It's intriguing to see MLS finally looking at conforming to the rest of the world’s “football” calendar. I’ve always said soccer would “make it” here before American football makes it there. However, definitions of success are scattered, numerous and ever variable.
Words of wisdom: "It wasn't by accident that the Gettysburg Address was so short. The laws of prose writing are as immutable as those of flight, of mathematics, of physics." -- Ernest Hemingway
AI sponsorship category gains more traction as UFC ties up with IBM
Call it the unlikeliest of couples.
IBM, one of earliest -- if not the first -- buyers of sports sponsorships from the tech (then called computer) category, has signed a global sponsorship deal with UFC, designed to leverage the exploding AI business. One source familiar with the deal put it at low eight figures over its four-year term.
The UFC’s first tech sponsorship of any consequence puts the MMA circuit in elite company, considering IBM’s other sports sponsorships are with top-shelf properties, including long-standing deals with USTA/U.S. Open, the Masters, Wimbledon and a recent agreement with the Ferrari F1 team.
“Typically, you wouldn’t see these brands coming together,” said Grant Norris-Jones, TKO Group's EVP and head of global partnerships. “Because of that, I’d put this one up against when we partnered with Disney [on media rights] in terms of [helping] our brand equity. We’re making inroads in the hottest category and working with a blue-chip brand on something that should energize fan engagement.”
Just as it was at the outset of IBM’s U.S. Open deal decades ago, this sponsorship will serve as a demonstration platform for the legacy computer maker, which has retooled as a cloud computing, consulting and AI provider. Accordingly, sponsorship activation will center on what’s being called the "UFC Insights Engine Built with IBM Watsonx," a fan engagement tool with real-time, AI-based predictive analytics that -- it is promised -- will offer “insights and advanced analysis of current and historical fighter performance, as well as match projections around outcomes, critical success factors, and method of victory."
That “Insight Engine,” scheduled to debut next year, will be branded and shown during UFC telecasts, referenced by on-air talent, distributed through social media and shown on venue videoboards.
IBM in the deal also gets designations as UFC’s initial "Global AI Partner," and "Official Technology Partner," along with exclusivity within the burgeoning B2B “Enterprise AI” category. MKTG and its variety of agency antecedents have handled IBM’s sports marketing efforts for decades. However, sources tell me the UFC sponsorship was negotiated directly with IBM.
This deal also begins to answer a rhetorical question posed in this newsletter space all year: When and how will artificial intelligence become a sponsorship category? Similar AI sponsorships of recent vintage include Intel’s global Olympic rights (a pact that has not yet been extended past 2024), Google’s hookup with MLB and the NFL’s deal with Amazon Web Services.
Phillies' Middleton says private equity firms undervalued team in recent capital raise
Penn’s sixth annual Wharton Sports Business Summit last week featured a number of top industry speakers. The highlight was a wide-ranging interview with Phillies managing partner John Middleton (perhaps not coincidentally, Phillies GM Sam Fuld is scheduled to complete a Wharton MBA in 2026, after which he will become the team's president of business operations).
One of the best exchanges from Middleton was when he revealed that prior to a recent capital raise reported at $500 million, the team rejected entreaties from private equity. "We looked at them and talked to several [PE] people," Middleton said. "The problem is that they all need to have exit strategies. ... Their whole need to get a return is all tied to buying under market. If they can buy under market and sell five to 10 years later at market, they make their return. They said, 'We think you’re worth X,' and we told them, 'We don’t think you are close.'"
The delta was 25%, according to Middleton. "That’s a pretty steep discount," he added.
Other Middleton musings:
On MLB's big markets and small markets: "Long-term, for baseball, we need to bring more money into the central [MLB] fund and have it distributed equally among the 30 teams, because that's the only way we’re all going to be able to remain competitive. ... Look at the Ohtani contact. What are the financial guardrails around a $700 million contract? ... If you’re a small-market team, it’s a problem."
On payroll and bringing in new partners: "Around COVID, we lost, over two years, a little over $200 million. My desire to get the [World Series] trophy back has caused me to spend a lot of money, so we are still losing money after COVID. ... We have a lot of work to do. [President of Baseball Operations] Dave Dombrowski laid out a vision for our Clearwater [spring training] facilities, and it’s a $350 million project. Citizens Bank Park is 20 years old, so there are some infrastructure improvements needed. Some fans enjoy games differently than they did 25 years ago, so we need to do more to adapt the stadium to those fans. We needed to broaden our financial base and add some depth, so we can do some of those things comfortably."
On new overhead: "The fastest-growing expense category in Major League Baseball over the past five years isn’t payroll. It’s actually ancillary services, like analytics. It’s just massive and [so is] the equipment. ... The minor league staff has doubled, and that’s where you need to be to keep up with the times"
On baseball vs. other businesses: "A lot of what you learned and needed to be great and successful outside of the sporting industry doesn’t apply. You have to be smart enough to realize that. ... You’ve got to know how to evaluate players, how to develop players, how to manage players. There’snothingyou do in the outside world that teaches any of those skill sets. ... And you can get buffaloed easily."
Speed reads
- Sponsors for the Mike Tyson-Jake Paul fight this weekend will include DraftKings, Celsius, Experian, Meta Quest and Spaten beer, notes SBJ's Adam Stern.
- Stern also reports that Amazon-owned robotaxi company Zoox will sponsor Williams Racing, in what the sides say is a first within F1. The deal comes ahead of next week’s Las Vegas Grand Prix on the Strip, one of the places where Zoox is already testing its tech.
- League One Volleyball has a new agreement with Revolve that will make the brand the league's official online fashion retail sponsor, reports SBJ's Xavier Hunter.
- The Wizards released their City Edition uniform in conjunction with Nike, building on last season’s Boundary Stone-themed jerseys that paid homage to African American surveyor Benjamin Banneker, who laid down 40 stone markers along the original boundaries of D.C., reports SBJ's Tom Friend.