IEG SPONSORSHIP REPORT

Airline Industry May Be In Holding Pattern, But SponsorshipActivity ContinuesAlthough airlines have faced significant challenges over the past several years–mainlyfluctuating oil prices, the global recession and, more recently, flu concerns–sponsorshipactivity remains alive and healthy.

Nearly all of the country’s major carriers have signed significant new deals and/orrenewed major partnerships over the past year.

Still, the skies are not entirely clear to the horizon. Economic turmoil has forcedAmerican Airlines to drop under-performing properties in favor of those that can be activated on a global basis, while Southwest has turned to one-year deals due to the uncertain economic situation.

As in years past, airlines’ key priorities remain promoting their positioning as the hometown carrier in key markets, gaining one-on-one marketing opportunities to letconsumers sample their on-board experience, building relations with frequent businessflyers and securing business from sponsored properties.

Deals are typically a combination of cash and in-kind tickets, with the proportion ofcash commensurate with the size of the property.

U.S. Airways Inc. stands out from its competitors among the eight largest U.S. airlinesin having a much smaller sponsorship presence. The other seven ranked by passengercounts prior to the Delta/Northwest merger are profiled on pages 4 and 5.

Sponsors: Properties Not MeetingOur NeedsWhat do sponsors talk about when properties aren’t around?

Not surprisingly, many topics that would give properties great insight into how toapproach and work with their partners.

IEG recently hosted the first in what is planned to be a series of round-table discussionsamong sponsorship decision-makers. The 10 sponsors who participated–individualswith national and regional responsibilities for major U.S. and Canadian B2C and B2B marketers–agreed to allow IEG SR to summarize the conversation provided their individual identities were not shared.

The conversation focused on the challengespresented by the economic crisis andhow sponsors and their property partnersare and should be responding.

The round-table participants identified

HOT CATEGORY

More Properties Roll The Dice WithCasino Partners Casinos are a good bet as prospectivesponsors for many properties.

Historically an active category, casinoshave raised their sponsorship ante oflate, with both commercial and tribalcasinos signing a number of new dealsover the past six months.

In one of the highest-profile deals,Potawatomi Bingo Casino earlier this year acquired presenting status of theMLB Milwaukee Brewers.

Other recent deals include Harrah’sEntertainment, Inc. and the MLB NewYork Mets; Isle of Capri Casinos, Inc. andthe NBA Memphis Grizzlies; MoheganSun and the MLB New York Yankees;Morongo Casino Resort & Spa and theL.A. County Fair; and Red Hawk Casinoand the Southwest Airlines Chinese NewYear Festival & Parade in San Francisco.

On top of that, two planned casinosrecently came to the rescue of a venerableproperty on the brink of financial ruin.

Foxwoods Resort Casino, which alreadyoperates a tribal casino in Connecticut,and SugarHouse Casino, a commercialenterprise, have the two available licensesto develop casinos in Philadelphia andare moving ahead with their plans despitecontinuing community opposition. Earlierthis month they each pledged $100,000

In Depth

Insights

IEGSPONSORSHIP REPORT

The latest on sports, arts, causeand entertainment marketing

May 11, 2009Volume 28: Number 9Published biweekly by IEG, LLCwww.iegsr.com

Casinos continued on page 2

Airlines: Who Does What continued on page 4

Sponsor Round Table continued on page 8

AT ISSUEWhat sponsors want

TAKEAWAYSour economy requires more flexibility from properties interms of re-structuring packages, payment structures.

AIRLINES: WHO DOES WHAT 4key activations, evaluation criteria and decision-maker contacts for the category’s most active sponsors

MEETING SPONSORS’ NEEDS 6means developing creative deal structures andreducing reliance on cash; four actionable tips from successful properties

ENTERTAINING PROSPECTIVE SPONSORS 7pays off for Roush Fenway Racing

ASSERTIONS 2

Inside This Issue

IEG SPONSORSHIP REPORTMay 11, 20092

Casinos continued from page 1Assertions

We have it on good authority that a major sports property granted one of the airlines profiled in this issue’s In Depth a free sponsorshipwhen faced with the prospect of losing the long-term partner. This newsleaves us conflicted. Elsewhere in this issue we report that sponsorparticipants in an IEG round table (see p. 1) clearly don’t believe properties are being flexible in helping sponsors adjust to difficulttimes; and we report on ways for rightsholders to help their partnersreduce cash commitments (see p. 6). So wasn’t the property in thiscase following the spirit of what we recommend? Perhaps. Our concernis twofold: First, indications are the gratis deal was prompted mostly by the desire to save face and maintain a full sponsor roster for aproperty known as a smart seller–not a justifiable reason in our book.Second, a completely free sponsorship represents excessive “flexibility”that could impact other properties. Not that we anticipate giving awaysponsorship to become the standard expected by sponsors, but havingit out there puts further pressure on properties at a time when theyare struggling mightily themselves.

We were very surprised by the Chicago Tribune article regardingMillerCoors’ deal for a Miller Lite Party Deck at Toyota Park, home of the MLS Chicago Fire. The proprietary area was described as “anall-you-can-eat-and-drink pavilion,” which as IEG SR senior editorWilliam Chipps said in the article, brings “an inherent amount of risk.”The description–provided to the newspaper by the property–also tookMillerCoors by surprise. Reps for the brewer, who were none toohappy, tell us that the Party Deck, while providing free beer, will not be promoted as “all you can drink”–the same as its similar sectionsin various stadiums, which have not experienced problems.

