"Notre Dame, Under Armour Ink Unprecedented $90M Deal"

From Athletic Business

Analysis by Sylvia Lee in SRM 435 (section 2)

Recently, Notre Dame and Under Armour signed the most lucrative apparel and shoe deal in college athletics history. The agreement is over a 10-year period worth about $90 million in cash and merchandise. Currently, Notre Dame has a deal with Adidas, which will be ending in June.

In addition to the $90 million deal, the agreement will also allow Notre Dame to take some of the cash in company stock, potentially making the payoff even greater. Because of this, “shares of Under Armour were up more than 3 percent on the day and 80 percent over the last year.”

Notre Dame fans are worried that Under Armour will change the traditional uniforms, but Kevin Plank (CEO of Under Armour) ensured the fans that they will not make any major tweaks. The deal also does not allow Under Armour to get any signage in the stadium. Since 1930, Notre Dame’s stadium has been free of all advertisements and does not have a video replay board, and they will continue on with this tradition.

From a sport-marketing standpoint, I believe this is a huge opportunity for Under Armour since they are continuing to compete with other sporting apparel companies such as Nike and Adidas. With every Notre Dame football game being nationally televised, Under Armour will get a great amount of exposure. Because of this new deal, die-hard Notre Dame fans, students and faculty of Notre Dame could possibly also to become loyal to this brand in a sense that it may make them feel a connection with the football players and program. With about a quarter of the United States population being a college football fan, there is no doubt that Under Armour has gained a tremendous amount of publicity after signing this $90 million deal with Notre Dame.

This article is related to this sport marketing and sales course because it is about the benefits a sports team and a company gained by signing a sponsorship deal. Under Armour will get a lot of national television exposure during college football season, and Notre Dame will be getting a total of $90 million in cash and merchandise.

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Analysis by Titus Till in SRM 435 (section 2)

On Tuesday, January 21st, 2014, Under Armour and Notre Dame announced to the world their new deal, which is arguably one of the biggest contracts in college sports history between a University and another big name company such as Nike, Adidas, Reebok or Under Armour. Notre Dame’s previous deal with Adidas was the richest in college sports with the 10-year $82 million contract that will soon expire. Notre Dame’s new contract is now being referred to as one of the most valuable shoe and apparel contracts in the country. This 10-year deal will begin as soon as the contract with Adidas expires in June. The value of the deal was not revealed by Notre Dame or Under Armour, but is estimated to be worth a whopping $90 million over the next ten years according to ESPN reporters. Notre Dame will be joining a plethora of schools across the country who have a school-wide deals with Under Armour including company owner, Kevin Plank’s, alma mater Maryland, Texas Tech, Boston College, Utah, Temple, Northwestern, South Florida and South Carolina. For the fans that may have concerns with having changes made to the historical uniforms that Notre Dame has worn for years, Plank says not to worry. Also, Under Armour will not have any signage within Notre Dame Stadium in order to keep the traditional atmosphere, which excludes any advertisements and even a video replay board within the stadium.

This deal ultimately benefits both Under Armour and Notre Dame from a marketing standpoint because of the huge fan base that both Under Armour and Notre Dame have accumulated over the years. With these two entities joining forces, more awareness of both brands will grow. Not only does this create more buzz around the Notre Dame community but also will generate more cash through Under Armour’s company stock. As of 12:30 p.m. ET on the day that this deal was announced the shares for Under Armour went up more than 3 percent and up more than 80 percent over last year. I believe that this deal will generate more sales from Notre Dame fans wanting to be apart of the new change going forth. As this relates to our class, this is a perfect example of a successful deal for both parties involved. If all deals could sound this good on paper the world would be a better place but unfortunately not every company has a growing name like Under Armour and not every school has a tradition like Notre Dame. Whoever came up with this idea to merge this school and this company was a genius from a marketing standpoint.

"No Backlash for Olympic Sponsors: Chobani Rises Most"

From Advertising Age

Analysis by Jacob Porter in SRM 334 (section 1)

For our article discussion we decided to use an article that discussed American advertising and marketing during the 2014 Winter Olympic games. This article discussed how certain advertising campaigns boosted recognition of companies in terms of buzz, word of mouth, and purchase consideration. These numbers are based off of a study conducted by YouGov brand index in which they sampled about 4,300 consumers daily to find out how the general population felt about marketing during the Olympics. Through this study it was learned that Chobani differentiated their product very effectively throughout the games. This is in large due to their pro-gay oriented advertisements. Russia has a ban on distributing same-sex propaganda to youth which caused an outrage especially among gay activists here in America. Chobani and other companies like Chevrolet took advantage of this and produced pro-gay advertisements that were very popular especially among the LGBT community. According to the article lesbian and gay purchase consideration for Chevrolet skyrocketed in the past month.

From a marketing standpoint companies such as Chobani and Chevrolet did excellent and were very wise with their marketing plan. They saw an opportunity which was the outrage of American citizens over Russia’s anti-gay laws and decided to take advantage of it. I think that this kind of marketing is a risk because there are still a fair amount of people in America that oppose homosexual marriage, but these companies took a risk and it paid off big for them.

