Enliven Beverage Deal Podcast Episode #2
How does the PGA Tour attract big brands to pay big money for a sponsorship? Michael Kuhn, Enliven’s Director of Account Services, shares insights from his time at the PGA Tour and running a sports sponsorship rights agency on how to get big brands excited about a partnering with your business.
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Episode Transcript:
Tim Harms:
Welcome to the Enliven Beverage Deal Podcast, where we’re all about saving and making you money by taking both the guesswork and the legwork out of your beverage partnership, and by leveling the playing field when it comes to negotiating your beverage contracts. I’m your host, Tim Harms. We’ve got a great show for you today. Stay tuned.
Tim Harms:
Well, today. We’re super excited. We’ve got a guest from the Enliven team joining us today. His name is Michael Kuhn. He’s our director of account services. Michael, how are you?
Michael Kuhn:
I am doing great. Thanks, Tim. Glad to be on the show.
Tim Harms:
Yeah. So glad to have you. So I’ve got a question for you. How many millions of dollars do you think a sponsor is going to pay to brand the Enliven Beverage Deal Podcast?
Michael Kuhn:
Don’t get your hopes up, my friend. I don’t know. You got to build your audience. You’ve got to-
Tim Harms:
10 million? 20 million? A hundred million?
Michael Kuhn:
Keep dreaming, keep dreaming. I mean, I’m there for the ride, and I’m happy to help however I can.
Tim Harms:
Well, I hear we have an expert on the air right now. So Michael came to us at Enliven with a pretty amazing resume. At a high level, you worked for the PGA tour. And then, after the PGA Tour, you branched off and actually ran your own naming rights, sports marketing agency. Can you tell us a little bit about that journey?
Michael Kuhn:
Yeah, absolutely. I mean, I was like any kid that loves playing sports as a kid. And I always knew that I’d worked in the business world in some way, so it always made sense to merge those things. And fortunately, through education and some lucky breaks along the way, I was able to put together a number of years working at the PGA Tour at the league level and worked mostly with our sponsors, which was a great time, selling and managing those large sponsor relationships.
Michael Kuhn:
And then, as you said, took that experience and went off on my own to help those sponsors across all different sports, not just golf. But it’s been a fun ride, and I’m glad to bring some of those insights into the deals and all the stuff that we get to do at Enliven with the beverage company.
Tim Harms:
Yeah, it’s been, it’s been really fun to have you on the team. And when we started talking, I just knew it would be like a hand and glove fit. But so today I thought, I mean, we were brainstorming in the shop, some fun ideas to bring to the podcast. And one I did came up was how are major sports sponsorship sold. And so we’d love for you just to give us and give our listeners an idea of someone like the PGA tour. How does that process work? Can you peel back the layers for us? Give us an inside scoop into what it means, what it would mean to sell sports sponsorships.
Tim Harms:
Yeah. I mean, first of all, I guess, how do companies justify such a huge investment? I mean, you hear these headlines, seven to eight figures per year. How does that work?
Michael Kuhn:
It’s a great question, and I don’t think the answer is the same for every single one. I mean, yeah, I think that makes sense. We were making decisions, and not anyone is guided by any one particular piece. But at the base level, you have to justify it to some degree. If you’re going to spend that sort of money, you’ve got to go to a board, and you’ve got to get it approved. The sponsor has to be thinking through it in some sort of rational fashion.
Michael Kuhn:
And so there’s a few buckets I kind of think of that these companies go through. And the first is just the standard marketing value, right? If you use the PGA tour as an example, so say a title sponsor for one tournament on the PGA tour, investment is kind of what you were talking about. It’s seven to eight figures per year. And, but they’re getting an association with the tour and everything that comes with that. They’re getting a ton of impressions based on their company name.
Michael Kuhn:
So say it’s waste management is a long time sponsor of the PGA tour, and it’s the Waste Management Phoenix Open. So all the ads for it are talking about waste management. The logo of the tournament has waste management incorporated into it. The telecast is just flooded with the green and the yellow from waste management. And you see that over and over. And so there’s an associated value put on that for all of the impressions that you’ll get.
