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Last week, during Big 12 media days, the league made a major business announcement that had nothing to do with football: It signed a significant new partnership that includes a conference-wide jersey patch, new naming rights and more. The partnership is with Monster Energy Drinks.
The league has finalized a multiyear deal with Monster Energy worth around $20M annually to make the company the “entitlement partner” of the Big 12 football and men’s and women’s basketball regular seasons, Sports Business Journal has learned.
The agreement centers on two marquee assets: a co-branded Big 12/Monster jersey patch that teams will wear in football and men’s and women’s basketball, and co-branded field and court logos that will appear on playing surfaces.
The Big 12 football and men’s and women’s basketball regular seasons will also be dubbed “Monster Energy Big 12 Football” and “Monster Energy Big 12 Basketball.”
The deal -- which Big Commissioner Brett Yormark is planning to unveil on Tuesday during his annual address at the league’s football media days -- is expected to pay member schools around $1M annually, multiple league sources said. Monster also will cover the costs of installing the new logos, expenses that won’t reduce schools’ annual distributions.
The Monster deal will not preclude Big 12 members from selling their own commercial jersey patches. However, Monster does have exclusivity in the energy drink category, meaning, for example, a school could not sell a Red Bull patch.
The most common feedback I read after this announcement — from fans and industry professionals and in the industry press — was that this is a bad deal for the Big 12. Specifically, the league didn’t get enough money for such a broad marketing deal.
I’m not sure I share that conclusion. That opinion comes not just from the conversations I’ve had over the past few months with athletic directors, consultants and MMR professionals, but also from my experience selling ads for Extra Points.
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The jersey patch world doesn’t work exactly like newsletter ads, but honestly, the fundamentals of the new marketplaces (along with lots of athlete NIL deals) are pretty similar. Stick with me for a second.
One important metric, of course, is the total potential reach. How many subscribers does a newsletter have? How many followers does an athlete have on Instagram? How many people could see a jersey over the course of a season? For a jersey sponsorship, there are lots of ways to pencil out that potential top-line number: the number of people who will see a particular team play in a stadium, plus the number of people who will watch a team play on TV (or streaming) … and then throw in some rough page views from the school website and impressions on social media accounts (since highlights and official school photos presumably include athletes in uniform). Throw ’em all into a spreadsheet, and presto: audience size.
But I think folks err if they assume audience size is the only metric that matters when figuring out valuation. You can’t just take a bunch of hypothetical impressions or views and exchange them for dollars, like you might at a currency exchange.
First, everybody has to consider who that potential audience is. We can pull up a spreadsheet and show that a school’s social media account has a following of, say, 100,000 people across multiple platforms. But what percentage of those followers are bots? What about random purchased accounts in, like, Vietnam or Peru? What about fans living overseas, or fans under 16? Those impressions wouldn’t be worth very much to an American brand, even if the top-line follower number were large. Or if you’re a health care company based in West Virginia, how useful are impressions to consumers in Utah or Florida?
Then you have to consider the quality of that impression. If you’re sitting in the 30th row at a football game, the only way you’re seeing the patch on a jersey is on the Jumbotron. Fans watching on TV won’t be able to see patches during the regular flow of action, either. Are the cutaways during slow-motion replays enough? If viewers can’t see patches, do broadcasters or reporters have to mention them?
There’s also the question of what specific real estate a company is buying and who might share it. As of Sunday evening, I’m aware of two other Big 12 institutions (Oklahoma State and Kansas) that have announced independent jersey patch sponsorship deals. At least two other Big 12 institutions are deep in discussions with potential partners. Those parters will need to share jersey real estate with the Big 12 patch and their athletic apparel partner patch.
Extra Points has obtained guidance sent to schools from Nike and adidas about what those companies consider acceptable sponsorship partners:
Via Nike, obtained by EP
Not all of the individual school sponsorship deals are the same, either. At Wisconsin, for example, Culver’s only bought the rights to appear on the uniforms for football, men’s basketball and hockey. Patches on the various women’s uniforms will go to a different sponsor, the UW Health System. Nebraska-Omaha is also splitting real estate among different partners. Other schools, like Wyoming, Washington State and George Washington, have sold the same sponsorship package for every one of their sports.
