Minnesota pro sports teams switched playbook on sponsorships because of pandemic

When Allianz Field opened in spring 2019 as home to the Minnesota United major league soccer team, it was quickly viewed by industry and media experts as one of the best in the country.

Among its awards, ESPN gave the 19,400-seat, $250 million stadium its 2019 Best MLS Stadium Experience Award, and the stadium was named Best New Venue by SportsTravel. It was also nominated for Stadium of the Year by the Sports Business Journal.

The momentum halted when the pandemic shutdown hit in March 2020, and stadium and team officials had to regroup. The reality: They had to fulfill sponsorship deals with an empty stadium.

"Nobody realized how COVID was going to impact every team," said Chris Wright, chief executive of Minnesota United. "We didn't realize at the time we would have zero fans in our new stadium."

Now that a full audience is back, Minnesota United is competing with the luster of a new stadium and in a marketing world that changed in the year of the pandemic.

Many professional teams, including Minnesota's other pro sports franchises, had hard discussions with sponsors during the year without fans and had to come up with creative solutions — some of which will change sports marketing for the future.

The Loons, Minnesota United's nickname, had a total attendance of 335,291 fans at Allianz Field in 2019, equating to an average of being over capacity for each home game. The new stadium helped Minnesota United grow its corporate partnership base to 74 companies, Wright said.

"Many conversations we began to have at the end of 2019 going into 2020, they progressed, but obviously everybody in the advertising and sponsorship world was somewhat nervous about the deliverables that you have as a franchise given the COVID-19 situation that we're all working through," Wright said. " It was very, very difficult."

The deals that emerged showcased brands in new ways on television and the Loons' digital channels and apps. The pandemic also changed how brands partnered with the soccer team on community-facing activations, like food drives, blood drives and fundraisers.

When the games stopped

Julia Gutz Moller, assistant vice president of sponsorships for stadium naming rights holder Allianz Life, recalls the limbo when games stopped in 2020 and the feeling of losing branding power at Allianz. By July, Major League Soccer decided to finish the season without fans in a tournament at Disney Wide World of Sports complex in Orlando.

Allianz worked with Minnesota United on branding opportunities in Orlando, in addition to positioning digital exposure on the team's online channels, Gutz Moller said.

Back in Minnesota, Allianz identified other ways to use the stadium.

"Our relationship with the Midway community goes deeper than the stadium," she said.

By summer, the neighborhood had been hit by civil unrest following the police killing of George Floyd on top of the economic realities of the pandemic, including unemployment, especially among restaurant and leisure industry workers.

Allianz partnered with the pro soccer team and Keystone Community Services for a free event series at Allianz Field called Farmers Market in a Box. Through the partnership, Allianz and Minnesota United distributed nearly 200,000 pounds of food to over 3,000 households, Gutz Moller said.

"We were worried and feared that awareness would decrease and would go down with a shortened season and no fans, and we found it stayed the same," Gutz Moller said. "In some places, we saw some increases."

In 2019, Allianz hosted foosball tables at the stadium. This year, the foosball was relaunched in a digital format with a sweepstakes component. Allianz still anticipates setting up tables at some games this year, but the digital component will stick for a while, Gutz Moller said.

Creative solutions emerge

Chicago-based marketing firm IEG pegs the value of U.S. sports and entertainment sponsorships at $26 billion prior to the virus outbreak, of which 54% was lost during the pandemic. That lost value equates to over half of paid rights fees.

The teams found each sponsor had different concerns, said Ryan Tanke, chief operating officer of the Minnesota Timberwolves and Minnesota Lynx.

"Every one of those conversations was unique and it needed to be treated as an individual conversation," he said. "There was no blanket approach. It had to be customized for each company."

While each team dealt with its own financial challenges during the year, their corporate partners were facing similar issues, making some of those conversations more difficult than others.

"You don't want to assume everybody did well in 2020," Tanke said. "Some got hit hard. We did a lot of listening."

For the Minnesota Twins, the overarching strategy was to make sure corporate partners were satisfied, said Laura Day, chief business officer for the Twins, which after 636 days, opened Target Field to full capacity on July 5.

For some of their partners, the Twins put a hold on their contract for the 2020 season, she said.

"We maintained conversation and communication, but in some cases, we kicked everything to 2021 and said, 'We're not going to expect you to step up and reach deep and pay us for something that we're not clear and certain we can deliver upon,'" she said.

About 120,000 sponsorship agreements across the U.S. were affected by the pandemic, according to IEG, and 5,000 brands were faced with decisions on how to recoup lost value. The firm estimates the sponsorship industry will need to make up $14 billion in lost value due to the pandemic.

Many pro teams were able to shift advertising placement in their buildings, or create virtual advertisements, to retain some value of their corporate partners' investment.

In summer 2020, the Minnesota Vikings, like other National Football League teams, began putting branded seat covers in the lower bowl. The team has 75 to 85 corporate partnerships, which vary in form, so conversations over how to proceed were complicated, said John Penhollow, the team's chief revenue officer.

"What we had to do was come up with what would be a set of ideas that could deliver the exposure they might have, knowing nobody is physically in the building with us," Penhollow said.

For example, the Vikings asked the NFL for permission to air some of the team's historic games, and ads that would have run during canceled preseason games aired during those historic replays.

During regular games, U.S. Bank had signage on tarps and under the main scoreboard, so the brand was visible for TV audiences, said Christopher Lee, the bank's senior vice president in charge of the Vikings stadium partnership. The bank also partnered with the team on a season ticket holder mailing promotion giving fans a kit that included things like game day recipes, puzzles and other giveaway items.

"Our way of saying, 'You can't come here, so let us come to you,'" Lee said.

The Twins also had branded tarps over seats, said Mike Clough, the Twins senior vice president of ticket sales and brand partnerships. Major League Baseball also allowed teams to place logos on the back of pitching mounds in 2020, and the Twins added digital insertions behind home plate and center field for television audiences.

The National Hockey League's Minnesota Wild was able to place branded stickers on players' helmets, which became a way for Xcel Energy — which has naming rights to the arena — to retain some of the value of the marketing deal, said Mitch Helgerson, the Wild's senior vice president of marketing. The NHL also allowed virtual signage around the glass for TV and streaming and also between the circles on the ice.

Going digital

Like other industries, sports marketing was trending toward digital activations before the pandemic. But the fan restrictions accelerated the shift, Helgerson said.

The Wild created two digital series, a behind-the-scenes look at the franchise called "Beyond Our Ice," and a magazine format show called "Wild Amplified." Sponsors were featured during both.

Similarly, the Timberwolves created "Track the Pack," an online series following players and coaches behind the scenes that amplified partnerships. The series led to a spinoff show called "Voices," which created a social opportunity to be part of conversation around social injustice following Floyd's death.

Moving forward, the Twins see more digital opportunities, Clough said. Those could be executed, for example, through the team's food and beverage mobile ordering platform.

Teams have become increasingly better at generating digital content to meet fans "where they're at," said Clint Warren, a sports management lecturer at the University of Minnesota. That content simultaneously creates digital inventory that can be monetized.

Postpandemic sponsorship deals

Full stadiums make for better television experiences, improving television ratings, Warren said, and a return to full capacity for area teams could also affect brand partnerships.

The Wild is "bullish" on the opportunities that come with fans returning to arenas and stadiums, Helgerson said.

"We're always trying to find new partners," he said. "The pandemic created new opportunities to connect brands with wider audiences."