Sponsors should weigh the option of seeking investment opportunities with properties that would also yield marketing benefits.
Were Mel Brooks writing The Producers today, would he consider making the title characters Transamerica and Bloom?
Probably not, but a unit of the financial services company is trying its hand at being a corporate Max Bialystock by becoming the lead producer of an up-coming Broadway musical.
What makes Transamerica Capital, Inc.’s move most unusual is that its role as investor originated not as part of a search for new profit centers, but as an interest in finding hospitality and sponsorship opportunities with entertainment properties.
Most sponsors would be content with paying a fee in exchange for sponsor ID, tickets and other standard benefits, but the Transamerica Corp. unit has decided to go a step further and take an equity stake in the productions it aligns with.
Although Broadway shows are notoriously dicey investments, TCI believes being both sponsor and producer negates any downside.
“We’re not spending any more money than other companies that sponsor musicals, and we have the potential to get a lot more out of it,” said Lon Olejniczak, TCI’s managing director. “You can make money if you invest in the right production. This gets our name out, and we have the potential to get our money back.”
Perhaps the biggest risk the company is taking is sponsoring an untested property, which if it flops would yield little to no marketing benefits. Olejniczak believes that risk is offset by the potential return on investment.
The production TCI is backing is In the Pocket, which is scheduled to make its Broadway debut in spring ’06. The company plans to be involved with another musical for ’07, Olejniczak said.
The company has already had an out-of-town tryout with In the Pocket, having invested $1.5 million in the show’s production in December ’03-January ’04 at the Mark Taper Forum in Los Angeles, where it was known as Like Jazz.
That opportunity was brought to Transamerica by Rudy Durand, a Hollywood-based director and producer whom Transamerica retained in ’02 to scout marketing and networking opportunities in the entertainment industry.
Olejniczak liked the show’s potential as a venue for entertaining TCI’s customers. As the wholesale marketing and sales arm for Transamerica Life Insurance Co.’s annuities, as well as a rep for mutual funds and other investment products, TCI targets financial institutions, broker/dealers and independent financial planners.
“We’re always looking for something that captures attention,” Olejniczak said. “The arts are not the first thing that comes to mind for client hospitality. It’s a different experience when a client can go see a theatrical production with an investor.”
Since the tie also would afford recognition akin to presenting sponsorship, Olejniczak saw “an interesting way” to raise awareness of the Transamerica name and its position as “a member of the AEGON Group,” which was how the company was billed on the show’s collateral materials. Transamerica Corp. was acquired by The Hague-based AEGON N.V. insurance conglomerate in ’99.
The company believed the musical had potential to do well, based in part on the pedigree of its creative team, a “who’s who of Broadway,” according to Olejniczak, including composer Cy Coleman, who recently passed away, and Oscar-winning lyricists Alan and Marilyn Bergman.
The production’s eight-week run was a critical and financial success, with the venue selling out every show during the second half of the run and in total booking 89 percent of capacity, Olejniczak said. TCI will use profits generated to enhance the show’s Broadway run, he said.
Its role as an investor affords the company a voice in the management and artistic direction of the production. Durand served as TCI’s on-site representative, providing input on casting and other creative
matters, Olejniczak said.
In the Pocket will not be TCI’s first involvement with a Broadway show. The company stepped in last fall as a white knight investor after another backer pulled out of Brooklyn The Musical. TCI has a producer credit, but not a sponsor presence with that show.
As it becomes involved in other productions down the road, TCI will explore incorporating product messaging into future scripts, Olejniczak said. “It’s tough to work financial products into a script, but it’s something we’re looking at.”
TCI’s other major sponsorship is title of the American Junior Golf Assn.’s Transamerica Junior in Denver.