Finally, there’s a slightly more difficult angle to quantify. What are sponsors actually trying to accomplish? Is the hope to buy “awareness” of a product in a particular footprint rather than drive specific sales? Is the jersey patch part of a deeper university or conference-wide partnership or activation? Do companies hope to improve brand awareness more for recruiting purposes, rather than consumer sales? Is it a B2B play?
All of this stuff matters, which is why no two sponsorship deals are exactly alike. A deal that might be worth $900,000 to one company could very well be worth $3 million to another.
There are certainly folks who think the terms of the Big 12 partnership aren’t good enough. Via FOS:
One industry source, however, called it “objectively a terrible deal,” saying Big 12 schools were worth much more than the $1 million (or potentially less) the schools would be getting from the annual payout. Another said the value of school-specific jersey patch deals made with schools of the caliber of the Big 12 was worth multiple millions of dollars per year.
Like I said up top, I’m not so certain. Comparing a conference sponsorship patch to a single-school deal isn’t an apples-to-apples comparison, since the physical real estate isn’t the same and Monster is offering additional compensation/marketing assets beyond the pure cash distribution. The Monster deal also doesn’t preclude any Big 12 institution from doing its own deals, as Oklahoma State and Kansas have done.
If it was so easy for individual Big 12 schools to lock down sponsorship deals worth multiple millions of dollars a year … I think more than two schools would have done it by now. And also, if schools (and their MMR partners) really felt the conference brand deal was a significant danger to the value of their future sponsorship opportunities … they wouldn’t have voted in favor of the deal. Brent Yormark and company didn’t do this unilaterally, after all.
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Could the deal still be a bad one? Sure, it’s possible.
All caveats aside, it is entirely possible that all of the league ADs have misread the market, and that the Monster deal could drive down the going rate for future school-specific marketing assets. It’s also possible that whatever make-goods that campuses with Pepsi contracts have to provide (Monster is owned in part by Coke) could undercut the profitability of the sponsorship program and strain important university partnerships.
I think it’s also worth wondering what the true value of some of the more intangible components of this partnership will actually be worth in practice. The Big 12 may refer to its regular-season contests as “Monster Energy Big 12 Football” in press releases or on broadcasts, but there’s no obligation for fans or reporters to do the same. I’m certainly not going to — at least, I won’t if Monster doesn’t cut a sponsorship deal with us — and I imagine many other outlets won’t, either.
And hey, I know it’s hard to account for taste, but it is entirely possible this thing is going to look and sound ugly. The green claw, if displayed prominently, might not look so great on Kansas State purple or Arizona State maroon and gold. Monster could have some sort of scandal or product recall that would further embarass the conference. We could look back on all of this three years from now and think of the Monster activation alongside “Leaders and Legends” and “This is for all the Tostitos.”
I say this as a guy who actually likes Monster and drinks it on a regular basis: This isn’t exactly the “Big 12, sponsored by vegetables.” There’s probably some Faculty Athletic Rep or professor or someone somewhere grumbling over the fact that higher education has embraced a beverage that probably isn’t the healthiest thing in the world. But if you’re a Big 12 school leader and you wanted the conference office to lead with caution, restraint and a healthy respect for tradition … well, you hired the wrong guy. You hired Commissioner Deals. And since you don’t have the brand power or television markets of the Big Ten or SEC, you need Commissioner Deals to find new revenue streams to help close that gap.
Not all of the conference’s recent plans have worked — or even happened — like Big 12 Mexico or Big 12 Member UConn. But it’s hard to argue that the Big 12 hasn’t connected more than it’s struck out on amibitous marketing swings.
Maybe this won’t work out. But I don’t think we have enough information to dismiss this deal completely out of hand right now. And as for the consultants and sales professionals who are upset the top-line number isn’t large enough … well, they’ve got plenty of time to sell more jersey patches and prove the Big 12 really did sell low.
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