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How The Bulls Are Cashing In On Their Global Fan Base
Crain’s Chicago Business, November 21, 2015
By Danny Ecker
Michael Jordan is still making money for the Chicago Bulls. Seventeen years after the basketball superstar last laced up his Nikes in Chicago, the Bulls are cashing in on his legacy, signing foreign sponsors that still associate His Airness with the team.
Two new team sponsors—Polish foreign currency exchange company Cinkciarz and Chinese smartphone maker ZTE—have come aboard this season as a result of the team's outreach to corporate partners overseas.
The Bulls are one of only a handful of franchises whose brands resonate with fans and companies where NBA games never have been played. And with the league's popularity abroad growing quickly, the team is seizing the chance to boost its bottom line while creating fans along the way. “We looked at this as an untapped opportunity,” says Scott Sonnenberg, the Bulls' vice president of corporate sales.
“You look at other (industry) categories we have—one might be hot for a period of time and then it goes away,” he continues. “But this is going to continue to grow.”
Most National Basketball Association teams able to lure foreign sponsors have done so because of a native star player—think Yao Ming drawing Chinese sponsors to the Houston Rockets more than a decade ago—or because of a large ethnic population in their hometown.
The Bulls, however, are trading on the legacy of the Jordan era as they pursue sponsorship deals with companies in China, Brazil, Mexico and central Europe.
The team's current lineup is helping out, too. Derrick Rose's jersey was the best-seller in Brazil among all NBA players' and third-highest in China for the 2014-15 season, according to the league. All but seven of the Bulls' 82 regular season games last year were shown internationally, among the most in the 30-team league.
“The Bulls are an American legend, a pop-culture icon,” Cinkciarz Vice President Piotr Kicinski said last month at a United Center event announcing the company's seven-year deal with the Bulls. “It means many positive things in Poland. My generation was brought up on the Chicago Bulls playing in the "90s.”
U.S. COMPANIES, TOO
The team's far-reaching appeal means something as well to American companies. Magellan, a Deerfield-based special steel distributor, operates more than 40 oceangoing vessels and doesn't have a consumer-facing website. Still, it signed on with the Bulls to have its logo displayed on the backdrop of nearly every Bulls news conference, in part because media coverage of the Bulls extends to places like Vietnam, Australia, Greece and Brazil, where many of its clients do business.
More foreign sponsors are interested in the Bulls (and other NBA teams) thanks to the spread of social media and digital content, which give teams a global platform. That also enables teams to sidestep a league rule that prevents them from promoting themselves outside a 75-mile radius from their home arena.
That rule applies overseas as well, which means companies like Cinkciarz cannot run advertisements in Poland using Bulls trademarks. But online and social media content are exempt from the restriction.
And the Bulls' more than 20 million followers on Facebook and Twitter—behind only the Los Angeles Lakers among American sports franchises—are a highly valuable asset for marketers. The Bulls estimate that 70 percent of their nearly 18 million Facebook fans live outside the United States.
Revenue from foreign sponsors today is just a few drops in the Bulls' revenue stream. The team declines to disclose financial details of its sponsorship deals, but industry experts estimate Cinkciarz and ZTE each are paying the team in the range of $500,000 annually. By comparison, the Bulls had $201 million in 2014 revenue, according to Forbes. But unlike foreign broadcasting deals and merchandise sales, the Bulls don't have to share the proceeds equally among all teams.
“They're keeping their brand relevant in those markets and around the world regardless of whether they're having a good or bad season,” says Laren Ukman, global head of consulting at Chicago-based ESP Properties, which represents the Cleveland Cavaliers for international sponsorship sales. “There will be other stars (around the league) that will come along, but ideally the logo in and of itself stays meaningful and relevant.”