homeVIRGINIA BUSINESS

SPORTS MARKETING
     

FUNDS
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GAMES

There's more competition than ever for the sports marketing dollar in Virginia. Sponsors pursue the top events, then let televisions and turnstiles tell the tale.

By Mike Ashley

Jon Lugbill doesn’t mind rolling up his sleeves and helping out at youth soccer tournaments. "They’re great events and they’re good for tourism," he says. "But they don’t generate the publicity."

And publicity is what sports marketing is all about.

Lugbill is executive director of the Metropolitan Richmond Sports Backers, an 8-year-old nonprofit organization dedicated to promoting sporting events in Richmond. As the Sports Backers have become more aware of the need to make a high-profile splash, they’ve set out in search of bigger games. That’s why in-line skaters, skateboarders and stunt cyclists descended on the state capital in May. More than 84,000 spectators watched roughly 300 competitors from around the world during the four-day X Trial series.

Equally important, a national TV audience was still tuning in nearly a month after the conclusion of the actual extreme-sports games to watch taped highlights on ESPN and ESPN2. They didn’t just see daredevil athletes, though; they saw Richmond’s recently refurbished riverfront.

"You can’t really put a price tag on 35 hours of national TV from the riverfront," says Lugbill. "I think it’s significant to show a national audience that Richmond has something besides just history."

The Retail Merchants Association of Greater Richmond shares that mind-set. Along with the Sports Backers, the group provides grants to 15 different events annually, including collegiate championships, international gymnastics competitions, Amateur Athletic Union events and the annual Crestar Richmond Marathon.

There are several groups like Lugbill’s across the state, working up a sweat to lure top sporting events and network television cameras to their hometowns. In the cities where those organizations are most successful, major regional and local sponsors easily join the mix.

Take a look at the Michelob Championship at Kingsmill, a stop on the PGA Tour, or the Trigon Champions in Richmond, part of the men’s senior tennis circuit. And don’t miss the Goody’s Body Pain 500 in Martinsville or the Food City 500, just a NASCAR lap or two across the Tennessee border in Bristol.

The Virginia Gold Cup, a steeplechase event, drew 50,000 fans to the Great Meadow Racecourse in The Plains in May, backed by heavy-hitters like Mercedes-Benz, NationsBank, United Airlines and Sprint. Sponsors paid between $25,000 and $100,000 for the affiliation. Mercedes-Benz bought the title sponsorship and set up an off-road driving course behind the race facility so attendees could test their four-wheel-drive vehicles.

While Virginia doesn’t have a major sports franchise within its boundaries, the hills are alive with the sound of minor-league baseball, soccer and hockey. Within the next two years, professional basketball will come to Richmond and arena football will surface in Virginia Beach, Richmond and Roanoke.

In Salem, at that sports-crazed city’s state-of-the-art football, baseball and civic center complex, NCAA Division III championships in football, basketball and softball have found a home and have flourished under the nurturing care of Director of Civic Facilities Carey Harveycutter and his assistant John Saunders.

"Your ultimate goal has to be to get the money in the local economy and have it generate," Saunders says. "Sports makes money that way. You may lose money directly, but once you get that money in your economy, it generates multiple times. Our community sponsors understand that."

If the event doesn’t make money directly, Salem still wins in unprecedented national television exposure, increased tourist traffic in normally slow periods and more than $2 million in local impact over the course of a year from an annual government investment of about $70,000. Local advertisers pay between $750 and $4,000 to get tickets and exposure, in addition to the warm fuzzies that come with putting their city on the national sports map.

So what do sponsors get for their sports-marketing buck? While tickets, luxury suites, signage, advertising tie-ins and name-recognition are all tangible rewards, there are more subtle benefits.

Trigon Healthcare sponsors the senior men’s professional tennis stop in Richmond and reaps the positive association that goes with the event. "With [Trigon’s] emphasis on health and wellness, it’s a natural fit for us to sponsor an event that raises awareness of the sport’s contribution to a healthy lifestyle," President and CEO Thomas G. Snead Jr. said in prepared remarks.

Other corporations use sponsorships to build relationships with key clients. University of Virginia alumni George Whitlow, for example, anted up for one of Scott Stadium’s new luxury suites. "It provides a forum where you can meet a client away from the place of business," says the owner of Lexus of Richmond and Whitlow Chevrolet. "A lot of business deals are done on a golf course or at a football or basketball game. A lot of my success over the years has come from meeting people away from the office."