When it comes to sponsorship, the Olympic movement has long been able to do things no other property would be able to pull off,from providing clean venues that eliminate TV-visible sponsor ID tocommanding nine-figure fees for rights that are limited to one country.The latest example comes from London 2012, which according to theFinancial Times is set to sign McCann Erickson as its official adagency for a reported fee of £10 million. Let’s see if we have thisstraight: Many properties actually pay agencies to create and placetheir ads. Some properties are fortunate to have agencies provide adservices pro bono. The London Games will have an agency that notonly will handle all its advertising, but will pay the equivalent of roughly$15 million for the privilege. The phrase “must be nice” comes to mind.

If iPhone apps are all the rage, why should sponsorship be immune?The Chicago 2016 bid committee has just introduced a “Countdown toCopenhagen” app that marks the days left until the October 2 IOC votein Denmark to select which candidate city will get the 2016 SummerGames. Each day brings iPhone users a historic fact about either theOlympics or Chicago along with the days remaining until the vote.Chicago is the first bid city to take advantage of this technology. Thecommittee also has engaged with 40,000 fans on Facebook and hasmore than 2,200 followers on Twitter. Given the relatively low cost ofdeveloping apps, we expect to see plenty of other properties offeringupdates and info through this new platform.

Jim Andrews

to help close a $500,000 shortfall facedby next month’s TD Bank PhiladelphiaInt’l Cycling Championship.

Although they once focused primarily on pro sports teams, fairs and festivals,casinos are increasingly aligning with college sports and other types of properties once considered off limits.

Case in point: San Diego State University sold title of its indoorsports facility in March to the Viejas Band of Kumeyaay Indians,which operates a casino, restaurants, retail and other businesses.The Viejas Arena deal–which is worth “approximately $6 millionover ten years,” according to the sponsor–will replace title sponsorship from Cox Communications, Inc. July 1.

In addition, the University of New Mexico’s athletic department lastyear announced a five-year, $2.5 million partnership with Route66 Casino Hotel that confers exclusive gaming sponsor status.

Dale Coleman, vice president of sales, marketing and creativeprogramming with Fairplex, the L.A. County Fair, Hotel andExhibition Complex, attributes much of the recent sponsorshipactivity to the changing nature of the gaming industry and theneed for casinos to promote their updated offerings.

“What they offer today is much different than 15 years ago,when they were perceived as run-down, second-rate offerings,”he said. “Today they are very much first-rate, state-of-the-artproperties. By coming to a fair, they can speak to folks whomay have a different opinion of who they are.”

Most of the recent deals in the category have emanated fromtribal casinos, which remains the fastest-growing segment of thecasino industry.

Gaming The System: Selling Sponsorship To CasinosBelow, hot buttons and suggestions for properties pitching dealsto commercial and tribal casinos:

Help entertain premium players. Gaming companies frequentlyuse sponsorship to access unique hospitality and other perks toreward high rollers, or “whales” in casino parlance.

For its part, Harrah’s activates its partnership with the Grizzliesby offering courtside seats to high rollers from its Harrah’s andHorseshoe Casino Hotel properties in nearby Tunica, Miss., aswell as customers from Harrah’s properties from as far away asChicago and California.

“Lakers fans may not be able to sit on the floor at a game in Los Angeles, but they are able to do that here,” said Mike Redlick,the Grizzles’ executive vice president of business operations.

And it’s not just the whales: Casinos also look for hospitalityopportunities for more casual players, said Redlick, who alsoworks with Boyd Gaming Corp.’s Sam’s Town, HollywoodCasino Corp. and others.

“Tickets and other perks aren’t just for key players, but for peoplewho sit at a $10 table for a few hours as well,” he said.

Wynn Resorts, Ltd.’s Wynn Las Vegas leverages its tie to theNBA Houston Rockets by hosting a golf tournament with teamplayers for its heavy-hitters, said Jason Kohll, the Rockets’ seniordirector of corporate development. The team also brings othersponsor reps to the outing, he added.

In addition to Wynn, the Rockets also signed a new partnershipwith Pinnacle Entertainment, Inc.’s L’auberge du Lac Casinoresort in Lake Charles, La. at the start of the NBA season.

WHOCasinos

TAKEAWAYExpanding categoryspending significantly onsponsorship, primarilyof local properties.

IEG SPONSORSHIP REPORT May 11, 2009 3

“It’s a category we want to grow,” Kohll said.

Drive casino traffic. Gaming companies all look for opportunitiesto bring people through their doors.

That can be accomplished in a number of ways. Sam’s TownTunica leverages its Grizzlies partnership through Sam’s TownTuesdays, where it distributes $20 free-play cards to the first10,000 fans over age 21 at FedEx Forum.

The team also has driven traffic to local casinos by having themhost viewing parties featuring team cheerleaders during awaygames, Redlick said.

For its part, Harrah’s is using its new partnership with the Metsto host customers and prospects at the Caesars Club, a 12,000-square-foot dining and entertainment facility in Citi Field.

“The inclusion of the Caesars Club is a wonderful opportunity toreach the loyal fan base of the Mets in New York and give thema taste of the new amenities we offer here in Atlantic City,” saidDan Nita, senior vice president and general manager, CaesarsAtlantic City, in a statement.

The sponsorship also includes promotional rights to two Class A minor league affiliates, the Brooklyn Cyclones and Florida’s St. Lucie Mets.

Provide broad reach. Big spenders in traditional media, casinosoften look for guaranteed advertising exposure to be included insponsorship packages.

