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Under Armour has been a favorite brand in the sports world for over a decade. The Under Armour story has been a case study in success; a tiny company that makes good competing against the giants in their space (i.e.- Nike & Adidas). They’ve grown up a lot from those early days in founder Kevin Plank’s basement; Under Armour is now a publicly traded company (NYSE: UA) with almost a billion dollars in revenue.
One of the characteristics that has made Under Armour successful is their aggressive attitude towards growth. They quickly diversified from an innovative apparel company into many other facets of the sportswear industry, including athletic footwear. With each new expansion of their business they seemed to thumb their nose at the established players in that space and set their sights on domination. Under Armour’s bravado was never more obvious then when they used the tagline “The future is ours” during their 2008 Super Bowl spot. But these days Under Armour is discovering that being one of the biggest brands in their space, a successful publicly traded company, has some downside.
Under Armour expansion into footwear has not gone as smoothly as planned, which has caused analysts and investors to loudly criticize UA’s moves thereby pummeling their stock price. This AdAge article says that analysts have characterized Under Armour’s moves as “weak”; particularly the decision by the company to pull back on how aggressively they plan to expand their shoe line. The negative attention has caused Under Armour’s stock price to drop dramatically to $26 per share from its previous 52-week high of $33 per share (Source: Yahoo Finance). It also means that Under Armour has some tough sledding ahead if it wants to continue to live up to its aggressive brand image.
Their are still big opportunities available to Under Armour in the athletic footwear category, but they might need to be a little more conservative. Perhaps they should follow the advice one expert said and grow things a little slower. Try to develop their niche in the shoe market organically, rather than forcing their way with a big media blitz (i.e.- Super Bowl commercial). There is a lot of established competition in shoes and Under Armour isn’t entering the space with anything revolutionary like they did in sports apparel with their moisture wicking shirts. If I was Under Armour I would try to focus on a certain niche in shoes, like: football cleats, workout shoes or casual shoes. Once successful in that space, then I would grow their product line into the more competitive categories like running shoes. Sometimes bigger isn’t better, even for big brands like Under Armour.
Interesting that the Portland Trailblazers are using their marquee opponents to sell single game tickets. On the tickets page of their official team website, the Trailblazers have a section on Upcoming Home Games. In it they say, “Can’t wait to see guys like Lebron, Shaw, D-Wade and Kobe when they come to town…” Directly above it they have a photo of Lebron James and Dwayne Wade (see image below).
There is nothing wrong with Portland promoting their opponents to sell more tickets, many teams have used this same technique. The New Jersey Nets are giving their fans jerseys of the star player on the opposing team. And there are certainly more people in Oregon who want to see a Blazers game against global icon James, so promoting a name like Lebron creates more awareness. But I’m surprised a team as good as Portland, with such strong fan support, would want to promote an opponent just to sell more tickets.
The story that Portland’s marketing department needs to tell is about their own young, exciting, talented squad. They need to be connecting the fans in Portland with the players on the Trailblazers. This is no longer the “Jailblazers”; this Portland squad has marketable young stars in Brandon Roy, Lamarcus Aldridge and Greg Oden. The Portland front office needs their fans to know that Rudy Fernandez’s favorite food is paella and that Jerryd Bayless was born the same year that Bull Durham hit movie theaters (1988).
These days there is no shame for a professional sports team doing whatever it takes to sell more tickets. The bottom line for most of the teams and leagues is that attendance figures are what they are judged on. But I hope the Portland Trailblazers don’t overlook their own great story. More long-term success will come from promoting their own team.
My Texas Longhorns are playing the Oklahoma State Cowboys this weekend, so I thought it was appropriate to rehash one of my favorite coach clips; the notorious of “I’m a man! I’m 40!“. This classic quote was said by Okie State head Coach Mike Gundy in September 2007 during a postgame press conference.
“I’m a man! I’m 40!” – by Mike Gundy
Unfortunately for Gundy he’ll probably never be able to live down this famous soundbite, because he is a good football coach who just got caught up in the moment. There are four paragraphs on his Gundy’s wikipedia entry detailing the incident, which is more information than the entire rest of the page combined.
Mike Gundy is 42 now, his birthday is August 12, 1967.
The steroid era in Major League Baseball has forever tainted the game. Most fans cannot watch an MLB game without wondering who is using performance enhancing drugs. Some of the best players in the game have been linked to PEDs; Alex Rodriguez, Jason Giambi and Manny Ramirez. And baseball’s biggest stars in this era have had the steroid rumors swirl around them, including; Barry Bonds, Roger Clemens, Mark McGwire and Sammy Sosa. What has MLB done to help this situation? What has the commissioner done to restore confidence that his players are clean? Not much. It seems their official stance is similar to AIG’s; just shut up and hope all of the negative attention goes away.