Wood Selig, associate athletics director for external operations, points out that the University of Virginia plans to move its office of career planning and placement to the new expanded area of the football stadium. "We’ll turn a facility that has usage 10 days a year into an area that will be used almost 365 days a year," he says. "We envision corporate suite-holders conducting job interviews on campus in their suite with prospective student employees."

On a less subtle level, the Virginia Lottery, one of the biggest sponsors of sporting events around the state, simply likes the size and diversity of sports-crazed crowds. According to Virginia Lottery Director Penelope W. Kyle, the agency advertises with nearly all the state’s public college and university athletic programs for an annual cost of nearly $500,000 and at every state minor-league baseball and hockey venue for slightly more than $100,000.

"We wanted to be in a forum where there were large groups of people, either there in person or listening on the radio or watching on television," she says. "We can’t think of anything else that pulls people together like [sports]."

Townley Goldsmith, manager of promotions and marketing for the Richmond Braves, says her team has pulled in more than 500,000 fans in each of the past six years. Outfield billboard sponsors like Cadmus Communications benefit from exposure, not only at the 70 Richmond Braves home games, but also from 30 Virginia Commonwealth University baseball games and other events such as concerts.

That exposure, however, isn’t the only reason sponsors like Cadmus advertise, though. "We try to make a statement that we support things people do in their leisure time when they’re out with their families," says Cadmus Director of Marketing Peter Habenicht, whose father once pitched for the Braves’ forerunner, the Virginians. "When they see Cadmus in that context, it’s not so much about selling as it’s saying, ‘We’re glad you’re here.’"

*  *  *

In 1993, Virginia tourism promoters were going around in circles about how to reach a growing target market in the Southeast. Turned out, going around in circles was just the solution to their marketing problem. When then-tourism director Pat McMahon heard he could get on board as a NASCAR sponsor for $200,000, the flag unfurled on a partnership that for two years in the mid-1990s put Virginia Tourism at the forefront of sports marketing.

John Siddall, president of the Richmond-based advertising firm of Siddall, Matus & Coughter, had been scratching his head about how to help his client, the Virginia Department of Economic Development, tap into a Southern market that was already making up a third of the state’s visitors. Expensive television advertising wasn’t in the modest state budget, but when Chester-based motor sports mogul Dan Cheverly approached the agency about NASCAR sponsorship, a green light went on.

"Our research showed that in 28 televised Busch Grand National races with our logo on the car, if we had to buy that in terms of television time, it would have cost about $3 million," recalls Siddall. "So that seemed like a pretty good idea."

To coincide with the 25th anniversary of the "Virginia is for Lovers" theme in 1994, the slogan was slapped on the No. 25 Busch Grand National car of 25-year-old Hermie Sadler, and the promotion was off to the races.

As rookie of the year, Sadler’s achievements garnered recognition and interviews, and so did the novelty of a state-sponsored race car. A special toll-free number was designated for the car and showcased on the dashboard for those comfy, inside-the-car camera angles, as well as on the side of the trailer that carried the car from race to race.

"When we looked at the numbers of the calls we received each Monday morning, you could even tell where that truck had traveled over the weekend," laughs Martha Steger, public relations director for what’s now called the Virginia Tourism Corp. "It was a very successful promotion."

Alas, after two years, public money couldn’t sustain a successful NASCAR team, even on the Busch Grand National circuit, a stepping-stone to the Winston Cup series. Today, $200,000 won’t even put your name on a NASCAR windshield wiper. The backwoods sport that grew up on dirt tracks throughout the Southeast is now running on opulent ovals paved with gold.

More than 100,000 spectators fill the stands at Richmond International Raceway for both of the track’s annual Winston Cup races: the Pontiac Excitement 400 in May and the Exide NASCAR Select Batteries 400 in September.

In May, a record 103,000 people piled in to see Dale Jarrett take the checkered flag in the Quality Car/Ford Credit car. Perhaps most importantly, NASCAR has positioned itself as family entertainment. "Have you ever seen a driver in victory lane with his family, his kids, his wife?" says Kenneth Campbell, vice president of public relations and marketing for the Richmond International Raceway. "People in the stands can admire that, and they bring their children to admire it, too." And at some Busch series races, children under 12 get in free.

