Outlook for NFL, NFLPA and sponsors
Sunday, June 5, 2011
NEW YORK (AP) — While fans fret about the NFL lockout affecting everything from training camps to regular-season games, marketing partners for the league and the players association aren’t panicking. Or fleeing.
They are making contingency plans, of course, because the time when sponsors and advertisers must make decisions on how loyal they can be to pro football is rapidly approaching.
“We’re not at an Armageddon date. We not staring that in the face this week,” Eric Grubman, NFL executive vice president of business operations for the NFL, told The Associated Press during the owners’ meetings last week. “The demand is good, I think strong. The platform of being with the NFL remains very valuable and healthy.
“We have had losses (of potential new sponsors) that won’t return immediately. With some of those, people have said they are not signing with us because of the labor situation. Those dollars have moved on forever, but those partners have not, I think. I think when we get back to (playing) games, I like our chances to get them back.
“We’re scratching and clawing to show them this, the value is still going to be there.”
On the other side, NFL Players, the marketing arm for the players association, says it has not lost any marketing partners. Keith Gordon, the organization’s president, believes the worth of its players to advertisers and sponsors could actually grow should the lockout continue into the fall.
“While sponsors are hoping that football resumes in the fall, they’re also positioning themselves to maximize player involvement without games being played,” he said. “The lockout provides greater access to players at a time when they would normally be inaccessible.
“While unfortunate, it creates an opportunity for players that would otherwise not be present.”
But those players already are in danger of losing money — aside from what they currently are spending for medical coverage and what they potentially will lose in salary and bonuses if training camps, the preseason and real games are lost.
“In general, the most costly part of the lockout has been the contraction of the commercial opportunities for players with NFL sponsors,” Gordon said. “In particular, those (sponsors) who have either decided not to renew or those who have shifted dollars elsewhere.
“Sponsors usually spend the summer months working with players and integrating them into creative (campaigns) for their season-long marketing campaigns.”
One sponsor, Procter and Gamble, has said it’s making alternate plans. Others surely are, as well.
“Of course, we hope that an agreement is reached soon and the season commences as scheduled,” P&G spokeswoman Anne Westbrook said. “But we are planning with many contingencies in mind.”
So are the league’s broadcast partners, who might have the most to lose without a new collective bargaining agreement soon. The last thing ESPN, NBC, Fox or CBS wants is the loss of the cash cow that comes with regular-season telecasts.
Forget the advance payments the networks already paid the NFL that are being held up by Judge David Doty in Minneapolis. Eventually, games will be played and the networks will get the programming they paid for.
What they might not get, given a protracted labor impasse, are the boffo ratings the NFL drew last year. They might not get their money’s worth if fans are turned off to the NFL.
“Lots of contingency planning going on out there and an awful lot of hand-holding,” said Marc Ganis, president of Chicago-based sports business consulting firm Sportscorp Ltd., and a keen observer of the league’s business side. “Networks want to be able to convey to advertisers they know what is happening and present a calm approach so advertisers stay with the plan.”
ESPN, of course, can offer alternate programming for advertisers tied to sporting events, but is that what advertisers will want? There really is no substitute in sports (or most of television) for the NFL and the eyeballs it attracts. Sure, ESPN has all that college football inventory, some of which perhaps could be switched to Sunday afternoons if the NFL is dark. Who’s to say that would be worthwhile to NFL sponsors, some of whom already are involved with college football?
“We are in contact constantly with our broadcast partners and they are planning for a normal schedule and for contingency plans, just as we are,” Grubman said.
“They have had the strongest market across the board they’ve ever had. They have the opportunity to encourage advertisers to compete with a full pile of advertising dollars. They are absolutely worried about losing a great platform, but the pile of advertising dollars is deeper this year.
“These are long-term partners already, and they have a natural interest to promote what we have. I am confident they will be on it as hard as we will be on it, promoting the partnership.”
If there is action to promote.
The NFL also partners with dozens of retailers, and they could be the hardest hit as the lockout continues. For back-to-school promotions that run from mid-to-late July, strict deadlines rapidly are approaching. For the holiday shopping season, which typically requires more lead time, a midsummer settlement could be problematic.
As Grubman notes, timetables are different for different marketing partners. The longest are for retailers and manufacturers.
“For marketing budgets and advertising budgets, it’s not a long a lead time,” he said. “Advertising money, if they are hesitant to commit, those are dollars they can shift to other programming.”
But the NFL is king, the only sport in America capable of handling all comers.
“There are other expectations that are keeping the advertisers and sponsors in the fold,” Ganis said. “First, it is more likely than not that an agreement that will cause most, if not all, of the 2011 season to be played will come together . ... Early season activities are at risk now. But there is an expectation that the NFL will find a way to help the sponsors and advertisers make themselves whole if their preseason and early season buys don’t come through. That will work for a little while longer, perhaps to early August.”
“Contingency planning for many of these companies is being done,” Ganis added, “though they hope they don’t have to pull the trigger on any contingency plans.”