Science Essay (Quality Work, On Time, A++ work)
In March, I had the opportunity to meet with the Commissioner of the National Hockey League (NHL) — one of the ‘Big 4’ sports leagues in North America — in his office in downtown New York City. As a fan of sport and a student of the business of sport, it was a most inspiring and illu- minating experience. The Commissioner, Gary Bettman, and I discussed a number of business-related issues during a 75- minute chat, including a solid 20 minutes on sponsorship. Although we know that a good proportion of sponsorship spending is invested in professional sport (about CAN$319 of the CAN$1.55bn spent in 2010 in Canada1), little is written about the details, trends and intricacies of spon- sorship specific to professional sport. My meeting with the Commissioner was an opportunity to delve into this a little.

My most important overall learning from Mr Bettman is that sponsorship is important, growing and providing value to NHL partners. This was illustrated just days after our meeting when Molson Coors announced a deal with the NHL for a seven-year sponsorship reportedly worth US$375m, making it the largest sponsorship deal in NHL history (sup- ported by a league announcement). During our interview, the Commissioner also outlined some very important obser- vations on sponsorship in major profes- sional sport, including:

• Sponsorship is important to NHL clubs on two levels: direct and indirect rev- enue. There is a revenue component

from the sponsor to the club but, more importantly, there is the indirect com- ponent of how the sponsor activates on the sponsorship to the benefit of the NHL using web, television and other marketing tools. He noted two sponsor- ships in particular where he had observed effective activation: Tim Horton’s and the NHL Heritage Classic, and Bridgestone and the NHL Winter Classic.

• An important metric to measure growth in sponsorship is the level of activation carried out by sponsors. Commissioner Bettman reported an increase of 87 per cent in activation by NHL sponsors in the past two years, meaning that NHL partners are spend- ing close to double on activating NHL sponsorships compared with 2008–09.

• Sponsorship remains an untapped ele- ment. ‘I think the future is limitless’, the Commissioner summarised after explaining plans to grow the NHL’s var- ious sponsorship-enabling platforms, including web, satellite radio, the nhl.com portal, NHL mobile and others.

• Sponsorship is important to the NHL at a human resources level. The Commissioner estimates that approxi- mately 30 of the NHL’s 400 full-time staff spend a significant proportion of their time working on sponsorship.

• Sponsorship does not discriminate against small market teams. The Commissioner pointed out that spon- sorship at a city level for a professional

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sports team is affected by the number of franchises in the market. New York, the largest market, has nine teams, while a small market like Ottawa only has one professional sports franchise.

• Community involvement and engage- ment are vital. The Commissioner emphasised in detail the point that, for club sponsorship to be successful, a team — including its players, coaches and management — must be active in the community, doing charitable work, connecting with people of all ages and demonstrating to sponsors and potential future sponsors that it cares and will provide opportunities for activation.

In summary, Commissioner Bettman sup- ported, added to and provided specific insights into much of what we know about sponsorship and the reality of sponsorship in a major professional sports league where

franchises are valued at hundreds of millions and where players can make upwards of US$10m per season. Importantly, he emphasised the role of the league in sup- porting its clubs on all levels of operation, including sponsorship, and where that sup- port includes both a strong league sponsor- ship base and the provision of platforms by which the clubs can provide activation opportunities for their own sponsors.

Norm O’Reilly North American Editor

May 2011

REFERENCES (1) O’Reilly, N. and Seguin, B. (2011) ‘5th

Annual Canadian Sponsorship Landscape Study’, paper presented at the Sponsorship Marketing Council of Canada Conference, Toronto, 7th April.

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