The sport’s demographics have become increasing appealing to sports-minded sponsors. "Forty percent of our people in the stands are women," Campbell says. "Traditionally, they’re the ones spending the grocery money, so you don’t have to wonder why Kellogg’s is here and Tide and other sponsors like that are here. They’re looking at the folks in these stands who shop at Ukrop’s or Safeway or Winn Dixie or wherever."

Steve Sheppard, spokesman for the Martinsville Speedway, estimates that his sleepy little city and surrounding Henry County benefit to the tune of about $30 million every time one of the two local Winston Cup weekends rolls around.

"We open the campgrounds a week ahead of time, and there are people who stay all week," he says. "By the time you figure in the television money" — $2 million per Winston Cup race — "and the exposure, it’s unbelievable."

Martinsville packed in 81,000 fans for the Goody’s Body Pain 500 in April, the same number the track drew at the NAPA Autocare 500 last September, just after adding seats. Not surprisingly, the track is under construction again. Another 12,000 seats and more luxury suites are coming this winter. Suites, ranging from 20 to 60 seats, cost between $25,000 and $35,000 and are primarily held by the big national sponsors like Pepsi, Coca-Cola, BB&T and of course, NAPA and Goody’s.

"More affluent and corporate types are noticing [NASCAR]," says Heather Petry, sales promotions specialist for Virginia Beach’s Stihl Inc., the outdoor power equipment manufacturer that recently signed an associate sponsorship agreement with driver Bill Elliott’s No. 94 McDonald’s racing team. "But we’ve always felt avid NASCAR fans were our customers, and for us, this is just a direct link with them and our market."

*  *  *

Virginia’s two pre-eminent football teams, the University of Virginia and Virginia Tech, struggled in the 1970s. But now they are high-caliber programs, both on the field and in how they handle their corporate sales.

"One of the biggest trends in our business is working with an outside sales group in our marketing," says Tim East, Virginia Tech’s assistant athletic director for marketing and promotions. "There are a lot of advantages to teaming up."

That’s one subject on which Hokies and Wahoos can agree. Virginia sold its marketing rights in 1993 to college athletics’ largest sports marketing firm, Host Communications of Lexington, Ky. Tech followed suit in 1994, teaming up with the new International Sports Properties of Winston-Salem, N.C.

Tech was the second university to sign on with International Sports Properties: Wake Forest was the first. And they have been followed by such high-profile programs as Alabama, Marshall, Missouri and Syracuse. International Sports Properties is now No. 2 behind Host Communications in total schools.

There’s strength in numbers, as the companies attract larger advertisers with a solid regional base of schools. But that’s not the only attraction for Tech and U.Va. "The main advantage ... is guaranteed revenue," says Steve Angelucci, International Sports Prop-erties’ senior vice president in Blacksburg. "If Virginia Tech went 0-11 next year, there’d still be a guaranteed rights’ fee no matter what, and we would be suffering in sales the next season, not the university."

Those rights fees can run from $600,000 all the way to $2 million for the nation’s top programs. To their credit, on and off the field, the Hokies have worked themselves toward the upper end of that scale.

Meanwhile, in Charlottesville, the sounds of construction at 68-year-old Scott Stadium are music to the ears of Wahoo boosters. Counting the famed hill in the north end zone, where students and others flop on the grass, the Cavaliers currently "seat" 47,000 for games, but that number should increase to more than 60,000 for the 2000 season. Four thousand new seats are going in this year, and Selig says all but 750 of those new seats were sold by June. The stadium expansion also will create 44 luxury suites that can be leased for $50,000 a year.

The stadium deal also prompted the university to find a new sports-marketing partner. Virginia signed an agreement with Premier Sports 18 months ago after switching from Host Communications. Premier, however, was bought out by Outdoor Systems, which in turn was purchased by a CBS marketing division called Infinity.

Virginia joined forces with Premier because of that firm’s experience at "enhancing the fan experience" and improving stadiums and arenas, Selig says. Those are important considerations when you’ve got a football stadium expansion on the drawing board and a new basketball arena in the long-term plan. Outsourcing marketing makes sense in these belt-tightening times around Virginia’s campuses. It also makes sense because of the commonwealth’s sometimes bureaucratic business practices.