Michael Kuhn:
And then in addition to that, there’s a TV ad package and all sorts of elements throughout the year that you could put a hard marketing number to. Now, when you add all those up, any ad buyer is going to say that’s not worth seven to eight, 10, 11, $12 million a year. They can’t justify it with just that. It’s the sum of all the parts that come up to make it work that.
Michael Kuhn:
And some of those other things are client entertainment. So at that, if we just build off of that waste management example, they’re going to bring their biggest clients from all over the country, maybe internationally, to come to their events. And it’s their event, and they’re getting a behind the scenes look. They get to play in the program. They get to play hand in hand with the pros that are playing in the tournament early in the week. And they get to watch them play. They probably are splicing in some business sessions and that sort of thing. That ends up being a very valuable business development exercise to entertain clients there.
Michael Kuhn:
So that’s one piece. There’s partnership benefits just from waste management being a sponsor, but then they might develop a relationship with another sponsor, maybe a banker, or insurance agents, or something that’s also a partner. And there’s those type of associations that make sense. And if you’re a major sponsor of a league, you’re normally going to win that league’s business too. And so there’s that offsetting element of it that goes into play.
Tim Harms:
So when you look at these sponsorships, and you’re trying to sell them to big global brands, I mean, how much of it is data-driven, look at the analytics, look at the impressions, look at the viewership? And how much of it is that emotional aspect where, man, you want to be associated with this event that happens in the American psyche, the Americans zeitgeist almost? How much is that emotion versus data?
Michael Kuhn:
Both are at play, but if I had to pick one over the other as being more important, I would say the emotion. And even I’d take it a step further and say the ego of whoever the decision-maker is, probably plays the biggest factor into the whole thing. So, you still start the conversation with the rational stuff and say, “This is what comes into it.” And you can build a case for what it’s all worth. But then at the end of the day, you need to wow somebody. If you’re selling a major sports sponsorship for $10 million a year, you need to get them excited at an emotional level. And that’s going to get them over the edge to actually make the investment.
Tim Harms:
Wow. So, what are some of those key things that you are trained to look for in the target companies, whether it was a CEO or whoever you were selling to? What were the trigger points that you’re really trying to appeal to?
Michael Kuhn:
Well, it’s great whenever you have an existing relationship. So just if you use, continuing on the golf example, if we were trying to sell to somebody, the best-case scenario was if you knew that they were already a big golfer, a golf fan. Or maybe they were good friends with a professional golfer already, and you have that kind of connection. So you know, at the end of the road, the person making the decision is already inclined towards the sport. Then you can start at the lower levels, work it up, or however it needs to happen. And you know that you’re sitting in good shape.
Michael Kuhn:
But one of the things that you can always do, no matter who you’re talking to, I think, is take something off of the page. We’re all like used to seeing, in the business world, seeing decks, seeing proposals. And you read something, and you can see the numbers, and you think through it rationally, and that’s one thing. But when you can see it, and you can start to feel it and sink your teeth into it … And what I’m saying there is during a presentation, instead of just speaking about it, instead of just showing an image on the screen, a video with some music …
Michael Kuhn:
So, for example, if Enliven wants to be a title sponsor of a PGA Tour event down the line, what I would imagine that folks at the PGA Tour would do is they would leverage all of the content in their entertainment assets to build a custom video. And they would then lean even on their broadcast partner like CBS. And they would have Jim Nance provide a custom audio intro for the Enliven Championship in Nashville, Tennessee, coming to you live for final round coverage. And it shows the whole opening graphic with our logo on the screen, and it zooms in and out. And it’s like all of a sudden, went from just being an idea to actually coming to life.
Michael Kuhn:
And that’s how. It’s a pretty simple way, but, I mean, it takes a lot of steps. But really quickly, you start to appeal to somebody’s emotions and can get them a whole lot more excited in something that you can sink your teeth into a whole lot more than just reading something on a page.
Tim Harms:
Yeah, absolutely. I can definitely see that. There’s so many tie ins to our business too. So, as I think about this, it obviously takes a long time to run through this process to do it justice. My question is, what happens if you cut that process short, or you short circuit the whole process?