Both Morongo’s sponsorship of the L.A. County Fair and Viejas’deal with SDSU afford exposure on large electronic signage visible to passing motorists on busy freeways.

Pay attention to new casinos. Like many other marketerslaunching new brands, casinos see sponsorship as a cost-effectiveway to grab attention when they make their debut.

For example, Red Hawk Casino’s participation in the San FranciscoChinese New Year fest followed by a month its December openingnear Sacramento.

Be sensitive to gambling issues. If an alignment with gamingcould be judged as inappropriate for a property’s mission, audienceor participants, partnerships can still be struck with casino operators if they are thoughtfully structured.

For example, title of the SDSU athletic facility is limited to thetribal Viejas name, not Viejas Casino.

“They were very sensitive to the fact that San Diego State has students under the age of 21; as a result, they made sure to promote their corporation and not just the casino,” saidRandy Bernstein, president and CEO of Premier Partnerships,the sponsorship sales agency that brokered the deal on behalf of the university.

The Southwest Airlines Chinese New Year Festival & Parade downplays gambling by aligning its casino partners with scholarships, coronations and other community-oriented activities.

“We have to be conscious that we are a family event, and we do not want to promote gambling,” said Peggy Kennedy,president of Kennedy Event Marketing, which sells sponsorshipfor the property. “Our casino partners support the communityand local nonprofits; they are not pitching the gambling angle.”

Know who to pitch. Local properties should reach out to marketing and/or promotions directors at tribal casinos or individual commercial casinos.

Owners of commercial casino chains, such as Harrah’s, Boyd and others also can sponsor multi-market or national properties out of corporate, but often leave local decisions to local marketing directors.

SOURCESCaesars Atlantic City, Tel: 609/348-4411Houston Rockets, Tel: 713/758-7200 L.A. County Fair, Tel: 909/623-3111Memphis Grizzlies, Tel: 901/888-4667Kennedy Event Marketing, Tel: 925/830-9940Premier Partnerships, Tel: 310/551-1777

Casino Sponsorships By Number Of Deals

Source: IEG Research

Arts 2%Entertainment 3%Causes 4%

Festivals 26%Sports 65%

2007 U.S. Gaming Revenue By Activity

Source: Casino City Press’s North American Gaming Almanac, 2008 and Indian Gaming IndustryReport, 2008-2009

Charitable Gaming 2%Race and Sports Wagering 4%

Lotteries 22%

Tribal Gaming 28%

Casino and Card Room Gaming 44%

“Our casino partners supportthe community and local nonprofits; they are not pitching the gambling angle.”

– Peggy Kennedy, Kennedy Event Marketing

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Airlines: Who Does WhatTARGETS / OBJECTIVES / KEY ACTIVATIONS DECISION-MAKING STRUCTURECOMPANY / CONTACT

AirTran Holdings, Inc.9955 AirTran Blvd.Orlando, FL 32827

Tad Hutcheson, vice president of marketing and sales407/318-5600

American Airlines4333 Amon Carter Blvd.Fort Worth, TX 76155

Billy Sanez, director of global advertising, promotions & corporate communications 817/963-1234

Continental Airlines, Inc.1600 Smith St. Houston, TX 77002

Dana Bates, director of advertising and sponsorship marketing 713/324-2950

Delta Air Lines, Inc.1030 Delta Blvd. Atlanta, GA 30320

Tim Mapes, senior vice president of marketing404/715-2600

JetBlue Airways Corp. 118-29 Queens Blvd.Forest Hills, NY 11375

Lisa Borromeo, manager, national sponsorships 718/286-7900

Southwest Airlines Co.2702 Love Field Dr.Dallas, TX 75235

Andy Allman, director of promotions, sports marketing and licensing 214/792-4000

United Airlines77 W. Wacker Dr. Chicago, IL 60601

Samantha Petti, manager of marketing communications312/997-8000

*Per U.S. Bureau of Transportation Statistics

Hutchenson reviews and signs off.

Accepts corporate-level and local proposals at AA-Promo.com/Guidelines.do.Local deals come out of localsales offices.

Skokie, Ill.-based ParagonMarketing Group screens andevaluates ties in conjunctionwith Bates, Jeff Jones, senioranalyst of advertising andsponsorship marketing, andother marketing staff. Paragonalso helps develop sponsorshipstrategy and implement ties.

Accepts proposals atDelta.Sponsorport.com.

Borromeo oversees nationalsponsorships, while fiveregional marketing managersreview and fund local ties.Accepts proposals throughJetBlue.com/Sponsorships.

Allman approves nationaldeals, as well as pro sportsteam ties and major sponsorships in Southwest’s 12 to 15 core markets.

Petti screens proposals.United’s marketing/promotionsdepartment is responsible forsports and events ties, whilenonprofit partnerships are handled by corporate socialinvestment/public relations.

Eighth largest U.S. airline uses sponsorship to accomplish two primary objectives:generate awareness and incent trial, especially in newer “growth” markets. “Once we getthe customer on the airplane, we can keep them,” Hutcheson said. Focuses on sports-,kids- and leadership-oriented properties in Atlanta, Baltimore, Boston, Indianapolis,Milwaukee and Orlando. Strategy is to have limited number of deals in each marketactivated through multiple channels. For example, leverages Colts tie with PeytonManning endorsement deal, seat upgrade promotion and large-scale model plane inLucas Oil Stadium. Signed deals this year with Brewers and slugger Ryan Braun.

