There are few people who have been more influential in the sports sponsorship and marketing solutions arenas than Dean Bonham. For the past 18 years, The Bonham Group has been at the cutting edge of sports business world, negotiating more than $2 billion in sponsorship contracts, over half of which Bonham has negotiated personally. Based in Denver, The Bonham Group list of clients boasts companies at the top of the Fortune 500 - IBM, Dell, FedEx, Miller Brewing Company, Target, Verizon – but also many of the sports worlds top organizations, including several baseball clubs. In addition, he has negotiated deals for corporate behemoths like Coca-Cola, Pepsi, Ford Motor Company, Budweiser, and AT&T.
Among his noteworthy accomplishments in baseball was serving as the lead negotiator for US Cellular and Petco Food Supplies as they closed deals with the Chicago White Sox and San Diego Padres for the naming rights to their ballparks. Bonham and his associate Don Hinchey write a sports business column for the Rocky Mountain News that is nationally syndicated. Bonham himself has been quoted or featured in the Denver Post, Washington Post, New York Times, Sports Illustrated, Forbes, Sports Business Journal, and he has been a guest on Fox News, CNBC, CNN’s Moneyline, and ABC’s Nightline.
Bonham was traveling abroad at the time of this interview, but was gracious enough to take time out and speak with The Biz of Baseball about both his experiences and why MLB is on the path to success, amongst other things.
Bizball: You have experience as the President of an NBA franchise. After seeing the top of that mountain, what made you want to venture out on your own to work on sports marketing as a consultant and negotiator?
Dean Bonham: In the late 1980s, when I was President of the Denver Nuggets, sponsorship evaluation and packaging were in their infancy—very seat-of-the-pants. Reliable metrics were virtually non-existent. I was frustrated by the lack of a more scientific approach, and I wanted something that would help me accurately measure the value of my sponsorship assets so I’d have a solid basis for negotiating with sponsors. I figured others in my position would need this too and that turned out to be the case.
Bizball: At what stage in their purchasing process do companies come to the Bonham Group? Do you generally work with people that have already made the decision to become involved with sports marketing, sponsorships, etc, or do you find that Bonham is contacted when companies are still in the exploratory stage and need some convincing?
Bonham: Companies approach The Bonham Group for advice throughout the marketing cycle. Occasionally, they’ll approach us in the development phase of a major campaign to solicit our counsel on how to strengthen their programs. At other times, they’ll contact us after they’ve made a decision to move forward on a sponsorship but are unsure how to proceed for maximum impact and effectiveness. We’re most often retained after a deal has been implemented to measure its effectiveness against the companies’ strategic objectives and their cost/value ratio parameters.
Bizball: Has the overall economy in the US impacted how companies are approaching their sponsorship budget, and if so, how?
Bonham: Advertising and marketing budgets (of which sponsorships are an important part) took a hit in the wake of 9/11 and the recession that followed, but they have rebounded nicely since then. Successful corporations recognize that marketing is a beast that must be fed in good times or bad.
Bizball: You have a system for evaluating sports properties called the "TBG Property Analysis". What are the different factors that go into such an evaluation and how does a baseball property differ from other properties?
Bonham: The TBG Property Analysis is a trademarked and proprietary process that we developed to itemize, appraise and package a property’s major sponsorship assets to enable them to deliver maximum value to the sponsor and revenue to the property. It requires both art and science. A baseball team is analyzed much like any major sports property, inventorying and valuing the assets, with special attention paid to the team’s status in the community as an important civic asset.
Bizball: How do you view the current MLB sponsorship market?
Bonham: I’m bullish on MLB sponsorships. The league and its sponsors have rolled out some top-notch material in the last 7 or 8 years and this is just the tip of the iceberg. The “Memorable Moments” deal with MasterCard and DHL’s “Delivery Man” promotion are good examples, as was the sponsor activation around the All-Star Game in Pittsburgh this year. The key thing is MLB is focused on delivering value to its partners and that’s a recipe for mutually-beneficial results.
Bizball: You boast the Arizona Diamondbacks, Cleveland Indians, Colorado Rockies, San Diego Padres, and the Branch Rickey Award among your baseball clients. Have your experiences with these organizations been similar in nature? What kind of things have you handled for each?
Bonham: We did a sponsorship summit for the Diamondbacks, showing their sponsors how they could work more effectively with each other and understand how they could enhance the value of their relationships with the team. We helped the Rockies document the value they deliver to their top 10 sponsors. We also did a sponsorship analysis for the Branch Rickey Award to help the organizers understand the value of their sponsorship assets. For the Indians and Padres, we did market research on fans and attendees, gauging their attitudes towards a number of key issues. Interestingly, the Padres hired us after we sat on the other side of the table from them while representing Petco Pet Supplies on the naming rights for Petco Park.
Bizball: So many teams have new ballparks now that will not need remodeling or tearing down for years to come. You have said in the past that selling the naming rights to an already existing stadium is worth less than that of a new one. Are there areas where the reverse is true?
Bonham: Generally, no. In the hypothetical cases where it could be true (Fenway Park or Yankee Stadium), a valued tradition trumps commercial interest.