Michael Kuhn:
Well, there’s so many stakeholders. You know? It’s not a simple thing. And even if a CEO or a decision-maker is inclined towards golf and has stated that they’re in, and they would like do it, you still have to go through the process of taking the rational approach and providing as much information as possible for the marketing value and all the other elements, and ways in which you can activate. At the end of the day, it’s a platform that you’re … for a sponsorship. You’re buying a platform.
Michael Kuhn:
And then you, as a company, you have your brand objectives and your marketing messages that you want to get out to that golf audience. Maybe it’s to the broader public, and you’re a consumer-facing company, maybe it’s more just for the entertainment aspect, and you’re just looking to maximize that. So you might do like a huge global summit and really blow it out onsite for that one week with the golf.
Michael Kuhn:
We had one partner, and it was one of the big accounting firms that was the sponsor of one of our tournaments. And they used their tournament as their biggest entertainment avenue every year. And they brought people from all over the world, and they brought the biggest speakers they had. Speakers like Malcolm Gladwell come and speak during the week of the tournament. And so they had a business session, and they had speakers like that going on, and then they’d go to the golf course. Then they’d have a big dinner on the beach and that sort of thing.
Michael Kuhn:
And so, but you’ve got to talk a sponsor through that process. Then, what is it going to look like? What’s important to you? How are you going to maximize this? It’s not just as simple as saying, “This is what it’s worth. Here you go.” Because you’ve got to think a few steps down the line towards implementation and really how it’s going to work because, at the end of the day, the property, the league, whoever’s selling the sponsorship wants that sponsor to be around, so you can’t sell it short. You can’t fast track it because it’s going to set everybody up for failure. And at the end of the day, a good partnership is one where everybody goes into it eyes wide open and gets value from it on both sides. And so as much as you can do that on the sales side of things, the better.
Tim Harms:
Yeah, I mean, there’s so much that’s … I’m thinking about our business. Our clients, oftentimes, want to treat Coke and Pepsi like big commodity companies. They’re just providing a bunch of volume, so their trading volume for price. But what you’re talking about is actually selling the brand company and guiding them through a process, helping them see what the partnership could mean, courting them, expanding their vision for all the different ways that could activate on the property. And once they have it, it’s a little different. It’s much more work. It’s approaching it from a different lens. You’re putting the brand company, you’re putting them on the stage, really. You’re not just expecting them to come and compete on your terms, or do things for you, but you go through the work, it yields so much more. I mean, it’s worth the effort.
Tim Harms:
Are you confident you’re getting all of the rebates that you’re due under your beverage deal? Are you sure your beverage vendor isn’t overcharging you? Well, there’s an easy way to find out. This is Tim Harms, and I wanted to jump in here and let you know that we have a new way to support you, and it’s called the Enliven Beverage Deal Audit. In just 15 minutes of your time, you can provide us with all of the information we need to get to work, identify beverage company errors on your behalf, and recover your money.
Tim Harms:
You can get started by going to beveragedealaudit.com. Once again, that’s www.dotbeveragedealaudit.com. And you can learn everything you need to know there to get started. It’s risk-free to you. There’s no upfront cost or charge, and we only receive compensation if we find errors and get you a check. Once again, it only takes 15 minutes. It’s a no-brainer. Go right now to beveragedealaudit.com, and sign up today. All right, now back to our conversation.
Tim Harms:
I mean, what other similarities do you see between your work at the PGA Tour on sports marketing, and now that you’re immersed in this wonderful world of beverages, how do you see the two worlds marrying?
Michael Kuhn:
Yeah. No, I see so many similarities, and you hit a lot of them right there in what you just described. But at the end of the day, a sports sponsorship and the pouring rights agreements that we put together at Enliven, at the end of the day, they’re partnerships. And spending that extra time to understand all of the different sides and the goals, and what each stakeholder is looking to achieve, and balancing that, I think that’s what we do at Enliven is help to almost translate between the beverage companies and our clients. And it’s really, really valuable.