Unit of AMR Corp. and second-largest U.S. carrier retooled its corporate-level sponsorship strategy last year, dropping under-performing properties and those that don’t offer an international marketing platform in favor of ties that can be activated on a global basis. Signed new partnerships in ’08 with MLS and the NFLCowboys and expanded its role with NBA’s international events to reach domesticand international travelers. The carrier has not dropped any major ties this year,Sanez said. Remains an active local sponsor. Seeks properties reaching 25-to-54-year-old business travelers and providing exclusivity, media exposure, promotionalelements and hospitality opportunities. Evaluates local deals based on their abilityto reach women, Hispanics, African-Americans, the GLBT community and other targeted groups.

Apart from dropping title of New Jersey’s Continental Airlines Arena in ’07, the seventh largest U.S. carrier has maintained long-term relationships with themajority of its sponsored properties. Continental uses sponsorship to reinforce itsmarket positioning and enhance relationships with frequent business travelers. The airline typically activates by offering OnePass members the opportunity to bidfrequent flyer miles for once-in-a-lifetime property-connected perks, such as walk-onroles in Broadway shows. Also looks to secure business from sponsored properties.Concentrates on properties located in its three key U.S. operating hubs: Cleveland,Houston and New York City.

Delta, which became the world’s largest airline following its ’08 merger withNorthwest Airlines Corp., uses sponsorship to engage with customers in key marketsand bring its brand to life through on-site activations, branded spaces and traditionalmedia, with a goal of increasing awareness and affinity among travelers. Looks toinclude employees in activation efforts as “the face of the Delta brand.” Measuresawareness gains and tracks new SkyMiles frequent flyer memberships generatedthrough sponsorship-related activities. The carrier, which has retained the bulk ofNorthwest’s sponsorships, this year signed a first-time presenting sponsorship of theTwins season–expanding Northwest’s previous relationship with the team–as well asa new deal with the Mets and an expanded partnership with the Yankees.

Ninth-largest U.S. carrier sponsors to position itself as a hometown carrier in itsservice markets and sample its on-board experience. The airline typically showcasesits seats, through on-site platforms such as Leg Rooms at endurance events whereparticipants can receive massages. Priority markets for sponsorship are its NewYork City home and Boston, its second largest and fastest growing market. Late lastyear announced a three-year partnership with the Red Sox, replacing Delta. Otherkey markets are Los Angeles, Orlando and Fort Lauderdale, Fla.

Largest U.S. carrier uses sponsorship to build customer loyalty and engrain itselfinto fabric of the communities it serves. Also sponsors to build presence in newmarkets. Typically leverages through on-site sweepstakes awarding tickets and interactive promotions where consumers can learn about Southwest. The carrierhas put more emphasis on one-year deals over the past couple of years as a result of the challenged economy, Allman said. Local deals are screened and funded by roughly 42 field marketing staffers; corporate-based promotions specialists provide input.

Fourth largest U.S. carrier and subsidiary of UAL Corp. uses its nearly 30-year-oldrelationship with the USOC as its major national sponsorship platform. Sponsors to engage customers, using property assets to elevate its brand and differentiatefrom competitors. Looks for on-site brand presence and promotion opportunities.Activation around Chicago Bears includes interactive schedule on team Web sitethat allows users to directly book United travel to away games. Also titles UnitedClub at Bears’ Soldier Field home to target highly valued premium customers.

IEG SPONSORSHIP REPORTMay 11, 2009

IEG SPONSORSHIP REPORT May 11, 2009 5IN

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CURRENT SPONSORSHIPS ADDITIONAL COMMENTS

Atlanta Symphony at Verizon Wireless Amphitheatre; Bastille Days Festival,Milwaukee; BB&T Charleston Food & Wine Festival, South Carolina; Florida FilmFestival, Orlando; Centennial Olympic Park Fourth of July Celebration, Atlanta;Georgia Aquarium; MLB Brewers; NFL Ravens and Colts; NHL Bruins; True ColorsTheatre Co., Atlanta; Visit Florida; Woodruff Arts Center, Atlanta; Zoo Atlanta

Title: American Airlines Arena, Miami; American Airlines Center, Dallas; AmericanAirlines Theatre, New York City. Cosponsor: AFI Dallas Int’l Film Festival; ArlingtonPark horse track, Arlington Heights, Ill.; Bank of America Chicago Marathon; BassPerformance Hall, Fort Worth; Brookfield Zoo, Illinois; ECHL Checkers; FedEx OrangeBowl and Festival; Grant Park Music Festival, Chicago; ING Miami Marathon andHalf Marathon; Int’l Reggae and World Music Awards, New York City; Los AngelesFilm Festival; Main Street Fort Worth Arts Festival; MLS and four teams; Navy Pier,Chicago; NBA Europe Live; NBA Mavericks and Heat; NFL Cowboys; PasadenaTournament of Roses Parade and Rose Bowl Game; Philadelphia Zoo; San AngeloStock Show & Rodeo, Texas; St. Jude Children’s Research Hospital; Susan G. Komen for the Cure; Zachary Scott Theatre Center, Austin, Texas.

Albuquerque Int’l Balloon Fiesta; The Broadway League/Tony Awards; CarnegieHall; ConocoPhillips Rodeo Run, Houston; Hobby Center for the Performing Arts,Houston; Houston Livestock Show and Rodeo; ING New York City Marathon;Lincoln Center for the Performing Arts; Make-A-Wish Foundation of America;March of Dimes March for Babies; Mercedes-Benz Fashion Week, Miami; MLBAstros and Indians; MLS Dynamo; NBA Cavaliers, Nets and Knicks; New JerseyPerforming Arts Center; NFL Browns, Texans and Giants; NHL Rangers; PGA TourAT&T Pebble Beach National Pro-Am; Rock & Roll Hall of Fame + Museum,Cleveland, and Annex NYC; USTA U.S. Open; Wings Over Houston Airshow.

