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Philadelphia Eagles opt for long-term stability, creating bespoke commercial partnerships

The Philadelphia Eagles’ Ari Roitman explains the long-term thinking behind his stability-first commercial strategy, and discusses how the team still managed to take maximum advantage of their unexpected Super Bowl victory.

MINNEAPOLIS, MN - FEBRUARY 04: Quarterback Nick Foles #9 of the Philadelphia Eagles raises the Vince Lombardi Trophy after defeating the New England Patriots, 41-33, in Super Bowl LII at U.S. Bank Stadium on February 4, 2018 in Minneapolis, Minnesota. (Photo by Patrick Smith/Getty Images)

  • Eagles’ sponsorship strategy is based around minimising risk and maximising stability
  • Focus is on working closely with fewer sponsors, signing long-term, high-value deals
  • Club have nevertheless found ways to reap benefits from first ever Super Bowl victory

Winning a first Super Bowl is a momentous occasion for any NFL franchise, and the Philadelphia Eagles’ 2018 victory was no exception. What was exceptional was the franchise’s commercial response. Where most teams would be looking to immediately cash in with a series of lucrative post-Super Bowl commercial deals, Ari Roitman, the Eagles’ senior vice-president of business, has enjoyed a summer not unlike any other.

Though not unique, the Eagles’ commercial model – based around engaging more closely with a smaller number of sponsors, tying them down to high-value, long-term deals – is rare in the NFL. As of August 2018, the Eagles had a total of 65 corporate partners; just over half the league-wide average of 116.

“That’s not because my guys aren’t doing their jobs,” Roitman says. “The business philosophy that we have operated under is what we call a ‘less is more’ philosophy. We do fewer deals, but we do larger deals from a remuneration perspective, as well as longer-term deals.”

The model, says Roitman, works for the Eagles “because of the market we’re in, a big city with a devoted fanbase and huge TV viewership”.

“What works for us wouldn’t necessarily work somewhere else,” he says. “What goes on in a different market makes sense in that market, and for us there’s a certain space we just choose not to play in. There’s a certain type of deal that does not work for the Philadelphia Eagles, and we’re very respectful about that, but we try and focus on those deals that fit our model, fit our goals and objectives, and we’ve seen success from that.”

The 2017 edition of Forbes’ annual Business of Football survey shows that, despite the Eagles’ significantly lower-than-average number of commercial partners, their annual revenue of $430m (€367m/£333m) was the eighth highest in the NFL. Although that figure combines matchday, broadcast and commercial revenues, it nevertheless offers an indication of an institution flourishing under its current model.

Minimising risk

Primarily it is a strategy designed to minimise risk, explains Roitman. “For a team like the Eagles, this model offers you protection and helps you when on-field performance is not great. If we’ve got a couple of years in a row where we’re not a winning team, by virtue of the fact that we do these long-term deals we’re not at risk of losing someone who might be on a more short-term deal and who will go, ‘the Eagles aren’t performing, or the TV audience isn’t there, or attendance isn’t there’ – or whatever their metrics are – they don’t have the ability to say, ‘okay, see you later’.”

Roitman also admits that that there is some risk of leaving money on the table with this strategy – “we win the Super Bowl, and you could argue that our rates should be going up and we should be generating way more business” – but argues that, given 2018 was the franchise’s first ever Super Bowl victory, the model continues to make sense.

Indeed, the Eagles’ overall valuation in the 2017 Forbes ranking of $2.65bn puts them in the top ten most valuable NFL teams, with year-on-year growth of six per cent. That figure can be expected to jump in the 2018 report, when the fallout from their Super Bowl triumph is taken into account, but it is unlikely to do so to the same extent as previous Super Bowl winners. In the 12 months following their victories, 2016 winners the Denver Broncos’ value leapt 24 per cent on the Forbes rankings, while unexpected 2017 runners-up the Atlanta Falcons’ rose 16 per cent, both at least partly inspired by post-Super Bowl commercial pushes.

The Broncos, for instance, signed a two-season partnership with United Airlines in summer of 2016. Roitman says this length of partnership is not something the Eagles are planning on, even to cash in on their Super Bowl success.

“We have deals on the low-end that are three-year deals and on the high-end are 20-year deals,” he says. “That’s a very wide gap. In general, I think five years as a minimum is a sweet spot for us. We do three-year deals, but we’re extremely hesitant to do anything under that number.”

Sixty-four per cent of the Eagles’ partnerships have a term of four years or longer, roughly twice the NFL average.

“So where that would be different is if we were a team that was much more transactional, much more short-term,” Roitman adds. “You’d see a much more significant bump in revenue for a club that does a lot of one or two-year deals after a Super Bowl win than you will with us. But I do believe that in the long-term we’re better off. We won one Super Bowl in the history of the franchise – if you’re making an argument over the business model that we operate under, we’ve benefited way more from the stability than we have lost in terms of potentially giving up business.”

Wider benefits

“I don’t want to give the impression that we’re not going to benefit from the Super Bowl win; I don’t think that’s the case at all,” says Roitman. “I also don’t want it to appear that we’re not going to benefit as much as we should – we’re having a wonderful new business year, and we’re seeing the benefits of the performance last year.”

