The Jersey Boys

NEW YORK Microsoft and the Seattle Sounders, one of the newest franchises in Major League Soccer, announced a five-year agreement in May. Reportedly worth $20 million, the deal places the "Xbox 360 Live" logo on the front of Sounders jerseys. For the Sounders -- a team that was just named in April and won't begin competitive play until March 2009 -- to be party to the software giant's largest sports sponsorship is a strong indicator that at least some marketers believe the league may be able to deliver a high return on investment.As MLS continues to ratchet up major jersey sponsorship deals, other American team sports leagues, including Major League Baseball, the National Basketball Association, the National Football League and the National Hockey League, are keeping a watchful eye, though they categorically deny plans to sell ad space on uniforms in this country.Microsoft's sponsorship marks the third significant deal struck this year by MLS. It follows Volkswagen of America's reported five-year $14 million payout to D.C. United in early May. VW will also pay an additional $1 million to $2 million each year as the league's auto sponsor. Best Buy's deal, announced in January, will reportedly see the electronics retailer pay $7.5 million to the Chicago Fire over three years. Overall, MLS has 10 jersey sponsorship deals in place for its 16 teams.The health of MLS was in question for a number of years. A 2004 press report indicated that the league had hemorrhaged $350 million since forming in 1993. (MLS games began in 1996.) But, a change in leadership -- commissioner Don Garber took the reins in 1999 -- saw the creation of a new strategy that gave a measure of autonomy to each individual club. This includes control over jersey sponsorships as well as ancillary programming related to stadium events, like concerts. Kathy Carter, evp of Soccer United Marketing, MLS' marketing arm, noted that the league had always intended to sell advertising on the front of shirts -- a common practice in soccer-mad nations around the globe -- but decided to wait until the identities of each club were carved out. "We worked on it for a number of years and felt it was a good time, that the value of the league was at the right level. The awareness was at a point where [the teams] had something real they could talk to a potential partner about," she said. Carter said the league monitored blogs once the sponsorships began to hear what people had to say. "Our research told us that there would be terrific acceptance. What we didn't realize is that they'd say, 'Well it's about time.' They now call us more authentic as a result of doing this because it puts us in line with the rest of the world," she said.But, for advertisers, just what is the value of the exposure? Joyce Julius Associates, a company that evaluates corporate sponsorships, measured the ESPN telecast when David Beckham debuted as an MLS player on July 21, 2007. The verdict: Sponsor Herbalife garnered more than $175,000 in TV exposure. Beckham's Los Angeles Galaxy jersey appeared for 37 seconds, translating into a value of $30,835. Other jerseys clocked in at 1 minute, 19 seconds, for an exposure value of $65,835. Added to that, signs featuring Herbalife logos reaped an additional $70,835 worth."It's pretty big value when you're thinking about the MLS and where it's positioned in the sporting landscape of the U.S.," said Eric Wright, vp of research and development at Joyce Julius, referring to the league's limited coverage in comparison to other pro sports. MLS' broadcast partners are ESPN/ABC, Fox Soccer Channel and Fox Sports en Espanol, HD Net and Univision. Coverage also extends to MLSnet.com, individual team sites, a YouTube channel, online coverage from its broadcast partners and mobile.Wright added that MLS "does a good job with the jersey sponsorships. Those are very sizeable. And as simple as the notion is, we are always kind of astounded when groups move forward with an offering like that for their sponsor and they don't allow them to have a large enough logo that can easily be seen on TV."Size, it seems, no longer matters. "What we do a very good job of is taking these players and developing them into personalities. So, you're not seeing a soccer shot from that wide of an angle anymore," said Mike Petruzzi, vp of national advertising sales at Fox Soccer Channel. "I think that lends a tremendous amount of value to the front of the jersey sponsorship."To measure its ROI, juice maker XanGo -- the first advertiser to sign on for the jersey sponsorship program in 2006, with Real Salt Lake -- employed marketing consultancy Amplify Sports and Entertainment, which uses proprietary measurement tools intended to align a client's business and its sponsorship objectives. "For XanGo, we were