Title: Classic Chastain Park Amphitheater, Atlanta. Presenting: MLB Twins season.Cosponsor: AIDS Walk New York; Atlanta Jazz Festival; Brigham Young Universityathletics; Cincinnati Ballet; Cincinnati Symphony Orchestra; Cirque du Soleil;Duke University athletics; Food Network South Beach Wine & Food Festival,Miami; Grammy Awards; MLB Braves, Mets, Yankees; National Assn. of CollegiateDirectors of Athletics; National Society of Black Engineers; NBA Hawks; NewOrleans Ballet Assn.; NFL Saints and Jets; NHL Ducks and Thrashers; PhillipsArena, Atlanta; PGA Tour; Sundance Film Festival; Tribeca Film Festival; Universityof Georgia athletics; U.S. Ski & Snowboarding Assn.; Wildlife ConservationSociety; Zoo Atlanta.

Austin Marathon and Half Marathon, Texas; Boston Marathon; Carlsbad Marathon& Half Marathon, California; Chelsea Piers, New York City; Fort Lauderdale A1AMarathon and Half Marathon; Litquake, San Francisco’s Literary Festival; MarineCorps Marathon, Washington, D.C.; Mission Federal ArtWalk, San Diego; MLBRed Sox and Dodgers; MLS Real Salt Lake; NBA Clippers and Magic; NFL Bills;Ukrop’s Monument Avenue 10K, Richmond, Va.; USA Luge.

Title: Chinese New Year Festival & Parade, San Francisco; Gasparilla Pirate Fest,Tampa. Presenting: Burger King Tu Ciudad, Tu Musica music competition, 10markets. Cosponsor: Busch Gardens (Tampa and Williamsburg, Va.); Hurley U.S.Open of Surfing, Huntington Beach, Calif.; The Health Museum, Houston;Houston Livestock Show & Rodeo; ING Bay to Breakers 12K, San Francisco; MLB Orioles, Cubs, Phillies, Padres and Rangers; National Cherry BlossomFestival, Washington, D.C.; Naismith Memorial Basketball Hall of Fame; NBA;NBA Rockets, 76ers, Suns, Spurs and Wizards; NHL Stars, Flyers and Sharks;PGA Tour FBR Open, Phoenix; Scottsdale Culinary Festival, Arizona; SeaWorldAdventure Parks (Orlando, San Antonio, San Diego).

Title: United Center, Chicago. Cosponsor: Breast Cancer Network of Strength;Chicago Convention & Tourism Bureau; Chicago Symphony Orchestra;Conservation Int’l; The Field Museum, Chicago; Joffrey Ballet of Chicago;Lookingglass Theatre Company, Chicago; MLB Cubs and White Sox; NBA Bulls;NFL Bears and Broncos; NHL Blackhawks; ORBIS Int’l; Smithsonian NationalZoological Park (National Zoo); Steppenwolf Theatre Company, Chicago; Taste of Chicago; U.S. Fencing Assn.; U.S. Figure Skating Assn.; USOC

Sponsorship represents roughly 25 percent of annual marketingbudget, Hutcheson said. Titles Fireworks Spectacular at AtlantaFourth of July event. Brewers tie includes AirTran AirwaysLanding Zone at Miller Park; carrier is activating with billboardstouting the sponsorship and deal with Braun. Also has endorse-ment deals with a handful of other pro athletes includingIndyCar Series driver Danica Patrick and NFLers Donald Driverand Matt Ryan. ’08 U.S. passenger count: 24.5 million.*

Activates 21-year-old Komen tie through Miles for the Cureprogram offering AAdvantage frequent-flyer members fivemiles for each dollar donated to the cause. American is putting more focus on branded entertainment, planning topartner with additional films this year after aligning with KungFu Panda, Sex in the City and Bottle Shock last year, Sanezsaid. Octagon, PR agency Weber Shandwick and promotionagency Eventys Latino help develop sponsorship strategy andactivation. ’08 U.S. passenger count: 92.7 million.

Also activates through proprietary events, such as last year’sPinstripes in the Park viewing event at New York City’s BryantPark around its former partnership with the MLB Yankees. “Welike to create events where Continental can have ownership andsustained equity, both at the event and, where appropriate,outside the venue,” said Tony Schiller, Paragon executive vicepresident. Activates NJPAC through multiple channels includingemployee ticket discounts, performances at Newark Int’lAirport and artist meet-and-greets for OnePass members. ’08 U.S. passenger count: 46.9 million.

Recently extended its 21-year partnership with the PGA Tourthrough ’10. PGA Tour deal confers status as official airline of PGA Tour, Champions Tour and Nationwide Tour; activatesby offering discounts and upgrades to tour pros. Also titlesGlobal Pavilion at The Barclays New York-area PGA Tour stop.Yankees tie reportedly includes exclusivity in the private jetcategory for Delta AirElite Business Jets. Activates USSA withathlete meet-and-greets in Delta Crown Room clubs and airportconcourses. ’08 U.S. passenger counts: 71.6 million (Delta);48.7 (Northwest).

