The Jersey Boys: Will Lucrative Sponsorships in Major League Soccer Provide a Gateway into Other Sports?

By Mahmud, Shahnaz | ADWEEK, June 23, 2008 | Go to article overview

The Jersey Boys: Will Lucrative Sponsorships in Major League Soccer Provide a Gateway into Other Sports?


Mahmud, Shahnaz, ADWEEK


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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.

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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 identifies 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 aware ness 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. …

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