Now it is the NBA’s turn to defend itself against the rumors that their league is tainted. These rumors come from a familiar source, former NBA referee Tim Donaghy. In his new book, Blowing the Whistle, Donaghy tells tales of the NBA refs working on behalf of the league to make games close. He asserts that he and fellow refs would make side bets that affected how they called the game. Worse he says that the league would instruct their officials to assist certain teams when a certain team winning was important to the league (sorry Sacramento Kings fans). Donaghy says a lot of damning stuff in the book; here are some more excerpts posted by Deadspin.
If any of the allegations by Donaghy are true, then the NBA has a huge problem they need to correct. The question now is how seriously will NBA Commissioner David Stern take these assertions from Donaghy? Will the league investigate further to see if these stories are true? Will they address this head-on or just hide and hope it goes away? A conspiracy theorist might already wonder if the league is punishing their referees by locking them out and using replacement refs to start the 2009-2010 season. Maybe there is more going on there than the two sides not being able to come to an agreement on a deal.
Back to reality, the NBA has to handle this situation carefully in my opinion. They don’t want to overreact because there is no proof any of the allegations are true. Remember that Donaghy is a convicted felon, who ratted out the mobsters he was helping to gamble on games and that Tim is likely broke. Which are all reasons he might not be the most reliable source and could very easily have embellished details in his book to make some extra cash.
But that’s a dangerous game of chicken to play if the NBA is going to simply say that Donaghy is a liar and not look into this matter further. Because it would take very little for this situation to escalate. What would it take to corroborate the stories told by Donaghy in his book? Just one other referee or player to step forward and validate Donaghy’s stories; then the NBA would have a sh*tstorm of negative media. This is likely what keeps David Stern up at night; someone coming forward to validate the claims of the NBA’s disgraced former referee.
If I’m Commissioner Stern, I would get on top of this situation now and find out if any of this is true. That would allow them to quickly correct any wrongdoing they discover and refute anything they find out is not true. If there is any wrongdoing by the league office or their refs, then they need to apologize to the fans and insure this never happens again. People will still love the NBA and they’ll respect the game more if they know it’s clean.
Gatorade started airing their “Be Like Mike” commercials in 1991. The commercials starred global basketball icon, Michael Jordan, in a series of off-court clips with footage of his NBA games intermingled. The catchy “Be Like Mike” provided the background theme for these spots. Suffice to say the commercials were an instant hit and people around the world began repeating the phrase every time they hit the basketball court. I remember a few memorable attempts of my own to “Be Like Mike” while goofing around on the basketball court.
Gatorade – “Be Like Mike” commercial
What wasn’t known at that time is the influence the “Be Like Mike” commercials by Gatorade would have on sports marketing. How many other brands would copy the formula in successful future commercials. The formula: catchy tune plus fast action of filmed spots and clips of game action all mixed together. Gatorade set a standard back in 1991 that has been copied by some of the biggest name in sports since then.
The Olympics is a great spectacle, but it’s no longer just about amateur athletic competition. The Olympics is big business these days with billions of dollars in sponsorship and television money on the line. So naturally there is a lot of back room politicking going on in support of all that money.
A new book by the former Chinese sports minister details some of the arrangements that allowed China to secure the 2008 Olympics. He claims that Chinese officials helped IOC President Jacques Rogge get re-elected in exchange for Rogge delivering the European vote in-favor of Beijing hosting the Summer Games. Full article here at the Times Online.
The IOC is generating a lot of money, but they try to focus attention on the grandeur of their events rather than the cash. But their secret ballot process allows their members to wheel and deal without fear of being exposed. These type of secret deals are not the exception, but rather the norm when it comes to the IOC.
In 2007 the New Jersey Devils and Seton Hall Pirates announced they would be moving their home games to the Prudential Center in Newark, New Jersey. The Devils and Pirates were both leaving the Continental Airlines Arena, which had been their home venue for nearly 20 years. That move had a domino effect which is still being felt today.
Continental Airlines subsequently backed out of their $1.3 million dollar annual contract for the naming rights the Meadowlands Arena; which had been called Continental Airlines Arena since 1995. The New Jersey Sports and Exposition Authority then went out to get bids from companies who wanted to put their name on the building. They received a few offers and finally settled on a deal with Izod at $1.4 million per year. The new name of the arena in East Rutherford, New Jersey would be the Izod Center.
The Izod Center has been the home venue for the NBA’s New Jersey Nets, as well as, a host of concerts and events for the past two seasons. But it appears now that could all come to an end. The Nets have been made plans to move their franchise to Brooklyn to play at the Barclays Center; a move that should happen in 2011. Which in theory would give the Izod Center a permanent resident for at least two more years, which would cover most of the three year’s left on the naming rights deal. But now the Nets are considering moving their home games to Prudential Center, which would leave the Izod Center devoid a full-time tenant.