Where possible, JetBlue looks to provide transportation forsponsored properties. Activated Red Sox tie this winter byoffering a nine-hour sale of fares as low as $9–honoring Soxlegend Ted Williams’ uniform number–between Boston andseven American League cities. CAA Sports brokered the Soxdeal. ’08 U.S. passenger count: 21.8 million.

Evaluates new sponsorship opportunities in October-December quarter. Houston Livestock Show & Rodeo andPadres deals are new this year. Does not look to provide airtravel for sponsored pro sports teams, Allman said. “We dohave a charter business, but we don’t have a tremendousamount of availability.” Typically measures success by tracking media exposure. ’08 U.S. passenger count: 101.9 million.

Marketing/Promotions sponsorships must guarantee revenuegeneration. Last year renewed its USOC sponsorship through’12; will fly U.S. Olympic teams to Games in Vancouver in’10 and London in ’12. Donated airplane to ORBIS Int’l, anonprofit dedicated to saving sight in developing countries.’08 U.S. passenger count: 63 million.

As the summary from IEG’s sponsor roundtable (see p. 1) makes clear, corporatemarketers do not believe most propertiesare doing enough to help them weatherthe economic storm and put both partiesin a position to be successful.

Whether the perception is fair or not, it is amarketplace reality that rightsholders mustbe prepared to address if they want tosecure new deals, as well as keep current partners on board and in positionto renew and grow their partnershipswhen the rebound comes.

Below, IEG SR highlights four salesstrategies that address sponsors’ concernsand can help position a property as agood partner for bad times.

Help sponsors offset fees. Where possible, properties should offer programsthat help sponsors recoup some or all oftheir rights fees.

Cleveland’s Int’l Exposition Center usesthat strategy with grocery and generalmerchandise retailer Marc Glassman, Inc.’sMarc’s chain, the presenting sponsor of thevenue’s temporary I-X Indoor AmusementPark, which visits the venue for three tofour weeks each spring.

The 50-store chain pays a cash fee and itsarea stores sell discount advance ticketsto the park, earning a commission oneach one sold.

“The amusement park has attendance of 200,000, which can generate a lot ofcommission revenue; Marc’s earns backits sponsorship fee and makes a profit ontop,” said Steve Volchko, the venue’s

sponsorship sales manager.

Although it gives up some of the revenuefrom ticket sales, the deal’s structure hastwo advantages for the property over simi-lar sponsorships in which a retailer doesnot pay a cash fee but receives sponsor-ship benefits in exchange for serving as aticket sales outlet, with all ticket revenuesgoing to the property: It gives Marc’s astrong additional incentive to promote ticketsales and the retailer’s fee is guaranteedincome, unlike ticket revenue.

Marc’s promotes the tickets in circularads, in-store announcements, and onemployee pins and counter cards, whilethe I-X Center touts the offer in ads andother marketing efforts.

“We drive people to get the $16 discountadvance tickets–which are a hot com-modity in this economic environmentwhere everyone wants a deal–in all of our marketing, so Marc’s gets additionalmedia inclusion,” said Volchko.

The I-X Center is offering other sponsorsa way to defray fees by giving them cashcredits for helping to secure additionalexhibitors for shows at the venue.

Sponsors only will receive the credit forthe first year of an exhibitor’s relationship.“The show will receive 100 percent ofexhibitor revenue after the initial year,while the sponsors continue to bringfresh blood,” Volchko added.

In addition to targeting sponsors such asfarm bureaus, who have members theycan influence to become exhibitors, thestrategy could work with media partners–

including direct marketing vehicles such asValpak coupons–and retailers, which couldbring in advertisers and vendors, he added.

Consider pay-for-performance deals. Sponsors can more easily justifyexpenditures if part–or sometimes all–of the property’s compensation is tied to the deal’s success.

This typically means a reduction in theup-front cash fee, with the property sharingin revenue from sponsorship-related sales.Payments on the back-end can also betied to non-sales benchmarks such as thenumber of requests for information, etc.

Along those lines, footwear manufacturerCrocs, Inc. (IEG SR, March 17, 2008) isattempting to renegotiate its deals withmusic festivals, pro sports teams and otherproperties as a result of financial pressures.

Crocs seeks to replace cash fees withdeals paying properties a commission for each shoe sold as a result of thesponsorship. The company plans to promote sales by accessing propertydatabases to tout special offers to fans,members and other stakeholders.

The company is finding the new payment structure a tough sell, saidKevin Adler, chief solutions officer withEngage Marketing, the sponsorshipagency that represents Crocs.

“I’m shocked at the number of propertiesthat aren’t open to these types of deals,”he said. “It doesn’t take up a lot of theirhard inventory, and there is a real revenueopportunity in a category they may nototherwise sell.”

Other companies reportedly using similarcommission-based deals include GreenBullion Financial Services, LLC’s Cash4Goldand identity theft prevention firm LifeLock,Inc. (IEG SR, Dec. 10, 2007).

Cash4Gold this year launched a sportsmarketing program to build on its firstever Super Bowl ad. Deals include co-titleof a NASCAR Nationwide Series team andcosponsorship of the NBA MilwaukeeBucks and Washington Wizards.

IEG SPONSORSHIP REPORTMay 11, 20096

With traditional sponsor categories from autos to financial services taking severe hits, and all corporations feeling the economic pinch, properties are mining dollars wherever they can.

One category unlikely to be on most radar screens is charitable organizations. With consumersand corporations pulling back on giving, nonprofits may be compelled to partner with other properties to raise awareness for their organization and cause.

For example, Indianapolis’s Shepherd Community Center has signed a $15,000 sponsorship of a music stage at the Indiana State Fair to educate people and gain donations for its poverty-fighting mission.

