Let's Go, Corporate Money? 10 Companies With Strong Ties to NCAA Sports
College sports fans represent the largest fan base in the US. So who is marketing themselves most actively to this market?
IMG College, a division of marketing giant IMG Worldwide, is largely behind the growth in corporate sponsorships. The company is probably the biggest player in college sports today, brokering deals of all sizes with diverse businesses and schools throughout the country. Andrew Giangola of IMG College, who spoke to Minyanville via email, provides some eye-opening statistics on the topic. College athletic programs have 173 million fans in the US, making college sports enthusiasts the largest fan base in sports. More than 114 million people attended college sporting events last year, which again beats out all other forms of sports. With regards to licensing, college sports are second only to Major League Baseball. That means, with well over 300 Division 1 schools in the NCAA, there are plenty of money-making opportunities available.
So just how deep is UPS (NYSE:UPS) in the world of college sports these days? Check out its website to see its title of "Official Logistics Partner" of the NCAA, Southeastern Conference, Big Ten Conference, and Pac-12 Conference to get your answer. In August 2011, UPS made headlines because of the sponsorship deal it made with 68 college sports teams -- the largest sponsorship deal, outside of network TV -- in college sports history. IMG College was responsible for bringing the players together for the four-year partnership worth $100 million, reported Sports Business Daily. According to the article, what made the deal so unique at the time was that the agreement with the 68 schools was straightforward and simple: "One negotiation, one contract, one approval from legal," wrote staff writer Michael Smith. Though UPS was probably the first, today there are several corporations sponsoring multiple college athletic programs with a single contract.
It's widely known that there are many NCAA Division I coaches receiving signing bonuses, but there are also many top-tier college athletic programs that receive cash perks from corporate sponsors. Nike (NYSE:NKE) is one business with contracts that not only provide uniforms, but also million-dollar signing bonuses to athletic departments. University of Alabama is a well-known example. The long-term partnership between Nike and Alabama began in 1994 and has flourished over time. In 2010, AL.com reported that the two struck a new deal that would continue through 2018. The eight-year, $30 million contract included all clothing, shoes, and accessories for athletes, in addition to bonuses for championship and title games won by both men's and women's teams. But it was the $2 million signing bonus that caught everyone's attention. Nike was not the first to use this tactic. Adidas (PINK:ADDYY) gave a $6.5 million signing bonus to Michigan in 2007 in a successful effort to lure the university away from Nike.
The DePaul Blue Demons men's basketball team might soon be shooting balls into the same hoops as the pros. Last week Crain's Chicago Business reported that Chicago's United Center, sponsored by United Airlines (NYSE:UAL) and owned by Chicago Blackhawks owner Bill Wirtz and Chicago Bulls owner Jerry Reinsdorf, offered the DePaul men's basketball team a mega-deal that includes 10 years of free rent. The Allstate arena, located in the Chicago suburb of Rosemont, has been the home to the DePaul's men's basketball team since the stadium opened as the Rosemont Horizon in 1980.
So what's the big deal about the United Center? It big, posh, and the house of basketball greats. The stadium opened in the summer of 1994 as United Center; naming rights had been purchased for $1.8 million per year through 2014. The amenities include seven restaurants and bars, meeting rooms, high-end executive suites, and a seating capacity of 22,220, which is a great deal more space than the Blue Demons' current digs offer. Other features include the incredible statue of Michael Jordan in-flight outside the arena and the direct reservation phone lines to United Airlines located in the executive suites, just in case a ticket holder feels compelled to book a flight while taking in a game on a Saturday night.
College football monolith Penn State fell hard in the wake of the Jerry Sandusky child abuse scandal that broke in November 2011. The football program, which made a profit of $53 million during the 2010-11 season, was hit by NCAA fines totaling $60 million in July, a four-year ban from post season bowl games, and a reduction in scholarships. But PepsiCo (NYSE:PEP) was not deterred. In May, the Center Daily Times reported that Penn State reached a 10-year exclusive deal with Pepsi and two months later Ad Age reported that Pepsi, a long-time sponsor of Penn State, was standing by the university, even as other corporate sponsors like State Farm and Benjamin Moore curtailed their support. "We are deeply disturbed by the findings of the investigation and the conduct of certain individuals at Penn State University, but will continue to honor our longstanding contract as a campus provider," said a Pepsi spokesman in a statement.