"With state procurement rules and regulations, before we outsourced our sports marketing we had to put together about a 60-page request for proposal for our four scoreboard signs in Scott Stadium," Selig says. "We ended up sending out a 70-page RFP to about 100 corporations asking them to submit a proposal to us on why they should be allowed to spend X number of dollars in Scott Stadium.

"How many businesses sell that way?" he asks. "None successfully."

*  *  *

The bottom line is that sports — both professional and amateur — are becoming increasingly business-oriented. Big-dollar sponsorships are no longer limited to major pro sports.

Big-league baseball stadiums, for example, used to shun billboards on their outfield fences. The billboards were considered a bush-league marketing ploy that minor-league franchises had to employ to make ends meet. Now many of the most heralded new stadiums in the major leagues are covered with billboards and banners.

"We only have two outfield signs, one in left field and one in right field," smiles Jay Richardson, the Norfolk Tides’ director of sales and marketing. "We did that to give it a major-league look. That was seven years ago, and now the major- league look is becoming a minor-league look."

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Chad Hunt
Brand X wins big: The X Trials attracted an estimated 84,000 spectators and a national television audience to downtown Richmond.





























































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Mark Rhodes
Angles in the Outfield: Townley Goldsmith persuades sponsors to put their marketing messages on the Richmond Braves' outfield fence.
























































































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Chad Hunt
Know your NASCAR: When it comes to economic impact, stock-car racing runs circles around other professional sporting events.

ON TRACK
A look at the top 10 sporting events in Virginia during the past 12 months
shows that everyone's racing to match NASCAR's attendance

Event Sport Location Month Crowd
1 Michelob Championship Golf Williamsburg 10/98 123,548
2 Pontiac Excitement 400 Auto Racing Richmond 5/99 103,000
3 Exide NASCAR Select Batteries 400 Auto Racing Richmond 9/98 103,000
4 X Trials Extreme sports Richmond 5/99 84,000
5 Goody's Body Pain 500 Auto Racing Martinsville 4/99 81,000
6 NAPA Autocare 500 Auto Racing Martinsville 9/98 81,000
7 Virginia vs. Virginia Tech Football Blacksburg 11/98 53,000
8 Virginia Gold Cup Steeplechase The Plains 5/99 50,000
9 The Virginia is for Lovers Cup Powerboat racing Norfolk 7/99 50,000
10 International Gold Cup Steeplechase The Plains 10/98 35,000

 

TAKE ME OUT TO THE BALLGAME
There are 16 professional teams in Virginia with more on the way in arena football
and International League Basketball. Here's a look at the current roster.

BASEBALL
Team Level Affiliation Stadium [Capacity] Avg. 1999 Crowd
Bristol White Sox Rookie Chicago White Sox DeVault Stadium [2,000] 800*
Danville Braves Rookie Atlanta Braves Dan Daniel Memorial Park [2,588] 1,449*
Lynchburg Hillcats Class A Pittsburgh Pirates City Stadium [4,000] 1,618
Matinsville Astros Rookie Houston Astros Hooker Field [2,700] 1,400*
Norfolk Tides Class AAA New York Mets Harbor Park [12,057] 6,160
Potomac Cannons Class A St. Louis Cardinals Pfitzner Stadium [6,000] 2,247
Pulaski Rangers Rookie Texas Rangers Calfee Park [2,200] NA
Richmond Braves Class AAA Atlanta Braves The Diamond [12,314] 6,011
Salem Avalanche Class A Colorado Rockies Salem Memorial [6,300] 2,943
HOCKEY
Hampton Roads Admirals ECHL Washinton Capitols Norfolk Scope [8,994] 6,149
Roanoke Express ECHL Independent Roanoke Civic Center [8,706] 4,740
Richmond Renegades ECHL San Hose Sharks Richmond Coliseum [11,088] 5,324
SOCCER
Hampton Roads Mariners A-League D.C. United Virginia Beach Sportsplex [6,000] 2,904
Northern Virginia Royals D-3 Pro D.C. United Annandale High School Stadium [4,000] 200
Roanoke Wrath D-3 Pro D.C. United Victory Stadium [13,000] 650
Richmond Kickers A-League D.C. United University of Richmond Stadium [10,000] 2,757
*1998 Attendance           ECHL - East Coast Hockey League         NA - Not Available


© AUGUST 1999, Media General Business Publications Inc.,
publisher of Virginia Business Magazine