“Their contributions are down and they want to do something different to bring consumer attentionto their donation needs,” said Debbie Dreiband, director of sponsorship sales with Live Nation,which represents the fair.

Live Nation, Midwest, Tel; 317/249-2710

Profiting From Nonprofits?

SELLING

Responding To Change: Four Actionable Ideas For Meeting Sponsors’ Evolving Needs

AT ISSUEHow can properties create win-win partnerships intoday’s unsettled economic climate?

TAKEAWAY Provide sponsors with ways to reduce cash commit-ments, limit the amount of additional dollars they willneed for activation and lower the barrier to entry.

LifeLock has focused its four-year-oldsponsorship campaign on auto racing andother sports properties, including a dealannounced in February with the AmericanMotorcyclist Assn. It also titles NASCARSprint Cup Series races at ChicagolandSpeedway and Michigan Int’l Speedway.

Bundle activation elements and costs into sponsorship agreements.Recognizing it can be difficult for sponsorsto secure dollars for activation in addition torights fees, some properties are includingactivation ideas and their costs in spon-sorship packages and contracts.

New York City’s Chelsea Piers sports and entertainment complex has used thatstrategy for several years, but is finding itmore effective today given growing corpo-rate scrutiny over marketing budgets.

“When presenting a sponsorship opportunity, we demonstrate how activation is built into the program so it doesn’t require an extra budget,” said

Dana Thayer, senior vice president ofChelsea Piers Management, Inc.

For example, the property included theproduction of several launch events for sponsor Setanta Sports around thechannel’s debut on RCN Corp.’s cablesystem, Thayer noted.

Create lower-cost ways of associatingwith the property. Realizing that five-and six-figure sponsorship packages maybe beyond the means of many compa-nies in an anemic economy, California’sMonterey Jazz Festival presented by Verizonis selling $1,000 first-time exhibitorpackages in two new thematic tents.

While the packages don’t offer exclusivityand other benefits reserved for officialmarketing partners, they do include bene-fits not available to festival vendors, suchas exposure on the September event’sWeb site and email blasts.

“We wanted to allow new partners to comein at entry-level pricing that reflects the

tough economic times,” said Paul Fingerote,the festival’s marketing director.

The festival is selling 10-foot-by-10-footspaces in the Taste Tent, for which it istargeting specialty food and drink brandsand related products, as well as in thesustainability-themed Green Scene Tent,targeted at renewable energy companies,environmental nonprofits and others.

The packages have caught the attentionof corporate marketers, with the festivalsigning two exhibitors for each tent in theshort time they have been on the market.The property hopes to secure six to tenexhibitors for each tent, added Fingerote,who also hopes to upsell the companieson larger packages in coming years.

IEG SPONSORSHIP REPORT May 11, 2009 7

PROSPECTING

Roush Fenway Takes Sponsor Prospect Hospitality Up A NotchWhile sports, festivals and other types of properties have long wined and dinedpotential sponsors at their events, therecent experience of one rightsholder recommends enhancing those opportunities to attract and whet the interest of prospects.

NASCAR team owner Roush FenwayRacing earlier this year hosted its firstbaseball fantasy camp to introduce itselfto new prospective partners. The teamdeveloped the camp in conjunction withthe MLB Boston Red Sox and FenwaySports Group, the agency established bySox owner John Henry and which owns50 percent of Roush Fenway.

The race team is looking for new partnersin part because some of the primarysponsors on its cars are looking to sellsome of their inventory to offset costs.

“Some of our Sprint Cup sponsors, namely Aflac, 3M, Dewalt and CrownRoyal, are willing to sell some of theraces if it makes sense,” said RobinJohnson, Roush Fenway’s executive vice president of business development.

“We were talking to Fenway SportsGroup, and asking how we could get more meetings with sponsorship decision-makers and C-level officers in a casual environment where there’s no hard sell.”

Looking to provide a spouse- and child-friendly atmosphere to which the teamcould invite prospects and their families,the two organizations developed thebaseball fantasy camp idea, rather thanoffer hospitality at NASCAR races, wherechildren are restricted from certain trackareas and where there are less interactiveexperiences for them.

“A CEO of one of our present partnershad said to me, “If I can find things to dowith my friends and children, I’m usuallywilling to listen,” said Johnson, noting thatkids can run the bases and participate in other activities at the camp.

“Baseball is more familiar to a lot of people than NASCAR, and it’s a slowgame with a lot of down time.”

The team hosted the camp in March atthe Red Sox spring training camp in FortMyers, Fla. Attendees were treated to twogames, took batting practice under theinstruction of former Sox outfielder MikeGreenwell, received behind-the-scenestours of City of Palms Park, a chat withCamping World Truck Series driver ColinBraun and other perks.

Although representatives from only a handful of the 100 companies that were invited attended the event, the invitation itself proved to be enough toopen up a dialogue with roughly 50 ofthe prospects, Johnson said in ruling the

program a success.

Moving forward, the team plans toexpand its use of baseball by invitingpotential partners to Red Sox road gamesin their areas. Roush Fenway also plansto invite representatives from existing corporate partners whose companies are based in the same market.

“One of our best sales tools is testimonialsand case studies from present sponsors.What better way is there to hear about asponsorship opportunity than from anexisting partner?” Johnson said.

While most properties do not have thefinancial wherewithal or relationships toduplicate Roush Fenway’s effort, rights-holders should try to develop unique hospitality programs that take advantageof the experiences they can offer.

