Welts: NBA 'Partnership' Building to Buttress Against Sponsor Backlash

Brandweek,  Oct 26, 1998  

Tags: league, NBA, partnership

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With a lockout that has now eliminated the first two weeks of the season, you would think the NBA'S business partners would be suffering. On the corporate side of things, however, the NBA appears to be taking care of its own. "We aren't as worried as you might think, "said a marketer at one of the league's largest sponsors. Given that NBA pacts are heavily media-weighted, the league's sponsors may have less upfront-committed money at stake than other leagues' sponsors in similar situations, but the sure-handed manner that gave the league its rep as tops in the sports sponsorship game also seems to beholding. "They have really diffused the situation as an issue among their sponsors," said a marketer at another league. "I wish we had been able to do that." How is the league doing it? Rick Welts, the NBA 's chief marketing officer, discussed the issue with Brandweek's Terry Lefton.

Brandweek: How, in a situation like this, can you not have anxious corporate partners?

Rick Welts: There are two different worlds out there. People who use us to sell their products, and the people [for whom] we are the product [licensees]. The former are pretty understanding of where we are going and what we are trying to come out of this being and they have alternatives as far as media. It's obviously different if you are a licensee. But the average tenure of an NBA sponsor is a decade, so we have relationships and longevity working in our favor. We've made them all aware that they will get the information they need. And I believe they have confidence that at some point we are going to accomplish what we are trying to do.

BW: Has anyone asked for relief?

RW: Not among that group, but certainly from some licensees. Really, two areas are being affected. New business prospects have stalled, and it's been a little bit harder to get to the finish line on a couple of deals that are, for the most part, done, but now there is no real urgency to finalize.

BW: We hear McDonald's has walked way from its All-Star balloting sponsorship...

RW: They decided they didn't want to do it, and we decided we weren't going to sell it to anyone else, given the uncertainty of our labor situation... What has really worked well for us and them is dedicated creative on the product side. That will be their focus going forward, and their future commitment to us is greater financially and resource-wise than it has ever been.

BW: Word is you may have as many as 100 fewer employees, down from around 800, when this is over.

RW: We re going to be a different organization, period. We're going to emerge as a better organization when this is over, but that doesn't mean that we will not have done some damage to our brand that I can't calculate . . . Most of the changes will be on the [licensed] consumer products front than on the marketing front per se. We've had a hiring freeze in place since the beginning of the summer so through attrition since then we are smaller. We will come out of this smaller, leaner and, hopefully, that means better.

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