The insurance giant Allstate (NYSE:ALL) became an official corporate partner of the NCAA with the announcement of a deal with CBS Sports (NYSE:CBS) and Turner Sports (NYSE:TWX) in March. (This was in addition to attaching its name to the NCAA Division I Football Championship Sugar Bowl in New Orleans.) The timing of the deal couldn't have been better -- March Madness was just around the corner. The Daily Herald reported on March 5 that Allstate inaugurated its new deal by airing commercials during the television coverage of the NCAA Division I Men's Basketball Championship on TBS, CBS, TNT and TruTV. Allstate filled the void left by State Farm (PINK:STFGX), which ended its partnership with the NCAA in 2011.
For the past four years, Under Armour (NYSE:UA) has designed special edition college football uniforms dubbed Freedom Jerseys to benefit the Wounded Warriors Project, a charity that assists injured military veterans. This year Boston College and University of Hawaii wore the uniforms, helping assist veterans while sending Under Armour some positive publicity. Earlier this fall Complex, a design and pop-culture magazine, covered Under Armour's design effort by showing off the uniform's main features: a highly stylized American flag, a patch with the Wounded Warriors logo, and the phrase "Believe in Heroes" embroidered on it. The flag also appears on the players' helmets, cleats and gloves. Boston College wore their uniforms during their October 27 game against the University of Maryland and Hawaii showed off theirs in a face-off with UNLV on November 24. The patriotic jerseys were auctioned off following the games to raise money for the charity. Fans can get in on the action and do some good by purchasing replica jerseys and t-shirts on the Under Armour website.
It's common knowledge that Reebok provides gear to multiple college athletic programs, but sports junkies also know it for playing host to the nation's top high school basketball players during its Reebok Breakout Challenge. The annual summer invitational is held at Philadelphia University and the teenage attendees get top-tier training and exposure. NCAA coaches from around the country flock to the event to catch a glimpse of the high school basketball stars looking to get a college scholarship. Washington Wizard's John Wall is a 2007 alumni of the program and participated in this past summer's event, offering advice and drills to the young athletes who have dreams of following his footsteps into the pros.
In late August the home improvement megastore Lowe's (NYSE:LOW) became the exclusive social media sponsor of IMG College's roster of colleges and universities. This deal isn't just about Twitter accounts and Facebook (NASDAQ:FB) pages. The agreement also included mobile apps, a must-have for any business or organization these days. Now colleges that are a part of IMG College's client list will have access to a top-tier interactive platform featuring videos, photo galleries, schedules, and news items.
Among the 80-plus schools that will be benefiting from the deal are Duke, Georgia Tech, Virginia Tech, and Wake Forest University, according to the Winston-Salem Journal. What's in it for Lowe's? Not only will the company become the exclusive home improvement dealer to all the schools involved, Lowes will able to use college logos in marketing and advertising campaigns, not to mention sponsoring roughly 40 homecoming games. Their logo will undoubtedly be prominently displayed on every inch of the sponsored stadiums come game day.
In 2011 the Milller Coors Brewing Company (now Molson Coors) (NYSE:TAP) signed a 23-school sponsorship deal reportedly worth over $10 million. But being a business that sells alcoholic beverages can come with added pressure, especially when dealing with college students. MillerCoors and similar companies face marketing restrictions when working with colleges and universities. Sports Buisiness Daily reported that in addition to the inclusion of responsible drinking ads in its marketing campaign, the company cannot use college logos on its bottles, cans, and other packaging. But many do not see any downsides to aligning with the industry. Andrew Giangola of IMG College, the agency behind the deal, said via email that the MillerCoors deal provided significant revenue to schools while allowing MC to increase its messaging around responsibility.
Gatorade, owned by Pepsi Co, has been associated with both professional and college sports for decades, and currently has sponsorship deals with the Big Ten and Big 12 conferences. So it's fitting that the brand's roots are in a university setting. The company originated at the University of Florida in 1965 when university physicians developed a drink to give a boost to the school's athletes, the Gators. (The school adopted the alligator as its logo in 1911.) The idea was to replace electrolytes lost from physical exertion. The researchers involved named the drink Gatorade and the rest is history. The company's website boasts that "today, Gatorade can be found on the sidelines of more than 70 Division I colleges as the official sports drink of their men's and women's intercollegiate sports."
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