“With the difficult economy, it’s importantto come up with new ways to get in frontof people,” Johnson noted.

SOURCERoush Fenway Racing, Tel: 704/720-4600

SOURCESChelsea Piers Management, Inc., Tel: 212/336-6800International Exposition Center, Tel: 216/676-6000Monterey Jazz Festival, Tel: 831/373-3366Engage Marketing, Tel: 312/981-3800

WHORoush Fenway Racing

TAKEAWAY Inviting sponsor prospects to unique hospitality experiences can open doors for properties.

Meeting Sponsors’ Needs continued from page 7

six areas of concern, summarized below:

Properties don’t fully realize impact ofthe economy on sponsors. Participantsnoted their surprise at current propertypartners’ attitudes regarding today’s business environment.

Sponsors say many properties remainfocused on themselves and their ownplights, and it shows in the sales process,as proposals and other communicationsfail to offer solutions to sponsors.

In some properties’ minds, sponsorsseem exempt from the turbulent times,participants said.

Most properties’ current sales efforts also don’t optimize both the sponsors’and properties’ time, participants said.They are looking for the basics in apitch–specific solutions–rather than elaborate presentations, and would

like to see properties adjust their pitchingetiquette accordingly.

The lack of understanding about the reality of economic factors also hasresulted in properties’ inflexibility whenthe sponsors have sought to restructuredeals (see next topic).

Difficulty of working within existingcontracts. With budgets under severepressure, the participants have foundthemselves taking a closer look at existing agreements at all stages.

Short of exercising an out clause, potential responses the sponsors haveexplored include renegotiating for a lower-level package and/or proposingalternative funding sources–such as providing in-kind products or services,offering promotional inventory or sharing the fee with an approved business partner.

Properties willing to explore such options will pave the way for renewalswhen the economy picks up again, the sponsors said.

Need for more flexibility and creativityfrom properties. Those two qualities arethe hallmarks of successful partnerships,according to the participants.

Flexibility on the part of both sponsor and property was described as the truefabric of a partnership. If one partner has an issue, the expectation is that bothparties will work to resolve it to maintaina good relationship.

Unfortunately, the sponsors said, properties sometimes still view sponsor-ship as a transactional relationship.

Participants seek creativity from properties in the form of tailored, turnkey activation ideas.

The sponsors believe they are offeringproperties not only rights fees, but alsogreater credibility and extended reach. Forthat investment, they want customizedactivation ideas that resonate with their brands.

Successful properties proactively go the extra mile to deliver opportunities for easy and impactful activation, participants said.

They would like properties to ask: “How do we make the sponsor’s businessbetter? What additional resources can weuse to assist with activation? How can wemake this a collaborative effort?”

How to streamline portfolios and buyefficiently. As the economy has forcedthem to do more with less, participantsare facing additional scrutiny within theircompanies and are taking steps to developmore cost-effective partnerships.

As an example, the sponsors said theyare asking properties to remove irrelevantbenefits from proposals. In addition, they are looking more closely at howsponsorships align with specific business objectives.

Participants indicated that they would likeproperties to lay out a plan for helping totrack and measure results, assistingsponsors with building an internal casefor moving the partnership forward.

Determining the price to pay. The economic climate also had participants’questioning the fair market value of sponsorships. Some wondered whetherthey should be expecting steep discountsgiven that it is a buyer’s market.

In addition, the sponsors felt that someproperties do not adequately value in-kindand promotional inventory.

Dealing internally with senior management. Most participants voicedconcern over deals dictated by seniorexecutives with minimal understanding ofthe company’s sponsorship strategy andwith no accountability for the decisions.

Instructed to “make it work,” the sponsorssaid they struggled to make businesscases for these deals.

They believe the economy will empowerthem to fix such long-time disconnectswithin their companies. A few of the participants said they already have usedthe economy as a way to eliminate some“sacred cows.”

Most of the sponsors said they are still grappling with how to achieve atleast some improvement in this area,understanding that internal politics isn’tgoing away anytime soon. To emphasizeaccountability, some participants usecompany Intranets to publicize sponsor-ships and their specific results.

Participants also want to help seniormanagement understand the internalchallenges they work through at the company. One participant noted that she educated her senior management by working with a third-party (IEG) toconduct internal interviews during asponsorship portfolio assessment.

IEG SPONSORSHIP REPORTMay 11, 20098

Editorial TeamLesa Ukman, Executive Editor, lesa.ukman@iegsr.comJim Andrews, Editorial Director, jim.andrews@iegsr.comWilliam Chipps, Senior Editor, william.chipps@iegsr.comKevin Thull, Production Director Eva Barriga, Senior Designer

Contact IEG640 North LaSalle, Suite 450Chicago, IL 60654-3186 U.S.A. Tel: 1-800/834-4850 or 312/944-1727Fax: 312/944-1897E-mail: info@iegsr.com

IEG Sponsorship Report® is published biweekly by IEG, LLC and delivered online at www.iegsr.com.Subscriptions include online access and are $449 per year ($370, nonprofit). Back issues are $27 each ($24 for subscribers).

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Sponsor Round Table continued from page 1

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Music Tour RoundupIEG SR predicts North American-based companies will spend $1.08 billion to sponsor music venues, festivals and tours in ’09, a 3.8 percent increase from the $1.04 billion spent in ’08.

For more information on sponsorship activity in the music space—including a one-on-one interview with Andrew Klein, senior vice president of global partnerships with AEG Live—visit the Subscribers Only area of IEGSR.com.

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