2020 had its fair share of (not-so) memorable moments in the sports and entertainment industry. We went from jam packed events, to a sudden pause that dragged on for months, to bubble and virtual events, followed by games with no fans, and now limited capacity attendance.
The partnership world was turned upside down in 2020, in what many believe to be for the better over the long-term of the sports and entertainment industry. Almost any and every idea was on the table and limits were stretched as rights holders looked every which-way to create value for brands amidst a global Pandemic.
The way the sports and entertainment industry handled 2020 is best summed up by one of many legendary quotes from UCLA basketball Coach, John Wooden:
"Things turn out best for the people who make the best of the way things turn out.”
This past year was not easy, but there seems positive indications that better times are just around the corner. As 2020 comes to an end, we to highlight some of the best emerging trends of the year that we think will alter the sports and entertainment industry for years to come:
Naming Rights with a Purpose
One of the most hyped announcements of 2020 was the unveiling of the Seattle NHL Expansion team, the Seattle Kraken. Along with the team’s brand emergence, the Kraken began landing partnership deals, headlined by the naming rights of Climate Pledge Arena. If you are searching your Rolodex to call on Climate Pledge, you will not find a company, but rather a cause for companies to be Net Carbon Zero by 2040. The engine behind this naming rights deal is behemoth Amazon, driven by a bigger purpose of promoting social good through the power and reach of sports.
In the press release announcing the naming rights deal Amazon founder and CEO, Jeff Bezos said, ““We look forward to working together with Oak View Group, a new Climate Pledge signatory, and NHL Seattle to inspire global climate action.” This is not just a brand awareness play, but a true driver and example of change, as there are plans for Climate Pledge Arena deliver on:
-Being the first arena in the world with a net Zero Carbon certification by the International Living Future Institute
-Having all-electric operations and be powered by 100% renewable electricity
-Operating all events at the arena at “zero waste” with durable and compostable containers
-Having Seattle Kraken and WNBA Storm tickets double as free public transit passes
Could we see the world’s largest companies or philanthropists take a new approach on positioning naming rights for larger social good initiatives?
“Patching” Up Revenue
In 2017-2018, the NBA was the first of the four major leagues to allow partner branding on player jerseys via the jersey patch. This decision paid serious dividends, generating over $150 million in new sponsorship revenue throughout the league.
The value of the player patches is believed to even be undervalued. According to a Sports Business Daily article, the patches could be worth at least 30% more than when the original deals were sold. In an era where attention is hard to capture, being on the shoulder of a top athlete is prime real-estate. National brand recognition between partner and rights holder reached as high as 66% between the Magic and Disney partnership.
Other leagues have taken notice, and even rolled out plans for equipment and jersey branding. Most recently, the NHL approved and rolled out the ability for clubs to sell helmet branding for the 2020-2021 season as a way to bolster losses from the COVID-19 Pandemic. It’s believed NHL clubs will be able to collectively salvage $15 million via the new ad space, although more so to keep current revenue as opposed to bringing in new dollars.
In addition the MLB has reportedly begun its valuation for sleeve patches and helmet decals as baseball season looms in the near future. The MLB had previously dipped its toe in the water with equipment branding, as the Red Sox and Yankees fashioned Biofreeze jersey patches during the 2019 London Series. According to a Nielsen report using the 2019 London Series as a baseline measurement, it’s projected that MLB teams could garner over $11 million in brand value over the course of a full MLB season.
One would tend to believe that once leagues and rights holders see the dollars these positions bring in and/or save throughout the 2020-2021 season, it will be hard to turn back the millions of dollars attributed to a simple patch or sticker.
Broadcasting of the Future
2020 also brought on a slew of changes in the broadcast space due to new arena layouts, no fans, and the need to provide partner value in new ways. The MLS took action during the MLS is Back Tournament by adding new camera angles, microphones, and digital ad-placements throughout the broadcast. The enhanced camera angles and microphones were designed to provide a different viewing experience and bring fans a vantage point of the game that is not possible to provide with thousands of fans in attendance.
While many broadcasts decided to go with ambient crowd noise, the MLS elected to amplify the sounds from on the pitch to capture the feel of a soccer match in closer detail. The most visible of MLS broadcast changes was the large virtual mid-field adidas logo that was met with mixed remarks from fans. Although this may not be a season-long opportunity in the future, virtual pitch signage may come into play via flighted or properly timed placements.
Broadcasts continue to develop as the need to reach new and underserved consumers via linear and digital channels is at an all-time high. The NFL and Nickelodeon are partnering together this coming January during Wild Card weekend to air a Playoff game via Nickelodeon outlets. This broadcast is sure to tap on past nostalgia of older generations and introduce the NFL to a younger audience in ways they have not yet done.
According to the NFL, the special broadcast will “feature one-of-a-kind kid-focused content and Nick-themed elements throughout, including a special halftime presentation, guest reporters and original on-field graphics, virtual filters and more.” There will be engagement throughout the week leading up to the game and throughout the game to provide an immersive viewing experience, highlighted by a sneak peek of the new SpongeBob series Kamp Koral: SpongeBob's Under Years, which is set to launch later in 2021.
Makegoods, Makegoods, Makegoods
If there are two words synonymous with the sports and entertainment industry in 2020 it’s COVID-19 and makegoods. Before the Pandemic hit, makegood was not a commonly used word in everyday vernacular. That all changed in March as rights holders and broadcasters had to quickly come up with answers for many unknown questions.
The Wall Street Journal reported in May that over $10 billion worth of sports and entertainment sponsorship could be delayed and that over 120,000 agreements and 5,000 brands had been affected. This report doesn’t take into account the past seven months, in which games and events have either been limping along or remained on pause.
This year didn’t stop rights holders and broadcasters from doing everything in their power to provide value for brands. Many of the initiatives mentioned above were bred as makegood opportunities, and countless other remedies have been created in order to save revenue and provide brand engagement.
Although delivering makegoods are something the sports and entertainment industry never want to enact again, having to work through the past year has provided the experience and confidence that people are resilient and willing to innovate in the face of adversity
It seems as if there is light at the end of the tunnel, with a COVID-19 vaccine starting to go into deployment and sporting events beginning to allow a limited capacity of fans at the arena and stadiums. We all hope we get back to the point of packed crowds again. If 2020 has taught us anything, it’s that we should and need to be ready to adapt, and that change, although it may be painful in the moment, leads to better opportunities once it's pushed through. Congratulations to everyone who has made it through this year, and cheers to a 2021 that will see the sports and entertainment industry rebound higher than Charles Barkley.