The Business of Sports with Rick Horrow

Sports Professor Ricard on the $1.3 trillion business of sports.

We're talking about an area and with a guy that had a profound effect on a substantial amount of that money and even bring more money into the fold from beginnings as a civil engineering major to one of the most prolific sponsorship experts in the world.

And a good friend, Mike Robichaug has that for an intro.

That's great.

Thank you.

Great to see you, Rick.

Yeah, absolutely.

Great to see you too.

So you go to VMI and you get a civil engineering degree and then an MBA from William and Mary.

Did we ever assume during those stages that you would end up kind of guiding the world of global sports sponsorship?

Definitely not.

I, I didn't even know what marketing was.

I was the classic, you know, did OK in math, so you go become an engineer, and it wasn't until I got to business school that I even knew there were things more than being an engineer.

Well, and you know, being an engineer is very important because it gives you another perspective as all of these perspectives for you.

But, you know, growing up and years ago, the idea of a sponsorship was finding a guy whose ego fit with that golf game to deliver a sponsorship.

The world has really come a long way, hasn't it?

Uh, it's unbelievable how much it's changed, and if you look at ownership and just all the changes going on, it's really incredible.

So, 9 years at Sprint Nextel, uh, new product development, I guess it gave you some real perspective, uh, uh, not only to see what works and what doesn't, but what could be sold and accepted and what couldn't.

Definitely.

Look, that was great.

The next 2 years were awesome.

We were a young startup company, kind of fighting our way, fighting the big guys, and, uh, working on the product was awesome.

I got to learn, I got to learn the business and, and understand what we were trying to do, uh, what the impacts of consumers were, how sales worked, how a company functions.

Uh, so it's just I really got to see a lot of things and it was kind of, kind of high profile anytime we launched a new. new phones were the big sexy thing when they came out each time.

So, uh, yeah, that was, that was a lot of fun.

That was a great company to work for.

Yeah, of course.

And as you teeth for the Mastercard, you have that the more you knew about a particular business, the better it was going to be to adapt the sport marketing techniques to it.

Yeah, without a doubt.

I mean, I think back then that was one of the days of starting where sponsorships weren't, I don't want to say they were ever generic, but they started really being much better tailored.

A brand really tried to say, hey, I don't want to just be a sponsor and hang signs and take some customers.

I need to really adapt it for my business.

And, you know, as I got to know my peers and saw what they were trying to do, whether it was pouring rights or automobiles or whatever, we all, we all needed to morph our sponsorship.

So if you didn't understand what your business was or the purpose was or the goals were, Uh, you both struggle from building the right portfolio, but also being adopted internally, which is a huge thing if you're on the corporate brand side, is getting the internal organism, uh, organization to work with you.

If I put all the parts on the table, would you be able to build a cell phone from the inside out?

Once back then, probably.

No, I'm kidding.

Uh they were, uh, I did get to go see them.

They used to be made in the US and I would go down and watch the plant down in Florida be made and And I think they could make, they were just, there was something about 5 every 2 or 3 minutes.

It was pretty wild to watch, so it was, uh, it was very interesting.

I get, I bet you your civil engineering background allowed you to understand a little bit more than most normal lay human beings as far as the process was concerned.

It did a little bit.

My lecture, my, my, uh, electrical engineering professor certainly would never have let me pick up anything and touched the phone, but, uh, no, look, I think when you're an engineer and you have the background, it's, uh, you're, you're a little comfortable, um, in the technical space, you're a little comfortable asking questions, and I think Anybody who's done any, any sort of anything well in their life realizes once you get to that point where you're just OK, asking questions and understanding, hey, I don't understand this, will you help me?

Um, but I kind of, I guess I was OK at asking the right questions and being just comfortable enough in the room to raise my hand, and learn from there.

I listened more to 2001 because I think it's a very significant development.

The bio says you basically started the first national sports and entertainment sponsorship department.

Uh, gutsy at the time, successful, now everybody kind of does that.

What was your thinking at the time and how hard was it to get done?

