October 17, 2008
To his credit, Gary Bettman hasn't been completely oblivious to the economic downturn's effect on the NHL. While steadfastly using the sometimes-murky concept of "ticket sales" to claim league financial solvency, he's also said that it's "naive to suggest that a major recession might not have some impact on the business."
This means he's addressed the issue of his organization's gloomy economic future more directly than either of the Presidential candidates have in three debates ... but we digress.
We could be seeing a preview of that impact in Ohio, where the Columbus Blue Jackets are having a decrease in sponsorship from three major companies: Huntington Bank, Anheuser-Busch and Pepsi have dropped out of the team's "Championship Partners Club."
Huntington, Anheuser-Busch and Pepsi will continue as "significant" sponsors but spend less at the base level with the team, said Cameron Scholvin, the Blue Jackets' vice president of corporate development. They are among nearly 100 companies that have some sort of sponsorship deal with the Jackets, including about a dozen that either are new sponsors or have expanded their commitment this season.
The three move from a class of sponsors that get a wide range of benefits for their money: Television and radio ads, customized promotional opportunities, signs and banners inside Nationwide Arena, use of arena concourses to promote their brands and additional exposure at the Blue Jackets' practice rink and Chiller skating centers. The team doesn't disclose how much its sponsorships cost, but sources familiar with the Jackets' packages have said Championship Partners spend $1 million or more a year with the team.
This change is significant for two reasons.
First, it reinforces that every corporate sponsor, and especially those in the financial sector or cutting jobs in the U.S., are going to re-evaluate all of their business partnerships. Washington Capitals owner Ted Leonsis has identified this as the biggest concern in the downturn, even more so than consumer consumption of tickets.
"We've added probably $3 million of business, and we've probably lost about two and a half million dollars in business from the hard-hit sectors: Banking, automotive, airlines," he said, regarding both sponsorships and suite sales. "[The Capitals] would grow even faster if the economy for our corporate customers was stronger."
But more important for the NHL is that there are still partnerships.
Huntington Bank, for example, is reducing its sponsorship of the Blue Jackets, but told Business First that it will be "focusing more on arena events such as Blue Jackets banking card night and promotions in bank offices." Anheuser-Busch still has some financial partnership with 20 of the league's 24 U.S. teams.
If the NHL can manage to retain these sponsors in a more limited manner, while adding some new heavy hitters like Honda, perhaps it won't have to make regrettable headlines like Bettman's former colleagues at the NBA have recently.
That said, the decrease in sponsorship revenue for a team like Columbus -- which, in the eyes of many, won't be filling coffers with playoff money again this season -- is a tad ominous.