Some of us have discussed this in other threads so I thought it would be cool to make a thread just for the off-field business side of the Galaxy. I'm planning to go to b-school and seek a career in marketing so this sorta combines 2 of my interests together. So to get things started, I have always wondered why we use Herbalife as a shirt sponsor. They don't have the best PR and it's gotta ding the Galaxy image just a bit, plus I can't imagine LA couldn't acquire a more lucrative sponsorship that can be beneficial for both parties, some synergy can take place. Well here's my idea, partner with Samsung and exploit the fact their key mobile product is the same name as our team. Here's a sample pitch (i did this in 2 minutes so I didn't really polish it much at all, just used ms paint to get the idea across)
I have a better idea. We should buy the rights to retrospectively show Manchester United games from the 2013-14 season. Simply play double headers of those matches with ours and see how the perception of our quality of play explodes overnight.
I think we "use" Herbalife because Herbalife came forward with a bigger check than anybody else. Remember, when we did this, it was a record-setting sponsorship deal for an MLS team. My memory was that not very many MLS clubs even had jersey sponsors when we did this deal originally. Part of the deal was its term. We can't just drop Herbalife and go elsewhere while they still have the sponsorship rights. Can't recall now, but I think this has a few more years to run. FWIW: I am NOT an Herbalife fan and have refused to buy a jersey that would turn me into a snake-oil salesman for that company. There are very few likely sponsors that I feel that strongly about. Nevertheless, LAG made a commitment and Herbalife's check didn't bounce, so the team is stuck with it for a few more years. I suppose in theory LAG could buy back the rights from Herbalife, and if Herbalife were to be in financial difficulties they might jump at a chance to end the commitment. I have no idea if that would be a cost prohibitive course right now.
It was a 10 year deal, wasn't it? I was thinking 5, but it's been 5 so far, and I remember it was a nice round number.
It was 5 initially 5 years coinciding with Beckham’s initial contract. It was extended another 10 years at the end of that for $4.4 million a year. I seem to recall being disappointed at the time, not because of the sponsor, but 10 years is a long time, $4.4 mil a year might be peanuts in 2022. Unless there’s a Lance Armstrong like scandal, Herbalife goes bankrupt or something else unlikely we’re stuck with them. // edit: source http://www.lagalaxy.com/news/2012/03/la-galaxy-and-herbalife-announce-record-10-year-extension
I believe the original deal expired and we re-upped with Herbalife. The company probably offered the most for the renewal because they were already identified with the brand and because it reaches a core demographic that is attractive to them. As far as Samsung (or any other company), it takes two to tango. My guess is that for Samsung there is concern about market confusion for its Galaxy product line.
Sponsorship on jersey , stadium , billboard , its really just extra easy money... however isn't herbalife a big part of the latino community ? "L.A. company Herbalife estimates Latinos account for about 60% of its U.S. sales made through its network of independent distributors" "Herbalife President Des Walsh said the company does not target any specific demographic." "Parra's success story is an exception. About 90% of Herbalife distributors make little or no income, the company acknowledges." "The company recently signed a 10-year, $44-million sponsorship of the Los Angeles Galaxy professional soccer team, which has a massive Latino fan base. Each year, it holds a national convention in Spanish called "Extravaganza Latina." http://articles.latimes.com/2013/feb/15/business/la-fi-herbalife-latino-20130216/2
marketing = LAG - 44Million / paper can be use for anything - improves the club Herbalife - Greater exposure
yes i know this but LAG just extended the partnership out again a year or so ago, they could've shed Herbalife at the time. you are not the only person that hates Herbalife enough not to buy a jersey either. I know that Herbalife writes the biggest check, im just saying that perhaps with Samsung their could be gains that couldn't be quantified, just starting the discussion, im very well aware of how a shirt sponsorship is awarded
that's a very interesting point about market confusion. So perhaps shirt sponsorship is stuck for now but there are certainly many other areas the Galaxy could improve?
OK - as long as we recognize that a discussion of what sponsor might be better is purely hypothetical and not something that can actually be addressed for another 7 or 8 years. Who knows - by that time Samsung may not even be selling a phone with the the "Galaxy" name on it. I only responded the way I did, not to suggest you did not understand how shirt deals work, but because you raised the question of why LAG was using Herbalife. And the answer to your question is that they have to. We can lament the fact that maybe they shouldn't have re-upped in 2012. But marketing is about what the team can do going forward. And it doesn't look like the shirt deal is something that can be addressed without some huge costs (At minimum the present value of $4.4 million / year for the balance of the deal) Short term marketing that can be observed locally: heavy reliance on saturation billboarding. And I still think the beer garden should be looked at as a marketing venture aimed at appealing to a group that we have agreed may not have been attracted to the team yet. Beer + discounted tickets may get some twenty-somethings to take another look at the team. I think it is a bigger step in the right direction than we have given to this group in the past. I suppose there is also a marketing element to the decision to hire Joe Tutino. It will be really nice to have an announcer who is both knowledgeable about the team and its history, and is passionate about it. I think Vin Scully is an amazing marketing force for the Dodgers. At some level, I hope Tutino replicates that for us. There is no reason to think that the team has cut back on community involvement like clinics for kids as they have in the past. With the G2 roster added, it will be easier to do more of this - and the G2 kids would probably be grateful to pick up a supplement to their paychecks. Galaxy Foundation also has a marketing element. By having the team name tied to worthy causes locally it adds an element of quality and class to the brand. I've gone on too long, but my underlying point is that marketing encompasses almost every interaction you have with the public. Stay on message, make sure the message is classy and inviting. Get the word out. PS: Because I am linguistically challenged, I am not aware of Spanish-language media efforts. Perhaps someone can comment on those.
