- Bedding brand Bedgear has entered a product-plus-cash deal with the NBA’s Boston Celtics
- The deal was instigated by the club’s sports department to enhance player performance
- The Celtics seek deals that add to both revenue and the competitiveness of club operations
American performance bedding company Bedgear’s one-year deal as the Official Performance Sleep System Partner of the NBA’s Boston Celtics was instigated by the team’s sporting department, Sports Sponsorship Insider has learned.
The partnership was launched around the NBA London Game at the O2 Arena in January and activated through the team’s social media channels to highlight the brand’s new ‘travel line’ of sleep products and the importance to the players of sleep and recovery to compensate for travel disruption and time zone changes.
According to Shana Rocheleau, Bedgear vice-president for strategic development, Celtics director of performance Art Horne had heard of the brand because of its partnership with the Boston Red Sox MLB franchise and wanted to integrate sleep advice into the team’s training programme.
His approach led to a marketing deal, albeit one with very few rights attached. “When sports organisations get it touch, sometimes we sell the product, or do a product-only placement, but other times we work with them if we think there is an opportunity to build awareness and that was the case with the Celtics,” said Rocheleau.
Along with the product, Bedgear pay a “small-scale” fee for logo rights, while rights for retail activations and product displays at the Celtic’s TD Garden arena have still to be negotiated.
The deal does not include contracted player appearance rights. Instead, images of the players, coaches and trainers with the travel line or being fitted with personalised sleep systems at the Celtics Practice Facility are activated by both parties as unique social content.
Brand insight: Bedgear
Founded in 2009 by chief executive Eugene Alleto, Bedgear entered the Boston market that year via local specialty home furnishings retailers. Its annual revenue is around $50m (€39.9m) per year.
Bedgear is also sold in national retailers in the US and Canada and is expanding globally with stores in Russia, China and Australia and a new store about to open in Thailand.
“For 2018, we have about 10 cities that are our focus cities for the year,” said Rocheleau. Some include markets where these sports teams are present like Boston and this is one of the ways we amplify our presence. This gives us coverage essentially over the US and Canada and overseas. We’re looking to really grow as an international brand and see that as the future.”
Bedgear currently partners with the NBA’s Celtics and Dallas Mavericks, but has previously worked with the NFL’s Denver Broncos and the MLB’s Red Sox and San Diego Padres. It was also the sleep partner of the 2017 New York Marathon. Deals are seldom longer than one year, said Rocheleau, because the brand wants to tell “authentic, real-time stories” rather than build on team IP.
When Bedgear became the Red Sox’s Official Performance Bedding Partner in 2016, it built a players’ sleep room at the team’s Fenway Park stadium and developed storytelling campaigns around the behind-the-scenes life and training of professional athletes.
Property insight: Boston Celtics
Founded in 1946, the franchise has won 17 NBA championships, most recently in 2008. It is ranked the NBA’s fifth most valuable team by Forbes, at an estimated $2.2bn.
The club’s valuation is based on revenue in 2015-16 of $200m and ebitda of $60.1m. According to Forbes, annual player expenses, including benefits and bonuses, were $84m.
The team is considered among the top six NBA franchises. This season, 34 Celtics games will be shown on national live television – one fewer than the LA Lakers in fifth place.
The team claims to have more than 12m global fans with more social media followers in China, the Philippines and Australia than in the greater Boston area.
The franchise was bought for $360m in 2003 by Boston Basketball Partners, led by three individual investors: Irving Grousbeck, Wycliffe Grousbeck and Steve Pagliuca.
Its home arena is the TD Garden, a facility owned by hospitality and food service company Delaware North. The team’s lease expires after the 2020-2021 season. Delaware North chief executive Jeremy Jacobs owns the Boston Bruins NHL franchise.
Partnerships
Speaking to Sports Sponsorship Insider, Celtics senior vice-president of corporate partnerships & business development Ted Dalton said the franchise’s sponsorship revenue is divided roughly 60:40 between national/global deals and local/regional deals, but the team customises its offerings to differentiate between local, regional, international and global brands.
Typically, the team gets 85 to 95 per cent revenue renewals from its sponsor programme each year. When telco Sprint ended its involvement in the NBA [after the 2014-15 season], its deal with the Celtics comprised a “big portion of renewal revenue so we were 15 to 20 points behind there and couldn’t make it up,” Dalton said.
Strategy drivers
Pure revenue is the key driver of the Celtic’s sponsorship strategy and to that end the partnership team has focused on selling rights in China even though the club can’t activate its partnerships because of NBA rules which prevent teams from activating sponsorships outside of their local market. “For us, it’s about finding the right partners who want to see their brand on the TV-viewable signage back in their home country.”
Along with revenue, the best-case scenarios are partnerships with brands that add value to the franchise’s basketball or business operations. The Bedgear partnership meets this criterion as does – on a much larger scale – the team’s jersey patch partnership with industrial giant GE.
“Where we can, we try to combine revenue with integration into the club. We work closely with basketball operations so we know what their needs are. GE is a great example of this. We have integrated a lot of GE’s health machinery into our new practice facility while GE’s data scientists work with us on both the basketball and business sides.
“First and foremost, brands must be a good match, we ask what are your objectives, your target audience and we need to get to the why. We want to know why they do it, so to reach a partnership is the ultimate goal.”
Dalton called the NBA’s ruling to allow jersey patches from this season a fantastic opportunity. “A lot of brands that we had early conversations with would probably have worked, but we could not have picked a more perfect partner than GE.
“They moved their headquarters back to Boston [from Connecticut] in 2016 and wanted to integrate into our colours and with our logo. They are not about appliances and light bulbs anymore, they’re a digital-industrial company who want to highlight their expertise.
“Regardless of the financials, we could not have put a brand on the jersey we were not 100 per cent comfortable with.”
More generally, Dalton considers the team and the NBA itself to be well-positioned to work with innovative tech companies. “New England is a very tech-heavy and tech-savvy market, while the league is also very tech-savvy,” he said. “The NBA demographic skews younger and is more diverse than other team sports, but is still highly educated, with great household income . The growth in tech partnerships is because we’re not a traditional sports marketing partnership – we do things differently and that has benefits for tech, biotech and industrial tech companies.”
Activations
By not owning the TD Garden, the Celtics lose out on some revenue streams, which forces the franchise to maximise others. Dalton said: “We are very fortunate to have the history and the brand and the legacy, but you’ve got to combine that with the value you bring to partners. We don’t own our arena so are more activation-centric than other NBA teams.
“Although we miss the in-arena branding and naming rights, we’ve gained from being forced to be more creative with in-market activations and original social and digital content.
“We always aim to add more expertise and more competencies within the partnership group. Even if a sponsor is a global brand it may not have all the resources it needs. We can help them with real-time updates on social media campaigns or give them reports on the reach, engagement and value using our in-house analytics team.”
The club’s social responsibility programme is also a clear differentiator, he said. “We are the only team which has the community group within the corporate group. We’re in the top three in terms of appearances by players, community events with partners and revenue generated for the community. We have 36 different community programmes, 29 of which are supported by corporate partners.”