Earlier this month, the NBA Phoenix Suns and WNBA Mercury unveiled Chicago-based venture capital firm Cleveland Avenue as the teams’ latest corporate partner. The stated goal of the multi-year alliance is to leverage the firm’s investments in AI, robotics, lifestyle consumer brands and other companies to establish the teams’ home venue “as a hub for innovation, sustainability, unique culinary experiences and testing ground for cutting-edge technologies.”
That announcement was followed up last week with the revelation that companies within Cleveland Avenue’s portfolio also would rotate being the Mercury’s jersey patch sponsor on an annual basis. CPG company Partake Foods and its line of allergy-free cookies, graham crackers and other products will be first up this season.
For sponsorship sellers, the efficiency of partnering with a single owner of numerous companies that can be plugged into a variety of roles, take advantage of assorted assets and fill multiple categories must be tempting. However, putting VCs at the top of sponsorship target lists is not an advisable sales strategy.
VCs are not set up to be active sponsorship marketers. While the level of involvement between investment firms and their portfolio companies varies wildly, very few VCs are routinely involved in marketing decision-making at the businesses they own or control.
That makes the Phoenix teams’ agreement relatively unique. And, importantly, its origins did not involve a pitch from the rights holder to Cleveland Avenue. The instigating factor was the two-and-a-half-year-old deal from locally based portfolio company Footprint to put its name on the teams’ arena and become the teams’ official sustainability partner.
The new partnership builds upon Footprint’s use of its naming rights deal to promote the company’s recyclable and compostable foodservice products, including cups, lids, plates, trays, straws and containers made from plant materials. Without that experience, to draw upon, it is highly doubtful Cleveland Avenue would have sought partnership opportunities for its other companies.
The two takeaways for sponsorship sellers from the Suns and Mercury’s newest deal are first, leverage successful existing partnerships to prospect among your current sponsors’ network and sphere of influence, whether that is other companies that share the same parent or investor, or other business alignments and connections your partners have.
Second, instead of cold calls to VC firms, properties enamored with the idea of one-stop shopping for potential partners would be much better off focusing on companies with large brand families that have a centralized marketing function and structuring deals similar to Procter & Gamble’s Olympic partnership, in which one agreement encompasses multiple personal care and household product categories and doles out benefits to numerous brands, including Tide, Gillette, Always and Head & Shoulders.