The fight for market share between cable and satellite TV providers has fueled sponsorship deals from companies in those industries for many years. With telecommunications companies taking a bigger–albeit still small–bite of the business they once had all to themselves, sponsorship activity from the dominant players in TV distribution has reached an all-time high.

All of the major companies in the space have been expanding their portfolios. All told, cable and satellite companies have spent tens of millions of dollars on new sponsorships over the past year, ranging from naming rights deals with live entertainment venues to pro sports ties to grassroots event affiliations.

A major reason for the stepped up activity is the sound of footsteps encroaching on their turf from the likes of AT&T, Inc.’s U-Verse and Verizon Communications, Inc.’s FiOS TV. As they roll out their TV services, the telcos are going head to head with cable companies in offering consumers one-stop voice, data and video communications services.

As far as the TV distribution market stands, cable companies still have the lion’s share of customers (see Chart 1), but that share continues to steadily dwindle, as it has since the beginning of the decade.

“You can now go to virtually any city in North America and find not just a cable or satellite TV service provider, but increasingly, a telephone company offering TV services,” said Michael Paxton, a principal analyst with In-Stat’s multimedia group.

That battle is expected to heat up even more as Clearwire Corp. and other companies roll out a new generation of wireless Internet service that offers voice and TV functionality.

Cable Companies Focus On Local Deals
The cable industry is dominated by Comcast Corp.’s Comcast Cable division, with 24.5 million subscribers as of the second quarter of this year, per In-Stat. Time Warner Cable Inc. is number two with 13.3 million subscribers, followed by Cox Communications, Inc. with 5.4 million; Charter Communications, Inc. with 5.2 million; and Cablevision Systems Corp. with 3.1 million.

Among recent new deals, Time Warner Cable this year took title to Time Warner Cable Arena–home to the NBA Charlotte Bobcats–and Raleigh, N.C.’s Time Warner Cable Music Pavilion at Walnut Creek, a venue previously titled by Alltel Corp.

TWC also has signed new partnerships with the MLB Cleveland Indians, NBA Cleveland Cavaliers and AHL Lake Erie Monsters.

Cablevision secured first-time sponsorships this year with Connecticut’s Norwalk Seaport Assn. Oyster Festival, Long Island’s Great South Bay Music Festival and other community events.

At the same time, Cox announced a new agreement with the NFL New Orleans Saints and Charter signed to present the ’09 AHL All-Star Classic and cosponsor the Chippewa Valley Outdoor Games in Eau Claire, Wis., among other deals.

Although Comcast has long been the most visible sponsor in the category, the latest flurry of activity sees TWC at the forefront. The company’s objectives reflect those of its cable brethren

TWC, which evaluates and funds deals out of six regional offices, as well as local divisional offices, has increased its sponsorship activity over the last few years to promote its bundled packages, which include digital cable, digital phone and Road Runner high-speed Internet service.

TWC’s Carolina region is one of the more active offices using sponsorship, taking the two venue titles in North Carolina.

“Our business has gone from a pure monopoly to a very competitive business in which we compete with a number of different companies; this is an opportunity to stake out our turf and say this is our area,” said George Douglas, the region’s vice president of marketing.

The naming rights deals give TWC a point of differentiation by helping demonstrate its local presence, he said.

“The localized aspect of our business is very important to us. Our main video competitors historically are Dish Network and DirecTV. They are national companies; they are not as localized as us.”

TWC activates the ties with on-site booths where representatives can answer questions and tout various products and services, Douglas said.

In addition to the two venues, the region sponsors a handful of college athletic programs including Duke University, The University of North Carolina at Chapel Hill and University of South Carolina.

The region also sponsors the North Carolina High School Athletic Assn., around which it broadcasts next-day footage of football and basketball games through its on-demand service.

Satellite Companies Stick With National Deals
Heated competition also has prompted new sponsorships from the two U.S. satellite TV providers. DirecTV Group, Inc. has built on its two-year-old NASCAR deal with a tie to the IndyCar Series, while EchoStar Communications Corp.’s Dish Network expanded its deal with NASCAR’s Roush Fenway Racing.

The satellite companies primarily use sponsorship to promote their proprietary sports programming, including packages that allow viewers to watch games involving teams not in their home market, and highlight the fact they also offer high definition programming.

For example, DirecTV’s NASCAR sponsorships promote Hot Pass, a proprietary product that allows subscribers to view multiple camera angles and focus exclusively on key drivers during race broadcasts.