There are some people who hate Samsung as much some hate Herbalife. Pretty much any major organization you’re going to find people with negative impressions of them. The teams in this league, in many leagues to be fair, just aren’t in a position to pick & choose their shirt sponsor – it’s literally going to be who writes the biggest check, outside of course legal/ethical guideline of the team/league/industry/locality.
@LAGConfidential: #LAGalaxy release first 2014 TV spot, a similar ad ran this morning during SportsCenter http://t.co/pkExI7O7SH
Maybe I’m just down on LA’s off-field lately, but that was pretty bad. The voice over was pitiful, sounded like something one of the players says during pre-season interviews not a refined script and the actor’s take verged on parody. Looks like they used footage all from the same game (LA vs RSL) when LA was wearing the third, seldom used kit while RSL was wearing white LA’s primary color. Even I had to do a double take at one point thinking it showed the Galaxy getting scored on. The more I see from LA’s marketing/branding this season the more I’m convinced there’s been a big change. I don’t know if they’ve changed their agency, brought the work in house, or if they had an in house team that’s had significant turn over, but something’s definitely changed and not for the better.
Or is it being run by the same agency/group that does the Kings? A 2 for 1 deal, all done in house to save on having two different marketing departments.
Did a little digging and there is a new designer at the Galaxy. Looks like they started late 2013, not gonna lay this at their feet, being the new person it can take some time to get your feet and gain respect for your opinion. Poor reflection on management though not having a better CoO in place.
agreed, the voice over is HORRIBLE. They could've found someone on youtube that could've produced and voiced over a better spot than that
I think I figured out their 2014 marketing theme! "THE 2014 LA GALAXY! Really, just waiting for that WC bump in July."
That was really disappointing. It's better not to spend the money to run the adds than to put out something weak. Edit: Watched it again (God the season needs to start soon) and parts of it weren't terrible. They're showing the right things and the script is fine, but between the uniforms and the abysmal voiceover, it's just so sad. I know a voiceover agent and I can put the Galaxy in touch for a small slice of the transaction!
Seems like Herbalife (for good or ill) has proven to be pretty dedicated partner to the Galaxy brand. They probably want to rehab the image associated with their own brand and have partnered with the Galaxy Foundation to do lots of community outreach (HL is located in South Bay, about 2 miles from SHC and has another office in LA Live) through their own non-profit foundation. This is from the press release about re-upped contract: LA Galaxy and Herbalife Announce Record 10-Year Extension They've also done quite a bit to promote both brands globally. Herbalife Family Foundation and LA Galaxy Foundation Donate to Hogar y Futuro Herbalife and LA Galaxy Support El Salvador Communities
cont... Another thing to note is that the direct-selling market in general has less of a stigma in Europe and Latin America, where HL has pretty significant traction: http://www.renttopapartments.com/blog/herbalife-extravaganza-barcelona/ This year they'll have "extravaganzas" in Singapore, South Africa, India, Chile, Ecuador, Panama the Czech Republic and a few other places. HL sponsored the Galaxy's Pac-Asia Tours from a few years ago as well. They sponsored both Messi and CR7 as a sponsor over the same period at some point. Also, branded content: Herbalife, LA Galaxy Lead MLS Into Branded Content Arena With Debut Of Original Unscripted Web Series 'Be A Pro' These are just things I found by searching "Herbalife Galaxy" (though in fairness there's a lot I know/remember just from following the team/press releases over the years); I'm not trying to change anyone's opinion of the company itself or say conclusively that it's the best deal for the Galaxy, but there's a lot more to the deal than HL just paying to have their name on the shirt. They have synergized the whole weight-loss deal with the pro sports angle, so Galaxy is one of their top brand partners. I'd be curious to know how other team sponsors compare on those fronts. Research conducted with a similar level of rigor (i.e. searching "Xbox Sounders") turned up comparatively few results. I've joked about the whole Samsung/Galaxy connection, but I'm not sure it actually makes sense in reality in terms of cross-promotion. Plus, it does seem like it would invite some of the Samsung/Apple partisanship. But it's not a topic I'm hugely knowledgable about.
I know the Galaxy have to share time with the Lakers on their deal with Fox Sports West but, the Dodgers channel launched earlier this week and they are showing every game including spring training. When we were scrounging for info on our preseason games, the FSW channel was broadcasting reruns and things that could have easily been aired at another time. I think this is a major oversight as the main programming we as fans want is the actual games, preseason or not. People who aren't fans, I think, would be more apt to at least linger on a game being broadcasted and become more familiar with the team better than with a poorly done 30 second commercial.
This is an important point. The newer clubs in the league have done a great job selling a game experience/culture that is unique to soccer. It gives the fans the feeling that this is 'their' game, set aside from the other major sports. Should the Galaxy try to foster this type of fan base? And if so, can they do it without losing the family-friendly orientation that they have created and that they have had success with?