Major League Baseball said on Tuesday it extended sponsorship deals with four major corporate partners and signed three new agreements in Japan despite the global financial downturn.
The multiyear deals, collectively worth "multiples of tens of millions" of dollars, include extensions with Procter & Gamble Co's, Gillette brand and Intercontinental Hotels Group Plc., as well as with PepsiCo Inc in Latin America and financial services company E.Sun Financial Holding Co Ltd in Taiwan.
"There's a comfort zone going to a Major League ballpark," said Tim Brosnan, MLB's executive vice president of business. "It's the comfort food of sports through the year and right now we think that's attractive to consumer products folks."
On the heels of the Japanese team's victory in the World Baseball Classic tournament in March, the U.S. sports league signed new deals in Japan with Lawson Inc., Japan's second-largest convenience store chain; large South Korean retailer Lotte Group, for its Soh ice cream brand; and Kowa Co Ltd of Japan, which makes pharmaceuticals including analgesic patches.
Still, times are tough. Baseball froze its 2009 budgets and officials expect attendance to fall as much as 10 percent, while revenue could come in flat compared with last year's record $6.5 billion. Signaling the potential struggles, MLB's average attendance during spring training games slid 7.7 percent.
"It would be foolhardy to even pretend that it's the greatest time in the world," Brosnan said.
MLB and its 30 teams are projected to see global sponsorship revenue decline 4.8 percent to $514 million this year, according to IEG, a unit of advertiser WPP Plc WPP.L that tracks such spending.
MLB does not disclose sponsorship revenue, but Brosnan said international business is growing and it is too early to draw conclusions about sponsorships given that the baseball season lasts six months. He said more deals will be signed this year.
Most sports leagues have been hurt as consumers cut spending on tickets and concessions and companies buy fewer high-priced suites and sponsorships. The National Football League, National Basketball Association and NASCAR race teams all have cut jobs in the past few months as the recession set in.
Many industry officials expect corporate spending on U.S. sports sponsorships to be down this year as companies, especially long-time backers in the auto and financial services sectors, trim costs.
Sponsorship deals typically include rights fees, commitments to advertise with the sport's broadcast partners and baseball-themed marketing initiatives, Brosnan said.
MLB's renewal with Gillette extends the relationship into its ninth decade. Gillette also expanded baseball-themed marketing into Puerto Rico.
Gillette's sports marketing spending will be flat this year compared with 2008, Gillette director of communications Mike Norton said. However, baseball remains a key property to reach the company's target market.
"We use sports as one of our major planks in order to reach men," he said. "Baseball has been such a strong part of American society ... It just really makes a lot of sense to connect Gillette, baseball and men."
The world's largest razor maker has been a league sponsor since 1939 and will continue to sponsor the rookie of the month awards in both the American and National leagues.
Gillette, which ran ads featuring MLB players as early as 1910, will continue to feature New York Yankees shortstop Derek Jeter in several TV commercials. It also uses other sports stars in its marketing, including golfer Tiger Woods, tennis's Roger Federer and soccer's Thierry Henry, and sponsors the stadium in which the NFL's New England Patriots play, as well as six NASCAR drivers.
As part of Intercontinental's new three-year deal, the company's Holiday Inn will become the official "road trip" partner for baseball, including awards of free game tickets to hotel guests.
"Almost half of our total volume comes from business travelers ... and Major League Baseball has a high correlation with heavy business travelers," said Wayne Hamilton, Holiday Inn's director of brand marketing.
(Source: euroinvestor.co.uk)