Bizball: How can teams gain additional revenue from their parks in a sponsorship sense?
Bonham: New sponsorship inventory is often found when teams keep a creative eye open. Alternatively, teams can package existing inventory in new ways to create additional value. Of course, revenue opportunities abound in the case of ballpark renovations or additions.
Bizball: Is there a new frontier in the naming rights business for existing stadiums/ballparks, and if so, what is it?
Bonham: There is a new frontier in facility naming rights, and it entails going above and beyond the customary exposure and hospitality benefits and integrating the sponsor in such a way that its key constituencies (fans, clients, prospects, employees) have an opportunity to interact with the company, the team and the facility in unique, exciting and mutually-satisfying ways. That’s the general idea; if I get more specific, I’ll have to charge you (or kill you).
Bizball: Of the ten most valuable naming rights deals, only one is for a MLB team (Minute Maid Park). What makes MLB parks less valuable to sports marketers?
Bonham: Many of the major markets – Boston, LA, Chicago & New York – haven’t had new ballparks built during this span. Only the White Sox built a new park during this time and did not name it initially. As for the value overall, baseball’s TV deals and media are much more regional than the NBA and NFL deals. Also, NFL stadiums and NBA/NHL arenas are more flexible venue as to the events they can potentially host. New ballparks are designed for baseball and there is no demand to host other events of great value.
Bizball: In 2004, you said that this era could be very well defined as the golden era of baseball. What led you to that conclusion and do you still believe that two years later?
Bonham: Several reasons cause me to be enthusiastic about baseball’s potential: the great strides the game has made toward institutionalizing labor peace; the recognition that the steroid issue had to be dealt with to ensure the integrity of the game; and the centralization and amplification of baseball’s major marketing functions under the auspices of the commissioner and his able staff.
Bizball: On the other hand, you have also stated that you believe MLB's economic model is flawed. Why do you believe that?
Bonham: I’ve changed my mind on this, primarily as a result of the changes within MLB. First and foremost is the change in the relations between MLB and the Players Association—they’re much less adversarial now. The luxury tax and the expansion of revenue sharing are also helping to level the playing field and there are prospects for continued improvement. In short, MLB is dealing with the problems in a proactive way and that bodes well for the future.
Bizball: Some MLB executives have stated that they have innovated on the marketing side more slowly than other leagues due to their reliance on tradition. One way that MLB stepped out of the box this year was with the World Baseball Classic tournament. Do you see this as an event that MLB can sustain, even grow, in subsequent years? What would you have done differently from a sponsorship and/or media perspective?
Bonham: Baseball was always a sleeping giant from a marketing perspective. The giant actually woke up 8-10 years ago and recognized that to compete in today’s crowded sports marketplace, it has to identify how tradition and the game’s many inherently attractive qualities can blend with innovation and more aggressive marketing to solidify and expand the game’s appeal. The World Baseball Classic was a giant step in this direction. The WBC automatically broadens the game’s global platform, with the potential for gaining millions of new fans (and a share of their discretionary income) for MLB. Having said that, the tournament and its related marketing and promotion are brand new and naturally lend themselves to refinements, some of which are undoubtedly already underway.
I look for MLB organizers to focus on a variety of things: how they can make the games and their results more accessible worldwide; how they can link interest in the WBC players back to their MLB clubs; and how they can make baseball’s unique equipment (bats, gloves, uniforms) status symbols around the globe.
Bizball: One of the basic principles of sports marketing is to cater to the fans, yet many Major League Baseball teams do a poor job marketing to their fan base. What teams do you think do a better job than others? What fundamental marketing tactics could most teams use to better their situation?
Bonham: All our clients do a good job, of course. The Colorado teams also score well in this area, and they are repaid with loyal support in a relatively small market. Other teams that seem to have a good handle on marketing to their fan base, and I’m not restricting myself to MLB teams, are the Minnesota Wild, the Los Angeles Angels, the Seattle Seahawks, the Dallas Mavericks and the Houston Rockets. The common denominators seem to be a committed management group and an appreciation for the “little people” in the marketplace.
As for tactics that can help, I’ll give you two. One is market research, which can tell you what you’re doing right and what you’re doing wrong. Sometimes the answers aren’t pretty; but if you want to improve, you need to hear them. I’m also big on fan forums. These are a form of market research; but if done right, they can also provide a team with excellent creative input.
Bizball: Lastly, any discussion of MLB and its business operation has to touch on Major League Baseball Advanced Media and its flagship site, MLB.com. What is your overall view of MLBAM?
Bonham: MLBAM is a remarkable success story that’s come a long way in six years. MLB showed a lot of foresight in putting it together and Bob Bowman has done an outstanding job of nurturing it in the formative stages and in growing the business. It’s been a big part of the awakening of the sleeping giant in terms of recognizing the change in how fans access and consume sports media. The initial problems with technology appear to have been mastered and the periodic disputes and resulting friction over property rights are a natural result of the shakeout in the development and financial ramifications of the new media. I see a huge revenue upside.
- Interview conducted by Paul Swydan
- Edited by Maury Brown
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