The latest version of the World Cup of Hockey has meant the return of this competition 12 years after it was last played, with ESPN’s coverage of the games featuring NHL players, and USA coach John Tortorella’s outspoken approach to a number of issues on and off the ice. The World Cup of Hockey has also introduced a novel concept that could fundamentally change sports sponsorship. ESPN, which has exclusive rights to the two week tournament, has been using “fancy CGI” ads that cover up the logos of corporate partners on the dasher boards around the ice with their own logos of television partners during game broadcasts.

Computer-generated imagery (CGI) ads with partner logos are not new in sports, and especially when it comes to hockey. Several broadcasts have used CGI logos behind the glass of the nets and sometimes there are specific dasher boards that are left blank for CGI logos and/or dynamic signage that changes throughout the game. However, the idea of replacing the logos seen by fans in the arena with different logos seen by television viewers is a new activation.

The positive to these CGI logos is that they provide broadcast partners with new revenue streams. Media partners often feature the dasher boards prominently throughout their hockey broadcasts. Yet, the partners make little if any revenue from displaying these ads. In virtually no other advertising channel would displaying ads result in that little revenue for a broadcast partner. Being able to use CGI ads would enable media partners to monetize this television viewable signage while still enabling teams, leagues, and / or events to sell the dasher boards to advertisers to gain exposure to fans in the arenas.

However, hockey teams often use the television viewable signage as a vital activation element for a partner purchasing a dasher board. In particular, corporate partners looking to maximize brand awareness and exposure buy dasher boards from teams specifically because these boards are frequently viewable during broadcasts. If that is no longer the case, then hockey teams may have a much more difficult time selling their dasher board inventory.

CGI ads will likely not only impact hockey. Basketball, baseball, and golf are among the sports where media viewable signage is a major source of corporate partnership revenue. However, media partners may start to demand the ability to use CGI signage to help increase the profitability of sports broadcasts given the prices they are paying to broadcast games.

This outcome can be viewed as a feature instead of a bug of the system. More specifically, there has been a concern in the sports industry that fans will not continue to pay for increases to their cable, satellite or telco provider to see sports broadcasts. Therefore, sports properties need to need provide avenues for broadcasts partners to monetize their investment to increase or maintain rights fees in the future. Having CGI ads provides that opportunity.

This does not mean that dasher board or signage near the playing surface will not be valuable. Thousands of fans in venues across the world will still be able to see these signs throughout the entirety of competition (often two hours or more at a time). Sports properties can still sell dynamic signage that changes logos that are visible to the fans in the venue. Being able to advertise to fans in an environment that often enhances a company’s brand perception is usually one of the primary goals of corporate partners.

However, increasingly the largest revenue stream for sports properties are their media rights deals. Creating new revenue streams for media partners during game broadcasts is in the best interest of sports partners and broadcast partners. Use of CGI ads is one interesting way to achieve this goal that needs to be examined by teams, leagues, and events going forward.

Adam is the CEO and Founder of Block Six Analytics. He is also a lecturer for Northwestern University’s Masters of Sports Administration and the co-author of The Sports Strategist: Developing Leaders For A High-Performance Industry.

 

Source : forbes.com

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