Uh, well, I was thinking how fortunate I was that my boss, Mark, um, who I still talk to these days, a wonderful guy, uh, that, that he realized we had gotten to the point, um, as the CMO that we had gotten to the point in our business development and, and growth, that it was time to be able to do that and diversify what we were doing.

So he did the first deals with, uh, um, Major League Baseball and the NHL.

And I was fortunate enough, he moved me into the role to, to run that.

And yeah, really, from there, we had a lot to learn.

We're very fortunate.

We hired a great agency to come in and, and teach me and teach us, uh, uh, how to, how to get it organized.

And we had great partners at the NHL and MLB.

Uh, but yeah, we were, you know, we were young and small and just getting started, but, but those were great places to start.

Well, but also, as far as the relationships go, it, it says that not only the MLB and NHL NFL, USDA, but Sony Pictures and Disney, so you cut across sports into entertainment.

We did, yeah.

That, that was actually really fun.

We worked with, uh, uh, a very different prior version of CA, um, but we worked with them on the, on the, uh, entertainment side.

And we got into movies, right?

That was a big thing, product placement, and we did have kind of a unique looking phone.

So we wanted to be in all as many relevant things that we could do.

But then starting to do some movie.

Promotions and understanding how if you, uh, if you, if you work with the films and, and help promote them, A, it helped us with retail, which was becoming new for us.

Uh, and also, you started getting the adjacency of the talent, um, through the movie.

Um, but yeah, that was a lot of fun.

We did, uh, you know, did, did, did a few different things with some, some really good partners.

You know not only as old, and I'm kidding, but experienced, but as a, as a, as a, why?

But I, but I'm a young, uh modest and why, and a mold breaker.

I mean, for example, to be able to do product placement with a phone in a movie, today you can't watch a movie without that.

But it must have been very difficult to conceptualize it, value it and sell it back then.

It, it was interesting, you know, the, the one, that I remember having the most fun with is we work with Law and Order and, uh, and I remember meeting with, uh, and I'm sorry, his name's escaping me right now, uh, the, the man who, who created it and owns it.

But I met with him and, and he was very particular that it needed to be authentic.

And he was probably the first person that really taught me, uh, about authenticity and how much that mattered.

And we explained to him that law enforcement and, and, and many, many groups like that were, were big users of our product.

And so, because we had to push the talk direct.

Connect back then.

So the fact that he would say, hey, uh, if this is how it's being used in real life and I want my show to be as authentic as possible, then I'm happy to work with you and, and integrate you.

So, it, it was more than just cutting a deal.

It was, it was really understanding it from a creative point of view, uh, getting into the stories, uh, which was great.

So let's fast forward to about 2008, 2009.

You start your 15 plus year career with MasterCard, most of it as the senior vice president for global sponsorships, uh, at the heyday at 100 people working for you in 5 business regions.

Uh, did you ever think that the sports sponsorship world would be as big and world encompassing as it had become under your direction?

Um, no, not really.

In fact, you know, one of the big things you went right to global is one of the reasons I wanted to go to a company, a Mastercard, was, uh, you know, was, was just had just gone public was to get in some international experience, being in the telecom space for anybody that knows in the US for the most part, if you're in telecom, it's a US-based business, and I wanted some of that international global experience and Mastercard.

Uh, was, I was very fortunate to go there.

And to all of a sudden, I have my eyes open to, um, you know, much, much bigger, uh, you know, not just sports or, or, or, or things, but things that crossed over many more borders, had to deal with languages, had to deal with different cultures.

And that was, was fascinating.

And then if you look today, how the NFL is going to Europe and, and, and, and football, soccer's Coming here.

It's, uh, you know, look, the Olympics was always that kind of, uh, main international, uh, you know, event that people looked at.

But there's so many other things now, and obviously television and production has, has evolved considerably.

So all of those things that have come together, uh, it's, it's, it's unbelievable to think you can be a fan of virtually anything, um, and live anywhere and be a fan of something else.