extremely successful," said Michael Neuman, president of Amplify.The firm's analysis found a 3.9-to-1 ROI, correlating to XanGo's business objectives and their assigned financial values based on aspects of the sponsorship. According to Amplify, one of the brand's biggest performers was a charitable program called The World's Largest Soccer Jersey. The effort involved the collection of Real Salt Lake fan autographs, with XanGo donating $10 per 2,000 signatures, and ran from August 2007 through the end of the MLS regular season in late October. Due to TV exposure gained from the giant jersey's placement in the team's Rice-Eccles stadium, the program ranked among the top four elements in the advertiser's media mix. According to Keith Wan, senior account director at Amplify, the value equaled 16 percent of all of XanGo's media exposure.But, the value of the exposure extends beyond impressions. For BMO Financial Group in Toronto, Canada, the four-year jersey sponsorship and 10-year stadium naming rights deal it cut in 2007 seeks to capitalize on the nation's growing soccer fan base. BMO was motivated by the groundswell of support it saw for the World Cup and European football championships. "This told us that when Toronto FC was being established ... the numbers were going to support us. We knew the general public was really going to grab hold of it," said Sandy Bourne, vp of advertising and corporate sponsorship and events for BMO.For German auto manufacturer Volkswagen, which owns a soccer team in its home country, one of the driving factors of its sponsorship is to build brand awareness in the U.S. The car company recently moved its American headquarters from Michigan to Washington, D.C., and wanted to integrate into the capital community. Building an emotional attachment through soccer is a key element."We think that by working in the local markets and local communities and exposing the brand, this will help us develop some relationships with those people and ultimately help sell more cars. But, the first thing we are trying to establish is some sort of emotional connection," said a VW representative. For others, getting on a global stage is an ambition. "People around the world love soccer. It's especially popular in the Hispanic market, where in the U.S., over 50 percent of our business is in this community," said Des Walsh, Herbalife's evp of operations and sales. "The excitement travels around the globe, as was recently seen in Asia when the Galaxy toured."That audience becomes more of a tangible reach as the league continues to export its talent overseas. Earlier this month, New York Red Bulls forward Jozy Altidore, considered one of the league's top players, announced his transfer to Spanish club Villareal CF. The price was $10 million -- the highest for any MLS player to date. "The transfer of American players to international leagues is an important step in elevating their international profile. That means increased competition between MLS teams and international clubs, which is also a benefit to advertisers," said David Sternberg, evp and COO of emerging networks at Fox Cable Networks.But could the sponsorships now playing out on the soccer field inspire a change in dynamic for the other sports leagues? Reps for MLB, the NBA, the NFL and the NHL have all officially stated that there are no plans to follow suit in selling ad space on their jerseys. However, after reiterating MLB's stance against uniform sponsorships, an MLB rep said, "We will continue to monitor what appears to be an increase in the trend that places non-manufacturer corporate marks on uniforms." What's more, Brian Cupps, Amplify's vp and group account director, said the company is in talks with several professional leagues. "Those three deals [Best Buy, VW and Microsoft] probably more than the first five or six have really opened up the eyes of the other leagues and could possibly lead to a reevaluation of signage on their jerseys."Added Amplify's Neuman: "Every single one wants to have a deeper understanding." With the first steps towards jersey sponsorship being taken by MLS in the U.S. -- in an environment where alternate streams of revenue are critical -- it will be interesting to see if the other major sports leagues follow suit. Ten of the MLS teams are now raking in roughly $23 million annually over the next three to five years -- a little industry in itself. If in fact the others do put their jerseys on the sponsorship block, given the scale of their team numbers -- the MLB, NBA and NHL each have 30 teams across North America, and the NFL has 22 -- a brand new multimillion-dollar advertising category could result.

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The Jersey Boys

Shahnaz Mahmud

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Shahnaz Mahmud