• by Paul Gough , July 25, 2003

A wide-ranging deal between IBM and the National Football League has delivered the NFL's soon-to-be-launched TV network its first charter advertiser.

A key part of the three-year agreement uses IBM's strength in digital-asset management and the NFL's need to store, retrieve and use more than 80 years of NFL's video, photographs and statistics. IBM will design a system so the NFL can quickly and easily find and distribute its classic games and other recorded history to television, Internet and other media properties. The goal: To make the NFL a more on-demand business.

Sources said the deal was worth about $6 million a year and a minimum of $25 million a year in advertising on the NFL. It makes IBM the league's "Official Technology Partner" and has the rights to use NFL and Super Bowl marks in advertising and marketing. It will also receive what the companies said was "prominent presence" on NFL.com and DirecTV's NFL Sunday Ticket.

While IBM has purchased spots during NFL games on broadcast television, it's the first time that IBM has entered into a sponsorship with the league.

"It's really a marriage of two very similar, very well respected brands. It's the right thing. It feels very right for all of us," said Rick Singer, director of marketing sponsorships for IBM.

IBM dropped its sponsorship of both the Olympics and the NBA within the past year, although executives declined to say why. IBM continues to sponsor golf and tennis.

"There's been a gaping hole in a global sports marketing platform for IBM since they dropped their Olympic sponsorship," said Jeff Bail, senior vice president of sports marketing at Draft and an adjunct professor on the topic at Northwestern University.

Bail points out that the deal wasn't about getting access to TV's ratings king, the Super Bowl. "IBM could advertise on the Super Bowl without having to be in a deal with the NFL," Bail said. "They're not sponsoring the NFL because of the Super Bowl."

He said that football's stature in the United States, along with its growing popularity in Europe and Japan, are important drawing cards for IBM. It gives them a global reach in sports marketing that they haven't had since they gave up the Olympics sponsorship.

Beyond the broad outlines of the sponsorship, it isn't clear what strategy IBM will employ to leverage its NFL sponsorship. IBM's Singer said it was too early to talk about the specifics of advertising and sponsorship, since the deal was only days old. That includes what IBM will do on NFL Network, which will launch Nov. 4.

"We're still talking to them about what position we'll have no the network," Singer said. But IBM's technology will play a big role in the creation of the network, producing content that will feed the NFL Network.

IBM is the first charter advertiser for the new 24-7 network, which will launch at 8 p.m. on Nov. 4 with the first edition of its signature news show, NFL Total Access. The Los Angeles-based show will be hosted by former ESPN anchor Rich Eisen.

Beyond Eisen's daily show, the network will feature other original programming, a deep library of NFL football games and, beginning next year, preseason games. Distribution will begin with DirecTV, which will offer the network as part of its basic service and bring 11.56 million subscribers along with it. NFL Network spokesman Seth Polansky said it will be the most widely distributed launch of a sports network in history. Cable agreements are being pursued, although no deals have been announced so far.

Polansky said that those deals and more charter advertisers will be announced as the network's launch grows closer. The network will be ad-supported, Polansky said. The NFL is positioning the network as more than just scores and games.

"We consider it more of a lifestyle network as opposed to a straight sports niche," Polansky said. He points to the 120 million American who watch NFL football every week and the 160 million fans the NFL claims throughout the United States.

Bail said that another sports network, even one with the backing of the NFL, would have a tough row to hoe in today's cluttered media environment. He expected that it might draw an audience from other networks but it's not likely to generate incremental ratings.

"It's going to be very low ratings, miniscule. How large can the ratings be for something like that? Less than a one, easily," Bail said.

He said that while football is enormously popular and the Super Bowl draws phenomenal ratings, the day-in, day-out football fan is more focused on matters closer to home.

"The way the NFL fan base works, fans are not fans per se of the NFL. They're fans of their local teams ... In Chicago, they love the NFL but they follow the Bears," Bail said.

He said that a lot of the programming will have appeal on a regional basis, particularly classic games. New Yorkers will be excited by old games featuring the Giants, which will probably leave Bears fans cold. But Chicago fans would be happy to see programming featuring their favorite team, he said.

"For the most part, most of it is going to be regional stuff. You can only show so many Super Bowls on air," Bail said. He said that many advertisers are going to take a wait-and-see approach to the network until it starts showing results.

"Like anything else, there's so many options for advertisers, that in this day and age, with investment and media dollars so important, advertisers involved in sports media have got to spend their media wisely," Bail said.

Polansky said NFL Network thinks there's plenty of need for a network where football fans can call their own.

"We believe there will be a demand for advertisers that will want to tie themselves to the brand, and the network is a good opportunity for them to get in on the ground floor," he said.

IBM said that NFL sponsorship met its needs nicely.

"The NFL reaches everybody," said IBM's Singer. "The NFL is obviously the broadest and deepest reaching property in the United States. Clearly, our key customers, line of business heads, IT people, love the NFL."