So, Market.us and I've seen a lot of these studies and you can plug numbers and pick them any way you want, but the number that I've seen that seems to be most realistic is that the international sports sponsorship market is at about $145 billion US by 2034.

CAGR 10% increase from 25 to 33.

Pretty prolific.

It may not be that number, but we know the industry is growing by leaps and bounds, and you were in a position to be ahead of your time with a global company.

Yeah, I mean, look, the, the, what we've all known and now we're just seeing is how much, um, you know, content or, you know, entertainment, whatever we want words we want to use for it.

The, the reality is what people do and, and, and what draws their attention and their, their fandomness, and sports is that universal.

And, you know, what the, once the mold started breaking years ago, where you, you had, uh, uh, different forms of entertainment, then you got into reality TV and you got to all these, these other areas, and then Uh, the, the idea that sport is so universal, it was appointment viewing.

It was, it was, if you were a fan, you dedicated your time, energy, money, you know, you only have so many hours in the day, so many passions you can do.

And sports just commands that.

And, and it, it, it, it always has been and it, and it's only growing today.

And that's what people just realized.

That's why if you look at the upfronts last week, everything's now being led by sports, and it used to be led by primetime TV.

Yeah, we're going to get into sport biz and how marvelous a concept that a company it is in just a minute, but the key question to segue into that is valuation.

You know, you had a chance to deal with that Mastercard, baseball, football, PGA, rugby, UEFA, etc.

When does it come a time where the corporation understands they are happy with their return on investment?

You've got to keep them happy, clearly, but happy ought to involve ROI, and it needs to involve brand awareness, and you were formulating your own opinion on what that means as you continued to run the sponsorship piece of the company.

For sure, I mean, listen, anybody who's on the brand side knows these are, these were always kind of big decisions, um, but they were also very visible.

Now they're very big decisions, but Uh, look, CFOs, CMOs, boards of director, uh, they, they all want to know these questions.

These are allocation of, of limited resources.

I don't care how big a company you are, uh, but for me, I was very fortunate to start back, uh, when we kind of skipped over at Nextel when we did the NASCAR deal, which was really the game changer, is we realized, uh, very quickly, again, the CMO Mark was like, hey, we need to measure this.

We need to figure out some way to understand the value of what we're doing.

I started learning about database, uh, you know, databases and how we could keep track of those things.

And we were actually able to prove, and that was also the advent of another technical change, which was, people may not remember this, but cell phones didn't always have geolocations.

Um, that was actually mandated by the government for, um, 911 services.

Well, every wireless company turned that into some sort of marketing value.

Well, we were able to use it for, for.

And we're able to use it and show the return on investment that we got on our NASCAR deal.

And so as you, as any business is looking, you know, they're not, they, they want to understand the return, of course, they want to understand that the resources being used well.

I think enlightened ones also say, well, if it's working so well, if I gave you more money, would you, would you be able to grow the business even more?

Um, and then it always came down to what decisions are you making and how do you know what decision to make and how do you know what to pay.

So, everybody, great segue.

Everybody knows in the industry that Robichaud's chops and credibility are far wide, deep, unquestioned, and I'm not blowing smoke, you're the best and you're maybe the only creative guy in that space.

I'll say it.

You don't have to.

Uh, your ability to then take what you've learned and be part of a new company is unparalleled.

Therefore, tell us about sports biz.

Yeah, we're, we're building what we like to think will be the most advanced analytics company in the sponsorship space.

Uh, we want to help brands, uh, measure and make better decisions.

There's a few other folks out doing that, but we think we have a few twists and turns that we look at, um, as far as how we incorporate design.

You know, look, brands, uh, uh, you know, are complicated.

You know, a lot of people think that I would make a decision on a sponsorship, which was rarely the case.

It was usually a company decision all the way up to executives.

But then when it came to the activating part, you know, I had other folks.

I had salespeople that I had an understanding from hospitality, but I had brand people, uh, in the company that they were responsible.

That's their main job.

You know, what are the brand standards?

How do we represent ourselves?

What the, what's the color scheme, all those decisions that are made.

