefully that will allow sponsors to come in at a very affordable cost for them,” Giangola said.

Other sports executives said they have been careful to avoid lowering the cost of sponsorships because it would set a bad precedent.

“No one is devaluing their brand; that’s the worst thing you can do,” said Keith Wachtel, senior vice president of corporate sales and marketing for the NHL. “What we try to do at the NHL is keep that value proposition high but figure out new and creative ways to engage those partners.

“There are always people out there - as bad as the economy is - that if you have a good idea and you can figure out a way that it’s going to help drive someone’s business, there are ways to get them funded.”