In addition to official status with NASCAR, DirecTV has a partnership with Int’l Speedway Corp., which affords title of SpeedWeek at Daytona Int’l Speedway and a presence at 11 other tracks. The company also serves as an associate sponsor of the Richard Childress Racing Sprint Cup Series entry driven by Clint Bowyer, with primary sponsorship at select races.

“Sponsorship is another way for us to show leadership in sports and our superior content over cable. We have sports packages that no one else has,” said Josh Stern, DirecTV’s director of advertising.

DirecTV aligned with IndyCar to promote its high definition programming. Each race is available in high definition, which DirecTV promotes through the inclusion of “In DirecTV HD” in the series’ logo.

While DirecTV sponsors its hometown Staples Center and NHL Los Angeles Kings, it has largely moved away from individual teams and venues in favor of national properties.

“We compete with Comcast, Time Warner Cable, Bright House and other cable providers, so the opportunity to reach a national audience is extremely important,” Stern said.

Just Marketing Int’l is DirectTV’s motorsports marketing agency of record.

Less active Dish Network sponsors a handful of auto racing, pro sports and college sports properties. For ’08, the company was the primary sponsor of a Roush Fenway car in 15 Sprint Cup races. The company uses the tie to promote its DishDVR and TurboHD products.

Tips For Working With TV Providers
Below, IEG SR shares hot buttons and other insights for properties selling or working with cable or satellite companies:

Promote bundled offerings. Properties should provide demonstration opportunities for cable companies to use to promote their full suite of services.

For example, TWC’s Mid-Ohio division leverages its sponsorship of the NHL Columbus Blue Jackets by providing high definition TVs and offering free long-distance calls and Internet access at the Time Warner HD Lounge in Nationwide Arena.

The region activates its partnerships with the MLS Columbus Crew and Triple-A Columbus Clippers with similar programs.

Offer perks for customer retention. To keep customers from switching to another provider, players in the TV distribution categories seek benefits they can pass along as rewards to promote loyalty.

For example, Comcast leverages its title of Everett, Wash.’s Comcast Arena by offering discount tickets to concerts and other events. The company alerts customers and directs them to a specified channel to see the latest offers.

Provide access to content for video-on-demand. Exclusive content for on-demand channels is a key deal point for cable companies.

“It’s all about content. The bottom line is, what kind of content can the sponsorship bring to the table?” said Eric Smallwood, vice president of project management with Front Row Marketing Services, which evaluates and negotiates deals on behalf of Comcast. The agency is a division of Comcast-Spectacor, L.P., the sports and entertainment arm of Comcast Corp.

“Provide them with exclusive content that could not be accessed through a satellite TV company or other non-cable means.”

Such content can range from non-game sports programming to activities at community festivals. For example, Comcast has used its sponsorship of the NFL Denver Broncos to provide an on-demand feature showing a behind-the-scenes view of the making of the team cheerleaders’ calendar.

Offer pass-through rights to TV networks. Cable companies often look for opportunities to promote the channels and programs they carry through joint promotions.

TWC Mid-Ohio frequently works with ESPN, Nickelodeon, TNT and other networks to access costumed characters and other content that it can bring to events.

“Our network partners like it because it helps promote their product,” said Judy Barbao, the division’s director of public affairs.

Leverage cross-promotion opportunities. Like other sponsors, cable and satellite providers can take advantage of new distribution channels and marketing opportunities offered by cosponsors.

Howard Freeman, president and CEO of event producer Promo 1 put the largest sponsors of the Quick Chek New Jersey Festival of Ballooning in association with PNC Bank to work for cosponsor Cablevision.

Noticing Verizon was going door to door to tout FiOS TV, Freeman put the cable company together with Quick Chek and The PNC Financial Services Group to promote Cablevision’s Optimum service.

The end result: Cablevision used the partnerships to distribute free coffee and talk up its service to consumers at Quick Chek c-stores and PNC branches in New Jersey.

Pay attention to competitive inroads. On the local level, companies may be particularly interested in new deals when a competitor enters the market with new services.

For example, Cablevision signed with the Norwalk Oyster Festival on the heels of AT&T’s launch of its U-Verse service in Connecticut, said Gary Marcus, senior vice president of business development with Elite Marketing Group, the cable company’s grassroots marketing agency of record, which screens, negotiates and implements ties.

Know who to approach. Cable companies primarily screen and fund deals out of regional and local marketing offices. Deals are typically evaluated by marketing vice presidents or directors.

Some companies fund deals out of community relations budgets, as well as marketing.

For example, TWC’s Mid-Ohio division sponsors pro sports teams out of marketing, and the Columbus Arts Festival and other community organizations out of public affairs.