Navigate Research

Industry Insights

As the industry leader in evaluating and measuring marketing investments, Navigate has a wealth of knowledge in the sponsorship and marketing space. This blog shares our knowledge and insights on current events in the sports business, marketing and sponsorship worlds.

Sponsorship and Sustainability in Sports

Navigate Research - Thursday, December 03, 2015

Written by: Jordan Bloem

With world leaders convening in Paris this week for climate discussions, the issue of sustainability is once again center stage in the news – and many players in world of sports have embraced their role in environmental responsibility. Teams and leagues throughout professional and collegiate sports have invested heavily in initiatives that are not only environmentally responsible but also provide valuable sponsorship opportunities for the right partners. The examples below show properties and brands that have led the way in “green” sponsorship in sports.

The HEAT Group Achieve LEED Gold Certification for AmericanAirlines Arena

 

AmericanAirlines Arena is proud to be LEED certified.

Earlier this year the U.S. Green Building Council awarded AmericanAirlines Arena with a LEED Gold certification, the first ever LEED Gold certification awarded by USGBC for a sports and entertainment facility. LEED certification has saved money for The HEAT Group from an efficiency standpoint and has also provided a valuable new sponsorship asset.

The LEED Gold certification builds on The HEAT Group’s original LEED certification achieved in 2009, which at the time attracted key partners including Home Depot and Waste Management, who combined to invest $1 million in sponsorship of HEAT’s sustainability work during the first year of LEED certification. Since that time Pepsi, Levy Restaurants and Pritchard Sports and Entertainment Group have also joined as sponsors of HEAT’s sustainability efforts.

Waste Management Phoenix Open Diverts 100% of Waste from Landfills


Recycling and compost bins at the Waste Management Phoenix Open.

The PGA TOUR’s most highly attended event is also its greenest. The Waste Management Phoenix Open, affectionately known as the “Greenest Show on Grass,” diverted 100% of tournament waste from landfills for the third consecutive year in 2015. With over half a million attendees, this is no small feat.

Waste Management has intelligently used the platform as title sponsor of the Phoenix Open to demonstrate its green capabilities, providing waste, recycling, and portable restroom services. In this way a brand that many would consider in no way related to sports has become endemic to one of the most popular sporting events in Phoenix each year and synonymous with sustainability.

Eat Local at MLB Stadiums

In 2011, Luke Yoder, the director of field operations at Petco Park, planted an assortment of vegetables in a garden at the ballpark. Those crops eventually made their way into food items sold at the stadium and began a trend of MLB teams planting their own gardens, including Coors Field in Denver, AT&T Park in San Francisco, and most recently Fenway Park in Boston.


Fenway Farms, presented by Stop & Shop, Dole, Sage Fruit, and Aramark.

These farms have provided healthy local produce for ballpark food and have also yielded sponsorship opportunities, particularly for food brands that now have a more organic (pun intended) way to connect with baseball fans. For example, “Fenway Farms,” which will grow an estimated 4,000 lbs of produce annually, is presented by Stop & Shop, Dole, Sage Fruit, and Aramark.

A New Opportunity in Sponsorship

As properties continue to increase their green initiatives, creative opportunities for sponsors will continue to grow. Brands traditionally align with properties to improve their perception among fans, however with a growth in sponsorship of green initiatives brands can now also reach environmentally conscious spectators that might be less interested in the game on the field but dragged to a game by friends or family.

It will be fascinating to watch as green sponsorships continue to grow more prevalent, not to mention beneficial for the future of a healthy planet.

The Scrutiny of Daily Fantasy Sports

Navigate Research - Thursday, November 12, 2015

Written by: Chris Miller

They are everywhere you look… TV commercials, online banners, newspapers, train stations, shopping malls, and sports arenas have all been flooded with advertisements of the two major daily fantasy sites- DraftKings and FanDuel.  As a matter of fact, this morning’s Mike and Mike radio broadcast featured two FanDuel commercials and if you take a look outside our office window in Chicago, you will see one of their billboards.  Even if you’ve never played on either of these sites, chances are you have noticed the barrage of advertisements over the last three months, the effort of a combined spend of over $200 million in TV advertising this NFL season. 

Much to their credit, the attempt to spread awareness by the two major players in the industry has worked pretty remarkably.  It is estimated that daily fantasy games will generate around $2.6 billion in entry fees this year.  Both FanDuel and DraftKings have raised over $300 million in investments from the likes of major media companies such as NBC Sports and ESPN, as well as each of the 5 major U.S. sports leagues.  These major media networks and leagues are obvious beneficiaries of daily fantasy play, with the inevitable growth of viewership and interest in sports that comes from those who participate.  For all of those who have entered a lineup on one of these sites, you know how important it is to monitor your players’ performances that night.  That’s likely why Adam Silver, the commissioner of the NBA, embraces the idea of daily fantasy sports betting and publicly declared his support for it.

