Peloton is in the sponsorship game, announcing a deal to become the “official connected fitness partner” of University of Michigan Athletics, which comes on the heels of a multiyear agreement signed in July with the English Premier League’s Liverpool Football Club.
And more partnerships will follow, according to company leadership. “Expect to hear more announcements about additional global partners in the weeks ahead,” CEO Barry McCarthy said on the company’s quarterly earnings call Wednesday.
From a property perspective, such announcements from a major brand in a category that nearly all rights holders have open are as welcome as a steady rainfall following a long drought. No doubt plenty of sponsorship salespeople are currently readying rights and benefits packages, brainstorming activation ideas and figuring out their best connections to Peloton CMO Leslie Berland and her team in hopes of becoming part of the Peloton portfolio.
But given the company’s rocky road after its high-flying performance during the Covid pandemic, rights holders should proceed with caution and eyes wide open. Although the company has marketing cash to spend right now, the outlook for its future health is hazy, calling into question the sustainability of any commitments it makes beyond the short term.
Beyond the mostly negative numbers contained in its quarterly report and the stock selloff that followed, of greater concern to potential partners may be the company’s current approach to growth of throwing everything at the wall and seeing what sticks.
Peloton is moving forward on a number of fronts. It wants to keep selling high-end equipment and $44 monthly all-access content subscriptions to those who can afford them and who have the potential to become devoted loyalists for life. It also has launched Peloton for Business, an effort to have employers offer the Peloton app and product discounts as wellbeing benefits, in addition to getting more of its equipment into fitness centers, health clubs and hotels.
At the same time, a brand relaunch in May is attempting to reposition the company as an anytime, anywhere, anyplace fitness solution for everyone, with new app pricing tiers that start with an unlimited free membership option that allows consumers to watch Peloton’s fitness classes and build their own workouts from wherever they are, including their gym. Additional $12.99 ($6.99 for college students) and $24 monthly levels open additional content and benefits.
This multi-prong approach may be Peloton’s most practical course of action, but from a property perspective brands lacking a clear strategic focus typically don’t make great partners, as priorities can quickly shift away from the partnership’s original objectives and marketing staff often simply have to keep their eyes on more balls than is practical.
Thus properties with Peloton on their target lists would be wise to anticipate some twists and turns during the course of a deal. They should be prepared to be flexible and should structure their deals to avoid locking either party into a commitment that may not make sense for one or both sides down the road.