What does this loss mean to Izod’s naming rights deal? It means Izod would no longer get the millions of mentions that come from having a professional sports franchise playing in your building (mentions on Sportscenter and in every newspaper that prints a story on the Nets game). It means that there would be approximately 800,000 fewer people attending events the arena bearing their name, because the 40 Nets home games are eliminated. In-short, it would mean a huge decrease in the exposure the deal originally was set to provide. On the plus side, Izod could save some money because the annual payment on the deal drops to $750k if the Nets are no longer the tenant. But does a reduced cost really offset all that Izod loses in exposure on the deal? No, Izod would be left with an aging venue sitting nearly empty next to the New Jersey interstate. Izod will be the naming rights partner for an arena that is dying. That is not exactly the kind of deal you want your brand associated with; Izod should look to get out of this deal if the Nets leave.
The IOC recently selected Rio de Janeiro to host the 2016 Summer Olympics. Rio beat out an impressive field of candidates, including; Chicago, Madrid and Tokyo. Rio de Janeiro was one of the host cities in Brazil that was selected by FIFA to host the 2014 World Cup soccer tournament. Which means the two biggest sporting events in the world are coming to Rio de Janeiro, Brazil.
Rio and Brazil are deserving hosts of these events, but one lingering question is will safety be an issue for these events? Rio does have a history of violence and has been named as one of the most dangerous cities in the world. The president of Brazil recently offered almost $60 million dollars to Rio de Janeiro; money that would be used to help curb the widespread gang violence in the city. This was after a particularly violent weekend in Rio which saw 17 people murdered as drug gangs battled the police.
These questions that Rio is facing now are the same questions that South Africa faced when when they were awarded the 2010 World Cup. In South Africa’s case those questions cannot be definitively answered until next Summer when the World Cup kicks off. A few people I know who traveled to South Africa recently said there are areas that are very safe and a few areas that tourists should probably stay away from; essentially they gave South Africa a positive rating when it comes to safety. So if South Africa can avoid any major violence, there is no reason to think that Rio and Brazil won’t be able to as well.
There is always lots of petty crime that follows these big sporting events. The pickpockets in Italy for the Torino Winter Olympics were legendary. So both South Africa and Brazil will have to work hard to keep crime to a minimum, but I don’t expect there will be much violence. They will both spend whatever it takes to keep the violence from drug gangs and the like from marring their big events. The memories of the murders at the 1972 Olympics in Munich and bombing in Atlanta in 1996 make sure they don’t forget what could happen if they let down their guard.
So although Rio de Janeiro is often in the headlines for violence, it is ultimately not likely to have any more violence during the Summer Games or World Cup than any other recent host city.
What happens when athletes switch their allegiance from one sports brand to another? They usually pick up a bigger paycheck. These days the goal of the big brands is to lock up their talent for the long haul. The term “lifetime deals” have come into play with athletes like Allen Iverson (Reebok) and Tiger Woods (Nike). Those type of deals originated with Michael Jordan who has been Nike’s shining star for a quarter of a decade.
But there are some athletes who switch brands. Here are 8 NBA stars who changed their sneaker deals: Kobe Bryant: Adidas to Nike Vince Carter: Puma to Nike Baron Davis: Reebok to Li-Ning Tim Duncan: Nike to Adidas Kevin Garnett: Nike to And 1 to Adidas Jason Kidd: Nike to Peak Stephon Marbury: And 1 to Starbury Chris Webber: Nike to Dada
Source: Complex.com
Li-Ning and Peak are both Chinese brands. Starbury was a line of discount shoes started by Steve & Barry’s; the chain liquidated their stores in 2008 but the shoes/apparel continue to be promoted by Marbury. Dada may or may not still be in business – most of the stuff about them I could find is dated, so I can’t tell. I guess that’s what happens when you select Chris Webber and Latrell Sprewell to endorse your product.
The internet has changed the way that most companies release their new products. Back in the days Nike might buy a glossy advertisement in Sports Illustrated to initially introduce a new shoe. Then the week of the shoe’s launch they would place half-page ads in sports section of newspapers in the top 20 markets. They would support this with some radio and possible a few TV spots during big games. It worked then…
Now Nike is just as likely to promote a new shoe by sending out information to a bunch of influential bloggers. They not only save money promoting their product in this manner, but are also getting a better ROI on the marketing dollars. This network of blogs has a loyal, engaged following that are the “early influencers” target that the company needs for their new product. The guy who reads engadget everyday is more likely than me to buy the latest & greatest product from Samsung. So when Samsung wants to get the word out, they go to Engadget.
This Brandweek article talks about that phenomena in the tennis shoe market. How a handful of influential blogs (bloggers) are being used by Adidas, Nike, Puma, Reebok, etc. to help push their latest offerings.