All that said, could the rapid growth and in-your-face promotional efforts be to blame for the increased scrutiny and uncertain future that lies ahead for these daily fantasy companies?  Though FanDuel has been around since 2009 and DraftKings since 2012, it was just Tuesday that New York attorney general, Eric Schneiderman, ordered the two major daily fantasy companies to stop taking bets from New York residents.  Schneiderman was quoted saying “Today we have sent a clear message: not in New York, and not on my watch.”  Pending an appeal, this cease-and-desist order would result in a loss of more than 1.1 million users and a combined $384 million in revenue per year. 

FanDuel and DraftKings’ legal teams vow to fight the decision made by the New York attorney general.  The passage of the Unlawful Internet Gambling Enforcement Act of 2006 left room for “games of skill,” and that is the main point of argument for these daily fantasy companies.  FanDuel CEO Nigel Eccles states "If you don't know football, you don't know basketball, you will quickly find out it's a game of skill."  Some would liken it to horse betting, which is legal in the state of New York and is perceived to have an aspect of skill involved.  Are there any major differences in analyzing information to choose a horse to win a race and analyzing information to select athletes for an optimal daily fantasy lineup?

With the decision of the attorney general in New York, you have to wonder what sort of domino effect might lie ahead for DraftKings and FanDuel.  Regardless, stricter regulations are certainly to come for these companies, and they could jeopardize their future altogether.  The puzzling part is how they’ve grown to be multi-billion dollar businesses right before the very eyes that are now challenging their legality.         

Perhaps the best approach for DraftKings and FanDuel would be to spend less money competing with each other, and join forces for a unified legal battle.

The Benefits of Coming Close

Navigate Research - Monday, November 02, 2015

Written by Jacquie Callahan

While winning a championship is every sports organization’s benchmark for success, coming close isn’t a complete failure, at least in terms of generating immediate fan engagement and revenue.  Until last night, and with last year’s loss against the San Francisco Giants, the Kansas City Royals had not won a World Series championship since 1985.  Even though it was almost 30 years since their last title, due to their recent accomplishments including back to back championship appearances, the Royals franchise has seen a positive impact on their fan engagement and overall financial success of the franchise.

From a measurement perspective, The Royals’ 2014 World Series appearance helped improve overall fan consumption.  According to an article in the Kansas City Star, 70 percent of adults in the Kansas City DMA either watched, attended or listened to at least one Royals game in 2014.  At 70 percent, this kind of fan consumption was tied with the Kansas City Chiefs and far surpassed University of Missouri sports teams.  Attendance jumped 12 percent for the season, and the playoff run generated more than $20M in revenue for the club.  The average attendance per game in 2014 was 21,628 and jumped to 26,587 in 2015. 

One question that immediately comes to mind is whether or not this success will be sustained over a long period of time, or will it just be something that is short-lived?  The Tampa Bay Rays were runner-ups in the 2008 World Series, which was also the team’s first winning season.  They saw some success in total revenue for that year with a total franchise revenue of $160M in 2008 (up from $138M in 2007), but dropped to $156 the following year.  They improved from a franchise value of $290M in 2008 to $320 in 2009, however, it is still considered one of the least valuable franchises in MLB.  The Texas Rangers saw a spike in average regular season home attendance between 2011 and 2012 following their trip to the World Series in 2011 against the St. Louis Cardinals in which they were defeated. The Detroit Tigers lost the World Series to the San Francisco Giants in 2012, but making it that far helped overall revenue increase from $238M in 2012 to $262M in 2013.

Since 2002 the Royals have continued to gain value as a franchise.  The most success the franchise has had was following the 2014 World Series appearance and is projected to improve following this year’s championship.  At the start of the 2015 season, the Royals were ranked 5th in the league in attendance and the average Royals ticket cost nearly $30, which was the eleventh-most expensive in the league at the time.

With Kansas City’s World Series victory over the New York Mets, it will be interesting to see if this is something that will help the franchise for many years or if it is something that is short-lived like it has been for other teams like the Rays.  World Series appearances help generate team popularity and fan engagement while also helping with immediate revenue growth, but what remains important for continued success is consistency.  

The Kansas City Royals celebrate after defeating the New York Mets 7-2 to win the World Series in New York on Monday, November 2.

Photo credit: CNN

Navigate Research assists UC Berkeley in establishing most comprehensive banking partnership of its kind

Navigate Research - Friday, October 30, 2015

CHICAGO, IL – October 29, 2015 – The University of California, Berkeley UC Berkeley today announced it has selected Bank of the West as the Official Bank of UC Berkeley. The 10-year agreement is one of the most comprehensive agreements in the country, both in terms of the services provided and financial support. Navigate Research worked with UC Berkeley to align stakeholders across campus and provided research and analytics to value and build a partnership of this caliber. 

“Navigate has been a valuable partner throughout this entire process”, said Solly Fulp, Executive Director of University Business Partnerships & Services for UC Berkeley. “They assisted in creating a comprehensive university-banking partnership that addressed UC Berkeley’s priorities in student programming, brand alignment, campus services, and revenue support.”

For more specifics on the agreement, review the official press release here.