Wednesday, April 15, 2015

Pick 6: Brands, Stories, and Trends Shaping Sports Business #29

A new champion was crowned at the Masters Sunday; let's see who has earned green jackets in sports business this week:

1. Live-Streaming as an Asset, not Threat

Live-streaming apps Meerkat and Periscope became instant social media darlings recently, with Periscope's ties to Twitter giving it an early advantage in the space. Sport properties and broadcast rights holders shudder at the thought of fans streaming games on Periscope, sharing with the world for free. While it is true that live-streaming by fans could devalue what TV networks have paid dearly to broadcast, sport properties must consider the possibilities of a service like Periscope. Great potential exists for using Periscope to give fans inside access in real-time and strengthen fan engagement efforts.

2. Sponsors' and Rightsholders' Quest to Boost Fan Engagement

Speaking of fan engagement, apps like Meerkat and Periscope are but one way to pull fans closer to the action and deepen their involvement. But, the quest to incorporate technology to raise engagement is not limited to on-site tactics, nor should it be limited to the property or venue operator. 

Sport properties should make the most of engagement opportunities with customers attending their event but not overlook the value of social media to have meaningful two-way communication when fans are away from the venue. Also, many sponsors would like to build engagement opportunities into their tie-ins with sport properties. New technologies are creating new possibilities and challenge sport marketers and sponsorship managers to think about how they can push the boundaries of engagement.

3. Coca-Cola's New Sponsorship Outlook

Ivan Pollard has been given the keys to one of the most powerful sponsor machines: Coca-Cola. In his position of senior vice president for connections, investment and assets, Pollard is taking an open-minded approach to the company's sports partnerships. He says that Coca-Cola is nearly 130 years-old, and you do not get to that point by doing today what you did yesterday.

Does that sentiment signal change in how Coca-Cola will invest in sports? A piece of evidence in support of this position may be the recent announcement that Pepsico would replace Coca-Cola as the NBA's non-alcoholic beverage partner. Pollard is focused on innovation in the sponsorship space. It will be interesting to see if the Coca-Cola moves in a new direction with sponsorship under Pollard's watch. 

4. And Pepsi's, Too

Is the latest battle in the cola wars moving from store shelves to the playing field? PepsiCo made waves this week when it announced it would be the exclusive food and beverage partner of the NBA beginning next season. The beverage part of the relationship is significant in that means Coca-Cola is out after having a relationship with the NBA since 1986.

Interestingly, the linchpin soft drink brand in Pepsico's sponsorship will be Mountain Dew, not Pepsi. Mountain Dew's target market is a good fit with the younger demographics of the NBA. That fit trumps the sheer audience size of the NBA that would normally make a company's marquee brand the most likely one to be featured.

The deal strengthens Pepsico's hold on top-tier professional sport properties in the U.S. as it already has relationships with the NFL, MLB, and NHL.

"PepsiCo Nabs NBA Sponsorship Rights Away from Coca-Cola," by Beth Kowitt, Fortune

5. Next Round of Apparel Wars Will Be Fought on Campuses

Coca-Cola and Pepsi are not the only companies locked in a heated category battle. Athletic apparel companies are fighting for supremacy, and association with colleges and universities is a key battleground. A 2013 estimate put the combined amount spent by Nike, Adidas, and Under Armour to partner with collegiate athletic programs at $250 million a year. That figure is likely to escalate in 2016 as contracts at major universities with lucrative licensed merchandise sales will be in play including the University of Texas and University of Michigan.

The rising value of apparel rights deals may be a factor in Nike becoming more selective about the investments it makes, opting to not pursue renewal of deals with Arizona State University and the University of Miami, for example. Nike's competitors will likely pursue both of those schools and fight for others, too. The intensified battle raises the question of whether a point will be reached in which the "apparel bubble" will burst and companies realize they have overspent on college apparel contracts? Or, is the return on investment still worth writing the huge checks to get access to loyal fans of top collegiate athletic programs?

"Nike, Adidas, Under Armour Prepare for NCAA Apparel Battle," by Matthew Kish, Portland Business Journal

6. Nike's Play for the Women's Market

Nike has its eyes focused on more than just college campuses. The company is making a significant push toward marketing to women with its #betterforit campaign. The message is to encourage women to push to achieve their fitness goals. The campaign debuted during the 2015 MTV Music Awards (see the video below).

The women's apparel and training market is hot for Nike as it has eclipsed its men's business in sales. It has also stoked competitive efforts by Under Armour and Reebok as well as extended competition from brands like Luluemon and Victoria's Secret. Which company will win the race to be the brand of choice among women?

Video of the Week

They say practice makes perfect. Watch Golden State Warriors guard Stephen Curry prove that to be almost a literal statement. He made a stunning 77 3-point shot attempts in a row and 94 out of 100. We can learn from Curry that practicing our craft might not make us perfect, but we will likely see improvement that will not occur without investing in the effort to get better.