And there's, there hasn't been a lot of great analytics to help brands understand the impact.

A lot of brand people, no fault of their own, but they don't go to stadiums.

They may not be a fan of that sport.

So they may think, well, if I, if this is how the logo looks here or there, it'll just look fine in a stadium or or some other application, and that may not be the case.

So being able to provide analytics stuff to a CMO level that says, hey, not only do I know what it's worth from the value and from the position, but now I also see, am I maximizing and getting the most value, um, out of those positions and, and how my brand's represented.

And, and, and I'll say it, and no offense to agencies, but nobody has the collective experience.

And the technical acumen, I know the company that you're now with touts Deep Sports, uh, Solutions, and also the ability to integrate AI, a newfangled, uh, teammate in this whole world.

Uh, how is this moving forward with all of these, all of these relative diverse parts?

Yeah, that, that's the part that's incredible, and I wish I was smart enough when I joined the company, but I, I've, I've really been learning from Steve, our owner since and studying it a lot.

Look, we all hear about AI, but you really do have to sit down and, and discipline yourself and, and, and understand what it means.

But every company out there is, is either doing it or talking about doing it.

And it's just a matter of with, within what department.

What I'm finding is it hasn't hit a lot of the marketing departments yet, or not all of them.

You know, I don't want to be judgmental, um, but The key is, it's, it's coming.

It's coming everywhere.

And as I talked to everybody, whether it's a property, an agency or another brand, is the key thing now is, is to say, hey, how can I use it?

How can I use it to be more efficient?

How can I make better decisions?

How can I do it faster?

Um, because it's coming now, I'd like to think we're going to be a part of that, and, and a part of changing it, but there's other people that are, that are doing it well, Generative AI for creative.

Um, all these things are going to impact the marketing, um, um, ecosystem, as we know it.

And so We just want to be able to ultimately have that brand.

Look, they have a product, they have a service, and they want to sell it.

Um, and the paradigm of the old ways of doing things as they continue to change are going to need new tools and resources.

And I would say the last thing is a lot of it's going to be self-serve.

Um, you know, we looked at a gentleman from from Procter and Gamble a few years ago that said, you know, far, far too long brands have ceded too much control up to third parties away from themselves, and that brands need to really regain their control.

That was Mr.

Pritchard, I believe.

Uh, that said that, and we believe that we believe brands are going to be doing things more in-house.

It doesn't mean agencies are going away.

It doesn't mean, uh, that sort of thing.

It just means they're going to be different, and they all know it and they're all working on it now and the smart ones are ahead of it.

So we just think there's going to be more self-service tools that either the brand or the agencies are going to use.

If you surveyed the growth of the industry post COVID.

I think one of the generalizations we can all agree on is that it's been survival of the fittest, but now people understand it's effectively cooperative environment.

There's a lot of revenue and there's a lot of assets out there, but everybody's kind of get along and it's not always a zero-sum game.

In that context, you've got brands, agencies, teams, leagues, uh, uh, uh, properties and athletes, and with your new company, you've got to in some way appeal to all of them.

How does that all work?

Yeah, 100%.

And, and actually that was one of the things we talked about as soon, as soon as I really started a few months ago is, um, every, first of all, every brand has a different relationship.

If they have an agency, they all have different relationships.

Um, and that's, you know, usually the DNA of the brand.

Um, so you can't look in and say, well, this is how I work with mine, so that must be how everybody does it, because that's not the case.

Um, I think also brands and CFOs know this.

Brand marketers, they love spending money.

It's a part of, part of what we do and And, and, and we believe, um, a lot in marketing and what its role is.

So I think it's gonna happen is it's going to change and it's gonna more how the spend happens.

I actually think properties are going to benefit because you're going to have agent, uh, you're gonna have brands be more active.

The money they save to be more efficient in certain areas, they're then gonna be use those resources and deploy them in other areas.

For, for, you know, kind of one of the, the ways that brands talk about this.

They talk about working dollars and what a, what a CFO would say is the fee you pay, uh, yeah, you get value for it, but they were considered that kind of a non-working dollar because you don't get necessarily direct visual benefit to promote your business.