Michael Kuhn:
And at the end of the day, a partnership should elevate both partners. And I see that happening with our relationships with our clients and the beverage companies just like I saw it happening with some of the successful sports sponsorships that I’ve worked on over the years. That’s one thing.
Michael Kuhn:
Another thing that’s interesting that I always have enjoyed watching, just being a competitor myself, playing sports growing up as a kid was just the competition that’s in play in the marketplace. And so, in the sports world, it’s a little different. We’ve been talking about title sponsors, but there’s official sponsors that typically own a category. So like MasterCard, for instance, is the official credit card of the PGA Tour at the moment. So that means that American Express cannot be the official and does not have any rights to advertise or promote an association PGA Tour.
Michael Kuhn:
And that’s a competitive play. A lot of the motivation for a MasterCard to hold that position and pay for that marketing position within the PGA Tour sponsorship structure is to keep a Visa and keep an American Express out of play. We see the same thing in the beverage world. Coke and Pepsi don’t want a competitor to come in, and we benefit from that whenever we bring both to the table and allow them both a fair chance at competing. It’s the same situation in the sports world. You bring all of the sponsors to the table, and the cream rises to the top, and they get to benefit that exclusive right.
Tim Harms:
Yeah, well said. Well said. I would argue even more so in beverages because Coke and Pepsi have a ubiquity strategy. Right? They want to be everywhere, and they want their competitor nowhere. So ratcheting up that fear, ratcheting up the greed is a key element.
Michael Kuhn:
You know, one point before we go off. As far as tying sports partnerships with beverage partnerships, one of the things that I’ve had a lot of fun seeing is the tie. All the beverage companies have their sports sponsorships locally in the cities in which they operate. And so I have had a lot of fun watching then use some of those assets and the benefits they receive from their sports partnership, and then the leveraging them with their beverage partners. And so, for instance, at one of the airports we work at, they have appearances that they get with players from the local NFL team in Philadelphia with the Eagles. And they basically ran a promotion where whoever’s sold the most water or sold the most carbonated beverage, whatever it was, was able to win an experience bowling with Zach Ertz from the Philadelphia Eagles.
Michael Kuhn:
And so those sort of things, the relationships tie in, and overlap, and help one another. And knowing the elements on the other side of a sports partnership is helpful for leveraging within a beverage partnership because you know the broader scope of what’s going on within the beverage company and all of the relationships that they have, so it’s fun to see those things intermingle.
Tim Harms:
Awesome. Well, Michael, it’s been such a pleasure. Hey, before we go, so I’m sure PGA Tour came with some perks. Who’s the most famous person you met with while you were there?
Michael Kuhn:
I mean, the most famous golfer is Tiger Woods, there’s no doubt, and I had a chance to meet him. I met Jack Nicklaus too, which is another generation. And I think that was almost more speechless to meet Jack Nicklaus, but both of those guys. Golfers are all great. I mean, they’re all so good at interacting with anyone and do a bunch of great things.
Tim Harms:
Well, Michael, man, thank you so much for coming on and for shining a light on what happens behind the scenes, how we get MasterCard, the official sponsor of the PGA Tour. I mean, I appreciate you coming on. And whenever you get the official sponsor of the Enliven Beverage Deal Podcast, please let me know.
Michael Kuhn:
I’ll let you know first. No problem.
Tim Harms:
All right. Michael, thank you.
Michael Kuhn:
Yeah
Tim Harms:
Thanks, everyone, for listening, and hope you found that informative. If you have a burning question about your beverage negotiation or partnership, we’d love to hear from you and answer it on this podcast. Reach out to us by emailing podcast@enlivenpartnership.com. And hey, before we sign off, I want to remind you that you can take both the guesswork and the legwork out of your beverage partnership. You can level the playing field in your beverage negotiations, and you can save or make your company millions through a new or an improved beverage agreement. The first step is a free beverage opportunity analysis, which will tell you just how much you can save, or you can make. Sign up for your free beverage opportunity analysis at enlivenpartnership.com and by clicking free savings estimate. On behalf of everyone here at Enliven, thanks for listening in.
