NEW YORK (AdAge.com) -- When Louisville, Ky.-based Papa John's signed a short-term, one-time deal with the National Football League around Super Bowl XLIV that included in-game promotions (but no pricey in-game spot), it hoped to sell 750,000 pizzas that day. Instead, it sold more than 900,000 pizzas at its 2,800 U.S. restaurants -- its best sales day ever.
"When we participated with the NFL, we took the Super Bowl from a very important day in our company to the single biggest sales day in our history," said Chief Marketing Officer Andrew Varga. "Once we saw the results from that, we realized pretty quickly that we should be evaluating whether we should be doing this long-term."
The chain is far from alone. Marketer interest in the NFL has been so strong that the league actually moved to reduce its number of sponsors to 21 for the upcoming season from 30 corporate partners in 2001 and 24 in 2008. The purpose was to avoid the sponsor-overload of, say, a Nascar, which has done a good job of delineating the categories for its partners so there are no conflicts but, nonetheless, still has 49 corporate sponsors.
"We've worked hard," said Mark Waller, who took over as the NFL's CMO last year with the charge of growing the league's business without falling into the trap that has befallen other leagues: peaks and valleys in both sponsorship and popularity. "We've done a good job of reducing the number of sponsors we have and making sure that the partners who work with us have absolute clarity over their space."
By the league's count, its corporate partners spend $1.5 billion every year in total advertising, promotion and merchandise around their respective deals with the NFL. And those deals range from $10 million to $15 million a year sponsorships, from the recent deal Papa John's cut to be the NFL's official pizza and what Procter & Gamble Co. spent last year to associate several of its brands with the league to some of the most whopping deals in sports. To wit:
- Anheuser-Busch, after several years on the sidelines, signed a six-year, $1.2 billion agreement in May to reclaim its position as the league's official beer sponsor. The price -- criticized by some -- was the biggest in company history, the first billion-dollar deal in NFL history and more than double what MillerCoors had paid. The deal takes effect in April of 2011.
- Earlier this year, Verizon Wireless agreed to fork over $720 million over the next four years to replace Sprint as the NFL's exclusive wireless partner.
- PepsiCo, in what will be an interesting scenario to watch, is in the final season of two deals totaling more than $1 billion: $560 million over six years for its Pepsi, Frito-Lay and Tropicana brands, and $500 million for Gatorade.
And, of course, there are the TV rights deals with CBS, Fox, NBC, ESPN and DirecTV that total $4 billion annually.
Currently, the only "conflict" for the NFL is competing financial services companies Barclays and Visa, but each owns a different type of sponsorship. Barclays is replacing Bank of America starting this season and will market credit cards bearing the NFL shield and the logo of the 32 franchises. Visa has league and collective club marketing rights for debit cards and is also the exclusive payment service for the NFL.
Rob Lefko, president of athlete marketing for Chicago-based Priority Sports, which represents numerous NFL players, said the only challenge he sees for the NFL is balancing the league and team sponsors. "The struggle will be to capitalize on the big national sponsors relative to the NFL as a whole, and give local teams enough leeway to put together their own agreements locally," he said.
The clarity that Mr. Waller spoke of is what A-B was looking for when it decided to get back in the game. The deal was surprising on two fronts. The Belgian company InBev, which purchased A-B for $52 billion two years ago, is notorious as a cost-cutter. And along those lines, some felt the $1.2 billion was an outrageous number.
"They grossly overpaid," said sports marketing expert Darren Rovell of CNBC. "That kind of money was absurd. At some point, this is going to catch up to all the leagues, every one of them, because eventually the sponsors are going to realize the ROI isn't there."
Mr. Waller, not surprisingly, disagrees. "When InBev bought A-B, everybody thought it was the end of the world," he said. "But once they settled into the management structure, not only did A-B come to the NFL, they came back to the NFL to a deal they had unfortunately lost [to MillerCoors] several years ago. Now, with a new management structure, a new corporate culture and a company with a focus on paying down debt, what do they do? Their first deal is with the NFL. To me, that's kind of a testament to the value proposition we bring to a company that is known for getting value."
Former A-B sports marketing chief Tony Ponturo, now CEO of the consultancy Ponturo Sports Management Group and who works with the NFL, said there was a reason that Anheuser-Busch overpaid. "They needed to excite their wholesaler system, and Wall Street, who were wondering if they were going to be the aggressive marketer of the future that they had been for the last 25 years. With one deal they said, 'We're here, and we just took out our No. 2 competitor,'" Mr. Ponturo said. "The NFL is the biggest sport with the biggest drama that culminates with the biggest, most-watched game. It's instant credibility to a sponsor."
Mr. Ponturo is working with the NFL as the league seeks to diversify and find new audience streams by co-producing a Broadway play that opens in New York in October called "Lombardi," about the famous Green Bay Packers coach and the man for whom the Super Bowl trophy is named after.
Though the Playbill-clutching crowd is about as far removed from a stadium filled with football fans as you can get, "we're always looking to challenge ourselves," Mr. Waller said. "From the commissioner on down through the organization, our goal is not to get complacent but to constantly innovate and bring in fresh thinking. Changing the Pro Bowl to be a week before the Super Bowl instead of after -- a lead-in, if you will, instead of a postscript -- and possibly expanding our season to 18 games [from 16], these are ideas where you don't rest on your laurels. 'Lombardi' is an example of that."