And then you've got your working dollars.

I think what you're going to see is, is you're going to see the non-working dollars maybe go down some, not that fees will go down, but other expenses you have that you don't necessarily see.

And then you're going to have more working dollars.

You can advertise more, you can do more hospitality.

If you have 3 MLB teams, maybe you'll have 7.

Um, so I think properties are going to benefit because they're gonna have, um, happier sponsors because they're gonna get maximum value.

Agencies are going to benefit because, um, their clients are going to do more.

They're going to be more active in more places, and the brands are going to benefit because they just know they're more efficient and they're getting more value.

So actually, it's gonna be different, but I do think, um, it's, it's, it's not necessarily a negative.

It's, it's just gonna be changed, uh, how people do things.

All right, so you're sitting in a creative room wherever that is, either with alcohol flowing or businesses, we'll leave that to the imagination.

Uh, when does the, uh, trade-off that traditionalism, uh, stop as far as preserving the existing structure of a sport versus the understanding that corporations and partners may want new forums and opportunities for advertising.

An example is the 100 million or so generated by the NHL as they define jersey patches.

Uh, you know, other examples abound, but, but where's that line and how do you deal with it?

I think consumers, it's really up to the consumer, right?

If you're a good marketing, you always start with the consumer, and, and the consumers are understanding the landscape and they understand that brands have a need to advertise their products.

I think it's all we always would say, you know, are you doing it authentically?

Are you doing it in a way that you really want to enhance the fan experience?

Is the fan somehow getting some kind of benefit from a marketer being there?

If it's more, you know, from a visual, from a patch, or, or some other form of advertising, I think.

As long as it's done right, done tastefully, we've all seen it, it, you know, it hasn't been, you know, overnight.

It's kind of morphed in.

Um, we see what's going on with college sports where they have a need for revenue.

Um, but I think, look, fans are pretty smart these days.

They understand, um, that money's always been a part of sport.

And, and as long as the brands do it in a way that's, uh, that, you know, engages them well, gives them, you know, ideally something for it, uh, I think you're just going to continue to see it as long as it can be absorbed into the system.

Um, technology is still going to continue to Bob.

We know digital is going to keep changing, signage is changing.

Uh, when you start thinking globally, you're going to see sports present themselves differently.

The sport itself may be the same, but the brands are going to get presented differently in different countries.

You'll be in character, you'll be in language, you may be sponsors that are locally relevant.

So all that stuff's gonna keep changing and evolving, and that'll be good for, that really should be good for everybody.

It could be good for everybody and hopefully people are most creative as to how to approach that being good for everybody.

Business brand value, you look at some of the numbers, you know, Nike's brand values, some say is that it's 650 million.

Adidas, Emirates, Santander, Red Bull, top.

5 people say all over $100 million in brand value.

Uh, what's the most important aspect of the brand value?

Is it the asset, the inventory, the kind of relationships that are generated, the hospitality, is it a combination of all of that?

Where does it come from?

Um, well, look, a brand's number one assets likability, you know, at the end of the day, everybody does business with people they like and brands they like.

So is it, is it likable?

I think then as you go down from there, is what are the characteristics of that brand that that attract an audience?

Is it, is it an adventuresome?

Is it, is it culturally pushing the envelope?

Is it, is it conservative, right?

We, we see, you know, financial services obviously are different than And, and, and then other things, you don't want to, you don't want to look too risky for your financial services, uh, as an example.

Uh, but look, brands build, um, really all for that consideration and ultimately decision.

You know, we say consideration is important, but ultimately, it doesn't matter if you consider me, it's only matters if you, if you actually, uh, you follow it up with a purchase and, and build some sort of loyalty to it.

Um, but that's what brands, that's what they're always trying to build and they're always trying to protect, uh, is, is to make sure that that, that brand health is there.

Couple more AI dangerous or necessary?

Inevitable.

Um, you know, it's, it's, it's, it's coming.

I think, um, I think we all have seen so many other technologies come in, in our life.

