The decision of two of the biggest conferences in college sports to cancel their fall seasons, ostensibly on health grounds, is yet another blow to sportswear giants struggling to manage the lack of live sporting occasions.
While the Pac-12 and Big Ten conferences have opted not to play, the ACC, SEC and Big 12 were still set to take place at the time of writing. But for sporting brands involved with colleges – like Nike, Adidas and Under Armour – there are financial implications to wrestle with as sales of jerseys and licensed products diminish.
“If you have a marketing asset that can’t be activated, doesn’t that diminish its value?” asked Matt Powell, senior industry adviser at researchers The NPD Group. “And isn’t there at least a case to go back to the school and say, ‘I want some relief on my on my contract with you?’”
Speaking to Yahoo!Sports, he explained why brands sponsor schools: “They want, one, their logo to be in every picture of the athletes playing their sport, and two, they want every college kid on the campus to be wearing merchandise that has their logo on it.
“If kids aren’t back at school, if teams aren’t playing, the fans aren’t buying, there is no residual marketing value of having your logo on television and that asset is really devalued.”
Broadcasters too will be feeling the pinch – The New York Times cited Kantar data showing that college football brought in nearly $1.6 billion in advertising (excluding digital platforms) last year.
“The lack of live sports through the spring, through the summer, is a major hit to these media companies who are trying to broadcast these games and justify the big rights fees they’ve paid to conferences,” Dan Wolken, National Sports Columnist USAToday, told Yahoo!Sports. There’s talk of playing games in the spring “but right now it’s a big mess.”
And he flagged “another inter-industry fight” during the fall as the contracts between schools, broadcasters and advertisers negotiated through intermediaries are unpicked. “The financial ramifications on every level of the college sports industry when you start cancelling games, especially football games, are massive,” he said.
Sourced from Yahoo!Sports, New York Times; additional content by WARC staff