National Collegiate Athletic Association

The NCAA News - News and Features

February 23, 1998

Corporate-partner program enters new era

BY DAVID PICKLE
EDITOR-IN-CHIEF, THE NCAA NEWS

Recent changes in the NCAA corporate-partner program have resulted in a better outcome for both the NCAA membership and for the corporate community.

The revised program is now managed by the NCAA staff, which has enhanced opportunities for corporate relationships with specific Association programs. The 21 corporate partnerships are sold by Host Communications, Inc., which guarantees $75 million for the Association over the next five years.

"This new arrangement helps the NCAA because nobody knows our assets better than ourselves," said Alfred B. White, NCAA director of promotions. "The way we do things now marries the corporate-partner effort with our objectives."

The NCAA's marketing, licensing and promotions staff has developed an "asset inventory" that makes clear what opportunities are available for corporate partners who seek to have direct involvement with Association programs and activities. The inventory includes a list of 78 ways that the partners can link with all areas of the NCAA, including championships, educational services, public affairs, promotions/special events, licensing, and finance and information. Specific activities range from involvement with the CHAMPS/Life Skills Program to billboards to seat cushions to advertising in records books.

The partners, of course, are primarily interested in selling their products and services, and in that regard, they have found that the relationship with college athletics works well for them.

Three segments

T. J. Nelligan, who handles NCAA corporate-partner sales for Host Communications, said that corporations can appeal to three market segments through the corporate-partner program:

  • Students and student-athletes. There are about 30 million students, almost 300,000 of whom are student-athletes. Nelligan said that although the numbers alone are impressive, corporations are attracted to the fact that the young people are in the process of being on their own for the first time and are establishing brand loyalties that could last a lifetime. Students will spend $80 billion in goods and services this year, Nelligan said.

  • College and universities and their administration, faculty and staff. The institutions themselves are a market for certain corporate-partner goods and services (for example, computers and paper). In addition, administration, faculty and staff represent a highly educated group with high demographic appeal.

  • Fans and alumni. Nelligan noted that not only are college sports fans appealing demographically ($55,000 in average household income), there are simply more of them than there are professional sports fans. Last year, almost 37 million attended college football games; attendance for National Football League games was about 20 million. College basketball attendance was about 33.5 million, while attendance for the National Basketball Association was in the low 20 millions. Most of the college fans, Nelligan said, have demonstrated lifelong affinities for their schools and for their favorite sports.

    The NCAA Executive Committee permits the existence of 20 corporate partners at a given moment (Rawlings, manufacturer of the official NCAA basketball, was granted corporate-partner status previous to the implementation of the new program). Contracts typically are for five years, although they can be for as few as three. Currently, there are 16 corporate partners, counting Rawlings, which means that five vacancies exist.

    Each partner fits into a specific category (see graphic, page 1). The categories are not predetermined, Nelligan said, because doing so would put the NCAA at a disadvantage in negotiating rights fees. Key areas such as computer software, airlines and car rental do not have corporate partners at the moment, but there is no pressure to fill the positions since other categories can be created. The only restrictions are that the number cannot exceed 20 (21 counting Rawlings), that the goods and services offered by a new corporate partner may not conflict with those of an existing one, and that the corporate partner must be willing to work within the Association's philosophy.

    Improved media opportunities

    The base fee for an NCAA corporate partner is $1.6 million, White said. Of that amount, $1 million is a rights fee and $600,000 goes for media.

    It is in the area of media where some of the greatest improvements for NCAA corporate partners have taken place. Previously, the media money could be applied only to NCAA championship game programs and radio. Although there is nothing wrong with either medium, prospective corporate partners didn't necessarily want to place their advertising in those areas.

    The new program offers much more flexibility, White said. The radio and program options are still there, but so are opportunities with CBS and ESPN. In addition, there is an option to work through PSP, a firm that publishes regular-season football and basketball programs.

    The most appeal for the corporate partners comes from involvement with the NCAA Football effort and from the relationship with the Division I Men's and Women's Basketball Championships. Nelligan said that sales have peaked in conjunction with NCAA promotions at those times, with the basketball tournaments being the granddaddy -- and grandmommy -- of them all.

    "A corporation can have basketball promotions that go on a month," Nelligan said. "The NCAA basketball championship is the best event in the country and maybe the world."

    The basketball Final Fours have been enhanced by the development of the "Hoop Cities," the fan festivals taking place for the first time under NCAA administration.

    "All of the new corporate partners and almost all of the rest of them are involved in both Hoop Cities," said Nelligan. "When they see how much these events have improved, we believe they are going to be very pleasantly surprised."

    The NCAA is projecting that 100,000 fans will tour the men's Hoop City in San Antonio, with 50,000 expected for the women's version in Kansas City, Missouri.

    Another effort that worked for the corporate partners was the NCAA Football Campus Tour, which promoted college football on 25 top campuses across the country this fall. More than 100,000 people participated in the event.

    However, a sport does not necessarily have to have the national appeal of football and basketball for the corporate-partnership arrangement to benefit both the sport and the partners.

    For example, Nelligan said that college baseball is viewed as a regional sport in marketing circles. However, Ocean Spray and Hershey's were able to develop promotions in conjunction with the College World Series that worked well for them and the event. Similar localized efforts have taken place in soccer, lacrosse, women's softball, gymnastics and ice hockey.

    Moreover, some partners have latched on to particular sports and built campaigns around their positive image. For example, GTE paid tribute in its advertising to field hockey.

    Membership involvement

    Several NCAA corporate partners have established programs that have a high degree of direct involvement with the membership.

    One of the most familiar is the Sears Directors' Cup program, which recognizes all-sports champions in Divisions I, II and III. The program has brought national recognition to college athletics programs that excel in a variety of sports. Another is the GTE Academic All-America Program, a highly positive program that brings recognition to student-athletes who have excelled athletically and academically.

    Marriott Hotels, a new partner, has developed a program to provide Marriott Rewards Cards to athletics directors and chief executive officers at all NCAA institutions. An announcement of that program will be going to the membership soon.

    All of those programs have elements of a win-win situation. College athletics gets needed money and exposure while corporations get increased sales.

    Still, those who are close to college athletics know that the corporate-partner program will always have its critics. Indeed, some believe it is the embodiment of the overcommercialization of college athletics. The philosophical gap between those people and supporters of corporate partnerships is not likely to be bridged any time soon.

    But the reality is that the program is in place and that the Association, through the actions of the Executive Committee, has committed to making it work. And although the revised program is a work in progress, the early returns show that the appeal to corporations has been enhanced and that tighter corporate links have been established with NCAA programs that directly benefit student-athletes.