This article relates to a lot of things we have discussed in this class. One of the things we have discussed in sales is to “know the market/customer”. Clearly these marketing campaigns were not just thrown together a week before the Olympics, but there was probably extensive market tests and data collection. Companies like Chevy and Chobani found out that there was a big market that would respond positively to a pro-gay advertisement. It definitely payed off as it raised awareness, buzz, and product consideration for both companies.

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Analysis by Shanik Murthy in SRM 333 (section 1)

This article focused on the brands that were associated with the 2014 Sochi Winter Olympics and how their popularity was affected due to Russia’s Anti-Gay laws. Some brands were official sponsors of the event while others were not. Chevrolet, even though it wasn’t an official sponsor, saw its brand consumer consideration rise substantially after it’s commercial depicting same-sex marriage was aired. Chobani yogurt had the overall biggest increase in various categories derived from the YouGov Brand Index statistical calculations. The companies that sponsored the events were taking a big risk in regards to its gay and lesbian consumers because of Russia’s Anti-gay laws. By sponsoring the events, gay and lesbian consumers would infer that those companies were supporting Russia in its views on same-sex marriage and Anti-gay laws. However it turned out that the gay and lesbians positive perception of the companies that sponsored the event actually increased overall. Even though these companies were taking a big risk by associating themselves with the Sochi Olympics, I believe it was a smart marketing tactic nonetheless. Due to the overall popularity of the Olympics, companies were able to showcase themselves on a world stage, which is a rare occurrence that only happens every few years. This article has a direct correlation with this course because it showed what marketing principles and tactics big companies used to attract consumers on the world’s biggest stage, even in an adverse environment such as Russia in it’s current state. This article also showcased the consumer behavior towards these brands and how each brand was affected by the consumer’s perception of them. Finally, because the Winter Olympics is a worldwide sporting event, the brands that affiliate themselves with such an event have to display their top marketing skills to relate and portray their brand to all types of consumers on the biggest stage in the world.

"Georgia Tech May Auction Tickets to Clemson Game"

From Athletic Business

View from the Northwestern News Network

Analysis by Kristina Mohler in KIN 501

Georgia Tech University is looking into adapting a new ticketing approach that Northwestern University has found to be successful. This approach is a Dutch-auction style, modified from a Netherlands style of selling flowers. Northwestern University economics professors Jeff Ely and Sandeep Boliga pitched their customized version of this auction to the athletics department for their ticket sales.

In this case, Northwestern would tailor ticket prices according to demand and popularity and set them accordingly. As game days approached, ticket prices would drop until the section was sold out. However, differing from normal Dutch auctions, if you bought a ticket at a higher price than the final buyer, you would be refunded the difference in prices in the same section. This way, everyone in the same section pays the same price and no one feels cheated. For example, if tickets go on sale for $80.00 and you buy one right away, but the price drops to $65.00 right before the game, you would be refunded $15.00. A “price floor” would be set to never go below what season ticket holders pay. This method encourages fans to not wait to buy tickets, increases revenue, fills seats, and makes season tickets more appealing. The sooner you buy, the better seats you are guaranteed. Additionally, there is a chance that the ticket price will drop and you could receive a rebate. Season tickets may be more appealing because you avoid the chance of tickets selling out at a higher price, and you avoid the auction all together.

Some schools and professional teams have started using dynamic pricing systems. These two systems are similar that their ticket prices fluctuate according to demand. However, dynamic pricing can go up or down, increasing as demand increases or decreasing as demand decreases. Therefore, someone who buys the first ticket to a game or event will pay less than the person who buys the last ticket. The Dutch auction style will only decrease, never increase. Also, dynamic pricing locks the buyer in at the price they purchase at. Northwestern’s “Purple Pledge” allows for a refund if the price drops in their section after purchasing. Both styles encourage fans to buy tickets early.

Georgia Tech’s Bobby Dodd stadium holds 55,000. Adjusting ticket pricing to higher and lower demand games could help fill seats and increase revenue. Clemson will be the largest selling game of Georgia Tech’s 2014 season, but I bet hosting Georgia in 2015 could be an even greater revenue generator. In the article, it states that Georgia Tech struggles to break even financially and does not currently fully fund scholarships for its track, cross country, or swim programs. As long as Georgia Tech truly uses increased revenue for positive incentives such as scholarship funding, I think this is a great method that could be adapted across the board.

One of my favorite parts about this is how it potentially cuts out the “second market” (StubHub, Craigslist, etc.). Some have also proposed the idea of venues having a buyback option of which they can resell for profit, instead of having a final sales policy which causes buyers to resell their tickets on such second market venues. This could be lost revenue for the original venue, especially for sold out events. To me, it makes the most sense to offer a full refund for tickets that they could then resell, especially for high-demand or sold out events. I understand how not having a buyback system avoids sales loss for events that do not sell out however. Most second markets charge a fee of their own, so fans do not receive their full money back, and new buyers usually overpay (unless tickets are marked way down). A venue buyback could potentially be a win-win for themselves and buyers, and could help eliminate second markets and perhaps some scalping. I tried selling tickets on StubHub, and it was going to be impossible for me to get my money back. The demand for the game had decreased since I bought the tickets, and I would have had to post them for more than I bought them for in order to end up with my money back after StubHub got their percentage of the sale.

The article states that Northwestern did not offer sales figures to Georgia Tech, but said that the auctions had been successful. I am interested to see final numbers for both schools for both the higher demand games and the lower demand games.