CHICAGO (AdAge.com) -- Between the sponsor nightmares created by Tiger Woods' philandering, the National Basketball Association's recent free-agent frenzy and the unprecedented global sponsor activation surrounding the 2010 FIFA World Cup, the business of sports has perhaps never been in the headlines so frequently.
And few people are more qualified to make sense of this turbulent and fascinating year than Michael Levine, co-head of CAA Sports since 2007. Mr. Levine leads a unit that not only represents more than 500 of the world's most famous athletes, but is also active in the areas of corporate marketing, broadcast rights and sports-property sponsorship sales. Ad Age recently caught up with Mr. Levine for a wide-ranging conversation about the state of the sports world.
Ad Age: We're just starting to see brands take advantage of the social-media presences of players. Wilson just broke a campaign starring Roger Federer on his Facebook page, and you guys work with Cristiano Ronaldo, maybe the most social-media savvy athlete in the world with 6 million Facebook fans and his own YouTube channel. But I'm struck by how rare it is for brands to take advantage of opt-in audiences of millions like the ones Federer and Ronaldo can deliver. Are these online presences coming up more in your negotiations? How do you value them?
Mr. Levine: Yes, we are seeing more of it. ... I think we're at such an early stage here in the growth of social media, and as time goes on we're going to see it be a more and more important element within the marketing mix for brands. ... We think our properties and athletes who have passionate fan bases have more and more opportunities to connect with them these days, more than they've ever had. We see tremendous value in the power of social media for our clients.
Ad Age: In terms of athletes, who do you think is doing it the best in terms of how they work with brands right now, in social media and otherwise?
Mr. Levine: Wow, that's a tough question. ... I really just love the way Derek Jeter's career has evolved, and his relationships with brands over that entire career has had such a similar and artistic growth. It's been natural, it's been authentic and it's been relevant.
Ad Age: And he's a client, right?
Mr. Levine: Yes, he's a client, and I'm a Yankees fan, so it's doubly biased. But if you take a look at some of the specifics of his career, he's evolved gradually with his partners and had only long-term partners. He was the first baseball athlete to join Michael Jordan's Brand Jordan [a Nike subsidiary], and has continued to lead their charge in baseball. He's had a longstanding and highly visible relationship with Gatorade, which again is another authentic connection between the athlete and the brand. And then in the last 24 months he's established an important relationship that we're proud of with Gillette as part of their Champions program and, within 12 months of that relationship beginning, he becomes the Yankees all-time hits leader and leads the Yankees to their 27th world championship. So he clearly epitomized what a champion was before and continues to, and that's how it should work. Authenticity and relevance are two words we're always seeking in these types of partnerships.
Ad Age: Is there an example of a brand working in sports that you think is really doing it the right way?
Mr. Levine: It's tough to choose one. One that has really impressed us is Delta. They're in the midst of a very competitive landscape with three major New York airports. They've made a strong commitment to sports and entertainment through partnerships with the Mets, Yankees and most recently with Madison Square Garden. ... They've created this Delta Sky Lounge at both Citi Field and Yankee Stadium, and they'll have one at the new Madison Square Garden as well, and that's a place where their guests and the fans can enjoy their team in an environment that is familiar to them, like they have at JFK and LaGuardia. And the work they've done with David Wright and Derek Jeter and their foundations has been spot on from a cause-marketing standpoint. They hosted a really well-attended viewing party during the subway series [between the Mets and Yankees] this past month in Madison Square Park. All of these different things make people feel like there's a strong connection between that airline and New York. And that's what their goals were, and their execution is meeting those goals.
Ad Age: You guys handle sales for some of sports' greatest blue-chip properties, including the Yankees and Madison Square Garden. So many brands want to be associated with those types of properties, and we've sometimes seen these things get sliced up pretty thin. How do you find the right balance so that you get maximum value for the property without watering down the value of the association?
Mr. Levine: We've had the good fortune of working with the Yankees as they were entering the new stadium, and Madison Square Garden as we head into its transformation over the next three years. And in each case we spend a lot of time trying to create the optimal formula that'll work for both the team and its partners. Each circumstance is different, but I feel like the Yankee partners and the newest signature partners at Madison Square Garden -- Coca-Cola and Delta -- are thrilled with the way these have been set up.
Ad Age: I don't think we can talk about the business of sports today without getting into all these NBA free agents. This has really become a phenomenon, and the athletes -- particularly LeBron James -- seem to have milked the publicity from it pretty well. Do you think the way this has played out has been good for brand LeBron or brand Dwayne Wade?
Mr. Levine: This is such a unique moment in the NBA's history, and, from our perspective, we think it's a great opportunity for our clients to be front and center for unique and special career moments. To be front and center night after night, week after week, whether it's during competition or during the off-season, we think is a good thing. ... I think that even casual sports fans have had a hard time not recognizing that this year's free agency in the NBA was unique and special. And when sports [events] cross over from avid to casual fans, that's only good for everyone who's a stakeholder in sports.
Ad Age: The other big sports stories of the year are all about Tiger Woods and Ben Roethlisberger and the like. Do you see any changes in how brands are approaching athletes in the wake of these stories?
Mr. Levine: We're not seeing any significant change. When you look back at marketer decision-making, there's always a risk-reward calculation brands have to make. And that's true whether you're talking about a TV show, branded web content, an athlete or a property. You're seeing scrutiny from the brand side to see whether the ROI and the risk-reward ratio can stack up, but I don't think it's changed drastically in recent years.