People worried about wireless cellphones back in the day.

We're worried about driverless cars, all sorts of stuff.

I would say we, we trust those that are thinking about it and smart.

We hope, uh, we hope our friends in the government are, have smart people thinking about it.

And, uh, but look, it's coming, and I think, um, the more people know about it, I think the danger is not understanding it.

And just getting overwhelmed and saying, well, that's too hard.

It's, it's, it's too smart for me.

I, I can't handle that.

I think that would be the danger.

Um, but it's gonna, it's gonna come it already is.

I mean, it's in so many ways, we just don't know it, and it's helping us.

I mean, it helps in the payments industry, it helps in the gaming industry.

There, there's so many places we're seeing and living in, we just don't know it.

Um, but it's, I think, I think people would be best benefit, uh, by at least having some general understanding of the vocabulary and how it works.

All right, so this one is interesting.

Uh, your corporate brand.

What what is the next big thing you sponsor?

Is it a blimp?

Oh no, no, no, Rick, that's years ago.

Is it a is it a second base?

No, no, no, we tried that.

What, what's the next big thing?

Uh, that's always a good one.

You know, it used to be that, like you said before, the strong survive and the, the strong get bigger.

Uh, but I also think the world's becoming more diversified from a sense of what people can handle, and a lot of that has to do, um, with, with the ability to, to, um, uh, you know, to, to distribute content differently.

You know, David Hill is getting a Lifetime Achievement Award this week, very well.

They're very well deserved.

Um, and I think I have this right, if, you know, Bringing, bringing the Premier League to the US years ago, you know, a lot of people are like, ah, that's not going to work.

What, what, what, what's he thinking?

There, there, there, there David goes again.

Um, but the reality is, it's unbelievable.

And I think that you look at bringing a sport, and now, look, the NBA has been way ahead of it going to Asia.

Um, hockey's already global, and I think they're doing so many smart things that, that, that 4 nations is, was, was, was, it was incredible.

One of the best things we've, we've seen this year.

Um, so I think it's, it's the globalization, it's the crossing over, and I think as long as the fans can, can understand it and absorb it, and, and I'd be remiss, how can I not talk about women's sports?

I got to spend a lot of time my last few years at, at, at Mastercard working on that.

And that's awesome.

I mean, to be able to see where that's come, and really the way we at least looked at it was the professionalization of it.

The fact that it's now a full-time job, a full-time Career and that these athletes can do what the male athletes have always done, which is, um, they can train, they can sleep right, they can eat right, they can get all those things.

So a, they're, they're physically, uh, better, um, but they also become faster, better technically.

And so that's why it's more popular.

It's not that all of a sudden we thought it's a good idea, it's the sport is better.

It's a better product and that's why it's so entertaining and standing on its own.

Finally, where is the business of sports branding slash sponsorship slash partnering partnership, uh, in the next 10 years and where is Robichaud in that?

Well, I hope we have a good run here at Sports Biz.

I think we have a lot of, um, uh, a lot of ideas that, that Steve and the team are working on as far as work that that stuff can go.

But it, it's personalization, I think is where it's going to keep going.

Um, I think the notion of delivering, uh, not just a mass, uh, advertising message to people in a mass way, but understanding who the audiences are.

I heard one of the baseball teams down in, in, uh, in Florida, you know, how they're tailoring to Different audiences and, and, you know, whether it's Hispanic audience or, or, or, or traditional US audience, there's just so many different ways people are, are understanding and adapting to their audience.

And then I think the technology will start allowing, uh, more of that delivery that, tell me, I'm not in the market for a new car, so don't tell me about cars, but tell me about something I am in the market for, um, and I just think you're gonna have a lot more, uh, response and, and, and engagement with your fans.

Tell you what, $150 billion sub-industry, that's pretty stout.

But with Mike Robbinshaw involved and sports biz and every other entity to try to stay one step ahead of the curve, the business in damn good hands.

Mike, thank you very much.

Thanks, Rick.

Sports professor Rick Harrow, speak with you soon.