The NFL is big business.
Despite the negative press they have gotten this year, the NFL is still insanely profitable. Currently, the league sees about $10 billion in annual revenue, a figure they hope to grow to $25 billion by 2027.
Where does all of this money come from? Well, there are four main sources: media rights, tickets, merchandise, and sponsorships.
Currently, about $2 billion of the NFL’s revenue comes from sponsorships, including deals with major brands such as PepsiCo, Anheuser-Busch and McDonald’s, just to name a few.
However, in the wake of domestic and child abuse scandals surrounding the league and some of its players, sponsors have begun voicing their displeasure with the league, and some, such as Radisson Hotels, have pulled their sponsorship.
While the league may have a serious image problem, companies will continue to invest millions of dollars for brand exclusivity in the NFL.
Bose and NFL Sign Major Sponsorship Deal
The latest brand to do so was Bose, who signed an exclusive deal with the NFL to become the league’s official headset. With the sponsorship, all members of NFL team’s coaching staffs would be required to use the Bose headsets during games – pretty great exposure for the brand. To make things even more interesting, Bose somehow got the NFL to agree to a clause that prevented all players from adorning their competitor’s products during games, and well as during pre and post game interviews.
Not a bad move by Bose to gain the upper hand on one of their major competitors, right?
Well, one of their major competitors, Beats By Dre, took exception.
How Beats By Dre Outsmarted Bose
After leading the San Francisco 49ers to a 22-17 win over the Kansas City Chiefs last Sunday, 49ers star quarterback Colin Kaepernick, who happens to be personally endorsed by Beats By Dre, showed up to his post-game news conference wearing a pair of pink Beats headphones, in support of breast cancer awareness month. The league swiftly handed him a $10,000 fine for actions, as per their agreement with Bose.
When asked if Beats By Dre paid his fine, Kaepernick said “We’ll let that be unanswered.” I’m guessing the real answer is “Yes”.
What’s $10,000 to Beats By Dre, who was acquired by none other than Apple earlier this year for a cool $3 billion? It’s nothing. It’s peanuts. For them, it’s a cheap way to make a big splash.
Not only did they still get one of the top players in the NFL to wear their headphones during a televised press conference, but they also made headlines worldwide for the stunt. Just to put this in perspective, a 30 second ad spot during the 2015 Superbowl will cost advertiser’s upwards of $4.5 million. I for one wouldn’t be surprised if Beats By Dre and Kap pulled this stunt again – especially if he brings his team to the big game. It would be a great investment.
Major brands, take note. That is how you make a $10,000 marketing budget go a long way.