There are several “direct, immediate benefits,” he says, of which the biggest was the revenue brought in from the victory parade, which exceeded $1m. A significant proportion of that income came through 13 of the club’s existing sponsors purchasing logo placements on the buses which drove through the streets of Philadelphia. Further revenue was raised from the sale of the TV rights for the parade, with NBC Sports Philadelphia+ showing the event live, and then on a loop for 24 hours afterwards, such was the excitement in the city. An estimated two million fans joined the celebration somewhere along its 4.8-mile route.

Merchandise has also accounted a significant proportion of those direct benefits. The club created a jewellery line, allowing fans to buy limited edition replica Super Bowl rings and other items celebrating the win, alongside a wide range of other commemorative merchandise. Taken collectively, the 2018 Eagles saw the second-highest “hot market” merchandise sales in history, behind only the 2016 World Series-winning Chicago Cubs, according to figures from sportswear retailer Fanatics. The company defines ‘hot market’ sales as those which take place in the 30 days immediately following a championship victory, of items directly related to the win.

Although the total sales figures were not revealed, Fanatics said that Eagles fans spent 60 per cent more on merchandise after their team’s Super Bowl win than New England Patriots fans in the preceding year. The NFL Player’s Association confirmed Eagles quarterback Nick Foles sold more merchandise than any other NFL player in the period between March and May 2018, while six other Eagles players joined him in the top 50. Much of this is a result of a first Super Bowl, but Roitman believes that the product lines created by the club helped to exploit fans’ fervour. “The jewellery line, the clothing lines, they’re specific to the Super Bowl win,” he says. “To have such incredible hot market sales is very significant, and that’s because we created items fans would want to buy. Hats, t-shirts, you name it – fans were buying up everything they possibly could.”

The club has also seen indirect benefits of the Super Bowl win. In July, the Eagles signed a six-year partnership with Philadelphia-based health insurance firm Independence Blue Cross, who will serve as the team’s official health insurance partner and the presenting partner of the Eagles’ training camp. IBX have previously partnered with the club informally on several occasions in the past, and Roitman says that a formalised, long-term deal has been something that has been spoken about for six years.

“Every year we had good dialogue, and every year we got to the finish line and didn’t close the deal,” he says. “I have no doubt that winning the Super Bowl has helped us close the deal this year. There are direct, immediate benefits and then there are indirect benefits, things like a brand going ‘ok, it’s time, we probably should have said ‘yes’ last year’.”

Maximising relations

While the benefits to the strategy are numerous, the one that has the biggest day-to-day effect is the club’s ability to work more closely with each of its sponsors, ensuring that every brand gets what it wants out of their partnership. “The first step of any relationship should be listening,” Roitman says. “That’s true in in any business, but the fact that we work with fewer brands, over a longer term, means we can really listen, and really get into building that relationship.”

The listening process starts right from the initiation of the partnership. “We pride ourselves on not thinking we have any answers before we sit down with a brand and try to understand what they’re trying to accomplish,” he adds. Using the example of Eagles’ founding partner Coca-Cola, Roitman explains: “It might be intuitive that they want to sell more products, but until they tell us that that’s their goal, I always tell my staff that we really don’t know. Listening first is paramount before we take any action.”

Again, he stresses that because the number of partners they work with is lower, members of his team are able to spend more time with each one, building a granular picture of what the club’s partners want to achieve and, as importantly, how they want to achieve it.

“Once we have that information, what we will hope to do is to create an asset mix that will accomplish those goals,” Roitman says. “What is it that they’re trying to do? And how can we afford them the benefits and assets that over time will make for a very successful, mutually-successful partnership? Whether it’s hospitality, whether it’s signage, whether it’s custom digital content – whatever it is that’s going to make the partnership successful and feed the client’s goals, that’s how we go about creating what we hope to be the asset mix for the partnership and we go from there.”

Roitman adds that this process is part of what contributes to the Eagles’ “very strong” retention rates. “Certainly management and retention is one of the huge upsides for us,” he says. “We can devote more time, we can devote more resources to these partnerships, and so as a result we tend not to lose partners, which is very important. I wouldn’t like to put a number on it, but I’d say significant proportion of our sponsors renew their deals with us for a second term.”

Furthermore, Roitman believes the “lack of clutter” in the Eagles’ sponsorship roster has helped to engender a premium feel to each of their deals. Every brand that works with the team “gets more elbow room to leverage our intellectual property”, because the vast majority of the larger deals they sign are exclusive. “We really believe in ownership,” says Roitman. “Obviously we have some deals that are non-exclusive, but the larger deals – and, given our model, we have more of those – leverage to a good degree the notion of exclusivity, owning spaces, owning areas of relationships with the Philadelphia Eagles.”

IBX, for instance, will be the Eagles’ only health insurance partner, allowing them to activate using the Eagles’ branding across the entire sector. Other teams – both within the NFL and from other leagues – will often sign deals with multiple partners from the same sector, with brands able to activate the partnership only in specific territories.

In spite of the Super Bowl win, Roitman will not change the Eagles’ commercial strategy, which he says is ultimately focused on “long-term success and stability”.

“It’s not about this year, necessarily, it’s not about the here and the now, its about building a successful, stable business not just for the current year but for the future,” he concludes. “My colleague Howie Roseman [the Eagles’ general manager] has to build a team not just for 2018, but for 2019 and beyond. We have the same things in mind. We’re trying to build a business that is going to thrive for many years to come.”

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